Mar 31, 2018
Notes:
1 In Financial year 2016-17 remuneration includes related to Mr. H.R Gupta paid against approval from MCA vide SRN C47011408 Dated 20 March 2015 for Financial Year 2014-15 Rs. 5.04, for Financial Year 2015-16 Rs. 20.16 and to Mr. B.K Gupta paid against approval from MCA vide SRN C47007919 20 March 2015 for Financial Year 2014-15 Rs. 5.04, for Financial Year 2015-16 Rs. 7.59.
2 Valued at year end market price (NSE).
3 As the incremental liabilities of contribution for gratuity and compensated absences are provided on actuarial basis for the Company as a whole, the amounts pertaining to Key Managerial Personnel are not disclosed above.
4 Effect of Ind AS has not been considered. Carrying value Rs. 452.12 (31.03.2017 : Rs 408.24 & 01.04.2016 : Rs.350.81)
36 Employee Benefits Refer note 2.13 for accounting policy on Employee Benefits (a) Defined contribution plans i. Provident Fund/Employees'' Pension Fund ii. Employees'' State Insurance |
The Company has recognised following amounts as expense in the Statement of Profit and Loss:
Particulars |
For the Year ended |
For the Year ended |
March 31, 2018 |
March 31, 2017 |
|
Included in contribution to Provident and Other Funds (refer note 27) |
||
Employer''s contribution to Provident Fund / Employees'' Pension Fund |
88.23 |
97.49 |
Included In contribution to Provident and Other Funds (refer note 27) |
||
Contribution paid In respect of Employees'' State Insurance Scheme |
13.87 |
9.53 |
(b) Defined Benefit Plan
Gratuity: The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded.
A. Balance Sheet
The assets, liabilities and surplus/fdeficit) position of the defined benefit plans at the Balance Sheet date were:
Defined Benefit Plan- Gratuity (Funded) |
|||
As at |
As at |
As at |
|
31st March, 2018 |
31st March, 2017 |
1st April, 2016 |
|
Present value of obligation |
132.73 |
126.51 |
81.11 |
Fair value of plan assets |
131.70 |
99.71 |
67.34 |
(Asset/Liabillty recognised In the Balance Sheet |
1.03 |
26.80 |
13.77 |
Net liability-current (Refer Note 17) |
1.03 |
26.80 |
13.77 |
Net liability-non-current (Refer Note 17) |
- |
- |
- |
1.03 |
26.60 |
13.77 |
|
B. Movements in Present Value of Obligation and Fair Value of Plan Assets |
|||
Plan Assets |
Plan Obligation |
Total |
|
As at 1st April, 2016 |
67.34 |
81.11 |
13.77 |
Current service cost |
- |
26.77 |
26.77 |
Past service cost |
- |
- |
- |
Interest cost |
- |
6.49 |
6.49 |
Interest income |
5.39 |
- |
(5.39) |
Return on plan assets excluding interest income |
1.01 |
- |
(1.01) |
Actuarial (gain)/loss arising from |
- |
- |
- |
changes in demographic assumptions |
|||
Actuarial (gain/loss arising from changes in |
- |
8.20 |
8.20 |
financial assumptions |
|||
Actuarial (gain)/loss arising from experience adjustments |
- |
4.66 |
4.66 |
Employer contributions |
26.70 |
- |
(26.70) |
Employee contributions |
- |
- |
- |
Assets acquired/ (settled) |
- |
- |
- |
Benefit payments |
(0.72) |
(0.72) |
- |
As at 31st March, 2017 |
99.71 |
126.51 |
26.80 |
As at 1st April, 2017 |
99.71 |
126.51 |
26.80 |
Current service cost |
- |
25.09 |
25.09 |
Past service cost |
- |
1.40 |
1.40 |
Interest cost |
- |
9.30 |
9.30 |
Interest Income |
7.33 |
- |
(7.33) |
Return on plan assets excluding interest income |
0.26 |
- |
(0.26) |
Actuarial (gain)/loss arising from |
- |
(5.25) |
(5.25) |
changes in demographic assumptions |
|||
Actuarial (gain)/loss arising from |
- |
(6.04) |
(6.04) |
changes in financial assumptions |
|||
Actuarial (gain)/loss arising from experience adjustments |
- |
- |
- |
Employer contributions |
42.67 |
- |
(42.67) |
Employee contributions |
- |
- |
- |
Assets acquired/(settled)* |
- |
- |
- |
Benefit payments |
(18.27) |
(18.27) |
- |
As at 31st March, 2018 |
131.70 |
132.73 |
1.03 |
Defined Benefit Plan- Gratuity (Funded) |
||
Year ended |
Year ended |
|
31st March, 2018 |
31st March, 2017 |
|
Expenses recognised In the Statement of |
||
Profit and Loss for the year |
||
Employee Benefit Expenses : |
||
Current service cost |
25.09 |
26.77 |
Past service cost |
1.40 |
- |
Finance costs : |
||
Interest cost |
9.30 |
6.49 |
Interest income |
(7.33) |
(5.39) |
Net Impact on profit {before tax) |
28.46 |
27.87 |
Recognised in other comprehensive income for the year |
||
Remeasurement of the net defined benefit plans: |
||
Actuarial (gain)/loss arising from |
- |
- |
Actuarial (gainj/loss arising from changes in financial assumptions |
(5.25) |
8.20 |
Actuarial (gain)/loss arising from experience adjustments |
(6.04) |
4.66 |
Return (gain)/loss on plan assets excluding interest income |
(0.26) |
(1.01) |
Net impact on other comprehensive Income (before tax) |
(11.55) |
11.85 |
D. Assets
The fair value of plan assets at the Balance Sheet date for the defined benefit plans for each category are as follows:
Defined Benefit Plan- Gratuity (Funded) |
|||
As at |
As at |
As at |
|
31st March, 2018 |
31st March, 2017 |
1st April, 2016 |
|
The major categories of plan assets as a percentage of total Insurer managed funds |
100% | 100% | 100% |
The Trustees have taken policy from Life Insurance Corporation of India (LIC) and pays premium. LIC in turn manages the assets which is within the permissible limits prescribed in the insurance regulations. The Company does not forsee any material risk from these investments.
Mar 31, 2016
b. Term and rights attached to shares:
Equity shares
The Company has only one type of equity share having par value of Rs. 10. All shares rank pari passu with respect to dividend, voting rights and other terms. Each shareholder is entitled to one vote per share except, in respect of any shares on which any calls or other sums payable have not been paid. The Company pays and declares dividends in Indian Rupees. The dividend proposed, if any, by the Board of directors is subject to approval of shareholders in the ensuing Annual General Meeting. The repayment of equity share capital in the event of liquidation and buy back of shares are possible subject to prevalent regulations. In the event of liquidation, normally the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
Preference shares
The Company had issued 9,500,000 zero coupon non-convertible, non- cumulative redeemable preference shares having par value of Rs. 10 each per share in the year ended 31 March 2013. During the current year, in its Annual General Meeting, the shareholders approved change in terms of 9,500,000 zero coupon non-convertible, non-cumulative redeemable preference shares to 9,500,000 compulsorily convertible preference shares. âIn principleâ approval from stock exchanges has been received on 16 October 2015 and on 4 April 2016 from NSE and BSE respectively. Accordingly, subsequent to the year end, on 8 April 2016 the Company changed the terms of preference shares subject to the condition that the mentioned 9,500,000 compulsorily convertible preference shares shall be locked-in for a period of one year from the date of change in terms.
* Include 6,032.788 equity shares of Rs. 10 each issued against conversion of secured loan.
d. For the period of five years immediately preceding the date of Balance sheet no shares were alloted for consideration other than cash. Further no bonus shares have been issued and there has been no buy back of shares during the period of five years immediately preceding the date of balance sheet.
1 Debt Restructuring in the year ended 31 March 2012
i) Background
The Company had set up a green field project for manufacturing Solar Photovoltaic cells with a capacity of 160 MW, comprising two lines of 80 MW each under Phase -I and is in the process of setting up an additional manufacturing facility Line -3 with a 200 MW capacity under Phase - II, at Plot No. 3C/1 Ecotech-II, Udyog Vihar Greater Noida in the State of Uttar Pradesh. The capacity of Phase-I has subsequently enhanced to 200Mw (100Mw each line). The lending banks (âLendersâ) had, at the request of the Company, sanctioned term loans, deferred payment guarantee facilities and working capital facilities on such terms and conditions as contained in various loan agreements / facility agreements entered into between the Company and the Lenders.
ii) Conditions that lead to restructuring
The Company witnessed significant downturn due to weak demand both globally as well as in the domestic market and incurred significant cash and operating losses. There was a mismatch between cost and selling prices that resulted in the stoppage of plant from September 2011, which severely impacted the cash flow position of the Company prompting the filing of a restructuring package of its loans that existed as on 1 July 2011 with the Corporate Debt Restructuring Cell (âCDR Cellâ). At the request of the Company and in consideration of its commitment to improve its operations, the application filed was referred to the Corporate Debt Restructuring Forum, a non-statutory voluntary mechanism set up under the aegis of the Reserve Bank of India (hereinafter referred to as the âCDRâ). Pursuant thereto, the CDR Empowered Group at their meeting held on 30 January 2012 approved a restructuring package in terms of which the loans as of 1 July 2011 were restructured and certain additional financial assistance was proposed to be extended to the Company that was set out in the Letter of Approval dated 7 March 2012 issued by Corporate Debt Restructuring Cell to the Lenders and the Company (hereinafter referred to as the âCDR Packageâ).
The terms and conditions of the CDR were binding on the Lenders and the Company, effective from the date of the signing of the Master Restructuring Agreement (âMRA) i.e. 28 March 2012 with each of the Lenders (except for Indian Bank). The Company had accordingly given effect to the CDR scheme w.e.f. from 1 July 2011, in the financial statements for the year ended 31 March 2012. However one of the banks of the consortium group
i.e. Indian Bank had not agreed to the CDR package and had not signed the Master Restructuring Agreement (MRA). The MRA was signed by the concerned bank on 5 July 2012. In connection with obtaining the necessary approvals for restructuring of existing loans, the promoters contributed funds in accordance with sanction letter. As a consequence, the Company received an unsecured loan from its promoters amounting to Rs. 950.00. During the year ended 31 March 2016, Rs.239.04 out of the above unsecured loan from promoters has been adjusted with excess remuneration paid for the year ended 31 March 2015 and 31 March 2016. Also refer note 35.
