Mar 31, 2017
THE COMPANY AND NATURE OF ITS OPERATIONS:
Deepak Fertilisers and Petrochemicals Corporation Limited having corporate office in Pune, Maharashtra, India carries on business in fertilisers, agri services, bulk chemicals, mining, chemical and value added real estate. The Company is a public limited company and is listed on the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited.
(i) Contractual obligations: The company does not have any contractual obligations in relation to investment properties as the same are not let out
(ii) Fair value
Estimation of fair value
The Company obtains independent valuations for its investment properties at least annually. The best evidence of fair value is current prices in an active market for similar properties. Where such information is not available, the Company considers information from a variety of sources including:
- Current prices in an active market for properties of different nature or recent prices of similar properties in less active markets, adjusted to reflect those differences
- Discounted cash flow projections based on reliable estimates of future cash flows
- Capitalised income projections based upon a propertyâs estimated net market income, and a capitalisation rate derived from an analysis of market evidence
The fair values of investment properties have been determined by an Independent Valuer. The main inputs used are the rental growth rates, expected vacancy rates, terminal yields and discount rates based on comparable transactions and industry data. All resulting fair value estimates for investment properties are included in level 3.
(i) Trade Receivable includes Rs.52,366.86 Lacs (31st March, 2016 Rs.79,476.73 Lacs, 1st April, 2015 Rs.33,498.73 Lacs) towards fertiliser subsidy receivable from the Government of India.
(ii) The carrying amounts of the trade receivables is net of receivables de-recognised under structured finance arrangements without recourse of Rs.36,149.92 lacs ( 31st March, 2016 Rs.24,250.33 Lacs, 1st April, 2015 Rs.17,213.03 Lacs ) and bills discounted of Rs.20,779.03 Lacs (31st March, 2016 â NIL, 1st April, 2015 â NIL)
Terms and rights attached to equity shares
The Company has only one class of issued Equity Shares having at par value of Rs.10 per share. Each holder of Equity Shares is entitled to one vote per Share.
The Company declares and pays dividend in Indian Rupees except in the case of overseas Shareholders where dividend is paid in respective foreign currencies considering foreign exchange rate applied at the date of remittance. The dividend proposed by the Board of Directors is subject to the approval of Shareholders in the ensuring Annual General Meeting.
In the event of liquidation of the Company the holders of Equity Share will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts in proportion to their shareholding.
Details of Micro and Small Enterprises as define munder MSMED ACT, 2006
To comply with the requirement of The Micro, Small And Medium Enterprises Development Act, 2006, the Company requested its suppliers to confirm it whether they are covered as Micro, Small or Medium enterprise as is defined in the said Act. Based on the communications received from such suppliers confirming their coverage as such enterprise, the Company has recognised them for the necessary treatment as provided under the Act, from the date of receipt of such confirmations.
(i) Leave Obligations
The leave obligations cover the Companyâs liability for sick and earned leave.
The amount of the provision of Discontinuing & Continuing Operations Rs.608.07 Lacs (31st March, 2016 - Rs.377.35 Lacs, 1st April, 2015 - Rs.298.64 Lacs) is presented as current, though the Company does not have an unconditional right to defer settlement for any of these obligations, as based on past experience, the Company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months. The amounts that reflect leave that is not expected to be taken or paid within the next 12 months is shown under current portion.
Post Retirement Benefits & Gratuity
(i) The Company has a Post Retirement Benefit plan, which is a defined benefit retirement plan, according to which executives superannuating from the service after ten years of service are eligible for certain benefits like medical, fuel, telephone reimbursement, club membership etc. for specified number of years. The liability is provided for on the basis of an independent actuarial valuation.
(ii) The Company has an obligation towards Gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump sum payments to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 to 30 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The plan is managed by a Trust and the fund is invested with recognised Insurance Companies under their Group Gratuity scheme. The Company makes annual contributions to Gratuity fund and recognises the liability for Gratuity benefits payable in future based on an independent actuarial valuation.
i) Sensitivity Analysis
The key assumption and sensitivity of the defined benefit obligation to changes in the weighted principal assumption is:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant acturial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to prior period.
NOTE 1: DISCLOSURE OF SBNS IN FINANCIAL STATEMENTS (AMENDMENT TO SCHEDULE III)
The MCA has amended division I and division II of the Schedule III. As per the amendment, each company needs to disclose the details of Specified Bank Notes held and transacted during the period from 8th November, 2016 to 30th December, 2016 in the prescribed format.
(i) Fair value hierarchy
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows:
Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. The following table provides the fair value measurement hierarchy of the Companyâs financials assets and liabilities that are measured at fair value or where fair value disclosure is required:
(ii) Valuation process to determine fair value
The following methods and assumptions were used to estimate the fair values of financial instruments:
i) The carrying amounts of cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current financial assets and liabilities are considered to be the same as their fair values, due to their short-term nature.
ii) The fair values of the equity investment which are quoted, are derived from quoted market prices in active markets. In the case of the investment measured at fair value and falling under fair value hierarchy Level 3, cost has been considered as an appropriate estimate of fair value. The carrying value of those investments are individually immaterial.
iii) The Company enters into derivative financial instruments with various counterparties, principally financial institutions with investment grade credit ratings. The fair value of derivative financial instruments is based on observable market inputs including currency spot and forward rate, yield curves, currency volatility, interest rate curves and use of appropriate valuation models.
iv) The fair value of the long-term borrowings carrying floating-rate of interest is not impacted due to interest rate changes and will not be significantly different from their carrying amounts as there is no significant change in the underlying credit risk of the Company (since the date of inception of the loans).
v) The fair values of the unsecured redeemable non-convertible debenture (included in long term borrowings) are derived from quoted market prices/discounting using current market interest rates. The Company has no other long-term borrowings with fixed-rate of interest.
