Mar 31, 2019
Notes to financial statements for the year ended 31st March, 2018
The financial instruments are categorised into two levels based on the inputs used to arrive at fair value measurements as described below:
i) Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.
ii) Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the-counter derivatives) is determined using the valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specifc estimates. If all significant inputs required to fair value an instrument are obserable, the instrument is included in level 2.
iii) Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
The Company''s policy is to recongise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period.
41.1 Financial risk management
The Group has exposure to the following risks arising from financial instruments: credit risk liquidity risk market risk interest rate risk
Risk management framework
The Company has a risk management policy which covers risks associated with the financial assets and liabilities. The risk management policy is approved by the Board of Directors. The focus of the risk management committee is to assess the unpredictability of the financial environmnet and to mitigate potential adverse effects on the financial performance of the company.
A Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers, loans and investment in debt securities. The Company establishes an allowance for doubtful trade receivables and impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments.
The maximum exposure to credit risk in case of all the financial instuments covered below is restricted to their respective carrying amount.
The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer and including the default risk of the industry, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.
The Company measures the expected credit loss of trade receivables based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends.
Notes to financial statements for the year ended 31st March, 2018 Ageing of Trade receivables
in Lakhs
Particulars |
As at 31 March 2019 |
As at 31 March 2018 |
Not due |
2,821.33 |
2,087.19 |
0-3 months |
418.34 |
480.25 |
3-6 months |
30.39 |
33.45 |
6 months to 12 months |
29.43 |
18.60 |
beyond 12 months |
11.41 |
1.53 |
Allowance for doubtful trade receivables (Expected credit loss allowance) |
8.01 |
9.91 |
Total |
3,302.90 |
2,611.11 |
Financial Assets are considered to be of good quality and there is no significant increase in credit risk. Movement in provisions of doubtful debts
Loans
In the case of loans to employees, the same is managed by establishing limits. (Which in turn based on the employees salaries and number of years of service put in by the concern employee).
Investment in debt securities
The Company makes Investments in Deposits or Commercial papers or similar instruments in Companies having AA, AA or higher ratings from Credit rating agencies. The Company also makes investments in Debt Mutual funds.
The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors or specific country risks.
Other than trade and other receivables, the Company has no other financial assets that are past due but not impaired. Cash and cash equivalents
The Company held cash and cash equivalents of Rs 2718.79 as at 31st March, 2019 (31st March, 2018: Rs 1429.30). The cash and cash equivalents are held with banks.
Derivatives
The derivative contracts are entered into with scheduled banks and financial institutions which have good credit ratings.
Particulars |
As at 31 March 2019 |
As at 31 March 2018 |
Opening provision |
9.91 |
16.36 |
Add: Additional provision made |
(1.90) |
(6.45) |
Closing provision |
8.01 |
9.91 |
Notes to financial statements for the year ended 31st March, 2019
B Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the Company''s short-term, medium-term and long-term funding and liquidity management requirements. The Company manages liquidity risk by monitoring forecast and actual cash flows, maintaining adequate reserves and by matching the maturity profiles of financial assets and liabilities.
The tables below provide details regarding the contractual maturities of significant financial liabilities as at:
As at 31st March 2019 |
|
As at 31st March 2018 |
||
Particulars |
Carrying a mount-Contractual cash flows |
Carrying amount-Contractual cash flows |
||
Up to lyear |
More than lyear |
Up to lyear |
More than 1 year |
|
Non-derivative financial liabilities |
||||
Trade and other payables |
2,158.75 |
- |
2,870.54 |
- |
Other financial liabilities |
785.65 |
- |
612.07 |
- |
Total non-derivative financial liabilities |
2,944.41 |
- |
3,482.61 |
- |
C Market risk
Market risk is the risk that the fair value or future cash flows of the financial instrument will fluctuate because of changes in market prices . Such changes in values of financial instruments may result from changes in foreign currency exchange rates, credit, liquidity and other market changes. The Company''s exposure to market risk is primarily on account of foreign currency exchange rate risk.
(a) Foreign Currency Exchange Rate Risk
The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed utilising forward foreign exchange contracts.
The following table analyzes foreign currency risk from financial instruments as of 31st March 2019 and 31st March 2018 :
Exposure to liquidity risk
Particulars |
USD |
EURO |
GBP |
SGD |
CAD |
AUD |
Accounts Receivable |
||||||
As at : |
||||||
31 March 2019 |
10.37 |
0.00 |
0.07 |
0.13 |
0.05 |
0.00 |
31 March 2018 |
10.62 |
0.00 |
0.14 |
- |
0.01 |
0.01 |
Accounts Payable |
||||||
As at : |
||||||
31 March 2019 |
7.68 |
- |
- |
- |
- |
- |
31 March 2018 |
13.21 |
- |
- |
- |
- |
- |
Notes to financial statements for the year ended 31st March, 2019
Foreign currency sensitivity analysis
The Company is mainly exposed to the currency : USD and GBP
The following table details the Company''s sensitivity to a 5% increase and decrease in the Rupee against the relevant foreign currencies. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% charge in foreign currency rate. A positive number below indicates an increase in the profit or equity where the Rupee strengthens 5% against the relevant currency. For a 5% weakening of the Rupee against the relevant currency, there would be a comparable impact on the profit or equity, and the balances below would be negative.
GBP impact
Particulars |
As at 31 March 2019 |
As at 31 March 2018 |
Increase in exchange rate by 5% |
6.29 |
3.54 |
Decrease in exchange rate by 5% |
(6.29) |
(3.54) |
Forward foreign exchange contracts
The Company has entered into Forward Exchange Contracts, being derivative instruments for hedge purposes and not intended for trading or speculation purposes, to establish the amount of currency in Indian Rupees required or available at the settlement date of certain receivables.
The following are the outstanding Forward Exchange Contracts entered into by the Company.
Outstanding contracts |
As at |
Foreign currency |
Carrying amount |
Derivative instruments |
|||
Accounts Receivables (USD) |
31 March 2019 |
1.00 |
68.58 |
31 March 2018 |
32.00 |
2,064.32 |
|
Accounts Payables(USD) |
31 March 2019 |
- |
- |
31 March 2018 |
1.24 |
80.92 |
Impact on profit or loss and total equity
Rs in lakhs
Particulars |
USD impact |
|
As at 31 March 2019 |
As at 31 March 2018 |
|
Increase in exchange rate by 5% |
250.11 |
194.12 |
Decrease in exchange rate by 5% |
(250.11) |
(194.12) |
Particulars |
Average Exchange rate |
|||
USD |
GBP |
INR/USD |
INR/GBP |
|
Export Transactions |
||||
As at : |
||||
31 March 2019 |
135.03 |
1.48 |
69.59 |
86.89 |
31 March 2018 |
118.43 |
0.82 |
64.40 |
86.22 |
Import Transactions |
||||
As at : |
||||
31 March 2019 |
61.48 |
0.04 |
71.47 |
77.93 |
31 March 2018 |
55.99 |
- |
66.88 |
- |
D Interest Rate Risk
Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates, in cases where the borrowings are measured at fair value through profit or loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates.
The Company''s investments are primarily in fixed rate interest bearing investments. Hence , the Company is not significantly exposed to interest rate risk. The Company makes Investments in Deposits or Commercial papers or similar instruments in Companies having AA, AA or higher ratings from Credit rating agencies. The Company also makes investments in Debt Mutual funds.
Exposure to interest rate risk
The interest rate profile of the Company''s interest-bearing financial instruments as reported to the management of the Company
Rs in Lakhs |
March 31, 2019 |
March 31, 2018 |
Fixed-rate instruments |
||
Financial Assets - measured at amortised cost |
0.00 |
0.00 |
Investment in Bonds |
0.00 |
15.40 |
Total |
0.00 |
15.40 |
Segmentwise Revenue, Results and Capital Employed for the year ended 31st March 2019
SI. NO. |
Particulars |
Year ended 31-03-2019 |
Year ended 31-03-2018 |
1 |
SEGMENT REVENUE |
||
a |
Laundry & Allied Products |
26,751.50 |
25,186.11 |
b |
IT Enabled Services |
3,884.63 |
3,023.95 |
c |
Windmill |
339.13 |
320.33 |
TOTAL |
30,975.26 |
28,530.39 |
|
Less : Inter segment Revenue |
(290.12) |
(277.40) |
|
SALES/INCOME FROM OPERATIONS |
30,685.14 |
28,252.99 |
|
2 |
SEGMENT RESULTS |
||
a |
Laundry & Allied Products |
6,033.03 |
5,140.49 |
b |
IT Enabled Services |
641.52 |
606.67 |
c |
Windmill |
185.99 |
206.99 |
TOTAL |
6,860.54 |
5,954.15 |
|
Less: Interest and Finance Charges |
(10.99) |
(62.45) |
|
Less: Unallocated Expenditure (Net-off) |
595.48 |
449.29 |
|
Un-allocable Income |
591.21 |
- |
|
TOTAL PROFIT BEFORE TAX |
8,036.24 |
6,340.99 |
|
3 |
SEGMENT ASSETS |
||
a |
Laundry & Allied Products |
13,159.36 |
11,635.58 |
b |
IT Enabled Services |
1,141.61 |
967.24 |
c |
Windmill |
1,023.18 |
1,053.40 |
d |
Unallocated / Corporate |
27,759.28 |
42,654.22 |
43,083.43 |
56,310.44 |
SI. NO. |
Particulars |
Year ended 31-03-2019 |
Year ended 31-03-2018 |
4 |
Segment Liabilities |
||
a |
Laundry & Allied Products |
2,865.83 |
3,390.32 |
b |
IT Enabled Services |
368.46 |
195.79 |
c |
Windmill |
10.86 |
10.14 |
d |
