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Notes to Accounts of Gujarat Narmada Valley Fertilizers & Chemicals Ltd.

Mar 31, 2015

1. (Rs. in Lacs)

As at As at 31-03-2015 31-03-2014

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances): 946.39 4,011.88

2. Other Commitments:

(i) The Company is committed to invest a further sum of Rs. 999 lacs (31-03-2014: Rs. 2,320 lacs) in the equity share capital of Bhavnagar Energy Co. Ltd. (BECL) as per the terms of the Shareholders'' Agreement. The Company is also committed to grant subordinate debt of Rs. 540 lacs (31-03-2014: Rs. 540 lacs) to BECL in the manner and in the form as may be finalized by the promoters with BECL.

(ii) Export obligation on account of benefit of concessional rate of Custom duty availed under EPCG license scheme on imports of capital goods is Rs. 48,653 lacs (31-03-2014: Rs. 51,069 lacs).

3. Contingent Liabilities not provided for:

(i) Claims against the Company not acknowledged as debts 12,021.23 2,964.63

(ii) Claims in respect of employees'' / contract labour matters Amount not ascertainable

(iii) Income tax assessment orders contested 1,816.37 2,389.17

(iv) Demands in respect of Central Excise Duty, Custom Duty, Service Tax and VAT as estimated by the Company 19,157.13 9,439.04

In respect of the above, the expected outflow will be determined at the time of final resolution of the dispute.

4. As one of the promoters of Gujarat Chemical Port Terminal Company Ltd. (GCPTCL), the Company has given undertaking to ICICI Bank for not to transfer, assign, dispose off, pledge, charge, or create any lien or in any way encumber Company''s existing or future shareholding in the GCPTCL in favour of any person so long as money remains due by GCPTCL to ICICI Bank or till the project is duly completed, whichever is later.

5. The Company has entered into a Shareholders'' Agreement for its investments in the equity share capital of Bhavnagar Energy Co. Ltd. (BECL) and Bharuch Dahej Railway Co. Ltd. (BDRCL). The agreement with regard to the equity investment in BECL, inter alia, includes terms whereby the Company''s investment in the equity share capital of BECL is subject to restrictions as regards transfer of shares up to the date of successful commercial operations of BECL. Similarly, the agreement with regard to the equity investment in BDRCL, inter alia, includes terms whereby the Company''s investment in the equity share capital of BDRCL is subject to lock in period restrictions. As per the said terms, the Company cannot transfer any part of the equity shares acquired pursuant to the agreement for a period of four years from the date of commercial operations of BDRCL.

6. Long-Term Loans and Advances include interest bearing unsecured loan of Rs. 160.00 Lacs (31-3-2014: Rs. 160.00 lacs) to Gujarat Chemical Port Terminal Company Ltd.

7. As per the provisions of "The Micro, Small And Medium Enterprises Development Act, 2006", the principal amount payable to Micro, Small and Medium enterprises is Rs. 814.38 Lacs (31-3-2014: Rs. 726.92 Lacs). The payments to Micro Small and Medium undertakings have been made within the prescribed time limit/ date agreed upon with supplier and hence no interest is payable for delayed payments. These amounts have been included in Trade Payables.

This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

8. Capitalization of exchange differences:

The Ministry of Corporate Affairs (MCA) has issued an amendment dated 29th December, 2011 to AS 11 ''The Effects of Changes in Foreign Exchange Rates'', to allow companies deferral/ capitalization of exchange differences arising on long-term foreign currency monetary items. In accordance with the above stated amendment to AS 11, the Company has capitalized exchange difference gain, arising on long-term foreign currency loan and payables, amounting to Rs. 4,204.62 lacs (Previous year: Loss of Rs. 4,196.15 lacs). The Company has also capitalized exchange difference loss, arising on long-term foreign forward contract, undertaken to fully hedge the foreign currency loan, amounting to Rs. 3,870.37 lacs (Previous year: Gain of Rs. 3,362.44 lacs).

9. The Scheme of Arrangement and Demerger for transfer of V-SAT/ISP Gateway Business of the Company to ING Satcom Ltd., an unlisted Company against cash consideration of Rs. 6 crore, was sanctioned by Hon''ble High Court of Gujarat vide its Common Oral Order dated June 15, 2012. The "Appointed Date" of the Scheme is 1st April, 2010. Subsequent to the Order passed by the Hon''ble High Court of Gujarat, sanctioning the Scheme of Demerger, two separate applications for transfer of V-SAT and ISP Gateway Licences standing in the name of the Company to the name of Transferee Company viz. ING Satcom Limited were submitted to Department of Telecommunications (DOT) on 31st January, 2013 which are still pending for approval before DOT.

