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Notes to Accounts of Dhanuka Agritech Ltd.

Mar 31, 2015

1. RELATED PARTY DISCLOSURE - ACCOUNTING STANDARD (AS-18)

a) Key Managerial Personnel and Relatives Relatives of Mr. Arun Kumar Dhanuka

Mr. Ram Gopal Agarwal, Chairman Mrs. Pushpa Dhanuka, Mother

Mr. Mahendra Kumar Dhanuka, Managing Director Mrs. Mamta Dhanuka, Wife

Mr. Arun Kumar Dhanuka, Director Mr. Arjun Dhanuka, Son

Mr. Rahul Dhanuka, Director Mrs. Aastha Dhanuka, Son's Wife

Mr. Mridul Dhanuka, Director Mrs. Megha Chripal, Daughter

pa Aga Mr. Manish Dhanuka, Brother

Mrs. Urmila Dhanuka, Wife Mrs Seema Dha Brother's Wife

Mr. Rahul Dhanuka, Son

Mrs. Reema Khowala, Daughter Relatives of Mr. Rahul Dhanuka

Mrs. Rashmi Gupta, Daughter Mrs. Madhuri Dhanuka, Wife

Mr. Mahendra Kumar Dhanuka, Brother Ms. Shailja Dhanuka, Daughter

Mr. Satya Narain Agarwal, Brother Master Shashwat Dhanuka, Son

Mrs. Lalita Dhanuk, Brother's Wife Relatives of Mr. Mridul Dhanuka

Relatives of Mr. Mahendra Kumar Dhanuka Mrs. Megha Dhanuka, Wife

Mrs. Uma Dhanuka, Wife Ms. Sahana Dhanuka, Daughter

Mr. Mridul Dhanuka, Son Ms. Tushti Dhanuka, Daughter Mr. Harsh Dhanuka, Son Mrs. Akangsha Dhanuka, Son's Wife

Companies, Firms & Trusts in which Key Management Personnel & their Relatives have Significant Influence:

Hindon Mercantile Limited RG Agarwal Trust

Exclusive Leasing and Finance Limited MK Dhanuka Trust

Dhanuka Laboratories Limited A.K. Dhanuka Trust

Sikkim Agro Industries Limited Manish Dhanuka Trust

Golden Overseas Pvt. Limited Mridul Trust

M.D. Buildtech Pvt. Limited Harsh Trust

H.D. Realtors Pvt. Limited Sampad Developers

Dhanuka Infotech Pvt. Limited IKO Overseas

Dhanuka Pvt. Limited Synmedic Laboratories

Otsuka Chemical (India) Pvt. Limited Synmedic Laboratories Pvt. Limited

Dhanuka Agri-Solutions Pvt. Limited (Wholly Owned Subsidiary) Ram Gopal Agarwal (HUF)

Balaji Builders Satya Narain Agarwal (HUF)

Shree Ram Enterprises Mahendra Kumar Dhanuka (HUF)

Passion Alliance Arun Kumar Dhanuka (HUF)

Dhanuka Marketing Company Manish Dhanuka (HUF)

Chiranji Lal Dhanuka Charitable Trust Rahul Dhanuka (HUF)

Durga Prasad Dhanuka Charitable Trust Mridul Dhanuka (HUF)

Triveni Trust Harsh Dhanuka (HUF)

Pushpa Dhanuka Trust

Future lease rents and escalation in rent have been determined on the basis of agreed terms. At the expiry of the initial lease term, generally the Company has an option to extend the lease for a further pre determined period.

2. CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES:

During the year, the Company has incurred expenditure in accordance with Section 135 of the Companies Act, 2013 on the CSR activities as specified in Schedule VII to the Companies Act, 2013. The details are as under:

(a) Gross amount required to be spent by the Company during the year - Rs.176.86 lakhs

(b) Amount spent during the year on :

(c) Short fall in amount spent on CSR activities (a-b) as referred above is Rs.11.99 lakhs

3. MAT CREDIT ENTITLEMENT:

MAT credit entitlement has not been accounted for in the books. The same shall be adjusted in the future tax liability in accordance with the provisions of the Income Tax Act, 1961.

4. GOVERNMENT GRANT/ INCENTIVE:

During the year the company has availed Excise Duty refund in respect of Udhampur Unit which has been reduced from Excise Duty. Considering the purpose for which subsidy is granted, the Company is of the view that excise duty refund being in the nature of capital receipt and hence is not regarded as Income in computing total income under normal provision of the Income Tax Act as well as under book profit u/s 115JB of the Income Tax Act.