Note 2: FINANCIAL RISK MANAGEMENT Year ended 31st March, 2017:
(A) Expected Credit Loss
(a) Expected credit loss for trade receivables under simplified approach
(B) Liquidity Risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, the treasury maintains flexibility in funding by maintaining availability under committed credit lines.
Management monitors rolling forecasts of the Companyâs liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows. These limits vary by location to take into account the liquidity of the market in which the entity operates. In addition, the Companyâs liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.
(i) Financing Arrangements
The Company had access to the following undrawn borrowing facilities at the end of the reporting period:
The bank overdraft facilities may be drawn at any time and are repayable on demand. The bank loan facilities may be drawn at any time in â and have an average maturity of 1 year (2016 -1 year, 2015 1 year).
(ii) Maturities of Financial Liabilities
The tables below analyse the Companyâs financial liabilities into relevant maturity groupings based on their contractual maturities for:
- all non-derivative financial liabilities, and
- net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the cash flows.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
(C) Foreign Currency Risk Exposure
(i) The Companyâs exposure to foreign currency risk at the end of the reporting period is presented in Note no 48
The sensitivity of profit or loss to changes in the exchange rates arises mainly from foreign currency denominated financial instruments and hedges thereof. There is no impact on other components of equity as the company has not designated foreign forward exchange contracts, foreign exchange option contracts as cash flow hedges.
(D) Cash flow and fair value interest rate risk
The Companyâs main interest rate risk arises from long-term borrowings with variable rates, which exposes the Company to cash flow interest rate risk. During 31st March, 2016 and 31st March, 2017, the Companyâs borrowings at variable rate were mainly denominated in INR, USD
The Companyâs fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.
The Company manages its cash flow interest rate risk by using floating-to-fixed interest rate swaps in case of ECBs. Under these swaps, the Company agrees with other parties to exchange, at specified intervals (mainly half yearly), the difference between fixed contract rates and floating rate interest amounts calculated by reference to the agreed notional principal amounts.
(i) Interest Rate Exposure
The exposure of the Companyâs borrowing to interest rate changes at the end of the reporting period are as follows:
Profit or loss is sensitive to higher/lower interest expense from borrowings as a result of changes in interest rates. Other components of equity change as a result of an increase/decrease in the fair value of the cash flow hedges related to borrowings.
Note 3: Effective 15th May, 2014, domestic gas supply to the Company was arbitrarily stopped pursuant to an order passed by the Ministry of Petroleum and Natural Gas. The Company successfully challenged the same before the Honâble Delhi High Court, which by its orders dated 7th July, 2015 and 19th October, 2015 directed the Government of India (GOI) to restore the gas supply. Review petition filed by the GOI, challenging the said order, has been rejected by the Court by an order dated 2nd February, 2016. Subsequently, the GOI filed an affidavit before Delhi High Court stating that Inter Ministerial Committee (IMC) has decided to recommend supply of pooled gas to the Company, subject to approval of competent authority. In the meantime, during the quarter, SLP filed by GOI against above orders of Delhi High Court is disposed off by Honâble Supreme Court without granting any relief to the petitioner (GOI).
Note 4: The Department of Fertilisers (DoF), Ministry of Chemicals and Fertilisers, had withheld subsidy, due to the Company in accordance with applicable Nutrient Based Subsidy (NBS) scheme of GOI, alleging undue gain arising to Company on account of supply of cheap domestic gas since challenged by the Company before the Honâble High Court of Bombay. Based on the directive of the Honâble Court, DoF agreed to release subsidy withheld except a sum of Rs.310 Crores pending final decision. Recently DoF has advised release of the aforesaid sum against a Bank Guarantee taking a favourable view on the request made by the company.
Note 5: GAIL has claimed a sum of Rs.357 crores in respect of supply of domestic natural gas for the period July 2006 to May 2014, alleging usage for manufacture of products other than Urea. As per contracts entered into between Company and GAIL, the purchase of gas was clearly intended, supplied and utilised for industrial applications. It has been in the full knowledge of the Department of Fertilisers, Government of India that the Company; as per the Industrial License, since its inception was never engaged in the manufacture of Urea. The Company has strongly challenged the claim currently being raised by GAIL as untenable, unsustainable, contractually unfounded, invalid and barred by limitation of time. Arbitration proceedings have since commenced. The Company has obtained legal advice and accordingly no provisioning is considered necessary.
