Mar 31, 2018
Notes forming part of the Standalone Financial Statements as at and for the year ended March 31, 2018
(All amounts in Rs. Lakhs, unless stated otherwise)
A. Exemptions and exceptions availed
In preparing these Ind AS financial statements, the Company has availed certain optional exemptions and mandatory exceptions in accordance with Ind AS 101 from previous GAAP to Ind AS, as explained below. The resulting difference between the carrying values of the assets and liabilities in the financial statements as at the transition date under Ind AS and previous GAAP have been recognised directly in equity (retained earnings or another appropriate category of equity). This note explains the adjustments made by the Company in restating its previous GAAP financial statements as at April 01, 2016 and the financial statements as at and for the year ended March 31, 2017.
A.1 Ind AS optional exemptions
(a) Business combinations
Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date.
The Company elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated.
(b) Investments in subsidiaries, associates and joint ventures
Ind AS 101 permits a first time adopter to measure it''s investment, at the date of transition, at cost determined in accordance with Ind AS 27, '' Separate Financial Statements'' or deemed cost. The deemed cost of such investment shall be it''s fair value at the Company''s date of transition to Ind AS, or previous GAAP carrying amount at that date. The Company has elected to measure its investment in subsidiary at the previous GAAP carrying amount as its deemed cost on the transition date.
(c) Deemed cost for property plant and equipment, intangible assets and investment properties
Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets'' and investment properties covered by Ind AS 40 Investment Property''. Accordingly, the Company has elected to measure all of its property, plant and equipment, intangible assets and investment properties at their previous GAAP carrying value.
(d) Designation of previously recognised financial instruments
Ind AS 101 allows an entity to designate investments in equity instruments at FVOCI on the basis of the facts and circumstances at the date of transition to Ind AS. The Company has elected to apply this exemption for its investment in equity shares.
A.2. Ind AS mandatory exceptions (a) Estimates
An entity''s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at April 01, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:
⢠Investment in equity instruments carried at FVPL or FVOCI;
⢠Impairment of financial assets based on expected credit loss model;
⢠Fair Value of investment properties;
⢠Asset held for sale
(b) Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS. Consequently the Company has appplied the above assessment based on facts and circumstances exisiting on the transition date.
(c) Derecognition of Financial Assets and Financial Liabilities:
Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions. The Company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.
B. Reconciliations between previous GAAP and Ind AS
Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following reconciliations provide the explanations and quantification of the differences arising from the transition from previous GAAP to Ind AS in accordance with Ind AS 101:
A. Reconciliation of Equity as at April 01, 2016 and March 31, 2017;
B. Reconciliation of Statement of Total Comprehensive Income for the year ended March 31, 2017; and
C. The impact on cash flows from operating, investing and financing activities for the year March 31, 2017. Reconciliation of total equity as at April 01, 2016 and March 31, 2017:
Description |
Notes to first time adoption |
April 01, 2016 |
March 31, 2017 |
Total equity (shareholders'' funds) as per previous GAAP |
37,755.08 |
37,540.55 |
|
Adjustments: |
|||
Proposed dividend and dividend distribution tax |
1 |
502.36 |
- |
Fair valuation of Investments |
3 |
9,401.61 |
22,260.89 |
Deferred revenue on government grant |
4 |
4,113.25 |
4,705.58 |
Depreciation on government grant |
4 |
(4,102.21) |
(4,650.87) |
Others |
13 |
(832.31) |
(901.95) |
Deferred tax impact in respect of Ind AS adjustments |
6 |
2.94 |
(3.03) |
Total adjustments |
9,085.64 |
21,410.62 |
|
Total equity as per Ind AS |
46,840.72 |
58,951.17 |
Reconciliation of total comprehensive income for the year ended March 31, 2017:
Description |
Notes to first time adoption |
March 31, 2017 |
Profit after tax as previous GAAP |
(214.53) |
|
Adjustments: |
||
Net impact on Investment-Fair Value Option through P&L |
3 |
643.39 |
Deferred revenue on government grant |
4 |
592.33 |
Depreciation on government grant |
4 |
(548.66) |
Acturial (Loss)/ Gain on Defined Benefit Plans considered under Other Comprehensive |
5 |
23.67 |
Income |
Description |
Notes to first time adoption |
March 31, 2017 |
Others |
13 |
(69.64) |
Deferred tax impact in respect of Ind AS adjustments |
6 |
(14.16) |
Total adjustments |
626.93 |
|
Profit after tax as per Ind AS |
412.40 |
|
Other comprehensive income |
12,200.41 |
|
Total comprehensive income as per Ind AS |
12,612.81 |
Cash Flow Reconciliation |
||||
Description |
Notes |
GAAP |
Adjustments |
Ind .AS |
Net cash from operating activities |
1,851.89 |
6,942.10 |
8,793.99 |
|
Net cash from investing activities |
(564.82) |
(6,703.85) |
(7,268.67) |
|
Net cash from financing activities |
(1,110.56) |
(10.79) |
(1,121.35) |
|
Net increase / decrease in cash equivalents |
176.51 |
227.46 |
403.97 |
|
Cash and cash equivalents as at April 01, 2016 |
13 |
574.31 |
- |
574.31 |
Cash and cash equivalents as at March 31, 2017 |
13 |
750.82 |
227.46 |
978.28 |
Notes to first time adoption:
The following explains the material adjustments made while transition from previous accounting standards to Ind AS: Note 1:- Proposed dividend
Under the previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognised as a liability. Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend of Rs 502.36 lakhs as at April 01, 2016 included under provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity increased by an equivalent amount.
Note 2:- Trade Receivables
As per Ind AS 109, the Company is required to apply expected credit loss model for recognising the allowance for doubtful debts. After the analysis of ageing of debtors, the Company has concluded that the existing amount of provision in the books is sufficient to cover any doubtful debt / s arising in future. As a result, no allowance for doubtful debts has been recognised by application of expected credit loss model for any of the years considered above.
Note 3:- Fair Valuation of Investments
Under the previous GAAP, investments in equity instruments and bonds instruments were classified as long-term investments or current investments based on the intended holding period and realisability. Long-term investments were carried at cost less provision for other than temporary decline in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments (other than equity instruments designated as at FVOCI) have been recognised in retained earnings as at the date of transition and subsequently in the Profit or Loss for the year ended March 31, 2017. This increased the retained earnings by Rs. 706.20 lakhs as at March 31, 2017 (April 01, 2016 - Rs. 2,540.48 Lakhs). Fair value changes with respect to investments in equity instruments designated as at FVOCI have been recognised in other comprehensive income as at the date of transition and subsequently in the other comprehensive income for the year ended March 31 2017. This increased other reserves by Rs.12,215.89 lakhs as at March 31, 2017 (April 01, 2016 - Rs. 6,861.00 Lakhs). Consequent to the above, the total equity as at March 31, 2017 increased by Rs. 12,922.09 Lakhs (April 01,2016 - Rs. 9,401.48 Lakhs).
Note 4:- Deferred Government Grant
As stated above, on transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as at April 01, 2016, measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment. However, in view of the Ind AS Transition Facilitation Company (ITFG) clarification bulletin dated April 17, 2017 (ITFG - 5 (Revised)), the deemed cost of property, plant and equipment as at the transition date has been increased by Rs. 2,678.52 lakhs as at March 31, 2017 (April 01, 2016- Rs 2,116.42 lakhs) being the unamortised EPCG scheme with corresponding increase in other non-current liabilities/ other current liabilities as on the date of the transition. Government Grant recognised under EPCG scheme and TUFS capital subsidy has been apportioned equivalent to the depreciation on EPCG and TUFS capital subsidy (Refer Note 47). The Company has provided incremental depreciation to the extent of Rs. 4,650.87 lakhs for the year ended March 31, 2017 ( Rs. 4,102.21 lakhs April 01, 2016) on the government grant.
Note 5: Remeasurements of post-employment benefit obligations
Under Ind AS, remeasurements i.e. acturial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of Statement of Profit and Loss under the previous GAAP. Consequently, the Loss for the year ended March 31, 2017 increased by Rs. 23.67 lakhs. There is no impact on the total equity and Loss.
Note 6:-Deferred Tax
Under previous GAAP, deferred tax accounting was done using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS approach has resulted in recognition of deferred taxes on temporary differences which were not recorded under previous GAAP. Further, the various transitional adjustments have led deferred tax implication which the Company has accounted for Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or other comprehensive income, on the date of transition.
Note 7:- Cash discount on purchases
Under previous GAAP, cash discount on purchases were classified under ''Other Income''. However, as per Ind AS, it is shown as reductions from Cost of materials consumed. Accordingly, cash discount of Rs. 3.01 Lakhs have been reclassified from other income and shown as reduction from cost of materials consumed. There is no impact on the total equity and loss.
Note 8:- Discounts and incentives to customers
Company runs various promotional programmes for its customers. The fair value of those discounts / incentives given to the customers and has reduced it from the total sales consideration to record revenue on net basis. This change has resulted in a decrease in total revenue and decrease in total expenses for the year ended March 31, 2017 by Rs. 975.07 Lakhs. There is no impact on the total equity and Loss.
Note 9:- Bill Discounting, Acceptances and Supplier Credit
Under previous IGAAP, bill discounting is netted against debtors. However, as per Ind AS based on criteria of derecognition of assets, the bill discounting is to be shown as separate liability under borrowings without netting of debtors. Further, acceptance and suppliers'' credit is shown in the borrowings instead of trade payable. There is no impact on the total equity and Loss.
Note 10:- Investment Property
Under the previous GAAP, investment properties were presented as part of non-current investments. Under Ind AS, investment properties are required to be separately presented on the face of the balance sheet. There is no impact on the total equity or profit / loss as a result of this adjustment.
Note 11:- Other Comprehensive Income
Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the Statement of Profit and Loss as ''other comprehensive income'' includes remeasurements of defined benefit plans and fair value gains or losses on FVOCI equity instruments. The concept of other comprehensive income did not exist under previous GAAP.
Note 12:- Retained Earnings:
Retained earnings as at April 01, 2016 has been adjusted consequent to the above Ind AS transition adjustments.
Note 13:- Others:
Others mainly comprises of:-
(a) Inventory- Under Indian GAAP, the Company was using different techniques for measurement of cost of similar inventories at various locations. However as per Ind AS-2, an entity shall use the same cost formula for all inventories having a similar nature and use to the entity. For inventories with a different nature or use, different costs formulas may be justified. Accordingly the Company has applied the same formula for valuation of inventory where there is similar nature or use of inventory and aligned the valuation method used in various division. The effect of the same for both the years are considered in total equity as on March 31, 2017 and April 01, 2016 and under Total Comprehensive Income for the year ended March 31, 2017;
(b) Impact of transaction costs in respect of borrowings to be deducted from the carrying amount of borrowings on initial recognition and are recognized in the Statement of Profit and Loss over the tenure of the borrowings as the part of the interest expense by applying the effective interest rate method; and
(c) Impact of foreign exchange forward contracts which are marked to market as at each Balance sheet date.
Note 14:- As required under paragraph (IOC) of Ind AS 101, the Company has reclassified items that it recognised in accordance with previous GAAP as one type of asset, liability or component of equity, but are a different type of asset, liability or component of equity in accordance with Ind AS.
Note 49
(i) As legally advised, the Company has not recognized as income recovery of rent and other charges of Rs.83.61 lakhs upto 31st March, 2018 (Rs. 83.61 lakhs upto 31st March, 2017) pending final resolution of legal dispute with certain ex-tenants of a property in South Mumbai. At present, the legal dispute is pending with the Hon''ble Bombay High Court. A sum of Rs. 577.89 lakhs (Net) was withdrawn by the Company in accordance with the Orders passed by the Hon''ble High Court of Bombay on the Civil Revision Applications filed by the ex-tenants and the said amount of Rs 577.89 lakhs has been included in other current/ non-current liabilities.
(ii) In an earlier year, the Company had sold part of its leasehold land at its Mazgaon unit. The Company is required to surrender the remaining leasehold land (reserved portion admeasuring about 27,287.82 square meters) to Municipal Corporation of Greater Mumbai for the purpose of extension of V.J.B. Udyan. The Company is also required to recommence the spinning unit which can accommodate 10,000 spindles. By virtue of the agreement, the developer will construct a structure and hand it over to the Company.
(iii) Pursuant to the demerger of the Real Estate and Investment Business to Sulakshana Securities Limited (SSL) in 2002, the shareholders of the Company are to be issued one equity share of Rs. 10/- each, fully paid-up, in SSL for every 500 shares of Rs. 100/-each, fully paid-up, held in the Company as consideration for the demerger, aggregating to Rs. 1.00 lakh. As the shareholders of the Company would be entitled to receive only fractional shares of SSL, the rehabilitation scheme sanctioned by BIFR envisages that these shares would be acquired by Navin Fluorine International Limited (NFIL) and the shareholders of the Company would receive proportionate payment in consideration thereof. The Company has received the said amount of Rs. 1.00 lakh from NFIL on behalf of the shareholders, which is pending disbursement upon completion of formalities.