5. SEGMENT INFORMATION:

The Company is engaged in the business of manufacturing and trading of various types of Pesticides. The entire operations are governed by same set of risk and returns. Hence, the same has been considered as representing a single primary segment. The said treatment is in accordance with the guiding principles enunciated in the Accounting Standard - 17 on Segment Reporting.

6. DUES TO MICRO, SMALL AND MEDIUM ENTERPRISES:

Amount due to Micro, Small and Medium Enterprises outstanding as at 31.03.2015 was Rs.851.27 lakhs. There is no overdue amount outstanding and interest due thereon as at 31.03.2015. The names of such Small and Medium Enterprises are:

7. SCHEME OF AMALGAMATION

A Scheme of Amalgamation was framed under the provisions of sections 391 and 394 of the Companies Act, 1956, and other applicable provisions, if any, for amalgamation of M/s A.M. Bros. Fintrade Pvt Ltd and M/s Dhanuka Finvest Pvt Ltd (the Transferor Companies No. 1 and 2 respectively) with M/s Dhanuka Agritech Ltd (the Transferee Company).

I. Salient features of the Scheme of Amalgamation are as follows:

a. All assets and liabilities including Income Tax and all other statutory liabilities of the Transferor Companies No. 1 and 2 will be transferred to and vested in the Transferee Company.

b. All the employees of the Transferor Companies No. 1 and 2 in service, on the Effective Date, shall become the employees of the Transferee Company on and from such date without any break or interruption in service and upon terms and conditions not less favorable than those subsisting in the concerned Transferor Company on the said date.

c. The Appointed Date for Amalgamation will be 1st January, 2015.

d. Shares to be issued for the Amalgamation:

i. The Transferee Company will issue 55,33,350 new equity shares of face value of Rs.2/- each fully paid to the equity share holders of Transferor Company No.1 in the proportion of the number of equity shares held by the shareholders of Transferor Company No.1. The fractional entitlement, if any, to which shareholders of the Transferor Company No.1 would become entitled to upon issue of new equity shares shall be rounded off by the Transferee company to the nearest integer. However, in no event, the number of new equity shares to be issued by the Transferee Company to the shareholders of the Transferor Company No.1 shall exceed the total number of equity shares held by the Transferor Company No.1 in the Transferee Company.

ii. The Transferee Company will issue 3,09,58,890 new equity shares of face value of Rs.2/- each fully paid to the equity share holders of Transferor Company No.2 in the proportion of the number of equity shares held by the shareholders of Transferor Company

No.2. The fractional entitlement, if any, to which shareholders of the Transferor Company No.2 would become entitled to upon issue of new equity shares shall be rounded off by the Transferee company to the nearest integer. However, in no event, the number of new equity shares to be issued by the Transferee Company to the shareholders of the Transferor Company No.2 shall exceed the total number of equity shares held by the Transferor Company No.2 in the Transferee Company.

The aforesaid Scheme of Amalgamation was approved by the Hon'ble High Court of Delhi vide its order dated 06th November, 2015 (Pronouncement date). The Scheme became effective on 01-12-15, being the date of filing of the Court Orders with the ROC. Since the Scheme is operative from the Appointed Date, 01-01-2015, it has been given effect to in the present audited accounts. Accordingly, the present audited accounts are consisting of financial figures of the Transferee Company as well as financial figures of the Transferor Companies No. 1 and 2.

II. In terms of the Scheme, the Transferee Company will issue 55,33,350 Equity Shares of Rs.2/- each, credited as fully paid up, to the members of the Transferor Company No. 1 and 3,09,58,890 Equity Shares of Rs. 2/- each, credited as fully paid up, to the members of the Transferor Company No. 2, in exchange of 100% share capital of these Companies after cancellation of cross holding, if any.

The aforesaid Shares to be issued by the Transferee Company have been disclosed under the head "Shares to be issued pursuant to the Scheme of Amalgamation" in the Balance Sheet.

The allotment of aforesaid shares to the respective shareholders of the Transferor Companies has been approved in the meeting of Board of Directors held on 02nd December, 2015.

