Mar 31, 2018
1 Corporate Information
The Dharamsi Morarji Chemical Company Limited is a Public Limited Company domiciled in India. Its equity shares are listed on the BSE Limited (BSE). The registered office of the Company is located at 317/321, Prospect Chambers, Dr. D.N. Road, Fort, Mumbai-400001. The Company is engaged in the business of manufacturing and selling of Commodity Chemicals and Speciality Chemicals.
Information on related party relationships of the Company is provided in Note - 43
The financial statements are authorised for issue in accordance with a resolution of the Board of Directors on 28th May, 2018
# The Company has elected to continue with the carrying value of its investment in Borax Morarji (Europe) GmBH, a wholly owned subsidiary, measured as per previous GAAP and used that carrying value on the transition date 1st April 2016 in terms of Para D15(b) (ii) of Ind AS 101.
Note
Inventories of Dahej Unit in the state of Gujarat amounting to Rs. Nil (Previous Year Rs. 575.63 Lakhs) are offered as security by way of hypothecation of Raw Materials, Finished Goods, Working in process, Packing Materials, Stores, Book Debts and Receivable for working capital facitlity provided by Bank in consortium. Working Capital Facility have since been surrendered by the Compnay.
Receivables of Rs. NIL (Previous year Rs. 609.86 Lakhs) pertaining to Dahej unit in the State of Gujarat are hypothecated as security for working capital facility provided by the Consortium Bank. Working capital facility have since been surrendered by the Company.
Before accepting any new customer, the Company has appropriate levels of control procedures which ensure the potential customerâs credit quality.
Generally, the Company supply as per the order received from its customers. The average Credit period on sale is 30-90 days
*Others include Rs. 500.00 lakhs receivable in respect of sale of Land at Ambernath in earlier years by erstwhile Borax Morarji Ltd. The Company is pursuing the matter for obtaining the necessary approval from the Government of Maharashtra , on receipt of which the Conveyance deed will be executed and registered in due course
Terms and Rights attached to Equity Shares
The Company is having only one class of Equity shares having a nominal value of Rs.10/- per share.
Every holder of the equity share of the Company is entitled to one vote per share held
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 to the Equity shareholders will be in proportion of the number of shares held by each shareholder
(a) (i) Working Capital Term Loan
Repayable in 60 EMIâs commencing from 17-02-2014. Rate of interest is 10.5%-12%. 50 EMIs have been paid in time, up to 31st March, 2018 and 10 are remaining to be paid as on that date.
Secured against mortgage of all the fixed assets of the Company, both present and future, situated at Roha and mortgage of office premises of the Company, situated at Mumbai.
Out of total outstanding term loan as on 31st March, 2018 of Rs. 76.34 Lakhs, amount due in next twelve months is Rs. 76.34 Lakhs, which is shown as âCurrent maturities of Long Term Debtsâ under âOther Current Liabilitiesâ.(See Note No. 21 (1)(i) ). The balance Term Loan of Rs. NIL is shown above as Working Capital Term Loan.
(a) (ii) Car Loan from a bank
Loans against vehicles are for a period of three to five years and repayable by way of equated monthly installment, Interest rate ranges between 9.50 to 10.25%
Secured against hypothecation of vehicles.
Out of total outstanding term loan as on 31st March, 2018 of Rs. 56.48 lakhs, amount due in next twelve months is Rs. 15.73 Lachs, which is shown as â Current maturities of Long Term Debtsâ under âOther Current Liabilitiesâ(See Note No. 21 (1)(ii) ) . The balance Term Loan of Rs. 40.75 Lakhs is shown above as Car loan from a bank.
(a) (iii) Project Loan from bank
Repayable in 36 EMIâs commencing from 27.07.2015. Rate of interest is 10.25% to 12%. 21 EMIs have been paid in time, up to 31st March, 2018 and 3 are remaining to be paid as on that date.
Secured against mortgage of all the fixed assets of the Company, both present and future, situated at Roha and mortgage of office premises of the Company, situated at Mumbai.
Out of total outstanding term loan as on 31st March, 2018 of Rs. 13.03 Lakhs, amount due in next twelve months is Rs.13.03 Lakhs, which is shown as â Current maturities of Long Term Debtsâ under âOther Current Liabilitiesâ(See Note No. 21 (1)(iii) ) . The balance Term Loan of Rs. Nil is shown above as Project Loan.
(a) (iv) Property Loan from bank
Property loan RS. 158.82 lacs taken on 21.03.2016 from a Bank. Repayable in 36 EMIâs commencing from 21.04.2016. Rate of interest is 10.25%-12%. 24 EMIs have been paid in time, up to 31st March, 2018 and 12 are remaining to be paid as on that date.
Out of total outstanding property loan as on 31 st March 2018 of Rs. 57.23 lakhs, amount due in next twelve months is Rs.57.23 Lakhs, which is shown as â Current maturities of Long Term Debtsâ under âOther Current Liabilitiesâ(See Note No.21 (1)(iv) ) The balance Term Loan of Rs. NIL is shown as Property Loan as above. Property loan is secured by way equitable mortgage of office premises of the Company situated at Mumbai.
(a) (v) Mortgage Term Loan from Bank:
Repayable in 60 EMIâs will commence from 27.04.2018. Rate of interest is 10.25%,
Secured against mortgage of all the fixed assets of the Company, both present and future, situated at Roha and mortgage of office premises of the Company, situated at Mumbai.
Out of total outstanding mortgage loan as on 31 st March 2018 of Rs. 1100.00 lakhs, amount due in next twelve months is Rs. 177.52 Lakhs, which is shown as â Current maturities of Long Term Debtsâ under âOther Current Liabilitiesâ(See Note No.21 (1)(v) ) The balance Term Loan of Rs. 922.48 Lakhs is shown as Mortgage Term Loan from Bank as above.
**Interest free Sales Tax Loan from MEDA
Interest free Sales Tax Loan from MEDA is repayable in 30 equal installment startding from May 2010 and ending May 2023
Out of total outstanding Interest free Sales Tax Loan as on 31 st March 2018 of Rs.110.67 lakhs, amount due in next twelve months is Rs.51.37 Lakhs, which is shown as â Current maturities of Long Term Debtsâ under âOther Current Liabilitiesâ(See Note No. 21 (1)(vi) ) The balance Term Loan of Rs.59.30 Lakhs is shown as Interest free Sales Tax Loan as above.
***Non- Convertible Preference Shares
Long Term Borrowing includes 280000, 2.5% Cumulative redeemable non-convertible Preference Shares of Rs.100/-each aggregating to Rs.280 lakhs which has been classified as Financial Liabilities as per requirements of Ind As 32 âFinancial instrument presentationâ. These Preference Shares were repayable in 16 equal yearly installment of Rs.17.50 lakhs each commencing from 1st April 2012. However, Company had approach and requested the Preference share holder for further extension of time for the redemption of the said Preference Shares. Preference share holder has agreed for further extension of time for the repayment of the said Preference shares any time upto 31st March 2022.
The Company has Authorised to issue 20,00,000 Cumulative redeemable Preference shares of Rs.100/- each (payable at par) out of which the Company has issued 2,80,000, 2.5% Cumulative redeemable non-convertible Preference Shares of Rs.100/- each fully paid up.
The Dividend as and when declared by the Company shall paid to the shareholder on the record date, which Board may fix from time to time. If in any year, the company has not declared any dividend on the Preference shares, the right to the dividend shall accumulated and the accumulated dividend will be paid out of the profits, if any, of the subsequent financial years including carry forward profit if any of the previous years before any dividend is paid to Equity Share holders.
Consequent to change in classification of 2.5% , Redeemable, cumulative, non-convertible preference shares, liability pertaining to undeclared and unpaid dividend and Dividend Distribution Tax thereon since up to the transition date i.e. up to 01.04.2016 amounting to Rs. 67.73 Lakhs has been reduced from Retained Earnings and included under Other Current Liabilities. Dividend and Dividend Distribution Tax thereon for the year ended 31st March 2018 and 31st March 2017 are accounted for under finance charges.
2.1 Payment towards trade is made as per the terms and condition of the contract/purchase order. Average Credit period is 30-90 days
2.2 (*) There are no Micro, Small and Medium Enterprises, to whom the Company owes dues at the Balance Sheet date, computed on unit wise basis. Further, the Company has not paid any interest to any Micro, Small and Medium Enterprises during the year ended on the Balance Sheet date, nor is any interest payable to any Micro, Small and Medium Enterprises(MSME) on the Balance sheet date. The information on MSME has been determinded to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.
3 In view of the âUnabsorbed Depreciationâ & âUnabsorbed Business Lossesâ accruing from the past years, there is no normal tax payable in the year ended 31st March, 2018 and for the year ended 31st March, 2017. In view of book profit in the current year in terms of Section 115JB of the Income Tax Act, 1961, provision has been made for Rs.348.92 Lakhs towards Minimum Alternate Tax(MAT) during the year ended 31.03.2018(Previous year Rs. 443.94 Lakhs)
4 There is only one reportable segment i.e chemicals business of the Company.
5 Corporate Social Responsibility
As per section 135 of the Companies Act, 2013, a Company meeting the applicability threshold needs to spend at least 2% of its average net profits for the immediately preceding three financial years on Corporate Social Responsibility (CSR) activities. Due to the average net profit of the Company is being negative, Company is not required to spend any amounts towards Corporate Social Responsibility activities during the year.
6 First Time Adoption of Ind AS:
These are the Companyâs first financial statements prepared in accordance with Ind AS.
The significant accounting policies set out in note 1(2) have been applied in preparing the financial statements for the year ended 31st March, 2018, the comparative information presented in these financial statements for the year ended 31st March, 2017, and in the preparation of an opening Ind AS balance sheet at 1st April, 2016 (the Companyâs date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies ( Accounting Standards) Rules, 2006 (as amended) and the other relevant provisions of the Act (previous GAAP or Indian GAAP).
Exemptions and exceptions availed
Set out below are the applicable Ind AS 101 optional exemptions applied in the transition from previous GAAP to Ind AS Business Combinations
The Company has elected to apply Ind AS 103 prospectively to business combinations occuring after its transition date. Business Combinations occuring prior to the transition date have not been restated.
The Company has elected not to apply Ind AS 21 retropectively to fair value adjustment and goodwill arising in business combination that occurred prior to the transition date.