(iv) As reported earlier, Writ Petition No.2982 of 2016 filed by the Company (along with Notice of Motion taken out therein) in the Hon''ble Bombay High Court, inter alia, challenging the illegal handing over of a part of land at Mazagaon (Reserved Land) by the Collector to Municipal Corporation of Greater Mumbai, which is required to be surrendered by the Company in lieu of eligibility of Non-cash Compensation, is pending. Status quo Orders are continuing in respect of the said Reserved Land and accordingly the
Company continues to remain in possession of the said Reserved Land. Note 50 - Disclosures of Specified Bank Notes (''SEN'')
The Ministry of Corporate Affairs (''MCA'') in its'' notification dated 30th March 2017 amended Schedule III to the Companies Act, 2013 requiring Companies to provide the following disclosure in the financial statement in respect of Specified Bank Notes (''SEN'') held and transacted during the period 8th November, 2016 to 30th December, 2016:
Particulars |
SBNs |
Other Denomination Notes |
Total |
Closing Cash in Hand as on 8th November, 2016 |
8.63 |
17.50 |
26.13 |
( ) Permitted Receipts |
0.02 |
75.70 |
75.72 |
(-) Permitted Payments |
5.00 |
75.48 |
80.48 |
(-) Amount Deposited in Banks |
3.65 |
1.15 |
4.80 |
Closing Cash in Hand as on 30th December, 2016 |
- |
16.57 |
16.57 |
Note 51 - Others |
Export Promotion Capital Goods (EPCG) scheme allows import of certain capital goods including spares at concessional duty subject to an export obligation for the duty saved on capital goods imported under EPCG scheme. The duty saved on capital goods imported under EPCG scheme being Government Grant, is accounted as stated in the Accounting policy on Government Grant.
In terms of our report attached. |
|||
For Price Waterhouse Chartered Accountants LLP |
For and on behalf of the Board of Directors |
||
Registration No.012754N/ N500016 |
H. A. Mafatlal |
||
Chairman |
Directors |
||
(DIN:00009872) |
Aniruddha Deshmukh |
V. R. Gupte (DIN:00011330) |
|
Managing Director & |
A. K. Srivastava (DIN: 00046776) |
||
P. H. Mafatlal |
Chief Executive Officer |
P. N. Kapadia (DIN:00078673) |
|
Executive Director |
(DIN:01389267) |
G. G. Chakravarti (DIN:00004399) |
|
(DIN:02433237) |
S. A. Shah (DIN:00058019) |
||
L. P. Pradhan (DIN:07118801) |
|||
Priyanshu Gundana |
Ashish A. Karanji |
Milan Shah |
|
Partner |
Company Secretary |
Chief Financial Officer |
|
Membership No. 109553 |
|||
Mumbai, May 3, 2018 |
Mumbai, May 3, 2018 |
Mar 31, 2017
(b) Term loan of Rs. 162.59 lakhs (Previous year Rs 315.50 lakhs) from a Financial Institution is repayable in quarterly installments till March, 2018. The loan is secured by pari-passu hypothecation charge on certain current assets of the Company and pledge by promoters/ promoter companies of certain shareholding in the Company. The loan carries interest @ 12.45% to 12.70% p.a. (Previous year 12.70% to 13.25% p.a.).
(c) Term loan of Rs. 1,437.01 lakhs (Previous year Rs. Nil) from a Financial Institution is repayable in quarterly installments begining from June 2017 till March, 2022 after a moratorium period of 12 months. The loan is secured by mortgage / hypothecation charge on certain fixed assets of the Company. The loan carries interest @ 11.75% to 12.00% p.a. (Previous year N.A.).
* Secured against Fixed Deposits of Rs.Nil, (Previous year: Rs.8,354.30 lakhs, last date of maturity 15th March, 2017).
** Cash credit facility are secured by hypothecation of certain stocks and book debts, both present and future, of the Company, second charge on certain Fixed Assets of the Company and pledge of investments held by the Company. The cash credit is repayable on demand and carry an interest @ 12.00% to 14.00% p.a. (Previous year 12.00% to 14.10% p.a.).
1) Building include Rs.12.86 lakhs (Previous year Rs.12.86 lakhs) being the cost of ownership premises in a co-operative society, including cost of shares received for the face value of Rs.2500/-, under the bye-laws of the society.
2) The Company is in process of getting expired leases renewed.
(i) Balance in Escrow Current account is operated under the supervision of Monitoring Committee constituted by the Government of Maharashtra, under Development Control Regulations, 1991.
(ii) (a) Bank deposits with more than 12 months maturity from Balance Sheet date is Rs.9.50 lakhs (Previous year Rs.10.00 lakhs).
(ii) (b) Includes balances with more than 12 months maturity from Balance Sheet date is Rs.219.43 lakhs (Previous year Rs.190.65 lakhs).
The interest subsidy for the year on the Term Loans availed under the Technology Up gradation Fund Scheme (TUFS) is Rs. 285.62 lakhs (Previous year Rs. 262.73 lakhs) and the same has been netted off from interest expense.
Note no. 3
Finance costs are net of Rs.473.47 lakhs (Previous year Rs. 175.92 lakhs) capitalized in fixed assets and CWIP- Refer note no. 31.13
In case of Mafatlal Centre:
A demand for Rs. 2,696.98 lakhs (Previous year Rs. 2,696.98 lakhs) for the period from 2004-07 and 2008-10 has been raised by Brihanmumbai Mahanagarpalika (''BMC'') towards Property Taxes in respect of the properties owned by various owners for the respective floors. The demand has been challenged by owners of various floors at appropriate forum and the matter is subjudice. In case the demand is finally upheld, the amount will be paid by the concerned co-owners and the Company will have no additional liability.
In case of Mafatlal Chambers:
A demand for '' 792.46 lakhs (Previous year Rs. 792.46 lakhs) for the period 2000-05 has been raised by Brihanmumbai Mahanagarpalika (''BMC'') towards Property Taxes in respect of the properties owned by the Company at the relevant time. The said demand has been disputed by the company. As per the directions given by the Honourable Bombay High Court, the BMC has granted hearing to the Company and the final outcome is awaited.
In the above matters (i) to (viii), the Company is hopeful of succeeding and as such does not expect any significant liability to crystallize.
Future cash outflows in respect of the above matters are determinable only on receipt of judgments / decisions pending at various forums / authorities.
Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors. The Company has not received intimation from most of the suppliers regarding the status under the Micro, Small and Medium Enterprises Development Act, 2006.
4 As legally advised, the Company has not recognized as income recovery of rent and other charges of Rs.83.61 lakhs up to 31st March, 2017 (Rs. 83.61 lakhs up to 31st March, 2016) pending final resolution of legal dispute with certain ex-tenants of a property in South Mumbai. At present, the legal dispute is pending with the Hon''ble Bombay High Court. A sum of Rs. 577.89 lakhs (Net) was withdrawn by the Company in accordance with the Orders passed by the Hon''ble High Court of Bombay on the Civil Revision Applications filed by the ex-tenants and the said amount of Rs. 577.89 lakhs has been included in other current / non-current liabilities (Refer Note no. 7, 11 and Note no. 16).
5 Details on derivatives instruments and unhedged foreign currency exposures
I The following forward contracts positions are open as at year end. These transactions have been undertaken to act as economic hedges for the Companyâs exposures to various risks in foreign exchange markets. The accounting of these transactions is stated in Note (h) of Significant Accounting Policies.
Forward exchange contracts are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency required or available at the settlement date of certain payables and receivables.
6 Due to inadequacy of profit, the managerial remuneration aggregating to Rs.406.26 lakhs, paid to Shri Aniruddha P. Deshmukh, Managing Director & Chief Executive Officer (Professional Director), Shri Priyavrata H. Mafatlal (Executive Director w.e.f. 1st November, 2016) and Shri Vishad P. Mafatlal, Executive Vice-Chairman up to 19th August, 2016, is in excess of the limits specified under Section 197(1) of the Companies Act, 2013. Though the remuneration is within the limits of Schedule V to the Companies Act, 2013, approval of the shareholders for the excess remuneration paid under Section 197(1) is required at the ensuing General Meeting.
7 In an earlier year, the Company had sold part of its leasehold land at its Mazgaon unit. The Company is required to surrender the remaining leasehold land (reserved portion admeasuring about 27,287.82 square meters) to Municipal Corporation of Greater Mumbai for the purpose of extension of V.J.B. Udyan. The Company is also required to recommence the spinning unit which can accommodate 10,000 spindles. By virtue of the agreement, the developer will construct a structure and hand it over to the Company.
8 Pursuant to the demerger of the Real Estate and Investment Business to Sulakshana Securities Limited (SSL) in 2002, the shareholders of the Company are to be issued one equity share of Rs.10/- each, fully paid-up, in SSL for every 500 shares of Rs. 100/- each, fully paid-up, held in the Company as consideration for the demerger, aggregating to Rs.1.00 lakh. As the shareholders of the Company would be entitled to receive only fractional shares of SSL, the rehabilitation scheme sanctioned by BIFR envisages that these shares would be acquired by Navin Fluorine International Limited (NFIL) and the shareholders of the Company would receive proportionate payment in consideration thereof. The Company has received the said amount of Rs. 1.00 lakh from NFIL on behalf of the shareholders, which is pending disbursement upon completion of formalities.
9 Proposed Dividend on 13,912,886 equity shares of the face value of Rs. 10/- each for the year ended 31st March, 2017 @ Rs. 2/- per share is subject to approval in the Annual General Meeting and is not recognized as liability (including Dividend Distribution Tax thereon).
10 As reported earlier, the Company has filed Writ Petition No.2982/2016 in the HonRs.ble Bombay High Court challenging the demand notice of Rs.45,435 lakhs (in respect of Development Agreement dated 17th June 2011 entered into by the Company for a part of its leasehold land at Mazagaon) issued by The Collector of Mumbai City and further actions of the office of Collector there under. Pending the admission of the aforesaid Writ Petition, the Hon''ble High Court has recorded by its Orders dated 19th January 2017 and 27th January 2017 that the Collector is ready to recall its Order/ Demand and the subsequent attachment dated 29th November 2016 and give a fresh hearing to the Company and accordingly this Hon''ble Court set aside the Order/ Demand and subsequent attachment dated 29th November 2016. Accordingly, as recorded in Order dated 27th January 2017, the aforesaid demand notice and attachment order has been withdrawn by the Collector and the same has been recorded in the Property Card of C. S. No. 593. Pursuant to the notification dated 10th February 2004, the Company is required to hand over 50% of the land bearing C. S. No. 593 to Municipal Corporation of Greater Mumbai ("MCGM") which is under reservation ("the said land") and as per the said notification, the Company would be eligible to get non-cash compensation in lieu thereof. The Collector claims to have handed over possession of the said reserved land to MCGM during the pendency of proceedings. The Company had filed Notice of Motion No. 5 of 2017 in the Writ Petition No.2982 of 2016 for handing over possession of the said Land to the MCGM under direction of the Court and the claim of the Collector has been challenged by the Company before the Court. The Hon''ble High Court has accordingly by its orders dated 16th March 2017, 13th April 2017 and 28th April 2017 directed status quo to be maintained. The Company continues to be in possession of the said reserved land. The Hon''ble High Court has allowed the Chamber Summons No. 90 of 2017 filed by the Company for impleading MCGM as a party to the Writ Petition and permitting the Company to carry out incidental and consequential amendments to the Writ Petition for bringing subsequent acts of the Collector and MCGM on record. All interim reliefs granted earlier by the Hon''ble High Court are continuing till further orders.
11 Segment Information
As per the Accounting standard (AS) 17 on "Segment Reporting", segment information has been provided under the Notes to Consolidated Financial Statements.
12 Employee benefit plans
a) Defined contribution plans
Contributions are made to Recognized Provident Fund / Government Provident Fund and Family Pension Fund which covers all regular employees. Contribution is also made in respect of executives to a Recognized Superannuation Fund. While both the employees and the Company make predetermined contributions to the Provident Fund, contribution to the Family Pension Fund and Superannuation Fund are made only by the Company. The contributions are normally based on a certain proportion of the employee''s salary. The Company recognized during the year Rs. 469.05 lakhs (Previous year Rs.472.65 lakhs) as Provident Fund Contribution, Rs. 242.05 lakhs (Previous year Rs.228.96 lakhs) as Super Annuation Contribution and Rs.144.22 lakhs (Previous year Rs.104.85 lakhs) as Pension Fund Contribution.
b) Defined benefit plans
Contributions are made to a Recognized Gratuity Fund in respect of gratuity based upon actuarial valuation done at the year end of every financial year using "Projected Unit Credit" method and it covers all regular employees. Major drivers in actuarial assumptions, typically, are years of service and employee compensation. Gains and losses on changes in actuarial assumptions are accounted for in the Statement of Profit and Loss.
The charge on account of provision for gratuity has been included in ''Employee Benefits Expense'' in the Statement of Profit and Loss.
The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.
The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.
All the employees are eligible for compensated absences of 30 days in each financial year which can be encashed during the tenure of employment. Employees cannot carry forward any compensated absences in excess of 300 days. The provision for these absences, made on the basis of Actuarial Valuation on "Projected Unit Credit" method is Rs. 636.51 lakhs (Previous year Rs.619.35 lakhs). Net charge for the year Rs. 284.55 (Previous year Rs.223.75 lakhs).
Note 13
Related Parties Transactions Details of Related Parties A Subsidiary Company
Mafatlal Services Limited B Jointly Controlled Entity
Al Fahim Mafatlal Textiles LLC- A Joint Venture with Al Fahim Linez LLC- (UAE) (Refer Note no. 32.6)
C Associates
D Key Management Personnel
Aniruddha Deshumkh
V. P. Mafatlal (upto 19th August 2016)
Priyavrata H. Mafatlal (From 1st November 2016)
Rajiv Dayal (upto 12th August 2015)
E Enterprises over which key management personnel and their relatives are able to exercise significant influence NOCIL Limited
Navin Flourine International Limited (upto 19th August 2016)
Sulakshana Securities Limited (upto 19th August 2016)
Krishnadeep Housing Development Private Limited (upto 19th August 2016)
Mafatlal Impex Private Limited (upto 19th August 2016)
Mafatlal Fabrics Private Limited (upto 19th August 2016)
F Individual having significant influence
H. A. Mafatlal
G Relatives of Individual having significant influence
Priyavrata H. Mafatlal (upto 31st October, 2016)
H Enterprises over which Individual having significant influence and relatives of such individual are able to exercise significant influence.
