Mar 31, 2013
THE COMPANY AND NATURE OF ITS OPERATIONS :
Deepak Fertilisers And Petrochemicals Corporation Limited having Corporate Office in Pune, Maharashtra, India, carries on business in fertilisers, agri services, bulk and speciality chemicals, mining chemicals and value added real estate.
Note-1 CONTINGENT LIABILITIES (Rs. in Lacs)
Liabilities classified and considered contingent due to contested claims and legal disputes
As at As at 31st March, 2013 31st March, 2012
Claim by suppliers 3,308.37 2,610.52
Income tax demands 665.08 2,131.50
Excise demands 2,212.28 2,295.06
Sales tax /VAT demands 2,585.14 1,747.58
Total 8,770.87 8,784.66
Note-2 The Company has imported capital goods under the Export Promotion Capital Goods (EPCG) Scheme of the Government of India, at concessional rates of duty on an understanding to fulfill quantified exports against which future obligation aggregates to Rs. 941.84 Lacs (Rs. Nil) over a period of eight years from the date of license.
Contingent Assets are not recognised or disclosed in the financials statements.
Note-3 Gas Authority of India Limited (GAIL) supplier to the Company of natural gas, one of the main raw materials, has effected the supplies at provisional rate as indicated in the invoices. However, according to the Company any revision in Natural Gas price will be only prospective as per the existing convention/practice followed by Government of India.
Note-4A The long term settlement with the Employees Union at Taloja Plant expired on 30th September, 2011. Pending finalisation thereof the Company has made estimated provision for liabilities on this account based on the past experience.
Note-4B The Company has made significant capital investments in Ishanya Mall. The same Mall has been incurring losses due to larger break-even period associated with the operations of the Mall which is extended due to continuing adverse economic environment since the launch of the Mall in 2007-08. The management of the Company is hopeful of turnaround in performance of the Mall in the coming years due to expected improvements in the economic environment, opening up of FDI Investments in Multi-Brand Retail and strategic initiative being planned in this regard. The Company has, however, in accordance with the requirements of Accounting Standard - 28 "Impairment of Assets", carried out impairment review of carrying value of the assets of the Mall, which has not indicated any impairment in its value.
Note-5 The Company has taken residential accommodation, office premises and warehouses on lease / rental basis.
Non-cancellable lease period varies from 3 months to 6 months. These lease are cancellable in nature. Lease rental recognised in the Statement of Profit and Loss is Rs. 1,113.58 Lacs.
Note-6 Clause 32 of the Listing Agreement disclosures
Loans and advances in the nature of loans to subsidiaries / entity in which Deepak Fertilisers And Pertrochemicals Corporation Limited has significant influence
Note-7 Previous year''s figures have been re-grouped wherever necessary to conform to current year''s grouping. Note-49 Previous year''s figures are given in brackets.
Mar 31, 2012
A. Terms/Rights attached with Equity Shares
The Company has only one class of Equity Shares having a par value of Rs 10/- per share. Each holder of Equity Shares is entitled to one vote per share.
The Company declares and pays dividend in Indian Rupees except in the case of overseas shareholders where dividend is paid in respective foreign currencies considering foreign exchange rate applied at the date of remittance. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting.
During the year ended 31st March, 2012 the amount of dividend per share recognized as distribution to equity shareholders is Rs 5.50 (31st March 2011, Rs 5.00).
In the event of liquidation of the Company the holders of Equity Share will be entitled to receive remaining assets of the Company, after distribution of all preferential distribution in proportion to the number of Equity Shares held by the shareholders.
(*) Represents relief/incentive granted by Government of India by way of refund of 90% of Customs Duty paid on NP Projects Imports. This amount is being adjusted against depreciation over the remaining useful life of the Fixed Assets of NP Project.
Note: The Company has entered into option contract to cover its risk towards foreign exchange exposure on External Commercial Borrowings. The marked to market loss of Rs Nil (Previous Year: Rs 221.80 Lacs) has been provided in the accounts.
Note: (i) Cash Credit facilities sanctioned by Banks including Working Capital Demand Loan and Buyer's Credit are secured by a first charge by way of hypothecation of stocks of raw materials, finished goods, stock-in-process, consumable stores and book debts.
(ii) Cash Credit is repayable on demand and carries variable interest (average for the year 13.25%).
(iii) Buyer's credits are generally due within 180 days and carry variable interest (average for the year 1.81%).
The aggregate amount of unclaimed dividend of previous years' as on 31st March, 2012 was Rs 372.73 Lacs (Previous Year: Rs327.18 Lacs). In accordance with the provisions of Section 205A (5) of the Companies Act, 1956, the dividend unclaimed for a period of seven years from the date of transfer to the Unpaid Dividend Account shall be credited to the Investor Protection and Education Fund.