Unallocated / Corporate |
1,349.34 |
1,606.13 |
4,594.49 |
5,202.38 |
||
TOTAL CAPITAL EMPLOYED IN THE COMPANY |
38,488.94 |
51,108.06 |
42 Related party disclosures
1 Names of related parties and nature of relationship:
Nature of relationship |
Name of related party |
||
Key Management Personnel |
Mr. R. Sam path |
Chairman |
Non-Executive |
Mrs. Indira Sundararajan |
Vice Chairperson |
Non-Executive |
|
Ms. Tara Parthasarathy |
Joint Managing Director |
Executive |
|
Mr. R. Senthil Kumar |
Whole-time Director |
Executive |
|
Dr. Gopakumar G. Nair |
Director |
Non Executive Independent |
|
Mr. Nimish Patel |
Director |
Non Executive Independent |
|
Mr. T.R Madhavan |
Director |
Non Executive Independent |
|
Mr. Vinod G. Nehemiah |
Director |
Non Executive Independent |
|
Mr. Navin M Ram |
Director |
Non Executive Independent |
|
Mr. S. Ragothaman |
Director |
Non Executive Independent |
|
Mr. Rajeev M. Pandia |
Director |
Non Executive Non Independent |
|
Mr. C.R. Chandra Bob |
Director |
Non Executive Non Independent |
|
Mr. S. Ramanan |
Chief Financial Officer |
||
Mr. Kishore Kumar Sahoo |
Company Secretary |
||
Enterprise over which the Key Managerial Personnel and their relatives are able to exercise significant influence. |
Thirumalai Chemicals Limited |
||
Thirumalai Charity Trust |
|||
Ahana LLC |
|||
Vedavalli Vidyalaya School ( a Unit of Akshaya Vidya Trust ) |
|||
Relatives of Key Managerial Personnel |
Mr. V. Bharatram |
President(Operations), IT-Enabled Services and BPO activities Division |
|
Ms. Meera Parthasarathy |
Vice President(Operations), BPO Division |
||
Ms. Vidya Sampath |
2 Transactions carried out with related parties referred in 1 above, in ordinary course of business
2018-19 |
2017-18 |
|
Sales |
||
Goods, Materials and Services |
||
Thirumalai Chemicals Limited |
0.36 |
0.38 |
Purchase |
||
Goods, Materials and Services |
||
Thirumalai Chemicals Limited |
- |
0.02 |
Remuneration paid to |
||
Mr. V. Bharathram |
104.06 |
62.08 |
Ms. Meera Parthasarathy |
62.18 |
33.96 |
Remuneration to Key Managerial Personnel |
||
Mrs. Indira Sundararajan |
50.95 |
216.85 |
Ms. Tara Parthasarathy |
71.57 |
63.88 |
Mr. R. Senthilkumar |
48.60 |
45.66 |
Mr. S. Ramanan |
32.74 |
32.74 |
Mr. Kishore Kumar Sahoo |
16.25 |
13.77 |
Sitting fees and commission to Independent and Non-Executive Directors |
105.13 |
89.68 |
Rendering of Services to |
||
Thirumalai Chemicals Limited |
7.58 |
21.07 |
Thirumalai Charity Trust |
- |
3.08 |
Vedavalli Vidyalaya School |
0.64 |
0.33 |
Ahana LLC,USA |
62.21 |
13.44 |
Rent Paid to |
||
Thirumalai Chemicals Limited |
38.21 |
37.68 |
Ms. Vidya Sampath |
0.98 |
- |
Receiving of services from |
||
Thirumalai Chemicals Limited |
1.15 |
1.32 |
Outstanding payables |
||
Thirumalai Chemicals Limited |
3.78 |
3.40 |
Advance received against sale of Property |
||
Thirumalai Chemicals Limited |
- |
136.36 |
Directors Remuneration Payables |
||
Mrs. Indira Sundararajan |
19.64 |
160.22 |
Ms. Tara Parthasarathy |
30.00 |
30.00 |
Mr. R. Senthilkumar |
10.00 |
9.00 |
Non executive directors commission |
73.53 |
64.08 |
Remuneration Payable |
||
Mr. V. Bharathram |
15.00 |
7.50 |
Outstanding receivables |
||
Vedavalli Vidyalaya School |
- |
- |
Thirumalai Charity Trust |
- |
0.09 |
Thirumalai Chemicals Limited |
0.83 |
0.24 |
Ahana LLC |
21.42 |
3.04 |
Donations paid |
||
Thirumalai Charity Trust |
88.00 |
70.00 |
Outstanding deposits receivables |
||
Ms. Vidya Sampath |
0.70 |
- |
Thirumalai Chemicals Limited |
14.00 |
14.00 |
43 Leases Operating lease
i) The company has taken certain premises for office use and godown under cancellable / non cancellable lease agreements. Some of these agreements have a price escalation clause. The lease rentals for the same are charged to Statement of Profit or Loss.
ii) Amounts recognised in profit or loss
Particulars |
31st March, 2019 |
31st March, 2018 |
Lease expense |
296.59 |
199.99 |
Contingent rent expense |
- |
- |
iii Future minimum rentals payable under non - cancellable operating lease are as follows
Particulars |
31st March, 2019 |
31st March, 2018 |
Payable |
||
Within one year |
291.56 |
285.42 |
After one year but not more than five years |
877.01 |
1,074.88 |
More than five years |
126.03 |
182.25 |
44 Earnings per share (EPS)
Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year.
i. Profit attributable to Equity holders of Company
Particulars |
31st March, 2019 INR |
31st March, 2018 INR |
Profit attributable to equity holders of the Company for basic and diluted earnings per share |
5,647.83 |
4,364.31 |
ii. Weighted average number of ordinary shares |
||
Particulars |
31st March, 2019 INR |
31st March, 2018 INR |
Number of Issued equity shares at April 1 |
292,00,000 |
292,00,000 |
Effect of shares issued as |
- |
- |
Nominal value per share |
2 |
2 |
Weighted average number of shares at March 31 for basic and diluted earnings per shares |
292,00,000 |
292,00,000 |
Basic earnings per share |
19.34 |
14.95 |
46 CSR Expenditure
a) Gross amount required to be spent by the Company during the year - Rs100.24 Lakhs (31st March, 2018: Rs 76.29 Lakhs)
b) Amount spent during the year: Rs 107.00 Lakhs (31st March, 2018: Rs 90.21 Lakhs) out of which Rs 88.00 Lakhs contributed to Thirumalai Charity Trust registered u/s 35AC/80G of Income Tax Act, 1961, engaged in rural healthcare, women empowerment, disability, de-addiction and village development, surrounding the manufacturing location of the Company.
47 Exceptional items of Rs 591.21 Lakhs represent Surplus on transfer of leasehold land during the year.
48 Disclosures required as per Micro, Small and Medium Enterprises Development Act, 2006 .
The disclosure regarding Micro and Small Enterprises has been made to the extent such parties have been identified
45 Research and Development Expenditure
Particulars |
As at 31 March 2019 |
As at 31 March 2018 |
The Company has Incurred Research and Development expenses as under: |
||
On Capital Account: |
||
Lab Equipment |
28.43 |
17.42 |
On Revenue Account |
||
Salaries & Allowances |
75.06 |
79.40 |
Contributions to Provident fund and other funds |
4.92 |
5.25 |
Chemicals and Consumables |
17.14 |
14.72 |
Other Expenses |
32.56 |
13.02 |
Total |
158.11 |
129.81 |
Particulars |
2018-19 |
2017-18 |
|
(i) |
Principal amount and Interest payable to the suppliers as at the end of the accounting year |
NIL |
NIL |
(ii)- |
The amount of interest paid by the buyer in terms of Sec.16 of the Micro, Small and Medium Enterprises Development Act, 2006 along with the amount of payment made to the supplier beyond the appointed day during each accounting year |
NIL |
NIL |
(iii) |
The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under the Micro, Small and Medium Enterprises Development Act |
NIL |
NIL |
(iv) |
The amount of Interest accrued and remaining unpaid at the end of each accounting year. |
NIL |
NIL |
(v) |
The amount of further interest remaining due and payable in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise, for the purpose of disallowance as deductible expenditure u/s 23 of Micro, Small and Medium Enterprises Development Act, 2006 |
NIL |
NIL |
49 CIF Value of Imports
Rs in Lakhs
Particulars |
Year ended 31 March, 2019 |
Year ended 31 March, 2018 |
Raw Materials |
4,443.89 |
3,737.05 |
Machinery spares |
0.40 |
0.57 |
Lab Equipment |
1.24 |
0.65 |
Total |
4,445.53 |
3,738.27 |
50. Expenditure in Foreign Currency |
||
Travelling |
35.00 |
39.13 |
Other Matters - Data procesing |
- |
0.11 |
Employees'' Training & seminar expenses |
27.21 |
26.66 |
Legal & Professional Charges |
36.29 |
2.90 |
Printing and Stationary |
7.72 |
- |
Bank Charges |
1.35 |
- |
Telephone Expense |
1.39 |
- |
Subscription Fees |
13.80 |
5.76 |
Software Expenses |
0.80 |
2.47 |
Sales Promotion Expenses |
9.05 |
38.58 |
Books,periodicals & subscriptions |
5.14 |
4.47 |
Total |
137.75 |
120.08 |
51. Earnings in foreign currencies |
||
Export of goods calculated on FOB basis |
6,027.26 |
4,992.64 |
Income from IT enabled services |
3,430.79 |
2,663.65 |
Total |
9,458.05 |
7,656.29 |
52 Previous years figures have been regrouped/reclassified wherever neccessary to correspond with the current year''s classification/disclosure.
For and on behalf of |
For and on behalf of the Board of Directors |
|
Brahmayya & Co |
TARA PARTHASARATHY |
R. SENTHIL KUMAR T.R. MADHAVAN |
Chartered Accountants |
Joint Managing Director |
Whole-time Director Director |
Firm Regn. No. 000511S |
DIN :07121058 |
DIN -.07506927 DIN:00163992 |
R.NAGENDRA PRASAD |
S. RAMANAN KISHORE KUMAR SAHOO |
|
Partner |
Chief Financial Officer Company Secretary |
|
Membership No.203377 |
||
Place: Chennai |
||
Date: 15th May, 2019 |
Mar 31, 2018
1 General Information
Ultramarine & Pigments Limited (the âCompanyâ) is a Public Limited Company domiciled in India and incorporated under the provisions of the Companies Act applicable in India. Its shares are listed on BSE Limited in India. The Company is engaged in manufacturing and selling of Pigments, Surfactants, IT-Enabled Services, and Business Process Outsourcing (BPO) activities. The Company caters to both domestic and international markets.
The registered office of the Company is located at Thirumalai House, Road No.29, Near Sion Hill Fort, Sion (E), Mumbai -400022. Its manufacturing units are located at Ranipet (Vellore District) and Ambattur (Chennai District) and Wind Power Generators are also installed in the state of Tamilnadu. IT enabled services and BPO activities are carried from offices situated in Chennai and Ranipet.
The financial statements were authorized for issue by the Companyâs Board of Directors on 30th May 2018.
2 Basis of preparation A Statement of compliance
These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 (as amended) notified under Section 133 of the Companies Act, 2013, (the âActâ) and other relevant provisions of the Act.
The Companyâs financial statements up to and for the year ended 31 March 2017 were prepared in accordance with the Companies (Accounting Standard) Rules, 2006 notified under Section 133 of the Act and other relevant provisions of the Act.