Sukarma Investments Private Limited
Suremi Trading Private Limited
Silvia Apparel Limited
Mafatlal Global Apparel Limited
Altamount Product and Services Private Limited
Figures in italics represent previous year figures.
- Includes Gratuity and leave encashment at the end of the tenure.
- Navin Flourine International Ltd., Mafatlal Impex Pvt. Ltd. and Sulakshana Securities Ltd. are considered to be related parties only till 19 August 2016. Note 32.6 Details of the Company''s interest in Joint Venture Interest in joint venture
The Company has interests in the following joint venture - Jointly Controlled Entity (JCE):
Note:- The Jointly controlled entity '' Al Fahim Mafatlal Textile LLC, UAE'' is currently under the process of winding up. Pursuant to such winding up the Company''s interest in the joint venture ceases to exist and the same passes on to the competent authority responsible for closure of operations as per the law of the jurisdication in which it is incorporated. Hence the Company has no access to the financials of the JCE which are under the control of such competent authority and so no information about it can be disclosed.
Note: Figures in brackets relate to the previous year.
Note 14
The Company has not made any remittances in foreign currencies on account of dividends during the year and does not have information as to the extent to which remittances in foreign currencies on account of dividends have been made by or on behalf of non-resident shareholders. The particulars of dividends paid to non-resident shareholders are as follows:
15The Ministry of Corporate Affairs (''MCA'') in its'' notification dated 30th March 2017 ammended Schedule III to the Companies Act, 2013 requiring Companies to provide the following disclosure in the financial statement in respect of Specified Bank Notes (''SBN'') held and transacted during the period 8th November 2016 to 30th December 2016:
Mar 31, 2016
b. (i) Terms / rights attached to Equity shares:
The Company has issued only one class of equity shares having a par value of Rs. 10/- per share. Each equity shareholder is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting.
During the year ended 31st March, 2016, the amount of dividend, per share, recognized as distributions to equity shareholders is Rs. 3/- (Previous year ended 31st March, 2015 Rs. 3/-).
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by shareholders.
(i) For Current maturities of Long Term Borrowings; Refer Note No.11(a) - Other Current Liabilities.
(ii) (a) Term loans of Rs. 1,764.15 lacs (Previous year Rs. 2,619.15 lacs) from a bank are repayable in quarterly installments till March, 2018. These loans are secured by a pari-passu mortgage / hypothecation charge on certain Fixed Assets, including leasehold land and hypothecation charge on certain current assets of the Company and pledge by promoters / promoter companies of certain shareholding in the Company. The loans carry interest linked to the lenders'' Prime Lending Rates. The effective rate of interest for the year was in the range of 14.25% to 14.90% p.a. (Previous year 14.90% to 15.00% p.a.).
(b) Term loan of Rs. 536.47 lacs (Previous year Rs. NIL) from a bank are repayable in quarterly installments beginning from June, 2017 till May, 2022 after a moratorium period of 15 months. The loan is secured by mortgage / hypothecation charge on certain Fixed Assets and pari-passu second charge on certain current assets of the Company. The loan carry interest linked to the lenders'' PLR. The effective rate of interest for the year was 12.25% p.a. (Previous year Not Applicable).
(c) Term loan of Rs. 2,499.99 lacs (Previous year Rs. 1,814.62 lacs) from a bank are repayable in monthly installments beginning from September, 2016 till August, 2021 after a moratorium period of 24 months. The loan is secured by mortgage / hypothecation charge on certain Fixed Assets and pledge of Equity shares owned by the Company. The loan carry interest linked to the lenders'' Prime Lending Rates. The effective rate of interest for the year was in the range of 14.25% to 14.50% p.a. (Previous year: 14.00% to 14.50% p.a.).
(d) Term loan of Rs. 2,457.63 lacs (Previous year Rs. 1,813.88 lacs) from a bank are repayable in monthly installments beginning from December, 2016 till December, 2021 after a moratorium period of 24 months. The loan is secured by mortgage / hypothecation charge on certain Fixed Assets and second charge on certain current assets of the Company. The loan carry interest linked to the lenders'' Prime Lending Rates. The effective rate of interest for the year was in the range of 12.50% to 13.50% p.a. (Previous year: 13.50% to 13.75% p.a.).
(iii) Loans for Vehicles from Banks is repayable in monthly installments and the same is secured by hypothecation of respective vehicles. The effective rate of interest for the year was in the range of 10.50% to 11% p.a. (Previous year 10.50% to 11% p.a.).
(iv) (a) Term loan of Rs. 464.25 lacs (Previous year Rs. 689.25 lacs) from a Financial Institution is repayable in quarterly installments till March, 2018. The loan is secured by a pari-passu mortgage / hypothecation charge on the Company''s certain Fixed Assets, including leasehold land and hypothecation charge on certain current assets of the Company and pledge by promoters / promoter companies of certain shareholding in the Company. The loan carry an interest linked to the lenders'' Prime Lending Rates. The effective rate of interest for the current year was at 12.70% to 13.25% p.a. (Previous year 13.25% to 16.75% p.a.).
(b) Term loan of Rs. 315.50 lacs (Previous year Rs. 468.41 lacs) from a Financial Institution is repayable in quarterly installments till March, 2018. The loan is secured by pari-passu hypothecation charge on certain current assets of the Company and pledge by promoters / promoter companies of certain shareholding in the Company. The loan carries interest @ 12.70% to 13.25% p.a. (Previous year 12.25% to 13.25% p.a.).
In case of Mafatlal Centre:
A demand for Rs. 2,696.98 lacs (Previous year Rs. 2,696.98 lacs) for the period from 01.04.2008 to 31.03.2010 has been raised by Brihanmumbai Mahanagarpalika towards Property Taxes in respect of the properties owned by various owners for the respective floors. No demand is raised in respect of common areas / properties in the name of the Company. The demand has been challenged by owners of various floors at appropriate forum and the matter is subjudiced. In case the demand is finally upheld, the amount will be paid by the concerned co-owners and the Company will have no additional liability
In case of Mafatlal Chambers:
A demand for Rs. 378.51 lacs (Previous year Rs. 378.51 lacs) for earlier years has been raised by Brihanmumbai Mahanagarpalika towards Property Taxes in respect of the properties owned by the Company for the respective floor.
In the above matters (i) to (ix), the Company is hopeful of succeeding and as such does not expect any significant liability to crystallize.
Future cash outflows in respect of the above matters are determinable only on receipt of judgments / decisions pending at various forums / authorities.
1. As legally advised, the Company has not recognized as income recovery of rent and other charges of Rs. 83.61 lacs upto 31st March, 2016 (Rs. 83.61 lacs upto 31st March, 2015) pending final resolution of legal dispute with certain ex-tenants of a property in South Mumbai. At present, the legal dispute is pending with the Honâble Bombay High Court. A sum of Rs. 577.89 lacs (Net) was withdrawn by the Company in accordance with the Orders passed by the Honâble High Court of Bombay on the Civil Revision Applications filed by the ex-tenants and the said amount of Rs. 577.89 lacs has been included in other current liabilities (Refer Note no. 7, 11 and Note no. 16).
2. a) Disclosure as per Clause 32 of the Listing Agreements with the Stock Exchanges
Loans and advances in the nature of loans given to subsidiaries, associates and others and investment in shares of the Company by such parties:
3. Details on derivatives instruments and unhedged foreign currency exposures
I. The following forward contracts positions are open as at year end. These transactions have been undertaken to act as economic hedges for the Companyâs exposures to various risks in foreign exchange markets. The accounting of these transactions is stated in Note (h) of Significant Accounting Policies.
Forward exchange contracts are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency required or available at the settlement date of certain payables and receivables.
30.12 a) Due to inadequacy of profit the remuneration paid to Shri Aniruddha Deshmukh Managing Director & Chief Executive Officer (Professional Director) is in excess of the limits specified under Section 197 of the Companies Act, 2013 read with Schedule V by Rs. 36.82 lacs. As required by the law necessary approvals are being / will be taken by the Company from the Shareholders and the Central Government.
b) Due to inadequacy of profit during the year Shri Vishad P Mafatlal (Vice-Chairman) has been paid remuneration with limits as prescribed under Schedule V of the Companies Act, 2013 and the same is subject to approval of the shareholders.
4 In an earlier year, the Company had sold part of its leasehold land at its Mazgaon unit. The Company is required to surrender the remaining leasehold land (reserved portion admeasuring about 27,287.82 square meters) to Municipal Corporation of Greater Mumbai for the purpose of extension of VJ.B. Udyan. The Company is also required to recommence the spinning unit which can accommodate 10,000 spindles. By virtue of the agreement, the developer will construct a structure and hand it over to the Company.
5 Pursuant to the demerger of the Real Estate and Investment Business to Sulakshana Securities Limited (SSL) in 2002, the shareholders of the Company are to be issued one equity share of Rs. 10/- each, fully paid-up, in SSL for every 500 shares of Rs. 100/- each, fully paid-up, held in the Company as consideration for the demerger, aggregating to Rs. 1.00 lac. As the shareholders of the Company would be entitled to receive only fractional shares of SSL, the rehabilitation scheme sanctioned by BIFR envisages that these shares would be acquired by Navin Fluorine International Limited (NFIL) and the shareholders of the Company would receive proportionate payment in consideration thereof. The Company has received the said amount of Rs. 1.00 lac from NFIL on behalf of the shareholders, which is pending disbursement upon completion of formalities.
6 Pursuant to the transitional provisions prescribed in Schedule II to the Companies Act, 2013, the Company had fully depreciated the carrying value of assets, net of residual value, where the remaining useful life of the asset was determined to be nil as on April 1, 2014, and had adjusted an amount of Rs. 111.57 lacs (net of deferred tax of Rs. 57.45 lacs) against the opening Surplus balance in the Statement of Profit and Loss under Reserves and Surplus of the previous year.
7 Segment Information
As per the Accounting standard (AS) 17 on "Segment Reporting", segment information has been provided under the Notes to Consolidated Financial Statements.
8. Employee benefit plans
a) Defined contribution plans
Contributions are made to Recognized Provident Fund / Government Provident Fund and Family Pension Fund which covers all regular employees. Contribution is also made in respect of executives to a Recognized Superannuation Fund. While both the employees and the Company make predetermined contributions to the Provident Fund, contribution to the Family Pension Fund and Superannuation Fund are made only by the Company. The contributions are normally based on a certain proportion of the employeeâs salary. The Company recognized during the year Rs. 472.65 lacs (Previous year Rs. 420.80 lacs) as Provident Fund Contribution, Rs. 228.96 lacs (Previous year Rs. 166.43 lacs) as Super Annotation Contribution and Rs. 104.85 lacs (Previous year Rs. 75.97 lacs) as Pension Fund Contribution.
b) Defined benefit plans
Contributions are made to a Recognized Gratuity Fund in respect of gratuity based upon actuarial valuation done at the year end of every financial year using "Projected Unit Credit" method and it covers all regular employees. Major drivers in actuarial assumptions, typically, are years of service and employee compensation. Gains and losses on changes in actuarial assumptions are accounted for in the Statement of Profit and Loss.
The charge on account of provision for gratuity has been included in ''Employee Benefits Expense'' in the Statement of Profit and Loss.
The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.
The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.
All the employees are eligible for compensated absences of 30 days in each financial year which can be encashed during the tenure of employment. Employees cannot carry forward any compensated absences in excess of 300 days. The provision for these absences, made on the basis of Actuarial Valuation on "Projected Unit Credit" method is Rs. 619.35 lacs (Previous year Rs. 657.30 lacs). Net charge for the year Rs. 223.75 lacs (Previous year Rs. 261.09 lacs).
Note 9.
Related Parties transactions Details of Related Parties A Subsidiary Company
Mafatlal Services Limited B Jointly Controlled Entity
AL Fahim Mafatlal Textiles LLC- A Joint Venture with Al Fahim Linez LLC- (UAE) (Refer Note no.31.6)
C Associates
D Key Management Personnel
Rajiv Dayal (till 12.08.2015)
V. P. Mafatlal
Aniruddha Deshkumh (From 13.08.2015)
E Enterprises over which key management personnel and their relatives are able to exercise significant influence
NOCIL Limited
Navin Flourine International Limited Sulakshana Securities Limited Krishnadeep Housing Development Private Limited Mafatlal Impex Private Limited Mafatlal Fabrics Private Limited Aureole Clothing Private Limited F Individual having significant influence H.A. Mafatlal
G Relatives of Individual having significant influence
Priyavrata H. Mafatlal
H Enterprises over which Individual having significant influence and relatives of such individual are able to exercise significant influence.
Sukarma Investments Private Limited Suremi Trading Private Limited Silvia Apparel Limited
Mafatlal Global Apparel Limited (since 24.03.2015)
Alt amount Product and Services Private Limited
Note 10.
11. The Company has not made any remittances in foreign currencies on account of dividends during the year and does not have information as to the extent to which remittances in foreign currencies on account of dividends have been made by or on behalf of non-resident shareholders. The particulars of dividends paid to non-resident shareholders are as follows:
12. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.