As per the legal opinion obtained from Legal Consultant, though the Scheme has been sanctioned by the Hon''ble High Court of Gujarat and has become effective, the Scheme is subject to and conditional upon the approval of the Government Authorities for transfer of Licences from GNFC to ING Satcom Limited.

During the year, an Agreement-Cum-Indemnity Bond was executed on 12-04- 2014 between the Company and ING Satcom Limited whereby, pending transfer of Licences, the assets of demerged business (other than Licences) have been handed over to ING Satcom Limited subject to certain terms and conditions, inter alia, including the terms of settling the transaction under different eventualities of rejection of transfer applications / non-transfer of Licences by 31-12-2014.

Since disposal of applications for transfer of Licences in the name of ING Satcom Limited by the competent authorities as well as settlement of transaction between the Company and ING Satcom Limited are still pending, no accounting treatment is given in the books of account of the Company for the year ended 31.03.2015.

Necessary accounting treatment will be given in the books of account of the Company either on disposal of applications for transfer of Licences in the name of ING Satcom Limited by the competent authorities or on finalization of settlement of transaction with ING Satcom Limited.

10. The Company capitalized its 50,000 MTPA TDI plant at Dahej in March 2014. The TDI plant at Dahej was in-operative for a major part of the year due to the issues of gas emission, subsequent corrective steps and teething problems. As at 31st March, 2015, the Company has in pursuance of Accounting Standard (AS 28) – ''Impairment of Assets'', assessed impairment of its TDI Dahej plant, having regard to the above-stated delay in starting operations and the related losses. Based on such assessment, the Company has accounted an impairment loss of Rs. 33,000 lacs in respect of the TDI Dahej plant, which has been recognized as an exceptional item in the statement of profit and loss.

The recoverable amount of the relevant assets has been determined on the basis of their value in use.

In estimating the future cash flows, management has based on externally available information, made certain assumptions relating to the future raw material prices, future TDI prices, operating parameters and the assets useful life which management believes reasonably reflects the future expectation of these items. However, if these assumptions change consequent to change in future conditions, there could be further adverse / favourable effect on the recoverable amount of the asset.

The assumption will be monitored on a periodic basis by the management and adjustments will be made if external conditions relating to the assumptions indicate that such adjustments are appropriate.

11. Confirmations of certain parties and banks for amounts due to them/ amounts due from them as per accounts of the Company are not received. Necessary adjustments, if any, will be made when the confirmations are received, reconciled and settled.

12. Segment Information:

Based on the guiding principles given in Accounting Standard on ''Segment Reporting'' (AS-17) as notified by Companies (Accounting Standards) Rules, 2006, the Company''s primary business segments are Fertilizers, Chemicals and Others (which includes mainly IT Division''s activities) which have got their own respective risk and return profiles.

13. The previous year''s figures have been regrouped/ reclassified, wherever necessary, to conform to the figures of the current year presentation. Figures are rounded off to the nearest lacs.


Mar 31, 2014

1. Other Commitments:

(i) The Company is committed to invest a further sum of Rs. 2,320 lacs (31-03-2013: Rs. 2,975 lacs) in the equity share capital of Bhavnagar Energy Co. Ltd. (BECL) as per the terms of the Shareholders'' Agreement. The Company is also committed to grant subordinate debt of Rs. 540 lacs (31-03-2013: Rs. Nil) to BECL in the manner and in the form as may be fi nalized by the promoters with BECL.

(ii) Export obligation on account of benefi t of concessional rate of Custom duty availed under EPCG license scheme on imports of capital goods is Rs. 51,069 lacs (31-03-2013:Rs. 56,055 lacs).

2. Contingent Liabilities not provided for:

(i) Claims against the Company not acknowledged as debts (mainly on account of water charges) 2,964.63 2,804.61

(ii) Claims in respect of employees''/ contract labour matters Amount not ascertainable

(iii) Income tax assessment orders contested 2,389.17 1,605.70

(iv) Demands in respect of Central Excise Duty, Service Tax and VAT as estimated by the Company 9,439.04 8,157.82

In respect of the above, the expected outflow will be determined at the time of fi nal resolution of the dispute.