Deemed Cost
The Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value as its deemed cost as their fair value on the date of transition i.e. 01.04.2016.
Investments in Subsidiary:
The Company has elected to measure its investment in subsidiary at their previous GAAP carrying value as its cost.
An explanation of how the transition from previous GAAP to Ind AS has affected the Companyâs financial position, financial performance and cash flows is set out in the following tables and notes.
Designation of previously recognized financial instruments:
The Company has opted to to designate certain equity investment (other than equity investments in Subsidiary Company) as FVTOCI on the date of transition.
Explanations for reconciliation of Balance Sheet as previously reported under IGAAP to IND AS.
A Valuation of Investments at fair Value through Other Comprehensive Income and to be reclassified to the Statement of Profit and Loss subsequently.
B Recognition of of certain financial assets like deposits, initially at Fair Value and subsequently at Amortized Cost and resultant winding/unwinding of interest element as per Ind AS-109
C Reclassification of Preference shares principal amount as Debt.
D Resultant effect of all changes effected in Retained Earnings on the transition to and implementation of Ind AS with effect from the date of transition i.e. 01.04.2016
E Reclassification of Preference shares principal amount as Debt and fair value of MEDA Loan at amortized cost
F Recognition of of certain financial liabilities like loans, deposits etc initially at Fair Value and subsequently at Amortized Cost and resultant winding/unwinding of interest element as per Ind AS-109
G Increase in Finance cost liability on account of provision for Preference shares dividend and tax payable thereon.
6.1 Impact of Ind AS adoption on the statement of cash flow for the year ended 31st March, 2018
The transition from previous GAAP to Ind AS has not affected the cash flows of the Company.
7 Risk management framework
The Companyâs board of directors has overall responsibility for the establishment and oversight of the Companyâs risk management framework. The Company, through three layers of defense namely policies and procedures, review mechanism and assurance aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations. The Audit committee of the Board with top management oversee the formulation and implementation of the Risk management policies. The risks are identified at business unit level and mitigation plan are identified, deliberated and reviewed at appropriate forums.
A Financial risk management
The Company has exposure to the following risks arising from financial instruments:
- credit risk (see (i));
- liquidity risk (see (ii)); and
- market risk (see (iii)).
i. Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers, loans and investments. The carrying amount of financial assets represents the maximum credit risk exposure.
Trade receivables
The Company has established a credit policy under which each new customer is analysed individually for creditworthiness before the payment and delivery terms and conditions are offered. The Companyâs review includes external ratings, if they are available, financial statements, credit agency information, industry information and business intelligence. Sale limits are established for each customer and reviewed annually. Any sales exceeding those limits require approval from the appropriate authority as per policy. In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are an individual or a legal entity, whether they are a institutional, dealers or end-user customer, their geographic location, industry, trade history with the Company and existence of previous financial difficulties.
Expected credit loss for trade receivables:
The Company based on internal assessment which is driven by the historical experience/ current facts available in relation to default and delays in collection thereof, the credit risk for trade receivables is considered low. The Company estimates its allowance for trade receivable using lifetime expected credit loss and accordingly provision is made for the doubtful debts.
Expected credit loss on financial assets other than trade receivables:
With regards to all financial assets with contractual cash flows other than trade receivable, management believes these to be high quality assets with negligible credit risk. The management believes that the parties from which these financial assets are recoverable, have strong capacity to meet the obligations and where the risk of default is negligible and accordingly no provision for excepted credit loss has been provided on these financial assets.
ii. Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation.
The Companyâs finance and accounts department is responsible for managing the short term and long term liquidity requirements. Short term liquidity situation is reviewed daily. Longer term liquidity position is reviewed on a regular basis by the Board of Directors and appropriate decisions are taken according to the situation.
iii. Market risk
Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates that will affect the Companyâs income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
Currency risk
The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchases and borrowings are denominated and the functional currency of the Company. The currencies in which the Company is exposed to risk are generally uSD and EuR. The Company follows a natural hedge driven currency risk mitigation policy to the extent possible. Any residual risk is evaluated and appropriate risk mitigating steps are taken, including but not limited to, entering into forward contract.
Sensitivity analysis
A reasonably possible strengthening (weakening) of the USD and EUR against all other currencies at 31 March would have affected the measurement of financial exposure denominated in a foreign currency and affected equity and profit or loss by the amounts shown below.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk because funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the Company are principally denominated in rupees of fixed rates of interest. The Company has exposure to interest rate risk, arising principally on changes in base lending rate.
B Capital management
For the purpose of Companyâs Capital Management, capital includes issued capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Companyâs Capital Management is to maximise the share holder value.
The Company manages its capital structure and make adjustment in light of changes in economic conditions and requirements covenants.
8 Segment Reporting :-
a) Primary Business Segment :
The Company is engaged in manufacture of Chemicals. As the Company is engaged only in one business segment.
9 Employee Benefits :
The Company has made provision for following benefit plans as per Accounting Standard 15 (Revised 2005) â Employee Benefitsâ. Defined Benefit Plans / Long Term Compensated Absences: As per Actuarial Valuation as on 31.03.2018, the required data is as follows:
10 Figures in respect of the previous year have been regrouped / rearranged wherever necessary.
Mar 31, 2016
Terms/Rights attached to Equity Shares:
The Company is having only one class of Equity shares having a nominal value of Rs.10/- per share.
Every holder of the equity share of the Company is entitled to one vote per share held
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 to the Equity shareholders will be in proportion of the number of shares held by each shareholder
Terms/Rights attached to Preference Shares:
(i) (i) 600000, 8% Redeemable Cumulative non - convertible Preference Shares of Rs.100/- each aggregating to Rs.600 Lacs were to be redeemed in 5 Equal yearly installment of Rs.120 Lacs each commencing from Financial Year 2008-09. But due to the Accumulated Losses of the Company, the Company was not in a position to redeem the said Preference Shares during the said Financial Years from 2008-2009 to 20122013. Therefore, the Company had approached and requested the Preference Share-holders for further extension of time for the redemption of the said Preference Shares. The Preference Share-holders have agreed for further extension of time for the redemption of the said Preference shares any time up to 31st March, 2018.
The cumulative dividend on these Preference Shares aggregating to Rs.624 Lacs (Previous year Rs.576 Lacs) is to be paid as and when declared by the Company.
(ii) 280000, 2.5% Redeemable Cumulative non - convertible Preference Shares of Rs.100/- each aggregating to Rs.280 Lacs are redeemable in 16 Equal yearly installment of Rs.17.50 Lacs each commencing from 1st April 2012. However, the Company has not redeemed the preference shares as per the redemption schedule due to the Accumulated Losses of the Company. Therefore, the Company had approached and requested the Preference Share-holder for further extension of time for the redemption of the said Preference Shares. The Preference Shareholder has agreed for further extension of time for the redemption of the said Preference shares any time up to 31st March, 2022.
The cumulative dividend on these Preference Shares aggregating to Rs. 57.81 Lacs (Previous year Rs. 50.81 Lacs) is to be paid as and when declared by the Company.
The holders of all Preference shares do not have any voting rights.
The holders of all Preference shares have a first right of cumulative dividend as compared to the shareholders of Equity shares in case the Company declares any dividend.
In the event of liquidation of the Company, all preference shareholders will have a priority over the Equity shareholders to receive remaining assets of the Company, after distribution of all other preferential amounts. The distribution to the Preference shareholders will be in proportion of the number of shares held by each shareholder
(a) (i) Working Capital Term Loan
Repayable in 60 EMI''s commencing from 17-02-2014. Rate of interest is 12%. 26 EMIs have been paid in time, up to 31st March, 2016 and 34 are remaining to be paid as on that date.
Secured against mortgage of all the fixed assets of the Company, both present and future, situated at Roha and mortgage of office premises of the Company, situated at Mumbai.
Out of total outstanding term loan as on 31st March, 2016 of Rs.259.35 Lacs, amount due in next twelve months is Rs.85.16 Lacs, which is shown as â Current maturities of Long Term Debts'' under âOther Current Liabilities''.(See Note No. IV(b)(ii). The balance Term Loan of Rs.174.19 Lacs is shown above as Working Capital Term Loan.
(ii) Car Loan from a bank
Repayable in 60 EMI''s commencing from 21-02-2015. Rate of interest is 10.50%. 14 EMIs have been paid in time, up to 31st March, 2016 and 46 are remaining to be paid as on that date.
Secured against hypothecation of vehicles.
Out of total outstanding term loan as on 31st March, 2016 of Rs.32.75 Lacs, amount due in next twelve months is Rs.6.20 Lacs, which is shown as â Current maturities of Long Term Debts'' under âOther Current Liabilities''(See Note No. IV(b)(iii) . The balance Term Loan of Rs.26.55 Lacs is shown above as Car loan from a bank.
(iii) Project Loan from bank
Repayable in 36 EMI''s commencing from 27.07.2015. Rate of interest is 12%.9 EMIs have been paid in time, up to 31st March, 2016 and 27 are remaining to be paid as on that date.
Secured against mortgage of all the fixed assets of the Company, both present and future, situated at Roha and mortgage of office premises of the Company, situated at Mumbai.
Out of total outstanding term loan as on 31st March, 2016 of Rs.229.78 Lacs, amount due in next twelve months is Rs.127.91 Lacs, which is shown as â Current maturities of Long Term Debts'' under âOther Current Liabilities''(See Note No. IV(b)(iv) . The balance Term Loan of Rs.101.87 Lacs is shown above as Project Loan.
(iv) Property Loan from bank
Property loan RS. 158.82 lacs taken on 21.03.2016 from a Bank. Repayable in 36 EMI''s commencing from 21.04.2016. Rate of interest is 12%.
Amount due in next twelve months is Rs.47.25 Lacs, which is shown as â Current maturities of Long Term Debts'' under âOther Current Liabilities''(See Note No.IV(b)(v). The balance Term Loan of Rs.111.57 Lacs is shown as Property Loan. as obove.
(*) There are no Micro, Small and Medium Enterprises, to whom the Company owes dues at the Balance Sheet date, computed on unit wise basis. Further, the Company has not paid any interest to any Micro, Small and Medium Enterprises during the year ended on the Balance Sheet date, nor is any interest payable to any Micro, Small and Medium Enterprises on the Balance sheet date.
The above information has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.