Note 6: The Company has made significant capital investments in Ishanya Mall. The said Mall has been incurring losses due to larger break-even period associated with the operations of the Mall which is extended due to continuing adverse economic environment since the launch of the Mall in 2007-08. The management of the Company continues to be hopeful of turnaround in performance of the Mall in the coming years due to expected improvements in the economic environment and strategic initiatives being planned in this regard. The Company has, however, in accordance with the requirements of Indian Accounting Standard 36-âImpairment of Assetsâ, carried out impairment review of carrying value of the assets of the Mall, which has not indicated any impairment in its value.
Note 7: SCHEME OF ARRANGEMENT
In an endeavour to sharpen the strategic future of each of its business verticals and focus on shareholdersâ wealth enhancement, the Company had proposed a Scheme of Arrangement for demerger of fertilisers and technical ammonium nitrate business into a wholly owned subsidiary Company, M/s. Smartchem Technologies Limited. The National Company Law Tribunal (NCLT) on 30th March,2017 granted approval to the Scheme and the Order of NCLT was received by the Company on 13th April, 2017. Post compliance of further requirements of the Order, the Company filed the same with Registrar of Companies on 1st May, 2017, being the date from which the Order became operational. The Scheme as approved by NCLT, provides that the demerger will be effective retrospectively from 1st January, 2015.
The businesses that are being de-merged have been disclosed as âDiscontinuing Operationsâ in the standalone financial statements for the year ended 31st March 2017, as per the requirements of Ind AS 105.
Note 8: LEASES
The Company has taken premises on operating lease for a period of one to ten years. The future lease payment of such operating lease is as follows:
Note 9: DISCLOSURE REQUIRED UNDER SECTION 186(4) OF COMPANIES ACT, 2013
Loans and advance to related parties includes loan given to a subsidiary. The particulars of which are disclosed below as required by Section 186(4) of Companies Act, 2013.
Note 10: FIRST-TIME ADOPTION OF IND AS Transition to Ind AS
These are the Companyâs first financial statements prepared in accordance with Ind AS.
The accounting policies set out in note 1 have been applied in preparing the financial statements for the year ended 31st March, 2017, the comparative information presented in these financial statements for the year ended 31st March, 2016 and in the preparation of an opening Ind AS balance sheet at 1st April, 2015 (the Companyâs date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Companyâs financial position, financial performance and cash flows is set out in the following tables and notes.
Exemptions and exceptions availed
Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.
Ind AS optional exemptions
1. Business combinations
Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date.
The Company elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated. The Company has applied same exemption for investment in associates and joint ventures.
2. Deemed cost
Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets and investment property covered by Ind AS 40 Investment Properties.
Accordingly, the Company has elected to measure all of its property, plant and equipment, intangible assets and investment property at their previous GAAP carrying value.
3. Designation of previously recognised financial instruments
Financial assets and financial liabilities are classified as fair value through profit and loss or fair value through other comprehensive come based on facts and circumstances as at the date of transition to Ind AS i.e. 1st April, 2015. Financial assets and liabilities are recognised at fair value as at the date of transition to Ind AS i.e. 1st April, 2015 and not from the date of initial recognition.
Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material.
The Company has elected to apply this exemption for such contracts/arrangements.
5. Investments in subsidiaries and associates
The Company has elected to apply previous GAAP carrying amount for its investment in subsidiaries and associates and at deemed cost at the date of transition to Ind AS, except for investment in Desai Fruits and Vegetables Pvt. Ltd. (an associate) where the Company has elected to use fair value as deemed cost on the date of transition to Ind AS.
Ind AS mandatory exceptions
1. Hedge accounting
Hedge accounting can only be applied prospectively from the transition date to transactions that satisfy the hedge accounting criteria in Ind AS 109, at that date. Hedging relationships cannot be designated retrospectively, and the supporting documentation cannot be created retrospectively. As a result, only hedging relationships that satisfied the hedge accounting criteria as of 1st April, 2015 are reflected as hedges in the Companyâs results under Ind AS, primarily being interest rate swap. Under Ind AS, the Company has chosen to not follow hedge accounting for such hedging relationships relating to foreign exchange forward & option contracts.
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.
Ind AS estimates as at 1 April 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:
- Investment in financial instruments carried at FVPL or FVOCI;
- Investment in debt instruments carried at FVPL; and
- Impairment of financial assets based on expected credit loss model.
3. Derecognition of financial assets and liabilities
Ind AS 101 requires a first-time adopter to apply the derecognition 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 derecognition 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 apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.
4. Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
Note 11: RECONCILIATION OF TOTAL EQUITY AS AT 31ST MARCH, 2016 AND 1ST APRIL, 2015
Notes to first-time adoption a Proposed dividend
Under Previous GAAP, proposed dividends including Dividend Distribution Tax (DDT) are recognised as a liability in the period to which they relate, irrespective of when they are declared. Under Ind AS, proposed dividend is recognised as a liability in the period in which it is declared by the company (usually when approved by shareholders in a general meeting) or paid.
