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Notes to Accounts of Adi Finechem Ltd.

Mar 31, 2015

1. Corporate Information :

Adi Finechem Limited ("The Company") was incorporated in May, 1985 as "H. K. Agro Oil Ltd." under the provisions of The Companies Act, 1956. The Company is engaged in manufacturing of Specialty Oleo Chemicals. The manufacturing facility for the same is set up at Village Chekhala, Ta. Sanand, Dist. Ahmedabad, Gujarat. The finished products of the Company can broadly be divided in to (a) Nutraceutical Products and (b) Oleo Chemicals. The equity shares of the Company are listed on Bombay Stock Exchange Ltd. and Ahmedabad Stock Exchange Ltd. There was a partial change in management of the Company w.e.f. April, 2010.

2.1 Term loans / Working Capital Term loans aggregating to Rs. 9,18,45,291/- (Previous Year Rs. 2,22,58,471/-) are secured primarily by hypothecation by way of first charge on all present and future stocks, book debts, vehicles and collaterals security by way of Equitable mortgage of industrial property bearing Survey No. 253/P and 312 situated at village Chekhala, Sanand-Kadi road and Hypothecation of plant and machinery installed at the factory premises. Current rate of Interest is 11.75% per annum repayable in 60 / 48 monthly installments commencing from 7th day of succeeding months of respective disbursements.

2.2 The Vehicle loans from HDFC Bank Limited are secured by hypothecation of vehicles and are further secured by personal guarantee given by a Director of the Company. The vehicle loan from ICICI Bank Ltd is secured by hypothecation of vehicle.

* The opening balance of Depreciation under the heads "Office Equipment" and "Furniture & Fixtures" include Rs. 1,17,345/- and Rs. 23,745/- respectively, being the adjustment made as per Schedule II of the Companies Act, 2013. The corresponding adjustment for aggregate amount of Rs. 1,41,090/- is given in Note No. 2 titled as "Reserves & Surplus"

* The basic and diluted EPS for the year 2013-14 have been restated pursuant to the issue of bonus equity shares in the ratio of 1:10 ( one bonus equity share of Rs. 10/- each for every 10 equity shares of Rs. 10/-each held).

* The estimates of future salary increase considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in employment market.

Defined Contribution Plans :

Rs.54,38,888/- (Previous Year Rs.23,05,243/-) recognised as an expense and included in the note 21 of Profit and Loss Account under the head " Contribution to Provident Fund,Gratuity and Superannuation"

3 Related Party Disclosures :

List of related parties where contracts exists and related parties with whom transactions have taken place and relationships

(i) Enterprise over which Key management personnel and their relatives are able to exercise significant influence Adicorp Enterprise Private Limited

PCD Investment Private Limited

UKM Investment Private Limited

Harihar Manufacturing & Trading Private Limited

Dashrath Jagmohandas Investment Private Limited

Super Handlers Private Limited

Ashmak Investment Private Limited

Adi Corporation

(ii) Key Management Personnel

Shri Nahoosh J. Jariwala Shri Bimal D. Parikh

4 Contingent Liabilities

As at As at Particulars 31st March 31st March 2015 2014

(a) In respect of Bank Guarantee given by bank to UGVCL 6,410,021 -

(b) In respect of disputed Income Tax matters 1,456,215 870,115

(c) In respect of Civil Suit 1,500,000 1,500,000

(d) In respect of Custom Duty 520,360 520,360

(e) In respect of Excise Duty 2,279,219 2,279,219

12,165,815 5,169,694

(f) Commitments:

Estimated amount of contracts remaining to be executed on capital account 47,303,966 51,205,113 and not provided for (Net of advances)

5 Dividends proposed to be distributed :

The Board of Directors, in its meeting held on May 04, 2015 recommended the dividend of Rs. 2.50 per equity share of Rs. 10/- each.

6 The balances under the head of Sundry Debtors, Sundry Creditors, Loans & Advances, Secured / Unsecured Loans are subject to confirmation and reconciliation.

7 Excise duty shown as deduction from domestic sales represents the amount of excise duty on sales. Excise duty expense under Note No.22 "Other Expenses " represents excise duty paid on sample etc. is not recoverable from sales.