These financial statements for the year ended 31st March 2018 are the first financial statements prepared in accordance with Indian Accounting Standards (Ind AS) and the adoption was carried out as per Ind AS 101, âFirst-time adoption of Indian Accounting Standardsâ. An explanation of how the transition to Ind AS has affected the previously reported financial position, financial performance and cash flows of the Company is provided in Note 41. This note includes reconciliation of the equity and the total comprehensive income for comparative years under IGAAP with the amounts reported under Ind AS.
Details of the Companyâs accounting policies are included in Note 3.
B Functional and presentation currency
These financial statements are presented in Indian Rupees (INR), which is also the Companyâs functional currency. All amounts have been rounded-off to the nearest lakhs,except per share data.
C Current and non-current classification:
All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria set out in the Schedule III to the Act. Based on the nature ofproducts and the time between the acquisition of assets for processing and their realisation in cashand cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities.
D Basis of measurement
The financial statements have been prepared on a historical cost basis except for the following:
1. Certain financial assets and liabilities that are measured at the fair value.
2. Assets held for sale are measured at lower of carrying amount or fair value.
3. Defined benefit plans - Plan assets measured at fair value
E Use of estimates and judgements
The preparation of the financial statements in conformity with Ind AS requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and reported amounts of revenues and expenses for the year. Actual results could differ from these estimates. Estimates and underlying assumptions and judgements are reviewed on an ongoing basis. Any revision to accounting estimates is recognized prospectively in the current and future periods.
In the process of applying the Companyâs accounting policies, management has made the following estimates, assumptions and judgements, which have significant effect on the amounts recognized in the financial statements:
Property, plant and equipment and Intangible assets
The Company has estimated the useful lives of each class of assets based on the nature of assets, the estimated usage of the assets, past history of replacement, anticipated technological changes, etc. Management believes that assigned useful lives are reasonable. The Company reviews the carrying amount of property, plant and equipment at the end of each balance sheet date. This re-assessment may result in change of depreciation expense in future periods.
Income taxes
Management estimates the provision for income taxes and deferred tax assets and liabilities. The Company reviews at each balance sheet date the carrying amount of deferred tax assets and liabilities. The factors used in estimates may differ from actual outcome which could lead to adjustment to the amounts reported in the financial statements.
Contingencies
Management assess and estimates the possible outflow of resources, if any, in respect of contingencies/claim/ litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy.
Allowance for uncollected accounts receivable and advances
Irrecoverable trade receivables are written off when management evaluates them as not collectible. Impairment is made on the expected credit losses, which are the present value of the cash shortfall over the expected life of the financial assets.
Assumptions and estimation uncertainties
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the year ending 31stMarch 2018 is included in the following notes:
- Notes 37 - recognition and measurement of provisions and contingencies: key assumptions about the likelihood and magnitude of an outflow of resources;
- Notes 38 - measurement of defined benefit obligations: key actuarial assumptions;
(iii) The Company has adopted carrying value as per previous GAAP as the deemed cost as per the exemption provided under Ind AS 101. Accordingly, the company has set the Net Block as per Previous GAAP as on April 1, 2016 as the Gross Block under Ind AS. Break up of the Gross block and accumulated depreciation as at April 1, 2016 is as follows:
(i) The Company has adopted Previous carrying value as per GAAP as the deemed cost as per the exemption provided under Ind AS 101. Accordingly, the company has set the Net Block as per Previous GAAP as on April 1, 2016 as the Gross Block under Ind AS. Break up of the Gross block and accumulated depreciation as at April 1, 2016 is as follows:
Notes :
1. Trade Receivable includes receivables from Related party - Rs. 3.37 ( 31st March 2017 - Rs.0.67, 31st March 2016 - Nil)
2. In determining the allowances for doubtful trade receivables the Company has used practical expedient by computing the expected credit loss allowance for trade receivables based on provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due and rates used in provision matrix.
3.1 Terms/rights attached to equity shares
(a) The Company has only one class of share referred to as equity shares having a par value of Rs. 2/-. Each holder of equity shares is entitled to one vote per share.
(b) The Company declares and pays dividends in Indian Rupees. The Board of Directors in their meeting held on 30th May, 2018 proposed a final dividend of Rs. 4.25 per equity share. The proposal is subject to approval of Shareholders at their meeting to be held on 6th August, 2018.
(c) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amount. The distribution will be proportionate to the number of equity shares held by the share holders.
(d) There is no change in issued and paid up share capital during the year.
Note : As at March 31, 2018 and March 31, 2017, there are no outstanding dues to micro and small enterprises. There are no interests due or outstanding on the same. :
[B] No provision has been made in respect of the following demands raised by the authorities since the Company has reasons to believe that it would get relief at the appellate stage as the said demands are excessive and erroneous.
[D] Pending Proceedings
The Companyâs pending litigation comprise of claims against the Company by the parties and proceedings pending with Revenue authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial results.
4. The Company has availed credit facilities (both fund based and non-fund based) from a bank is secured by hypothecation of stocks (raw materials and finished goods) and book debts of the company and further secured by mortgage by way of deposit of title deeds of land and buildings situated at Plant at Ranipet. However, no amount is outstanding (fund based) as on 31st March, 2018.
5. Employee benefits
[A] Defined contribution plans:
The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plans for qualifying employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions payable by the Company are at rates specified in the rules of the schemes.
[B] Defined benefit plan:
Gratuity is payable to all the members at the rate of 15 days salary for each completed year of service.
6. Sensitivity analysis
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate and expected salary increase. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.
These plans typically expose the Company to actuarial risks such as : investment risk , interest risk , longevity risk and salary risk.
Investment risk:
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create plan deficit.
Interest risk:
A decrease in the bond interest rate will increase the plan liability; however, this will be partially off set by an increase in the plan assets.
Longevity risk:
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the planâs liability.
Salary risk:
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the planâs liability.
The company offsets tax assets and liabilities if and only if it has a legally enforceable right to offset current tax assets and current tax liabilities and deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.
7. Transition to Ind AS:
These are the Companyâs first financial statements prepared in accordance with Ind AS. The Company has adopted the Indian Accounting Standards (Ind AS) and adoption was carried out in accordance with Ind AS 101 First Time Adoption of Indian Accounting Standards. The transition was carried out from Generally Accepted Accounting Principles in India (Indian GAAP) as prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, which was the âPrevious GAAPâ.
The significant accounting policies set out in Note 1 to 3 have been applied in preparing the financial statements for the year ended 31 March 2018 including the comparative information for the year ended 31 March 2017 and the opening Ind AS balance sheet on the date of transition i.e. 1 April, 2016.
In preparing its Ind AS balance sheet as at 1 April 2016 and in presenting the comparative information for the year ended 31 March 2017, the Company has adjusted amounts previously reported in the financial statements prepared in accordance with previous GAAP. This note explains the principal adjustments made by the Company in restating its financial statements prepared in accordance with previous GAAP, and how the transition from previous GAAP to Ind AS has affected the Companyâs financial position, financial performance and cash flows.
Exemptions availed on first time adoption of Ind-AS 101
Ind-AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has accordingly applied the following exemptions
A. Ind-AS Optional Exemptions
1 Deemed Cost - Property, Plant and Equipment and Intangibles Assets :
As permitted by Ind AS 101, The Company elected 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 decommissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets. Accordingly the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.
2 Government Grants
The Company has elected to apply the requirements of Ind AS 20 retrospectively to Government Grants existing at the date to Ind AS.
3 Designation of previously recognised financial instruments
As permitted by Ind AS 101, The Company has opted to avail this exemption to designate certain equity investments (other than equity investments in subsidiaries, associates and joint arrangements) as at fair value through other comprehensive income (FVOCI) based on facts and circumstances at the date of transition to Ind AS (rather than at initial recognition). Other equity investments are classified at fair value through profit or loss (FVTPL).
Mandatory Exceptions
4 Estimates
An entityâs 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.
As per Ind AS 101, where application of Ind AS requires an entity to make certain estimates that were not required under previous GAAP, those estimates should be made to reflect conditions that existed at the date of transition (for preparing opening Ind AS balance sheet) or at the end of the comparative period (for presenting comparative information as per Ind AS).
The Companyâs estimates under Ind AS are consistent with the above requirement. Key estimates considered in preparation of the consolidated financial statements that were not required under the previous GAAP are listed below:
(i) Investment in equity instruments carried at fair value through other comprehensive income (FVOCI); and
(ii) Impairment of financial assets based on expected credit loss model.
5 Derecognition of financial assets and financial liabilities
Ind AS 101 requires 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 in Ind AS 109 retrospectively from a date of the entityâs choosing, 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 use the exemption for de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.
6 Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortised cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable. Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of financial assets accounted at amortised cost has been done retrospectively except where the same is impracticable.
7 Impairment of Financial Assets
Ind AS 101 requires an entity to apply the Ind AS requirements retrospectively if it is practicable without undue cost and effort to determine the credit risk that debt financial instruments where initially recognised. The company has measured impairment losses on financial assets as on the date of transition i.e. 1st April, 2016 in view of cost and effort.
B. Transition to Ind AS - Reconciliations
The following reconciliations provide a quantification of the effect of significant differences arising from the transition from previous GAAP to Ind AS as required under Ind AS 101:
(i) Reconciliation of Balance sheet as at 1st April, 2016 (Transition Date);
(ii) Reconciliation of Balance sheet as at 31st March, 2017;
(iii) Reconciliation of Total Comprehensive Income for the year ended 31st March, 2017;
(iv) Reconciliation of Equity as at 1st April, 2016 and as at 31st March, 2017;
(v) Adjustments to Statement of Cash Flows.
The presentation requirements under Previous GAAP differs from Ind AS, and hence, Previous GAAP information has been re-grouped for ease of reconciliation with Ind AS. The re-grouped Previous GAAP information is derived from the Financial Statements of the Company prepared in accordance with Previous GAAP.
(iv) Adjustments to Statement of Cash Flows.
On account of transition to Ind AS , there is no material adjustment to the statement of Cash flows as on 31st March, 2017.