Mar 31, 2014
Note
Particulars As at 31st
March, 2014 As at
31st
March, 2013
1.1 Contingent liabilities and commitments (to the extent not provided
for)
(a) The Company is contingently liable for :
i Bills of exchange discounted 574.25 357.63
ii Demands of income-tax authorities disputed in
appeals (mainly relate to disallowance of investment 730.85 701.32
/ loan write off, claim of interest on refund
of excise duty/ sales tax, disallowance of chapter
VIA deductions, etc. (pending before the Income-tax
Appellate Tribunal/ High Court))
iii Demands under excise and other proceedings
disputed in appeals (mainly relating to matters 2,614.89 2,614.89
like differential duty on revision of assessable
value of yarn captively consumed, duty on T.C.
hard waste, duty on drill etc. (pending at various
stages, from Assistant Commissioner to CESTAT))
iv Disputed demand notice issued by the 2,960.55 1,453.27
Commissioner of Central Excise
relating to Excise and Service Tax matters
(Current year: including Penalty)
v Claims against the Company not acknowledged as 113.38 113.38
debts (mainly relating to dispute on fixed water
charges at Navsari Unit, disputed service tax,
interest on sales tax)
vi Concessional customs duty on import of machinery 1,198.21 1,136.11
under EPCG Scheme payable subject to fulfillment of
mandatory import/ export obligation. The
Company has submitted a bond to the authorities of Rs.
1,000.00 lacs.
vii Claims made by workers against the Company 1,172.08 1,191.61
(mainly relating to matters like termination,
compensation etc.)
viii Demands from Director General of Foreign Trade 4.79 4.79
against Advance License
ix The Company is a lessee in respect of the land on - -
which Mafatlal Centre and Mafatlal Chambers is erected.
In this regard:
In case of Mafatlal Centre:
a) A demand for Rs. 2,696.98 lacs (Previous year Rs. 2,712.47 lacs) for the
period from 01.04.2008 to 31.03.2010 has been raised by Brihanmumbai
Mahanagarpalika towards Property Taxes in respect of the properties
owned by various owners for the respective floors. No demand is raised
in respect of common areas / properties in the name of the Company. The
demand has been challenged by owners of various floors at appropriate
forum and the matter is subjudice. In case the demand is finally upheld
the amount will be paid by the concerned co-owners and the Company will
have no additional liability
b) Pursuant to introduction of new system of capital based assessment
of Property Taxes, there is an outstanding demand for Rs. 378.21 lacs
(Previous year Rs. 196.30 lacs) for the period from 01.04.2010 to
31.03.2014 in respect of the properties owned by various owners for the
respective floors and in respect of common areas / properties in the
name of the Company. The demand has been challenged by various owners
and / or the Company before appropriate forum. The demand of Rs. 378.21
lacs will be paid by the concerned co-owners and the Company will have
no liability on account of the same.
In case of Mafatlal Chambers:
a) A demand for Rs. 378.51 lacs (Previous year Rs. 378.51 lacs) for earlier
years has been raised by Brihanmumbai Mahanagarpalika towards Property
Taxes in respect of the properties owned by the Company for the
respective floor.
b) Pursuant to introduction of new system of capital based assessment
of Property Taxes, a demand for Rs. 887.80 lacs for the period from
01.04.2010 to 31.03.2014 (Previous year Rs. 576.03 lacs upto 31.03.2013)
has been raised in respect of the properties owned by various owners
for the respective floors and in respect of common areas / properties
in the name of the Company. The demand has been challenged by various
owners and / or the Company before appropriate forum. In case the
demand is finally upheld, the Company will have to pay Rs. 97.01 lacs. Of
this demand, Rs. 75.16 lacs has been deposited upto 31.03.2014. Balance
demand of Rs. 812.64 lacs (Rs. 887.80 lacs less Rs. 75.16 lacs) will be paid
by the concerned co-owners and the Company will have no liability on
account of the same.
In the above matters (i) to (ix), the Company is hopeful of succeeding
and as such does not expect any significant liability to crystallize.
1.2 I. MISHAPAR INVESTMENTS LIMITED (MISHAPAR):
a) During the previous year, pursuant to the Scheme of Arrangement and
Amalgamation (the "Scheme"), Mishapar Investments Limited (the
"Transferor Company" or "Mishapar") had merged with the Company (the
"Transferee Company"), upon which the undertaking and the entire
business, including all assets and liabilities of Mishapar stood
transferred to and vested in the Transferee Company with effect from
1st April 2012. The Scheme became effective on 28th May, 2013 and was
given effect to in the previous year. The amalgamation had been
accounted under the "Purchase Method" as envisaged under the Scheme and
the Accounting Standard (AS) Â 14 on "Accounting for Amalgamations"
notified under the Companies (Accounting Standards) Rules, 2006.
b) Since Mishapar was Wholly Owned Subsidiary of the Transferee
Company, there was no consideration payable or receivable on
implementation of the Scheme. The entire issued, subscribed and paid-up
Share Capital had been cancelled against the corresponding investment
of the Transferee Company and an amount of Rs. 3,931.71 lacs being excess
of carrying value of the investments in the Transferee Company (Rs.
4,800.10 lacs) over the Net Assets acquired (Rs. 868.39 lacs) was debited
to Goodwill pursuant to the Scheme approved by the Honourable High
Court of Judicature at Mumbai. The Goodwill so arising was charged off
to the Statement of Profit and Loss of the Transferee Company and the
charge so arising was set-off in the Statement of Profit and Loss
against the balance available in the Securities Premium Account. Also,
388 equity shares of Rs. 10 each held by Mishapar in the share capital of
the Transferee Company stood cancelled pursuant to the Scheme.
c) Particulars of assets and liabilities taken over on amalgamation:
II. MAFATLAL DENIM LIMITED (MDL):
a) During the previous year, in terms of the Scheme of Arrangement and
Amalgamation (the "Scheme"), Mafatlal Denim Limited (the "Transferor
Company" or "MDL") had merged with the Company (the "Transferee
Company"), upon which the undertaking and the entire business,
including all the assets and liabilities of MDL stood transferred to
and vested in the Transferee Company with effect from 1st April 2012.
The Scheme approved by the Honourable High Court of Judicature at
Gujarat, became effective on 28th May, 2013 and was given effect to in
the previous year. The assets and liabilities were transferred at their
respective book values under the "Pooling of Interest Method" as
envisaged under the Scheme and the Accounting Standard (AS) Â 14 on
"Accounting for Amalgamations" notified under the Companies
(Accounting Standards) Rules, 2006
b) Particulars of assets and liabilities taken over on amalgamation:
Dues to Micro and Small Enterprises have been determined to the extent
such parties have been identified on the basis of information collected
by the Management. This has been relied upon by the auditors. The
Company has not received intimation from most of the suppliers
regarding the status under the Micro, Small and Medium Enterprises
Development Act, 2006.
1.3 As legally advised, the Company has not recognized as income
recovery of rent and other charges of Rs. 83.61 lacs upto 31st March,
2014 (Rs. 186.29 lacs upto 31st March, 2013), pending final resolution of
the legal dispute with certain ex-tenants of a property in South
Mumbai. The Civil Revision Applications filed by the ex-tenants has
been admitted by the Hon''ble Bombay High Court and the ex-tenants have
deposited Rs. 1,233.47 lacs (amount decreed by the learned trial judge
alongwith interest awarded by the appeal bench of the Small Causes
Court) as directed by the Hon''ble High Court while granting stay on the
order issued by the Appeal Bench of the Hon''ble Small Causes Court. The
Company has withdrawn the said amount of Rs. 1,233.47 lacs by providing
undertakings as directed by the Hon''ble High Court to repay the amount,
if the ex-tenants succeed in the civil revision applications which are
pending for final disposals. Out of the said amount, Rs. 655.58 lacs has
been paid to Sulakshana Securities Limited, in whom one of the premises
was vested under the Company''s rehabilitation scheme which was approved
by BIFR, during the pendency of the said litigation. The balance amount
of Rs. 577.89 lacs has been included in Other Current Liabilities (Refer
Note no. 11 and Note no. 16).
1.4 Disclosure as per Clause 32 of the Listing Agreements with the
Stock Exchanges
Loans and advances in the nature of loans given to subsidiaries,
associates and others and investment in shares of the Company by such
parties:
1.5 The remuneration of Shri V. P. Mafatlal, Vice-Chairman and Shri
Rajiv Dayal, Managing Director & Chief Executive Officer (Professional
Director) was approved by the members by way of a special resolution
passed at the Annual General Meeting (''AGM'') held on 31st July, 2013.
Due to inadequate profits during the current year, the total managerial
remuneration of Rs. 232.07 lacs (Shri V. P. Mafatlal  Rs. 114.79 lacs and
Shri Rajiv Dayal  Rs. 117.28 lacs) paid to the above executive directors
is in excess of the limits specified under Section 198, 349 & 350 of
the Companies Act, 1956 by Rs. 78.61 lacs. As required by law, necessary
application will be made to the Central Government in this regard.
1.6 In the earlier year, the Company had sold part of its leasehold
land at its Mazgaon unit. The Company is required to surrender the
remaining leasehold land (reserved portion admeasuring about 27,287.82
square meters) to Municipal Corporation of Greater Mumbai for the
purpose of extension of V.J.B. Udyan. The Company is also required to
recommence the spinning unit which can accommodate 10,000 spindles. By
virtue of the agreement, the developer will construct a structure and
hand it over to the Company.
1.7 Pursuant to the demerger of the Real Estate and Investment
Business to Sulakshana Securities Limited (SSL) in 2002, the
shareholders of the Company are to be issued one equity share of Rs. 10/-
each, fully paid-up, in SSL for every 500 shares of Rs.100/- each, fully
paid-up, held in the Company as consideration for the demerger,
aggregating to Rs. 1.00 lac. As the shareholders of the Company would be
entitled to receive only fractional shares of SSL, the rehabilitation
scheme sanctioned by BIFR envisages that these shares would be acquired
by Navin Fluorine International Limited (NFIL) and the shareholders of
the Company would receive proportionate payment in consideration
thereof. The Company has received the said amount of Rs.1.00 lac from
NFIL on behalf of the shareholders, which is pending disbursement upon
completion of formalities.
The Company has entered into operating lease arrangements for certain
facilities and residence premises. The leases are non-cancellable and
are for a period upto 9 years and may be renewed for a further period
upto 3 years based on mutual agreement of the parties. The lease
agreements provide for an increase in the lease payments upto 15% every
3 years. There are no sub-leases.
1.8 Segment Information
As per the Accounting standard (AS) 17 on "Segment Reporting", segment
information has been provided under the Notes to Consolidated Financial
Statements.
1.9 Employee benefit plans
a) Defined contribution plans
Contributions are made to Recognized Provident Fund / Government
Provident Fund and Family Pension Fund which covers all regular
employees. Contribution is also made in respect of executives to a
Recognized Superannuation Fund. While both the employees and the
Company make predetermined contributions to the Provident Fund,
contribution to the Family Pension Fund and Superannuation Fund are
made only by the Company. The contributions are normally based on a
certain proportion of the employee''s salary. Amount recognized as
expense in respect of these defined contribution plans, aggregate to Rs.
619.46 lacs (Previous year Rs. 526.66 lacs).
b) Defined benefit plans
Contributions are made to a Recognized Gratuity Fund in respect of
gratuity based upon actuarial valuation done at the year end of every
financial year using "Projected Unit Credit" method and it covers all
regular employees. Major drivers in actuarial assumptions, typically,
are years of service and employee compensation. Gains and losses on
changes in actuarial assumptions are accounted for in the Statement of
Profit and Loss.
The charge on account of provision for gratuity has been included in
''Employee Benefits Expense'' in the Statement of Profit and Loss.
The discount rate is based on the prevailing market yields of
Government of India securities as at the Balance Sheet date for the
estimated term of the obligations.
The estimate of future salary increases considered, takes into account
the inflation, seniority, promotion, increments and other relevant
factors.
All the employees are eligible for compensated absences of 30 days in
each financial year which can be encashed during the tenure of
employment. Employees cannot carry forward any compensated absences in
excess of 300 days. The provision for these absences, made on the basis
of Actuarial Valuation on "Projected Unit Credit" method is Rs. 647.16
lacs (Previous year Rs. 629.24 lacs). Net charge for the year Rs. 166.78
lacs (Previous year Rs. 276.25 lacs).
1.10 Related Parties Transactions Details of Related Parties
A Subsidiary Companies
Mafatlal Services Limited
Ibiza Industries Limited (also a joint venture)
(currently under liquidation)
Sunanda Industries Limited (currently under liquidation)
Mayflower Textiles Private Limited (upto 25.03.2014)
Myrtle Textiles Private Limited (upto 25.03.2014)
Repal Apparel Private Limited (upto 25.03.2014)
Mafatlal Global Apparel Limited (upto 29.09.2012)
Silvia Apparel Limited (upto 30.03.2013)
B Jointly Controlled Entity
AL Fahim Mafatlal Textiles LLC- A Joint Venture with Al Fahim Linez
LLC- (UAE) (Refer Note no.31.6) C Associates
Mafatlal Global Apparel Limited (since 29.09.2012)
Mafatlal V. K. Intex Limited (upto 25.03.2014)
Mafatlal Engineering Industries Limited (currently under liquidation)
Mafatlal Limited - (Incorporated in United Kingdom) (currently under
liquidation)
Sushmita Engineering and Trading Limited (upto 25.03.2014)
Repos Trading Company Limited (upto 25.03.2014) D Key Management
Personnel
H. A. Mafatlal (upto 28.05.2013)
Rajiv Dayal
V. P. Mafatlal
E Relatives of Key Management Personnel
Rupal V. Mafatlal
Rekha H. Mafatlal (upto 28.05.2013)
Priyavrata H. Mafatlal (upto 28.05.2013)
F Enterprises over which key management personnel and their relatives
are able to exercise significant influence NOCIL Limited
Navin Flourine International Limited Sulakshana Securities Limited
Krishnadeep Housing Development Private Limited Mafatlal Impex Private
Limited Mafatlal Fabrics Private Limited Myrtle Chemtex Trading Private
Limited Aureole Clothing Private Limited
G Individual having significant influence
H.A. Mafatlal (since 29.05.2013)
H Relatives of Individual having significant influence
Rekha H. Mafatlal (since 29.05.2013)
Priyavrata H. Mafatlal (since 29.05.2013)
I Enterprises over which Individual having significant influence and
relatives of such individual are able to exercise significant influence
Sukarma Investments Private Limited
Suremi Trading Private Limited
Altamount Product and Services Private Limited
Silvia Apparel Limited (since 31.03.2013)
Details of transactions with related parties during the year :
1.11 Details of the Company''s interest in Joint Venture having Joint
Control, as per the requirements of Accounting Standard- 27 on
Financial Reporting of Interests in Joint Ventures notified under the
Companies (Accounting Standards) Rules, 2006 is as under:
Interest in joint ventures
The Company has interests in the following joint ventures - Jointly
controlled entities (JCE):
The Joint Venture has come in to existence in the previous year.