3. Statement of Profit and Loss includes:

(a) In the item of Sales (which is net of Rebate and Discounts): (i) Subsidy from Government of India under the Retention Price Scheme and Nutrient Based Subsidy (NBS) Scheme 1,59,693.29 1,53,916.05

(ii) Reimbursement of expenses in respect of Imported Fertilizers 0.00 774.77

(b) Payments to Auditors: As auditor (i) Statutory Audit Fees 19.38 16.85

(ii) Tax Audit Fees 3.65 2.86

(iii) Other services for Certifi cation work etc. 10.47 10.29

(iv) Reimbursement of Expenses 2.43 1.48

(v) Income Tax Assessment work &

Retainership 29.00 13.66

(c) Payments to Cost Auditor: (i) Cost Audit Fees 2.81 2.81

(ii) Reimbursement of Expenses 0.27 0.21

(d) Foreign Exchange Rate Differences-Loss/(Gain) 690.96 1,059.57

4. As one of the promoters of Gujarat Chemical Port Terminal Company Ltd. (GCPTCL), the Company has given undertaking to ICICI Bank for not to transfer, assign, dispose off, pledge, charge, or create any lien or in any way encumber Company''s existing or future shareholding in the GCPTCL in favour of any person so long as money remains due by GCPTCL to ICICI Bank or till the project is duly completed, whichever is later.

5. The Company has entered into a Shareholders'' Agreement for its investments in the equity share capital of Bhavnagar Energy Co. Ltd. (BECL) and Bharuch Dahej Railway Co. Ltd. (BDRCL). The agreement with regard to the equity investment in BECL, inter alia, includes terms whereby the Company''s investment in the equity share capital of BECL is subject to restrictions as regards transfer of shares upto the date of successful commercial operations of BECL. Similarly, the agreement with regard to the equity investment in BDRCL, inter alia, includes terms whereby the Company''s investment in the equity share capital of BDRCL is subject to lock in period restrictions. As per the said terms, the Company cannot transfer any part of the equity shares acquired pursuant to the agreement for a period of four years from the date of commercial operations of BDRCL.

6. Long-Term Loans and Advances include interest bearing unsecured loan of Rs. 160.00 Lacs (31-3-2013: Rs. 160.00 lacs) to Gujarat Chemical Port Terminal Company Ltd.

7. As per the provisions of "The Micro, Small And Medium Enterprises Development Act, 2006", the principal amount payable to Micro, Small and Medium enterprises is Rs. 726.92 Lacs (31-3-2013: Rs. 541.27 Lacs) The payments to Micro, Small and Medium undertakings have been made within the prescribed time limit/ date agreed upon with supplier and hence no interest is payable for delayed payments. These amounts have been included in Trade Payables.

This information has been determined to the extent such parties have been identifi ed on the basis of information available with the Company.

8. Related Party Disclosures:

Related party disclosures, as required by AS-18, "Related Party Disclosures", are given below:

(C) Defi ned benefi t plans - As per actuarial valuation on Balance Sheet Date:

The Company has a defi ned benefi t gratuity plan. Every employee who has completed fi ve years or more of service gets a gratuity as per payment of Gratuity Act. The Scheme is funded with Gratuity Trust.

9. Operating Lease:

The Company has given offi ce premises on operating lease. The lease term is for three to four years. There are no restrictions imposed by lease arrangements.

10. Capitalization of exchange differences:

The Ministry of Corporate Affairs (MCA) has issued an amendment dated 29th December, 2011 to AS 11 ''The Effects of Changes in Foreign Exchange Rates'', to allow companies deferral/ capitalization of exchange differences arising on long-term foreign currency monetary items.

In accordance with the above stated amendment to AS 11, the Company has capitalized exchange loss, arising on long-term foreign currency loan and payables, amounting to Rs. 4,196.15 lacs (Previous year: Rs. 708.62 lacs) to the cost of Capital Work in Progress (CWIP). The Company has also capitalized exchange gain, arising on long-term foreign forward contract, undertaken to fully hedge the foreign currency loan, amounting to Rs. 3,362.44 lacs (Previous year: Rs. 185.72 lacs) to the cost of CWIP.

11. Th e Scheme of Arrangement and Demerger for transfer of V-SAT/ISP Gateway Business of the Company to ING Satcom Ltd., an unlisted Company against cash consideration of Rs.6 crore, was approved by the Board of Directors at its meeting held on July 31, 2010 and further approved by the shareholders, secured creditors and unsecured creditors of the Company at their respective meetings held on 31.8.2011 in pursuance of the directions given by Hon''ble High Court of Gujarat.

The "Appointed Date" of the Scheme is 1st April, 2010.

On approval to the Scheme as aforesaid, a Company Petition was fi led before Hon''ble High Court of Gujarat for its sanction to the said Scheme. Hon''ble High Court of Gujarat sanctioned the Scheme of Arrangement and Demerger of V-SAT and ISP Gateway Business Division/ Undertaking to ING Satcom Limited, an unlisted Company vide its Common Oral Order dated June 15, 2012. The Company received from the Hon''ble High Court of Gujarat, the certifi ed copy of drawn up Order sanctioning the Scheme of Arrangement and Demerger of V-SAT and ISP Gateway Business Division/

Undertaking to ING Satcom Limited, an unlisted Company. The Company physically fi led the Order(s) with the Registrar of Companies, Gujarat on 16th August, 2012.

