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Notes to Accounts of Aditya Birla Chemicals (India) Ltd.

Mar 31, 2015

1. RELATED PARTY DISCLOSURE

Disclosure in respect of Related Parties pursuant to Accounting Standard 18

(A) List of Related Parties

(i) Holding Company

Hindalco Industries Limited

(ii) Subsidiaries Company

Aditya Birla Chemicals (Belgium) BVBA

(iii) Fellow Subsidiaries Company

Utkal Alumina International Limited

Renuka Investment and Finance Limited

(iv) Key Managerial Personnel

Mr. K.C. Jhanwar (Managing Director)

(iv) Significant Influence

Tanfac Industries Ltd.

B.2 Power (electricity) purchase as well as sale (supply) to UPPCL & JSEB has been accounted for in the accounts as sale/purchase of power.

B.3 In the opinion of the management, Current Assets, Loan and Advances would realize, at least, at the value stated in the Balance Sheet, in the normal course of business.

B.4 Stores & Spares consumed includes replacement of Spare parts of Plant & Machinery, as per consistent policy followed by the company.

B.5 Statutory dues include Rs.1025.00 Lacs (Previous Year Rs. 879.36 Lacs) towards liability made under Entry Tax of Goods Act, 2007 (UP) which is disputed.

B.6 The depreciation expense charged for the year ended March, 31 2015 is lower by Rs 2537.82 Lacs arising out of difference in useful lives of fixed assets as per Schedule XIV of Companies Act 1956 Act and Schedule II of Companies Act, 2013.

B.7 The Company has a process whereby periodically all long term contracts are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law / accounting standards for material foreseeable losses on such long term contracts has been made in the books of account. The Company did not have any derivative contracts as at balance sheet date

B.8 Figures of previous year have been regrouped / rearranged wherever necessary


Mar 31, 2014

B.1 Segment information

The Company is primarily engaged in Chlor Alkali Chemicals. Since the inherent nature of entire business activities is governed by the same act of risk and returns, there is no reportable segment. Company does not have reportable secondary segment.

B.2 CONTINGENT LIABILITIES & PROVISIONS

SNO Particulars As at As at March March 31,2014 31,2013

A) Contingent Liabilities not provided for in respect of the following:

a) Outstanding Bank Guarantees (Against which 2.203.72 1,787.09 Rs. Nil has been deposited as FDR with Banks, Previous year Rs. 316 lacs)

b) Claims/Disputed liabilities against the Company not acknowledged as debt

i) a) Annual Minimum Guarantee Electricity charges & delayed payment surcharge thereon against which Rs.100 lacs (previous year Rs.100 lacs) has been deposited (The order of Consumer Grievance Redressal Forum relating to Annual Minimum Guarantee case was challenged byJSEB before Ranchi High Court. On hearing, the Ranchi High Court directed J SEB to raise the bill in accordance with the Forum''s order subject to final adjudication of fending writ. Complying with Forum''s order, JSEB has raised bill which involved a refund of Rs 17.80 Eacs to the Company. Since the writ is fending before the Court, contingent liability of Rs.6S62.84 lacs has been disclosed in the accounts). 6,562.84 6,562.84

b) Delayed payment of surcharge on the amount of fuel surcharge arrears 483.63 483.63 ii) Amount claimed by the Kandla Port Trust not acknowledge by company, matter is pending before the Court. 382.60 382.60

iii) Income Tax

a) AY 2007-08 for which the Company has filed appeal with CIT (Appeals) and Petition u/s 154 has been filed for considering correct amount of TDS & Advance Tax 197.02 197.02

b) AY 2008-09 for which the Company has filed appeal with CIT (Appeals) and Petition u/s 154 has been filed for considering correct amount of TDS 357.32 357.32

c) AY2010-11 for which the Company has filed appeal with CIT (Appeals) and Petition u/s 154 has been filed for reducing demand (Against which Rs.19.09 lacs paid) 141.78 141.78

d) Various other cases for which the Company has filed appeal with CIT (Appeals) 8.44 8.44