Note: Figures in brackets relate to the previous year.
1.12 The Company has not made any remittances in foreign currencies on
account of dividends during the year and does not have information as
to the extent to which remittances in foreign currencies on account of
dividends have been made by or on behalf of non-resident shareholders.
The particulars of dividends paid to non-resident shareholders are as
follows:
1.13 The Ministry of Corporate Affairs, Government of India, vide
General Circular No. 2 and 3 dated 8th February 2011 and 21st February
2011 respectively has granted a general exemption from compliance with
Section 212 of the Companies Act,1956, subject to fulfilment of
conditions stipulated in the circular. The Company has satisfied the
conditions stipulated in the circular and hence is entitled to the
exemption. Necessary information relating to the subsidiaries has been
included in the Consolidated Financial Statements.
1.14 Previous year''s figures have been regrouped / reclassified
wherever necessary to correspond with the current year''s classification
/ disclosure.
Mar 31, 2013
1. Corporate Information
Mafatlal Industries Limited (the Company) is a public limited company
domiciled in India and incorporated under the provisions of the
Companies Act, 1956. Its shares are listed on the Mumbai and Ahmedabad
stock exchanges. The Company belongs to the reputed industrial house of
Arvind Mafatlal Group in India, established in 1905. The Company is
engaged in textile manufacturing and trading, having its units at
Nadiad and Navsari.
2.1 I. MISHAPAR INVESTMENTS LIMITED (MISHAPAR)
a) In terms of the Scheme of Arrangement and Amalgamation ("the
SchemeÂ), Mishapar has been merged with the Company (Transferee
Company), upon which the undertaking and the entire business, including
all assets and liabilities of Mishapar stand transferred to and vested
in the Transferee Company. Assets and liabilities so transferred have
been recorded at their fair value as determined by the Board of
Directors of the Transferee Company The amalgamation has been accounted
under "Purchase Method'' as envisaged in the Accounting Standard (AS) -
14 "Accounting for Amalgamations notified under the Companies
(Accounting Standards) Rules, 2006. Mishapar was a Non-Banking Finance
Company into investing and financing activity and was 100% subsidiary
of the Company
b) The Scheme filed by the Company has been approved by the Honourable
High Court of Judicature at Mumbai, with an appointed date of 1st
April, 2012 and an effective date of 28th May 2013 (''the Effective
Date''), being the date on which all the requirements under the
Companies Act, 1956 have been completed
c) Since amalgamating company is Wholly Owned Subsidiary of the
Transferee Company, there is no consideration payable or receivable on
implementation of the Scheme. The entire issued, subscribed and paid-up
Share Capital of Mishapar has been cancelled against the corresponding
investments of the Transferee Company. Also, 388 equity shares of Rs.
10 each held by Mishapar in the Transferee Company stands cancelled
pursuant to the Scheme.
d) Details of assets and liabilities acquired on amalgamation and
treatment of the difference between the fair value of net assets
acquired and carrying cost of investment by the Transferee Company in
Mishapar:
II. MAFATLAL DENIM LIMITED (MDL):
a) In terms of The Scheme of Arrangement and Amalgamation ("the
SchemeÂ), MDL has been merged with the Company (transferee company),
upon which the undertaking and the entire business, including all
assets and liabilities of MDL stand transferred to and vested in the
Transferee Company. Assets and liabilities so transferred have been
recorded in the books of Transferee Company at the book values as
recorded in the books of the Transferor Company The amalgamation has
been accounted under "Pooling of Interest Method as envisaged in the
Accounting Standard (AS-14) "Accounting for Amalgamations notified
under the Companies (Accounting Standards) Rules, 2006. MDL was engaged
in the business of manufacturing and marketing of various denim fabrics
and other products.
b) The Scheme filed by the Company has been approved by the Honourable
High Court of Judicature at Gujarat, with an appointed date of 1 April,
2012 and an effective date of 28th May 2013 (''the Effective Date''),
being the date on which all the requirements under the Companies Act,
1956 have been completed
c) With effect from the appointed date, all the business undertakings,
assets, liabilities, rights and obligations of MDL stood transferred to
and vested in the transferee company in consideration for issue of 1
equity share of Rs. 10 each in the transferee company for every 10
equity shares of Rs. 10 each held in MDL
d) The assets, liabilities and reserves of MDL as at 1st April 2012
have been taken over at their respective book values on the appointed
date as follows
(i) Particulars of assets, liabilities and reserves taken over on
amalgamation
(ii) The sum ofRs. 3,634.48 lacs, arrived as above, has been credited
to Capital Reserve Account on account of reduction in the capital while
issuing the shares to the shareholders of the transferor company as per
the ratio prescribed in the Scheme.
In view of the aforesaid amalgamations with effect from 1st April,
2012, the figures for the current year are not comparable with those of
the previous period
2.3 During the year 2010-2011, the Company had sold part of its
leasehold land at its Mazgaon unit.
The Company is required to surrender the remaining leasehold land
(reserved portion admeasuring about 27,287.82 square meters) to
Municipal Corporation of Greater Mumbai for the purpose of extension of
V.J.B. Udyan. The Company is also required to recommence the spinning
unit which can accommodate 10,000 spindles. By virtue of the agreement,
the developer will construct a structure and hand it over to the
Company
2.4 Pursuant to the demerger of the Real Estate and Investment
Business to Sulakshana Securities Limited (SSL), in 2007 the
shareholders of the Company are to be issued one equity share of Rs. 10
each, fully paid-up, in SSL for every 500 shares of Rs. 100 each, fully
paid-up, held in the Company as consideration for the demerger,
aggregating toRs. 1.00 lac. As the shareholders of the Company would be
entitled to receive only fractional shares of SSL, the rehabilitation
scheme sanctioned by BIFR envisages that these shares would be acquired
by Navin Fluorine International Limited (NFIL) and the shareholders of
the Company would receive proportionate payment in consideration
thereof. The Company has received the said amount of Rs. 1.00 lac from
NFIL on behalf of the shareholders, which is pending disbursement upon
completion of formalities.
2.5 Depreciation on fixed assets of (a) the Old Unit at Nadiad and
Ahmedabad; and (b) Head Office of the Company, acquired prior to
1-4-1978, was provided on written down value basis and on all other
assets, on straight-line basis, as per the provisions of the Companies
Act, 1956, at the rates and in the manner specified in Schedule XIV of
this Act. The Company has during the previous period changed the method
of depreciation retrospectively of the above mentioned fixed assets
from WDV to SLM for uniformity in the method of depreciation. Hence
depreciation charge for the previous period was higher byRs. 1.93 lacs
on account of change in the accounting policy.
2.6 Disclosures required under Section 22 of the Micro, Small and
Medium Enterprises Development Act, 2006:
Dues to Micro and Small Enterprises have been determined to the extent
such parties have been identified on the basis of information collected
by the Management. This has been relied upon by the auditors. The
Company has not received intimation from most of the suppliers
regarding the status under the Micro, Small and Medium Enterprises
Development Act, 2006
2.7 As legally advised, the Company had not recognised rent/recovery
of expenses ofRs. 186.29 lacs upto 31st March, 2013 (Rs. 181.92 lacs
upto 31st March, 2012) pending final resolution of the legal dispute
with certain tenants/ex-tenants of a property in South Mumbai. During
the financial year 2011, the Hon''ble Small Causes Court had passed
Orders for payment of arrears of rent mesne profits and other charges
to the Company. Being aggrieved by the said Orders, the Company and the
ex-tenants had filed Appeals and Cross-Appeals respectively. During the
current year, the Appeals and Cross- Appeals were heard by Appeal Bench
of the Hon''ble Small Causes Court and the Company''s appeals were
partially allowed. The Company was awarded Rs. 1,222.92 lacs. The Court
also awarded interest @ 6% p.a. to be paid to the Company from the date
of the filing of the suits till the date of the actual payment of the
entire dues. Aggrieved by the above decisions, the ex-tenants filed
Civil Revision applications in the Hon''ble Bombay High Court against
the orders of the Appeal Bench of the Hon''ble Small Causes Court in
awarding an increased amount to the Company. Subsequent to the close of
the year, the Hon''ble Bombay High Court has admitted the Civil Revision
applications and granted stay on the orders passed by the Appeal Bench
of the Hon''ble Small Causes Court.
2.8 In the previous period, pursuant to the Scheme of Amalgamation
under Section 391 to 394 of the Companies Act 1956, eight companies had
merged with the erstwhile wholly owned subsidiary Mishapar Investments
Limited (Mishapar) w.e.f. 1st April 2011 in terms of the Order dated
7th September, 2012 of the Hon''ble High Court of Bombay sanctioning the
Scheme. The balances of loans, advances and deposits held by the
Company in those amalgamating companies were transferred to Mishapar as
at 1st April,2011. Upon this merger, the entire business including
assets and liabilities of the amalgamating companies stood transferred
to and vested in Mishapar at their book values.
Following companies were amalgamated;
(a) Vibhadeep Investments and Trading Limited
(b) Sushmita Holdings Limited
(c) Mafatlal Holdings Limited
(d) Sunanda Industrial Machinery Limited
(e) Sudas Manufacturing & Trading Limited
(f) Soushreyas Investments (I) Limited
(g) Samatva Investments Limited (h) Navlekh Investments Limited
In terms of the said scheme of amalgamation, the Company was to receive
9,00,000 13.5% Cumulative Preference shares of Rs. 100 each of Mishapar
Pending issue of such shares, the amount was disclosed under
Non-current Investments as preference shares suspense in the previous
period. During the current year, these were converted into preference
share capital and duly allotted to the Company. Pursuant to the Scheme
of Amalgamation with Mishapar (Refer Note no. 30.3), these investments
in preference shares were cancelled against the preference share
capital in Mishapar
2.9 In the previous period, the Company had changed the method of
valuation of trading goods from First -In- First- Out (FIFO) to
Weighted Average Cost (WAC) method for achieving greater uniformity.
The change had no impact as there was no closing stock of trading
goods.
2.10 Disclosure as per Clause 32 of the Listing Agreements with the
Stock Exchanges
Loans and advances in the nature of loans given to subsidiaries,
associates and others and investment in shares of the Company by such
parties
3.1 Segment Information
Disclosures relating to segment information have been made in the notes
forming part of the Consolidated financial statements.
3.2 Employee benefit plans
a) Defined contribution plans
Contributions are made to Recognized Provident Fund / Government
Provident Fund and Family Pension Fund which covers all regular
employees. Contribution is also made in respect of executives to a
Recognized Superannuation Fund. While both the employees and the
Company make predetermined contributions to the Provident Fund,
contribution to the Family Pension Fund and Superannuation Fund are
made only by the Company. The contributions are normally based on a
certain proportion of the employee''s salary. Amount recognized as
expense in respect of these defined contribution plans, aggregate to
Rs. 526.68 lacs (Previous period Rs. 355.80 lacs).
b) Defined benefit plans
Contributions are made to a Recognized Gratuity Fund in respect of
gratuity based upon actuarial valuation done at the year end of every
financial year using "Projected Unit Credit method and it covers all
regular employees. Major drivers in actuarial assumptions, typically,
are years of service and employee compensation. Gains and losses on
changes in actuarial assumptions are accounted for in the Statement of
Profit and Loss.
The charge on account of provision for gratuity has been included in
''Employee Benefit Expense'' in the Statement of Profit and Loss.
3.3 Related Parties Transactions
Details of Related Parties
A Subsidiary Companies
Ibiza Industries Limited (also a joint venture) currently under
liquidation
Sunanda Industries Limited (direct subsidiary since 01.04.2012) (In the
previous period, subsidiary through wholly owned subsidiary, Mishapar
Investments Limited) currently under liquidation.
Mayflower Textiles Private Limited (direct subsidiary since 01.04.2012)
(In the previous period subsidiary through wholly owned subsidiary,
Mishapar Investments Limited)
Myrtle Textiles Private Limited (direct subsidiary since 01.04.2012)
(In the previous period subsidiary through wholly owned subsidiary,
Mishapar Investments Limited)
Repal Apparel Private Limited (direct subsidiary since 01.04.2012) (In
the previous period subsidiary through wholly owned subsidiary,
Mishapar Investments Limited)
Mafatlal Services Limited
Mafatlal Global Apparel Limited (since 01.04.2011 through wholly owned
subsidiary, Mishapar Investments Limited) (till 29.09.2012)
Silvia Apparel Limited (till 30.03.2013)
Mishapar Investments Limited (till 31.03.2012) (wholly owned subsidiary
which amalgamated with the Company). B Jointly Controlled Entities
AL Fahim Mafatlal Textiles LLC- A Joint Venture with Al Fahim Linez
LLC- (UAE) (Refer Note no. 31.6) C Associates
Mafatlal VK Intex Limited
Mafatlal Engineering Industries Limited- currently under liquidation
Mafatlal Limited - (Incorporated in United Kingdom)- currently under
liquidation
Sushmita Engineering and Trading Limited
Mafatlal Global Apparel Limited (since 29.09.2012)
Repos Trading Company Limited D Key Management Personnel
Hrishikesh A. Mafatlal
Rajiv Dayal ( w.e.f. 01.04.2012) *
Vishad P. Mafatlal (w.e.f. 01.04.2012) **
* In the position of Managing Director in erstwhile Mafatlal Denim
Limited, the amalgamating Company.
