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Notes to Accounts of Dhunseri Petrochem Ltd.

Mar 31, 2014

(Rs. in crores)

As at As at 31.03.2014 31.03.2013

Note 1 CONTINGENT LIABILITIES

(a) Claims against the Company not acknowledged as debts

(i) Customs Demand-matter under dispute @ @

(ii) Service Tax Demand-matter under dispute 0.18 0.18

(iii) Income Tax-matter under dispute 0.83 0.83

(iv) Entry Tax-matter under dispute 11.76 -

It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings.

(b) Standby Letters of Credit issued in connection with loan taken by Dhunseri Petrochem 79.33 71.79 & Tea Pte Limited, a wholly owned subsidiary, from a bank

(c) Bank Guarantee 2.33 -

(d) The Company does not expect any reimbursements in respect of the above contingent liabilities.

@ Amount is below the rounding off norm adopted by the Company.

Note 2 DISCONTINUING OPERATIONS

The Board of Directors at its meeting held on 28th January, 2014 approved a Scheme of Arrangement (the Scheme) for demerger of the "Tea Division" of the Company which is engaged in the business of cultivation, production and marketing of tea, by way of transfer to M/s Dhunseri Tea & Industries Limited and reorganisation of the "IT SEZ Division" which is engaged in the business of providing infrastructure facilities to the Information Technology/Information Technology Enabled Services (IT/ITES) units with special economic zone status, by transferring the same to M/s Dhunseri Infrastructure Limited with effect from the appointed date i.e. 1st April, 2014. The Company has also intimated to the Stock Exchanges about the Scheme on 28th January, 2014. The Tea Division is a separate business segment as per AS-17 "Segment Reporting" and IT SEZ division which is yet to start its operation was included in unallocated assets and liabilities in segment reporting. The Scheme is subject to requisite approvals, including sanction of the The Hon''ble High Court at Calcutta which is pending. Accordingly aforesaid Tea Division and IT SEZ Division have been considered as discontinuing operations.

Note 3 REVALUATION OF FIXED ASSETS

All fixed assets other than Computers and Furniture & Fixtures located at Ten tea estates and Eight factories in the state of Assam had been revalued by M/s S. R. Batliboi Consultants Pvt. Limited, Registered Valuer, on 1st April, 2009, to Rs. 183.19 crores (Previous Year- Rs. 183.19 crores ) resulting in increase in net book value of assets by Rs. 149.90 crores (Previous Year- Rs. 149.90 crores) which had been credited to the Revaluation Reserve. The Revaluation Reserve has been fully adjusted in earlier years.

Buildings, Plant & Machinery and Vehicles were revalued by the Net Replacement Value method whereas Freehold Land and Leasehold Land & Estate Development were revalued by Plantation Value method.

III FOREIGN CURRENCY CONVERTIBLE BONDS (FCCB)

The erstwhile South Asian Petrochem Limited (subsequently merged with Dhunseri Petrochem & Tea Limited) had issued 200 Zero Percent Unsecured Foreign Currency Convertible Bonds (FCCB) of US$ 100,000 each in the year 2007-08. Out of these FCCBs, outstanding bonds had been fully redeemed in the year 2012-13 and the premium on redemption amounting to Rs. Nil (Previous Year- Rs. 14.80 crores) had been adjusted with Securities Premium Account.

Note 4 LOANS AND ADVANCES

(a) Loans and advances to related parties under "Short-term loans and advances" (Note 22) includes amount due from

(i) A Private Limited Company in which Director of the Company is a director-Rs. Nil (Previous Year- Rs. 0.02 crore).

(ii) Subsidiary Companies amounting to Rs. 16.35 crores ( Previous Year- Rs. 5.57 crores ).

I Gratuity

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme, the Gratuity Trust Fund make payment to vested employees at retirement, death/disability, withdrawal of an amount based on the respective employee''s eligible salary for specified number of days depending upon the tenure of service subject to a maximum limit of Rs. 0.10 crores. Vesting occurs upon completion of five years of service. Liability with regard to the aforesaid gratuity plan is determined by actuarial valuation as set out in Note l(g)(ii) above, based upon which the Company makes annual contributions for Gratuity to the Trust Fund.

Note 5

DISCLOSURE OF RELATED PARTIES AND RELATED PARTY TRANSACTIONS IN KEEPING WITH ACCOUNTING STANDARD 18

Names of related parties and description of relationship: Where control exists

(A) Subsidiary Companies:

(1) Egyptian Indian Polyester Company S.A.E.

(2) Dowamara Tea Company Private Limited (up to 20th March,2014)

(3) Dhunseri Petrochem & Tea Pte Ltd.

(4) Dhunseri Tea & Industries Limited (formerly Dhunseri Services Limited) (acquired during the year ended 31.03.2014)

(5) Dhunseri Infrastructure Limited (formerly Dhanurveda Infrastructure Private Limited) (acquired during the year ended 31.03.2014)

(B) Subsidiaries of Dhunseri Petrochem & Tea Pte Ltd.