iv) Liquidated damage and interest claimed by BSIDC not acknowledged by the Company 171.22 157.20

v) Compensation payable against various labour cases pending with various Courts 156.00 156.00

vi) Incremental Lease Rent with Interest to Tata Motors Ltd. as per the order of High court 45.56 42.42

vii) Sales Tax

AY 2003-04 for which the Company has filed writ no.l811/2007 before Allahabad High Court against Dy Commissioner(A), Sonebhadra Order (due to non submission of certificate of Trade tax check post at Nepal Border Rs.1.63 lac was deposited) and disallowance byjt. Commissioner (corporate), Sonebhadra of VAT credit for Asst. Year 2007-08 and 2008-09 18.19 10.86

viii) Excise

a) For the Period (2000-01 to 2006-07): Demand of Excise duty on clearance of SBP to M/s UNICEF without payment of Excise duty under Notification No. 108/95 CE. Case is pending before CESTAT, New Delhi 60.42 60.42

b) For the Period (June''03- March'' 07): Case against demand raised for excise duty is pending before CESTAT, New Delhi 533.46 533.46

c) For the Period (April''04- September''08): Case against demand raised for excise duty is pending before CESTAT, Kolkata 525.70 525.70

d) Various other cases pending before excise department, High Court & CESTAT 12.40 14.76

ix) Service tax

a) Demand of Service Tax for the period April'' 05- June'' 06. Cases were pending before CESTAT, New Delhi. 159.55 141.21

b) Demand of penalty on service tax on banking and other financial services availed by company for issue of FCCB. Cases were pending before CESTAT, New Delhi . 25.11 25.11

c) For the Period (January''05- August''07): Case against demand raised for Service Tax is filed Appeal before CESTAT, Kolkata 105.02 Nil

B.3 RETIREMENT BENEFITS

The details of the Company''s defined benefit plans for its employees are as under:

There are no amounts included in the fair value of Plan Assets for:

- Company''s own financial instrument

- Property occupied by or other assets used by the company

Expected rate of return on assets is based on the average long term rate of return (assumed rate on return) expected on investments of the funds during the estimated term of the obligations.

There are no amounts included in the fair value of Plan Assets for:

- Company''s own financial instrument

- Property occupied by or other assets used by the company

Expected rate of return on assets is based on the average long term rate of return expected on investments of the funds during the estimated term of the obligations.

In respect of Defined contribution schemes-

The Company contributes 12% of salary for all eligible employees towards Provident Fund managed by Approved Trust. The company also contributes a 15% of salary for eligible employees as per scheme towards Superannuation Funds managed by Approved Trusts.

The Company has recognised the following amount as an expense and included in the Notes B.27 "Contribution to Provident Fund and other Funds":

The shortfall of interest on Trust Managed Funds compared to statutory rates (presently Nil), if any, arising in future is not recognised as the Guidance Note from Actuarial Society of India is yet to be issued in relation to this.

B.4 RELATED PARTY DISCLOSURE

Disclosure in respect of Related Parties pursuant to Accounting Standard 18

(A) List of Related Parties

(i) Holding Company

Hindalco Industries Limited

(ii) Fellow Subsidiaries Company

I Aditya Birla Minerals Limited

2 Al Dotcom Sdn. BHD

3 Albrasilis-AluminiodoBrasillndustriaeComerciaLtda

4 Alcom Nikkei Specialty Coatings Sdn Berhad

5 Aluminum Company of Malaysia Berhad

6 Aluminum Upstream Holdings LLC

7 Aluminium Norf GmbH

8 4260848 Canada Inc.