** In the position of Joint Managing Director in erstwhile Mafatlal
Denim Limited, the amalgamating Company. E Relatives of Key Management
Personnel
Priyavrata H. Mafatlal
Vishad P. Mafatlal
F Enterprises over which key management personnel and their relatives
are able to exercise significant influence NOCIL Limited
Navin Fluorine International Limited
Sulakshana Securities Limited
Krishnadeep Housing Development Private Limited
Mafatlal Impex Private Limited
Mafatlal Denim Limited (till 31.03.2012, since amalgamated with the
Company pursuant to the Scheme of Amagamation Refer No no. 30.3)
Myrtle Chemtex Trading Private Limited
4.1 a) Mafatlal Denim Limited (MDL), the erstwhile company which has
amalgamated with the Company had re-appointed Mr.Rajiv Dayal as
Managing Director & Chief Executive Officer and Mr.Vishad P.Mafatlal as
Joint Managing Director of MDL with effect from April 1, 2011 for a
term of 5 years. Managerial remuneration of Rs. 139.28 lacs had been
paid during the year 2011-12. As stipulated by the provisions of the
Companies Act, 1956 requiring the approval of the Central Government
for appointment and remuneration of Managerial personnel in the case,
inter alia, of a company that is in default in payment of its debts,
the erstwhile MDL had made the applications to the Government on June
20, 2011 seeking approval for the re-appointment and payment of
remuneration to Mr. Rajiv Dayal and Mr. Vishad P. Mafatlal.
The erstwhile MDL was technically in default to SICOM Limited, a
Secured lender pending the Sanction of the Section 391 Scheme pending
before the Hon''ble Gujarat High Court. SICOM declined to give their No
Objection Certificate for the re- appointments for the reason that they
already had their debts adjudicated by the Hon''ble Debt Recovery
Tribunal, Mumbai. The Government rejected the applications of MDL on
September 23, 2011 for the reason that MDL had not submitted No
Objection Certificate from SICOM, one of the Secured lenders. MDL has
made an application for reconsideration, as default to the secured
lenders no longer exists.
Subsequently, SICOM Limited assigned the entire Debt in favour of M/s.
Mishapar Investments Limited (another Company that amalgamated with the
Company) on July 26, 2012. Thereafter, MDL obtained the No Objection
Certificate from the said assignee and approached the MCA once again on
September 5, 2012. Pursuant to the said letter, MCA advised MDL to file
the applications afresh. Accordingly, MDL has filed Fresh Applications
on October 25, 2012 and awaits their approval. b) An amount of Rs.
964.05 lacs waived by SICOM Limited at the time of assignment has been
accounted as Reliefs and concessions on assignment of Liabilities.
4.2 Mr Rajiv Dayal and Mr Vishad P. Mafatlal have been appointed as
the managing director and joint managing director respectively in the
Board Meeting held on 30th May 2013. Their appointment is subject to
the shareholders'' approval at the ensuing Annual General Meeting.
4.3 The Ministry of Corporate Affairs, Government of India, vide
General Circular No.2 and 3 dated 8th February 2011 and 21st February
2011 respectively has granted a general exemption from compliance with
Section 212 of the Companies Act,1956, subject to fulfilment of
conditions stipulated in the circular. The Company has satisfied the
conditions stipulated in the circular and hence is entitled to the
exemption. Necessary information relating to the subsidiaries has been
included in the Consolidated Financial Statements.
4.4 The figures for the financial year 2012-13, includes the figures
of erstwhile Mafatlal Denim Limited and erstwhile Mishapar Investments
Limited which have been amalgamated with the company with effect from
1st April 2012. The figures for the current financial year 2012-13 are
for twelve months and figures for the previous period are for nine
months. Hence the current year figures are not comparable with the
previous period figures.
4.5 Previous period''s figures have been regrouped / reclassified
wherever necessary to correspond with the current year''s classification
/ disclosure.
Mar 31, 2012
1. Corporate Information
Mafatlal Industries Limited (the Company) is a public limited company
domiciled in India and incorporated under the provisions of the
Companies Act, 1956. Its shares are listed on the Bombay and Ahmedabad
stock exchanges. The Company belongs to the reputed industrial house of
Arvind Mafatlal Group in India, established in 1905. The Company is
engaged in textile manufacturing having its operating units at Nadiad
and Navsari.
a.(i) Terms / rights attached to Equity shares:
The Company has only one class of equity shares having a par value of
Rs.107- per share. Each equity shareholder is entitled to one vote per
share. The Company declares and pays dividends in Indian rupees. The
dividend proposed by the Board of directors is subject to the approval
of the shareholders in the ensuing Annual General Meeting.
During the period ended 31st March, 2012, the amount of dividend, per
share, recognized as distributions to equity shareholders is Rs. NIL
(period ended 30th June, 2011 Rs. NIL).
(ii) Terms / rights attached to Preference shares:
In terms of Modified Scheme (MS) approved by BIFR. In June 2009
600,00,000 Fully Redeemable Non-Cumulative Preference Shares of Rs.
10/- each are redeemable over a period of eight years as a subordinated
liability to the dues of workers, statutory agencies and the secured
creditors. 50% of the shares were redeemed during the period. Upon,
declaration these shares carry a rate of dividend of 1% from the
financial year commencing on or after 1st January, 2014.
b. During 1987-88, 535,000 shares (of Rs. 100/- each) were allotted on
rights basis subject to the result of suit nos. 3181 and 3182 of 1987
filed by three shareholders against the Company and Others in the
Ahmedabad City Civil Court. The suits are pending disposal.
c. During the period of 14 months ended 31st May, 2010, in terms of
Modified Scheme (MS) approved by BIFR, 300,00,000 Optionally
Convertible Fully Redeemable Non-Cumulative Preference Shares of Rs.
10/- each were converted into 48.13,860 Equity Share of Rs.10/- each of
the Company at a premium of Rs.52.32 per equity share.
d) Balances with earmarked accounts include deposits amounting to Rs.
2,78117 lacs (as at 30th June, 2011 Rs. Nil) and Fixed Deposits account
current period Rs. Nil (as at 30th June, 2011 Rs. 33.88 lacs) which
have an original maturity of more than 12 months.
(ii) Earmarked accounts
(a) includes Rs. 2.031.94 lacs in Fixed Deposit Escrow Account and Rs.
409.23 lacs in escrow current account (operated under the supervision
of Monitoring Committee constituted by the Govt, of Maharashtra under
Development Control Regulations, 1991) (as at 30th June, 2011 Rs.
60,616.13 lacs)
(b) Includes Rs. 2,781.77 lacs in Fixed Deposits accounts (as at 30th
June, 2011 Rs. 0.83 lacs) over which the banks have Hen.
2.1 (a) During the previous period, the Company had concluded an
Agreement with Gliders Buildcon LLP ('the developer'), an entity of
Ajay Ptramal Group, on 17th June, 2011 for transfer of development
rights in leasehold land at its Mazgaon unit, admeasuring about 30,910
square meters for a lump sum consideration of Rs. 60,580.00 lacs. The
proceeds from the development agreement (to the extent pertaining to
leasehold land held as stock in trade) amounting to Rs. 48,326.87 lacs
for the previous period has been included in Note 21 'Revenue from
Operations- Sate of Products.' The remaining proceeds (pertaining to
leasehold land held as fixed assets) amounting to Rs. 12,202.86 lacs
(net of book value of leasehold land amounting to Rs. 0.01 lac and
portion of building amounting to Rs. 50.26 lacs on date of sale) for
the previous period is included in 'Profit on sale of Fixed assets'
under Note 28 'Exceptional Items (net)'. As required by the Development
Control Rules, Government of Maharashtra, the utilization of sales
proceeds from sale of textile mill lands is being monitored by a
Monitoring Committee appointed by the Government of Maharashtra under
Development Control Regulations, 1991.
2.2 (b) The Company is required to surrender the remaining leasehold
land (reserved portion admeasuring about 27,287.82 square meters) to
Municipal Corporation of Greater Mumbai for the purpose of extension
of V.J.B. Udyan. The Company is also required to recommence the
spinning unit which can accommodate 10,000 spindles. By virtue of
the abovementioned agreement, the developer will construct a structure
and hand it over to the Company.
2.3 In the previous period, the Board for Industrial and Financial
Reconstruction (BIFR) vide its order dated 19th August, 2010 discharged
the Company from the purview of Sick Industrial Companies (Special
Provisions ) Act,1985 (SICA) / (BIFR) consequent to the networth of the
Company turning positive.
2.4 Pursuant to the demerger of the Real Estate and Investment
Business to Sulakshana Securities Limited (SSL), the shareholders of
the Company are to be i issued one equity share of Rs. 10/- each, fully
paid-up, in SSL for every 500 shares of Rs. 100/- each, fully paid-up,
held in the Company as consideration for the demerger, aggregating to
Rs. 1.00 lac. As the shareholders of the Company would be entitled to
receive only fractional shares of SSL, the rehabilitation scheme
sanctioned by BIFR envisages that these shares would be acquired by
Navin Fluorine International Limited (NFIL) and the shareholders of the
Company would receive proportionate payment in consideration thereof.
The Company has received the said amount of Rs. 1.00 lac from NFIL on
behalf of the shareholders, which is pending disbursement upon
completion of formalities.
2.5 The Ahmedabad Unit of the Company has discontinued operations with
effect from 1st March, 2003. On 21st May, 2003, the Company entered
into an 'Agreement ' to Sell' with Annapurna Polymers Private Limited
(APPL) for this Unit at an aggregate consideration of Rs. 677.70 lacs.
The sale, after getting all approvals, was to be completed on or before
31 st December, 2003. Pending this, a separate 'Conducting Agreement'
was entered with APPL, effective 1 st June, 2003, under which APPL
operated the Unit on the Company's behalf. The conducting agreement was
extended from time to time. The said sale was completed on 14th
December, 2010 and the profit of Rs. 611.76 lacs on sale of unit and
profit on sale of building of Rs. 24.31 lacs had been recognized in the
previous period.
2.6 Depreciation on fixed assets of (a) the Old UnitatNadiad and Unit
at Ahmedabad; and (b) Head Office of the Company, acquired prior
to1-4-1978, was provided on written down value basis and on all other
assets, on straight-line basis, as per the provisions of the Companies
Act, 1956, at the rates and in the manner specified in Schedule XIV of
this Act. The Company has during the period changed the method of
depreciation retrospectively of the above mentioned fixed assets from
WDV to SLM for uniformity in the method of depreciation. Depreciation
for the period is higher by Rs. 1.93 lacs (Previous period Rs.NIL) on
account of change in the accounting policy.
2.7 Disclosures required under Section 22 of the Micro, Small and
Medium Enterprises Development Act, 2006
The Company has not received intimation from most of the suppliers
regarding the status under the Micro, Small and Medium Enterprise
Development Act, 2006, and hence disclosure requirements in this regard
as per Schedule VI. of the Companies Act, 1956 is not being provided.
Dues to Micro and Small Enterprises have been determined to the extent
such parties have been identified on the basis of information collected
by the Management. This has been relied upon by the auditors.
2.8 As legally advised, the Company has not recognised rent / recovery
of expenses of Rs. 181.92 lacs (Rs. 178.65 lacs upto 30th June, 2011)
pending final resolution of the legal dispute with certain
tenants/ex-tenants of a property in South Mumbai. During the financial
period 2011, the Hon'ble Court of Small Causes Court has passed Orders
for payment of arrears of rent mesne profits and other charges to the
Company. Being aggrieved by the said Orders, the Company and the
ex-tenants have filed Appeals and Cross-Appeals respectively which have
been admitted and are pending for final hearing.
2.9 Pursuant to tie scheme of Amalgamation (the Scheme) under section
391 to 394 of the Companies Act 1956 (the Act) the erstwhile following
companies (Amalgamating Companies) merged with the wholly owned
subsidiary Mishapar Investments Limited (Mishapar) (the Amalgamated
Company) w.e.f. 1st April 2011, (the Appointed date) in tarn; of order
dated 7th September, 2012 of the Hon'ble High Court of Bombay
sanctioning the Scheme. The balances held in the Transferor Companies
have been transferred to the Subsidiary company on the appointed date.
Upon this merger the entire business including assets and liabilities
of the Transferor Companies stand transferred to and vested in the
Amalgamated Company at their book values. The following Companies have
been Amalgamated:-
a) Vibhadeep Investments & Trading Limited
b) Sushmita Holdings Limited
c) Mafatlal Holdings Limited
d) Sunanda Industrial Machinery Limited
e) Sudas Manufacturing & Trading Limited
f) Soushreyas Investments (I) Limited
g) Samatva Investments Limited
h) Navlekh Investment Limited
In terms of the scheme, the Company is to receive 9,00,000 13.5%
Cumulative Preference shares of Rs. 100/- each of Mishapar Investments
Limited (the subsidary), pending issue of such shares the amount has
been disclosed under Non-current Investments as preference shares
suspense.