(6) Makandi Tea & Coffee Estates Ltd. (acquired during the year ended 31.03.2013)

(7) Kawalazi Estate Company Ltd. (acquired during the year ended 31.03.2013)

Others

(C) Group Companies (i.e. Companies in which Key Management Personnel is able to exercise significant influence):

(8) Naga Dhunseri Group Limited

(9) Trimplex Investments Limited

(10) Mint Investments Limited

(11) Dhunseri Investments Limited

(D) Key Management Personnel

(12) Mr. C. K. Dhanuka ( Executive Chairman)

(13) Mr. M. Dhanuka (Vice Chairman and Managing Director)

(14) Mr. B. Chattopadhyay (Chief Executive Officer and Managing Director)

(15) Mr. R. K. Sharma (Executive Director, Finance)

Note M DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY EXPOSURES-

a)The Company uses Forward Exchange Contracts and Interest Rate Swaps to hedge its exposures in foreign currency related to firm commitments and highly probable forecasted transactions. Outstanding Forward Contracts as at 31st March, 2014 taken to hedge various foreign currency receivables on past performance basis is Rs. 24.63 crores (Previous Year- Rs. 38.86 crores) and foreign currency loan payable is Rs. Nil (Previous Year- Rs. 40.35 crores), Interest Rate Swap contracts outstanding as at year end is Rs. 353.53 crores (Previous Year- Rs. 55.83 crores).

b) Foreign Currency Exposures(net) that are not hedged as at 31st March, 2014 by a derivative instrument or otherwise is Rs. 1158.04 crores (Previous Year-Rs. 1016.31 crores).

Note 6 LEASE OBLIGATION

Operating Lease

The Company has taken various office premises under operating leases which are cancellable having tenures of 11 months/9 years. There is no specific obligation for renewal of these agreements. Lease rent for the year amounts to Rs. 1.84 crores (Previous Year- Rs. 1.76 crores) debited to the Statement of Profit and Loss.

Note 7 UNDERTAKING GIVEN TO LENDERS OF SUBSIDIARY COMPANIES

The Company had invested an amount of Rs. 196.26 crores (Previous Year - Rs. 156.62 crores) by way of equity contribution up to 31st March, 2014, towards PET Resin manufacturing project in its subsidiary company Egyptian Indian Polyester Company S.A.E. (EIPET). EIPET has also taken loans from various lenders to fund the project. As the sponsor shareholder having majority stake in EIPET, the Company has given an undertaking to the lenders that in the event of the failure of EIPET to make any term loan repayment on due date and triggering of Market Redirection Event as specified in the agreement, which according to the Company are within its control, the Company will be required to pay to the lenders the amounts due by EIPET subject to a specified limit. Based on the information available with the Company, the loan amount outstanding in EIPET books as on 31st March, 2014 amounts to US$ 16.13 crores equivalent Rs. 969.61 crores (Previous Year-US$ 8.09 crores, equivalent Rs. 440.00 crores), which is not due for payment.

Note 8

Miscellaneous expenses (Refer Note 34) include a donation of Rs. 1.00 crore (Previous Year Rs. Nil) for a political purpose to Satya Electoral Trust.

Note 9

Previous Year''s figures have been rearranged/regrouped wherever necessary.


Mar 31, 2013

NOTE 1 INSURANCE CLAIM

A major fire broke out in the raw material store at the Company''s Haldia plant on 14.03.2011 leading to destruction/ damage of certain fixed assets, spares, raw materials and packing materials. The items damaged being insured, insurance claims were filed by the Company. The impact of all related losses due to fire had been duly accounted for and an equivalent amount of Rs. 64.63 crores recognised as insurance claim receivable during the year 2010-11. After partial settlement of the claim in the previous year and giving effect to related adjustments an amount of Rs. 9.82 crores was receivable at the begining of the year. Upon final settlement of the claim during the year the Company received Rs. 7.52 crores (including Rs. 0.63 crore for loss of profit which has been recognised in the Statement of Profit and Loss during the year under the head ''''Other income'''') from the insurance company and charged off Rs. 2.93 crores in the Statement of Profit and Loss on account of short settlement of claim by the insurance company (included under the head ''''Other expenses'''').

NOTE 2

REVALUATION OF FIXED ASSETS

All fixed assets other than Computers and Furniture & Fixtures located at ten tea estates (Previous year eleven tea estates) and nine factories (Previous year eight factories) in the state of Assam had been revalued by M/s S. R. Batliboi Consultants Pvt. Limited, Registered Valuer, on 1st April, 2009, to Rs. 183.19 crores (Previous Year Rs. 200.47 crores) resulting in increase in net book value of assets by Rs. 149.90 crores (Prevous Year Rs. 162.50 crores ) which had been credited to the Revaluation Reserve.The Revaluation Reserve has been fully adjusted in earlier years.

Buildings, Plant & Machinery and Vehicles were revalued at the Net Replacement Value method whereas Freehold Land, Leasehold Land and Land & Estate Development were revalued at Plantation Value method.