Subsequent to the Order passed by the Hon''ble High Court of Gujarat, sanctioning the Scheme of Demerger, two separate applications for transfer of V-SAT and ISP Gateway Licenses standing in the name of the Company to the name of Transferee Company viz. ING Satcom Limited have been submitted to Department of Telecommunications (DOT) on 31st January, 2013.

As per the legal opinion obtained from Legal Consultant, though the Scheme has been sanctioned by the Hon''ble High Court of Gujarat and has become effective on 16.8.2012, the Scheme is subject to and conditional upon the approval of the Government Authorities for transfer of Licence of V-SAT from GNFC to ING Satcom Limited. Hence, no accounting treatment in respect of Demerger Scheme is given in the books of account of the Company for the year ended 31.03.2014.

Necessary accounting treatment will be given in the books of account of the Company on transfer of Licenses in the name of ING Satcom Ltd. by the competent authorities, which is in progress.

12. Confirmations of certain parties and banks for amounts due to them/ amounts due from them as per accounts of the Company are not received. Necessary adjustments, if any, will be made when the confi rmations are received, reconciled and settled.

13. Segment Information:

Based on the guiding principles given in Accounting Standard on ''Segment Reporting'' (AS-17) as notifi ed by Companies (Accounting Standards) Rules, 2006, the Company''s primary business segments are Fertilizers, Chemicals and Others (which includes mainly IT Division''s activities) which have got their own respective risk and return profi -les.


Mar 31, 2013

1. As one of the promoters of Gujarat Chemical Port Terminal Company Ltd. (GCPTCL), the Company has given undertaking to ICICI Bank for not to transfer, assign, dispose off, pledge, charge, or create any lien or in any way encumber Company''s existing or future shareholding in the GCPTCL in favour of any person so long as money remains due by GCPTCL to ICICI Bank or till the project is duly completed, whichever is later.

2. The Company has entered into a Shareholders'' Agreement for its investments in the equity share capital of Bhavnagar Energy Co. Ltd. (BECL) and Bharuch Dahej Railway Co. Ltd. (BDRCL). The agreement with regard to the equity investment in BECL, inter alia, includes terms whereby the Company''s investment in the equity share capital of BECL is subject to restrictions as regards transfer of shares upto the date of successful commercial operations of BECL. Similarly, the agreement with regard to the equity investment in BDRCL, inter alia, includes terms whereby the Company''s investment in the equity share capital of BDRCL is subject to lock in period restrictions. As per the said terms, the Company cannot transfer any part of the equity shares acquired pursuant to the agreement for a period of four years from the date of commercial operations of BDRCL.

3. Long-Term Loans and Advances include interest bearing unsecured loan of Rs. 160.00 Lacs (31-3-2012: Rs. 160.00 lacs) to Gujarat Chemical Port Terminal Company Ltd.

4. As per the provisions of "The Micro, Small And Medium Enterprises Development Act, 2006", the principal amount payable to Micro, Small and Medium enterprises is Rs. 541.27 Lacs (31-3-2012: Rs. 863.74 Lacs) The payments to Micro Small and Medium undertakings have been made within the prescribed time limit/ date agreed upon with supplier and hence no interest is payable for delayed payments. These amounts have been included in Trade Payables.

This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

5. Capitalization of exchange differences:

The Ministry of Corporate Affairs (MCA) has issued an amendment dated 29th December, 2011 to AS-11 ''The Effects of Changes in Foreign Exchange Rates'', to allow companies deferral/ capitalization of exchange differences arising on long-term foreign currency monetary items.

In accordance with the above stated amendment to AS-11, the Company has capitalized exchange loss, arising on long-term foreign currency loan and payables, amounting to Rs. 708.62 lacs

(Previous year: Rs. 737.14 lacs) to the cost of Capital Work in Progress (CWIP). The Company has also capitalized exchange gain, arising on long-term foreign forward contract, undertaken to fully hedge the foreign currency loan, amounting to Rs. 185.72 lacs (Previous year: Rs. 172.01 lacs) to the cost of CWIP.

6. Share Application Money of Rs. 125.00 lacs (31-03-2012: Rs. Nil) represents amount paid to Bhavnagar Energy Co. Ltd. towards equity, pending allotment.

7. The Scheme of Arrangement and Demerger for transfer of V-SAT/ ISP Gateway Business of the Company to ING Satcom Ltd., an unlisted Company against cash consideration of Rs.6 crore, was approved by the Board of Directors at its meeting held on July 31, 2010 and further approved by the shareholders, secured creditors and unsecured creditors of the Company at their respective meetings held on 31.8.2011 in pursuance of the directions given by Hon''ble High Court of Gujarat.