8 Leases :

Finance Lease :

In accordance with accounting standards 19 "Leases"issued by the Institute of Chartered Accountants of India, the assets acquired on finance lease on or after April 01,2001 are capitalised and a loan liability recognised. Consequently depreciation is provided on such assets,installments paid are allocated to the liability and the interest is charged to Profit and Loss Account.

Assets acquired on lease agreements mainly comprise of vehicles. The agreements provide for reimbursement of taxes,levy etc imposed by any authorities in future. There are no exceptional/restrictive covenants in the lease agreements.

and whose signature(s) are appended below as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 30th Annual General Meeting of the Company, to be held on Monday, July 27, 2015 at 5.00 p.m. at Memories Hall, 2nd Floor, TGB Banquets & Hotel Ltd., (The Grand Bhagwati), S. G. Road, Bodakdev, Ahmedabad - 380 054 and at any adjournment thereof in respect of such resolutions as are indicated below:

Notes:

(1) This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company not less than 48 hours before the commencement of the meeting.

(2) A Proxy need not be a member of the Company.

(3) A person can act as a proxy on behalf of members not exceeding fifty and holding in the aggregate not more than 10% of the total share capital of the Company carrying voting rights. A member holding more than 10% of the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as a proxy for any other person or shareholder.

(4) This is only optional. Please put a 'V' in the appropriate column against the resolutions indicated in the Box. If you leave the 'For' or 'Against' column blank against any or all the resolutions, your Proxy will be entitled to vote in the manner as he/she thinks appropriate.

(5) Appointing a proxy does not prevent a member from attending the meeting in person if he/she so wishes.

(6) in the case of joint holders, the signature of any one holder will be sufficient, but names of all the joint holders should be stated.


Mar 31, 2014

1. Segment Reporting:

The Company has only one reportable business segment "Speciality Chemicals" as primary segment. The Company has identified the Secondary Segment as geographical segment based on the location of customers.

2. Related Party Disclosures :

List of related parties where contracts exists and related parties with whom transactions have taken place and relationships

(i) Enterprise over which Key management personnel and their relatives are able to exercise significant influence Adicorp Enterprise Private Limited PCD Investment Private Limited UKM Investment Private Limited Harihar Manufacturing & Trading Private Limited Adi Enterprise

Dasrath Jagmohandas Investment Pvt. Limited Super Handlers Private Limited Ashmak Investment Private Limited Adi Logistics

(ii) Key Management Personnel

Shri Nahoosh J. Jariwala Shri Bimal D.Parikh

3. Contingent Liabilities

As at As at Particulars 31st March 31st March 2014 2013

(a) Outstanding Bank Guarantees given to various Statutory bodies

(a) In respect of disputed Income Tax matters 870,115 870,115

(b) In respect of Civil Suit 1,500,000 1,500,000

(c) In respect of Custom Duty 520,360 520,360

(d) In respect of Excise Duty 2,279,219 -

5,169,694 2,890,475

(d) Commitments:

Estimated amount of contracts remaining to be executed on capital account 51,205,113 36,210,700 and not provided for (Net of advances)

4. Disclosure of Derivatives

The Company uses derivative instruments i.e forward contracts to hedge I its risks of net exposure associated with foreign currency fluctuations. The I Company does not enter into any forward contract which is intended for trading I or speculative purposes. However there are no outstanding foreign exchange I forward contracts for hedging foreign currency in relation to Exports as at I March 31, 2014.

5. The Board of Directors, in its meeting held on May 19, 2014, recommended the dividend of Rs. 1.50 per equity share of Rs. 10/-each.

6. Insurance claim lodged by the Company in respect of fire that took place in previous financial year ended 31-03-2013 is settled during the year.

7. The balances under the head of Sundry Debtors, Sundry Creditors, Loans & Advances, Secured / Unsecured Loans are subject to confirmation and reconciliation.

8. Excise duty shown as deduction from domestic sales represents the amount of excise duty on sales. Excise duty expense under Note No. 22 "Other Expenses " represents excise duty paid on sample etc. is not recoverable from sales.