(a) Freehold land includes:
- Rs 3,600 Lacs (Previous Year Rs 3,600 Lacs) represented by 24,000 Equity Shares of Rs 10/- each in a company, which is the legal owner of the land in respect of which the Company has acquired exclusive rights of development.
- Rs 1,046.42 Lacs (Previous Year: Rs 815 Lacs) represented by 1,38,888 Equity Shares (Previous Year: 8,024) of Rs 10/- each in the said company, which is the legal owner of the land on which the Company has been granted the rights of use and occupation by virtue of the shares so held.
(b) Buildings include a sum of Rs 11,572.87 Lacs (Previous Year: Rs 3,308.87 Lacs) represented by 38,236 (Previous Year: 17,628) Equity Shares of Rs 10/- each in a company which is the legal owner of the buildings in respect of which the Company has an exclusive right of use and occupation by virtue of the shares so held.
(c) Gross Block of Plant and Machinery includes:
- Rs.421.63 Lacs (Previous Year: Rs 421.63 Lacs) being the cost of Fixed Assets, ownership of which does not vest with the Company, being amortized over 60 months.
- Rs.6,212.61 Lacs (Previous Year: Rs 4,564.61 Lacs) towards foreign exchange fluctuation on Long Term Loans.
(d) During the year, the Company has acquired additional equity shares of an associate company viz: Yerrowda Investments Ltd. (YIL) by virtue of which The said company has become the Company's subsidiary under the Companies Act, 1956. However, since these shares represent indefeasible and perpetual occupancy rights in the immovable properties owned by the said company, the cost of acquisition thereof is treated as part of fixed assets in consonance with the past practice.
(e) Impairment of Assets: The Company has examined carrying cost of its identified Cash Generating Units (CGU) by comparing present value of estimated future cash flows from such CGUs, in terms of Accounting Standard-28 on Impairment of Assets, according to which no provision for impairment is required as assets of none of CGUs are impaired during the Financial Year ended 31st March, 2012.
1. Contingent liabilities (Rs.in Lacs)
Liabilities classified and considered contingent due to contested claims and legal 31st March 2012 31 st March 2011
Claim by Supplier 2,610.52 5,963.81
Income Tax demands 2,131.50 1,152.77
Excise demands 2,295.06 1,574.16
Sales Tax/VAT demands 1,747.58 1,657.20
TOTAL 8,784.66 10,347.94
2. Gas Authority of India Limited (GAIL) supplier to the Company of natural gas, one of the main raw materials, has affected the supplies at provisional rate as indicated in the invoices. According to the Company any revision in Natural Gas price will be only prospective as per the existing convention/practice followed by Government of India.
3. Details of Micro and Small Enterprises as defined under MSMED Act, 2006
To comply with the requirement of The Micro, Small And Medium Enterprises Development Act, 2006, the Company requested its suppliers to confirm it whether they are covered as Micro, Small or Medium enterprise as is defined in the said Act. Based on the communications received from such suppliers confirming their coverage as such enterprise, the Company has recognized them for the necessary treatment as provided under the Act, from the date of receipt of such confirmations and there is no default in payment to such enterprise as specified in the said Act. However, the amounts outstanding as well as interest applicable are insignificant and hence not separately disclosed.
4. Previous year's figures have been re-grouped wherever necessary to conform to current year's grouping.
5. The Financial Statements for the year ended 31st March, 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Financial Statements for the year ended 31st March, 2012 has been prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification. The adoption of Revised Schedule VI does not impact recognition and measurement principles followed for preparation of Financial Statements.
6. Inter-segment Sales Pricing: Inter-segment revenue has been recognized as estimated under Excise Regulations.
7. Secondary Segment Information: There are no reportable geographical segments since the Company caters mainly to needs of Indian Markets.
Mar 31, 2011
1. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 5,495.09 Lacs (Previous Year: Rs. 10,092.26 Lacs).
2. The following liabilities are classified and considered contingent due to contested claims and legal disputes:
. Claims by Suppliers Rs. 5,963.81 Lacs (Previous Year : Rs. 5,825.04 Lacs). Taxes & Duties
. Income Tax demands Rs. 1,152.77 Lacs (Previous Year : Rs. 1,152.77 Lacs).
. Excise demands : Rs. 1,574.16 Lacs (Previous Year: Rs. 920.13 Lacs).
. Sales Tax / VAT demands Rs. 1,657.20 Lacs (Previous Year : Rs. 704.59 Lacs).
3. Gas Authority of India Limited (GAIL) supplier to the Company of natural gas, one of the main raw materials, has effected the supplies at provisional rate as indicated in the invoices. However, according to the Company any revision in Natural Gas price will be only prospective as per the existing convention/practice followed by Government of India.