The Company''s export business over the last three years has been steadily growing. This has been possible due to appropriate marketing efforts coupled with quality consciousness on the part of the Company. The focused R & D activity to identify and develop relevant products meeting high quality standards has always remained vital to the Company''s business, and efforts are undertaken to spread this message across the customer base both abroad as well as domestic. The Company is confident of improving the current growth rate substantially in overseas business in addition to consolidating the domestic market both in Specialty and Bulk chemicals. In the near term, the company expects to achieve this objective by making use of the available unutilized capacity as well as building up additional capacity. The marketing team is also being strengthened. Consequently, there is virtual certainty of realization of âDeferred Tax assetâ mainly resulting from unabsorbed depreciation and carried forward losses. Accordingly, the recognized âDeferred Tax Assetâ of Rs. 2654.15 Lacs as at 31.03.2009, without any addition, is being carried forward.
1 Figures in respect of the previous year have been regrouped / rearranged wherever necessary
Mar 31, 2015
1. In view of the "Unabsorbed Depreciation" & "Unabsorbed Business
Losses" accruing from the past years, there is no taxable income during
the year ended 31st March, 2015 and for the year ended 31st March,
2014. Accordingly, No provision has been made in respect of current
income tax.
2. During the year, the manufacturing of Fertilizsers at Khemli Factory
of the Company remained closed for the entire year and hence the
fertilizer segment will no longer be a primary business of the Company.
There is only one reportable segment i.e chemicals business of the
Company.
3. Since the manufacturing operations of Fertilizsers at Khemli Factory
of the Company have been closed, the services of all employees of that
factory have been separated. The Company has provided for the
compensation and other retirement benefits to those employees
amounting to Rs. 142.60 Lacs which have been considered as an
Exceptional item.
4. Segment Reporting :
The Company is operating in one reportable primary business segment
i.e. Chemicals. Secondary segment information in relation to domestic
markets and foreign markets is disclosed to the extent possible taking
into account the nature of products, the different risks and returns,
the organisation structure and the internal reporting system.
5. Figures in respect of the previous year have been regrouped /
rearranged wherever necessary
Mar 31, 2014
1 Contingent Liabilities not provided for:
Rs. in Lacs
As at 31st March,
2014 As at
31st March, 2013
(i) Outstanding claims in respect
of Excise Duty, Sales-Tax, etc. 110.14 44.55
(ii) Guarantees given by the Company''s
Bankers 36.46 36.46
(iii) Arrears of Cumulative Preference
Dividend 571.81 516.81
(iv) Claims against Company not
acknowledged as debts 55.76 55.76
(v) Estimated Amount of Contracts
remaining to be executed on Capital
Account & not provided for
(Net of Advances) 10.36 7.25
2 Wages, Salaries and Bonus include provision made as per actuarial
valuation in respect of accumulated leave salary encashable on
retirement in accordance with Accounting Standard 15 notified pursuant
to the Companies (Accounting Standards) Rules, 2006 . Contribution to
Provident and other funds includes Company''s contribution to Provident
Fund, Family Pension Fund, Gratuity Fund (based on actuarial valuation)
and Superannuation Fund.
3 In view of the "Unabsorbed Depreciation" & "Unabsorbed Business
Losses" accruing from the past years, there is no taxable income
during the year ended 31st March, 2014 and for the year ended 31st
March, 2013. Accordingly, No provision has been made in respect of
current income tax.
4 The Company had obtained the requisite approval of the shareholders
under section 293(1)(a) of the Companies Act, 1956 for sale / transfer
/ disposal of its Land, Factory Buildings and Plant & machinery at its
Ambernath factory. (Written Down Value of the fixed assets of the
Company at its Ambarnath factory as on 31-03-2014 is Nil (previous year
is Rs. 736.87 Lacs). Therefore, while reporting "Segment Results",
in Note No. (6) to the accounts, depreciation of Ambarnath factory has
been shown separetly . Also Profit on sale of Fixed Assets of Ambarnath
factory and Written Down Value of Assets scrapped of Ambarnath Factory
along with Current Assets and Current Liabilities relating to the
Ambarnath factory of the Company has been excluded for segment-wise
reporting of "Capital Employed".
5 Segment Reporting :
The Company has disclosed Business Segments as its primary segments.
Reporting segments have been identified as Fertilisers, Chemical and
others/unallocated, taking into account the nature of products, the
different risks and returns, the organisation structure and the
internal reporting system.
Segment Revenue, Segment Results, Segment Assets and Segment
Liabilities include the respective amounts identifiable to each of the
segments as also the amounts allocated on a reasonable basis to the
respective segments. The expenses, which are not directly related to
the business segments, are shown as unallocated costs. Corporate
current assets and liabilities have been allocated on the basis of
turnover of the segments. Assets and Liabilities that can not be
allocated between the segments are shown as a part of unallocated
assets & liabilities. Inter Segment Transfers are at cost of
production.
6 The Company has prepared the financial statements for the year ended
31.03.2014 on a "Going Conern Basis" since the Company is confident
that its profitablity will improve in future in view of the following:
The Company''s export business over the last three years has been
growing at an impressive rate of 50%. This has been possible due to
appropriate marketing efforts coupled with quality consciousness on the
part of the company. The focused R & D activity to identify and develop
relevant products meeting high quality standards has always remained
vital to the company''s business, and efforts are undertaken to spread
this message across the customer base both abroad as well as domestic.
The company is confident of improving the current growth rate
substantially in overseas business in addition to consolidating the
domestic market both in Speciality and Bulk chemicals. In the near
term, the company expects to achieve this objective by making use of
the available unutilized capacity as well as building up additional
capacity. The marketing team is also being strengthened.
7 The Company has elected to present Profit/(Loss) before Finance
Costs, Depreciation and Tax i.e.(EBITDA) as a separate line item on the
fface of the statement of the profit and loss.
8 Figures in respect of the previous year have been regrouped wherever
necessary.
Mar 31, 2013
1 Contingent Liabilities not provided for:
Rs. in Lacs
As at As at
31st March,
2013 31st March,
2012
(i) Outstanding claims in respect
of Excise Duty, Sales-Tax, etc. 44.55 44.55
(ii) Guarantees given by the
Company''s Bankers / 36.46 51.46
(iii) Arrears of Cumulative
Preference Dividend 516.81 461.81
(iv) Claims against Company not
acknowledged as debts 55.76 55.76
(v) Estimated Amount of Contracts remaining to be executed on Capital
Account & not 7.25 54.00 provided for (Net of Advances)
2 Wages, Salaries and Bonus include provision made as per actuarial
valuation in respect of accumulated leave salary encashable on
retirement in accordance with Accounting Standard 15 notified pursuant
to the Companies (Accounting Standards) Rules, 2006 . Contribution to
Provident and other funds includes Company''s contribution to Provident
Fund, Family Pension Fund, Gratuity Fund (based on actuarial valuation)
and Superannuation Fund.
3 In view of the "Unabsorbed Depredation" & "Unabsorbed Business
Losses" accruing from the past years, there is no taxable income during
the year ended 31st March, 2013 and for the year ended 31st March,
2012. Accordingly, No provision has been made in respect of current
income tax.
4 The Company had obtained the requisite approval of the shareholders
under section 293( 1 )(a) of the Companies Act, 1956 for sale /
transfer / disposal of its Land, Factory Buildings and Plant &
machinery at its Ambemath factory. (Written Down Value of the fixed
assets of the Company at its Ambamath factory as on 31-03-2013 is Rs.
736.87 Lacs). Therefore, while reporting "Segment Results", in Note No.
(6) to the accounts, depreciation of Ambamath factory has been shown
separetly . Also Profit on sale of Fixed Assets of Ambamath factory and
Written Down Value of Assets scrapped of Ambamath Factory along with
Current Assets and Current Liabilities relating to the Ambamath factory
of the Company has been excluded for segment-wise reporting of "Capital
Employed". ~
5 Segment Reporting:
The Company has disclosed Business Segments as its primary segments.
Reporting segments have been identified as Fertilisers, Chemical and
others/unallocated, taking into account the nature of products, the
different risks and returns, the organisation structure and the
internal reporting system.
Segment Revenue, Segment Results, Segment Assets and Segment
Liabilities include the respective amounts identifiable to each of the
segments as aiso the amounts allocated on a reasonable basis to the
respective segments. The expenses, which are not directly related to
the business segments, are shown as unallocated costs. Corporate
current assets and liabilities have been allocated on the basis of
turnover of the segments. Assets and Liabilities that can not be
allocated between the segments are shown as a part of unallocated
assets & liabilities. Inter Segment Transfers are at cost of production.
Related party relationships are as identified by the Company and relied
upon by the Auditors. Figures in brackets pertain to Previous Year
6 The Company has prepared the financial statements for the year ended
31.03.2013 on a "Going Concern Basis" since the Company is confident
that its profitablity will improve in future in view of the following:
The Company''s export business over the last three years has been
growing at an impressive rate of 55%. This has been possible due to
appropriate marketing efforts coupled with quality consciousness on the
part of the company. The focused R&D activity to identify and develop
relevant product meeting high quality standards has always remained
vital to the company''s business and efforts are undertaken to spread
this message across the customer base both abroad as well as domestic.
The company is confident of improving the current growth rate
substantially in overseas business in addition to consolidating the
domestic market both in Speciality and Bulk chemicals. In the near
term, the company expects to achieve this objective by making use of
the available unutilized capacity as well as building up additional
capacity. The marketing team is also being strengthened.
7 Employee Benefits:
The Company has made provision for following benefit plans as per
Accounting Standard 15 (Revised 2005)" Employee Benefits". Defined
Benefit Plans / Long Term Compensated Absences: As per Actuarial
Valuation as on 31.03.2013, the required data is as follows:
8 The Company has elected to present Profit/(Loss) before Finance
Costs, Depreciation and Tax i.e.(EBITDA) as a separate line item on the
face of the statement of the profit and loss.
9 Figures in respect of the previous year have been regrouped wherever
necessary
Mar 31, 2012
NOTE: I SHARE CAPITAL
Terms/Rights attached to Equity Shares:
The Company is having only one class of Equity shares having a nominal
value of Rs. 10/- per share.
Every holder of the equity share of the Company is entitled to one vote
per share held.
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 to the
Equity shareholders will be in proportion of the number of shares held
by each shareholder.