2.10 In the current period the Company has changed the method of
valuation of trading goods from FIFO to weighted average cost method
for achieving greater uniformity and hence changed the accounting
policy. This change has no impact as there is no closing stock of
trading goods.
3.1 Employee benefit plans
a) Defined contribution plans
Contributions are made to Recognized Provident Fund / Government
Provident Fund and Family Pension Fund which covers all regular
employees. Contribution is also made in respect of executives to a
Recognized Superannuation Fund. While both the employees and the
Company make predetermined contributions to the Provident Fund,
contribution to the Family Pension Fund and Superannuation Fund are
made only by the Company. The contributions are normally based on a
certain proportion of the employee's salary. Amount recognized as
expense in respect of these defined contribution plans, aggregate to
Rs.355.80 lacs (Previous period Rs. 566.85 lacs).
b) Defined benefit plans
Contributions are made to a Recognized Gratuity Fund in respect of
gratuity based upon actuarial valuation done at the year end of every
financial year using "Projected Unit Credit" method and it covers all
regular employees. Major drivers in actuarial assumptions, typically,
are years of service and employee compensation. Gains and losses on
changes in actuarial assumptions are accounted for in the Statement of
Profit and Loss. The charge on account of provision for gratuity has
been included in 'Employee Benefit Expense' in the Statement of Profit
and Loss.
Compensated Absences
All the employees are eligible for compensated absences of 30 days in
each financial year which can be encashed during the tenure of
employment. Employees cannot carry forward any compensated absences in
excess of 300 days. The provision for these absences, made on the basis
of Actuarial Valuation on "Projected Unit Credit" method is Rs. 300.49
lacs (Previous period Rs. 274.24 lacs.) charge for the perio
Rs.198.21 lacs (Previous period Rs. 203.30 lacs).
Note 3.2
Related Parties transactions Details of Related Parties A Subsidiary
companies
Ibiza Industries Limited (also a joint venture) (Currently under
Liquidation)
Mishapar Investments Limited
Sunanda Industrial Machinery Limited (till 01.04.2011)
Sudas Manufacturing & Trading Limited (till 01.04.2011)
Mafatlal Services Limited
Mafatlal Global Apparel Limited (since 01.04.2011 through wholly owned
subsidiary, Mishapar Investments Limited)
Silvia Apparel Limited (since 01.04.2011 through wholly owned
subsidiary, Mishapar Investments Limited)
Mayflower Textiles Private Limited (since 01.04.2011 through wholly
owned subsidiary, Mishapar Investments Limited)
Mrytle Textiles Private Limited (since 01.04.2011 through wholly owned
subsidiary, Mishapar Investments Limited)
Sunanda Industries Limited (since 01.04.2011 through wholly owned
subsidiary, Mishapar Investments Limited)
Repal Apparel Private Limited (since 01.04.2011 through wholly owned
subsidiary, Mishapar Investments Limited) B Associates Mafatlal VK
Intex Limited
Sunanda Industries Limited (till 01.04.2011)
Mafatlal Holdings Limited (till 01.04.2011)
Mafatlal Engineering Industries Limited
Mafatlal Limited (Incorporated in United Kingdom)
Repal Apparel Private Limited (till 31.03.2011)
Sushmita Engineering and Trading Limited
Sumish Associates (till 01.04.2011)
Sushmita Holdings Limited (till 01.04.2011) C Enterprises over which
key management personnel and their relatives are able to exercise
significant influence
Ensen Holdings Limited
NOCIL Limited
Marigold International Private Limited
Navlekh Investment Limited (till 01.04.2011)
Navin Fluorine International Limited
Romago AG, Zurich
Sulakshana Securities Limited
Vibhadeep Investments & Trading Limited (till 01.04.2011)
Krishnadeep Housing Development Private Limited
Urvija Associates
Mafatlal Impex Private Limited
Eyeindia.Com Private Limited
Mafatlal Denim Limited
Sushripada Investments Private Limited
Mafatlal Fabrics Private Limited D Key managerial personnel
Hrishikesh A. Mafatlal E -Relatives of Key Management Personnel
Priyavrata H. Mafatlal (w.e.f 01.01.2011)
Jun 30, 2011
As at
31st May, 2010
Rupees Rupees
in lacs in lacs
1. Contingent liabilities,
in respect of:
a. Bills of exchange discounted 217.03 219.40
b. Demands of income-tax and
wealth tax authorities disputed
in appeals (mainly relate to
disallowance of investment/ loan
write off, claim of interest on
refund of excise duty/ sales tax,
disallowance of chapter VIA
deductions, etc. (pending before
the Income-Tax Appellate
Tribunal/ High Court)) 669.35 989.46
c. Demands under excise and
other proceedings disputed in
appeals [mainly relating to
matters like differential
duty on revision of assessable
value of yarn captively
consumed, duty on T.C. hard
waste, duty on drill etc.
(pending at various stages,
from Assistant Commissioner
to CESTAT)] 2697.21 2603.36
d. Claims against the Company
not acknowledged as debts
(relating to dispute on fixed
water charges and interest
claimed at Navsari and
Nadiad unit) 2673.22 677.51
e. Concessional customs duty
on import of machinery under
EPCG Scheme payable subject
to fulfillment of mandatory
import/ export obligation
(including interest upto
Balance Sheet date) 1027.39 970.76
f. Claims made by workers
against the Company (mainly
relating to matters like
termination, compensation etc.) 1101.12 1116.95
g. Demands from Director
General of Foreign Trade
against Advance License 311.56 384.97
h Stamp duty on Amalgamation
of Company - 1229.47
In the above matters (2b). to
(2g), (Previous period (2b) to
(2h)) the Company is hopeful
of succeeding and as such does
not expect any significant
liability to crystallize.
i. Guarantees given on behalf of
Subsidiary Company à Ibiza
Industries Limited 850.28 850.28
2. a) The Company has concluded an Agreement with Gliders Buildcon LLP
(Ãthe developer'), an entity of Ajay Piramal Group, on 17th June, 2011
for transfer of development rights in leasehold land at its Mazgaon
unit, admeasuring about 30,910 square meters for a lump sum
consideration of Rs. 60,580.00 lacs. The proceeds from the development
agreement (to the extent pertaining to leasehold land held as stock in
trade) amounting to Rs. 48,326.87 lacs has been included in ÃTurnover.'
The remaining proceeds (pertaining to leasehold land held as fixed
assets) amounting to Rs. 12,202.86 lacs (net of book value of leasehold
land amounting to Rs 0.01 lac and portion of building amounting to Rs
50.26 lacs on date of sale) is included in ÃProfit on sale of fixed
assets' under Schedule 13 ÃOther Income'. As required by the
Development Control Rules, Government of Maharashtra, the utilization
of sales proceeds from sale of textile mill lands is being monitored by
a Monitoring Committee appointed by the Government of Maharashtra under
Development Control Regulations, 1991.
b) The Company is required to surrender the remaining leasehold land
(reserved portion admeasuring about 27,287.82 square meters) to
Municipal Corporation of Greater Mumbai for the purpose of extension of
V.J.B. Udyan. The Company is also required to recommence the spinning
unit which can accommodate 10,000 spindles. By virtue of the
abovementioned agreement, the developer will construct a structure and
hand it over to the Company.
3 (a)The Board for Industrial & Financial Reconstruction (BIFR) had
declared the Company, a sick industrial undertaking, within the meaning
of section 3(1)(o) of the Sick Industrial Companies (Special
Provisions) Act, 1985 (SICA) on 19th September, 2000. It sanctioned a
scheme for rehabilitation ('the sanctioned scheme' (SS)) of the Company
on 30th October, 2002. The Company had taken several steps for
implementation of the SS, but certain delays occurred in completion of
reorganization of charges. Hence, at the directive of BIFR, the Company
initiated the process of modifying the SS. BIFR vide their Order dated
24th / 25th June 2009 approved the Modified Scheme (MS) in terms of
provisions of section 18(4) read with section 19(3) of SICA. The
Company has initiated the process of sale of surplus assets identified
in the MS. Based on the Audited Accounts on 31st May, 2010, wherein
networth of the Company had turned positive, the company made an
application to the BIFR for deregistration of its reference. BIFR vide
its order dated 19th August, 2010 discharged the Company from the
perview of SICA/BIFR.
(b)Pursuant to the demerger of the Real Estate and Investment Business
to Sulakshana Securities Limited (SSL), the shareholders of the Company
are to be issued one equity share of Rs. 10/- each, fully paid-up, in
SSL for every 500 shares of Rs. 100/- each, fully paid-up, held in the
Company as consideration for the demerger, aggregating to Rs. 1.00 lac.
As the shareholders of the Company would be entitled to receive only
fractional shares of SSL, the SS envisages that these shares would be
acquired by Navin Fluorine International Limited (NFIL) and the
shareholders of the Company would receive proportionate payment in
consideration thereof. The Company has received the said amount of Rs.
1.00 lac from NFIL on behalf of the shareholders, which is pending
disbursement upon completion of formalities.
4. Tax provision for the current period 1st June, 2010 to 30th June,
2011 has been made after considering various deductions including
brought forward business loss available under the Income Ta x Act,
1961.
5. During 1987-88, 535,000 shares (of Rs. 100/- each) were allotted on
rights basis subject to the result of suit nos. 3181 and 3182 of 1987
filed by three shareholder against the Company and Others in the
Ahmedabad City Civil Court. The suits are pending disposal.
6. The Ahmedabad Unit of the Company has discontinued operations with
effect from 1st March, 2003. On 21st May, 2003, the Company entered
into an ÃAgreement t Sell' with Annapurna Polymers Private Limited
(APPL) for this Unit at an aggregate consideration of Rs. 677.70 lacs.
The sale, after getting all approvals, was to b completed on or before
31st December, 2003. Pending this, a separate ÃConducting Agreement'
was entered with APPL, effective 1st June, 2003, under which APP
operated the Unit on the Company's behalf. The conducting agreement was
extended from time to time. The said sale has been completed on 14th
December, 201 and the profit of Rs. 611.76 lacs has been recognized
during the period.
7. Depreciation on fixed assets of (a) the Old Unit at Nadiad and
Unit at Ahmedabad; and (b) Head Office of the Company, acquired prior
to1-4-1978, is provided o written down value basis and on all other
assets, on straight-line basis, as per the provisions of the Companies
Act, 1956, at the rates and in the manner specifie in schedule XIV of
this Act.
8. Payments to and Provisions for Employees includes Rs.4.18 lacs,
which is subject to approval by way of special resolution at the
forthcoming Annual Genera Meeting under section 314 of Companies Act,
1956.
9. Short Term loan from Bank is obtained by placing Fixed Deposit of
Mafatlal Industries Employee's Co-operative Credit Society at Nadiad as
collateral.
10. a. The net amount of exchange difference included in the Profit
and Loss account for the period is Rs.4.40 lacs gain (Previous period,
Rs. 3.97 lacs (Loss)).
11 Research and development expenditure debited to the Profit and Loss
account by charge to relevant heads of account amount to Rs.28.12 lacs
(Previous period, Rs. 31.42 lacs).
12. In the Modified Scheme, the Company has sought various reliefs and
concessions from various authorities and parties, which the BIFR has
endorsed it for their consideration. Labour matters pending in various
Courts will continue and any decree / award will be acceptable to both
the Company and workers.
13. The Company has not received intimation from most of the suppliers
regarding the status under the Micro, Small and Medium Enterprise
Development Act, 2006, and hence disclosure requirements in this regard
as per schedule VI of the Companies Act, 1956 is not being provided.
14. The Company had issued legal notices to certain tenants/
ex-tenants in its buildings in South Mumbai for revision in rent/
recovery of expenses. Pending settlement with them, rent, of Rs.2.11
lacs, aggregate to date as at 30th June, 2011, Rs.39.95 lacs (previous
period, Rs. 2.27 lacs, aggregate to date as at 31st May, 2010, Rs.
37.84 lacs) and recovery of expenses, of Rs.2.61 lacs, aggregate to
date as at 30th June, 2011, Rs.138.70 lacs (previous period, Rs. 5.36
lacs, aggregate to date as at 31st May, 2010, Rs.136.09 lacs) have not
been accounted, on legal advice.
15. Figures for the current period are for thirteen months and figures
for the previous period are for fourteen months. Hence the same are not
strictly comparable.
16. Employee benefits:
Contributions are made to Government Provident Fund and Family Pension
Fund which covers all regular employees. Contribution is also made in
respect of executives to a Recognized Superannuation Fund. While both
the employees and the Company make predetermined contributions to the
Provident Fund, contribution to the Family Pension Fund and
Superannuation Fund are made only by the Company. The contributions are
normally based on a certain proportion of the employee's salary. Amount
recognized as expense in respect of these defined contribution plans,
aggregate to Rs.566.85 lacs (Previous period Rs.552.97 lacs).
As per the guidance provided by the Accounting Standards Board of the
Institute of Chartered Accountants of India on implementing AS 15,
Employee Benefits (revised 2005) states that benefit involving employer
established provident fund, which require interest shortfalls to be
compensated, are to be considered as defined benefit plans. Pending
issuance of the guidance note from the Actuarial Society of India, the
Company's actuary has expressed an inability to reliably measure
provident fund liabilities. Accordingly the Company is unable to
exhibit the related information.
Contributions are made to a Recognized Gratuity Fund in respect of
gratuity and provision is made for compensated absences based upon
actuarial valuation done at the end of every financial year using
ÃProjected Unit Credit' method and it covers all regular employees.
Major drivers in actuarial assumptions, typically, are years of service
and employee compensation. Gains and losses on changes in actuarial
assumptions are accounted for in the Profit and Loss account.