9 AV Metals Inc, Canada

10 AV Minerals BV, Netherland

II Birla Maroochydore Pty Limited

12 Birla Mt Gordon Pty Limited

13 Birla Nifty Pty Limited

14 Birla Resources Pty Limited

15 Consorcio Candonga (Unincorporated Joint venture)

16 Dahej Harbour and Infrastructure Limited

17 Deutsche Aluminium Verpackung Recycling GmbH(J-V)

18 East Coast Bauxite Mining Company Private Ltd.

19 Eurofoil, Inc.

20 France Aluminium Recyclage SA

21 Hindalco Do Brasillnd Com Alumina Ltda

22 Hindalco - Almex Aerospace Limited

23 Hindalco Guinea SARL

24 Lucknow Finance Company Limited

25 Logan Aluminium Inc.

26 4260856 Canada Inc

27 Mauda Energy limited

28 Minerals and Mnerals Limited

29 Novelis (Shanghai) Aluminum Trading Co, Ltd.

30 Novelis Acquisitions LLC

31 Novelis North America Holdings Inc.

32 Novelis (India) Infotech Ltd.

33 Novelis AG

34 Novelis Aluminium Beteiligungsgesellschaft mbH

35 Novelis Aluminium Holding Company

36 8018227 Canada Inc.

37 Novelis Brand LLC

38 8018243 Canada Limited

39 Novelis Corporation (Texas)

40 Novelis Cast House Technology Ltd

41 Novelis Deutschland GmbH

42 Novelis de Mexico SA de CV

43 Novelis Europe Holdings Limited

44 Novelis do Brasil Ltda

45 Novelis Inc.

46 Novelis Sheet Ingot GmbH

47 Novelis Korea Ltd.

48 Novelis Italia SpA

49 Novelis Delaware LLC.

50 Novelis Lamines France SAS

51 Novelis No. 1 Limited Partnership

52 Novelis Madeira, Unipessoal, Lda

53 Novelis PAE SAS

54 Novelis PAE Corporation

55 Novelis South America Holdings LLC

56 Novelis Services Limited

57 Novelis (China) Aluminum Products Co, Ltd.

58 Novelis Switzerland SA

59 Novelis UK Ltd.

60 Novelis MEA Ltd.

61 Novelis Vietnam Company Limited

62 Novelis Asia Holdings (Singapore) Pte. Ltd.

63 Renuka Investments & Finance Limited

64 Renukeshwar Investments & Finance Ltd.

65 Suvas Holdings Limited

66 Tubed Coal Mines Ltd.

67 Utkal Alumina International limited

68 Utkal Alumina Technical & General Services Limited

(iii) Key Managerial Personnel

Mr. K.C. Jhanwar, Managing Director from 1/3/2014 Mr. V.R Agrawal, Managing Director up to 28/2/2014

(iv) Significant Influence

Tanfac Industries Ltd.

* Paid to Renuka Investments & Finance Limited

Amounts in brackets represent corresponding amount of previous year.

There have been no write off/ write back in respect of the related parties during the year

Related party relationship have been identified by the management and relied upon by the auditors.

Related parties transaction represents cost of materials & services bought/sold net of taxes, duty and discounts.

B.5 Power (electricity) purchase as well as sale (supply) to UPPCL, UP, JSEB, Jharkhand and HESCOM, Karnataka has been accounted for in the accounts as sale/purchase of power..

B.6 In the opinion of the management, Current Assets, Loan and Advances would realize, at least, at the value stated in the Balance Sheet, in the normal course of business.

* Expenses towards gratuity and leave encashment provisions are determined actuarially on an overall company basis at the end of each year and accordingly have not been considered in the above information.

** In the determination of Manager''s remuneration, certain perquisites have been valued in accordance with the Income Tax Rules, 1962.

The Computation of net profit under section 349 of the Companies Act, 1956 has not been given as no commission is payable to the Managing Director and/or Whole Time Director(s) under Section 309 of the Companies Act, 1956 ("the Act") and the remuneration has been paid to the Managing Director in accordance with the provisions of clause (C) of section II of part II of schedule XIII to the act.

B.7 Stores & Spares consumed includes replacement of Spare parts of Plant & Machinery, as per consistent policy followed by the company.

B.8 Statutory dues include Rs.879.36 Lacs (Previous Year Rs. 697.40 Lacs) towards liability made under Entry Tax of Goods Act, 2007 (UP) which is disputed.