Notes to reconciliations:-
A Fair valuation of investments in Mutual funds
Under previous GAAP, non current investments were carried at cost less other - than - temporary diminution in value, determined separately for each individual investment and current investments were measured at lower of cost or fair value. Under Ind AS, these financial assets have been classified as FVTPL on the date of transition. The fair value changes are recognised in profit or loss. On transitioning to Ind AS, these financial assets have been measured at their fair value which is higher than cost as per previous GAAP, resulting in following changes:
B Fair value of investments in Equity Shares
Under Indian GAAP, the company accounted for long term investments in Thirumalai Chemicals Limited at cost less any other - than - temporary diminution in the value of investments. Under Ind AS, the company has designated these investments at fair value through other comprehensive income. Ind AS requires measurement of these investments at fair value. On the date of transition, the difference between the cost of the investments and the fair value is recognised under equity in a separate reserve i.e. Equity Instruments through Other Comprehensive Income reserve
C Derivative Contracts
Under previous GAAP, in respect of derivative contracts such as forward exchange contracts, premium/discount arising at the inception of the forward exchange contract to hedge foreign currency risks, were amortised as expense or income over the life of the contract. Exchange differences on such forward exchange contracts were recognised in the Statement of Profit and Loss. Under Ind AS, all derivative contracts are measured at fair value through profit and loss. The changes can be shown as follows:
D Capital Grant
Under the previous GAAP, Capital grant related to Property, plant and equipments were presented as a reduction from cost of respective Capital assets. As per Ind AS, the same is presented as âDeferred Incomeâ under the head liability. The deferred grant revenue is released to the Statement of Profit and Loss over the expected useful life of the underlying asset. This has resulted in an increase in profit net of depreciation for the year ended 31st March 2017 by Rs.0.12 Lakhs and recognition of deferred income of Rs. 2.45 Lakhs
E Excise Duty
Under the previous GAAP, revenue from sale of goods was presented net of the excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. Recovered Excise duty has been presented in the Statement of Profit and Loss as an expense. This has resulted in an increase in the revenue from operations and expenses for the year ended 31 March 2017 by Rs. 2,372.27 Lakhs. The total comprehensive income for the year remains unchanged.
F Remeasurement of defined benefit liabilities
Under previous GAAP, actuarial gains and losses were recognised in profit or loss. Under Ind AS, the actuarial gains and losses form part of remeasurement of the net defined benefit liability/asset which is recognised in other comprehensive income. Consequently, the tax effect of the same has also been recognised in other comprehensive income under Ind AS instead of profit or loss.
G Trade Receivables
Under previous GAAP, the Company had recognised provision on trade receivables based on the expectation of the Company. Under Ind AS the Company provides loss allowance on receivables based on the Expected Credit Loss (ECL) model which is measured following the âsimplified approachâ at an amount equal to the lifetime ECL at each reporting date.
H Current tax effect
Under previous GAAP, the Company has recognised the provision for gratuity and leave encashment and the same has been adjusted in deferred tax. Under Ind AS , the same has been adjusted in current tax I 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. Under Ind AS, accounting of deferred tax is done 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.
J Other Comprehensive Income
Under previous GAAP, there was no concept of other comprehensive income. Under Ind AS specified items of income, expense, gains or losses are required to be presented in other comprehensive income.
8 Financial instruments
A Valuation:
All financial instruments are initially recognised and subsequently re-measured at fair value as described below:
i) The fair value of investment in quoted Equity shares is measured at quoted price or NAV
ii) The fair value of Forward Foreign Exchange contracts is determined using forward exchange rates at the balance sheet date.
iii) All foreign currency denominated assets and liabilities are translated using exchange rate at reporting date.
iv) The fair value of the remaining financial instruments is determined using discounted cash flow analysis.
(a) These investments in equity instruments are not for trading. Instead, they are held for medium or long term strategic purpose. Upon the application of Ind AS 109, the Company has chosen to designate these investments in equity instruments as at FVTOCI as the Directors believe that this provides a more meaningful presentation for medium or long term strategic investments, than reflecting changes in fair value immediately in profit or loss.
(b) These investment in equity are not significant in value and hence additional disclosures are not presented.
Fair value of financial assets and financial liabilities that are not measured at fair value (but fair value disclosure are required)
Notes to financial statements for the year ended 31st March, 2018
The financial instruments are categorised into two levels based on the inputs used to arrive at fair value measurements as described below:
i) Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.
ii) Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the-counter derivatives) is determined using the valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2
iii) Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
The Companyâs policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period.
9.1 Financial risk management
The Group has exposure to the following risks arising from financial instruments:
- credit risk
- liquidity risk
- market risk
- interest rate risk
Risk management framework
The Company has a risk management policy which covers risks associated with the financial assets and liabilities. The risk management policy is approved by the Board of Directors. The focus of the risk management committee is to assess the unpredictability of the financial environment and to mitigate potential adverse effects on the financial performance of the company.
A Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers, loans and investment in debt securities. The Company establishes an allowance for doubtful trade receivables and impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments.
The maximum exposure to credit risk in case of all the financial instruments covered below is restricted to their respective carrying amount.
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer and including the default risk of the industry, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.
The Company measures the expected credit loss of trade receivables based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends.
Loans
In the case of loans to employees, the same is managed by establishing limits. (Which in turn based on the employees salaries and number of years of service put in by the concern employee)
Investment in debt securities
The Company makes Investments in Deposits or Commercial papers or similar instruments in Companies having AA, AA or higher ratings from Credit rating agencies. The Company also makes investments in Debt Mutual funds.
The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors or specific country risks.
Other than trade and other receivables, the Company has no other financial assets that are past due but not impaired
Cash and cash equivalents
The Company held cash and cash equivalents of Rs. 1429.29 as at 31st March, 2018 (31st March, 2017: Rs. 664.17, 1st April, 2016 : Rs. 822.60). The cash and cash equivalents are held with banks.
Derivatives
The derivative contracts are entered into with scheduled banks and financial institutions which have good credit ratings.
B Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the Companyâs short-term, medium-term and long-term funding and liquidity management requirements. The Company manages liquidity risk by monitoring forecast and actual cash flows, maintaining adequate reserves and by matching the maturity profiles of financial assets and liabilities.
The tables below provide details regarding the contractual maturities of significant financial liabilities as at:
C Market risk
Market risk is the risk that the fair value or future cash flows of the financial instrument will fluctuate because of changes in market prices. Such changes in values of financial instruments may result from changes in foreign currency exchange rates, credit, liquidity and other market changes. The Companyâs exposure to market risk is primarily on account of foreign currency exchange rate risk.
(a) Foreign Currency Exchange Rate Risk
The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed utilising forward foreign exchange contracts.
Foreign currency sensitivity analysis
The Company is mainly exposed to the currency : USD and GBP.
The following table details the Companyâs sensitivity to a 5% increase and decrease in the Rupee against the relevant foreign currencies. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% charge in foreign currency rate. A positive number below indicates an increase in the profit or equity where the Rupee strengthens 5% against the relevant currency. For a 5% weakening of the Rupee against the relevant currency, there would be a comparable impact on the profit or equity, and the balances below would be negative.
Forward foreign exchange contracts
The Company has entered into Forward Exchange Contracts, being derivative instruments for hedge purposes and not intended for trading or speculation purposes, to establish the amount of currency in Indian Rupees required or available at the settlement date of certain receivables.
D Interest Rate Risk
Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates, in cases where the borrowings are measured at fair value through profit or loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates.
The Companyâs investments are primarily in fixed rate interest bearing investments. Hence , the Company is not significantly exposed to interest rate risk. The Company makes Investments in Deposits or Commercial papers or similar instruments in Companies having AA, AA or higher ratings from Credit rating agencies. The Company also makes investments in Debt Mutual funds.
10 Leases Operating lease
i) The company has taken certain premises for office use and godown under cancellable / non cancellable lease agreements. Some of these agreements have a price escalation clause. The lease rentals for the same are charged to Statement of Profit or Loss .
11 Earnings per share (EPS)
Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year.
12 CSR Expenditure
a) Gross amount required to be spent by the Company during the year - Rs. 76.29 Lakhs (31st March, 2017: Rs. 58.99 Lakhs)
b) Amount spent during the year: Rs. 90.21 Lakhs (31st March, 2017: Rs. 67.00 Lakhs) out of which Rs. 70 Lakhs contributed to Thirumalai Charity Trust registered u/s 35AC/80G of Income Tax Act, 1961, engaged in rural healthcare, women empowerment, disability, de-addiction and village development, surrounding the manufacturing location of the Company.
13 Disclosures required as per Micro, small and medium enterprises development act, 2006 .
The disclosure regarding Micro and Small Enterprises has been made to the extent such parties have been identified
14 The comparative financial information of the Company for the year ended 31st March, 2017 and the transition date opening balance sheet as at 1stApril, 2016 included in these Ind AS financial statements are derived from the audited financial statements for the year ended 31st March, 2017 prepared in accordance with the Companies ( Accounting Standards) Rules, 2014, which are adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS.
Mar 31, 2016
Note 1. Other Notes:
The Company''s pending litigations comprise of claims against the Company by the parties and proceedings pending with Revenue authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial results. Refer Note 4.1 for details on contingent liabilities.
Note 2. Disclosures in accordance with Accounting Standards (AS) Note 6.1 (AS)-15 Employee benefits Defined contribution plans
The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions payable by the Company are at rates specified in the rules of the schemes.
Other Long Term benefits
The Company''s Long Term benefit includes Leave encashment payable at the time of retirement in full, or encashable during the year in which services are rendered subject to limit of 180 days. Present value of obligation as at the beginning of the year is Rs.19,105,845 (Prev. Year Rs. 16,596,079) and the actuarial gains and losses recognized in full in the Statement of Profit and Loss is Rs.4,516,655 (Prev. Year Rs.4,106,839 ). The present value of obligation as at March 31,2016 is Rs.22,011,958 (Prev. Year Rs. 19,105,845). The estimates of future salary increases considered in actuarial valuation take account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.
Note 3. Disclosure requirement of Accounting Standard 17 "Segment Reporting".
a. Primary Segments
The Company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of the products, the differing risks and returns, the organization structure and internal reporting system. The Company''s operations predominantly relate to manufacture of Laundry and Allied products and its intermediaries and providing IT Enabled Services & BPO actives and generation of power from wind turbine.
b. Secondary Segments
The Company caters mainly to the needs of the domestic market. The export turnover is not significant (except IT Enabled Services Division) in the context of total turnover. As such there are no reportable geographical segments. The income from IT Enabled Services is predominantly from exports. .
c. Segment Revenue, Segment Results, Segment Assets and Segment Liabilities include the respective amounts identifiable to each of the segments as also amounts allocated on a reasonable basis. The expenses, which are not directly attributable to the business segment, are shown as unallocated / corporate cost.
d. Assets and Liabilities that cannot be allocated between the segments are shown as a part of unallocated / corporate assets and liabilities respectively.
4. Expenditure towards Corporate Social Responsibility activities:
a) Gross amount required to be spent by the Company during the year: Rs. 44,31,000/-
b) Amount spent during the year: Rs. 65,00,000/- contributed to Thirumalai Charity Trust registered u/s 35AC of Income Tax Act 1961, engaged in rural healthcare, women empowerment, disability, de-addiction and village development, surrounding the manufacturing location of the company.
