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Notes to Accounts of Mangalore Chemicals & Fertilizers Ltd.

Mar 31, 2015

1. The amount due to Micro, Small and Medium Enterprises as on 31.3.2015 is Nil (Nil).

2. Segment Reporting

The Company's business comprises of manufacture, purchase and sale of fertilizers and related products constituting a single segment. The sales of these products are predominantly made in India. Hence, the segment information as per "Accounting Standard 17 - Segment Reporting" is not required to be disclosed.

32 Related Party Disclosures a) List of related parties:

Key Management Personnel

Deepak Anand, Managing Director

K. Prabhakar Rao, Whole-time Director

K. Raghuveeran, Company Secretary*

T. M. Muralidharan, Chief Financial Officer*

b) General Description of Lease terms:

i) Lease rentals are charged on the basis of agreed terms.

ii) Assets are taken on lease over a period of 3/5 years.

3. Accounting for taxes on Income

In accordance with the "Accounting Standard 22 - Accounting for Taxes on Income", issued by the Institute of Chartered Accountants of India, the Company has recognised Rs. 20,39.62 lakhs as deferred tax credit (net) for the current year which includes Rs. 1,13.75 lakhs adjusted in the retained earnings.

4. As per the practice consistently followed by the Company, the concession rate for Urea has been recognised based on latest notification rates under NPS-III and further adjusted with input price escalation/(de-escalation) aggregating ( Rs. 176,56.36 lakhs) for the year 2014-15 as estimated by Management (previous year Rs. 24,10.50 lakhs).

5. In accordance with the Companies Act, 2013, the Company has during the current financial year revised the useful life of its fixed assets to comply with the useful life as per Schedule II to the Companies Act, 2013. As per the transition provision, the Company has adjusted Rs. 2,20.92 lakhs (net of deferred tax of Rs.1,13.75 Lakhs) with the opening balances of the retained earnings and has also adjusted Rs. 2,44.55 Lakhs with the opening balance of the Revaluation Reserve. Had the Company continued to follow the earlier useful life of its fixed assets, the depreciation expense for the year ended 31st March 2015 would be higher by Rs. 8,82.03 Lakhs and the Profit before Tax for the year ended 31 st March 2015 would have been lower by Rs. 8,82.03 Lakhs.

6. Certain line items which are specified in the prescribed format of the schedule III, wherever amount is nil for current and previous year are not shown.

7. Previous year's figures have been reworked, regrouped, rearranged and reclassified wherever necessary.


Mar 31, 2014

SHARE CAPITAL

. The rights, preferences and restrictions attached to shares The Company has only one class of shares issued and paid up referred to as equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in the case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their holdings.

Contingent Liabilities (Rs. in Lakhs) 2013-14 2012-13

a) Outstanding Bank Guarantees 6,84.18 15,62.42

b) Claims against the Company not acknowledged as debt.

i) Disputed customs duty liability under appeal by Company before CESTAT 90.60 90.60

ii) Disputed Income-tax liability for Assessment Year 2008-09 (Assessment Year 2009-10) 4,27.77 6,92.87

Segment Reporting

The Company''s business comprises of manufacture, purchase and sale of fertilizers and related products constituting a single segment. The sales of these products are predominantly made in India. Hence, the segment information as per "Accounting Standard 17 - Segment Reporting" is not required to be disclosed.

As per the practice consistently followed by the Company, the concession rate for Urea for the year 20I3-I4 has been recognised based on latest notification rates under NPS-III and further adjusted with input price escalation aggregating '' 24,I0.50 lakhs (previous year ( Rs. 28,40.00) lakhs) as estimated by Management.


Mar 31, 2013

1 Contingent Liabilities

a) Outstanding Bank Guarantees 15,62.42 16,53.92

b) Claims against the Company not acknowledged as debt.

i) Disputed customs duty liability under appeal by Company beforeCESTAT 90.60

ii) Disputed arrears of electricity charges, under appeal by Company / KPTCL 2,38.58

c) Disputed Income-tax liability for assessment year 2009-10 6,92.87 7,92.87

2 The amount due to Micro, Small and Medium Enterprises as on 31.3.2013 is Nil (Nil).

3 Segment Reporting

The Company''s business comprises of manufacture, purchase and sale of fertilizers and related products constituting a single segment. The sales of these products are predominantly made in India. Hence, the segment information as per "Accounting Standard 17 - Segment Reporting" is not required to be disclosed.

4 Accounting for taxes on Income

In accordance with th e "Accounting Standard 22 - Accounting for Taxes on Income", issued by the Institute of Chartered Accountants of India, the Company has provided Rs. 1,91.26 lakhs as deferred tax Liability (net) for the current year.