NOTE 3 FOREIGN CURRENCY CONVERTIBLE BONDS (FCCB)

The erstwhile South Asian Petrochem Limited (since merged with Dhunseri Petrochem & Tea Limited) had issued 200 Zero Percent Unsecured Foreign Currency Convertible Bonds (FCCB) of USD 100,000 each in the year 2007-08. Out of these FCCBs, bonds amounting to USD 75,00,000 which were outstanding at the end of the previous year have been fully redeemed at 136.86% of their principal amount during the year. The premium on redemption amounting to Rs. 14.80 crores (Previous Year Rs. Nil ) has been adjusted with Securities Premium Account. (Refer Note 3)

NOTE 4 LOANS AND ADVANCES

(a) Loans and advances to related parties under "Short term loans and advances" (Note 22) includes amount due from- (i) A Private Limited Company in which Director of the Company is a director - Rs. 0.02 crore (Previous Year: Rs. - @ ).

(ii) A Subsidiary Company amounting to Rs. 5.57 crores ( Previous Year Rs. 3.63 crores ).

(b) Advance to Suppliers/Service Providers under "Short term loans and advances" (Note 22) includes amount due from- (i) A firm in which Director of the Company is partner- Rs. - @ (Previous Year: Rs. 0.01 crore).

@ Amount is below the rounding off norm adopted by the Company.

NOTE 5 EMPLOYEE BENEFIT OBLIGATION

I. Gratuity

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme, the Gratuity Trust Funds/Life Insurance Corporation of India (LICI) make payment to vested employees at retirement, death/disability, withdrawal, of an amount based on the respective employee''s eligible salary for specified number of days depending upon the tenure of service. Vesting occurs upon completion of five years of service. Liability with regard to the aforesaid gratuity plan is determined by actuarial valuation as set out in Note 1(g)(ii) above, based upon which, the Company makes annual contributions for Gratuity to a trust and LICI.

The estimates of future salary increases considered in the actuarial valuation takes into account factors like inflation, seniority, promotion and other relevant factors. The expected return on plan assets is determined after taking into consideration composition of the plan assets held, assessed risk,historical results on plan assets,the Company''s policy for plan asset management and other relevant factors.

II. Contribution for Defined Contribution Plan comprising Rs. 0.51 crore (Previous Year Rs. 0.06 crore) on account of the Company''s contribution to Super annuation fund and Rs. 3.37 crores (Previous Year: Rs. 3.06 crores) on account of the Company''s contribution to Provident funds has been recognised as an expense and included in Note 31- Employee benefits expense under the head "Contribution to provident and other funds” in the Statement of Profit and Loss.

NOTE 6 DISCLOSURE OF RELATED PARTIES AND RELATED PARTY TRANSACTIONS IN KEEPING WITH ACCOUNTING STANDARD 18

Names of related parties and description of relationship:

(A) Subsidiary Companies:

(1) Egyptian Indian Polyester Company S.A.E.

(2) Dowamara Tea Company Pvt. Ltd.

(3) Dhunseri Petrochem & Tea Pte Ltd.

(B) Subsidiaries of Dhunseri Petrochem & Tea Pte Ltd.

(1) Makandi Tea & Coffee Estates Ltd. (acquired during the year ended 31.03.2013)

(2) Kawalazi Estate Company Ltd. (acquired during the year ended 31.03.2013)

(C) Group Companies: (i.e. Companies in which Key Management Personnel is able to exercise significant influence)

(1) Madhuting Tea Private Ltd.

(2) Naga Dhunseri Group Ltd.

(3) Trimplex Investments Ltd.

(4) Mint Investments Ltd.

(5) Plenty Valley Intra Ltd.

(6) Dhunseri Investments Ltd.

(D) Key Management Personnel

(1) Mr.C.K.Dhanuka (Executive Chairman)

(2) Mr. M .Dhanuka (Vice Chairman and Managing Director)

(3) Mr. B. Chattopadhyay (Chief Executive Officer and Managing Director)

(4) Mr. R.K Sharma (Executive Director, Finance) (with effect from 1st April 2012)

(5) Mr. B K Biyani (Executive Director, Corporate) (upto 31st March 2012)

NOTE 7 FOREX EXPOSURE

a) The Company uses Forward Exchange Contracts and Interest Rate Swaps to hedge its exposures in foreign currency related to firm commitments and highly probable forecasted transaction. Outstanding Forward Contracts as on 31st March, 2013 taken to hedge various foreign currency receivables is Rs. 38.86 crores (Previous Year Rs. 1.87 crores) and foreign currency loan payable is Rs. 40.35 crores (Previous Year Rs. Nil), Interest Rate Swap contract outstanding as at year end is Rs. 55.83 crores (Previous Year Rs. Nil).

b) Foreign Currency Exposures that are not hedged by a derivative instrument or otherwise is Rs. 1016.31 crores (Previous Year Rs. 744.68 crore).