Mar 31, 2013

BACKGROUND

Aditya Birla Chemicals Limited (''the Company'') is subsidiary company of Hindalco Limited - a leading aluminium company of India having global operations. The company is engaged in the business of chloro chemicals having plant and registered office at Ghanshyam Kunj'' Garhwa Road'' Rehla'' Dist: Palamau'' Jharkhand.

In the financial year 2011-12'' the company acquired Chloro Chemical Division and salt works of Kanoria Chemicals & Industires Lmited situated respectively at Renukoot (Uttar Pradesh) and Jhangi (Gujarat) (articulated as ''Renukoot Chemical Division'' or ''RCD'') with effect from May 24'' 2011 (''the effecive date''). The assets'' liabilities'' revenue'' expenses and other details in the financial statements for the previous year include numbers/details of RCD from the effective date. The corresponding figures and details of previous year'' are therefore'' not fully comparable with those for the year under report which include items of RCD for full year.

A.1 Power (electricity) purchase as well as sale (supply) to UPPCL & JSEB has been accounted for in the accounts as sale/ purchase of power.

A.2 In the opinion of the management'' Current Assets'' Loan and Advances would realize'' at least'' at the value stated in the Balance Sheet'' in the normal course of business.

** In the determination of Manager''s remuneration'' certain perquisites have been valued in accordance with the Income Tax Rules'' 1962.

The Computation of net profit under section 349 of the Companies Act'' 1956 has not been given as no commission is payable to the Managing Director and/or Whole Time Director(s) under Section 309 of the Companies Act'' 1956 ("the Act") and the remuneration has been paid to the Managing Director in accordance with the provisions of clause (C) of section II of part II of schedule XIII to the act.

A.3 Stores & Spares consumed includes replacement of Spare parts of Plant & Machinery'' as per consistent policy followed by the company.

A.4 Statutory dues include provision of Rs. 697.40. Lacs (Previous Year Rs. 510.26 Lacs) is made for liability towards Entry Tax of Goods Act'' 2007 (UP) which is disputed

A.5 Figures of previous year have been regrouped/ rearranged wherever necessary


Mar 31, 2012

A) BACKGROUND

Aditya Birla Chemicals Limited ('the Company') is subsidiary company of Hindalco Limited - a leading aluminum company of India having global operations. The company is engaged in the business of chloro chemicals "having plant and registered office at Ghanshyam Kunj, Garhwa Road, Rehla, Dist: Palamau, Jharkhand

During the year under report, the company acquired chloro chemical division and salt works of Kanoria Chemicals & Industries Limited situated respectively at Renukoot (Uttar Pradesh) and Jhangi (Gujarat) (articulated as 'Renukoot Chemical Division' or 'RCD') with effect from May 24, 2011 ('the effective date'). The assets, liabilities, revenue, expenses and other details in the financial statements for the year under report include numbers/details of RCD from the effective date. The corresponding figures and details of previous year, are therefore, not comparable with those for the year under report.

12,004,987 Equity Shares (Previous year 12,004,987) of the Company are held by Hindalco Industries Limited, the holding Company 775,000 shares (Previous year 775,000) are held by Renuka Investment & Finance Limited (Subsidiary of Hindalco Industries Limited).

The Company has only one class of share referred as equity share having a par value of Rs 10/-. Each holder of equity share is entitled to same right in all respect.

*Grant received from Jharkhand State Government of Rs. 525.00 lacs (Previous Year Rs.175.00 lacs) in the nature of Capital subsidy not related to any specific assets credited to capital reserve during the year.

(i) Security and Terms of Term loan from Banks amounting to Rs 67,968.75 Lacs (Previous Year Rs Nil)

(a) Nature of Securities

Secured by way of first charge to the Bank on all the movable plant and machinery both present and future being movable properties, now stored at or being stored installed at Rehla, Jharkhand and Renukoot , Uttar Pradesh and second charge on all the stock in trade both present and future and all the book debts, outstanding money receivables, claims and bills due / to be due to the company.