The "Appointed Date" of the Scheme is 1st April, 2010.

On approval to the Scheme as aforesaid, a Company Petition was filed before Hon''ble High Court of Gujarat for its sanction to the said Scheme. Hon''ble High Court of Gujarat sanctioned the Scheme of Arrangement and Demerger of V-SAT and ISP Gateway Business Division/ Undertaking to ING Satcom Limited, an unlisted Company vide its Common Oral Order dated June 15, 2012. The Company received from the Hon''ble High Court of Gujarat, the certified copy of drawn up Order sanctioning the Scheme of Arrangement and Demerger of V-SAT and ISP Gateway Business Division/ Undertaking to ING Satcom Limited, an unlisted Company. The Company physically filed the Order(s) with the Registrar of Companies, Gujarat on 16th August, 2012.

Subsequent to the Order passed by the Hon''ble High Court of Gujarat, sanctioning the Scheme of Demerger, two separate applications for transfer of V-SAT and ISP Gateway Licenses standing in the name of the Company to the name of Transferee Company viz. ING Satcom Limited have been submitted to Department of Telecommunications (DOT) on 31st January, 2013.

As per the legal opinion obtained from Legal Consultant, though the Scheme has been sanctioned by the Hon''ble High Court of Gujarat and has become effective on 16.8.2012, the Scheme is subject to and conditional upon the approval of the Government Authorities for transfer of Licence of V-SAT from GNFC to ING Satcom Limited. Hence, no accounting treatment in respect of Demerger Scheme is given in the books of account of the Company for the year ended 31.03.2013.

Necessary accounting treatment will be given in the books of account of the Company on transfer of Licenses in the name of ING Satcom Ltd. by the competent authorities, which is in progress.

8. Confirmations of certain parties and banks for amounts due to them / amounts due from them as per accounts of the Company are not received. Necessary adjustments, if any, will be made when the confirmations are received, reconciled and settled.

9. Segment Information:

Based on the guiding principles given in Accounting Standard on ''Segment Reporting'' (AS-17) as notified by Companies (Accounting Standards) Rules, 2006, the Company''s primary business segments are Fertilizers, Chemicals and Others (which includes mainly IT Division''s activities) which have got their own respective risk and return profiles.

10. The previous year''s figures have been regrouped / reclassified, wherever necessary, to conform to the figures of the current year presentation. Figures are rounded off to the nearest lacs.


Mar 31, 2012

A. Security details:

(i) Rupee term loans from banks are secured by way of first mortgage on all immovable properties, both present and future for which charge is created / to be created and are further secured by way of hypothecation created / to be created on all non-current assets and second charge by way of hypothecation created / to be created on all current assets including stocks and book debts.

(ii) Foreign currency term loan from bank is secured by way of first mortgage on all immovable properties, both present and future for which charge is to be created and is further secured by way of hypothecation to be created on all movable fixed assets.

(iii) The above charges are ranking pari-passu among the lenders.

b. Repayment details:

(i) Rupee term loans from banks of Rs. 57,400 lacs carries interest @ 11.50% p.a. (floating) payable on monthly basis. The loan is repayable in quarterly installments starting from 30.09.2012 and ending on 30.06.2017.

(ii) Rupee term loans from banks of Rs. 9,300 lacs carries interest @ 11.00%~11.25% p.a. (floating) payable on monthly basis. The loan is repayable in quarterly installments starting from 31.12.2013 and ending on 30.09.2021.

(iii) Foreign currency term loan from bank carries interest @ 6 month Euribor plus 1.98% payable on half yearly basis. The loan is repayable in half yearly installments starting from 01.10.2014 and ending on 01.04.2020.

(iv) Unsecured rupee term loan from bank is against assignment of security held by the Company towards outstanding of House Building Advance given to its employees and carries interest @ 11.70 % p.a. (floating) payable on monthly basis. The loan is repayable in quarterly installments starting from 31.12.2009 and ending on 30.9.2014.

(v) Unsecured rupee term loan from other of Rs. 55,000 lacs carries interest @ 9.25 % p.a. (floating) payable on quarterly basis. The loan is repayable in quarterly installments starting from 24.2.2012 and ending on 24.11.2012.

(vi) Unsecured rupee term loan from other of Rs. 10,000 lacs carries interest @ 9.25% p.a. (floating) payable on quarterly basis. The loan is repayable in quarterly installments starting from 31.12.2013 and ending on 30.09.2015.