5. Due to closure of its operations by Lapiz Inc, USA, an associate of the company, the company received its share of distributable surplus and repatriated during the year and the resultant surplus arising out of it of Rs.15,56,224/- recognized in the Profit and loss account. As there is no investments in the associate at the end of the financial year, no consolidated financial statements required to be presented for the current financial year.
6. Previous yearâs figures have been regrouped / reclassified wherever necessary to correspond with the current years classification / disclosure.
Mar 31, 2015
1. CORPORATE INFORMATION
Ultramarine & Pigments Limited ("the Company") is a public limited
company domiciled in India incorporated under the provisions of the
Companies Act, 1956. Its shares are listed on Bombay Stock Exchange in
India. The Company is engaged in manufacturing and selling of pigments,
surfactants, IT enabled services and Business Process Outsourcing (BPO)
activities. The Company caters to both domestic and international
markets.
2. Terms/rights attached to equity shares
(a) The Company has only one class of share referred to as equity
shares having a par value of Rs.2/-. Each holder of equity shares is
enttiled to one vote per share.
(b) 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.
(c) In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive any of the remaining assets of the
Company, after distribution of all preferential amount. The
distribution will be proportionate to the number of equity shares held
by the share holders.
(d) There is no change in issued and paid up share capital during the
year
(Amount in rupees)
Year ended Year ended
31.03.2015 31.03.2014
3. Other disclosures as per
revised schedule VI
3.1. Contingent liabilities and
commitments (to the extent not provided for)
(a) Contingent liabilities
(i) Claims against the Company/disputed
liabilities not acknowledged
as debts in respect of labour disputes 480,000 480,000
(ii) Bank Guarantees issued and outstanding 904,007 478,381
(iii) Letter of Credit issued and outstanding - -
(b) Commitments
(i) Estimated amount of contracts remaining
to be executed on capital
account and not provided for 5,911,115 -
Against which advance paid 2,425,000 -
The Company had entered into an agreement on 28th April, 2011 with
Gujarat Industrial Development Corporation (GIDC) for allotment of land
at Dahej. The Company has acquired the land at Dahej-Petroleum,
Chemicals and Petro Chemicals Investment Region (PCIR) in Gujarat with
the intention of expanding its surfactant chemicals manufacturing and
processing operations. As per the said agreement, the Company within a
period of two years from the agreement date is required to build
factory. However, due to delay in the availability of adequate
infrastructure (including water supply), the proposed expansion is
likely to be delayed. As per the agreement with the GIDC the Company
is liable to pay penalty for delay in implementation of the project. As
on 31st March 2015, Rs.13,29,770/- (P.Y. Rs.13,29,770/-) has been
outstanding in the books of account towards the same.
However, due to Government land passing through the said plot,
corrigendum order for the same was issued on 28/01/2014 and physical
possession of the plot was received only on 02/05/2014. Since the
Company has two years time period from the date of revised agreement to
build factory, provision for penalty for delay in implementation of the
project is not required for the year 2014-15.
(c) No provision has been made in respect of the following demands
raised by the authorities since the Company has reasons to believe that
it would get relief at the appellate stage as the said demands are
excessive and erroneous
(i) By the Income tax authorities
[Rs. 5,64,64,894/-
(PY Rs. 5,70,61,890/-) deposited
with tax authorities] 69,286,277 57,061,890
(ii) Interest and penalty on account
of the alleged delay in
payment of dues under the ESI Act. 108,119 108,119
(iii) Sales Tax Authorities 1,121,128 1,015,810
4. Other Notes:
4.1 Changes in accounting estimates
Effective April 1, 2014, the Company has revised the estimated useful
life of certain items of fixed assets in accordance with the useful
life specified in Part C of Schedule II to the Companies Act, 2013 or
as re-assessed by the Company. As per the said Schedule, where the
fixed asset have completed their useful lives, the carrying value(net
of residual value) as at April 1, 2014 of Rs. 88,69,898 (net of
deferred tax) has been recognized/ adjusted in the opening surplus and
in case of other fixed assets the carrying value( net of residual
value) as at April 1, 2014 is being depreciated/amortized over the
remaining useful life. The depreciation/amortization expense over the
year ended march 31st 2015, would have been higher by Rs. 2,58,94,433/-
had the Company continued with the previously assessed useful lives of
such assets.
4.2
The Company's pending litigations comprise of claims against the
Company by the parties and proceedings pending with Revenue
authorities. The Company has reviewed all its pending litigations and
proceedings and has adequately provided for where provisions are
required and disclosed the contingent liabilities where applicable, in
its financial statements. The Company does not expect the outcome of
these proceedings to have a materially adverse effect on its financial
results. Refer Note 4.1 for details on contingent liabilities.
5. Disclosures in accordance with Accounting Standards (AS)
5.1 (AS)-15 Employee benefits Defined contribution plans
The Company makes Provident Fund and Superannuation Fund conributions
to defined contribution plans for qualifying employees. Under the
Schemes, the Company is required to contribute a specified percentage
of the payroll costs to fund the benefits. The contributions payable by
the Company are at rates specified in the rules of the schemes.
Other Long Term benefits
The Company's Long Term benefit includes Leave encashment payable at
the time of retirement in full, or encashable during the year in which
services are rendered subject to limit of 180 days. Present value of
obligation as at the beginning of the year is Rs.16,596,079 ( Prev.
Year Rs. 15,660,667 ) and the actuarial gains and losses recognised in
full in the Statement of Profit and Loss is Rs.4,106,839 ( Prev. Year
Rs.935,452 ). The present value of obligation as at March 31,2015 is
Rs.19,105,845 ( Prev. Year Rs. 16,596,079 )
The estimates of future salary increases considered in actuarial
valuation take account of inflation, seniority, promotion and other
relevant factors such as supply and demand in the employment market.
5.2 Disclosure requirement of Accounting Standard 17 "Segment
Reporting".
a. Primary Segments
The Company has disclosed Business Segment as the primary segment.
Segments have been identified taking into account the nature of the
products, the differing risks and returns, the organisation structure
and internal reporting system. The Company's operations predominantly
relate to manufacture of Laundry and Allied products and its
intermediaries and providing IT Enabled Services & BPO activities and
generation of power from wind turbine.
b. Secondary Segments
The Company caters mainly to the needs of the domestic market. The
export turnover is not significant (except IT Enabled Services
Division) in the context of total turnover. As such there are no
reportable geographical segments. The income from IT Enabled Services
is pre-dominantly from exports.
c. Segment Revenue, Segment Results, Segment Assets and Segment
Liabilities include the respective amounts identifiable to each of the
segments as also amounts allocated on a reasonable basis. The expenses,
which are not directly attributable to the business segment, are shown
as unallocated / corporate cost.
d. Assets and Liabilities that cannot be allocated between the
segments are shown as a part of unallocated / corporate assets and
liabilities respectively.
5.3 Related Party Disclosures as required by AS 18 of Companies
(Accounting Standards) Rules 2006 is as follows:
(A) Related Parties and Relationship
(a) Companies in which the company has substantial interest (i.e more
than 20% in voting power directly or indirectly)
Thirumalai Chemicals Limited.
Lapiz Inc, U.S.A.
(b) Other related parties
Thirumalai Charity Trust
Chempak Industries
Hamsa Investments Associates Pvt. Ltd.
Varadaraja Credits & Investments Pvt. Ltd.
Meera Parthasarathy
S. Srinath
(c) Key Management Personnel:
Mr. R.Sampath, Chairman & Managing Director
Mrs. Indira Sundararajan, Vice Chairman & Managing Director
Mr. S. Sridhar, Joint Managing Director
Ms. Tara Parthasarathy, Joint Managing Director
Mr. V. Bharathram, President(Operations), IT-Enabled Services and BPO
activities Division.
Mr.B.Sreenivasacharyulu - Vice President - Operation & New Business
5.4 Disclosures as required by AS 27 financial reporting of interest in
joint ventures.
The Company has investments in a jointly controlled entity as per the
following details: Name and Country of Incorporation : LAPIZ INC, USA.
Proportion of ownership interest : 35.00%
Proportionate share for the year ended 31st March 2015 in respect of
i. Assets Rs. 6,956,419 (Prev. Year Rs. 15,683,453)
ii. Liabilities Rs. 5,327,672 (Prev. Year Rs. 14,282,171)
iii. Income Rs. 49,274,857 (Prev. Year Rs. 72,981,330)
iv. Expenses Rs. 49,102,551 (Prev. Year Rs. 72,188,515)
3. Expenditure towards Corporate Social Responsibility activities:
a) Gross amount required to be spent by the Company during the year:
Rs. 38,14,355/-
b) Amount spent during the year: Rs. 57,50,000/- contributed to
Thirumalai Charity Trust registered u/s 35AC of Income Tax Act 1961,
engaged in rural healthcare, women empowerment, disability,
de-addiction and village development,surrounding the manufacturing
location of the company.
4. The Company has an associate company viz., Lapiz Inc.. As per the
Notification number GSR-E 723 dated 14th October, 2014 issued by the
Ministry of Company Affairs, a company which does not have a subsidiary
but has one or more associate companies is not required to prepare
consolidated financial statements for the financial year 2014-15.
Accordingly, the Company has not prepared consolidated financial
statements in the current financial year.
5. Director's remuneration includes the sum of Rs. 1.33 lacs paid to
Ms. Tara Parthasarthy, joint managing director, whose appointment is
subject to approval by the shareholders in the ensuing annual general
meeting.
6. Previous years figures have been regrouped / reclassified wherever
necessary to correspond with the current years classification /
disclosure.
Mar 31, 2014
A. CORPORATE INFORMATION
Ultramarine & Pigments Limited(''''UPL" or "the Company") is a public
limited company domiciled in India incorporated under the provisions of
the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange
in India. The Company is engaged in manufacturing and selling of
pigments, surfactants, IT enabled services and Business Process
Outsourcing (BPO) activities. The Company caters to both domestic and
international markets.