NOTE 8 DISCLOSURE AS PER THE MICRO, SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ACT, 2006 (MSMED ACT)

The Company has amounts due to suppliers under The Micro, Small and Medium Enterprise Development Act, 2006 (MSMED Act) as at 31st March 2013. The disclosure pursuant to the said Act is as under:

NOTE 9

The Company had invested an amount of Rs. 156.62 crores (Previous Year Rs. 156.62 crores) by way of equity contribution up to 31st March, 2013 , towards PET Resin manufacturing project in its subsidiary Company Egyptian Indian Polyester Co., S.A.E. (EIPET). During the year, EIPET has also taken loans from various lenders to fund the project. As the sponsor shareholder having majority stake in EIPET, the Company has given an undertaking to the lenders that in the event of the failure of EIPET to make any term loan repayment on due date and triggering of Market Redirection Event as specified in the agreement, which according to the Company are within its control, the Company will be required to pay to the lenders the amounts due by EIPET subject to a specified limit. Based on the information available with the Company, the loan amount outstanding in EIPET books as on 31st March, 2013 amounts to USD 8.09 crores [Equivalent rupee amount Rs. 440 crores] (Previous Year USD 3.79 crores, equivalent Rs. 193.64 crores), which is not due for payment.

NOTE 10

Miscellaneous expenses (Refer Note 34) include a donation of Rs. Nil (Previous Year Rs. 0.8 crore) to a Political Party - Assam Pradesh Congress Committee.

NOTE 11

Previous Year''s figures have been rearranged/regrouped wherever necessary.


Mar 31, 2012

(a) The Company has one class of equity share having a par value of Rs 10 each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in the case of interim dividend. In the event of liquidation the equity shareholders are eligible and receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

(b) Terms of securities/other liabilities convertible into equity shares : Refer Notes 39 and 54.

(c) Shares allotted as fully paid pursuant to contracts without payment being received in cash (during five years immediately preceding 31st March, 2012).

(i) During the year 2010-11- 23,313,859 Equity Shares of Rs 10/- each were issued as fully paid up, issued pursuant to the scheme of arrangement without payment being received in cash.

(ii) During the year 2008-09- 4,727,095 Equity Shares of Rs 10/- each were issued as fully paid up, issued pursuant to the scheme of amalgamation without payment being received in cash.

Nature of Security

(a) Loans Repayable on demand from Banks

(i) Amounting to Rs 15514.57 lacs (Previous Year Rs 14562.92 lacs):

First charge by way of hypothecation ranking pari-passu over all present and future inventories, consumables, stores and spares, book-debts and all other movables of petrochem division.

Secured/ to be secured by joint mortgage on pari-passu second charge basis on all the immovable properties of the existing and new PET plant situated at Mouza Basudevpur, JLNo. 126, PS Durgachak & Mouza Paranchak, JL No. 145, PS Bhabanipur, Haldia, West Bengal together with all the buildings and structures thereon including fixed plant and machinery and fixtures and fittings permanently fastened to the earth or fastened to anything attached to the earth.

Secured by personal guarantee of two of the Promoter Directors of the Company.

(ii) Amounting toRs 2510.30 lacs (Previous YearRs 87.17 lacs):

Secured by a first hypothecation charge on the current assets of the Company's tea division namely, stocks of raw materials, stock- in-process, semi finished and finished goods, stores and spares not relating to plant and machinery, bills receivable, book debts and all other movables, both present and future wherever situated and equitable mortgage over the immovable properties by deposit of title deeds of tea estates and personal guarantee of the promoter director of the Company and to be secured by second pari-passu charge on the immovable property of the Company viz. Land being no. IT15A within notified SEZ in JL No. 35 in Mouza Gangapur at KITP Basanti Highway, within the jurisdiction of Kolkata Leather Complex police station.

(a) Quality Upgraded subsidy amounting to Rs 54.99 lacs (Previous Year: Rs 14.40 lacs) received during the year under Tea Board Quality Upgrade ration & Product Diversification has been adjusted against the cost of the respective assets.

(b) The Assam Government has acquired in total 793.05 hectares of land under the Assam Fixation of Ceiling on Land Holdings Act, 1956 and PW.D. has acquired 4 hectares of land for construction of public road. Pending the receipt/finalization of compensation money from the authorities in respect of the above acquisition, no adjustment in this regard has been made in these accounts.

(c) Disposal column includes Gross Block and Accumulated Depreciation of assets written off worth Rs 4.04 lacs (Previous Year Rs 1.81 lacs) & Rs 3.02 lacs (Previous Year Rs 1.49 lacs) respectively.

(d) Gross Block-Addition and Depreciation -Disposal column includes Rs 484.25 lacs and Rs 195.13 lacs respectively on account of assets reinstated/restored subsequent to Fire at Haldia Plant on 14.03.2011.

(e) Other adjustments column includes adjustments on account of exchange difference Rs 859.39 lacs (Previous Year - Rs Nil) (Refer Note- 38) and borrowing cost Rs Nil (Previous Year - Rs 361.71 lacs).

Note 1 CONTINGENT LIABILITIES

(a) Claims against the Company not acknowledged as debts

(i) Customs Demand - matter under dispute 148.61 148.61

(ii) Service Tax Demand - matter under dispute 18.13 18.13

(iii) Income Tax-matter under dispute 82.77 - It is not practicable for the Company to estimate the timings of cash outflows,

if any, in respect of the above pending resolution of the respective proceedings.