Terms/Rights attached to Preference Shares:
(i) 600000, 8% Redeemable Cumulative non- convertible Preference Shares
of Rs. 100/- each aggregating to Rs. 600 Lacs were to be redeemed in 5
Equal instalments of Rs. 120 Lacs each commencing from 2008-09 to
2012-13. However, the Company has not redeemed these preference shares
as per this redemption schedule in view of the carried forward losses.
The cumulative dividend on these Preference Shares aggregating to Rs.
432 Lacs (Previous year Rs. 384 Lacs) is to be paid as and when
declared by the Company.
(ii) 280000, 2.5% Redeemable Cumulative non convertible Preference
Shares of Rs. 100/- each aggregating to Rs. 600 Lacs are redeemable in
16 Equal quarterly instalments of Rs. 17.50 Lacs each commencing from
1st April, 2012.
The cumulative dividend on these Preference Shares aggregating to Rs.
29.81 Lacs (Previous year Rs. 22.81 Lacs) is to be paid as and when
declared by the Company.
The holders of all Preference shares do not have any voting rights.
The holders of all Preference shares have a first right of cumulative
dividend as compared to the shareholders of Equity shares in case the
Company declares any dividend.
In the event of liquidation of the Company, all preference shareholders
will have a priority over the Equity shareholders to receive remaining
assets of the Company, after distribution of all other preferential
amounts. The distribution to the Preference shareholders will be in
proportion of the number of shares held by each shareholder.
V - (a) FIXED ASSETS - TANGIBLE
NOTE: V(d) AND V(e)
(*) The Company has made a provision for Doubtful Debts and Advances
aggregating to Rs. 1998.22 lacs upto the period ended 31.03.2012
(Previous Year 1898.22 lacs). In the opinion of the Management of the
Company, this provision is adequate to cover the Doubtful Debts &
Advances as on 31.03.2012, including those in respect of dues from GFC,
Syria stated below (to the extent considered doubtful).
A contract was entered into in 1993 between the Company and General
Fertiliser Co., (GFC) Horns, Syria for revamping of two streams of
Sulphuric Acid Plant of GFC by the Company. The value of the contract
was USD 12.8 million plus Syrian Pounds 72 million, equivalent to Rs.
44.24 crores, considering the exchange rates prevailing in 1993. The
Company has completed this project and has also given the required
performance test runs on the two streams of the Sulphuric Acid plant.
The Company has also received all payments from GFC, Syria except
payment of certain invoices aggregating to USD 1.37 million (included
in "Sundry Debtors") equivalent to Rs. 620.56 lacs as on 31.03.2012.
The Company has also made claims from GFC, Syria towards interest on
delayed payments, bank charges for extension of the validity period of
the Letter of Credit/bank Guarantees and other overheads.
The Company has not taken any credit for these claims in the books of
account. As provided in the contract, the case was referred to the
Arbitration Tribunal at Damascus, Syria. The Arbitration Tribunal has
given its award, according to which GFC, Syria was required to make
payment to the Company of the aforesaid unpaid dues aggregating to USD
1.37 million.
Further, the Arbitration Tribunal has accepted certain claims made by
the Company as also by GFC, Syria. The Company as well as GFC, Syria
have filed their respective appeals against the Arbitration award with
the State Council at Damascus, Syria. The Company as well as GFC, Syria
have made certain claims on each other, in their respective appeals as
filed with the State Council. The State Council constituted a seven
member Expert Committee in October 2002 to examine these claims and
give its recommendations. The Report of this Expert Committee,
containing its recommendations has been submitted to the State Council.
The comments received from GFC, Syria and the Company (in response to
the recommendations of the Expert Committee) have been forwarded by the
State Council to the Expert Committee. Based on these comments, the
Expert Committee has submitted its Report to the State Council
recommending payment to the Company of the aforesaid invoices
aggregating to USD 1.37 million (equivalent to Rs. 620.56 lacs) and
certain other claims of the Company.
On this basis, the Supreme Administrative Court of Syria has given its
judgement according to which a net amount of about USD 0.90 Million
(equivalent to Rs. 456.48 lacs) is payable by GFC to the Company as on
31.03.2012. The shortfall in receivable between the amount included in
"Sundry Debtors" as on 31.03.2012 (i.e. Rs. 620.56 lacs) and the net
amount payable to the Company as on 31.03.2012 as per the judgement
given by Supreme Administrative Court of Syria (i.e. Rs. 456.48 lacs),
has already been provided in earlier Financial Year.
The Company has made a provision for Doubtful Debts and Advances
aggregating to Rs. 1998.22 lacs upto the period ended 31.03.2012
(Previous Year 1898.22 lacs), in the opinion of the Management of the
Company, this provision is adequate to cover the Doubtful Debts &
Advances as on 31.03.2012, including those in respect of dues from GFC,
Syria (to the extent considered doubtful).
The Debtors as on 31.03.2012 are subject to confirmations from
customers.
1. Contingent Liabilities not provided for:
As at As at
31st March, 2012 31st March, 2011
(i) Outstanding claims in
respect of Excise Duty,
Sales Tax, etc. 44.55 46.40
(ii) Guarantees given by the
Company's Bankers 51.46 51.46
(iii) Arrears of Cumulative
Preference Dividend 461.81 406.81
(iv) Claims against Company
not acknowledged as debts 55.76 55.76
(v) Estimated Amount of
Contracts remaining to be
executed on Capital Account & 54.00 -
not provided for (Net of Advances)
2. Wages, Salaries and Bonus include provision made as per actuarial
valuation in respect of accumulated leave salary encashable on
retirement in accordance with Accounting Standard 15 notified pursuant
to the Companies (Accounting Standards) Rules, 2006. Contribution to
Provident and other funds includes Company's contribution to Provident
Fund, Family Pension Fund, Gratuity Fund (based on actuarial valuation)
and Superannuation Fund.
3. The cost to the Company arising out of the conversion of Lenders'
Sacrifice (by way of the reduction in the interest rates) was being
amortised equally over the period of repayment of term loans to the
Lenders, upto 30th June 2010. In view of the completion of the
negotiated settlements with the Lenders during the period ended
31/03/2011, the entire unamortised amount of Lenders' Sacrifice
amounting to Rs. 70.97 lacs as on 30/06/2010 has been amortised during
the period ended 31/03/2011 (i.e. 1st July, 2010 to 31st March, 2011).
4. No provision has been made in respect of current income tax since
there is no taxable income during the year ended 31st March 2012 and
for the period ended 31st March, 2011.
5. The Company has obtained the requisite approval of the shareholders
under section 293(1)(a) of the Companies Act, 1956 for sale/transfer/
disposal of its Land, Factory Buildings and Plant & machinery at its
Ambernath factory. (Written Down Value of the fixed assets of the
Company at its Ambarnath factory as on 31-03-2012 is Rs. 1739.73 Lacs).
Therefore, while reporting "Segment Results", in Note No. (18) to the
accounts, depreciation of Ambarnath factory has been shown separately
and remaining loss of Ambarnath factory has been included in
"Others/Unallocated Expenditure". Also, Fixed Assets, Current Assets
and Current Liabilities relating to the Ambarnath factory of the
Company has been excluded for segment-wise reporting of "Capital
Employed".
6. Segment Reporting:
The Company has disclosed Business Segments as its primary segments.
Reporting segments have been identified as Fertilisers, Chemical and
Others/Unallocated, taking into account the nature of products, the
different risks and returns, the organisation structure and the
internal reporting system.
Segment Revenue, Segment Results, Segment Assets and Segment
Liabilities include the respective amounts identifiable to each of the
segments as also the amounts allocated on a reasonable basis to the
respective segments. The expenses, which are not directly related to
the business segments, are shown as unallocated costs. Corporate
current assets and liabilities have been allocated on the basis of
turnover of the segments. Assets and Liabilities that cannot be
allocated between the segments are shown as a part of unallocated
assets & liabilities. Inter Segment Transfers are at cost of
production.
7. Related Parties Disclosures :
(A) Promoters holding more than 20% of the voting power
Name of the Nature of Relationship
Related Parties
(i) Shri L.N. Goculdas Promoter and Chairman (holding more than 20% of
the voting power)
(B) Associate/Other Related Companies
Name of the Related Parties Nature of Relationship
(i) Borax Morarji Ltd. Associate Company
(ii) The Natural Gas Co. Pvt. Ltd. Other Related Company
(iii) L.P. Gas Transport &
Bottling Co. Pvt. Ltd. Other Related Company
(iv) Phoenix Distributors Pvt. Ltd. Other Related Company
(v) Jasraj Trading Co. Other Related Company
(vi) Kosan Industries Pvt. Ltd. Other Related Company
(vii) Bombay Foods Pvt. Ltd. Other Related Company
(C) Key Management Personnel
Name of the Related Parties Nature of Relationship
(i) Shri B.L. Goculdas Chief Executive Officer
(ii) Shri D.N. Vaze Chief Finance Officer
(iii) Shri D.T. Gokhale Vice President
(Legal/Corporate Affairs) &
Company Secretary.
8. The Company has prepared the financial statements for the year ended
31.03.2012 on a "Going Concern Basis" since the Company is confident
that its profitably will improve in future in view of the following:
a) A new activity of trading (in various fertilizers and other agri
inputs) which the Company will commence in association with a
"strategic investor" after completing sale of Fixed Assets of the
Company situated at Ambernath, and
b) Continued efforts by the Company for improving efficiency,
restructuring/rationalisation of operations and optimisation of cost.
9. Employee Benefits:
The Company has made provision for following benefit plans as per
Accounting Standard 15 (Revised 2005)" Employee Benefits". Defined
Benefit Plans/Long Term Compensated Absences: As per Actuarial
Valuation as on 31.03.2012, the required data is as follows:
10. The Company has elected to present Profit(Loss) before Finance
Costs, Depreciation and amortisation and Tax i.e. (EBITDA) as a
separate line item on the face of the statement of the profit and loss.
11. During the year ended 31st March, 2012 the revised schedule VI
notified under the Companies Act, 1956 has become applicable to the
Company for preparation and presentation of its financial statements.
The adoption of revised schedule VI does not impact recognition and
measurement principles followed for preparation of financial
statements. However, it has significant impact on presentation and
disclosures made in the financial statements. The Company has also
reclassified the previous year's figures in accordance with the
requirements applicable in the current year.