1. Contingent Liabilities not provided for:

(i) Claims against the Company not acknowledged as debts (mainly on account of water charges) 3,227.59 2,369.66

(ii) Claims in respect of employees'/ contract labour matters Amount not ascertainable

(iii) Income tax assessment orders contested 3,609.28 2,149.67

(iv) Demands in respect of Central Excise Duty, Service Tax and VAT in fertilizers and chemical divisions' activities and the same as estimated by the Company 3,027.62 1,724.21

2. As one of the promoters of Gujarat Chemical Port Terminal Company Ltd. (GCPTCL), the Company has given undertaking to ICICI Bank for not to transfer, assign, dispose off, pledge, charge, or create any lien or in any way encumber Company's existing or future shareholding in the GCPTCL in favour of any person so long as money remains due by GCPTCL to ICICI Bank or till the project is duly completed, whichever is later.

3. The Company has entered into a Shareholders' Agreement for its investments in the equity share capital of Bhavnagar Energy Co. Ltd. (BECL) and Bharuch Dahej Railway Co. Ltd. (BDRCL). The agreement with regard to the equity investment in BECL, inter alia, includes terms whereby the Company's investment in the equity share capital of BECL is subject to restrictions as regards transfer of shares upto the date of successful commercial operations of BECL. Similarly, the agreement with regard to the equity investment in BDRCL, inter alia, includes terms whereby the Company's investment in the equity share capital of BDRCL is subject to lock in period restrictions. As per the said terms, the Company cannot transfer any part of the equity shares acquired pursuant to the agreement for a period of four years from the date of commercial operations of BDRCL.

4. Long-Term Loans and Advances include interest bearing unsecured loan of Rs. 160.00 lacs (31-3-2011: Rs. 160.00 lacs) to Gujarat Chemical Port Terminal Company Ltd.

5. As per the provisions of "The Micro, Small And Medium Enterprises Development Act, 2006", the principal amount payable to Micro, Small and Medium enterprises is Rs. 863.74 lacs (Previous year Rs. 1,311.27 lacs). The payments to Micro, Small and Medium undertakings have been made within the prescribed time limit / date agreed upon with supplier and hence no interest is payable for delayed payments. These amounts have been included in Trade Payables. This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

6. a. Finance Lease:

The Company had given CNG Buses to Gujarat State Road Transport Corporation (GSRTC) on finance lease for the period of three years which has been completed in the Financial Year 2010-11. As per the terms of Memorandum of Understanding (MoU), after the completion of total lease payments, the leased assets will be on the name of and under the ownership of GSRTC by paying Residual Value upto 1% of the total cost of the leased assets by GSRTC to the Company.

Necessary adjustment will be made in the Books of Accounts on completion of necessary formalities and receipt of the Residual Value of the leased assets from GSRTC by the Company.

b. Operating Lease:

The Company has given office premises on operating lease. The lease term is for three to four years. There are no restrictions imposed by lease arrangements.

7. Capitalization of exchange differences:

The Ministry of Corporate Affairs (MCA) has issued an amendment dated 29th December, 2011 to AS-11 'The Effects of Changes in Foreign Exchange Rates', to allow companies deferral / capitalization of exchange differences arising on long-term foreign currency monetary items.

In accordance with the above stated amendment to AS-11, the Company has capitalized exchange loss, arising on long-term foreign currency loan, amounting to Rs. 737.14 lacs (Previous year: Rs. Nil lacs) to the cost of Capital Work in Progress (CWIP). The Company has also capitalized exchange gain, arising on long- term foreign forward contract, undertaken to partially hedge the foreign currency loan, amounting to Rs. 172.01 lacs (previous year: Rs. Nil lacs) to the cost of CWIP.

8. In view of confirmation of long term availability of LSHS, it was decided to initiate closure of the Wet gas Sulphuric Acid Project which was under implementation and a provision of Rs. 3,000.00 lacs had been made in the Statement of Profit and Loss for the year 2009-10 towards the impact of the closure. Now upon finalization of the impact of the project closure at Rs. 2,773.35 lacs, the same has been adjusted against the provision of Rs. 3,000.00 lacs made in 2009-10 and excess provision of Rs. 226.65 lacs has been written back in the current year 2011-12 as 'Other Income'.

9. Board of Directors at its meeting held on July 31, 2010 had, inter alia, approved-

(a) The Transfer of V-SAT / ISP Gateway Business of GNFC to ING Satcom Ltd., an unlisted Company, through Scheme of Arrangement and De-merger against cash consideration of Rs. 6 crores.

(b) Draft Scheme of Arrangement and De-merger in respect of proposed Transfer of V-SAT / ISP Gateway Business of GNFC to ING Satcom Ltd., an unlisted Company.

The "Appointed Date" of the Scheme is 1st April, 2010.

The draft Scheme of Arrangement and Demerger for transfer of V-SAT / ISP Gateway Business of the Company to ING Satcom Ltd., an unlisted Company, against cash consideration of Rs. 6 crores, has been approved by the shareholders, secured creditors and unsecured creditors of the Company at their respective meetings held on 31.8.2011 in pursuance of the directions given by Hon'ble High Court of Gujarat.