(b) The Company does not expect any reimbursements in respect of the above contingent liabilities.

Note 2 INSURANCE CLAIM

A major fire broke out in the raw material store at the Company's Haldia plant on 14.03.2011 leading to destruction/ damage of certain fixed assets, spares, raw materials & packing materials. The items damaged being insured, insurance claims were filed by the Company. The impact of all related losses for fixed assets, spares, raw materials and packing materials damaged/destroyed due to fire had been duly accounted for and an equivalent amount of Rs 6462.93 lacs (Rs 5157.66 lacs and Rs 1305.27 lacs on account of raw materials & packing materials and fixed assets & spares respectively) recognized as insurance claim receivables during the year 2010-11. During the current year upon settlement of claim pertaining to raw material and packing material by the insurance company, the Company has received Rs 3626.69 lacs (including reimbursement of expenses of Rs 23.82 lacs) from the insurance company and recovered Rs 532.91 lacs (net of tax) through disposal of salvage materials and the balance amount of related claim receivable being Rs 1023.92 lacs has been written off in these financial statements (Refer Note-34) under the head "Other expenses". Claims on account of destruction / damage of fixed assets & spares are yet to be settled by the insurance Company and the related claim amounting to Rs 982.08 lacs (net of salvage value and value of assets reinstated in books on restoration of certain assets-Rs 323.19 lacs) included in "Insurance Claim Receivable" (Refer note - 23) is outstanding at the year end. Further the Company has also lodged claims for loss of profits on account of loss suffered during the period of disruption in the operation of the plant due to fire which is pending settlement and has not been accounted for on prudent basis.

Note 3

Miscellaneous expenses (Note 34) include a donation of Rs 7.5 lacs (Previous Year- Rs Nil) to a Political Party-Assam Pradesh Congress Committee.

Note 4 REVALUATION OF FIXED ASSETS

All fixed asset other than Computers and Furniture & Fixtures located at eleven tea estates and nine factories in the state of Assam had been revalued by M/s S. R. Balboa Consultants Pvt. Limited, Registered Valuer, on 1st April, 2009, to Rs 20047.00 lacs resulting in increase in net book value of assets by Rs 16250.00 lacs which had been credited to the Revaluation Reserve. The Revaluation Reserve has been fully adjusted in earlier years.

Buildings, Plant & Machinery and Vehicles were revalued at the Net Replacement Value method whereas freehold land and leasehold land & estate development were revalued at Plantation Value method.

Note 5 CHANGE IN ACCOUNTING POLICY

The Company has exercised the option as set out in paragraph 46A of the Accounting Standard 11 on the effects of Changes in Foreign Exchange Rates, pursuant to the Notification dated 29th December 2011 .Accordingly, during the current financial year exchange differences arising on restatement of long term foreign currency loans obtained for the purpose of acquisition of depreciable capital assets, which were hitherto being recognized in the Statement of Profit and Loss, has been adjusted in the cost of depreciable assets, which would be depreciated over the balance lives of the assets.

Had the Company continued to follow the earlier accounting policy, the net foreign exchange loss recognized in the Statement of Profit and Loss would have been higher by Rs 3,785.03 lacs with corresponding decrease in net profit for the year and fixed assets would have been lower to the same extent.

Note 6 FOREIGN CURRENCY CONVERTIBLE BONDS (FCCB)

(a) The erstwhile South Asian Petrochem Limited (presently Dhunseri Petrochem & Tea Ltd) had allotted 200 Zero Coupon Unsecured Foreign Currency Convertible Bonds (FCCBs) of US $ 1,00,000 each for an aggregate amount of US $ 20,000,000 (i.e., Rs 7864.00 lacs) in the year 2007-08. After buyback bonds amounting to US $ 7,500,000 are outstanding as on date. The outstanding bonds are redeemable on January 23, 2013 at 136.86% of their principal amount. The bond holders have an option to convert these bonds into equity shares at the reset price of Rs 170.10 per share with a fixed rate of exchange on conversion of Rs 39.32 (US$ 1), subject to certain adjustments. The Bonds may also be redeemed, in whole but not in part, at the option of the Company at any time, subject to certain conditions. Also the Company has an option requiring mandatory conversion of all the outstanding bonds on or after January 16, 2011 and up to January 14, 2013.

The Company is of the view that the balance outstanding bonds may not ultimately be redeemed as the same may be converted into equity shares within the assigned date and hence has not considered the effect of realignment of the bond value as prescribed in the Accounting Standard (AS 11) on Effects of Changes in Foreign Exchange Rates' notified in the Companies (Accounting Standards) Rules 2006 and also not provided for premium on redemption of the said bonds. The future cash flows if any cannot be determined at this stage.

(b) Unutilized proceeds of Rs 2949.00 lacs lying as on 31.03.2011 in the form of Fixed Deposits have been fully utilized towards equity participation in the overseas project in Egypt.

Note 7 LOANS AND ADVANCES

Loans and advances to related parties under "Short term loans and advances" (Note 22) includes amount due from-

(i) Private Limited Company in which Director of the Company is a director - Rs 0.10 lacs (Previous Year Rs 0.39 lacs).