During the financial year 2013-14, the Company received interest free unsecured loan from a party amounting to Rs. 250.00 towards meeting expenses and also to meet promoters contribution requirement under proposed CDR-2, to be converted into 2,5000,00 zero coupon redeemable non convertible non cumulative preference shares of face value of Rs 10 each after approval from shareholders. However during the previous year, after approval from shareholders the Company had, instead of preference shares, allotted 2,500,000 equity shares of Rs 10 each at par value.
iii) Principal terms of the Master restructuring Agreement (âMRAâ) in accordance with the CDR scheme.
a) Waivers of existing events of default and the consequential effect thereof:
In accordance with the CDR scheme the consortium of lenders had waived the obligation of the Company
to pay any liquidated damages, default or penal interest / interest / further interest charged by the Lenders in
excess of the concessional rates approved under CDR package.
b) Restructuring of the loans existed as at 1 July 2011:
Each of the Lenders and Company agreed that the loans shall be reconstituted as follows:
- Rupee Term Loans of Rs. 34,485.82 together with all interest, charges, costs, expenses and any other amounts accrued was reconstituted into Facility -A;
- Short Term Loan of Rs. 2,200.00 from Andhra Bank outstanding as on 1 July 2011 i.e. the Cut-off date was rescheduled and converted into âPriority Medium Term Loanâ as Facility -B;
- Irregularity as on 31 March 2012 in Working Capital Limits comprising cash credit, packing credit, buyerâs credit facility, bill discounting and irregularities due to anticipated devolvement of LCs was converted into WCTL as Facility C;
- Interest accrued/ to be accrued on Secured term loans, Short term loan and WCTL until 30 June 2013 to be funded by way of Funded Interest Term Loan (âFITLâ) as Facility- D.
c) Sanction for additional funding
1. Project Loan from Union Bank of India
Union Bank of India (âUBIâ) sanctioned a Project Loan amounting to Rs. 27500 (including Term Loan-
II of Rs. 22,800 for project Line-C and Priority Term Loan of Rs. 4,700).
2. Priority medium term loan
As part of the CDR package the Lenders agreed to provide additional funding in the form of priority medium term loans of Rs. 10,000 for the implementation of 200 MW Plant in the proportion of the outstanding exposure to the Company as on the 1 July 2011.
d) Reset of Interest Rate:
The Lenders along with the approval of CDR EG, shall have a right to reset the rate of interest on the term loans after every three years (or short period as decided by the CDR EG) and working capital interest rate every year.
e) Consequential effect of the CDR Scheme on the interest cost and the classification of the interest accrued on borrowings as loans
As explained in note 6 (iii) (a) above, the Lenders waived the obligation of the Company to pay any liquidated damages, default or penal interest / interest / further interest charged by the Lenders in excess of the concessional rates approved under the CDR package w.e.f 1 July 2011. Consequently, an interest credit received from the Lenders amounting to Rs 1,201.70 and the balance of interest accrued outstanding as at 31 March 2012 relating to various facilities amounting to Rs 3,502.00 was transferred to FITL.
f) Default in repayment of loan and interest
As per the terms of the first Corporate Debt Restructuring package, principal amount of Rs.29,244.69 is due as on 31 March 2016 (previous year Rs.9,46784) Further, the interest of Rs. 30,199.89 is due as on 31 March 2016 (Previous year Rs. 17054.93).
iv. Second Re-structuring
In light of continuing downturn in the solar industry where margins were under significant stress and the continuing operating and cash losses of the Company, the Company could not achieve the projection submitted under first CDR package. Considering the above, the Company approached its lenders for second CDR package in the financial year ended 31 March 2014. During the year ended 31 March 2016, consortium bankers in their joint lenders meeting has decided that banksâ are not considering second restructuring proposal as of now and exploring the possibility of sale to Asset Restructuring Company and/or to invoke change in management.
*Pursuant to Companies Act, 2013 (âthe Actâ) being effective from 01 April 2014, the Company had revised depreciation rates with effect from 1 April 2014, as per the useful life specified in Part âCâ of Schedule II of the Act or as per the managementâs estimate based on preliminary internal/ external evaluation for all of its assets. As a result of this change, the depreciation charge for the for the year ended 31 March 2015 is lower by Rs.1,436.27 lakhs. In respect of the assets whose useful life is already exhausted as on 01 April 2014, depreciation of Rs. 45.92 lakhs (net of tax impact of Rs. Nil) has been adjusted in Reserves and Surplus in accordance with the requirements of Schedule II of the Act.
* Borrowing cost of Rs. 787.57 (previous year Rs. 1,421.82) and amortized ancillary cost of Rs. 12.36 (previous year Rs. 24.72) have been included in additions to capital work-in-progress. Capital work in progress includes exchange differences amounting to Rs. 398.34 (previous year Rs. 2,327.83) relating to the application of para 46A of AS -11 âAccounting for the effects of changes in foreign exchange ratesâ Capital work in Droaress also includes Rs. 13.77 (Devious year Rs. 8.14) on account of directly attributable expenses.
* The Company has significant unabsorbed depreciation/carry forward losses as per the tax laws. In view of absence of virtual certainty of realization of carried forward tax losses/unabsorbed depreciation in the foreseeable future, deferred tax asset has been recognized only to the extent of deferred tax liability.
3. COMMITMENTS
a) Estimated amount of contracts remaining to be executed on capital account (net of advances) not provided for Rs. Nil (previous year Rs. 337.73).
b) For commitments relating to lease arrangements (Refer note 27).
c) For commitments relating to net positive foreign exchange earnings (Refer note 33).
4. LEASE TAKEN BY THE COMPANY
The Company has various operating leases under cancellable and non cancellable operating lease arrangements for plant and machinery, accommodation for employees and other assets which are renewable on a periodic basis. Rent expenses for operating leases included in the Statement of Profit and Loss is Rs. 24.87 (previous year: Rs. 35.31).
Previous year figures are given in brackets.
5. The Company has incurred expenses in foreign currency amounting to Rs.137,251.53 lakhs (including amortization of imported machinery) till 31 March 2016. Being an Export Oriented Unit, the Company had imported such machinery and raw material without payment of customs duty, on the basis of an undertaking given to Special Economic Zone that the Company shall be able to earn a positive Net Foreign Exchange (NFE) within ten years from the commencement of its operations (i.e. 16 July 2009). As at 31 March 2016, the Company has a negative Net Foreign Exchange Earnings of Rs. 3,478.40 lakhs.
During the year ended 31 March 2015, the Company had filed an appeal before the relevant authorities to consider the DTA sale of 3,864.89 lakhs made in the earlier years to consider as eligible sale for calculation of NFE under para
6. (f) of Foreign Trade Policy (FTP) in place of para 6.8 of FTP Further it has been noticed that: i) while submitting the APR of 2011-12 and 2012-13, the Company had erroneously considered the domestic purchase of Rs. 331.07 lakhs as imported purchase resulting thereby higher forex outflow ii) while submitting the APR of 2009-10, the Company had considered full year amortization of capital expenditure instead of calculating the same from the date of start of commercial production resulting into higher amortization of Rs.1,409.07 lakhs which was considered as forex outflow in that year. If the appeal is accepted, and the impact of above referred correction is recognized, the NFE as on 31 March 2016 would have been positive by Rs. 2,126.16 lakhs.
7. Related party disclosures List of related parties
a) Related parties where control exists:
i) Key managerial personnel controlling the Company
Mr. H.R Gupta Managing Director
Mr. B.K Gupta Chairman & Whole Time Director (till 17 August 2015)
ii) Other key managerial personnel
Mr. A. K. Agarwal Chief Financial Officer
b) Other related party relationships where transactions have taken place:
i) Relative of key managerial personnel
Priya Desh Gupta Relative of Director
Abha Gupta Relative of Director
Roshini Gupta Relative of Director
Pranav Gupta Relative of Director
ii) Party holding significant influence over the enterprise Greenlite Lighting Corporation
*The Company has accrued/paid managerial remuneration which was in excess of the limits specified in Schedule V read with Section 197 of the Companies Act, 2013. The Company had filed applications with the Central Government for regularizing the payments of managerial remuneration. Subsequent to the year end, the Company received letters from Central Government rejecting such applications. Accordingly, the Company has recovered the managerial remuneration paid in current year of Rs. 184.99 lakhs and in previous year of Rs. 14784 lakhs by adjusting the payable balances of directors. The recovered amount has been netted off from employee benefit expenses for the year ended 31 March 2016.
8. EMPLOYEES BENEFIT
Disclosure in respect of employee benefits under Accounting Standard 15 âEmployee Benefitsâ:
a) Defined Contribution Plans: The Company has recognized Rs. 69.12 (Previous year Rs. 6720) related t employersâ contribution to Provident Fund Scheme in the Statement of Profit and Loss.
b) Post employment benefit plan in the form of gratuity:
The Company has a post employment benefit in the form of gratuity wherein the last drawn salary plus dearness allowance is used to compute gratuity as per the provisions of the Payment of Gratuity Act, 1972. A period of 5 years has been considered as vesting and the maximum benefit that can be availed under the scheme is Rs. 10.00.
9. SEGMENT INFORMATION
(a) Information about primary business segment
In the opinion of the management, there is only one reportable segment i.e. manufacturing of solar cells, as envisaged by Accounting Standard 17 âSegment Reporting.
(b) Information on secondary/ geographical segment
The Company sells its products to various customers within the country and also exports to other customers. Considering the size and proportion of exports to local sales, the Company considers sales made within the country and exports as different geographical segments.