9. Leases :

Finance Lease :

In accordance with accounting standards 19 "Leases" issued by the institute of Chartered Accountants of India, the assets acquired on finance lease on or after April 01, 2001 are capitalised and a loan liability recognised. Consequently depreciation is provided on such assets, installments paid are allocated to the liability and the interest is charged to Profit and Loss Account.

Assets acquired on lease agreements mainly comprise of vehicles. The agreements provide for reimbursement of taxes, levy etc imposed by any authorities in future. There are no exceptional/restrictive covenants in the lease agreements.


Mar 31, 2013

1 Related Party Disclosures :

List of related parties where contracts exists and related parties with whom transactions have taken place and relationships

(i) Enterprise over which Key management personnel and their relatives are able to exercise signifcant infuence

Adicorp Enterprise Private Limited

PCD Investment Private Limited

UKM Investment Private Limited

Harihar Manufacturing & Trading Private Limited

Adi Enterprise

Dasrath Jagmohandas Investment Pvt Limited

Super Handlers Private Limited

Ashmak Investment Private Limited

Adi Logistics

(ii) Key Management Personnel

Shri Nahoosh J. Jariwala Shri Bimal D. Parikh

(iii) Relatives of Key Management Personnel

Miss Vaishnavi N. Jariwala Miss Priyanshi N. Jariwala

2 Contingent Liabilities

As at As at Particulars 31st March 31st March 2013 2012

(a) Outstanding Bank Guarantees given to various Statutory bodies 397,000

(b) In respect of disputed Income Tax matters 870,115 7,325,188

(c) In respect of Civil Suit 1,500,000 1,500,000

(d) In respect of Custom Duty 520,360 520,360

2,890,475 9,742,548

(d) Commitments:

Estimated amount of contracts remaining to be executed on capital account 36,210,700 4,929,373 and not provided for (Net of advances)

3 Dividends proposed to be distributed :

The Board of Directors, in its meeting held on May 18, 2013, recommended the dividend of Rs. 1 /- per equity share of Rs. 10/-each.

4 During the year, on 27-11-12, fre took place at the factory of the Company. The Company has lodged a claim with insurance company under fre policies which is under process. Based on the current status of the claim, the insurance claim Receivable and corrssponding loss on fre is accounted for. The difference, if any, on settlement will be effected in the statement of proft and loss.

5 The balances under the head of Sundry Debtors, Sundry Creditors, Loans & Advances, Secured / Unsecured Loans are subject to confrmation and reconciliation.

6 Excise duty shown as deduction from domestic sales represents the amount of excise duty on sales. Excise duty expense under Note No.22 "Other Expenses" represents excise duty paid on sample etc. is not recoverable from sales.

7 Leases :

Finance Lease :

In accordance with accounting standards 19 "Leases"issued by the institute of Chartered Accountants of India,the assets acquired on fnance lease on or after April 01, 2001 are capitalised and a loan liability recognised. Consequently depreciation is provided on such assets, installments paid are allocated to the liability and the interest is charged to Proft and Loss Account.

Assets acquired on lease agreements mainly comprise of vehicles. The agreements provide for reimbursement of taxes,levy etc imposed by any authorities in future. There are no exceptional / restictive convenants in the lease agreement.


Mar 31, 2012

(1) The Cash Flow statement has been prepared under the Indirect Method as set out in Accounting Standard - 3 on Cash Flow Statement issued by The Institute of Chartered Accountants of India.

(2) Purchase of Fixed Assets include items in Capital Work in progress including capital advances

(3) The previous year's figures have been re-grouped wherever necessary to make them comparable with this year's figures.

4.1 The equity share holders of the Company are entitled to receive interim and/ or final dividend as declared and approved by the Board of Directors and/or the share holders of the Company. The dividend so declared will be in proportion to the number of equity shares held by the shareholders

4.2 In the event of the liquidation of the Company, equity share holders will be entitled to receive remaining assets of the company. The distribution will in proportion to the number of equity shares held by the share holders.