4. Exceptional items represent:
. Amortisation of VRS Compensation paid Rs. Nil (Previous Year: Rs. 54.98 Lacs).
. Gains arising on transfer of rights in unusable surplus land amounting Rs. Nil (Previous Year: Rs. 3,551.80 Lacs).
. Cost of assets discarded or in the process of being discarded under restructuring of the real estate business Rs. 338.09 Lacs (Previous Year: Rs. 992.46 Lacs).
5. The Company has sold part of the Fertiliser Bonds (issued in lieu of fertiliser subsidy) pursuant to the decision of Government of India to buy back outstanding bonds in two tranches in 2010-11 and 2011-12 at a price to be decided later and compensate the Company atleast 50% of the loss incurred on such sale. Accordingly, the Company has accounted for the loss of Rs. 199.52 Lacs (net of 50% compensation receivable from Government of India) and the same has been shown under operating and other expenses. Consequently the provision towards Mark to Market loss made earlier on such bonds amounting to Rs. 525.18 Lacs has been reversed and shown under Operating and other expenses.
6. In respect of long term investment in listed securities, the diminution in value is estimated on the basis of appraisal made by Portfolio Managers.
7. The Company has entered into option contract to cover its risk towards foreign exchange exposure on External Commercial Borrowing taken during the year. The marked to market loss of Rs. Nil (Previous Year: Rs. 221.80 Lacs) has been provided in the accounts.
8. IMPAIRMENT OF ASSETS: The Company has examined carrying cost of its identified Cash Generating Units (CGU) by comparing present value of estimated future cash flows from such CGUs, in terms of Accounting Standard-28 on Impairment of Assets, according to which no provision for impairment is required as assets of none of CGUs are impaired during the financial year ended 31st March, 2011.
9. (i) Sundry Debtors include due from companies in which some of the Directors are Directors/Members: Rs. 691.03 (payable) on the basis of provisional discount (Previous Year receivable: Rs. 319.35 Lacs) maximum amount due during the year: Rs. 279.34 Lacs (Previous Year: Rs. 954.80 Lacs).
(ii) Loans and Advances include:
. Security deposit of Rs. 200 Lacs (Previous Year: Rs. 200 Lacs) placed with Vice-Chairman & Managing Director towards lease of residential premises.
. Due from officers Rs. 0.30 Lacs (Previous Year : Rs. 4.42 Lacs) Maximum amount due during the year Rs. 4.42 Lacs (Previous Year: Rs. 8.54 Lacs).
10. To comply with the requirement of The Micro, Small And Medium Enterprises Development Act, 2006, the Company requested its suppliers to confirm it whether they are covered as Micro, Small or Medium enterprise as is defined in the said Act. Based on the communications received from such suppliers confirming their coverage as such enterprise, the Company has recognised them for the necessary treatment as provided under the Act, from the date of receipt of such confirmations and there is no default in payment to such enterprise as specified in the said Act. However, the amounts outstanding as well as interest applicable are insignificant and hence not separately disclosed.
11. The aggregate amount of unclaimed dividend of previous years as on 31st March, 2011 was Rs. 327.18 Lacs (Previous Year: Rs. 292.59 Lacs). In accordance with the provisions of Section 205A (5) of the Companies Act, 1956, the dividend unclaimed for a period of seven years from the date of transfer to the unpaid dividend account shall be credited to the Investor Education and Protection Fund.
12. Segment Reporting - Refer Annexure - A.
13. Related Party Disclosures - Refer Annexure - B.
14. Statutory dues not deposited on account of dispute - Refer Annexure - C.
15. Previous years figures have been re-grouped wherever necessary to conform to current years grouping.
Mar 31, 2010
1 Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs.l2,578,721/- (Previous year Rs.21,873,473/-)
2 Contingent liability in respect of:
i. Disputed demands of excise authorities Rs.6,185,062/- (Previous year Rs.6,964,013/-)
Pending before the Commissioner of Central Excise (Appeals) Rs. 1,939,003/-, (Previous Year Rs.l,939,003/-)
Pending before High Court of Bombay, at Goa Rs. 2,882,439/-, (Previous Year Rs.2,882,439/-)
Pending before CESTAT Rs. 1,066,076/-, (Previous Year Rs. 1,566,335/-)
Pending filing appeal with CESTAT Rs.297,544/- (Previous year Rs.576,236/-).
The Company is confident of defending the above demands and expects no liability on this count.
ii. Claims against the Company not acknowledged as debts Rs.3,410,000/- (Previous year Rs. 9,943,810/-)
Claim raised by Delhi Transport Corporation Rs. Nil (Previous year Rs. 6,533,810/-) pending before the Delhi High Court. During the year, the matter was decided against the company and the liability has since been settled.
Claim raised by a customer Rs.3,235,000 /- (Previous Year Rs. 3,235,000/-) towards disputed penal charges for delay in meeting delivery deadlines.