During the year 2013-14, the Company has received a show cause notice from the Office of the Commissioner, Customs, Central, Excise & Service Tax Commissioner ate (Authority), Noida, whereby the authority has asked the Company to explain why custom duty of Rs. 9,430.19 lakhs along with interest and penalty thereon should not be levied on the Company in respect of import of duty free capital goods, as the Company could not install the machinery within the stipulated time period. The Company has filed its reply with the authority citing the delays in installation primarily due to financial constraint arising out of the downturn in the solar industry. The case has been heard on 28th April 2015 and accordingly, the Commissioner Central Excise has passed an order in favour of the Company.
** During the current year, the Company has received a demand cum show cause notice from the Office of the Principal Commissioner, Service Tax Commissioner ate (Authority), Noida, whereby the authority has asked the Company to explain why service tax of Rs. 218.28 lakhs including cess should not be demanded and recovered from the Company under the proviso to Section 73(1) of Finance Act 1994. Subsequent to the year end, the Company has paid service tax amounting to Rs. 11.61 lakhs under protest.
10 The Companyâs claim to its being eligible for certain capital incentives has been ordered in favour of the Company by the High Court of Delhi directing the concerned authorities to recalculate the threshold limit within four weeks from the date of the order (i.e. 3 July 2015). In the absence of timely response by the department, the Company filed contempt petition in High Court of Delhi and the court again directed the department to comply with the order dated 3 July 2015 within a period of six weeks from 11 May 2016 and fixed next date of hearing on 5 August 2016. Concerned authorities had also moved an appeal to the Double Bench of High Court of Delhi against the order dated 3 July 2015 of High Court of Delhi for which next date of hearing is 14 July 2016.
11 The Company had been awarded a turnkey contract by MP Urja Vikas Nigam Limited (MP Urja) for setting up of 3MW (in aggregate) SPV Power Plants. In accordance with the stipulated terms of the contract, the Company has deposited earnest money deposit (EMD) amounting to Rs. 60.10 lakhs. Out of the total contract, work orders aggregating to 1.6 MW amounting to Rs. 2,914.13 lakhs was raised on the Company that was required to be executed till 30 June 2013. The Company has raised the bills for having completed 0.1 MW (5 sites) until 31 March 2014 and the dues outstanding in relation to the executed portion amounts to Rs. 177.23 lakhs. The Company had also filed an application seeking extension with MP Urja for completion of the unexecuted work. Company received a final notice from MP Urja rejecting the extension plea and deciding to cancel the work order (other than the 3 sites considered completed by MP Urja) given to the Company along with the forfeiture of EMD and imposition of penalty due to the non-compliance by the Company. The Company is contesting the MP Urja claims citing logistical issues, delay in handing over the sites and delays in issuing site completion reports by MP Urja and has requested to recall the notice for cancellation of work orders and has further requested to allow the Company to complete the pending work allocated. The Company is under final negotiation with the department and believes that the matter will be resolved within financial year 2016-17 and outstanding amount will be realized after adjusting some amount of penalties which is not yet ascertained. As a consequence, the impact of the (a) loss or damage due to the action that MP Urja may take; (b) the outcome of the final notice issued, that may include forfeiture of EMD, adjusting the dues against any loss or damage and levy of penalty, and (c) the Companyâs inability to complete the order within the stipulated time period, is uncertain and the same shall crystallize only on the conclusion of discussion and the actions that the authorities may take against the Company.â
12. Previous period figures have been re-grouped/re-classified to conform to current year classification.
Mar 31, 2015
1. DEBT RESTRUCTURING IN THE YEAR ENDED 31ST MARCH 2012
i) Background
The Company had set up a green field project for manufacturing Solar
Photovoltaic cells with a capacity of 160 MW, comprising two lines of
80 MW each under Phase ÂI and are in the process of setting up an
additional manufacturing facility Line -3 with a 200 MW capacity under
Phase  II, at Plot No. 3C/1 Ecotech-II, Udyog Vihar Greater Noida in
the State of Uttar Pradesh. The lending banks ('Lenders') had, at the
request of the Company, sanctioned term loans, deferred payment
guarantee facilities and working capital facilities on such terms and
conditions as contained in various loan agreements / facility
agreements entered into between the Company and the Lenders.
ii) Conditions that lead to restructuring
The Company witnessed significant downturn due to weak demand both
globally as well as in the domestic market and incurred significant
cash and operating losses in the previous years. There was a mismatch
between cost and selling prices that resulted in the stoppage of plant
from September 2011, which severely impacted the cash flow position of
the Company prompting the filing of a restructuring package of its
loans that existed as on 1 July 2011 with the Corporate Debt
Restructuring Cell ('CDR Cell'). At the request of the Company and in
consideration of its commitment to improve its operations, the
application filed was referred to the Corporate Debt Restructuring
Forum, a non-statutory voluntary mechanism set up under the aegis of
the Reserve Bank of India (hereinafter referred to as the "CDR").
Pursuant thereto, the CDR Empowered Group at their meeting held on 30
January 2012 approved a restructuring package in terms of which the
loans as of 1 July 2011 were restructured and certain additional
financial assistance was proposed to be extended to the Company that
was set out in the Letter of Approval dated 7 March 2012 issued by
Corporate Debt Restructuring Cell to the Lenders and the Company
(hereinafter referred to as the "CDR Package").
The terms and conditions of the CDR were binding on the Lenders and the
Company, effective from the date of the signing of the Master
Restructuring Agreement ('MRA') i.e. 28 March 2012 with each of the
Lenders (except for Indian Bank). The Company had accordingly given
effect to the CDR scheme w.e.f. from 1 July 2011, in the financial
statements for the year ended 31 March 2012. However one of the banks
of the consortium group i.e. Indian Bank had not agreed to the CDR
package and had not signed the Master Restructuring Agreement (MRA).
The MRA was signed by the concerned bank on 5 July 2012. In connection
with obtaining the necessary approvals for restructuring of existing
loans, the promoters contributed funds in accordance with sanction
letter. As a consequence, the Company received an unsecured loan from
its promoters amounting to Rs. 950.00.
During the previous year, the Company has received interest free
unsecured loan from a party amounting to Rs. 250.00 towards meeting
expenses for CDR-2 to be converted into 2,5000,00 zero coupon
redeemable non convertible non cumulative preference shares of face
value of Rs 10 each on approval from shareholders. However during the
current year, on approval from shareholders the Company has, instead of
prefrence shares, allotted 2,500,000 equity shares of Rs 10 each at par
value.
iii) Principal terms of the Master restructuring Agreement ('MRA') in
accordance with the CDR scheme.
a) Waivers of existing events of default and the consequential effect
thereof:The Company in accordance with the terms and conditions of the
MRA agreed to the reconstitution of the Existing Loans due to the
Lenders pursuant to the CDR Package. As part of the restructuring
arrangement, the Lenders waived any existing Events of Default in
connection with the Existing loans and any rights, remedies or powers
that had arisen in connection therewith. Also, each of the Lenders
waived the obligation of the Company to pay any liquidated damages,
default or penal interest / interest / further interest charged by the
Lenders in excess of the interest rates specified in the existing
documents for financing and security of such Lender as they existed
prior to 1 July 2011, without considering any increase in such rates on
account of the occurrence of any default under such documents, together
with compound interest, penalties or any other charges thereon under
those documents of such Lender during the period commencing on 1 July
2011 and ending on 30 June 2013.
In accordance with the CDR scheme the consortium of lenders had waived
the obligation of the Company to pay any liquidated damages, default or
penal interest / interest / further interest charged by the Lenders in
excess of the concessional rates approved under CDR package.
b) Restructuring of the loans existed as at 1 July 2011:
- Each of the Lenders and Company agreed that the loans shall be
reconstituted as follows:
- Rupee Term Loans of Rs. 34,485.82 together with all interest,
charges, costs, expenses and any other amounts accrued was
reconstituted into Facility -A;
- Short Term Loan of Rs. 2,200.00 from Andhra Bank outstanding as on 1
July 2011 i.e. the CutÂoff date was rescheduled and converted into
"Priority Medium Term Loan" as Facility -B;
- Irregularity as on 31 March 2012 in Working Capital Limits comprising
cash credit, packing credit, buyer's credit facility, bill discounting
and irregularities due to anticipated devolvement of LCs was converted
into WCTL as Facility C;
- Interest accrued/ to be accrued on Secured term loans, Short term
loan and WCTL until 30 June 2013 to be funded by way of Funded Interest
Term Loan ("FITL") as Facility- D.
c) Sanction for additional funding
1. Project Loan from Union Bank of India
Union Bank of India ('UBI') sanctioned a Project Loan amounting to Rs.
27,500 (including Priority Term Loan of Rs. 4,700). The Project Loan by
UBI was sanctioned in the following manner:
a) The Company was sanctioned Rs. 22,800 Letter of Credit (LC) opened
in favour of M/s. Schmid Technology Systems GmbH ('Schmid') through
UBI, for a period of 35 months from the date of shipment out of the
project loan sanctioned. In accordance with the said arrangement, the
letter of credit shall be converted into Term Loan in February 2014.
Schmid discounted the said Letter of Credit with their bankers
(counterparty bank). UBI in consultation with the Company entered into
a deferred payment credit facility with the counterparty bank wherein,
a sum of Rs. 22,142.26 was paid by the counterparty bank to M/s. Schmid
towards imported capital goods until 31 March 2012.
UBI is paying the interest in relation to such financing to the
counterparty bank, which is being charged to the Company. In accordance
with the terms of the deferred payment facility, there is no obligation
to pay to Schmid as the same was discharged by the counterparty bank.
As a consequence, UBI has an obligation towards the counterparty bank
to repay the loan in accordance with the terms agreed at the end of the
Letter of credit term i.e. 35 months from the date of shipment. Such
amount payable under the deferred payment mechanism was therefore
classified as long term borrowings. During the curent year the
deferred payment mechanism was paid out of term loan facility reffered
as 5(e). The balance as at 31 March 2015 and 31 March 2014 amount to
Rs. Nil and Rs. 26,754.78 respectively.
b) Rs. 4,700 out of the said project loan representing priority medium
term loan shall be disbursed by UBI to the Company towards capital
expenditure. In the current year, the Company has drawn a sum of Rs.