12. As required by the revised Schedule VI to the Companies Act, 1956,
Trade Receivables could not be classified as outstanding for a period
of more than six months from the due date instead of the invoice date.
The necessary modification in the existing computer program will be
carried out in the current Financial year. However, it does not have
any significant impact on the financial statements.
13. The figures as per these financial statements are not comparable
with the figures in respect of previous financial year as the current
financial year is of twelve months period commencing from April, 2011
to March, 2012 where as the financial statements of the previous
financial year were prepared for a period of 9 months commencing from
1st July, 2010 to 31 March, 2011.
14. Figures in respect of the previous year have been regrouped wherever
necessary.
Mar 31, 2011
July 10 to April 09 to
March 11 June 10
1. Contingent Liabilities not provided for:
(i) Outstanding claims in respect of Excise
Duty, Sales-Tax, etc. 46.40 44.21
(ii) Guarantees given by the Company's Bankers 51.46 33.75
(iii) Arrears of Cumulative Preference Dividend 406.81 365.56
(iv) Claims against Company not acknowledged
as debts 55.76 55.76
(v) Estimated Amount of Contracts remaining
to be executed on Capital Account & not
provided for. - 29.77
2. Wages, Salaries and Bonus include provision made as per actuarial
valuation in respect of accumulated leave salary encashable on
retirement in accordance with Accounting Standard 15 notified persuant
to the companies (Accounting Standards) Rules, 2006. Contribution to
Provident and other funds includes Company's contribution to Provident
Fund, Family Pension Fund, Gratuity Fund (based on actuarial valuation)
and Superannuation Fund.
3. In case of payments made from 1st April, 2000, under the Voluntary
Retirement Schemes of the Company, the total amount paid is treated as
a deferred revenue expenditure and amortised over a period of 84 months
or the number of months service foregone, whichever is lower, using the
sum of digits method. Under this method the charge to Profit and Loss
account is lowest in the first year and the highest in the last year.
However, the amount to be amortised beyond 31st March 2010 also is
charged during the period of April 2009 to June 2010, in accordance
with Accounting Standard (AS 15) (Revised 2005) on Employee Benefits.
Accordingly a sum of Rs.Nil (Previous Year Rs.741.88 lacs) has been
charged to the Profit and Loss Account as deferred revenue expenditure,
on account of compensation paid to employees under Early Voluntary
Retirement Schemes and Rs. Nil (Previous Year Rs.Nil) has been carried
forward to Deferred Revenue Expenditure account as per the method of
accounting followed by the Company.
4. The cost to the Company arising out of the conversion of Lenders'
Sacrifice (by way of the reduction in the interest rates) was being
amortised equally over the period of repayment of term loans to the
Lenders, upto 30th June 2010. In view of the completion of the
negotiated settlements with the Lenders during the period ended
31/03/2011, the entire unamortised amount of Lenders' Sacrifice
amounting.to Rs. 70.97 lacs as on 30/06/2010 has been amortised during
the period ended 31/03/2011.
11 Miscellaneous expenses for the period ended 31.03.2011 includes gain
/ (loss) Rs.(18.28) lacs (previous year Rs. (12.24) lacs )on foreign
exchange.
5. There are no Micro, Small and Medium Enterprises, to whom the
Company owes dues at the Balance Sheet date, computed on unit wise
basis. Further, the Company has not paid any interest to any Micro,
Small and Medium Enterprises during the 9 months period ended on the
Balance Sheet date, nor is any interest payable to any Micro, small and
Medium Enterprises on the Balance sheet date.
The above information has been determined to the extent such parties
have been identified on the basis of information available with the
Company. This has been relied upon by the auditors.
13 (a) A contract was entered into in 1993 between the Company and
General Fertiliser Co., (GFC) Horns, Syria for revamping of two streams
of Sulphuric Acid Plant of GFC by the Company. The value of the
contract was USD 12.8 million plus Syrian Pounds 72 million, equivalent
to Rs.44.24 crores, considering the exchange rates prevailing in 1993.
The Company has completed this project and has also given the required
performance test runs on the two streams of the Sulphuric Acid plant.
The Company has also received all payments from GFC, Syria except
payment of certain invoices aggregating to USD 1.37 million (included
in "Sundry Debtors") equivalent to Rs.620.01 lacs as on 31.03.2011. The
Company has also made claims from GFC, Syria towards interest on
delayed payments, bank charges for extention of the validity period of
the Letter of Credit/bank Guarantees and other overheads.
The Company has not taken any credit for these claims in the books of
accounts. As provided in the contract, the case was referred to the
Arbitration Tribunal at Damascus, Syria. The Arbitration Tribunal has
given its award, according to which GFC, Syria was required to make
payment to the Company of the aforesaid unpaid dues aggregating to USD
1.37 million. .
Further, the Arbitration Tribunal has accepted certain claims made by
the Company as also by GFC. Syria. The Company as well as GFC, Syria
have filed their respective appeals against the Arbitration award with
the State Council at Damascus, Syria. The Company as well as GFC, Syria
have made certain claims on each other, in their respective appeals as
filed with the State Council. The State Council constituted a seven
member Expert Committee in October 2002 to examine these claims and
give its recommendations. The Report of this Expert Committee,
containing its recommendations has been submitted to the State Council.
The comments received from GFC, Syria and the Company (in response to
the recommendations of the Expert Committee) have been forwarded by the
State Council to the Expert Committee. Based on these comments, the
Expert Committee has submitted its Report to the State Council
recommending payment to the Company of the aforesaid invoices
aggregating to USD 1.37 million (equivalent to Rs.620.01 lacs) and
certain other claims of the Company.
On this basis, the Supreme Administrative Court of Syria has given its
judgement according to which a net amount of about USD 0.90 Million
(equivalent to Rs. 398.43 lacs) is payable by GFC to the Company as on
31.03.2011 The shortfall in receivable between the amount included in
"Sundry Debtors" as on 31.03.2011 (i.e. Rs.620.01 lacs) and the net
amount payable to the Company as on 31.03.2011 as per the judgement
given by Supreme Administrative Court of Syria (i.e. Rs. 398.43 lacs),
has already been provided in earlier Financial Year.
(b) The Company has made a provision for Doubtful Debts and Advances
aggregating to Rs.1898.22 lacs upto the period ended 31.03.2011
(Previous Year 1823.22 lacs). In the opinion of the Management of the
Company, this provision is adequate to cover the Doubtful Debts &
Advances as on 31.03.2011, including those in respect of dues from GFC,
Syria (to the extent considered doubtful).
(c) The Debtors as on 31.03.2011 are subject to confirmations from
customers.
6 Consequent to the negotiated settlements with the Secured/Unsecured
Lenders, an amount aggregating to Rs.3362.76 Lacs payable by the
Company to these lenders has been waived by the said lenders. The
Company has credited this amount of Rs. 3362.76 Lacs to 'Capital
Reserve' during the period ended 31.03.2011, since it consists of
principal amount of borrowings only (without any interest component).
Those negotiated settlements do not involve any cash flows and hence
are not included in the Cash Flow from "Financing Activities'' as
disclosed in the attached Cash Flow Statement for the period ended 31
st March 2011.
7 Interest expense for the period ended 31 st March 2011 and for the
period ended 30th June 2010 is net off interest income of Rs.10.55 lacs
and Rs.12.67 lacs, respectively. Tax deducted at source in respect of
aforesaid interest income for the period ended 31st March 2011 is Rs.
1.55 lacs (Previous year Rs.1.01 lacs).
8 (a) No provision has been made in respect of current income tax
since there is no taxable income during the period ended 31st March
2011 and for the period ended 30th June 2010.
(b) The Company will start trading in various fertilisers and other
agri inputs in association with a " Strategic Investor", after
completing sale of fixed assets of the Company at its Ambamath factory.
This will result in significant additional turnover and profits.
Consequently, there is virtual certainty of realisation in respect of
"Deferred Tax Asset" mainly resulting from unabsorbed depreciation and
carried forward losses. Accordingly, the Company had recognised
"Deferred Tax Asset" amounting to Rs. 2148.17 Lacs, in the Financial
Accounts for the 18 months ended 30th September 2007, considering
unabsorbed depreciation and unabsorbed business losses upto 31.03.2007.
The Company has recognised further "Deferred Tax Asset" amounting to Rs.
505.98 lacs in the Financial Accounts for the period of 18 months ended
31.03.2009, mainly resulting from Unabsorbed Depreciation upto
31.03.2009 and Unabsorbed Business Losses upto 31.03.2008. The Company
will also recognise "Deferred Tax Asset" resulting from further
"Unabsorbed Depreciation" and further "Unabsorbed Business Losses",
after completing sale of fixed assets of the Company at its Ambamath
factory.
8. (a) The non-viable operations of the Company's fertiliser and
chemical business at its Ambemath factory had resulted in continued
losses and delayed payment of wages and salaries to employees for last
several months. With a view to reduce losses, the Management had
submitted its Charter of Demands on the Company's recognised Union at
Ambemath, which has been rejected by the Union. The Management,
therefore, has suspended the operations of its Ambemath factory, with
effect from 23rd January, 2009 and has issued a notice of "Lock Out" of
the said factory with effect from 9th February, 2009. Consequently, the
Company has not provided for the employees cost with effect from 9th
February, 2009 (being not payable), in respect of those employees who
are covered by "Lock Out.
The Company's recognised Union at Ambemath requested the Industrial
Court, Maharashtra, at Thane to grant various interim reliefs
(including granting of stay on the effect, implementation, and
operation of the afforsaid notice of "Lock Out"). This request of the
Union was rejected by the Industrial Court, Maharashtra, at Thane.
Subsequently, the Company signed a Memorandum of Agreement dated 30th
June 2010 with the Company's recognised Union at Ambarnath, under which
a Voluntary Separation Scheme was introduced for the workmen at
Ambemath (including workmen of Head Office). Accordingly ail workmen at
the Company's Ambarnath factory (including workmen of Head Office) have
since applied for Voluntary Separation from the services of the
Company. The "Separation Compensation" (aggregating to Rs.707.01 lacs)
payable to all these workmen has been provided in the books of account
for the extended Financial Year ended 30/06/2010 and same has since
been paid to these workmen in August, 2010 alongwith all other legal
dues.