5 As per the practice consistently followed by the Company, the concession rate for Urea for the year 2012-13 has been recognised based on latest notification rates under NPS-III and further adjusted with input price escalation aggregating Rs. (28,40.00) lakhs (previous year escalation Rs. (3,50.00) lakhs) as estimated by Management.

6 Certain line items which are specified in the prescribed format of the revised schedule VI, wherever amount are nil for current and previous year are not shown.

7 Previous year''s figures have been reworked, regrouped, rearranged and reclassified wherever necessary.


Mar 31, 2012

1 Contingent Liabilities

a) Outstanding Bank Guarantees 16,53.92 15,93.61

b) Claims against the Company not acknowledged as debt.

Disputed arrears of electricity charges, under appeal by Company / KPTCL 2,38.58 2,38.58

c) Disputed Income-tax liability for assessment year 2009-10 7,92.87 -

2 The amount due to Micro, Small and Medium Enterprises as on 31.3.2012 is Nil (Nil).

3 Segment Reporting

The Company's business comprises of manufacture, purchase and sale of fertilizers and related products constituting a single segment. The sales of these products are predominantly made in India. Hence, the segment information as per "Accounting Standard 17 - Segment Reporting" is not required to be disclosed.

b) General Description of Lease terms:

i) Lease rentals are charged on the basis of agreed terms.

ii) Assets are taken on lease over a period of 3/ 5 years.

4 Accounting for taxes on Income

In accordance with the "Accounting Standard 22 - Accounting for Taxes on Income", issued by the Institute of Chartered Accountants of India, the Company has provided Rs.1,01.87 lakhs as deferred tax Liability (net) for the current year.

5 As per the practice consistently followed by the Company, the concession rate for Urea for the year 2011-12 has been recognised based on latest notification rates under NPS - III and further adjusted with input price escalation aggregating Rs. (3,50.00) lakhs as estimated by Management.

6 Certain line items which are specified in the prescribed format of the revised schedule VI, wherever amount are nil for current and previous year are not shown.

7 Previous year's figures have been reworked, regrouped, rearranged and reclassified wherever necessary.


Mar 31, 2011

1. Amalgamation of MCF International Limited with the Company

- Pursuant to the Scheme of Amalgamation ('the Scheme') of the erstwhile MCF International Limited (MCFIL) as approved by the Hon'ble High Court of Karnataka on July 8, 2011, the entire business and undertaking of MCFIL including all assets, liabilities, duties and obligations have been transferred to and vested in the Company with effect from April 1, 2010.

- The Amalgamation has been accounted for under the 'Pooling of interests' method as prescribed by Accounting Standard 14, "Accounting for Amalgamations", notified under Sec 211 (3C) of the Companies Act 1956.

- In accordance with the Scheme, 50,000 Equity Shares of Rs. 10/- each held by the Company in the equity share capital of MCFIL stand cancelled. The difference of Rs. 3,27.24 lakhs between assets, liabilities, statutory reserves of MCFIL and the carrying value of investments being cancelled, has been adjusted against balance in Profit and Loss Account.

- In view of the accounting for amalgamation with effect from April 1, 2010, the fgures of the current year are not strictly comparable with those of the previous year.

(Rs. in Lakhs)

2010-2011 2009-2010

2. Contingent Liabilities

a. Outstanding Bank Guarantees 15,93.61 3,58.37

b. Claims against the Company not acknowledged as debt.

Disputed arrears of electricity charges, under appeal by Company / KPTCL 2,38.58 2,38.58

3. Secured and Unsecured loans

a) Term loan from Banks: Rs. 19,72.22 lakhs (previous year Rs. 15,74.31 lakhs) is secured by First charge on the project assets, and second charge on all of the Company's fixed assets including all movable and immovable properties both present and future.

b) Working Capital facilities of Rs. 167,89.18 lakhs (previous year Rs. 81,50.65 lakhs) from banks are secured by a frst pari passu charge on present and future plant and machinery, stock of fertilizers including work-in-process and raw materials, book debts, outstanding monies, receivables, claims, bills, contracts, engagements, securities, investments, rights and assets of the Company (except property effectively otherwise hypothecated / charged or mortgaged to the banks).

c) Loans from others is lease liability secured by hypothecation of assets acquired under the facility.

4. Leasehold land of Rs. 3.04 lakhs is towards 3.041 acres taken on lease from the New Mangalore Port Trust.

5. Depreciation includes Rs. 7,09.09 lakhs (previous year Nil) towards accelerated depreciation of D G sets to be replaced.