III. Amalgamation of Transferor Companies with the Transferee Company has been accounted for under the Purchase Method as per Accounting Standard-14 (AS-14) as prescribed under the Companies (Accounting Standards) Rules, 2006. Accordingly, all the assets and liabilities of each of the Transferor Companies have been recorded in the Company's books. Inter-company balances, if any, stand cancelled.

IV. The following accounting treatment has been given to some of the issues pertaining to the Scheme:

a. 3,64,92,240 Equity Shares of the Transferee Company held by the Transferor Companies have been extinguished out of the issued and paid- up share capital of the Transferee Company on cancellation of cross holding.

b. An amount of Rs. 95.05 Lakhs being excess of net assets of the transferor companies over the face value of the shares to be issued by the transferee company to the shareholders of the transferor companies and adjusted for cancellation of investment in the equity share capital of the transferee company has been recorded as capital reserve in the transferee company.

8. Trade receivables/ customers are shown net of trade discounts and rate differences.

9. Trade receivables, Trade payables and advances are subject to confirmation and/ or reconciliations except those for which confirmations/ reconciliations already received.

10. Previous year's figures have been regrouped and rearranged wherever considered necessary.

11. All the figures have been shown in lakhs.


Mar 31, 2014

1. Terms/Rights attached to Equity Shares

1. The Company has only one class of Equity Shares having at par value of Rs. 2/- per share. Each Equity share is entitled to one vote.

2. The Company has paid 100% Interim Dividend i.e. Rs. 2.00 per Equity Share having Face value of Rs. 2/- each during the Financial Year 2013-14. The total outgo on this account amounted to Rs. 1,170.41 lacs (including Rs. 170.02 Lacs of Corporate Dividend Tax). The Interim Dividend was paid to the Shareholders whose names appeared in the Register of Members on Record date, i.e. 18-02-2014 and entire amount of the said Dividend was paid within Statutory time lines stipulated by the Companies Act, 1956.

3. During the year ended 31st March, 2014, the amount of final dividend is proposed at 100% i.e. Rs. 2.00 per equity share having face value of Rs. 2/-each

4. In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts.

5. The distribution will be in proportion to the number of Equity Shares held by the shareholders.

2 Unclaimed dividends do not include any amounts, due and outstanding to be credited to Investor Education and Protection fund.

3 Other payables includes statutory dues, employee related costs and provision of discounts and rebates on sale.

Note: During the year company has received Rs. 13,63,599/- on account of Capital Investment Subsidy from Directorate of Industries & Commerce , Govt of Jammu & Kashmir, in respect of Plant & Machinery installed at Udhampur (J&K) unit . The same has been reduced from the carrying cost of Plant & Mechinery of Udhampur unit as per the provision of Accounting Standard (AS-12).

* : Stock of Raw Materials includes value of goods in transit of Rs. 79.44 lacs [Previous Year Rs. 84.48 lacs]

~: Stock of Packing Materials includes value of goods in transit of Rs. 16.59 lacs [Previous Year Rs. 47.13 lacs] #: Stock of Finished Goods includes value of goods in transit of Rs. Nil [Previous year Rs. 296.31 lacs]

* Fixed deposit with Bank having maturity with in one year .

** Fixed deposit with Bank having maturity more than one year been shown under heading Non current Assets (Refer Note no 14)

* Note : Excise duty paid is net of excise duty refund of Udhampur unit (J&K) of Rs. 962.85 lacs (Previous year Rs. 526.68 lacs)


Mar 31, 2013

1. The Company has only one class of Equity Shares having at par value of Rs.2/- per share. Each Equity is entiled to one vote.

2. The Company has paid 75% Interim Dividend i.e. Rs.1.50 per Equity Share having Face value of Rs.2/- each during the Financial Year 2012-13. The total outgo on this account amounted to Rs.872.01 lakhs (including Rs.121.72 Lakhs of Corporate Dividend Tax). The Interim Dividend was paid to the Shareholders whose names appeared in the Register of Members on record date, i.e. 19th February, 2013 and entire amount of the said Dividend was paid within statutory time-lines stipulated by the Companies Act 1956.

3. During the Year ended 31st March, 2013, the amount of Final Dividend is proposed at 65% i.e. Rs. 1.30 per equity shares having face value Rs. 2/- each.