On approval to the Scheme as aforesaid, a Company Petition has been filed before Hon'ble High Court of Gujarat for its sanction to the said Scheme which is now posted for final hearing.

Necessary adjustments will be made in the Books of Accounts on completion of all formalities in this regard and on obtaining & filing with the concerned Registrar of Companies the Order of Hon'ble High Court of Gujarat sanctioning the scheme of Arrangement and Demerger.

10. Confirmations of certain parties and banks for amounts due to them / amounts due from them as per accounts of the Company are not received. Necessary adjustments, if any, will be made when the confirmations are received, reconciled and settled.

11. Segment Information:

Based on the guiding principles given in Accounting Standard on 'Segment Reporting' (AS-17) as notified by Companies (Accounting Standards) Rules, 2006, the Company's primary business segments are Fertilizers, Chemicals and Others (which includes mainly IT Division's activities) which have got their own respective risk and return profiles.

12. The Company prepares and presents its financial statements as per Schedule VI to the Companies Act, 1956, as applicable to it from time to time. In view of revision to the Schedule VI as per the notifications issued by the Ministry of Corporate Affairs (MCA), Government of India, the financial statements of the Company for the financial year ended 31st March, 2012 have been prepared as per the requirements of the Revised Schedule VI to the Companies Act, 1956. The previous year's figures have been accordingly regrouped / reclassified wherever necessary to conform to the figures of the current year presentation. Figures are rounded off to the nearest lacs.


Mar 31, 2011

(Rs. in Lacs)

2010-11 2009-10

1. Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) 1,08,254.57 1,03,736.61

2. Contingent Liabilities not provided for: (i) Claims against the Company not acknowledged as debts (mainly on account of water charges) 2,369.66 1,803.60

(ii) Guarantees / Letters of Credit given by Banks on behalf of the Company 24,494.90 29,665.92

(iii) Claims in respect of employees'/ contract labour matters Amount not ascertainable

(iv) Income tax assessment orders contested 2,149.67 3,234.24

3. As one of the promoters of Gujarat Chemical Port Terminal Company Ltd. (GCPTCL), the Company has given undertaking to ICICI Bank for not to transfer, assign, dispose off, pledge, charge, or create any lien or in any way encumber Company's existing or future shareholding in the GCPTCL in favour of any person so long as money remains due by GCPTCL to ICICI Bank or till the project is duly completed, whichever is later.

4. Loans and Advances include interest bearing unsecured loan of Rs. 160.00 Lacs (Previous year Rs. 160.00 Lacs) to Gujarat Chemical Port Terminal Company Ltd.

5. As per the provisions of "The Micro, Small And Medium Enterprises Development Act, 2006", the principal amount payable to Micro, Small and Medium enterprises is Rs. 1,311.27 Lacs (Previous year Rs. 800.78 Lacs). The payments to Micro, Small and Medium undertakings have been made within the prescribed time limit/ date agreed upon with supplier and hence no interest is payable for delayed payments. These amounts have been included in Sundry Creditors.

This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

6 a) Finance Lease:

The Company has given CNG Bu es to G jarat St te Road Transport Corporation (GS TC) on fi ance lea e for the period of three years which has been completed in the cu rent Fina cial Year 2010-11. As per the terms o Memoran um of U derstand g (MoU), after the completion of total ease payments, th leased ssets will be on the name of and under the ownership o GSRTC y paying Residual Value upto 1% of the total ost of th leased ssets by GSRTC to the Company.

Necessary adjustment will be made in the Books of Accounts on completion of necessary formalities and receipt of the Residual Value of the leased assets from GSRTC by the Company.

7. In view of confirmation of long term availability of LSHS now, it has been decided to initiate closure of the Wet gas Sulphuric Acid Project which was under implementation. Provision of Rs. 30 crore has been made in the Profit & Loss Account for the year 2009-10 towards the impact of the closure. Further necessary adjustments will be made in the Books of Accounts on finalization of the impact of the project closure.

8. As per the Accounting Policy adopted, the Company had so far been accounting insurance claims on accrual basis. However, this accounting policy is reviewed and revised to cash basis from the current Financial Year 2010-11. Had there been no change in Accounting Policy, the Profit after Tax (PAT) for the current year and Reserves and Surplus as well as Loans and Advances as on 31-03-2011 would have been higher by Rs. 347.27 lacs.