Note 1 : Other disclosures as per revised schedule VI
Note 1.1 : Contingent liabilities and commitments (to the extent not
provided for)
(a) Contingent liabilities
(i) Claims against the Company/disputed
liabilities no acknowledged as debts
in respect of labour disputes 480,000 480,000
(ii) Bank Guarantees issued and outstanding 478,381 380,000
(b) Commitments
(i) Estimated amount of contracts remaining to
be executed on capital account and not
provided for - 2,015,177
Against which advance paid - 441,700
(ii) Import duty on Goods imported under
advance licence pending fulfillment of
export obligation - 5,683,937
(iii) The Company had entered into an agreement on 28th April, 2011
with Gujarat Industrial Development Corporate on (GIDC) for allotment
of land at Dahej. The Company has acquired the land at Dahej-Petroleum,
Chemicals and Petro Chemicals Investment Region (PCIR) in Gujarat with
the intent on of expanding its surfactant chemicals manufacturing and
processing operations. As per the said agreement, the Company within a
period of two years from the agreement date is required to build
factory. However, due to delay in the availability of adequate
infrastructure (including water supply), the proposed expansion is
likely to be delayed. As per the agreement with the GIDC the Company is
liable to pay penalty for delay in implementation of the project. As on
31st March 2014, Rs. 13,29,770 has been provided for in the books of
account towards the same.
Note 2 : Disclosures in accordance with Accounting Standards (AS)
Note 2.1 : (AS)-15 Employee benefits
Defined contribution plans
The Company makes Provident Fund and Superannuation Fund contributions
to defined contribution plans for qualifying employees. Under the
Schemes, the Company is required to contribute a specified percentage
of the payroll costs to fund the benefits. The contributions payable
by the Company are at rates specified in the rules of the schemes.
Other Long Term benefits
The Company''s Long Term benefit includes Leave encashment payable at
the t me of ret rement in full, or encashable during the year in which
services are rendered subject to limit of 90 days. Present value of
obligation as at the beginning of the year is Rs.15,660,667 (Prev. Year
Rs. 13,960,343) and the actuarial gains and losses recognised in full
in the Statement of Profit and Loss is Rs. 935,452 (Prev. Year
Rs.1,700,284). The present value of obligation as at March 31,2014 is
Rs. 16,596,079 (Prev. Year Rs. 15,660,627).
The estimates of future salary increases considered in actuarial
valuation take account of inflation, seniority, promotion and other
relevant factors such as supply and demand in the employment market.
Note 2.2 : Disclosure requirement of account ng Standard 17 "Segment
Reporting" issued under Companies (Account ng Standards) Rules 2006.
a. Primary Segments
The Company has disclosed Business Segment as the primary segment.
Segments have been identified taking into account the nature of the
products, the differing risks and returns, the organisation structure
and internal reporting system. The Company''s operations predominantly
relate to manufacture of Laundry and Allied products and its
intermediaries and providing IT Enabled Services & BPO activities and
generation of power from wind turbine.
b. Secondary Segments
The Company caters mainly to the needs of the domestic market. The
export turnover is not significant (except IT Enabled Services
Division) in the context of total turnover. As such there are no
reportable geographical segments. The income from IT Enabled Services
is pre-dominantly from exports.
c. Segment Revenue, Segment Results, Segment Assets and Segment
Liabilities include the respective amounts identifiable to each of the
segments as also amounts allocated on a reasonable basis. The expenses,
which are not directly attributable to the business segment, are shown
as unallocated corporate cost.
d. Assets and Liabilities that cannot be allocated between the
segments are shown as a part of unallocated corporate assets and
liabilities respectively.
e. Inter Segment transfers are made on cost plus basis.
Note 2.3 : Related Party Disclosures as required by AS 18 of Companies
(Accounting Standards) Rules 2006 is as follows:
(A) Related Parties and Relationship
(a) Companies in which the company has substantial interest (i.e more
than 20% in voting power directly or indirectly)
Thirumalai Chemicals Limited
Lapiz Inc, U.S.A.
(b) Other related part es Thirumalai Charity Trust Chempak Industries
Hamsa Investments Associates Pvt. Ltd. Varadaraja Credits &
Investments Pvt. Ltd. Meera Parthasarathy S. Srinath
(c) Key Management Personnel:
Mr. R. Sampath, Chairman & Managing Director
Mr. S. Sridhar, Joint Managing Director
Mrs. Indira Sundararajan, Whole time Director
Mr. V. Bharatram, President(Operations), IT-Enabled Services and BPO
act vit es Division.
Mr. B. Sreenivasacharyulu - Senior General Manager
Note 3.1 : Previous years figures have been regrouped / reclassified
wherever necessary to correspond with the current year`s
classification / disclosure.
Mar 31, 2013
1 CORPORATE INFORMATION:
ULtramarine & Pigments Limited (''''UPL" or "the Company") is a
pubLic Limited company domiciLed in India incorporated under the
provisions of the Companies Act, 1956. Its shares are Listed on Bombay
Stock Exchange in India. The Company is engaged in manufacturing and
seLLing of pigments, surfactants, and aLso engaged in IT enabLed
services. The Company caters to both domestic and internationaL
markets.
Terms/rights attached to Equity Shares
(a) The Company has only one cLass of share referred to as equity
shares having a par vaLue of Rs. 2/-. Each hoLder of equity shares is
enttiLed to one vote per share.
(b) 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
year ended 31st March, 2013 the amount per share dividend recognised as
distribution to equity sharehoLders was Rs. 2.25 (Previous year Rs.
3/-)
(c) In the event of Liquidation of the Company, the hoLders of equity
shares wiLL be entitLed to receive any of the remaining assets of the
Company, after distribution of aLL preferentiaL amount. The
distribution wiLL be proportionate to the number of equity shares heLd
by the share hoLders.
(d) There is no change in issued and paid up share capitaL during the
year
Notes:
(a) An exclusive charge by way of hypothecation over Wind Turbine
Generators, acquired / to be acquired by the company and second pari
passu charge by way of hypothecation of the Company''s other movable
fixed assets and books debts.
(b) Repayable in twelve quarterly equal instalments starting from 20th
Mar 2012 of Rs. 66,66,667/- with interest @ 11.50% .
(c) Repayable to Gujarat Industrial Development Corporation in twelve
quarterly equal instalments starting from 30th June 2011 of Rs.
27,75,645/- with interest @ 13.50% .
(iii) The company had entered into an agreement on 28th April, 2011
with Gujarat Industrial Development Corportation for allotment of land
at Dahej. The company has acquired the land at Dahej-Petroleum,
chemicals and petro chemicals investment region (PCPIR) in Gujarat with
the intention of expanding its surfactant chemicals manufacturing and
processing operations. As per the said agreement, the company within a
period of two years from the agreement date build and completely finish
it for occupation of building to be used as industrial factory.
However, due to delay in the availability of adequate infrastructure
(including water supply), it was decided to defer the proposed
expansion for some time. As per the agreement with the GIDC the company
has to pay penalty for delay in implementation of the project. As on
31st March 2013, Rs. 13,29,770 has been provided for in the books of
account towards this.
Note 2.1 : (AS)-15 Employee benefits
Defined contribution pLans
The Company makes Provident Fund and Superannuation Fund contributions
to defined contribution pLans for quaLifying empLoyees. Under the
Schemes, the Company is required to contribute a specified percentage
of the payroLL costs to fund the benefits. The Company recognised Rs.
12,170,492 (Year ended 31 March, 2012 Rs. 10,959,457) for Provident
Fund contributions and Rs. 3,427,114 (Year ended 31 March, 2012 Rs.
3,239,355) for Superannuation Fund contributios in the Statement of
Profit and Loss. The contributions payabLe by the Company are at rates
specified in the ruLes of the schemes.
Other Long Term benefits
The Company''s Long Term benefit includes Leave encashment payable at
the time of retirement in full, otherwise it is encashable during the
year in which services are rendered subject to in excesss of 90 days.
Present value of obligation as at the beginning of the year is Rs.
13,960,343 (Prev. Year Rs. 8,757,114) and the actuarial gains and
losses are recognised in full in the Profit and Loss account for Rs.
1,700,284 (Prev. Year Rs. 5,203,229). The present value of obligation
as at March 31, 2013 is Rs. 15,660,627 (Prev. Year Rs. 13,960,343)
The estimates of future salary increases considered in actuarial
valuation take account of inflation, seniority, promotion and other
relevant factors such as supply and demand in the employment market.
Note 2.2 : Disclosure requirement of accounting Standard 17 "Segment
Reporting" issued under Companies (Accounting Standards) Rules 2006.
a. Primary Segments
The Company has disclosed Business Segment as the primary segment.
Segments have been identified taking into account the nature of the
products, the differing risks and returns, the organisation structure
and internal reporting system. The Company''s operations predominantly
relate to manufacture of Laundry and Allied products and its
intermediaries and providing IT Enabled Services.
b. Secondary Segments
The Company caters mainly to the needs of the domestic market. The
export turnover is not significant (except IT Enabled Services
Division) in the context of total turnover. As such there are no
reportable geographical segments. The income from IT Enabled Services
is pre-dominntly from exports.
c. Segment Revenue, Segment Results, Segment Assets and Segment
Liabilities include the respective amounts identifiable to each of the
segments as also amounts allocated on a reasonable basis. The expenses,
which are not directly attributable to the business segment, are shown
as unallocated corporate cost.
d. Assets and Liabilities that cannot be allocated between the
segments are shown as a part of unallocated corporate assets and
liabilities respectively.
e. Inter Segment transfers are made on cost plus basis.
2.3 : AS 19 Details of Leasing arrangements
The Company has taken premises for office use and godown under
cancellable lease agreements. The total lease rentals recognised as
expense during the year Rs. 28,215,040 (Prev. Year Rs. 24,643,185).
As per the above lease agreements the rent and car parking charges will
be enhanced by 15% over the last paid rent at the end of thrity six
months from the date of commencement of the lease agreement. The option
to renew the lease deed for a further period shall be at the sole
option of the lessee to be excercised by giving six months prior notice
in writing before the end of lease term of sixty months from the date
of commencement of lease.
Mar 31, 2012
1 CORPORATE INFORMATION:
Ultramarine and Pigments Limited is a public limited company domiciled
in India, incorporated under the provisions of the Companies Act, 1956.
Its shares are listed in Bombay Stock Exchange Ltd, India. The company
is engaged in manufacturing and selling of pigments, surfactants, and
also engaged in IT enabled services. The company caters to both
domestic and international markets.
(a) Terms/rights attached to Equity Shares
The Company has only one class of share referred to as equity shares
having a par value of Rs 2/-. Each holder of equity shares is enttiled
to one vote. per share In the event of liquidation of the Company, the
holders of equity shares will be entitled to receive any of the
remaining assets of the Company, after distribution of all preferential
amount. The distribution will be proportionate to the number of equity
shares held by the share holders.
(b) There is no change in issued and paid up share capital during the
year.
(c) Bonus shares
34,50,000 Equity shares of Rs 10/- each (later divided into 1,72,50,000
equity shares of Rs 2/- each) allotted as fully paid bonus shares by
capitalisation of General Reserve in the year 2005-06.