(b) Term of Repayment

Repayable 32 (Previous year Nil) quarterly installment of Rs 2,343.75 lacs each from 31st August, 2012 along with interest of 11.5% p.a. (also refer Note B.8.(i))

(ii) Security & Terms of Term loan from Banks amounting to Rs 260 Lacs (Previous Year Rs 1,380 Lacs)

(a) Nature of Securities

Term loan way of first exclusive charge to the Bank all the stock in trade both present and future consisting of raw materials, finished goods, goods in process of manufacturing and all the book debts, outstanding moneys receivable, claims and bills etc.& all the movable plant and machinery both present and future stored at or at present installed at Garhwa Road , Rehla, Distt: Palamau.

(b) Term of Repayment

Repayable 4 (Previous year 8) quarterly installment of Rs 280 lacs each from 1st April and ended with last installment of Rs 260 lacs on 01.04.2013 alongwith interest of 8% p.a.(also refer Note B.8.(i))

(i) Rs 115.75 lacs Secured against pledge of Fixed Deposits of the Company.

(ii) Rs 2411.79 lacs against exclusive first charge by way of hypothecation on all stock in trade both present & future consisting of raw materials, finished goods, goods in process and all book debts, outstanding money receivables, claims & bills due / to be due to the Company.

Trade Receivables include dues from Holding Company, Hindalco Industries Limited, Rs 1,507.92 lacs (Previous year Rs 132.66 lacs) maximum due at any time during the year Rs 1,966.12 lacs (Previous year Rs 1,011.22 Lacs)

*With a view to optimise the benefits of specialization and minimize cost to the Company, its share of expenses towards business operations of Rs Nil (Previous year Rs 15.73 lacs) contributed to Aditya Birla Nuvo Limited and Rs 44.64 Lacs (Previous year Rs 112.60 lacs) contributed to Grasim Industries Limited the same has been accounted under 'Business Head Office expenses in Notes B.30

Out of the Assets acquired of RCD (Refer note under title Background), the Company has identified Lindane BHC plants (which have been shut down for past few years) and Mercury Plant which are classified as 'assets held for disposal'. The resultant loss of Rs. 2273.98 Lacs has been booked and classified as exceptional item during the year.

B.1 Segment information

The Company is primarily engaged in Chlor Alkali Chemicals. Since the inherent nature of entire business activities is governed by the same act of risk and returns, there is no reportable segment. Company does not have reportable secondary segment.

B.2 CONTINGENT LIABILITIES & PROVISIONS

A) Contingent Liabilities not provided for in respect of the following:

a) Outstanding Bank Guarantees (Against which Rs.406 lacs has been 1,717.01 769.01 deposited as FDR with Banks, Previous year Rs. 465 lacs)

b) Claims/Disputed liabilities against the Company not acknowledged as debt

i) a) Annual Minimum Guarantee Electricity charges & delayed payment 6,511.25 6,459.65 surcharge thereon against which Rs.100 lacs (previous year Rs.100 lacs) has been deposited (The order of Consumer Grievance Redressal Forum relating to Annual Minimum Guarantee case was challenged by JSEB before Ranchi High Court. On hearing, the Ranchi High Court directed JSEB to raise the bill in accordance with the Forum's order subject to final adjudication of pending writ.

Complying with Forum's order, JSEB has raised bill which involved a refund of Rs 17.80 Lacs to the Company. Since the writ is pending before the Court, contingent liability of Rs.6511.25 lacs has been disclosed in the accounts).

b ) Delayed payment of surcharge on the amount of fuel surcharge arrears 482.12 480.63

ii) Amount claimed by the Kandla Port Trust not acknowledge by company, 382.60 Nil matter is pending before the Court.