Nil (previous year Rs. 300.00) out of the sanctioned limit.
2. Priority medium term loan
As part of the CDR package the Lenders agreed to provide additional
funding in the form of priority medium term loans of Rs. 10,000 for the
implementation of 200 MW Plant in the proportion of the outstanding
exposure to the Company as on the 1 July 2011. Such funding priority
shall be in the form of deferred letter of credit for 35 months which
shall be funded by the Priority loans. In the current year, the Company
has drawn a sum of Rs. 1,150.00 (previous year Rs. 21.76) (net of
repayment) out of the sanctioned limit.
d) Reset of Interest Rate:
The Lenders who are part of the consortium of banks, alongwith the
approval of CDR EG, shall have a right to reset the rate of interest on
the term loans after every three years (or short period as decided by
the CDR EG) and working capital interest rate every year.
e) Consequential effect of the CDR Scheme on the interest cost and the
classification of the interest accrued on borrowings as loans
As explained in note 6 (iii) (a) above, the Lenders waived the
obligation of the Company to pay any liquidated damages, default or
penal interest / interest / further interest charged by the Lenders in
excess of the concessional rates approved under the CDR package w.e.f 1
July 2011. Consequently, an interest credit received from the Lenders
amounting to Rs 1,201.70 and the balance of interest accrued
outstanding as at 31 March 2012 relating to various facilities
amounting to Rs 3,502.00 was transferred to FITL.
f) Default in repayment of loan and interest
As per the terms of the first Corporate Debt Restructuring package, 10%
of principal amount aggregating to Rs. 6,717.08 and 5% of principle
amount aggregating to Rs. 459.78 became due during the current year
ended 31 March 2015 and 3% of principal amount aggregating to Rs.
2,439.29 became due during the previous year ended 31 March 2014.
Further, the interest outstanding on the term loans as at 31 March 2015
amounts to Rs. 16,968.59 (Previous year Rs. 6,030.46).
3. 2nd Re-structuring
In light of continuing downturn in the solar industry where margins
were under significant stress and the continuing operating and cash
losses of the Company, the Company could not achieve the projection
submitted under first CDR package. Considering the above, the Company
has approached for second CDR package in the financial year ended March
31, 2014 which is under consideration with banks.
4. COMMITMENTS
a) Estimated amount of contracts remaining to be executed on capital
account (net of advances) not provided for Rs. 337.73 (previous year
Rs. 8,268.18).
b) For commitments relating to lease arrangements (Refer note 29).
c) For commitments relating to net positive foreign exchange earnings
(Refer note 35).
5. LEASE TAKEN BY THE COMPANY
The Company has various operating leases under cancellable and non
cancellable operating lease arrangements for plant and machinery,
office premises, accommodation for employees and other assets which are
renewable on a periodic basis. Rent expenses for operating leases
included in the Statement of Profit and Loss is Rs. 21.12 (previous
year: Rs. 55.14).
6. The Company has incurred expenses in foreign currency (including
amortisation of imported machinery) amounting to Rs. 115,937.53 lakhs
till 31 March 2015. Such machinery and raw material have been imported
without payment of customs duty, being an Export Oriented Unit, on the
basis of an undertaking given to customs authorities that the Company
shall be able to earn a positive Net Foreign Exchange within ten years
from the commencement of its operation. At current quarter end (i.e.
after five years of commencement of its operations), the Company's
earnings is a negative Net Foreign Exchange Earnings of Rs. 6,585.79
lakhs (previous quarter Rs. 18,557.22 lakhs). On a 5 year block basis
the company had achieved the negative NFE of Rs. 26,102.08 lakhs upto
31 March 2014. In the next block of five years starting from 1 April
2014 till end of current quarter, the Company could achieve positive
NFE of Rs. 19,516.29 lakhs. As explained in Note 2 above, the ability
of the Company to meet its export obligations over the next 5 years is
dependent on various factors which have created multiple uncertainties,
the effect of which , is not ascertainable at present.
7. Related party disclosures List of related parties
a) Parties where control exists :
i) Key managerial personnel controlling the Company*
Mr. H.R Gupta
Mr. B.K Gupta
b) Other related party relationships where transactions have taken
place:
i) Party holding significant influence over the enterprise Greenlite
Lighting Corporation
8. Employees benefit
Disclosure in respect of employee benefits under Accounting Standard 15
"Employee Benefits" prescribed by the Companies (Accounting Standards)
Rules 2006:
a) Defined Contribution Plans: The Company has recognised Rs. 67.20
(Previous year Rs. 25.87) related to employers' contribution to
Provident Fund Scheme in the Statement of Profit and Loss.
b) Post employment benefit plan in the form of gratuity:
The Company has a post employment benefit in the form of gratuity
wherein the last drawn salary plus dearness allowance is used to
compute gratuity as per the provisions of the Payment of Gratuity Act,
1972. A period of 5 years has been considered as vesting and the
maximum benefit that can be availed under the scheme is Rs. 10.00.
9. Segment Information
(a) Information about primary business segment
In the opinion of the management, there is only one reportable segment
i.e. manufacturing of solar cells, as envisaged by Accounting Standard
17 "Segment Reporting", prescribed by the Companies (Accounting
Standards) Rules, 2006.
(b) Information on secondary/ geographical segment
The Company sells its products to various customers within the country
and also exports to other companies. Considering the size and
proportion of exports to local sales, the Company considers sales made
within the country and exports as different geographical segments.
10. Shareholders had passed ordinary resolution through postal ballot
on 31st January, 2011 to empower and authorise the Board of Directors
to vary terms and contracts mentioned in the prospectus dated 18th
September, 2010, vary/ amend/ alter the utilisation of net proceeds
inter se one or other of the purposes for their utilisation, described
in the said prospectus on even date and utilise any part of the net
proceeds for a purpose or purposes other than those described in the
said prospectus. The funds raised and utilised by the Company are as
under:
11. The Company had been awarded a turnkey contract by MP Urja Vikas
Nigam Limited (MP Urja) for setting up of 3MW (in aggregate) SPV Power
Plants with a capacity ranging between 10-50 KW per plant, vide letter
of intent dated 12 September 2012, through a tender process during the
quarter ended 31 December 2012. The contract included design,
engineering, supply, installation and commissioning and interfacing of
Solar Photovoltaic Power Plants (SPVPP) with 5 years Warranty Cum
Comprehensive Maintenance Contract (CMC). In accordance with the
stipulated terms of the contract, the Company has deposited earnest
money deposit (EMD) amounting to Rs. 60.10 lakhs. Out of the total
contract, work orders aggregating to 1.6 MW amounting to Rs. 2,914.13
lakhs was raised on the Company that was required to be executed till
30 June 2013. The Company has raised the bills for having completed 0.1
MW (5 sites) until 31 March 2014 and the dues outstanding in relation
to the executed portion amounts to Rs. 177.23 lakhs. The Company had
also filed an application seeking extension with MP Urja for completion
of the unexecuted work.
During the previous year, the Company had received a final notice from
MP Urja rejecting the extension plea and deciding to cancel the work
order (other than the 3 sites considered completed by MP Urja) given to
the Company along with the forfeiture of EMD and imposition of penalty
due to the non compliance by the Company. MP Urja had also stated in
the notice that it shall take action against the Company on account of
breach of terms and conditions of the agreement. The contract
stipulates a penalty if there is a delay in completing the work order
that can extend to a maximum of 10 % of the order value and MP Urja
will be free to purchase the balance goods from elsewhere without
notice to the Company and carry out the unexecuted work, at Company's
cost and risk. Also, any loss or damage that MP Urja may sustain due to
such failure MP Urja shall have a right to recover any loss or damage,
if any, from any sum payable to the Company. Further, if recovery is
not possible from the Company on account of the Company's failure to
pay the losses or damages within one month from the claim, the recovery
shall be made under Madhya Pradesh Public Demand Recovery Act or any
other law applicable under these circumstances.
The Company is contesting the MP Urja claims citing logistical issues,
delay in handing over the sites and delays in issuing site completion
reports by MP Urja and has requested to recall the notice for
cancellation of work orders and has further requested to allow the
Company to complete the pending work allocated. The response of MP Urja
is still waited. However, the management is under final negotiation
with the department and hope the matter will be resolved in the next 2
quarter of the next financial year and outstanding amount will be
realised after adjusting sum amount of penalties which is not yet
ascertained. As a consequence, the impact of the loss or damage due to
the action that MP Urja may take and the outcome of the final notice
issued, that may include forfeiture of EMD, adjusting the dues against
any loss or damage and levy of penalty, in the light of the Company
expressing its inability to complete the order within the stipulated
time period, is uncertain and the same shall crystallise only on the
conclusion of discussion and the actions that the authorities may take
against the Company.
12. During the current year, one of the consortium lender banks of the
Company has given the credit of Rs. 296.72 lakhs (previous year Rs.
223.82 lakhs) in the loan account of the Company with the realisations
on sale of shares pledged by the one of the promoter, Greenlite
Lighting Corporation, Canada (a promoter group company). The Company
has recorded the same as interest free unsecured loan from Geenlite
Lighting corporation, Canada and the same is repayable after 31 March
2016.
13. Previous period figures have been
re-grouped/re-classified/re-arranged wherever necessary to make them
comparable.
Mar 31, 2014
1. Commitments
a) Estimated amount of contracts remaining to be executed on capital
account (net of advances) not provided for Rs. 8,268.18 (previous year
Rs. 8,653.13).
b) For commitments relating to lease arrangements (Refer note 29).
c) For commitments relating to net positive foreign exchange earnings
(Refer note 35).