Notes:
(a) An exclusive charge by way of hypothecation over windturbine
generators, acquired / to be acquired by the company and second pari
passu charge by way of hypothecation of the Company other movable fixed
assets including books debts.
(b) Repayable in twelve quarterly equal instalments starting from 20th
Mar 2012 of Rs 66,66,667/- with interest @ 11.50%.
(c) Repayable to Gujarat Industrial Development Corporation in twelve
quarterly equal instalments starting from 30th June 2011 of Rs
27,75,645/- with interest @ 13.50%.
Notes:
(a) Cash credit / Export credit facilities is secured by hypothecation
of stock of raw materials, work in progress, finished goods, packing
materials, stores and spares and book debts of the company and secured
by a second charge on the immovable properties.
Note
Amount due is fully secured by equity instruments having market value
of Rs 7,06,837/- (previous year Rs 9,34,288/-), including those shares
the market value of which Rs 6,58,350/- (previous year Rs 8,75,490/-)
which are transferred in the name of the company.
As at As at
31.03.2012 31.03.2011
Note 4 : Other disclosures
as per revised Schedule VI
Note 4.1 :Contingent
liabilities and commitments
(to the extent not provided for)
(a) Contingent liabilities
(i) Claims against the Company/
disputed liabilities not
acknowledged as debts in respect 1,680,000 1,680,000
of labour disputes
(ii) Bank Guarantee issued
and outstanding 624,005 350,000
(iii)Letter of Credit issued
and outstanding 584,820 Nil
(b) Commitments
(i) Estimated amount of contracts
remaining to be executed on
capital account and not 3,103,187 9,846,863
provided for
Against which advance paid 660,406 2,864,150
(ii) Import duty on Goods
imported under advance licence
pending fulfilment of export 5,683,937 5,683,937
obligation
(c) No provision has been made in respect of the following demands
raised by the authorities since the company has reasons to believe that
it would get relief at the appellate stage as the said demands are
excessive and erroneous
(i) By the Income tax authorities 42,443,045 42,443,045
Against which amount already paid. 28,627,516 12,627,516
(ii) Central Excise duty and penalty. 5,556,114 5,556,114
(iii) Interest and penalty on
account of the alleged delay
in payment
of dues under the ESI Act. 108,119 108,119
Note 5.1 : (AS)-15 Employee benefits
Defined contribution plans
The Company makes Provident Fund and Superannuation Fund contribution
to defined contribution plans for qualifying employees. Under the
Schemes, the Company is required to contribute a specified percentage
of the payroll costs to fund the benefits. The Company recognised Rs
10,267,993 (Year ended 31 March, 2011 Rs 7,470,975) for Provident Fund
contributions and Rs 3,239,355 (Year ended 31 March, 2011 Rs 2,790,505)
for Superannuation Fund contributios in the Statement of Profit and
Loss. The contributions payable by the Company are at rates specified
in the rules of the schemes.
The Company's Long Term benefit includes Leave encashment payable at
the time of retirement in full, otherwise it is encashable during the
year in which services are rendered subject to in excesss of 90 days.
Present value of obligation as at the beginning of the year is Rs
8,757,114 (Prev. Year Rs 7,326,711) and the actuarial gains and losses
are recognised in full in the Profit and Loss account for Rs 5,203,229
(Prev. Year Rs 1,430,403). The present value of obligation as at March
31,2012 is Rs 13,960,343 (Prev. Year Rs 8,757,114)
The estimates of future salary increases considered in actuarial
valuation takes into account inflation, seniority, promotion and other
relevant factors
Note 5.2 : Disclosure requirement of accounting Standard 17 "Segment
Reporting" issued under Companies (Accounting Standards) Rules 2006.
a. Primary Segments
The company has disclosed Business Segment as the primary segment.
Segments have been identified taking into account the nature of the
products, the differing risks and returns, the organisation structure
and internal reporting system. The company's operations predominantly
relate to manufacture of Laundry and Allied products and its
intermediaries and providing IT Enabled Services.
b. Secondary Segments
The company caters mainly to the needs of the domestic market. The
export turnover is not significant (except IT Enabled Services
Division) in the context of total turnover. As such there are no
reportable geographical segments. The income from IT Enabled Services
is pre-dominantly from exports.
c. Segment Revenue, Segment Results, Segment Assets and Segment
Liabilities include the respective amounts identifiable to each of the
segments as also amounts allocated on a reasonable basis. The expenses,
which are not directly attributable to the business segment, are shown
as unallocated corporate cost.
d. Assets and Liabilities that cannot be allocated between the
segments are shown as a part of unallocated corporate assets and
liabilities respectively.
Note 5.3 : Related Party Disclosures as required by AS 18 of Companies
(Accounting Standards) Rules 2006 is as follows:
A. Related Parties and Relationship
(a) Companies in which the company has substantial interest (i.e more
than 20% in voting power directly or indirectly) Thirumalai Charity
Trust
Lapiz Inc, U.S.A.
(b) Other related parties
Thirumalai Chemicals Limited.
Chempak Industries
Hamsa Investments Associates Pvt. Ltd.
Varadaraja Credits & Investments Pvt. Ltd.
Ms. Meera Parthasarathy
(c) Directors of the Company
Mr. R. Sampath, Chairman & Managing Director
Ms. Indira Sundararajan, Wholetime Executive Director
Mr. S. Santhanam
Mr. S. Sridhar
Mr. Nimish Patel
Mr. M. C. Choksi
Dr. G. G. Nair
Ms. K. R. Javeri
(d) Key Management Personnel
Mr. V. Bharatram, President(Operations), IT - Enabled Services
Division.
Mr. B. Sreenivasacharyulu - Senior General Manager
5.4 : AS 19 Details of Leasing arrangements
The Company has taken premises for office use and go down under
cancellable lease agreements. The total lease rentals recognised as
expense during the year Rs 19,071,721 (Prev. Year Rs 4,284,283).
As per the above lease agreements the rent and car parking charges will
be enhanced by 15% over the last paid rent at the end of thirty six
months from the date of commencement of the lease agreement. The option
to renew the lease deed for a further period shall be at the sole
option of the lessee to be exercised by giving six months prior notice
in writing before the end of lease term of sixty months from the date
of commencement of lease.
6.1 : Disclosures required as per Micro, Small and Medium Enterprises
Development Act, 2006.
Sundry Creditors include due to Micro and Small Enterprises to whom the
company owes amounts outstanding for more than 45 days. The above
information regarding Micro and Small Enterprises had been determined
to the extent such parties have been identified.
6.2 : The revised schedule VI has become applicable from 1st April,
2011, for the preparation of financial statements. This has
significantly impacted the disclosure and presentation made in the
financial statements. Previous years figures have been regrouped /
reclassified wherever necessary to correspond with the current year's
classification / disclosure.
Mar 31, 2011
As at As at
31.03.2011 31.03.2010
Rs. Rs.
1 Contingent Liability in respect of
a. Estimated amount of contracts to be
executed on capital 9,846,863 2,120,772
account and not provided for
Against which advances paid 2,864,150 710,467
b. Bank Guarantees issued and
outstanding 350,000 726,000
c Letter of Credit issued and outstanding - 26,051,200
d. Import duty / Excise Duty on Capital
Goods against fulfilment of 5,683,937 6,364,153
export obligations
e. Import duty on Goods imported under
advance licence pending fulfilment - 183,665
of export obligation
f. Claims agaist the Company/disputed
liabilities not acknowledged as debts 1,680,000 900,000
in respect of labour disputes
2 No provision has been made in respect of the following since the
company has reasons to believe that it would get relief at the
appellate state as the said demands are excessive and erroneous :
i) Disputed demands from Income Tax Authorities to the extent of Rs.
42,443,045 (Previous Year Rs. 6,071,405 ), against which amount already
paid Rs. 12,627,516 (Previous Year Rs. 6,730,469 ).
ii) Disputed demands from Central Excise to the extent of Rs. 6,874,340
(Previous Year Rs. Nil), against which amount already paid Rs. Nil
(Previous Year Rs. Nil).
4 The Ministry of Corporate Affairs, Government of India vide its
General Notification No. S.O.301(E) dated 8th February 2011 issued
under section 211(3) of the Companies Act, 1956 has exempted certain
classes of companies from disclosing certain information in their
profit & loss account.The Company being an Ãexport oriented company is
entitled to the exemption. Accordingly,disclosures mandated by
paragraphs 3(i)(a),3(ii)(a),3(ii)(b) and 3(ii)(d) of Part II, Schedule
VI to the Companies Act, 1956 have not been provided.
10 Sales is net of cash discount Rs. 2,636,665/- (Previous Year
Rs.1,351,625/-)
11 In the opinion of the Board, the current assets, loans and advances
are approximately of the value stated in the ordinary course of
business. The provision for depreciation and all known liabilities is
adequate and not in excess of amount reasonably necessary.
15 Provision for current tax includes provision for wealth tax 50,000
(Previous Year Rs. 50,000 )
16 Sundry Debtors include an amount due from a party of Rs. 349,470
(Previous Year Rs. 356,620) which is fully secured by shares having
market value of Rs. 934,288 (Previous Year Rs. 650,938), including shares
of the market value of Rs. 875,490 (Previous Year Rs. 576,620) already
transferred in the name of the company.
17 Unpaid dividend (included in Current Liabilities Schedule 10)
represent amounts to be credited to the Investor Education and
Protection Fund as and when they become due.
20 Disclosure requirement of accounting Standard 17 ÃSegment Reporting"
issued under Companies (Accounting Standards) Rules 2006.
a. Primary Segments
The company has disclosed Business Segment as the primary segment.
Segments have been identified taking into account the nature of the
products, the differing risks and returns, the organisation structure
and internal reporting system. The companys operations predominantly
relate to manufacture of Laundry and Allied products and its
intermediaries and providing IT Enabled Services.
b. Secondary Segments
The company caters mainly to the needs of the domestic market. The
export turnover is not significant (except IT Enabled Services
Division) in the context of total turnover. As such there are no
reportable geographical segments. The income from IT Enabled Services
is pre-dominntly from exports.
c. Segment Revenue, Segment Results, Segment Assets and Segment
Liabilities include the respective amounts identifiable to each of the
segments as also amounts allocated on a reasonable basis. The expenses,
which are not directly attributable to the business segment, are shown
as unallocated corporate cost.
d. Assets and Liabilities that cannot be allocated between the
segments are shown as a part of unallocated corporate assets and
liabilities respectively.
4. Other Long Term benefits
The Companys Long Term benefit includes Leave encashment payable at
the time of retirement in full, otherwise it is encashable during the
year in which services are rendered subject to in excesss of 90 days.