The charge on account of provision for gratuity and compensated
absences has been included in ÃContribution to Gratuity Fund' and
ÃSalaries, Wages and Bonus' respectively.
Break-up of Plan Assets:
The fair value of the plan assets is distributed in the following
manner:
- 53 % (Previous Period 64 %) in deposits with a nationalised bank
- 47% (Previous Period 36%) in various debt instruments
Compensated Absences:
All the employees are eligible for compensated absences of 30 days in
each financial year which can be encashed during the tenure of
employment. Employees cannot carry forward any compensated absences in
excess of 300 days. The provision for these absences, made on the basis
of Actuarial Valuation on ÃProjected Unit Credit' method is Rs. 274.24
lacs. (Previous period Rs.227.87 lacs)
17. Related party transactions
Names of the related parties where control exists
Subsidiary companies
Ibiza Industries Limited (also a joint venture) (Currently under
Liquidation)
Mishapar Investments Limited
Sunanda Industrial Machinery Limited
Sudas Manufacturing & Trading Limited
Mafatlal Services Limited
Names of other related parties and description of relationship where
transactions have taken place during the period
Subsidiary companies
Ibiza Industries Limited (also a joint venture) (Currently under
Liquidation)
Mishapar Investments Limited
Sunanda Industrial Machinery Limited
Sudas Manufacturing & Trading Limited
Mafatlal Services Limited
Associates
Hybrid Financial Services Limited (formerly known as Mafatlal Finance
Company Limited) (till 18th February, 2010)
Mafatlal VK Intex Limited
Sunanda Industries Limited
Sushmita Holdings Limited
Mafatlal Engineering Industries Limited
Mafatlal Limited - UK
Repal Apparel Private Limited
Sushmita Engineering and Trading Limited
Mafatlal Holdings Limited (till 30.11.2010)
Mafatlal Global Apparel Limited (w.e.f 22.03.2011)
Sumish Associates
Enterprises over which key management personnel and their relatives are
able to exercise significant influence
Ensen Holdings Limited
NOCIL Limited
Marigold International Private Limited
Navlekh Investment Limited
Navin Fluorine International Limited
Romago AG, Zurich
Sulakshana Securities Limited
Vibhadeep Investments & Trading Limited
Krishnadeep Housing Development Private Limited
Urvija Associates
Mafatlal Impex Private Limited
Eyeindia.Com Private Limited
Mafatlal Denim Limited
Mafatlal Holdings Limited ( w.e.f. 30.11.2010)
Key managerial personnel Hrishikesh A. Mafatlal
Relatives of Key Management Personnels Priyavrata H. Mafatlal (w.e.f.
01.01.2011)
Mishapar Investments Ltd.(wholly owned subsidiary of the Company) hold
12,66,670 Equity Shares of Rs.10/- each in Ibiza Industries Ltd. Hence
the combined share of the Company and its subsidiary in Ibiza
Industries Ltd. is 54.89%. Ibiza Industries Limited is under
liquidation as per Order dated 26th April, 2007 passed by the Hon'ble
Bombay High Court while admitting winding up petition. Hence, the
details of Ibiza Industries Limited are not given in the above
statement.
May 31, 2010
As at 31st
March, 2009
Rupees Rupees
in lacs In lacs
1. Estimated contracts remaining to be
executed on capital account and
not provided for - 363.64
2. Contingent liabilities, in respect of:
a. Bills of exchange discounted 219.40 176.32
b. Demands of income-tax and wealth tax
authorities disputed in
appeals (mainly relate to disallowance of
investment/ loan write off,
claim of interest on refund of excise
duty/ sales tax, disallowance of
chapter VIA deductions, etc. (pending
before the Income-tax Appellate Tribunal/High
court)) 989.46 989.46
c. Demands under excise and other
proceedings disputed in appeals
(mainly relating to matters like
differential duty on revision of
assessable value of yarn captively consumed,
duty on T.C. hard waste,
duty on drill etc. (pending at various
stages, from Assistant Commissioner to
CESTAT) 2603.36 2,710.98
d. Claims against the Company not
acknowledged as debts (relating to
dispute on fixed water charges at
Navsari Unit) 677.51 635.48
e. Concessional customs duty on import
of machinery under EPCG Scheme
payable subject to fulfillment of mandatory Ã
import/export obligation (including interest
upto Balance Sheet
date) 970.76 911.00
f. Claims made by workers against
the Company (mainly relating to
matters like termination,
compensation etc.) 1116.95 1,417.20
g. Demands from Director General of
Foreign Trade against Advance
License 384.97 381.05
h Stamp duty on Amalgamation of
company 1229.47 -
i. Guarantees given on behalf of
Subsidiary Company - Ibiza Industries
Limited 850.28 850.28
In the above matters (2b. to 2h.), the Company is hopeful of succeeding
and as such does not expect any significant liability to crystallize.
3 (a) The Board for Industrial & Financial Reconstruction (BIFFt) had
declared the Company, a sick industrial undertaking, within the meaning
of section 3(1)(c of the Sick Industrial Companies (Special Provisions)
Act, 1985 (SICA) on 19th September, 2000. It sanctioned a scheme for
rehabilitation (the sanctioned scheme (SS)) of the Company on 30th
October, 2002, issued on 15th November, 2002 and appointed the
Industrial Development Bank of India (IDBI) as th Monitoring Agency
(MA). The SS envisaged corporate, business and financial restructuring
of the Companys business. The Company had taken several step for
implementation of the SS, but certain delays occurred in completion of
reorganization of charges. Hence, at the directive of BIFR, the Company
initiate the process of modifying the SS. BIFR vide their Order dated
24th / 25"1 June 2009 approved the Modified Scheme (MS) in terms of
provisions of section 18(4 read with section 19(3) of SICA. The Company
has initiated the process of sale of surplus assets identified in the
MS.
(b) Pursuant to the demerger of the Real Estate and Investment Business
to Sulakshana Securities Limited (SSL), the shareholders of the Company
are to b issued one equity share of Rs* TO/- each, fully paid-up, in
SSL for every 500 shares of Rs. 100/- each, fully paid-up, held in the
Company as consideration fc the demerger, aggregating to Rs. 1.00 lac.
As the shareholders of the Company would be entitled to receive only
fractional shares of SSL, the SS envisages th: these shares would be
acquired by NFIL and the shareholders of the Company would receive
proportionate payment in consideration thereof. The Compar has received
the said amount of Rs. 1.00 lac from NFIL on behalf of the
shareholders, which is pending disbursement upon completion of
formalities.
(c) During the previous year, at the behest of the Company, dues
aggregating to Rs.50,906.80 lacs were assigned by the lending banks,
along with underlyin security and all other rights, title and
Entitlements to the Secured Creditors being group companies. Under the
MS read with inter se Settlement Agreement, th Secured Creditors had
settled their dues at their cost of acquisition of Rs. 13,168.47 lacs.
Accordingly, the resultant gain of Rs.37,738.33 lacs was accounts in
the previous year.
i. In view of substantia) reliefs & concessions on restructuring of
loans and liabilities received by the Company pursuant to the MS
approved by the BIFR, as mentioned in Note 5 above and sale surplus on
properties, the accumulated tosses have substantially reduced and the
net worth of the Company as at balance sheet date has turned positive.
Accordingly accounts are prepared on going concern basis.
D. Depreciation on fixed assets of (a) the Old Unit at Nadiad and Unit
at Ahmedabad; and (b) Head Office of the Company, acquired prior
to1-4-1978, is provided on written down value basis and on all other
assets, on straight-line basis, as per the provisions of the Companies
Act, 1956, at the rates and in the manner specified In schedule XIV of
this Act.
I. The Company holds certain unquoted investments at a cost of
Rs.4,052.76 lacs (as at 31st March, 2009, Rs. 4,052.76 lacs) in
companies, the networth of whose, as per their latest available audited
accounts have been partially/ substantially eroded. Marginal erosion
has also taken place in the Companys investment in its wholly-owned
subsidiary, Mishapar Investments Limited. During the period, an amount
of Rs.4,001.88 lacs has been provided as diminution in the value of
unquoted Investments.
Sundry Debtors (Schedule 8), Loans (Schedule 10) and Advances
Recoverable in Cash or in kind for the value to be received (Schedule
10) includes overdue amounts of Rs.3,629.59 lacs (as at 31 st March
2009 Rs.3,629.59 lacs), Rs.47S.60 lacs (as at 31 st March 2009
Rs.475.60 lacs) and Rs,210.90 lacs (as at 31 st March 2009 Rs.210.89
lacs) respectively which have since been secured by pledge of shares
vide pledge agreement dated 25th June, 2010.
i. a. The net amount of exchange difference included in the Profit
and Loss account for the period Is Rs.3.97 lacs (Loss) (previous year,
Rs. 484.68 lacs (gain)).
4. The Company has not received any intimation from suppliers
regarding their status under the Micro, Small and Medium Enterprise
Development Act, 2006 and hence disclosure requirements in this regard
as per Schedule VI of the Companies Act, 1956 could not be provided,
5. The Company had issued legal notices to certain tenants/
ex-tenants in its buildings in South Mumbai for revision in rent/
recovery of expenses. Pending settlement æ with them, rent, of Bs.2.27
lacs, aggregate to date as at 31 st May, 2010, Rs.37.84 lacs (previous
year, Rs. 1.95 lacs, aggregate to date as at 31 st March, 2009, Rs.
35.57 lacs) and recovery of expenses, of Rs.5.36 lacs, aggregate to
date as at 31st May, 2010, Rs.136.09 lacs (previous year, Rs. 7.51
lacs, aggregate to ddte as at 31st March, 2009, Rs.144.73 lacs) have
not been accounted, on legal advice.
6. The Brihanmumbai Municipal Corporation had issued an attachment
notice on the Company for its property at Lower Parel, Mumbai for
recovery of arrears of property tax. This has been stayed subject to
the Company making payment towards outstanding dues on schedule. This
has been agreed to by the Company and accordingly all the necessary
payments have been made.
7 Tax provision for the current period 1st April 2009 to 31st May,
2010 has been made after considering various deductions including carry
forward business loss available under the Income Tax Act, 1961.
8. Employee benefits:
Contributions are made to Government Provident Fund and Family Pension
Fund which covers all regular employees. Contribution is also made in
respect of executives to a Recognized Superannuation Fund. While both
the employees and the Company make predetermined contributions to the
Provident Fund, contribution to the Family Pension Fund and
Superannuation Fund are made only by the Company. The contributions are
normally based on a certain proportion of the employees salary. Amount
recognized as expense in respect of these defined contribution plans,
aggregate to Rs.552.97 lacs (Previous year Rs.417.15 lacs).
As per the guidance provided by the Accounting Standards Board of the
Institute of Chartered Accountants of India on implementing AS 15,
Employee Benefits (revised 2005) states that benefit involving employer
established provident fund, which require interest shortfalls to be
compensated, are to be considered as defined benefit plans. Pending
issuance of the guidance note from the Actuarial Society of India, the
Companys actuary has expressed an inability to reliably measure
provident fund liabilities. Accordingly the Company is unable to
exhibit the related information.
Contributions are made to a Recognized Gratuity Fund in respect of
gratuity and provision is made for compensated absences based upon
actuarial valuation done at the end of every financial year using
Projected Unit Credit method and it covers all regular employees.
Major drivers in actuarial assumptions, typically, are years of service
and employee compensation* Gains and losses on changes in actuarial
assumptions are accounted for in the Profit and Loss account.
The charge on account of provision for gratuity and compensated
absences has been included in Contribution to Gratuity Fund and
Salaries, Wages and Bonus respectively.
Compensated Absences:
All the employees are eligible for compensated absences of 30 days in
each financial year which can be encashed during the tenure of
employment. Employees cannot carry forward any compensated absences in
excess of 300 days (as at 31st March, 2009, 240 days). The provision
for these absences, made on the basis of Actuarial Valuation on
Projected Unit Credit method is Rs. 227.87 lacs (Previous year
Rs.246.46 lacs).
9- Related party transactions
Names of the related parties where control exists
Subsidiary companies
Ibiza Industries Limited (also a joint venture) (Currently under
Liquidation)
Mishapar Investments Limited
Sunanda Industrial Machinery Limited
Sudas Manufacturing & Trading Limited
Mafatlal Services Limited
Names of other related parties and description of relationship where
transactions have taken place during the period/year
Subsidiary companies
Ibiza Industries Limited (also a joint venture) (Currently under
Liquidation)
Mishapar Investments Limited
Sunanda Industrial Machinery Limited
Sudas Manufacturing & Trading Limited
Mafatlal Services Limited
Associates
Hybrid Financial Services Limited (formerly known as Mafatlal Finance
Company Limited) (till 18* February, 2010)
Mafatlal VK Intex Limited
Sunanda Industries Limited
Mafatlal Holdings Limited
Sushmita Holdings Limited
Mafatlal Engineering Industries Limited
Mafatlal Limited - UK
Ftepal Apparel Private Limited
Sushmita Engineering and Trading Limited
Enterprises over which key management personnel and their relatives are
able to exercise significant influence
Ensen Holdings Limited
NOCIL Limited
Marigold International Private Limited
Navlekh Investments Limited
Navin Fluorine International Limited
Romago AG, Zurich
Sulakshana Securities Limited
Vibhadeep Investments & Trading Limited
Krishnadeep Housing Development Private Limited
Sumish Associates
Urvija Associates
Mafatlal Impex Private Limited
Eyeindia.Com Private Limited
Mafatlal Denim Limited
10 Figures for the current are for fourteen months and figures for the
previous year are for twelve months; hence not comparable.
11 Figures of the previous year have been regrouped, rearranged and/or
reclassified wherever necessary to correspond with those of the current
period.
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article