2. The Company has incurred expenses in foreign currency (including
amortisation of imported machinery) amounting to Rs. 106,746.62 lakhs
till 31 March 2014. Such machinery and raw material have been imported
without payment of customs duty, being an Export Oriented Unit, on the
basis of an undertaking given to customs authorities that the Company
shall be able to earn a positive Net Foreign Exchange within ten years
from the commencement of its operation. At current year end (i.e. after
five years of commencement of its operations), the Company''s earnings
is a negative Net Foreign Exchange Earnings of Rs. 26,120.04 lakhs. As
explained in Note 1, the ability of the Company to meet its export
obligations over the next 5 years is dependent on various factors which
have created multiple uncertainties, the effect of which, is not
ascertainable at present.
3. Contingent liabilities
Particulars As at As at
31st March, 2014 31st March, 2013
Excise duty demand - 76.76
pending settlement
Service tax demand - 1,903.71
pending settlement
Custom duty demand 9,430.19 -
pending settlement*
Total 9,430.19 1,980.47
* During the current year, the Company has received a show cause notice
from the Office of the Commissioner, Customs, Central, Excise & Service
Tax Commissionerate (''Authority), Noida, whereby the authority has
asked the Company to explain why custom duty of Rs. 9,430.19 lakhs
along with interest and penalty thereon should not be levied on the
Company in respect of import of duty free capital goods, as the Company
could not install the machinery within the stipulated time period. The
Company has filed a reply with the authority citing the delays in
installation primarily due to financial constraint arising out of the
downturn in the solar industry. Response of the department on the same
is still awaited.
4. The Company had been awarded a turnkey contract by MP Urja Vikas
Nigam Limited (MP Urja) for setting up of 3MW (in aggregate) SPV Power
Plants with a capacity ranging between 10-50 KW per plant, vide letter
of intent dated 12 September 2012, through a tender process during the
quarter ended 31 December 2012. The contract included design,
engineering, supply, installation and commissioning and interfacing of
Solar Photovoltaic Power Plants (SPVPP) with 5 years Warranty Cum
Comprehensive Maintenance Contract (CMC). In accordance with the
stipulated terms of the contract, the Company has deposited earnest
money deposit (EMD) amounting to Rs. 60.10 lakhs. Out of the total
contract, work orders aggregating to 1.6 MW amounting to Rs. 2,914.13
lakhs was raised on the Company that was required to be executed till
30 June 2013. The Company has raised the bills for having completed 0.1
MW (5 sites) until 31 March 2014 and the dues outstanding in relation
to the executed portion amounts to Rs. 177.23 lakhs. The Company had
also filed an application seeking extension with MP Urja for completion
of the unexecuted work till 30 June 2014.
During the year, the Company had received a final notice from MP Urja
rejecting the extension plea and deciding to cancel the work order
(other than the 3 sites considered completed by MP Urja) given to the
Company alongwith the forfeiture of EMD and imposition of penalty due
to the non compliance by the Company. MP Urja has also provided in the
notice that it shall take action against the Company on account of
breach of terms and conditions of the agreement. The contract
stipulates a penalty if there is a delay in completing the work order
that can extend to a maximum of 10 % of the order value and MP Urja
will be free to purchase the balance goods from elsewhere without
notice to the Company and carry out the unexecuted work, at Company''s
cost and risk. Also, any loss or damage that MP Urja may sustain due to
such failure MP Urja shall have a right to recover any loss or damage,
if any, from any sum payable to the Company. Further, if recovery is
not possible from the Company on account of the Company''s failure to
pay the losses or damages within one month from the claim, the recovery
shall be made under Madhya Pradesh Public Demand Recovery Act or any
other law applicable under these circumstances. Management is
contesting the aforesaid claims citing logistical issues, delay in
handing over the sites and delays to issue site completion reports on
part of MP Urja and has requested to recall the notice for cancellation
of work orders and has further requested to allow the Company to
complete the pending work allocated. The response of MP Urja is still
waited. As a consequence, the impact of the loss or damage due to the
action that MP Urja may take and the outcome of the final notice
issued, that may include forfeiture of EMD, adjusting the dues against
any loss or damage and levy of penalty, in the light of the Company
expressing its inability to complete the order within the stipulated
time period, is uncertain and the same shall crystallise only on the
conclusion of discussion and the actions that the authorities may take
against the Company.
5. During the year, on 24 March 2014 the Company has received a
letter from National Stock Exchange with reference to the
recommendations of Qualified Audit Review Committee advising the
Company to rectify the qualification in respect of i) Treatment of
demurrage charges amounting to Rs. 1,254.51 lakhs that were paid at the
time of removal of machinery which was lying at the bonded warehouse
for a significant period of time and formed part of the cost of
acquisition of an asset and were inappropriately capitalised under
capital work-in-progress; ii) Multiple uncertainties due to various
factors impacting going concern.
In response to the observations, the Company has rectified the
treatment of demurrage charges and in respect of the uncertainties
impacting going concern, the Company has filed a reply with the stock
exchange explaining that the factors impacting going concern are not
wholly within the control of the Company and therefore cannot be
rectified. Accordingly, the financial statements includes demurrage/
detention charges aggregating to Rs. 1.308.36 lakhs (including Rs.
53.85 lakhs emanating from reconciliations with the vendor) and have
been included in other expenses.
6. During the current year, one of the consortium lender banks of the
Company has given the credit of Rs. 223.82 lakhs in the loan account of
the Company with the realisations on sale of shares pledged by the one
of the promoter, Greenlite Lighting Corporation, Canada (a promoter
group company). The Company has recorded the same as interest free
unsecured loan from Lighting corporation, Canada and the same is
repayable after 31 March 2015.
7. Previous period figures have been
re-grouped/re-classified/re-arranged wherever necessary to make them
comparable.
Mar 31, 2013
1 Commitments
a) Estimated amount of contracts remaining to be executed on capital
account (net of advances) not provided for Rs. 8,653.13 (previous year
Rs. 2,674.30).
b) For commitments relating to lease arrangements (Refer note 29).
c) For commitments relating to net positive foreign exchange earnings
(Refer note 35).
2 Lease taken by the Company
The Company has various operating leases under cancellable and non
cancellable operating lease arrangements for plant and machinery,
office premises, accommodation for employees and other assets which are
renewable on a periodic basis. Rent expenses for operating leases
included in the Statement of Profit and Loss is Rs. 316.29 (previous
year: Rs. 266.35).
3 The Company has incurred expenses in foreign currency (including
amortisation of imported machinery) amounting to Rs. 101,211.69 till
31st March 2013. Such machinery and raw material have been imported
without payment of customs duty, being an Export Oriented Unit, on the
basis of an undertaking given to customs authorities that the Company
shall be able to earn a Net Positive Foreign Exchange within ten years
from the commencement of its operation. At the year end (i.e. after
three years of commencement of its operations), the Company''s earnings
is a Negative Net Foreign Exchange Earnings of Rs. 22,124.03. As
explained in Note 1 above, the ability of the Company to meet its
export obligations over the next 6 years is dependent on various
factors which have created multiple uncertainties, the effect of which
if any is not ascertainable.
4 Related party disclosures List of related parties
a) Parties where control exists :
i) Key managerial personnel controlling the Company Mr. H.R Gupta Mr.
B.K Gupta
b) Other related party relationships where transactions have taken
place during the year
i) Other key managerial personnel Mr. A.K Agarwal
5 Employees benefit
Disclosure in respect of employee benefits under Accounting Standard 15
"Employee Benefits" prescribed by the Companies (Accounting Standards)
Rules, 2006:
a ) Defined Contribution Plans: The Company has recognised Rs. 69.36
(Previous year Rs. 72.42) related to employers'' contribution to
Provident Fund Scheme in the Statement of Profit and Loss.
b) Post employment benefit plan in the form of gratuity:
The Company has a post employment benefit in the form of gratuity
wherein the last drawn salary plus dearness allowance is used to
compute gratuity as per the provisions of the Payment of Gratuity Act,
1972. A period of 5 years has been considered as vesting and the
maximum benefit that can be availed under the scheme is Rs. 10.00.
6 Segment Information
(a) Information about primary business segment
In the opinion of the management, there is only one reportable segment
i.e. manufacturing of solar cells, as envisaged by Accounting Standard
17 "Segment Reporting", prescribed by the Companies (Accounting
Standards) Rules, 2006.
(b) Information on secondary/ geographical segment
The Company sells its products to various customers within the country
and also exports to other companies. Considering the size and
proportion of exports to local sales, the Company considers sales made
within the country and exports as different geographical segments.
7 Shareholders had passed ordinary resolution through postal ballot on
31st January, 2011 to empower and authorise the Board of Directors to
vary terms and conditions mentioned in the prospectus dated 18th
September, 2010, vary/ amend/ alter the utilisation of net proceeds
inter se one or other of the purposes for their utilisation, described
in the said prospectus on even date and utilise any part of the net
proceeds for a purpose or purposes other than those described in the
said prospectus. The funds raised and utilised by the Company are as
under:
8 Contingent liabilities
Particulars As at As at
31st March, 2013 31st March, 2012
Excise duty demand pending
settlement 76.76 -
Service tax demand pending
settlement 1,903.71 -
Total 1,980.47 -
9 The Company had been awarded a turnkey contract by MP Urja Vikas
Nigam Limited (MP Urja) for setting up of 3MW (in aggregate) SPV Power
Plants with a capacity ranging between 10-50 KW per plant, vide letter
of intent dated 12th September 2012, through a tender process during
the year. The contract included design, engineering, supply,
installation and commissioning and interfacing of Solar Photovoltaic
Power Plants (SPVPP) with 5 years Warranty Cum Comprehensive
Maintenance Contract (CMC). Out of the total contract, 1.6 MW was
required to be executed till 30th June 2013. The contract remained
unexecuted as at 31st March 2013. However, the Company is in the
process of executing 100 KW subsequent to 31st March 2013. Also, the
Company has filed an application seeking extension with MP Urja for
completion of work. The contract stipulates a penalty if there is a
delay in completing the work order that can extend to a maximum of 10 %
of the order value and in the event of delay beyond 10 weeks, MP Urja
has the authority to cancel the contract. The likely impact of the loss
or damage due to inability or delay to complete the orders by the
Company is not quantifiable as the final outcome thereof, is uncertain
and the same shall crystallise only after the completion of discussion
and necessary clearances from the necessary authorities.