(ii) Subsidiary Company amounting to Rs 363.33 lacs (Previous Year Rs 24.44 lacs).

Advance to Suppliers/Service Providers under "Short term loans and advances" (Note 22) includes amount due from- (i) Firm in which Director of the Company is partner- Rs 0.55 lacs (Previous Year Rs 1.49 lacs).

Security Deposits under "Long-term loans and advances "(Note 16) includes amount due from

(i) A Limited Company in which Directors of the Company are interested as Director - Rs 127.50 lacs (Previous Year Rs 127.50 lacs) being deposit for use of office space with parking.

Note 8 BTEMPLOYEE BENEFIT OBLIGATION

Contribution for Defined Contribution Plan comprising Rs 6.72 lacs (Previous Year Rs 6.22 lacs) on account of the Company's contribution to Super annotation fund and Rs 306.57 lacs (Previous Year: Rs 263.19 lacs) on account of the Company's contribution to Provident funds has been recognized as an expense and included in Note 31- Employee benefits expense under the head "Contribution to provident and other funds" in the Statement of Profit and Loss.

(g) Contribution expected to pe paid to the plan during the period 2012-13 is Rs 132.19 lacs.

The estimates of future salary increases considered in the actuarial valuation takes into account factors like inflation, seniority, promotion and other relevant factors. The expected return on plan assets is determined after taking into consideration composition of the plan assets held, assessed risk, historical results on plan assets, the Company's policy for plan asset management and other relevant factors.

Note 9 SEGMENT REPORTING

The Company has considered business segment as the primary segment for disclosure. The components of these business segments are Polyester Chips and Tea.

The segment wise revenue, assets and liabilities relate to the respective amounts directly identifiable with each of the segments. There is no inter-segment revenue.

The geographical segments considered for disclosure as secondary segment is , based on location of customers.

# As per agreement of Zero Percent Unsecured Foreign Currency Convertible Bonds (FCCB) the bond holders have an option to convert these bonds into equity shares at a minimum price of Rs170.10 per share which has been taken as fair value for the purpose of calculating Diluted EPS.

Note SET DISCLOSURE OF RELATED PARTIES AND RELATED PARTY TRANSACTIONS IN KEEPING WITH ACCOUNTING STANDARD 18: Names of related parties and description of relationship:

A. Subsidiary Companies:

1. Egyptian Indian Polyester Company S.A.E.

2. Dowamara Tea Company Pvt. Ltd. (acquired during the year ended 31.03.2012)

3. Dhunseri Petrochem &Tea Pte Ltd. (formerly Dhunseri Holding (Singapore) Pte Ltd.) (set up during the year ended 31.03.2012)

B. Group Companies: (i.e Companies in which Key Management Personnel is able to exercise significant influence)

4. Madhuting Tea Private Ltd.

5. Naga Dhunseri Group Ltd.

6. Trimplex Investments Ltd.(formerly Trimplex Investments Private Ltd.)

7. Mint Investments Ltd.

8. Plenty Valley Intra Ltd.

9. Dhunseri Investments Ltd.

C. Key Management Personnel

10. Mr. C. K. Dhanuka. ( Executive Chairman)

11. Mr. M. Dhanuka (Vice Chairman and Executive Director)

12. Mr. B. Chattopadhyay (Executive Director and Chief Executive Officer)

13. Mr. B. K. Biyani (Executive Director, Corporate)

Note FOREX EXPOSURE

(a) Foreign Currency Exposures that are not hedged by a derivative instrument or otherwise is Rs 74468.17 lacs (Previous Year Rs 45286.96 lacs).

(b) Outstanding Forward Contracts as on 31st March, 2012 taken to hedge various foreign currency receivables is Rs 186.99 lacs (Previous Year Rs 827.82 lacs).

Note 10 LEASE OBLIGATION Operating Lease:

The Company has taken various office premises under operating lease having tenures of 11 months / 9 years. There is no specific obligation for renewal of these agreements. Lease rent for the year amounts to Rs 121.99 lacs (Previous Year Rs 91.58 lacs).

Apart from above the Company has taken a motor vehicle on non-cancellable operating lease and lease rent amounting to Rs 6.42 lacs (Previous Year Rs 6.92 lacs) has been charged in the Statement of Profit and Loss. The future minimum lease payments not later than one year as on 31.03.12 is Rs Nil (Previous Year-Rs 5.76 lacs)

Note 11 LIABILITY AGAINST PURCHASE OF SHARES

Other Long-term liabilities (Note-6) and other Current liabilities (Note 10) includes Rs Nil (Previous Year Rs 2184.02 lacs) and Rs 1284.03 lacs (Previous Year Rs Nil) respectively which is on account of purchase of 77.58 lacs (Previous Year: 131.95 lacs) Equity Shares of erstwhile South Asian Petrochem Limited, from certain group companies (sellers) whereby the purchase consideration is payable within five years from the purchase date (i.e., 31st March, 2008) at the option of the sellers, either in cash or by converting the consideration into Equity Shares of the Company at a value to be determined by an independent Chartered Accountant and as per SEBI Guidelines.