(b) The Company has obtained the requisite approval of the shareholders
under section 293(1 )(a) of the Companies Act, 1956 for sale / transfer
/ disposal of its Land, Factory Buildings and Plant & Machinery at its
Ambemath factory. (Written Down Value of the Fixed Assets of the
Company at its Ambemath factory as on 31.03.2011 is Rs. 2380.12 lacs).
Therefore, while reporting "Segment Results", in Note No. 18 to the
accounts, depreciation of Ambarnath factory has been shown separetly
and remaining loss of Ambarnath factory has been included in
"Others/Unallocated Expenditure". Also, Fixed Assets, Current Assets
and Current Liabilities relating to the Ambarnath factory of the
Company have been excluded for segment-wise reporting of "Capital
Employed".
9 Segment Reporting :
The Company has disclosed Business Segments as its primary segments.
Reporting segments have been identified as Fertilisers, Chemical, and
Others / Unallocated, taking into account the nature of products, the
different risks and returns, the organisation structure and the
internal reporting system.
Segment Revenue, Segment Results, Segment Assets and Segment
Liabilities include the respective amounts identifiable to each of the
segments as also the amounts allocated on a reasonable basis to the
respective segments. The expenses, which are not directly related to
the business segments, are shown as unallocated costs. Corporate
current assets and liabilities have been allocated on the basis of
turnover of the segments. Assets and Liabilities that cannot be
allocated between the segments are shown as a part of unallocated
assets & liabilities. Inter Segment Transfers are at cost of
production.
10 Related Parties Disclosures :
(A) Promoters holding more than 20% of the voting power
Name of the Related Parties Nature of Relationship
(i) Shri L.N.Goculdas Promoter and Chairman (holding more than 20%.of
the voting power)
(B) Associate/Other Related Companies
Name of the Related Parties Nature of Relationship
(i) Borax Morarji Ltd. Associate Company
(ii) The Natural Gas Co.Pvt.Ltd. Other Related Company
(iii) L.P.Gas Equipment Pvt.Ltd. Other Related Company
(iv) Phoenix Distributors Pvt.Ltd. Other Related Company
(v) Jasraj Trading Co. Other Related Company
(vi) Kosan Industries Pvt.Ltd. Other Related Company
(vii) Bombay Foods Pvt.Ltd. Other Related Company
(C) Key Management Personnel
Shri D.P.Goculdas Chief Executive Officer upto 06.04.2011
Shri B.L.Goculdas Chief Executive Officer
Shri D.N.Vaze Chief Finance Officer
Shri D.T.Gokhale Vice President (Legal / Corporate Affairs) &
Company Secretary
11 The Company has prepared the financial statements for the period
ended 31.03.2011 on a "Going Conern Basis" since the Company is
confident that its profitablity will improve in future in view of the
following:
a) A new activity of trading (in various fertilizers and other agri
inputs) which the Company will commence in association with a
"Strategic Investor" after completing sale of Fixed Assets of the
Company situated at Ambernath, and
b) Continued efforts by the Company for improving efficiency,
restructuring / rationalisation of operations and optimisation of cost.
12 The Company has closed the current Financial Year of 9 months on
31/03/2011, as decided by the Board of Directors of the Company.
Accordingly Financial Statements for the Current Financial Year have
been prepared for a period of 9 months commencing from 1st July, 2010
and ending on 31 st March, 2011. Therefore, figures as per these
Financial Statements are not comparable with the figures in respect of
previous financial year i.e. 1st April, 2009 to 30th June, 2010 (which
was a period of 15 months).
13 Figures in respect of the previous year have been regrouped wherever
necessary.
Jun 30, 2010
1. Professional Fees include Payments to Auditors for : April 09 to
Oct 07 to June 10 March 09
2. No provision has been made towards Commission to Directors due to
inadequacy of profit for the years April 2009 to June 2010, Oct. 2007
to March 2009, April 2006 to Sept. 2007, 2005-2006, 2004-2005 &
2003-2004. Remuneration and benefits paid to Chief Executive Officers/
Executive Directors for the years, April 2009 to June 2010, Oct. 2007
to Mar. 2009, April 2006 - Sept. 2007, 2005-2006, 2004-2005 and 2003-
2004 are within the limit prescribed under Schedule XIII to the
Companies Act, 1956.
3. Contingent Liabilities not provided for:
(i) Outstanding claims in respect of Excise Duty, Sales-Tax, etc.
44.21 81.13
(it) Guarantees given by the Company and Companys Bankers 33.75 950.83
(iii) Arrears of Cumulative Preference Dividend 365.56 296.81
(iv) Claims against Company not acknowledged as debts 55.76
(v). Estimated Amount of Contracts remaining to be executed on Capital
Account & not provided for. 29.77
4. Wages, Salaries and Bonus include provision made as per actuarial
valuation in respect of accumulated leave salary encashable on
retirement in accordance with Accounting Standard 15 of the Institute
of Chartered Accountants of India. Contribution to Provident and other
funds includes Companys contribution to Provident Fund, Family Pension
Fund, Gratuity Fund (based on actuarial valuation) and Superannuation
Fund.
5. In case of payments made from 1st April, 2000, under the Voluntary
Retirement Schemes of the Company, the total amount paid is treated as
a deferred revenue expenditure and amortised over a period of 84 months
or the number of months service foregone, whichever is lower, using the
sum of digits method. Under this method the charge to Profit and Loss
account is lowest in the first year and the highest in the last year.
However, the amount to be amortised beyond 31st March 2010. also is
charged during the period of April 2009 to June 2010, in accordance
with Accounting Standard (AS 15) (Revised 2005) on Employee Benefits.
Accordingly a sum of Rs.741.88 lacs (Previous Year Rs.369.26 lacs) has
been charged so the Profit and Loss Account as deferred revenue
expenditure, on account of compensation paid to employees under Early
Voluntary Retiremr-it Schemes and Rs. Nil (Previous Year Rs.741.88
lacs) has been carried forward to Deferred Revenue Expenditure account
as per the method of accounting followed by the Company.
6. Subsidy from Govrnments of Gujarat (Rs.25 lacs), Maharashtra
(Rs.20 lacs) and Rajasthan (Rs.15 lacs) for setting up of industrial
units at Jhar, (Dist.Amreli), at Roma (Dist.Raigad) and Khemti
(Dist.Udaipur), respectively, is repayable in the event of
non-fuifilment of stipulated conditions.
7. Miscellaneous expanses for the period ended 30.06.2010 includes
gain / (loss) Rs.(12.24) lacs {previous year Rs. (103.07) lacs} on
foreign exchange.
8. There are no Mici Small and Medium Enterprises, to whom the
Company owes dues, which are outstanding for more than 45 days at the
Balance Sheet data computed on unit wise basis. Further, the Company
has not paid any interest to any Micro, Small and Medium Enterprises
during the 15 months period ended on the Balance Sheet date, nor is any
interest payable to any Micro, Small and Medium Enterprises on the
Balance sheet date.
The above information has been determined to the extent such parties
have been identified on the basis of information available with the
Company. This has, been relied upon by the auditors.
9. A contract was en-red into in 1993 between the Company and General
Fertiliser Co., (GFC) Horns, Syria for revamping of two streams of
Sulphuric Acid Plant of GFC by the Company. The value of the contract
was USD 12.8 million plus Syrian Pounds 72 million,equivalent to
Rs.44.24 crores, Considering the exchange rates prevailing in 1993. The
Company has completed this project and has also given the required
performance testingss on the two streams of the Sulphuric Acid plant.
The Company has also received all payments from GFC, Syria except
payment of certain invoices aggregating to USD 1.37 million (included
in "Sundry Debtors") equivalent to Rs.645.91 lacs as on 30.06.2010. The
Company has also made claims from GFC, Syriatowards interest on
delayed payments, bank charges for extention of the validity period of
the Letter of Credit/bank Guarantees and other overheads.
The Company has not taken any credit for these claims in the books of
accounts. As provided in the contract, the case was referred to the
Arbitration Tribunal at Damascus, Syria. The Arbitration Tribunal has
given its award, according to which GFC, Syria was required to make
payment to the Company of the aforesaid unpaid dues aggregating to USD
1.37 million.
Further, the Arbitration Tribunal has accepted certain claims made by
the Company as also by GFC.Syria. The Company as well as GFC, Syria
have filed their respective appeals against the Arbitration award with
the State Council at Damascus, Syria. The Company as well as GFC, Syria
have made certain claims on each other, in their respective appeals as
filed with the State Council. The State Council constituted a seven
members Expert Committee in October 2002 to examine these claims and
give its recommendations. The Report of this Expert Committee,
containing its recommendations has been submitted to the State Council.
The comments received from GFC, Syria and the Company (in response to
the recommendations of the Expert Committee) have been forwarded by the
State Council to the Expert Committee. Based on these comments, the
Expert Committee has submitted its Report to the State Council
recommending payment to the Company of the aforesaid invoices
aggregating to USD 1.37 million (equivalent to Rs.645.91 lacs) and
certain other claims of the Company.
On this basis, the Supreme Administrative Court of Syria has given its
judgement according to which a net amount of about USD 0.90 Million
(equivalent to Rs. 415.44 lacs) is payable by GFC to the Company as on
30.06.2010. The shortfall is receivable between the amount included in
"Sundry Debtors" as on 30.06.2010 (i.e. Rs.645.91 lacs) and the net
amount payable to the Comapany as on 30.06.2010 as per the judgement
given by Supreme Administrative Court of Syria (i.e. Rs.415.44 lacs),
has already been provided in earlier Financial Years.
10. (a) The Company has made a provision for Doubtful Debts and
Advances aggregating to Rs.1823.22 lacs upto the period ended
30.06.2010
(Previous Year 1723.22 lacs). In the opinion of the Management of the
Company, this provision is adequate to cover the Doubtful Debts &
Advances as on 30.06.2010, including those in respect of dues from GFC,
Syria (to the extent considered doubtful).
(b) The Debtors as on 30.06.2010 are subject to confirmations from
customers.
11. Interest expense for the period ended 30th June 2010 and for the
period ended 31st March 2009 is net off interest income of Rs. 12.67
lacs and Rs.9.25 lacs, respectively. Tax deducted at source in respect
of aforesaid interest income for the period ended 30 th June 2010 is
Rs. 1.01 lacs (Previous year Rs.0.98 lacs)
12. (a) No provision has been made in respect of current income tax
since there is no taxable income during the period ended 30th June 2010
and for the period ended 31 st March 2009.