10 Previous period figures have been
re-grouped/re-classified/re-arranged wherever necessary to make them
comparable.
Mar 31, 2012
A. Term and rights attached to Equity shares
The Company has only one type of equity shares having par value of Rs.
10 each per share. All shares rank pari passu with respect to dividend,
voting rights and other terms. Each shareholder is entitled to one vote
per share except, in respect of any shares on which any calls or other
sums payable have not been paid. The Company pays and declares
dividends in Indian Rupees. The dividend proposed, if any, by the Board
of Directors is subject to approval of shareholders in the ensuing
Annual General Meeting. The repayment of equity share capital in the
event of liquidation and buy back of shares are possible subject to
prevalent regulations. In the event of liquidation, normally the equity
shareholders are eligible to receive the remaining assets of the
Company after distribution of all preferential amounts, in proportion
to their shareholding.
b. Aggregate number of equity shares issued for consideration other
than cash and shares bought back during the period of five years
immediately preceding 31st March, 2012
(i) 185,000 equity shares (in '000) of Rs. 10 each, fully paid and
15,000 equity shares (in '000) of Rs. 0.50 each partly paid were issued
to the shareholders of erstwhile Indosolar Limited in the year ended
31st March, 2009 in accordance with the scheme of amalgamation. Such
partly paid equity shares were made fully paid prior to the effective
date of scheme of amalgamation i.e. 24th September, 2009.
(ii) No shares have been bought back during the five-year period ended
31st March, 2012 (31st March, 2011). guarantees given by the Directors
of the Company i.e. Mr. B. K. Gupta and Mr. H.R. Gupta.
1 DEBT RESTRUCTURING
i) Background
The Company had set up a green field project for manufacturing Solar
Photovoltaic cells with a capacity of 160 MW, comprising two lines of
80 MW each under Phase -I and are in the process of setting up an
additional manufacturing facility Line -3 with a 200 MW capacity under
Phase - II, at Plot No. 3C/1 Ecotech-II, Udyog Vihar Greater Noida in
the State of Uttar Pradesh. The existing lending banks ('Lenders') had,
at the request of the Company, sanctioned Term loans, deferred payment
guarantee facilities and working capital facilities on such terms and
conditions as contained in various loan agreements / facility
agreements entered into between the Company and the Lenders.
ii) Conditions leading to restructuring
The Company witnessed significant downturn due to weak demand both
globally as well as in the domestic market and incurred significant
cash and operating losses during the year. Also, the current mismatch
between cost and selling prices resulted in the stoppage of plant from
September, 2011, which severely impacted the cash flow position of the
Company that prompted the filing of a restructuring package of its
existing loans with the Corporate Debt Restructuring Cell ('CDR Cell').
At the request of the Company and in consideration of its commitment to
improve its operations, the application so filed was referred to the
Corporate Debt Restructuring Forum, a non-statutory voluntary mechanism
set up under the aegis of the Reserve Bank of India (hereinafter
referred to as the "CDR"). Pursuant thereto, the CDR Empowered Group at
their meeting held on 30th January, 2012 approved a restructuring
package in terms of which the existing loans were restructured and
certain additional financial assistance was proposed to be extended to
the Company as set out in the Letter of Approval dated 7th March, 2012
issued by Corporate Debt Restructuring Cell to the Lenders and the
Company (hereinafter referred to as the "CDR Package")
The terms and conditions of the CDR are binding on the Lenders and the
Company, effective from the date of the signing of the Master
Restructuring Agreement ('MRA') i.e. 28th March, 2012 (except in case
of Indian Bank wherein the ('MRA') is yet to be signed) with each of
the Lenders. Under the CDR package, the Company is entitled to the
reliefs and concessions granted by the Lenders pursuant to the Approved
CDR Package, with effect from 1st July, 2011 ('the Relevant Date'). In
connection with obtaining the necessary approvals for restructuring of
existing loans, the promotors were required to contribute funds in
accordance with sanction letter. As a consequence, the Company received
an unsecured loan from its promotors amounting to Rs. 950.00.
iii) Principal terms of the Master restructuring Agreement ('MRA') in
accordance with the CDR scheme.
a) Waivers of existing events of default and the consequential effect
thereof:
The Company in accordance with the terms and conditions of the MRA
agreed to the reconstitution of the Existing Loans due to the Lenders
pursuant to the CDR Package. As part of the restructuring arrangement,
the Lenders waived any existing Events of Default in connection with
the Existing loans and any rights, remedies or powers that had arisen
in connection therewith. Also, each of the Lenders waived the
obligation of the Company to pay any liquidated damages, default or
penal interest / interest / further interest charged by the Lenders in
excess of the interest rates specified in the existing documents for
financing and security of such Lender as they existed prior to 1st
July, 2011, without considering any increase in such rates on account
of the occurrence of any default under such documents, together with
compound interest, penalties or any other charges thereon under those
documents of such Lender during the period commencing on 1st July, 2011
and ending on 30th June, 2013.
b) Restructuring of the Existing loans:
- Each of the Lenders and Company agreed that the Existing Loans shall
be reconstituted as follows:
- Existing Rupee Term Loans of Rs. 34,485.82 together with all
interest, charges, costs, expenses and any other amounts accrued and
outstanding on 1st July, 2011 has been reconstituted into Facility -A;
- The existing Short Term Loan of Rs. 2,200.00 from Andhra Bank
outstanding as on 1st July, 2011 i.e. the Cut-off date shall be
rescheduled and converted into "Priority Medium Term Loan" as Facility
-B;
- The estimated amount of irregularity as on 31st March, 2012 in
Working Capital Limits previously consisting of cash credit, packing
credit, buyer's credit facility and bill discounting on the basis of
prevailing exchange rates, prevailing realisable value of inventory
etc. including irregularities due to anticipated devolvement of LCs
upto 31st March, 2012, subject to reconciliation at the time of
implementation, shall stand converted into WCTL as Facility - C;
- The outstanding amount on account of interest on Secured term loans,
interest on Short term loan, interest on WCTL and interest on existing
Working Capital from cut-off date till 30th June, 2013, not exceeding
Rs. 9,845.00 shall stand funded by way of Funded Interest Term Loan
("FITL") as Facility - D
c) Sanction for additional funding
1. Project Loan from Union Bank of India
Union Bank of India ('UBI') sanctioned a Project Loan amounting to Rs.
27,500 (including Priority Term Loan of Rs. 4,700). The Project Loan by
UBI has been sanctioned in the following manner:
a) The Company has been sanctioned Rs. 22,800 Letter of Credit (LC)
opened in favour of M/s. Schmid Technology Systems GmbH ('Schmid') by
UBI, for a period of 35 months from the date of shipment out of term
loan disbursement. In accordance with the said arrangement, the same
shall be converted into Term Loan in February, 2014. Schmid discounted
the said Letter of Credit with their bankers (counterparty bank) and
UBI in consultation with the Company and Schmid, entered into a
Deferred payment credit facility with the counterparty bank wherein, a
sum of Rs. 22,142.26 has been paid by the counterparty bank to M/s.
Schmid towards imported capital goods . UBI is paying the interest in
respect relating to such financing to the counterparty bank, which is
being charged to the Company. In accordance with the terms of the
agreement with Schmid and the Deferred payment facility, there is no
obligation to pay to Schmid as the same has been discharged by the
counterparty bank. As a consequence, UBI has an obligation towards the
counterparty bank to repay the loan in accordance with the terms agreed
at the end of the Letter of credit term i.e. 35 months from the date of
shipment. Such amount payable under the Deferred payment mechanism has
therefore been classified as Long term borrowings.
b) Rs. 4,700 out of the said Project Loan shall be disbursed by UBI to
the Company towards capital expenditure.
2. Medium term loan
As part of the CDR package the Lenders have agreed to provide
additional funding in the form of medium term loans of Rs.10,000 for
the implementation of 200 MW Plant in the proportion of the outstanding
exposure to the Company as on the 1st July, 2011. Such funding shall be
in the form of deferred letter of credit for 35 months which shall be
funded by the Priority loans.
d) Reset of Interest Rate:
The Lenders who are part of the consortium of banks, alongwith the
approval of CDR EG, shall have a right to reset the rate of interest on
the term loans after every three years (or short period as decided by
the CDR EG) and working capital interest rate every year.
e) Consequential effect of the CDR Scheme on the interest cost and the
classification of the interest accrued on borrowings as loans
As explained in note 6 (iii) (a) above, the Lenders waived the
obligation of the Company to pay any liquidated damages, default or
penal interest / interest / further interest charged by the Lenders in
excess of the concessional rates approved under the CDR package from
1st July, 2011, the consequential effect has been that there has been a
credit received from the Lenders amounting to Rs 1,201.70 and the
balance of interest accrued outstanding as at 31st March, 2012 relating
to various facilities amounting to Rs 3,502.00 transferred to FITL.
f) Balances outstanding in relation to facilities availed from Indian
Bank pending finalisation and approval
As explained in note (ii) above, one of the consortium banks i.e.
Indian Bank is yet to sign the Master Restructuring Agreement. However,
management believes that as per RBI guidelines the CDR package has been
approved by super majority of the consortium of banks. Accordingly, the
owings to this particular bank have been reclassified and interest has
been recalculated in accordance with the CDR package. The short term
borrowings comprising cash credit amounting to Rs 1,223.92 and devolved
Letter of Credit amounting to Rs. 511.57 have been reclassified as Long
term borrowing (Rs. 1,402.43) and Short term borrowings (Rs. 333.06)
as at 31st March, 2012. The existing term loan of Rs. 5,996.79 has been
disclosed as long term borrowing with Nil current maturities. The
interest due w.e.f 1st July, 2011 till 31st March, 2012 at revised
rates amounting to Rs. 549.73 has been reclassified as a Funded
Interest Term Loan. The above reclassifications and interest
calculations are subject to reconciliation and approval by this
particular bank.