iii) Income Tax

a) AY 1998-99, 2000-01, ITAT (Appeals) effect Pending with A.O. 13.15 13.15 (Against which Rs 9.32 lacs paid)

b) AY 2007-08 for which the Company has filed appeal with CIT (Appeals) 197.02 197.02 and Petition u/s 154 has been filed for considering correct amount of TDS & Advance Tax

c) AY 2008-09 for which the Company has filed appeal with CIT (Appeals) 357.32 357.32 and Petition u/s 154 has been filed for considering correct amount of TDS

d) Various other cases for which the Company has filed appeal with CIT 8.44 2.27 (Appeals)

iv) Liquidated damage and interest claimed by BSIDC not acknowledged by 143.18 129.16 the Company

v) Compensation payable against various labour cases pending with various 156.00 156.00 Courts

vi) Land revenue and Maintenance charges payable to Ranchi Industrial Area 10.50 10.50 Development Authority (RIADA), Ranchi Sales Tax

vii) AY 2003-04 for which the Company has filed writ no.1811/2007 before 10.86 Nil Allahabad High Court against Dy Commissioner(A), Sonebhadra Order

(due to non submission of certificate of Trade tax check post at Nepal Border Rs.1.63 lac was deposited)

viii) Excise

a) For the Period (2000-01 to 2006-07): Demand of Excise duty on clearance 60.42 Nil of SBP to M/s UNICEF without payment of Excise duty under Notification

No. 108/95 C.E. Case is pending before CESTAT, New Delhi

b) For the Period (June'03- March' 07): Case against demand raised for 533.46 Nil excise duty is pending before CESTAT, New Delhi

c) Various other cases pending before excise department, high Court & 14.76 Nil CESTAT

ix) Service tax

a) Demand of Service Tax for the period April' 05- June' 06. Cases were 141.21 Nil pending before CESTAT, New Delhi.

b) Demand of penalty on service tax on banking and other financial 25.11 Nil services availed by company for issue of FCCB. Cases were pending

before CESTAT, New Delhi.

There are no amount included in the fair value of Plan Assets for:

- Company's own financial instrument

- Property occupied by or other assets used by the company

Expected rate of return on assets is based on the average long term rate of return (assumed rate on return) expected on investments of the funds during the estimated term of the obligations.

There are no amount included in the fair value of Plan Assets for:

- Company's own financial instrument

- Property occupied by or other assets used by the company

Expected rate of return on assets is based on the average long term rate of return expected on investments of the funds during the estimated term of the obligations.

The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors.

In respect of Defined contribution schemes-

The company contributes 12% of salary for all eligible employees towards Provident Fund managed by Approved Trust. The company also contributes a 15% of salary for eligible employees as per scheme towards Superannuation Funds managed by Approved Trusts.

The Company has recognized the following amount as an expense and included in the Notes B.26 "Contribution to Provident Fund and other Funds:

* (Mr. S.S.Gupta Rs.75.57 lac and Mr. V.R.Agrawal 21.05 lac)

**Paid to Renuka Investments & Finance Limited

S Amounts in brackets represent corresponding amount of previous year.

There have been no write off / write back in respect of the related parties during the year. Related party relationship have been identified by the management and relied upon by the auditors.

B.3 Power (electricity) purchase as well as sale (supply) to UPPCL & JSEB has been accounted for in the accounts as sale/ purchase of power.

B.4 In the opinion of the management, Current Assets, Loan and Advances would realize, at least, at the value stated in the Balance Sheet, in the normal course of business.

* Expenses towards gratuity and leave encashment provisions are determined actuarially on an overall company basis at the end of each year and accordingly have not been considered in the above information.

** In the determination of Manager's remuneration, certain perquisites have been valued in accordance with the Income Tax Rules, 1962.

The Computation of net profit under section 349 of the Companies Act, 1956 has not been given as no commission is payable to the Managing Director and/or Whole Time Director(s) under Section 309 of the Companies Act, 1956 ("the Act") and the remuneration has been paid to the Managing Director in accordance with the provisions of clause (C) of section II of part II of Schedule XIII to the Act.

B.5 Stores & Spares consumed includes replacement of Spare parts of Plant & Machinery, as per consistent policy followed by the company.

B.6 Statutory dues include provision of Rs 510.26 lacs is made for liability towards Entry Tax of Goods Act, 2007 (U.P) which is disputed.

B.7 Figures of previous year have been regrouped/ rearranged wherever necessary

 
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