(b) The Company will start trading in various fertilisers and other
agri inputs in association with a " Strategic Investor", after
completing One Time settlement (OTS) of dues to secured lenders
(presently in progress). This will result in significant additional
turnover and profits. Consequently, there is virtual certainty of
realisation in respect of "Deferred Tax Asset" mainly resulting from
unabsoberd depreciation and carried forward losses. Accordingly, the
Company had recognised "Deferred Tax Asset" amounting to Rs. 2148.17
Lacs, in the Financial Accounts for the 18 months ended 30th September
2007, considering unabsorbed depreciation and unabsorbed business
losses upto 31.03.2007. The Company has recognised further "Deferred
Tax Asset" amounting to Rs. 505.98 lacs in the Financial Accounts for
the period of 18 months ended 31.03.2009, mainly resulting from
Unabsorbed Depreciation upto 31.03.2009 and Unabsorbed Business Losses
upto 31.03.2008. The Company will also recognise "Deferred Tax Asset"
resulting from further "Unabsorbed Depreciation" and further
"Unabsorbed business losses" after completing OTS of dues to secured
lenders.
13. (a) The non-viable operations of trie Companys fertiliser and
chemical business at its Ambemath factory had resulted in continued
losses and delayed payment of wages and salaries to employees for last
several months. With a view to reduce losses, the Management had
submitted its Charter of Demands on the Companys recognised Union at
Ambemath, which has been rejected by the Union. The Management,
therefore, has suspended the operations of its Ambemath factory, with
effect from 23rd January, 2009 and has issued a notice of "Lock Ouf of
the said factory with effect from 9th February, 2009. Consequently, the
Company has not provided for the employees cost with effect from 9th
February, 2009* (being not payable), in respect of those employees who
are covered by "Lock Ouf.
The Companys recognised Union at Ambemath requested the Industrial
Court, Maharashtra, at Thane to grant various interim reliefs
(including granting of stay on the effect, implementation, and
operation of the afforsaid notice of "Lock Out"). This, request of the
Union was rejected by the Industrial Court, Maharashtra, at Thane.
Subsequently, the Company signed a Memorandum of Agreement dated 30th
June 2010 with the Companys recognised Union at Ambamath, under which
a Voluntary Separation Scheme was introduced for the workmen at
Ambemath (including workmen of Head Office). Accordingly all workmen at
the Companys Ambamath factory (including workmen of Head Office) have
since applied for Voluntary Separation from the* services of the
Company. The "Separation Compensation" (aggregating to Rs.707.01 lacs)
payable to all these workmen has been provided in the books of account
for the extended Financial Year ended 30/06/2010 and same has since
been paid to these workmen in August, 2010 alongwith all other legal
dues.
(b) The Company is in the process of obtaining the requisite approval
of the shareholders under section 293(1 )(a) of the Companies Act, 1956
for sale / transfer / disposal of its Land, Factory Buildings and Plant
& machinery at its Ambemath factory. The Company has already issued the
Postal Ballot Forms for the same to its shareholders for this purpose.
In view of the above, Fixed Assets, Current Assets and Current
Liabilities relating to Ambemath Factory of the Company have been
excluded from the" Segment Assets" and the "Segment Liabilities"
indicated in Note No. 18 to the Accounts.
14. Segment Reporting:
The Company has disclosed Business Segments as its primary segments.
Reporting segments have been identified as Fertilisers and Chemical,
taking into account the nature of products, the different risks and
returns, the organisation structure and the internal reporting system.
Segment Revenue, Segment Results, Segment Assets and Segment
Liabilities include the respective amounts identifiable to each of the
segments as also the amounts allocated on a reasonable basis to the
respective segments. The expenses, which are not directly related to
the business segments, are shown as unallocated costs. Corporate assets
and liabilities have been allocated on the basis of turnover of the
segments! Assets and Liabilities that cannot be allocated between the
segments are shown as a part of unallocated assets & liabilities. Inter
Segment Transfers are at cost of production.
15. Related Parties Disclosures :
(A) Promoters holding more than 20% of the voting power
Name of the Related Parties Nature of Relationship
(I) LateShriR.M.Goculdas Promoter and Chairman, (holding more than 20%
of the voting power), upto 09th November, 2009
(li) Shri LN.Goculdas Promoter and Vice Chairman (holding more than 20%
of the voting power) upto 9th November, 2009, and Promoter and Chairman
(holding more than 20% of the voting power), from 10th November, 2009
(B) Substdiary/Assocfate/Other Related Companies
Name of the Related Parties Nature of Relationship
(I) DMCC Oil Terminals (Navlakhi) Ltd. Subsidiary Company upto
30.06.2009
(II) Borax Morarji Ltd. Associate Company
(III) The Natural Gas Co.Pvt.Ltd. Other Related Company
(IV) LP.Gas Equipment Pvt.Ltd. Other Related Company
(V) Phoenix Distributors Pvt.Ltd. Other Related Company
(VI) Jasraj Trading Co. Other Related Company
(VII) Kosan Industries Pvt.Ltd. Other Related Company
(VIII) Bombay Foods Pvt.Ltd. Other Related Company
(C) Key Management Personnel
(I) Shri D.P.Gocuidas Chief Executive Officer
(II> Shri B.L.Goculdas * Chief Executive Officer
(III> Shri D.N.Vaze Chiaf Finance Officer
16. Since the Equity Shares held by the Company in DMCC Oil Terminal
(NavlakW) Limited (DOTL), were sold during the current year, DOTL is
not a subsidiary of the Company after this sale. Therefore, the Company
is not required to prepare the Consolidated Financial Statements.
17. The Company has prepared the financial statements for the period
ended 30.06.2010 on a "Going Conern Basis", since the Company is
confident that its profitablity will improve in future in view of the
following:
a) A new activity of trading (in various fertilizers and other agri
inputs ), which the Company w*l commence in association with a
"strategic investor" after completing OTS of dues to Banks, and
b) Continued efforts by the Company for improving efficiency,
restructuring / rationalisation of operations and optimisation of cost
18. The Company has extended the current Financial Year by 3 months
upto 30/06/2010, as decided by the Board of Directors of the Company.
Accordingly, Financial Statements for the current Financial year have
been prepared for a period of 15 months commencing from 1st April, 2009
and ending on 30th June, 2010.
Therefore, figures as per these Financial Statements are not comparable
with the figures in respect of previous financial year i.e. 1 st
October, 2007 to 31 st March, 2009.
19. Figures in respect of the previous year have been regrouped
wherever necessary.
Mar 31, 2009
1. No provision has been made towards Commission to Directors due to
inadequacy of profit for the years Oct 2007 to March 2009, April 2006
to Sept. 2007, 2005-2006, 2004-2005 & 2003-2004. Remuneration and
benefits paid to Executive Directors for the years Oct 2007 to Mar
2009, April 2006 - Sept. 2007, 2005-2006, 2004-2005 and 2003-2004 are
within the limit prescribed under Schedule XIII to the Companies Act,
1956.
2. Contingent Liabilities not provided for:
(i) Outstanding claims in respect of Excise
Duty, Sales-Tax, etc. 81.13 83.64
(ii) Guarantees given by the Company and
Companys Bankers 950.83 1587.04
(iii) Arrears of Cumulative Preference Dividend 296.81 216.00
3. Wages, Salaries and Bonus include provision made as per actuarial
valuation in respect of accumulated leave salary encashable on
retirement in accordance with Accounting Standard 15 of the Institute
of Chartered Accountants of India. Contribution to Provident and other
funds includes Companys contribution to Provident Fund, Family Pension
Fund, Gratuity Fund (based on actuarial valuation) and Superannuation
Fund.
4. In case of payments made from 1st April, 2000, under the Voluntary
Retirement Schemes of the Company, the total amount paid is treated as
a deferred revenue expenditure and amortised over a period of 84 months
or the number of months service foregone, whichever is lower, using the
sum of digits method. Under this method the charge to Profit and Loss
account is lowest in the first year and the highest in the last year.
However, the amount to be amortised beyond 31 st march 2010, will be
charged during the financial year 2009-10, in accordance with
Accounting Standard (AS 15) (Revised 2005) on Employee Benefits.
A sum of Rs.369.26 lacs (Previous Year Rs.162.48 lacs) has been charged
to the Profit and Loss Account as deferred revenue expenditure, on
account of compensation paid to employees under Early Voluntary
Retirement Schemes and Rs. 741.88 lacs (Previous Year Rs. 1111.14 lacs)
has been carried forward to Deferred Revenue Expenditure account as per
the method of accounting followed by the Company.
5. Subsidy from Governments of Gujarat (Rs.25 lacs), Maharashtra
(Rs.20 lacs) and Rajasthan (Rs.15 lacs) for setting up of industrial
units at Jhar, (Dist.Amreli), at Roha (Dist.Raigad) and Khemli
(Dist.Udaipur), respectively, is repayable in the event of
non-fulfilment of stipulated conditions.
6. (a) Miscellaneous income for the period ended 31.03.2009 includes
gain / (loss) on foreign exchange (net) amounting to nil (previous year
Rs. 107.92 Lacs).
(b) Miscellaneous expenses for the period ended 31.03.2009 includes
gain / (loss) Rs.(103.07) lacs (previous year Nil) on foreign exchange.
7. There are no Micro, Small and Medium Enterprises, to whom the
Company owes dues, which are outstanding for more than 45 days at the
Balance Sheet date, computed on unit wise basis. Further, the Company
has not paid any interest to any Micro, Small and Medium Enterprises
during the period of 18 months ended on the Balance Sheet date, nor is
any interest payable to any Micro, Small and Medium Enterprises on the
Balance sheet date.
The above information has been determined to the extent such parties
have been identified on the basis of information available with the
Company. This has been relied upon by the auditors.
8. A contract was entered into in 1993 between the Company and
General Fertiliser Co., (GFC) Horns, Syria for revamping of two streams
of Sulphuric Acid Plant of GFC by the Company. The value of the
contract was USD 12.8 million plus Syrian Pounds 72 million, equivalent
to Rs.44.24 crores, considering the exchange rates prevailing in 1993.