** Details of dues to micro and small enterprises defined under the
MSMED Act, 2006
The Ministry of Micro, Small and Medium Enterprises has issued an
Office Memorandum dated 26th August, 2008 which recommends that Micro
and Small Enterprises should mention in their correspondence with their
customers the Entrepreneurs Memorandum number as allocated after filing
of the Memorandum. Based on information received and available with the
Company, there are no amounts payable to Micro and Small Enterprises as
at 31st March, 2012. Based on the information presently available with
the Company, there are no dues outstanding to micro and small
enterprises covered under the Micro, Small and Medium Enterprises
Development Act, 2006.
* Fixed deposits includes Rs. 413.08 (previous year Rs. 1,190.00 ) as
margin money against guarantees issued by bank.
# Fixed deposits includes Rs. 2,375.30 (previous year Rs. 2,595.30 ) as
margin money against guarantees issued by bank. Rs. 2,375.00 (previous
year Rs. 2,375.00) have been funded from monies received from initial
public issue. Also, refer note 41.
3 The Global Photovoltaic sector remains in a structural oversupply in
2012 with an estimated capacity likely to be in the region of 50GW with
the operating capacity being lower than that. Correspondingly, the
demand would be approximately 35GW. It is expected that China, USA,
Japan and India shall be the main demand growth drivers in 2012.
The Indian Solar Energy Market has developed over the last few years
mainly due to the National Solar Mission ('NSM') and the State Solar
programs. Annual installed capacities/projections are as under:
The market size estimates in some of the expert reports (Deustche Bank
and McKinsey) suggest that the annual capacity may be much higher
compared to the above projections. The most recently conducted bidding
process by NTPC Vidyut Vyapar Nigam Limited ('NVVN') under National
Solar Mission (NSM) led to a sharper than expected reduction in the
Project Costs Assumptions due to aggressive bidding. As a consequence,
this has impacted the
price points for Solar cells and Modules, thus making the economics
challenging at this point in time. Project developers are also facing
difficulties in obtaining Financial Closure from Banks for their
Projects, which is further delaying the finalization of orders for
Solar cells and Modules.
The current mismatch between cost and selling prices has resulted in
the stoppage of plant from September, 2011, which severely impacted the
cash flow position of the Company that prompted the filing of a
restructuring package with the Corporate Debt Restructuring Cell. In
connection therewith, the Company prepared Cash Flow projections after
taking into account the current business realities and such cash flows
have been incorporated in the CDR package which has been approved by
the consortium of banks. Management has simultaneously implemented
operational improvement actions and new initiatives as part of the
compensating actions to protect the margins in the context of the
current price erosion. The cash flow projections have been prepared
with an assumption that the project developers shall be able to achieve
financial closures and that the Company shall be able to garner a
reasonable share of demand both under NSM and State Solar Missions with
sustainable and reasonable gross margins despite low selling prices.
The Company's cash flow projections are largely dependent upon the
achievement of all these factors.
Management believes that the sector requires significant government
support and policy intervention to support the viability of the sector.
A few such policy initiatives under active discussion and the outcome
of which is awaited at this point in time relate to:
- The Imposition of Anti Dumping Duty on goods from China, Taiwan,
Malaysia & USA as per the petition filed by The Solar Manufacturers
Association of India on 18th January, 2012;
- The continuance and increasing scope of Local Content Requirement
['LCR'] for the PV cells in Phase II of NSM [2013 to 2017]; and
- Commitment of the government to the National Solar Mission and State
Solar Missions.
As a result of the above significant uncertainties and possible changes
in the business dynamics mentioned above, the outcome of which
including consequential impact on the Company's cash flows will be
known only in the ensuing period, the cash flows that were prepared by
management and as approved by the CDR cell have been considered for
impairment assessment. Based on such analysis, the cash flow
projections do not indicate impairment as at 31st March, 2012 .
4 Commitments
a) Estimated amount of contracts remaining to be executed on capital
account (net of advances) not provided for Rs. 2,674.30 (previous year
Rs. 26,903.16).
b) For commitments relating to lease arrangements (refer note 30)
c) For commitments relating to net positive foreign exchange earnings
(refer note 36).
5 Lease taken by the Company
The Company has various operating leases under cancellable and non
cancellable operating lease arrangements for plant and machinery,
office premises, accommodation for employees and other assets which are
renewable on a periodic basis. Rent expenses for operating leases
included in the Statement of Profit and Loss is Rs. 266.35 (Previous
year: Rs. 372.55).
6 The Company had imported machinery, raw material and incurred other
expenses in foreign currency amounting to Rs. 124,066.77 (previous year
Rs. 113,705.52) till 31st March, 2012. Such machinery and raw material
have been imported without payment of customs duty, being an Export
Oriented Unit, on the basis of an undertaking given to customs
authorities that the Company shall be able to earn a net positive Net
Foreign Exchange within ten years from the commencement of its
operation. At year end (i.e. after three years of commencement of its
operations), the Company's earnings is a negative Net Foreign Exchange
Earnings of Rs. 16,123.90 (previous year Rs. 9,018.29). Management is
confident that they would be able to achieve a positive net foreign
exchange during the unexpired period. Also, refer note 29.
7 Related party disclosures List of related parties
a) Parties where control exists :
i) Key managerial personnel controlling the Company Mr. H.R Gupta Mr.
B.K Gupta
b) Other related party relationships where transactions have taken
place during the year
i) Relatives of key managerial personnel controlling the Company Mrs.
Priya Desh Gupta
ii) Other key managerial personnel Mr. A.K Agarwal
8 Employees benefit
Disclosure in respect of employee benefits under Accounting Standard 15
"Employee Benefits" prescribed by the Companies (Accounting Standards)
Rules, 2006:
a) Defined Contribution Plans: The Company has recognised Rs. 77.50
(Previous year Rs. 75.53) related to employers' contribution to
Provident Fund and Employees State Insurance Scheme in the Statement of
Profit and Loss.
b) Post employment benefit plan in the form of gratuity:
The Company has a post employment benefit in the form of gratuity
wherein the last drawn salary plus dearness allowance is used to
compute gratuity as per the provisions of the Payment of Gratuity Act,
1972. A period of 5 years has been considered as vesting and the
maximum benefit that can be availed under the scheme is Rs. 10.00 .
9 Segment Information
(a) Information about primary business segment
In the opinion of the management, there is only one reportable segment
i.e. manufacturing of solar cells, as envisaged by Accounting Standard
17 "Segment Reporting", prescribed by the Companies (Accounting
Standards) Rules, 2006.
(b) Information on secondary/ geographical segment
The Company sells its products to various customers within the country
and also exports to other companies. Considering the size and
proportion of exports to local sales, the Company considers sales made
within the country and exports as different geographical segments.
10 During the previous year ended 31st March 2011, the Company incurred
significant losses on account of delay in stabilization of one of its
lines that had become operational in March, 2010. As a consequence, the
Company claimed compensation for operational losses incurred during the
period April, 2010 to September, 2010 from its vendor. In lieu of such
claim, the Company received cash compensation amounting to Euro 50.00
lakhs (equivalent to Rs. 3,167.65) from its supplier of machinery. Such
claim had been disclosed as an exceptional item in the Statement of
Profit and Loss.
11 Shareholders had passed ordinary resolution through postal ballot on
31st January, 2011 to empower and authorise the Board of Directors to
vary terms and contracts mentioned in the prospectus dated 18th
September, 2010, vary/ amend/ alter the utilisation of net proceeds
inter se one or other of the purposes for their utilisation, described
in the said prospectus on even date and utilise any part of the net
proceeds for a purpose or purposes other than those described in the
said prospectus. The funds raised and utilised by the Company are as
under:
12 During the year, the Company received a loan amounting to Rs. 531.38
from a foreign company to satisfy one of the stipulation of CDR package
[also refer to note 6(ii)]. Such loan is categorised as External
Commercial Borrowings in respect of which certain regulatory
formalities were to be complied with and clearances were to be obtained
prior to the receipt of such loan. Management has compiled the
necessary documentation and have filed the application with the Reserve
Bank of India on 22nd May, 2012 for condonation of non compliance with
such regulatory requirements
Mar 31, 2011
1. Deferred tax
The Company has significant unabsorbed depreciation/ carry forward
losses as per the tax laws. In view of absence of virtual certainty of
realisation of carried forward tax losses/unabsorbed depreciation in
the foreseeable future, deferred tax asset has been recognised only to
the extent of deferred tax liability.
2. Contingent liabilities:
(a) Bills discounted with banks outstanding as at 31st March 2011 Rs.
Nil (previous year: Rs. 115,161,283). Also refer to note 20 of this
schedule.
(b) Estimated amount of contracts remaining to be executed on capital
account (net of advances) not provided for Rs. 2,690,315,927 (Previous
year Rs. 11,529,269).
3. The Company has imported machinery, raw material and incurred other
expenses in foreign currency amounting to Rs.11,370,552,000 till 31st
March, 2011. Such machinery and raw material have been imported without
payment of customs duty, being an Export Oriented Unit, on the basis of
an undertaking given to customs authorities that the Company shall be
able to earn a net positive Net Foreign Exchange within five years from
the commencement of its operation. At year end (i.e. after two years of
commencement of its operations), the Company's earnings is a negative
Net Foreign Exchange Earnings of Rs.901,829,000. Management is
confident that they would be able to achieve a positive net foreign
exchange during the unexpired period.
4. Related party
a) Parties where control exists:
i) Key managerial personnel controlling the Company
Mr. H.R. Gupta
Mr. B.K. Gupta
b) Other related party relationships where transactions have taken
place during current year:
i) Relatives of key managerial personnel controlling the Company Mrs.
Priya Desh Gupta
ii) Other key managerial personnel Mr. A.K. Agarwal
5. Employee benefit
Disclosure in respect of employee benefits under Accounting Standard 15
"Employee Benefits" prescribed by the Companies (Accounting Standards)
Rules, 2006:
(a) Defined Contribution Plans: The Company has recognised Rs.7,552,551
(Previous year Rs.7,090,093) related to employers' contribution to
Provident Fund and Employees State Insurance Scheme in the Profit and
Loss Account.