In the case of the Company, the declaration of dividend for March 2015 had ocurred after period end. Therefore, the liability of Rs.4,101.08 lacs for the year ended on 31st March, 2015 recorded for dividend has been reversed with corresponding adjustment to retained earnings. Correspondingly, total equity increased by this amount. b Fair value adjustments on investments
Current investments: Under Previous GAAP, current investments in equity instruments such as mutual funds and government securities are recognized at cost or net realizable value, whichever is lower. Long-term investments in equity instruments are recorded at cost unless there is an other than temporary decline in the value of investments.
Ind-AS 101 allows considering fair value as deemed cost for the Companyâs investment in subsidiaries, associates. This choice is available for each investment individually. The deemed cost for all investment in equity instruments has been considered as the cost under the Previous GAAP except for Desai Fruits and Vegetables Private Limited (an associate) wherein the Company has their fair value as deemed cost. Consequently, fair value adjustment amounting to Rs.2,033 lacs has been considered as on the transition date thereby leading to a decrease in retained earnings as on that date.
The Company holds investment in government securities with the objective of both collecting contractual cash flows which give rise on specified dates to cash flows that are solely payments of interest on principal amount outstanding and selling financial asset. The resulting fair value changes of these investments have been recognised in retained earnings as at the date of transition and subsequently in Other Comprehensive Income for the year ended 31st March, 2016 (Rs.57.52 lacs). This resulted an increase in retained earnings as at 31st March, 2016 by Rs. Nil (1st April, 2015: Rs.19.12 lacs). c Financial guarantees: The Company has issued certain financial guarantees to banks in relation to loans availed by a step down subsidiary from these banks. Ind AS requires liability from such financial guarantees to be recorded initially at fair value. The amortisation of financial guarantee has resulted in a gain amounting to Rs.39.72 lacs as at 31st March, 2016 (1st April, 2015: Rs.21.27 lacs). d Provision for expected credit loss under Ind AS 109
Under Previous GAAP, the Company has created provision for impairment of receivables which comprises only in respect of specific amount for incurred losses. Under Ind AS, impairment allowance has been determined based on Expected Credit Loss (ECL) model. The total ECL provision amounting to Rs.211.08 lacs considered as on the transition date has been adjusted against the retained earnings. Impact of Rs.117.04 lacs for the year ended 31st March, 2016 has been charged of to the Statement of profit and loss. e Adjustment relating to loan processing fees
Under previous GAAP, loan processing fees have been expensed out to Statement of Profit and Loss Account but under Ind AS, such loan processing fees have to be amortised on effective interest rate basis over the loan period. The Company under previous GAAP had capitalised such fees to fixed assets as per AS 16. Under IND AS, amortisation of such fees has resulted in a decrease in retained earnings at 31st March, 2016 and 1st April, 2015. f Fair Valuation of derivative contracts
The Company hedges its foreign currency risk by entering into forward and option contracts which are fair valued through profit and loss under Ind AS as the same are not designated as hedges for the purposes of financial reporting. This has resulted into a decrease in retained earnings by Rs.78.24 lacs as at 31st March, 2016 (1st April, 2015: Rs.134.67 lacs)
The Company has entered into interest rate swap which is fair valued through other comprehensive income under Ind AS as the same is designated as a cash flow hedge. This has resulted in decrease in retained earnings by Rs.30.99 lacs as at 31st March, 2016 (1st April, 2015: Rs.200.47 lacs). g Actuarial loss transferred to Other Comprehensive Income
Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of statement of profit and loss. As a result of this change, the profit for the year ended 31st March, 2016 has increased by Rs.23.35 lacs. There is no impact on total equity.
These adjustments pertain to fair valuation of security deposits which has resulted into an increase in retained earnings by Rs.6.45 lacs as at 31st March, 2016 (1st April, 2015: Rs.0.16 lacs).
The adjustment also includes provision for decommissioning liabilities on lease hold land as required under Ind AS 16 added to the cost of property, plant and equipment amounting to Rs.28.70 lacs which was adjusted against the retained earnings.
i Other comprehensive income
Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit and loss but are shown in the Statement of profit and loss as âother comprehensive incomeâ includes remeasurements of defined benefit plans and net gain on cash flow hedge.
j Deferred tax
The various transitional adjustments have led to temporary differences and accordingly, the Company has accounted for such differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or a separate component of equity.
Note 12 In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7 - Statement of cash flows and Ind AS 102 - Share-based payment. These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to Ind AS 7 - Statement of cash flows and Ind AS 102 - Share based payment, respectively. The amendments are applicable from 1 April, 2017 and will be given effect to from the financial year subsequent to evaluation by the Company.
Note 13 Previous yearâs figure have been re-grouped wherever necessary to conform to current yearâs grouping.
Note 14 Previous year figures are given in bracket/Itallics.
Mar 31, 2016
Note-1. Exceptional items in previous year represented cost of voluntary separation scheme to employees at Taloja Unit.
Note-2. DISCLOSURE REQUIRED UNDER SECTION 186 (4) OF COMPANIES ACT, 2013
a. Included in loans and advance to related parties is a loan given to a subsidiary the particulars of which are disclosed below as required by Sec 186(4) of Companies Act, 2013.