The Company has completed this project and has also given the required
performance test runs on the two streams of the Sulphuric Acid plant.
The Company has also received all payments from GFC, Syria except
payment of certain invoices aggregating to USD 1.37 million (included
in "Sundry Debtors") equivalent to Rs.703;59 lacs as on 31.03.2009.
The Company has also made claims from GFC, Syria towards interest on
delayed payments, bank charges for extention of the validity period of
the Letter of Credit/bank Guarantees and other overheads. The Company
has not taken any credit for these claims in the books of accounts. As
provided in the contract, the case was referred to the Arbitration
Tribunal at Damascus, Syria. The Arbitration Tribunal has given its
award, according to which GFC, Syria was required to make payment to
the Company of the aforesaid unpaid dues aggregating to USD 1.37
million. Further, the Arbitration Tribunal has accepted certain claims
made by the Company as also by GFC, Syria. The Company as well as GFC,
Syria have filed their respective appeals against the Arbitration award
with the State Council at Damascus, Syria. The Company as well as GFC,
Syria have made certain claims on each other, in their respective
appeals as filed with the State Council. The State Council constituted
a seven member Expert Committee in October 2002 to examine these claims
and give its recommendations. The Report of this Expert Committee,
containing its recommendations has been submitted to the State Council.
The comments received from GFC, Syria and the Company (in response to
the recommendations of the Expert Committee) have been forwarded by the
State Council to the Expert Committee. Based on these comments, the
Expert Committee has submitted its Report to the State Council
recommending payment to the Company of the aforesaid invoices
aggregating to USD 1.37 million (equivalent to Rs.703.59 lacs) and
certain other claims of the Company. On this basis, the Supreme
Administrative Court of Syria has given its judgement according to
which a net amount of about USD 0.90 Million (equivalent to Rs. 453.59
lacs) is payable by GFC to the Company as on 31.03.2009. In addition,
the Company is entitled to receive interest @ 5% p.a. from GFC, Syria
on the aforesaid net amount of about USD 0.90 million (equivalent to
Rs. 453.59 lacs as on 31/03/2009), till the date of payment, as per the
aforesaid judgement, which has not been accrued by the Company in the
books of accounts. The shortfall in receivable between the amount
included in "Sundry Debtors" as on 31.03.2009 (i.e. Rs.703.59 lacs) and
the net amount payable to the Comapany by GFC, Syria as on 31.03.2009
as per the judgement given by Supreme Administrative Court of Syria
(i.e. Rs.453.59 lacs), has already been provided in earlier Financial
Year.
9. (a) The Company has made a provision for Doubtful Debts and
Advances aggregating to Rs. 1723.22 lacs upto the period ended
31.03.2009
In the opinion of the Management of the Company, this provision is
adequate to cover the Doubtful Debts & Advances as on 31.03.2009,
including those in respect of dues from GFC, Syria (to the extent
considered doubtful).
(b) The Debtors as on 31.03.2009 are subject to confirmations from
customers.
10. (a) Interest expense for the period ended 31.03.2009 is after
reduction in interest cost on borrowings from lenders to the extent of
Rs 20.69 lacs (Previous year Rs.153.10 Lacs) (due to reduction in the
interest rates), persuant to revised Corporate Debt Restructuring (CDR)
package approved by the lenders, effective from 1st April 2005, subject
to certain conditions, which are being fulfilled by the Company.
(b) Interest expense for the period ended 31 st March 2009 and for the
period ended 30th September 2007 is net off interest income of Rs.9.25
lacs and Rs. 9.14 lacs, respectively. Tax deducted at source in respect
of aforesaid interest income for the period ended 31st March 2009 is
Rs. 0.98 lacs (Previous year Rs.1.55 lacs)
(c) As per one of the conditions of the revised CDR package approved by
the lenders (effective from 01.04.2005), the Company is required to
convert a part of sacrifice undertaken by the lenders in the revised
CDR package vis a vis, the earlier CDR package, due to reduction in the
interest rates (on Net Present Value basis) amounting to Rs.267.90
lacs, partly into Equity Shares of the Company (valued at Rs.115.56
Lacs, inclusive of securities premium) and partly into unsecured loans
(amounting to Rs.152.34 lacs). The cost to the Company arising out of
conversion of the above sacrifice undertaken by the lenders (Rs. 267.90
lacs) is being amortised equally during eight Financial Years from
2005-06 to 2012-13, since all Term Loans are to be paid by the Company
by 31st March 2013, as per revised CDR package. Accordingly, Rs. 80.95
lacs (Previous Year Rs.54.83 lacs) has been amortised during the period
ended 31st March 2009 and the unamortised amount of Rs. 103.23 lacs has
been carried forward as Deferred Revenue Expenditure, as on 31st March
2009
(d) The Company has not recognised interest aggregating to Rs.785.82
lacs for the eighteen months period ended 31.03.2009(Previous year Nil)
as the banks concerned have not debited the same to the respective
accounts of the Company.
11 (a) No provision has been made in respect of current income tax
since there is no taxable income during the period ended 31st March
2009 and period ended 30th September 2007.
(b) The Company will start trading in various fertilisers and other
agri inputs in association with a "Strategic Investor", after
completing One Time settlement (OTS) of dues to Banks. This will result
in significant additional turnover and profits. Consequently, there is
virtual certainty of realisation in respect of "Deferred Tax Asset"
mainly resulting from unabsoberd depreciation and carried forward
losses. Accordingly, the Company had recognised "Deferred Tax Asset"
amounting to Rs. 2148.17 Lacs, in the Financial Accounts for the period
of eighteen months ended 30th September, 2007, considering unabsorbed
depreciation and unabsorbed business losses upto 31.03.2007. The
Company has recognised further "Deferred Tax Asset" amounting to Rs.
505.98 lacs in the Financial Accounts for the period of eighteen months
ended 31.03.2009, mainly resulting from Unabsorbed Depreciation upto
31.03.2009 and Unabsorbed Business Losses upto 31.03.2008. The Company
will also recognise Deferred Tax Asset resulting from Unabsorbed
Business Loss for the Previous Year April 2008 to March 2009, after
filing the Income Tax Return for this previous year (Assessment Year
2009-2010)
12. The non-viable operations of the Companys fertiliser and chemical
business at its Ambernath factory had resulted in continued losses and
delayed payment of wages and salaries to employees for last several
months. With a view to reduce losses, the Management had submitted its
Charter of Demands on the Companys recognised Union at Ambernath,
which has been rejected by the Union. The Management has, therefore,
suspended the operations of its Ambernath factory, with effect from
23rd January, 2009 and has issued a notice of "Lock Out" of the said
factory with effect from 9th February, 2009. Consequently, the Company
has not provided for the employees cost with effect from 9th February,
2009 (being not payable), in respect of those employees who are covered
by "Lock Out".
The Companys recognised Union at Ambernath requested the Industrial
Court, Maharashtra, at Thane to grant various interim reliefs
(including granting of stay on the effect, implementation, and
operation of the afforsaid notice of "Lock Out"). This request of the
Union has been rejected by the Industrial Court, Maharashtra, at Thane.
13 Segment Reporting:
The Company has disclosed Business Segments as its primary segments.
Reporting segments have been identified as Fertilisers and Chemical,
taking into account the nature of products, the different risks and
returns, the organisation structure and the internal reporting system.
Segments Revenue, Segment Results, Segment Assets and Segment
Liabilities include the respective amounts identifiable to each of the
segments as also the amounts allocated on a reasonable basis to the
respective segments. The expenses, which are not directly related to
the business segments, are shown as unallocated costs. Corporate assets
and liabilities have been allocated on the basis of turnover of the
segments. Assets and Liabilities that cannot be allocated between the
segments are shown as a part of unallocated assets & liabilities. Inter
Segment Transfers are at cost of production.
14 Related Parties Disclosures:
(A) Promoters holding more than 20% of the voting power
Name of the Related Parties Nature of Relationship
(i) Shri R.M.Goculdas Promoter and Chairman, holding
more than 20% of
the voting power (directly/
indirectly)
(ii) Shri L.N.Goculdas Promoter and Vice Chairman,
holding more than 20% of the
voting power (directly)
(B) Subsidiary/Associate/Other Related Companies
Name of the Related Parties Nature of Relationship
(i) DMCC Oil Terminals (Navlakhi) Subsidiary Company
Ltd.
(ii) Borax Morarji Ltd. Associate Company
(iii) The Natural Gas Co.Pvt.Ltd. Other Related Company
(iv) LP.Gas Equipment PvLLtd. Other Related Company
(v) Phoenix Distributors
Pvt.Ltd. Other Related Company
(vi) Jasraj Trading Co. Other Related Company
(vii) Kosan Industries Pvt.Ltd. Other Related Company
(viii) Bombay Foods Pvt.Ltd. Other Related Company
(C) Key Management Personnel (Whole Time Directors)
Name of the Related Parties Nature of Relationship
(i) Shri D.P.Goculdas Managing Director (upto 31/03/09)
(ii) Shri B.LGoculdas Managing Director (upto 31/03/09)
(iii) Shri D.N.Vaze Whole time Director (upto 31/03/09)
15 Since it is proposed to sell the Equity Shares held by the Company
in DMCC Oil Terminal (Navlakhi) Limited (DOTL), the control of the
Company on DOTL is expected to be temporary. DOTL will not remain a
subsidiary of the Company after this sale. Therefore, in terms of para
11 (a) of the Accounting Standard (AS-21) issued by the Institute of
Chartered Accountants of India, the Company is not required to prepare
the Consolidated Financial Statements.
16 The Company has prepared the financial statements for the eighteen
months ended 31.03.2009 on a "Going Conern Basis" since the Company is
confident that its profitablity will improve in future in view of the
following:
a) A new activity of trading (in various fertilizers and other agri
inputs ) which the Company will commence in association with a
"statagic investor" after completing OTS of dues to Banks, and
b) Continued efforts by the Company for improving efficiency,
restructuring / rationalisation of operations and optimisation of cost.
17 Company has extended the current financial year by 6 months upto
31/03/2009 in accordance with the approval received by the Company from
the Registrar of Companies, Maharashtra State, Mumbai. Acoordingly
financial statements for the current financial year have been prepared
for a period of 18 months commencing from 01/10/2007 and ending on
31/03/2009.
18 Figures in respect of the previous year have been regrouped wherever
necessary.
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