Nature of Security and terms of repayment for Long term secured borrowings :

5.1 Term loans Rs.15,118,555 (Previous Year :248,331)are secured primarly by Hypothecation by way of first and exclusive charge on all present and future stocks and book debts and colleteral security by way of Equitable mortgage of industrial property bearing survey no. 253 & 312 suitated at village chekhala, sanand kadi road and Hypothecation of plant and machinery installed at the factory premises. Further secured by personal gurarantee given by Promoter Directors.Rate of Interest is 13.50% Repayable in 36 monthly installments commencing from December 2011.

5.2 The Vehicle loans from Bank are secured by hypothecation of vehicles and are further secured by personal guarantee given by the Directors of the company.

Working Capital Loan Rs. 140,469,524 (Previous Year :96,169,280)are secured primarly by Hypothecation by way of first and exclusive charge on all present and future stocks and book debts and colleteral security by way of Equitable mortgage of industrial property bearing survey no. 253 & 312 suitated at village chekhala, sanand kadi road and Hypothecation of plant and machinery installed at the factory premises. Further secured by personal gurarantee given by Promoter Directors.Rate of Interest is 13.50%

6 Related Party Disclosures :

List of related parties where contracts exists and related parties with whom transaction have taken place and relationship.

(i) Enterprise over which Key management personnel and their relatives are able to exercise significant influence

Adicorp Enterprise Private Limited

PCD Investment Private Limited

UKM Investment Private Limited

Harihar Manufacturing & Trading Private Limited

Adi Enterprise

Dasrath Jagmohandas Investment Pvt Limited

Super Handlers Private Limited

Munindra Investment Private Limited

Adi Logistic

Navin Syntex Private Limited

Newzen omputers Private Limited

Tulsishyam Investment Private Limited

Ashmak Investment Private Limited

(ii) Key Management Personnel

Shri Nahoosh J. Jariwala

Shri Bimal D.Parikh

(iii) Relatives of Key Management Personnel

Miss Vaishnavi N.Jariwala

Miss Priyanshi N.Jariwala

7 Disclosure of Derivatives

The Company uses derivative instruments i.e forward contracts to hedge its risks of net exposure associated with foreign currency fluctuations. The Company does not enter into any forward contract which is intended for trading or speculative purposes.However there are no outstanding Foreign exchange forward contract for hedging Foreign currency in relation to Exports as at March 31,2012

Foreign Currency exposure not hedged by derivative instrument as at March 31,2012 amount to Rs 69,447,054 (Previous Year Rs.3,06,98,143 /-)

On the basis of the information and records available with the Company, there are no delays in payments to Micro, Small and Medium Enterprises as required to be disclosed under the MSMED Act and above mentioned disclosures are made under the Note No. 7 " Trade Payables". This has been relied upon by the auditors.

8. The balances under the head of Sundry Debtors, Sundry Creditors, Loans & Advances, Secured / Unsecured Loans are subject to confirmation and reconciliation.

9. Excise duty shown as deduction from domestic sales represents the amount of excise duty on sales. Excise duty expense under Note No.22 "Other Expenses" represents excise duty paid on sample etc. is not recoverable from sales.

10. Leases:

Finance Lease:

In accordance with accounting standards 19 "Leases"issued by the institute of Chartered Accountants of India,the assets acquired on finance lease on or after April 01,2001 are capitalised and a loan liability recognised.Consequently depreciation is provided on such assets,installments paid are allocated to the liability and the interest is charged to Profit and Loss Account.

Assets acquired on lease agreements mainly comprise of vehicles.The agreements provide for reimbursement of taxes,levy etc imposed by any authorities in future.There are no exceptional/restictive convenants in the lease agreements.

The minimum installments and present value as at March 31,2012 in respect of asset acquired under the lease agreement are as under:


Mar 31, 2010

Current Year Previous Year Rs. Rs.

1. Contingent Liabilities :

(a) Disputed demand of Central Excise Department NIL NIL

(b) Disputed demand of Income Tax Department 73,25,190 73,25,190

(b) Defined Contribution Plans :

Rs. 13,02,097/- (Previous year Rs. 11,69,843/-) recognised as an expense and included in the Schedule 13 of Profit and Loss Account under the head "Contribution to Provident Fund, Gratuity and Superannuation".