Note-3. During the year Platinum Blasting Services Pty. Ltd. (a subsidiary of Smartchem Technologies Limited, which in turn is a wholly owned subsidiary of the Company), has acquired entire ownership interest for consideration amounting to '' 1,850 Lacs (AUD 37 Lacs) in Australian Mining Explosives Pty. Ltd. (AME), an Australian Company engaged in the business of storage and handling of Technical Ammonium Nitrate.
Note-4. The Company has made significant capital investments in Ishanya Mall. The said Mall has been incurring losses due to larger break-even period associated with the operations of the Mall which is extended due to continuing adverse economic environment since the launch of the Mall in 2007-08. The management of the Company continues to be hopeful of turnaround in performance of the Mall in the coming years due to expected improvements in the economic environment and strategic initiatives being planned in this regard. As in the past the Company has in accordance with the requirements of Accounting Standard 28- "Impairment of Assets", carried out impairment review of carrying value of the assets of the Mall, which has not indicated any impairment in its value.
Note-5. The Company has long-term investment in Desai Fruits and Vegetables Private Limited (JV) which is strategic in nature.
During the year ended 31st March, 2014, consequent to losses incurred by JV and substantial erosion of net worth, the Company made provision of Rs, 507.09 Lacs for diminution in value of the investment that was assessed to be other than temporary nature. Due to subsequent improvement in operating performance, as a result of various strategic initiatives taken by the management of JV, the management of the Company reassessed the carrying value of the investment in JV and being of the opinion that diminution in value was of temporary in nature, reversed the said provision in the financial year ended on 31st March, 2015. There is no change in the said assessment of the management as at 31st March, 2016.
Note-6. During the year the Company was required to spend Rs, 392.00 Lacs of which the Company has incurred CSR expenses of Rs, 167.89 Lacs (Rs, 83 Lacs), which includes contribution/donation of Rs, 167.86 Lacs (Rs, 80.50 Lacs) to a related party, which are engaged in activities eligible under Section 135 of Companies Act, 2013 read with Schedule VII thereto and other expenses of Rs, 0.03 Lacs (Rs, 2.50 Lacs) which are directly incurred by the Company.
Note-7. SCHEME OF ARRANGEMENT, AMALGAMATION, RESTRUCTURING ETC.
(a) With a view to paving the way for future growth strategic objective and unlocking the shareholder''s value, the Board of Directors of the Company at its meeting held on 29th March, 2016 approved the Scheme of arrangement between Deepak Fertilizers And Petrochemicals Corporation Limited and its wholly owned subsidiaries, SCM Fertichem Limited and Smartchem Technologies Limited (''the Scheme''), under sections 391 to 394 of the Companies Act, 1956. The Scheme provides for the transfer of Fertilizer and TAN undertaking (''the Undertakings'') of the Company to SCM Fertichem Limited for a slump exchange consideration of '' 74,300 Lacs followed by transfer and vesting of the said Undertakings into Smart hem Technologies Limited by way of de-merger for a consideration to be discharged by issue of one equity share of Smart hem Technologies Limited for every equity share held in SCM Fertichem Limited. The appointed date as per the Scheme is 1st January, 2015.
(b) The Board of Directors of the Company at its meeting held on 5th November, 2015 approved a Scheme of Amalgamation of SCM Solider Limited, a wholly owned subsidiary, with the Company. The appointed date as per the Scheme is 1st April, 2015.
Both these Schemes are subject to the sanction of Hon''ble Bombay High Court, other requisite approvals from competent authorities band will be given effect to in the respective financial statements upon receiving the said approvals.
Note-8. The long-term settlement with the Employees Union at Taloja Plant expired on 30th September, 2015. Pending finalization thereof the Company has made estimated provision for liabilities on this account based on the past experience.
Note-9. A The Company has taken residential accommodation, office premises and warehouses on lease/rental basis. Lease period varies from one month to twelve months. These lease are cancellable in nature. Lease rental recognized in the Statement of Profit and Loss is Rs, 1,647.82 Lacs (Rs, 1,041.20 Lacs).
Note-10. The Company had in the previous year made Investments of Rs, 18,000 Lacs in Non-Convertible Debentures of its wholly owned subsidiary, SCM Soilfert Limited, which acquired equity shares of Mangalore Chemicals & Fertilizers Limited (MCFL). Equity shares of MCFL were sold during the year and debentures were fully redeemed.
Note-11. Provisions for others included in Note 7 represents provision towards price differences. The outflow on this account is expected within a year.
Note-12. Previous year''s figures have been re-grouped wherever necessary to conform to current year''s grouping.
Note-13. Previous year figures are given in bracket.
1. Primary segment reporting (by business segments)
Composition of business segment
Segment Products covered
a) Chemicals Ammonia, Methanol, DNA, C NA, CO2, TAN, IPA, Propane, Bulk and Speciality Chemicals
b) Bulk Fertilizers NP, MOP, DAP, Ammonium Sulphate, Mixtures, SSP, Sulphur, Micronutrients,
SSF, Bio Fertilizers, Fruits, Vegetables, Pesticides
c) Realty Real Estate Business
d) Others Windmill Power
2. Inter-segment Sales Pricing: Inter-segment revenue has been recognized as estimated under Excise Regulations.
3. Secondary Segment Information: There are no reportable geographical segments since the Company caters mainly to needs of Indian Markets.