Penalty proposed to be levied by the Securities and Exchange Board of India Rs. 175,000/- (Previous Year Rs.l75,000/-) for alleged violation of regulation 6 and 8 of SEBI (Substantial acquisition of shares and takeovers) Regulations 1997 (pending before the Adjudicating Officer) notice dated 21.07.2004.
The Company is confident of defending the above demands and expects no liability on these counts.
iii. Appeal by the Income Tax Dept against the order of Income Tax Appellate Tribunal (ITAT)- amount shown in the appeal Rs.37,329,969/- (Previous year Rs. 37,329,969/-)
The Income Tax Department has gone in appeal against the Order of the ITAT in respect of depreciation not claimed by the Company in
Assessment Year 1990-91, the income tax liability on which is stated to be computed by the department at Rs. 3,732,996 which, due to a typographical error, has been shown as Rs. 37,329,969/- in the appeal.
The Company is confident of defending the above demand and expects no liability on this count.
iv. Disputed demand of Rs. 1,000,000/- (Previous year Rs. 1,000,000/-) as and by way of damages, for alleged breach of agreement to sell the Bungalow situated at Panaii.Goa.
Appeal pending before High Court of Bombay at Goa
v. Bills discounted with a bank Rs.729,614,768/- (Previous year Rs.548,413,885/-)
The above remuneration excludes contribution to gratuity and leave encashment as the incremental liability has been accounted for the company as a whole.
The above remuneration is in excess of the limits specified in Schedule XIII of the Companies Act, 1956 and hence is subject to approval of Central Government under Section 198/309 of the Companies Act, 1956.The company is in the process of making the application to the Central Government.
2 Computation of net profits as per Section 349 read with Section 309(5} and Section 198 of the Companies Act, 1956.
3 Operating Lrase Rentals;
The company has taken certain sheds and residential premises on cancelable operating lease basis. Amount of lease rentals charged to Profit and loss account in respect of such cancelable operating leases are Rs.2,024,483/- (Previous Year Rs. 1,927,605/-).
(a) Segment information for primary segment reporting (by business segment)
The Company has two business segments:-
i) Pressing Division - Manufacturing of pressed parts, components, sub-assemblies and assemblies for various range of automobiles.
ii) Bus body Building Division - Manufacturing of Bus bodies and component parts for Bus bodies.
(b) Inter-segment Transfer Pricing
Inter-segment transfers are made at transfer price.
(c) Common Expenses
Common Expenses are allocated to different segments on reasonable basis as considered appropriate.
4 The Company has exported bus bodfes and component parts thereof of the sales value of Rs. 506,997,266/- (Previous year Rs. 1,826,448,746/-) through a merchant exporter.
5 The excise duty related to the difference between the opening and closing stock of finished goods is disclosed separately in the "Schedule 12 - Other Income" as "Excise Duty".
6 Warranty Provision
Warranty pertains to replacement of defective parts and expenses incurred in relation to rectification of workmanship defects.
7 In the financial year ending 31st March 2007,the company issued 1,481,913 equity shares of Rs. 10 each on Rights basis at a premium of Rs.465/- per share aggregating to Rs. 703,908,675/- The objects of the issue were to substantially increase capacity, upgrade and modernise the Bus Body building facilities and shift the existing presses from the main Sheet Metal Pressing unit (at Honda,Goa) to a location in or around Pune.
The Rights issue closed for subscription on 20th Apn1,2007 and shares were allotted on 19th May,2007. The management had then decided to shift the pressing unit to Dharwar (Karnataka) instead of Pune.
Further, at the AGM held on 8th August, 2009, the members have approved utilisation of the unspent amount as on the date of AGM for other purposes such as funding incremental working capital needs, new business opportunities, in-organic growth and to invest in group companies.
The statement of proceeds from the Rights Issue and utilisation thereof is as under:
8 The company had opted for sales tax deferral scheme under the 1988 Package Scheme of incentive of Bombay Sales Tax Act, 1959 under certificate of entitlement No 412302/S/R-31B/1069 dated 4/2/2000. The total sales tax collected and deferred under the said scheme aggregated to Rs 48,428,000/-. The repayment under the scheme was due from 2010 onwards. During the previous year the Company settled the full liability by paying an amount of Rs.20,830,269/- being the NPV (Net Present Value) calculated in accordance with the provisions of the said act. The differential amount of Rs. 27,597,731/- had been accounted as income and disclosed as an "exceptional item" in the Profit and loss account.
9 Hitherto, the company was valuing the inventory of Components, Stores and Spares on FIFO Basis. During the year, the company has changed the method to weighted average. The impact of the change is not material.
10 Figures of the previous year have been regrouped wherever necessary to correspond with those of the current year.