2. Excise duty shown as deduction from domestic sales represents the amount of excise duty on sales. Excise duty expense under Schedule 13 "Manufacturing Expenses & Other Expenses" represents excise duty paid on sample etc. is not recoverable from Sales.

3. The following disclosures are made for the amounts due to the Micro, Small and Medium Enterprises as at 31st March, 2010.

(Amount in Rs.)

Principal amount remaining unpaid to any supplier as at the year end 2,99,819 (Unpaid as at 31st March, 2009) (1,59,035)

Interest due on the above mentioned principal amount remaining unpaid to any - supplier as at the year end (-)

Amount of the interest paid by the Company in terms of Section 16 of Micro, Small - and Medium Enterprises Development Act, 2006 ("MSMED Act") along with the amount of the payment made to the supplier beyond the appointed day during the (-) accounting year.

Amount of the interest due and payable for the period of delay in making payment - but without adding the interest specified under the MSMED Act. (-)

Amount of Interest accrued and remaining unpaid at the end of the accounting - year. (-)

On the basis of the information and records available with the Company, there are no delays in payments to Micro, Small and Medium Enterprises as required to be desclosed under the MSMED Act and above mentioned disclosures are made under the Schedule -10 "Current Liabilities and Provisions". This has been relied upon by the auditors.

4. Related Party Disclosures :

(a) List of Related Parties with whom transactions have taken place and Relationship :

Name of Related Party Relationship

Aja Impex Pvt. Ltd. formerly known as

(Shri Aja Electro Chem Pvt. Ltd.)

Shri Abhyudaya Chemicals Pvt. Ltd.

Shri Arya Investment Pvt. Ltd.

Essenar Investments Pvt. Ltd. " Enterprises over which key management personnel and their

PCD Investment Pvt. Ltd. relatives are able to exercise significant influence.

UKM Investment Pvt. Ltd. (Associate Companies / Enterprise)

Harihar Manufacturing & Trading Pvt. Ltd.



Adicorp Enterprises Pvt. Ltd.

Shri Rajan R. Harivallabhdas > Key Management Personnel

Shri Nahoosh J. Jariwala



Shri A. R. Harivallabhdas

Smt. K. A. Harivallabhdas Relatives of key Management Personnel Smt. S. D. Harivallabhdas

Miss Vaishnavi N. Jariwala

Miss Priyanshi N. Jariwala

(C) List of other Companies under common control:

1. Shri Ajita Investment Pvt. Ltd.

2. Shri Amala Investment Pvt. Ltd.

3. Rekhank Investment Pvt. Ltd.

4. Archisa Investment Pvt. Ltd.

5. Agam Investment Pvt. Ltd.

6. Anugat Investment Pvt. Ltd.

Note : Transactions with related parties which are not material in nature and carried out in normal course of business such as payment of electricity bills, telephone bills, office maintenance charges etc. are not shown.

(b) The total installed capacity of the company is 10,000 M.Tons per annum measured in terms of throughput of raw material. (As certified by the management and accepted by the Auditors as such.)

- The Quantitative details under following para (C) to (h) is as submitted by the management and accepted by the Auditors as such.

5. Capital work in progress includes advances given to suppliers Rs. 23,63,747/- (Previous Year Rs. NIL)

6. The balances under the head of Sundry Debtors, Sundry Creditors, Loans & Advances, Secured/Unsecured Loans are subject to confirmation and reconciliation.

7. In the opinion of the Management of the Company, the Current Assets, Loans & Advances are approximately of the value stated if realized in the ordinary course of business. The provision for the depreciation and for all known liabili- ties are adequate and not in excess of amount reasonably necessary. There are no Contigent Liabilities other than stated.

8. As there is a Business loss as per the provisions of the Income Tax Act,1961 therefore no provision for Tax has been made.

9. The details of Previous years expenses is as under:

10. Figures of previous year have been re-grouped / reclassified, wherever necessary to make them comparable with the figures of this year.

 
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