4. In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts.

5. The distribution will be in proportion to the number of Equity Shares held by the shareholders.

5.1 Term loan from HDFC Bank is secured by way of first charge over immovable properties situated at Sanand (Gujarat), and the personal guarantee of the Promoter Directors. The term loans carried interest rate @12.55% during the Year.

6.1 Unclaimed dividends do not include any amounts, due and outstanding to be credited to Investor Education and Protection fund.

6.2 Other payables includes Statutory Dues, Employee related costs and provision of discounts and rebates on sale.


Mar 31, 2012

A. Terms/Rights attached to Equity Shares:

The Company has only one class of Equity Share having par value of Rs.2/- per share. The Equity Shares have pari-passu Voting Rights.

During the year ended 31st March, 2012, the amount of Dividend per Share recognized as distribution to Equity Shareholders is Rs.2.20 per Equity Share (Previous year Rs.2/- per Equity Share).

In the event of liquidation of the Company, the Equity Shareholders will be entitled to receive remaining assets of the Company after distribution of all preferential amounts.

The distribution will be in proportion to the number of Equity Shares held by the Shareholders.

As per the records of the Company, including its Register of Shareholders/Members and other declarations received from Shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of Shares.

1.1 Unclaimed Dividend does not include any amount, which is due and outstanding and has to be credited to Investor Education and Protection Fund.

1.2 Other payables include Statutory dues, Employee related costs and provision of discounts and rebates on sale.


Mar 31, 2011

1) Deferred Revenue Expenditure:

Revenue expenditure where benefit is expected to accrue over a longer period is amortized equally over a period of 5 years.

2 Contingent Liabilities not provided for:

Particulars As on As on 31.03.2011 31.03.2010

(Rs.) (Rs.)

a) Bank Guarantees 3,40,000 Nil

b) Letter of Credit 37,97,69,695 11,42,27,475

c) Sales Tax pending in appeals 2,63,000 2,63,000

d) Income Tax cases pending in appeals 10,64,244 21,29,460

e) Excise Disputes pending 1,04,13,000 1,04,13,000

f) Claims against the Company not acknowledged as debt - 77,663

3. Defined-Benefit Plans (AccountingStandards AS-15):

The Company offers its employees defined-benefit plans in the form of a gratuity scheme. Benefits under the defined- benefit plans are typically based either on years of service and the employees compensation (generally immediately before retirement). The gratuity scheme covers substantially all regular employees. For the gratuity scheme, the Company contributes funds to Gratuity Trust.

4 Related Party Disclosure (Accounting Standard AS-18):

a) Key Managerial Personnel & Relatives :

- Mr. Ram Gopal Agarwal, Director

- Mr. Mahendra Kumar Dhanuka, Managing Director

- Mr. Arun Kumar Dhanuka, Director

- Mr. Rahul Dhanuka, Director

- Mr. Krishnakumar Baijnath Kejariwal, Director (upto 13th Sep,2010)

Relatives of Mr. Ram Gopal Agarwal

- Mr. Satya Narain Agarwal, Brother

- Mrs. Urmila Dhanuka, Wife

- Mrs. Reema Khowala, Daughter

- Mrs. Rashmi Gupta, Daughter

Relatives of Mr. Mahendra Kumar Dhanuka

- Mr. Satya Narain Agarwal, Brother

- Mrs. Uma Dhanuka, Wife

- Mr. Mridul Dhanuka, Son

- Mr. Harsh Dhanuka, Son

Relatives of Mr. Arun Kumar Dhanuka

- Mrs. Pushpa Dhanuka, Mother

- Mr. Manish Dhanuka, Brother

- Mrs. Mamta Dhanuka, Wife

Relatives of Mr. Rahul Dhanuka

- Mrs. Madhuri Dhanuka, Wife

- Ms. Shailja Dhanuka, Daughter

- Mst. Shashwat Dhanuka, Son

Relatives of Mr. Krishnakumar Baiinath Keiariwal

- Mr. Shriyas Kejariwal, Son

- Mrs. Aarti Gupta , Daughter

- Mrs. Manju Kejariwal, wife

Companies/Firm in which key management personnel & their relatives have significant influence

- Cosmo Components Private Limited

- Duke Impex Private Limited

- Exclusive Leasing and Finance Limited

- Golden Overseas Limited

- Growth Advertising and Marketing Private Limited

- Hindon Mercantile Limited

- Liberty Sales Private Limited

- Zoom Leasing and Finance Company Limited

- Sikkim Agro Industries Limited

- Dhanuka Laboratories Limited

- Dhanuka Infotech (P) Ltd.