(b) Post employment benefit plan in the form of gratuity:
The Company has a post employment benefit in the form of gratuity
wherein the last drawn salary plus dearness allowance is used to
compute gratuity as per the provisions of the Payment of Gratuity Act,
1972. A period of 5 years has been considered as vesting and the
maximum benefit that can be availed under the scheme is Rs. 1,000,000.
6. Segment reporting
Business segment: In the opinion of the management, there is only one
reportable segment i.e. manufacturing of solar cells, as envisaged by
Accounting Standard 17 "Segment Reporting", prescribed by the Companies
(Accounting Standards) Rules, 2006.
Geographical segment: The Company sells its products to various
customers within the country and also exports to other countries.
Considering the size and proportion of exports to local sales, the
Company considers sales made within the country and exports as
different geographical segments.
7. During the year, the Company has recognised bills discounted with
recourse and outstanding at year end as part of working capital loan in
Schedule 4 and the corresponding recoverable under sundry debtors
following the principle of gross presentation. In the previous year,
outstanding bills discounted amounting to Rs. 114,240,581 were adjusted
against sundry debtors.
8. During the year the Company received a credit note from principal
supplier of machinery amounting to Euro 1,500,000 (equivalent to Rs.
90,551,100 ) to compensate for the delay in the supply of machinery in
accordance with the terms of the contract. The amount of credit note
has been adjusted to the cost of plant and machinery and the
depreciation has been accordingly, recomputed with retrospective
effect, resulting in a downward adjustment to depreciation charge by
Rs.6,767,243 in the year ended 31st March, 2011.
9. During the year ended 31st March, 2011, the Company incurred
significant losses on account of delay in stabilization of one of its
lines that had become operational in March, 2010. As a consequence, the
Company claimed compensation for operational losses incurred during the
period April, 2010 to September, 2010 from its vendor. In lieu of such
claim, the Company received cash compensation amounting to Euro
5,000,000 (equivalent to Rs. 316,764,500) from its supplier of
machinery. Such claim has been disclosed as an exceptional item in the
Profit and Loss Account.
10. Previous year figures have been regrouped / recast wherever
necessary to confirm to current year's classification.
Mar 31, 2010
1. Scheme of amalgamation
i. Scheme
As per the scheme of amalgamation approved by the Board of directors of
Indosolar Limited (formerly known as Robin Solar Private Limited)
(Robin) or (the Company) on 16 March 2009 and sanctioned by the
High Court of Judicature at Delhi vide order dated 16 September 2009,
erstwhile Indosolar Limited (Transferor Company) amalgamated into the
Company (Transferee Company) w.e.f. the appointed date, i.e. 1
January 2009. The scheme as approved by the High Court was filed with
the regional offices concerned of the Registrar of Companies. The
Scheme became effective from 24 September 2009 after the approved
scheme was filed with the Registrar of Companies.
Robin has been incorporated with the objective of setting up an Export
Oriented Unit for solar energy.
ii. Salient features of the Scheme
The salient features of the scheme are as follows:
a) All assets, debts, liabilities, duties and obligations comprising
the undertaking of the Transferor company stood transferred or deemed
to have been transferred to Robin with effect from
1 January 2009. All such assets, liabilities and reserves of the
Transferor Company were taken over at book values at the opening of the
business on 1 January 2009.
b) The shareholders of Robin were paid Rs. 227,350,000 in proportion to
their shareholding in the Company as on 1 January 2009. Further, as per
the scheme this amount of Rs. 227,350,000 was to be adjusted against
the debit balance of the shareholders of Robin appearing in the books
of Robin/ Transferor company. (Also refer to note 2(iv)(e) of schedule
19).
c) All shares of the Company, i.e. 10,000 equity shares of Rs. 10 each
fully paid up were to be reduced and the paid up value to the
shareholders entitled thereto were to be paid in cash, as part of the
Scheme. Consequent to such payment, these shareholders ceased to have
any continuing stake in the Company.
d) The Authorised Share Capital of Transferred Company was increased to
the extent of the Authorised Share Capital of the Transferor Company
from the effective date without any further act or deed.
e) The name of the Transferor Company was changed to "Indosolar
Limited", and the Memorandum and Articles of Association of the
Transferee Company were substituted by the Memorandum and Articles of
Association of the Transferor Company and the Transferee Companys
constitution changed from Private to Public, without any further act or
deed, upon the Scheme coming into effect.
iii. Consideration
In consideration of transfer and vesting of the undertaking of the
Transferor company, in terms of the Scheme, 185,000,000 equity shares
of Rs. 10 each and 15,000,000 equity shares of Rs. 0.5 each partly paid
were allotted to shareholders of the Transferor Company in the same
proportion of their holdings in the Transferor Company (the paid up
capital of the Transferor Company is same as the shares allotted).
The Transferor Company called and received Rs. 9.50 against 15,000,000
equity shares subsequent to the appointed date. As per the approved
scheme the same shall continue in the Transferee Company on the same
terms and conditions as if the same had been issued and allotted by the
Transferee Company.
iv. Accounting treatment
The amalgamation was in the nature of merger and had been accounted for
in accordance with the approved scheme of amalgamation and as
prescribed by Accounting Standard 14 Ã "Accounting for Amalgamation":
b. The debit balance of the Profit and Loss Account aggregating Rs.
55,503,765 of the Transferor Company had been recognised in the same
form and at the same amount as in the books of Transferor Company at
the appointed date in the year ended 31 March 2009.
c. The shares pending issue to shareholders of Transferor Company,
amounting to Rs. 1,857,500,000 was disclosed as Equity shares to be
issued pursuant to the scheme of amalgamation as at 31 March 2009.
After the scheme became effective from 26 September 2009, such shares
were allotted as fully paid on the effective date. (Also refer to note
2(iv)(e) of schedule 19).
d. The amount of Rs. 100,000 on account of reduction of share capital
has been paid to the shareholders of Robin, as per the scheme. (Also
refer to note 2(iv)(e) of schedule 19).
e. In the year ended 31 March 2009, the amount of Rs. 227,350,000
payable to the shareholders of Robin, as per the scheme, was adjusted
against the advance receivable aggregating Rs. 205,450,000 existing in
the books of erstwhile Indosolar Limited and the balance of Rs.
21,900,000 was included in sundry creditors. The amount of Rs.
227,350,000 in respect of payments to be made to the shareholders was
adjusted against revaluation reserve existing in Robins books as at 31
December 2008 as per the scheme.
f. The Company changed its name from Robin Solar Private Limited to
Robin Solar Limited on 12 October 2009 and further to Indosolar Limited
on 30 October 2009 to give effect to the terms of the scheme.
2. Deferred tax
The Company has significant unabsorbed depreciation/ carry forward
losses as per the tax laws. In view of absence of virtual certainty of
realisation of carried forward tax losses/unabsorbed depreciation in
the foreseeable future, deferred tax asset has been recognised only to
the extent of deferred tax liability.
3. a) Contingent liabilities:
Bills discounted with banks outstanding as at 31 March 2010 Rs.
115,161,283 (previous year:Rs. Nil)
b) Estimated amount of contracts remaining to be executed on capital
account (net of advances) not provided for Rs. 11,529,269 (Previous
year Rs. 1,623,789,784).
4. Related party:
a) Parties where control exists:
i) Key managerial personnel controlling the Company Mr. H.R. Gupta
Mr. B.K. Gupta
(w.e.f 1 July 2008
b) Other related party relationships where
transactions have taken
place during current year:
i) Relatives of key managerial personnel
controlling the Company Mrs. Priya Desh
Gupta
ii) Other key managerial personnel Mr. A.K. Agarwal
iii) Enterprise over which key managerial
personnel controlling the Company Erstwhile Indosolar
Limited
have significant influence ("Indo") (w.e.f 15
January 2008
till 31 December
2008)
5. Employee benefit
Disclosure in respect of employee benefits under Accounting Standard 15
"Employee Benefits" prescribed by the Companies (Accounting Standards)
Rules, 2006:
a) Defined Contribution Plans: The Company has recognised Rs.7,090,093
related to employers contribution to Provident Fund in the Profit and
Loss Account.
b) Post employment benefit plan in the form of gratuity:
The Company has a post employment benefit in the form of gratuity
wherein the last drawn salary plus dearness allowance is used to
compute gratuity as per the provisions of the Payment of Gratuity Act,
1972. A period of 5 years has been considered as vesting and the
maximum benefit that can be availed under the scheme is Rs. 350,000.
6 Managerial remuneration in excess of limits prescribed by section
309
Pursuant to the scheme of amalgamation that was filed with the
Registrar of Companies on 24 September 2009, the Company got converted
from Private Company to Public Company with effect from that date.
The Managing Director and other Whole-time Directors have been
appointed with effect from 26 September 2009, with a remuneration in
excess of the limits prescribed by the Companies Act, 1956 (the Act)
as the Company has incurred losses in the year ended 31 March 2010 The
remuneration amounting to Rs. 24,353,250 paid/ accrued during the
period 26 September to 31 March 2010, in excess of the limits
prescribed under Schedule XIII of the Act, is held in trust by such
managerial personnel until such Central Government approval.
The Company has filed necessary applications for obtaining approval
from the Central Government, which is awaited, for the appointment and
remuneration paid to the managerial personnel for such period.
7 Segment reporting Business segment
In the opinion of the management, there is only one reportable segment
i.e. manufacturing of solar cells, as envisaged by Accounting Standard
17 "Segment Reporting", prescribed by the Companies (Accounting
Standards) Rules, 2006.
Geographical segment
The Company sells its products to various customers within the country
and also exports to other companies. Considering the size and
proportion of exports to local sales, the Company considers sales made
within the country and exports as different geographical segments.
8. The Company had sought confirmation from its vendors on their
status under Micro, Small and Medium Enterprises Development Act,
2006.Based on the information available till date, there are no amounts
due to any micro or small enterprise under the Micro, Small and Medium
Enterprises Development Act, 2006.
9. Previous year figures have been regrouped / recast wherever
necessary to conform to current years classification.
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