Note 12

The Company has invested an amount of Rs 15662.06 lacs byway of equity contribution up to 31st March 2012, towards PET Resin manufacturing project in its subsidiary company Egyptian Indian Polyester Company, S.A.E. (EIPET). During the year, EIPET has also taken loans from various lenders to fund the project. As the sponsor shareholder having majority stake in EIPET, the Company has given an undertaking to the lenders that in the event of the failure of EIPET to make any term loan repayment on due date and triggering of Market Redirection Event as specified in the agreement, which according to the Company are within its control, the Company will be required to pay to the lenders the amounts due by EIPET subject to a specified limit. Based on the information available with the Company, the loan amount outstanding in EIPET books as on 31st March 2012 amounts to USD 378.52 lacs [Equivalent rupee amount Rs 19363.67 lacs, (Previous Year Rs Nil)], which is not due for payment.

Note 13

Till the year ended 31 st March 2011 ,the Company was using pre-revised Schedule VI to the Companies Act 1956, for preparation of and presentation of its financial statement. During the year ended 31st March 2012,the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company. The Company has reclassified previous year's figures to conform to this years' classification in line with the revised Schedule VI to the Companies Act,1956.


Mar 31, 2011

1. Revaluation of Fixed Assets

a) All fixed asset except computers and furniture & fixtures located at eleven tea estates and nine factories in the state of Assam have been revalued by M/s S. R. Batliboi Consultants Pvt. Limited, Registered Valuer, on 1st April 2009, to Rs. 20,047.00 Lacs resulting in increase in net book value of assets by Rs. 16,250.00 Lacs which has been credited to the Revaluation Reserve. Buildings, plant & machinery and vehicles are revalued at the Net Replacement Value method whereas freehold land and leasehold land & estate development are revalued at Plantation Value method. b) Depreciation on revalued asset has been adjusted with the revaluation reserve to the extent available amounting to Rs. Nil (Previous Year Rs. 111.63 Lacs).

2. Preferential Issue of Equity Shares and Warrants:

During the year 2007-08, to meet the company's fund requirement for expansion including equity participation in overseas subsidiary, retirement of high cost borrowings and other business purposes the Company raised Rs. 7,416.23 Lacs by preferential allotment of equity shares and equity share warrants. Net proceeds have been fully utilised towards equity participation/other expenses in the overseas project in Egypt.

3. Foreign Currency Convertible Bonds (FCCB):

a) The erstwhile South Asian Petrochem Ltd (presently Dhunseri Petrochem & Tea Ltd) had allotted 200 Zero Coupon Unsecured Foreign Currency Convertible Bonds (FCCBs) of USD 1,00,000 each for an aggregate amount of USD 2,00,00,000 (i.e., Rs. 7,864.00 Lacs) in the year 2007-08. After buyback bonds amounting to USD 75,00,000 are outstanding as on date. The outstanding bonds are redeemable on 23rd January 2013 at 136.86% of their principal amount. The bond holders have an option to convert these bonds into equity shares at the reset price of Rs. 170.10 per share with a fixed rate of exchange on conversion of Rs. 39.32 (USD 1), subject to certain adjustments. The Bonds may also be redeemed, in whole but not in part, at the option of the Company at any time, subject to certain conditions. Also the company has an option requiring mandatory conversion of all the outstanding bonds on or after 16th January 2011 and up to 14th January 2013. The company is of the view that the balance outstanding bonds may not ultimately be redeemed as the same may be converted into equity shares within the assigned date and hence has not considered the effect of realignment of the bond value as prescribed in the Accounting Standard (AS 11) on 'Effects of Changes in Foreign Exchange Rates' notified in the Companies (Accounting Standards) Rules 2006 and also not provided for premium on redemption of the said bonds. The future cash flows if any cannot be determined at this stage.

b) The balance net proceeds of Rs. 2,949.00 Lacs from the issue of the FCCB, pending utilisation has been included in Cash and Bank Balances.

4. (i) Contingent liability for the Petrochem Division in respect of show cause notices received from the Custom and Service Tax Departments amounts to Rs. 166.74 Lacs (Previous Year Rs. 599.43 Lacs) which is being contested by the company. A part of the demand pertaining to interest and penalty is not quantifiable and the future cash flows if any cannot be determined at this stage.

Other contingent liabilities for the Tea Division not provided for in respect of certain possible obligations which may arise at a later date, with respect to:

a) obtaining renewal of lease of a tea estate from the Government.

b) a title suit pending in the district civil court over a certain portion of land. c) claims that may arise in future towards post employment benefits of certain employees.

Liabilities in respect of the above are not ascertainable at this stage and the future cash flows on account of the above cannot be determined unless the judgement/decisions/demand are received from the appropriate forums.

(ii) Estimated amount of contracts remaining to be executed on capital account Rs. 22,156.94 Lacs. (Previous Year Rs. 1,019.24 Lacs).