Shri Somnath Patil resigned as a member of the Committee w.e.f. 22nd January, 2016.
Shri Vipin Agarwal was inducted as a member of the Committee w.e.f. 22nd January, 2016.
Shri Mandar Velankar, Asst. Company Secretary acts as Secretary to all the Committees of the Board of Directors.
- SHARE AND DEBENTURE TRANSFER COMMITTEE
The composition of the Share and Debenture Transfer Committee consits of a. Shri. S. C. Mehta b. Smt. Parul S. Mehta c. Shri. Vipin Agarwal d. Shri. Pranav Thakkar. The Committee has been constituted for considering the proposal of transfer, transmission, transposition of shares, issue of split, consolidated share certificates, remat of shares etc. During the year under review 51 meetings of Share and Debenture Transfer Committee were held.
- PERFORMANCE EVALUATION OF BOARD, COMMITTEES AND DIRECTORS
Pursuant to the provisions of the Companies Act, 2013 and Regulation 19 of SEBI (Listing Obligation and Disclosure Requirement) Regulations 2015, the Board has carried out the annual performance evaluation of the Chairman, Directors, Board as well as its Committees for FY 2015-16.
Mar 31, 2013
THE COMPANY AND NATURE OF ITS OPERATIONS :
Deepak Fertilisers And Petrochemicals Corporation Limited having Corporate Office in Pune, Maharashtra, India, carries on business in fertilisers, agri services, bulk and speciality chemicals, mining chemicals and value added real estate.
Note-1 CONTINGENT LIABILITIES (Rs. in Lacs)
Liabilities classified and considered contingent due to contested claims and legal disputes
As at As at 31st March, 2013 31st March, 2012
Claim by suppliers 3,308.37 2,610.52
Income tax demands 665.08 2,131.50
Excise demands 2,212.28 2,295.06
Sales tax /VAT demands 2,585.14 1,747.58
Total 8,770.87 8,784.66
Note-2 The Company has imported capital goods under the Export Promotion Capital Goods (EPCG) Scheme of the Government of India, at concessional rates of duty on an understanding to fulfill quantified exports against which future obligation aggregates to Rs. 941.84 Lacs (Rs. Nil) over a period of eight years from the date of license.
Contingent Assets are not recognised or disclosed in the financials statements.
Note-3 Gas Authority of India Limited (GAIL) supplier to the Company of natural gas, one of the main raw materials, has effected the supplies at provisional rate as indicated in the invoices. However, according to the Company any revision in Natural Gas price will be only prospective as per the existing convention/practice followed by Government of India.
Note-4A The long term settlement with the Employees Union at Taloja Plant expired on 30th September, 2011. Pending finalisation thereof the Company has made estimated provision for liabilities on this account based on the past experience.
Note-4B The Company has made significant capital investments in Ishanya Mall. The same Mall has been incurring losses due to larger break-even period associated with the operations of the Mall which is extended due to continuing adverse economic environment since the launch of the Mall in 2007-08. The management of the Company is hopeful of turnaround in performance of the Mall in the coming years due to expected improvements in the economic environment, opening up of FDI Investments in Multi-Brand Retail and strategic initiative being planned in this regard. The Company has, however, in accordance with the requirements of Accounting Standard - 28 "Impairment of Assets", carried out impairment review of carrying value of the assets of the Mall, which has not indicated any impairment in its value.
Note-5 The Company has taken residential accommodation, office premises and warehouses on lease / rental basis.
Non-cancellable lease period varies from 3 months to 6 months. These lease are cancellable in nature. Lease rental recognised in the Statement of Profit and Loss is Rs. 1,113.58 Lacs.
Note-6 Clause 32 of the Listing Agreement disclosures
Loans and advances in the nature of loans to subsidiaries / entity in which Deepak Fertilisers And Pertrochemicals Corporation Limited has significant influence
Note-7 Previous year''s figures have been re-grouped wherever necessary to conform to current year''s grouping. Note-49 Previous year''s figures are given in brackets.
Mar 31, 2012
A. Terms/Rights attached with Equity Shares
The Company has only one class of Equity Shares having a par value of Rs 10/- per share. Each holder of Equity Shares is entitled to one vote per share.
The Company declares and pays dividend in Indian Rupees except in the case of overseas shareholders where dividend is paid in respective foreign currencies considering foreign exchange rate applied at the date of remittance. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting.
During the year ended 31st March, 2012 the amount of dividend per share recognized as distribution to equity shareholders is Rs 5.50 (31st March 2011, Rs 5.00).
In the event of liquidation of the Company the holders of Equity Share will be entitled to receive remaining assets of the Company, after distribution of all preferential distribution in proportion to the number of Equity Shares held by the shareholders.
(*) Represents relief/incentive granted by Government of India by way of refund of 90% of Customs Duty paid on NP Projects Imports. This amount is being adjusted against depreciation over the remaining useful life of the Fixed Assets of NP Project.
Note: The Company has entered into option contract to cover its risk towards foreign exchange exposure on External Commercial Borrowings. The marked to market loss of Rs Nil (Previous Year: Rs 221.80 Lacs) has been provided in the accounts.