Present value of obligation as at the beginning of the year is Rs.
7,326,711( Previous Year Rs. 6,315,746 ) and the actuarial gains and
losses are recognised in full in the Profit and Loss account for Rs.
1,430,403 ( Previous Year Rs. 1,010,964 ). The present value of
obligation as at March 31,2011 is Rs. 8,757,114 ( Previous Year Rs.
7,326,710 )
The estimates of future salary increases considered in actuarial
valuation takes into account inflation, seniority, promotion and other
relevant factors
24 RELATED PARTY DISCLOSURES
Related Party Disclosures as required by AS 18 of Companies (Accounting
Standards) Rules 2006 is as follows: (A) Related Parties and
Relationship
(a) Companies in which the company has substantial interest (i.e more
than 20% in voting power directly or indirectly) Thirumalai Chemicals
Limited(Upto 17.02.2011)
Thirumalai Charity Trust Lapiz Inc, U.S.A.
(b) Other related parties Chempak Industries
Hamsa Investments Associates Pvt. Ltd. Varadaraja Credits &
Investments Pvt. Ltd. Meera Parthasarathy
(c) Directors of the Company
Mr. R.Sampath, Chairman & Managing Director Mrs. Indira Sundararajan,
Wholetime Director Mr. S.Santhanam Mr. S. Sridhar Mr. Nimish Patel Mr.
M.C.Choksi Dr. G.G. Nair Ms. K.R.Javeri
(d) Key Management Personnel
Mr.V.Bharatram, Vice-President(Operations), IT-Enabled Services
Division. Mr.B.Sreenivasacharyulu - Senior General Manager
27 DISCLOSURES AS REQUIRED UNDER CLAUSE 32 OF THE LISTING AGREEMENT
Loans and Advances / Sundry Debtors include
Amount receivable from Associates
a) Thirumalai Chemicals Limited - NIL - (Previous Year - NIL)
Maximum Amount Due at any time during the year Rs. 211,287,864 (Previous
Year Rs. 106,796,775)
b) Lapiz Inc U. S. A - Rs. 39,420,071/- (Previous Year Rs. 40,124,343)
Maximum Amount Due at any time during the year Rs. 45,235,090/- (Previous
Year Rs. 74,895,131)
28 Cash and bank balance include Rs. Nil (Previous Year Rs. 21,59,998)
being remittance in transit.
29 During the year, rate of amortisation for Software was increased
from 25% to 33% on account of which amortisation is higher by Rs.
11,60,369/- during the year.
30 Previous Years figures have been regrouped and recast wherever
necessary. Figures in brackets represent previous years figures.
Mar 31, 2010
As at As at
31.03.2010 31.03.2009
Rs. Rs.
1. Contingent Liability in respect of
a. Estimated amount of
contracts to be
executed on capital 2,120,772 2,394,886
account and not provided for
Against which advances paid 710,467 2,394,886
b. Bank Guarantees issued and
outstanding 726,000 786,040
c. Letter of
Credit issued and outstanding 26,051,200 -
d. Import duty / Excise Duty on
Capital Goods against fulfilment 6,364,153 7,184,496
of export obligations
e. Import duty on Goods imported
under advance licence pending
fulfilment 183,665 183,665
of export obligation
2. No provision has been made in respect of the following since the
company has reasons to believe that it would get relief at the
appellate state as the said demands are excessive and erroneous:
Disputed demands from Income Tax Authorities to the extent of Rs.
6,071,405 (Prev.Year .8,897,963 ), against which amount already paid
Rs.6,730,469 (Prev.Year Rs.8,715,633 .
3. In the opinion of the Board, the current assets, loans and
advances are approximately of the value stated in the ordinary course
of business. The provision for depreciation and all known liabilities
is adequate and not in excess of amount reasonably nece ssary.
4. Provision for current tax includes provision for wealth tax
Rs.50,000 (Previous Year Rs.65,000)
5. Sundry Debtors include an amount due from a party of Rs. 356,620
(Previous Year Rs.363,220) which is fully secured by shares having
market value of Rs. 650,938 (Previous Year Rs.2,30,913), including
shares of the value of Rs. 576,620 (Previous Year Rs.201,575) already
transferred to the name of the company
6. Unpaid dividend ( included in Current Liabilities Schedule 11)
represent amounts to be credited to the Investor Education and
Protection Fund as and when they become due.
7. Disclosure requirement of accounting Standard 17 "Segment
Reporting" issued under Companies (Accounting Standards) Rules 2006.
a. Primary Segments
The company has disclosed Business Segment as the primary segment.
Segments have been identified taking into account the nature of the
products, the differing risks and returns, the organisation structure
and internal reporting system. The companys operations predominantly
relate to manufacture of Laundry and Allied products and its
intermediaries and providing IT Enabled Services.
b. Secondary Segments
The company caters mainly to the needs of the domestic market. The
export turnover is not significant (except IT Enabled Services
Division) in the context of total turnover. As such there are no
reportable geographical segments. The income from IT Enabled Services
is pre-dominntly from exports.
c. Segment Revenue, Segment Results, Segment Assets and Segment
Liabilities include the respective amounts identifiable to each of the
segments as also amounts allocated on a reasonable basis. The expenses,
which are not directly attributable to the business segment, are shown
as unallocated corporate cost.
d. Assets and Liabilities that cannot be allocated between the
segments are shown as a part of unallocated corporate assets and
liabilities respectively.
8. Other Long Term benefits
The Companys Long Term benefit includes Leave encashment payable at
the time of retirement in full, otherwise it is encashable during the
year in which services are rendered subject to in excesss of 90 days.
Present value of obligation as at the beginning of the year is
Rs.6,315,746 (PreviousYear Rs. 76,13,232) and the actuarial gains and
losses are recognised in full in the Profit and Loss account for
Rs.1,010,964 (Previous Year Rs. 13,82,509). The present value of
obligation as at March 31, 2010 is Rs.7,326,710 (Previous Year Rs.
62,30,723). The estimates of future salary increases considered in
actuarial valuation takes into account inflation, seniority, promotion
and other relevant factors
9. Related Party Disclosures
Related Party Disclosures as required by AS 18 of Companies (Accounting
Standards) Rules 2006 is as follows: (A) Related Parties and
Relationship
(a) Companies in which the company has substantial interest (i.e more
than 20% in voting power) directly or indirectly
Thirumalai Chemicals Ltd.
Thirumalai Charity Trust
Lapiz Inc.
(b) Other related parties Chempak Industries
Hamsa Investments Associates Pvt. Ltd. Varadaraja Credits &
Investments Pvt. Ltd. Meera Parthasarathy
(c) Directors of the Company
Mr. R.Sampath, Chairman & Managing Director Mrs. Indira Sundararajan,
Executive Director Mr. S.Santhanam Mr. S.Sridhar Mr. Nimish Patel Mr.
M.C.Choksi Dr. G.G.Nan- Ms. K.R.Javeri
(d) Key Management Personnel
Mr. V.Bharatram, Vice-President (Operations), IT Enabled Services
Division Mr. B.Sreenivasacharyulu - General Manager - Mfg.
26. Disclosures as required by Accounting Standard (AS) 27 Financial
reporting of Interest in Joint Venture
The Company has investments in a jointly controlled entity as per the
following details 1. a. Name and Country of Incorporation : LAPIZ
INC, USA
b. Proportion of ownership interest : 35.00%
c. Proportionate share for the year ended 31st March 2010 in respect
of
i. Assets Rs. 12,946,559 (Prev. Year Rs. 19,378,705)
ii. Liabilities Rs. 14,553,028 (Prev. Year Rs. 21,588,349)
iii. Income Rs. 44,365,898 (Prev. Year Rs. 52,340,077)
iv. Expenses Rs. 43,937,932 (Prev. Year Rs. 54,774,307)
10. The company has an investment of Rs.89,800,000 in ordinary share
of TCL Industries (Malaysia) Sdn Bhd (TCLM). TCLM had been making
losses on the manufacture of Maleic Anhydride (MAN) due to the high
prices of Benzene feedstock and as on 31s December 2007, its net worth
had been eroded. In January 2008, TCLM successfully commissioned its
plant for the manufacture of MAN from Butane instead of Benzene, which
was expected to make TCLM competitive with other MAN manufacturers.
However, with the global meltdown in Sep-Dec 2008, TCLM had to close
operations as its operations became unviable. As a result, one of the
unsecured creditors of TCLM appointed a provisional liquidator on 2nd
January 2009. At the meeting of creditors and shareholders of TCLM on
3,d February 2009, the appointment of the provisional liquidator was
confirmed. In view of the above developments, the realisability of the
investment in TCLM is highly uncertain. The Board of Directors of the
Company therefore in their meeting dated 23.12.2008 decided to write
down the said innestrment of Rs. 89,800,000 aganist the Amalgamation
Reserve General Reserve and Capital Reserve of the Company.
After obtaining approval of Shareholders in the Extraordinary General
Meeting held on 9,h March, 2009 for the same, the company filed a
petition u/s 78, 100 to 104 of the Companies Act, 1956 before the
Honble High Court of Bombay to adjust the said amount against the
Reserves of the Company. The Honble High Court of Bombay approved the
above adjustment vide its order dated 5lh August 2009. The said scheme
of adjustment became effective after the order of the Honble High
Court of Bombay was filed with the Registrar of Companies, Mumbai.
In terms of the said order of the Honble High Court of Bombay, the
investment of Rs. 89,800,000/- in TCLM was adjusted as under:
Amalgamation Reserve: 95,13,439 Capital Reserve : 1,000,000
General Reserve : 7,92,86,561
Had the Company followed the provisions of AS 13 Accounting for
Investments as prescribed by the Companies (Accounting Standards)
Rules, 2006, the write-down in the value of the investment in TCLM
would have to be charged to the Profit and Loss A/c with corresponding
reduction in the profit for the year,
11. Disclosures as Required Under Clause 32 of The Listing Agreement
Loans and Advances / Sundry Debtors include
Amount receivable from Associates
a) Thirumalai Chemicals Limited - NIL (Previous Year - NIL)
Maximum Amount Due at any time during the year Rs. 106,796,775
(Previous Year Rs. 102,532,188)
b) Lapiz Inc USA - Rs. 40,124,343 (Previous Year Rs. 59,976,738)
Maximum Amount Due at any time during the year Rs.74,895,131 (Previous
Year Rs. 64,323,481)
12. Cash and bank balance include Rs. 21,59,998 (Previous Year - Rs.
52,11,600) being remittance in transit.
13. Previous Years figures have been regrouped and recast wherever
necessary. Figures in brackets represent previous years figures.