- M.D.Buildtech (P) Ltd.

- H.D.Realtors (P) Ltd.

- Dhanuka Pvt. Ltd.

- Madhuri Designs -N- Exports (P) Ltd.

- Balaji Buliders

- S.P Enterprises

- Investors Associates

- Eight Reit

- Shree Ram Enterprises

- Passion Alliance

- Tempex Enterprises

- Key ideas Infotech ELtd.

The Deferred Tax Liability/Assets has arisen on account of the time difference between the depreciation admissible under the Income Tax Act, 1961 and the depreciation adjusted in the Accounts.

5. On 9th July 2010 a fire broke out at Gurgaon plant situated at Daulatabad Road, Gurgoan. The claim for the same was filed with the Insurance Company. The accounting effect for claim has been given on the basis of provisional assessment of the surveyor. The claim has not yet been received by the Company.

6. In terms of Accounting Standard (AS 28) on "impairment of Asset" issued by Institute of Chartered Accountant of India (ICAI), the Company during the year carried out an exercise of identifying the assets that may have been impaired in accordance with the said accounting standard. The Company has identified that no asset of the Company has been impaired during the year.

7. Segment information:

The Company is engaged in the business of manufacturing and trading of various types of pesticides. The entire operations are governed by same set of risk and returns. Hence the same has been considered as representing a single primary segment. The said treatment is in accordance with the guiding principles enunciated in the Accounting Standard -17 on segment reporting.

8. In pursuance to Section 81(1 A) of the Companies Act, 1956 read with Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 ("the Regulations") The Company has issued and allotted 41,25,000 equity shares of Rs. 2/- each on preferential basis, at a premium of Rs.80.20 per share, constituting post issue 8.25% of the total issued and paid-up share capital of the Company to M/s 2020 Equity Investors Limited, a sub account of Muse Capital Advisors Limited, in the Board meeting held on 13th September, 2010. The approval of the shareholders was accorded in the Extra-Ordinary General Meeting of the Company held on 30th August, 2010.

9. The Company has subdivided its equity shares of face value of Rs.10/- each into 5 equity shares of face value of Rs.2/- each. The record date for this purpose was 4th September, 2010. Due to the aforesaid split up of shares the basic & diluted earning per share has been restated for the previous year.

10. In accordance with notification no S.O.301 (E) dated 08th Feb., 2011 issued by Ministry of Corporate Affairs Govt, of India, exempting manufacturing Company from disclosing information required under Para 3 (i) (a) and 3 (ii) (a) of the Part II of Schedule VI i.e. disclosure of information about sales and raw materials consumed , the Board has approved not to disclose the aforesaid information.

11. Sundry Debtors/Customers are shown net of trade discounts and rate differences.

12. Previous years figures have been regrouped and rearranged wherever considered necessary.

13. All the figures have been shown to the nearest rupee.


Mar 31, 2010

(i) On 14th Aug 2009 a fire broke out at Gurgaon plant situated at Daulatabad Road, Gurgoan. The claim for the same was filed with Insurance company. The accounting effect for claim has been given on the basis of provisional assessment of the surveyor. The claim has not yet been received by the Company.

(ii) On 3rd August, 2009, it was noticed by the Company, that some unauthorized foreign exchange transactions have been allegedly entered into by some of the employees of the Company with Banks. In order to safeguard the interests of the Company, the matter was reported to the Law Enforcing Agencies for investigation and initiating appropriate action under the law. Three employees were involved out of which services of two were terminated and one employee has been suspended pending completion of enquiry. The matter has been settled with the concerned Banks and all business dealings with them have been discontinued.

(iii) In terms of Accounting Standard (AS 28) on "impairment of Asset" issued by Institute of Chartered Accountant of India (ICAI), the Company during the year carried out an exercise of identifying the assets that may have been impaired in accordance with the said accounting standard. The Company has identified that no asset of the Company has been impaired during the year.

(iv) Segment information

The Company is engaged in the business of manufacturing and reselling of various types of pesticides. The entire operations are governed by same set of risk and returns, hence the same has been considered as representing a single primary segment. The said treatment is in accordance with the guiding principles enunciated in the Accounting Standard - 17 on segment reporting.

The company sells its products within India, hence, it is considered to be operating in single geographical segment.

 
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