Note: (i) Cash Credit facilities sanctioned by Banks including Working Capital Demand Loan and Buyer's Credit are secured by a first charge by way of hypothecation of stocks of raw materials, finished goods, stock-in-process, consumable stores and book debts.
(ii) Cash Credit is repayable on demand and carries variable interest (average for the year 13.25%).
(iii) Buyer's credits are generally due within 180 days and carry variable interest (average for the year 1.81%).
The aggregate amount of unclaimed dividend of previous years' as on 31st March, 2012 was Rs 372.73 Lacs (Previous Year: Rs327.18 Lacs). In accordance with the provisions of Section 205A (5) of the Companies Act, 1956, the dividend unclaimed for a period of seven years from the date of transfer to the Unpaid Dividend Account shall be credited to the Investor Protection and Education Fund.
(a) Freehold land includes:
- Rs 3,600 Lacs (Previous Year Rs 3,600 Lacs) represented by 24,000 Equity Shares of Rs 10/- each in a company, which is the legal owner of the land in respect of which the Company has acquired exclusive rights of development.
- Rs 1,046.42 Lacs (Previous Year: Rs 815 Lacs) represented by 1,38,888 Equity Shares (Previous Year: 8,024) of Rs 10/- each in the said company, which is the legal owner of the land on which the Company has been granted the rights of use and occupation by virtue of the shares so held.
(b) Buildings include a sum of Rs 11,572.87 Lacs (Previous Year: Rs 3,308.87 Lacs) represented by 38,236 (Previous Year: 17,628) Equity Shares of Rs 10/- each in a company which is the legal owner of the buildings in respect of which the Company has an exclusive right of use and occupation by virtue of the shares so held.
(c) Gross Block of Plant and Machinery includes:
- Rs.421.63 Lacs (Previous Year: Rs 421.63 Lacs) being the cost of Fixed Assets, ownership of which does not vest with the Company, being amortized over 60 months.
- Rs.6,212.61 Lacs (Previous Year: Rs 4,564.61 Lacs) towards foreign exchange fluctuation on Long Term Loans.
(d) During the year, the Company has acquired additional equity shares of an associate company viz: Yerrowda Investments Ltd. (YIL) by virtue of which The said company has become the Company's subsidiary under the Companies Act, 1956. However, since these shares represent indefeasible and perpetual occupancy rights in the immovable properties owned by the said company, the cost of acquisition thereof is treated as part of fixed assets in consonance with the past practice.
(e) Impairment of Assets: The Company has examined carrying cost of its identified Cash Generating Units (CGU) by comparing present value of estimated future cash flows from such CGUs, in terms of Accounting Standard-28 on Impairment of Assets, according to which no provision for impairment is required as assets of none of CGUs are impaired during the Financial Year ended 31st March, 2012.
1. Contingent liabilities (Rs.in Lacs)
Liabilities classified and considered contingent due to contested claims and legal 31st March 2012 31 st March 2011
Claim by Supplier 2,610.52 5,963.81
Income Tax demands 2,131.50 1,152.77
Excise demands 2,295.06 1,574.16
Sales Tax/VAT demands 1,747.58 1,657.20
TOTAL 8,784.66 10,347.94
2. Gas Authority of India Limited (GAIL) supplier to the Company of natural gas, one of the main raw materials, has affected the supplies at provisional rate as indicated in the invoices. According to the Company any revision in Natural Gas price will be only prospective as per the existing convention/practice followed by Government of India.
3. Details of Micro and Small Enterprises as defined under MSMED Act, 2006
To comply with the requirement of The Micro, Small And Medium Enterprises Development Act, 2006, the Company requested its suppliers to confirm it whether they are covered as Micro, Small or Medium enterprise as is defined in the said Act. Based on the communications received from such suppliers confirming their coverage as such enterprise, the Company has recognized them for the necessary treatment as provided under the Act, from the date of receipt of such confirmations and there is no default in payment to such enterprise as specified in the said Act. However, the amounts outstanding as well as interest applicable are insignificant and hence not separately disclosed.
4. Previous year's figures have been re-grouped wherever necessary to conform to current year's grouping.
5. The Financial Statements for the year ended 31st March, 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Financial Statements for the year ended 31st March, 2012 has been prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification. The adoption of Revised Schedule VI does not impact recognition and measurement principles followed for preparation of Financial Statements.
6. Inter-segment Sales Pricing: Inter-segment revenue has been recognized as estimated under Excise Regulations.
7. Secondary Segment Information: There are no reportable geographical segments since the Company caters mainly to needs of Indian Markets.
Mar 31, 2011
1. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 5,495.09 Lacs (Previous Year: Rs. 10,092.26 Lacs).
2. The following liabilities are classified and considered contingent due to contested claims and legal disputes:
. Claims by Suppliers Rs. 5,963.81 Lacs (Previous Year : Rs. 5,825.04 Lacs). Taxes & Duties
. Income Tax demands Rs. 1,152.77 Lacs (Previous Year : Rs. 1,152.77 Lacs).
. Excise demands : Rs. 1,574.16 Lacs (Previous Year: Rs. 920.13 Lacs).