9. Board of Directors at its meeting held on July 31, 2010 had, inter alia, approved- (a) The Transfer of V-SAT / ISP Gateway Business of GNFC to ING

Satcom Ltd., an unlisted company through Scheme of Arrangement

and De-merger against cash consideration of Rs. 6 crore. (b) Draft Scheme of Arrangement and De-merger in respect of proposed Transfer of V-SAT / ISP Gateway Business of GNFC to ING Satcom Ltd., an unlisted company. Subsequent to approval to the Scheme of Arrangement and De- merger by the Board of Directors, an application to the Bombay Stock Exchange Ltd. and the National Stock Exchange of India Ltd. for their approval as required under the Listing Agreement was made and such approval from both the Stock Exchanges have been received. The Company is now in the process of filing an application before Hon'ble High Court of Gujarat for obtaining its directions for holding of meetings of its shareholders and creditors for their approval to the Scheme.

Necessary adjustments will be made in the Books of Accounts on completion of all formalities in this regard and on obtaining & filing with the concerned Registrar of Companies the Order of Hon'ble High Court of Gujarat sanctioning the scheme of Arrangement and De-merger.

10. Confirmations of certain parties and banks for amounts due to them/ amounts due from them as per accounts of the Company are not received. Necessary adjustments, if any, will be made when the confirmations are received, reconciled and settled.

11. Previous year's figures have been regrouped wherever necessary to conform to the figures of the current year.

12. Segment Information:

Based on the guiding principles given in Accounting Standard on 'Segment Reporting' (AS-17) as notified by Companies Accounting Standards Rules, 2008, the Company's primary business segments are Fertilizers, Chemicals and Others (which includes mainly IT Divisions' activities) which have got their own respective risk and return profiles.


Mar 31, 2010

(Rs. in Lacs)

2009-10 2008-09

1. Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) 1,03,736.61 41,999.48

2. Contingent Liabilities not provided for: (i) Claims against the Company not acknowledged as debts (mainly on account of water charges and compensation for land acquisition) 1,803.60 1,146.02

(ii) Guarantees / Letters of Credit given by Banks on behalf of the Company 29,665.92 38,443.42

(iii) Claims in respect of employees/ contract labour matters Amount not ascertainable

(iv) Income tax assessment orders contested 3,234.24 2,808.87

3. The Company has strategic investment in the equity capital of Gujarat Chemical Port Terminal Company Ltd. (GCPTCL) in capacity of promoters, aggregating to Rs. 4,941.00 lacs as on 31st March, 2010.

As per the Corporate Debt Restructuring (CDR) programme undertaken, GCPTCL has reduced the face value of its equity share from Rs.10/- each to Re.1/- each. In view of the above, the Company has made provision of Rs. 3,101.40 lacs in the current year towards diminution in value of investment in the equity of GCPTCL.

4. As one of the promoters of Gujarat Chemical Port Terminal Company Ltd. (GCPTCL), the Company has given undertaking to ICICI Bank for not to transfer, assign, dispose off, pledge, charge, or create any lien or in any way encumber Companys existing or future shareholding in the GCPTCL in favour of any person so long as money remains due by GCPTCL to ICICI Bank or till the project is duly completed, whichever is later.

5. Loans and Advances include interest bearing unsecured loan of Rs. 160.00 lacs to Gujarat Chemical Port Terminal Company Ltd.

6. As per the provisions of "The Micro, Small And Medium Enterprises Development Act, 2006", the principal amount payable to Micro, Small and Medium enterprises is Rs. 800.78 lacs (Previous year Rs. 434.28 lacs) The payments to Micro Small and Medium undertakings have been made within the prescribed time limit/ date agreed upon with supplier and hence no interest is payable for delayed payments. These amounts have been included in Sundry Creditors.

This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

* For part of the current year/ previous year

7. In view of confirmation of long term availability of LSHS now, it has been decided to initiate closure of the Wet gas Sulphuric Acid Project which was under implementation. Provision of Rs. 30 crores has been made in the Profit & Loss Account towards the impact of the closure. Further necessary adjustments will be made in the Books of Accounts on finalization of the impact of the project closure.

8. The Company has accounted income of Rs. 34 crores in current financial year towards estimated insurance claim of Business Interruption for the period upto 31-03-2010 following accident in Section 700 of Ammonia Plant of the Company on 09-02-2010 (3rd shift).

9. Confirmations of some parties and banks for amounts due to them/ amounts due from them as per accounts of the Company are not received. Necessary adjustments, if any, will be made when the confirmations are received, reconciled and settled.

10. Previous years figures have been regrouped wherever necessary to conform to the figures of the current year.

11. Segment Information:

Based on the guiding principles given in Accounting Standard on Segment Reporting (AS-17) as notified by Companies Accounting Standards Rules, 2008, the Companys primary business segments are Fertilizers, Chemicals and Others (which includes mainly IT Divisions activities) which have got their own respective risk and return profiles.

 
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