5. Advances recoverable in cash or in kind or for value to be received under Loans & Advances includes amount due from:

a. Firm in which Director of the company is partner is Rs. 1.49 Lacs (Previous Year: Rs. 1.25 Lacs). Maximum amount outstanding at any point of time during the year is Rs. 1.49 Lacs (Previous Year: Rs. 8.10 Lacs).

b. Directors of the company Rs. Nil (Previous Year: Rs. 2.60 Lacs). Maximum amount outstanding at any point of time during the year is Rs. 2.60 Lacs (Previous Year: Rs. 2.60 Lacs).

c. Private limited company in which Director of the company is director is Rs. 0.39 Lacs (Previous Year: Rs. 0.75 Lacs). Maximum amount outstanding at any point of time during the year is Rs. 1.76 Lacs (Previous Year: Rs. 0.75 Lacs).

d. Subsidiary Company amounting to Rs. 281.88 Lacs (Previous Year Rs. 2,348.40 Lacs). Maximum amount outstanding at any point of time during the year is Rs. 6,578.41 Lacs (Previous Year: Rs. 2,348.40 Lacs).

6. Deposits with Govt. Authorities and others include Rs. 127.50 Lacs (Previous Year: Rs. 127.50 Lacs) being deposit for use of office space with parking, with a private limited company in which Directors of the Company are interested as Director.

7. A major fire broke out in the raw material store at the Company's Haldia plant on 14.03.2011 leading to destruction/damage of certain fixed assets, spares & raw materials. The impact of all related losses for fixed assets, raw materials & spares damaged/destroyed due to fire have been duly accounted for amounting to Rs. 6,462.93 Lacs under respective heads during the year. The items damaged were adequately insured so the amount of Rs. 6,462.93 Lacs towards the loss as stated above has been recognised as income under the head "Other Income" and the insurance claim for the same has been submitted to the insurance company, which is under their active consideration.The Insurance Policies are in full force. The Company is also having Loss of Profits (LOP) policy on account of fire to cover the loss suffered during the period of disruption in the operation of the plant for which claim will be lodged at a later date.

8. Employee Benefit Obligation

Contribution for Defined Contribution Plan amounting to Rs. 273.65 Lacs (Previous Year: Rs. 248.97 Lacs) has been recognised as an expense and included in Schedule 16 "Contribution to Provident Fund and Other Funds" in the Profit & Loss Account.

9. Basic and Diluted Earnings Per Share

* After considering 2,33,13,859 Equity Shares of Rs. 10/- each fully paid up and ranking pari-passu with the existing equity shares to be issued by the company to the ordinary shareholders of SAPL. #As per agreement of Zero Percent Unsecured Foreign Currency Convertible Bonds (FCCB) the bond holders have an option to convert these bonds into equity shares at a minimum price of Rs. 170.10 per share which has been taken as fair value for the purpose of calculating Diluted EPS.

10. Disclosure of related parties and related party transactions: Names of related parties and description of relationship:

A. Subsidiary Company:

1 Egyptian Indian Polyester Company S.A.E.

B. Group Companies:

2 Madhuting Tea Private Limited

3 Naga Dhunseri Group Ltd.

4 Trimplex Investment Private Limited

5 Mint Investments Limited

6 Plenty Valley Intra Limited

7 Dhunseri Investments Ltd (formerly DI Marketing Ltd.)

C. Key Management Personnel

8 Mr. C. K. Dhanuka (Executive Chairman)

9 Mr. M. Dhanuka (Vice Chairman & Executive Director)

10 Mr. B. Chattopadhyay (Executive Director & CEO)

11 Mr. B. K. Biyani (Executive Director, Corporate)

11. a) Foreign Currency Exposures that are not hedged by a derivative instrument or otherwise is Rs. 45,286.96 Lacs (Previous Year Rs. 31,536.03 Lacs).

b) Outstanding Forward Contracts as on 31st March 2011 taken to hedge various Foreign Currency Receivables is Rs. 827.82 Lacs (Previous Year Rs. 4,743.06 Lacs).

12. Lease Obligation

Operating Lease:

The company has taken various office premises under operating lease having tenures of 11 months/5 years. There is no specific obligation for renewal of these agreements. Lease rent for the year amounts to Rs. 91.58 Lacs (Previous Year Rs. 72.31 Lacs).

Apart from above the company has taken a motor vehicle on non-cancelable operating lease and lease rent amounting to Rs. 6.92 Lacs (Previous Year Rs. 6.92 Lacs) has been charged to Profit and Loss account. The future minimum lease payments as on 31.03.11 are as under:

13. Other Liabilities include Rs. 2,184.03 Lacs (Previous Year: Rs. 3,782.03 Lacs) on account of purchase of 131.95 Lacs (Previous Year: 228.52 Lacs) Equity Shares of South Asian Petrochem Ltd. from certain group companies (sellers) whereby the purchase consideration is payable within five years from the purchase date (i.e., 31st March 2008) at the option of the sellers, either in cash or by converting the consideration into Equity Shares of the company at a value to be determined by an independent Chartered Accountant and as per SEBI Guidelines.

14. Previous Year's figures have been rearranged/regrouped wherever necessary.

 
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