6 As per the practice consistently followed by the Company, the concession rate for Urea for the year 2010-11 has been recognised based on latest notified rates under NPS-III and further adjusted with input price escalation aggregating Rs. 6,60.00 lakhs, as estimated by Management.

The concession rate for Phosphatic and Potassic fertilizers for April 2010 to March 2011 has been based on the notified price and a provision of Rs. 19,65.00 lakhs has been made, as estimated by Management, for any price variation.

(ii) Compensated Leave (Unfunded)

Defined benefit obligation of compensated absence in respect of the employees of the Company is arrived on the basis of actuarial valuation conducted as on 31.3.2011 which works out to Rs. 4,20.40 lakhs (previous year Rs. 3,71.96 lakhs). Increase in the obligation towards compensated leave has been charged to Profit and Loss Account Rs. 48.44 lakhs (previous year Rs. 12.36 lakhs).

7. Segment Reporting

The Company's business comprises of manufacture, purchase and sale of fertilizers and related products constituting a single segment. The sales of these products are predominantly made in India. Hence, the segment information as per "Accounting Standard 17 - Segment Reporting" is not required to be disclosed.

8. Related Party Disclosures a) List of related parties:

i) Associates

United Breweries (Holdings) Limited

ii) Subsidiary *

MCF International Limited

iii) Key Management Personnel

Deepak Anand, Managing Director K. Prabhakar Rao, Wholetime Director

b) General Description of Lease terms:

i) Lease rentals are charged on the basis of agreed terms.

ii) Assets are taken on lease over a period of 3/5 years.

9. Accounting for taxes on Income

In accordance with the "Accounting Standard 22 - Accounting for Taxes on Income", issued by the Institute of Chartered Accountants of ndia, the Company has recognised Rs. 1,52.85 lakhs as deferred tax Asset (net) for the current year.

10. The previous year's fgures have been reworked, regrouped, rearranged and reclassified wherever necessary.


Mar 31, 2010

1. Contingent Liabilities (Rs.in Lakhs)

2009-2010 2008-2009

a) Outstanding Bank Guarantees 3,58.37 4,88.07

b) Outstanding Corporate Guarantee given to bank for loans taken by subsidiary 2,47.86 1,24.56

c) Claims against the Company not acknowledged as debt.

i) Disputed arrears of electricity charges, under appeal by Company / KPTCL 2,38.58 2,38.58

ii) Despite settlement of all crystallised dues under one-time settlement approved by the BIFR, Syndicate Bank had made a claim which was disputed by the Company. This has been settled during the year. - 7,73.04

2. Secured and Unsecured loans

a) Term loan from Banks of Rs.15,74.31 lakhs (previous year Rs.14,18.03 lakhs) is secured by exclusive charge on the specific assets, and second charge on all of the Companys fixed assets including all movable and immovable properties both present and future.

b) Working Capital facilities from banks are secured by a first pari passu charge on present and future plant and machinery, stock of fertilizers including work-in-process and raw materials, book debts, outstanding monies, receivables, claims, bills, contracts, engagements, securities, investments, rights and assets of the Company (except property effectively otherwise hypothecated / charged or mortgaged to the banks).

c) Loans from others is lease liability secured by hypothecation of assets acquired under the facility

3. Leasehold land of Rs. 3.04 lakhs is towards 3.041 acres taken on lease from the New Mangalore Port Trust

4. The amount due to Micro, Small and Medium Enterprises as on 31-3-2010 is Nil (Nil)

5. Interest & Finance Charges includes an amount of Rs. 6 crores paid to Syndicate Bank towards full and final settlement of their claim

6. As per the practice consistently followed by the Company, the concession rate for Urea for the year 2009-10 has been recognised based on the latest notified rates under NPS-III and further adjusted with input price escalation aggregating Rs. 5,80.58 lakhs, as estimated by Management.

The concession rate for Phosphatic and Potassic fertilizers for April to June 2009 has been recognised based on the notified price and from July 2009 to March 2010 has been accounted based on notified base rate and estimated de-escalation aggregating Rs.30,34 lakhs, as estimated by Management.

Review of such estimates by the Management, with the actual rates of concession notified by GOI from time to time, has established that these are conservative and fairly aligned.

7. Segment Reporting

The Companys business comprises of manufacture, purchase and sale of fertilizers and related products constituting a single segment. The sales of these products are predominantly made in India. Hence, the segment information as per Accounting Standard 17 Segment Reporting is not required to be disclosed.

8. The previous years figures have been reworked, regrouped, rearranged and reclassified wherever necessary.

 
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