. Sales Tax / VAT demands Rs. 1,657.20 Lacs (Previous Year : Rs. 704.59 Lacs).
3. Gas Authority of India Limited (GAIL) supplier to the Company of natural gas, one of the main raw materials, has effected the supplies at provisional rate as indicated in the invoices. However, according to the Company any revision in Natural Gas price will be only prospective as per the existing convention/practice followed by Government of India.
4. Exceptional items represent:
. Amortisation of VRS Compensation paid Rs. Nil (Previous Year: Rs. 54.98 Lacs).
. Gains arising on transfer of rights in unusable surplus land amounting Rs. Nil (Previous Year: Rs. 3,551.80 Lacs).
. Cost of assets discarded or in the process of being discarded under restructuring of the real estate business Rs. 338.09 Lacs (Previous Year: Rs. 992.46 Lacs).
5. The Company has sold part of the Fertiliser Bonds (issued in lieu of fertiliser subsidy) pursuant to the decision of Government of India to buy back outstanding bonds in two tranches in 2010-11 and 2011-12 at a price to be decided later and compensate the Company atleast 50% of the loss incurred on such sale. Accordingly, the Company has accounted for the loss of Rs. 199.52 Lacs (net of 50% compensation receivable from Government of India) and the same has been shown under operating and other expenses. Consequently the provision towards Mark to Market loss made earlier on such bonds amounting to Rs. 525.18 Lacs has been reversed and shown under Operating and other expenses.
6. In respect of long term investment in listed securities, the diminution in value is estimated on the basis of appraisal made by Portfolio Managers.
7. The Company has entered into option contract to cover its risk towards foreign exchange exposure on External Commercial Borrowing taken during the year. The marked to market loss of Rs. Nil (Previous Year: Rs. 221.80 Lacs) has been provided in the accounts.
8. IMPAIRMENT OF ASSETS: The Company has examined carrying cost of its identified Cash Generating Units (CGU) by comparing present value of estimated future cash flows from such CGUs, in terms of Accounting Standard-28 on Impairment of Assets, according to which no provision for impairment is required as assets of none of CGUs are impaired during the financial year ended 31st March, 2011.
9. (i) Sundry Debtors include due from companies in which some of the Directors are Directors/Members: Rs. 691.03 (payable) on the basis of provisional discount (Previous Year receivable: Rs. 319.35 Lacs) maximum amount due during the year: Rs. 279.34 Lacs (Previous Year: Rs. 954.80 Lacs).
(ii) Loans and Advances include:
. Security deposit of Rs. 200 Lacs (Previous Year: Rs. 200 Lacs) placed with Vice-Chairman & Managing Director towards lease of residential premises.
. Due from officers Rs. 0.30 Lacs (Previous Year : Rs. 4.42 Lacs) Maximum amount due during the year Rs. 4.42 Lacs (Previous Year: Rs. 8.54 Lacs).
10. To comply with the requirement of The Micro, Small And Medium Enterprises Development Act, 2006, the Company requested its suppliers to confirm it whether they are covered as Micro, Small or Medium enterprise as is defined in the said Act. Based on the communications received from such suppliers confirming their coverage as such enterprise, the Company has recognised them for the necessary treatment as provided under the Act, from the date of receipt of such confirmations and there is no default in payment to such enterprise as specified in the said Act. However, the amounts outstanding as well as interest applicable are insignificant and hence not separately disclosed.
11. The aggregate amount of unclaimed dividend of previous years as on 31st March, 2011 was Rs. 327.18 Lacs (Previous Year: Rs. 292.59 Lacs). In accordance with the provisions of Section 205A (5) of the Companies Act, 1956, the dividend unclaimed for a period of seven years from the date of transfer to the unpaid dividend account shall be credited to the Investor Education and Protection Fund.
12. Segment Reporting - Refer Annexure - A.
13. Related Party Disclosures - Refer Annexure - B.
14. Statutory dues not deposited on account of dispute - Refer Annexure - C.
15. Previous years figures have been re-grouped wherever necessary to conform to current years grouping.
Mar 31, 2010
1 Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs.l2,578,721/- (Previous year Rs.21,873,473/-)
2 Contingent liability in respect of:
i. Disputed demands of excise authorities Rs.6,185,062/- (Previous year Rs.6,964,013/-)
Pending before the Commissioner of Central Excise (Appeals) Rs. 1,939,003/-, (Previous Year Rs.l,939,003/-)
Pending before High Court of Bombay, at Goa Rs. 2,882,439/-, (Previous Year Rs.2,882,439/-)
Pending before CESTAT Rs. 1,066,076/-, (Previous Year Rs. 1,566,335/-)
Pending filing appeal with CESTAT Rs.297,544/- (Previous year Rs.576,236/-).
The Company is confident of defending the above demands and expects no liability on this count.
ii. Claims against the Company not acknowledged as debts Rs.3,410,000/- (Previous year Rs. 9,943,810/-)
Claim raised by Delhi Transport Corporation Rs. Nil (Previous year Rs. 6,533,810/-) pending before the Delhi High Court. During the year, the matter was decided against the company and the liability has since been settled.
Claim raised by a customer Rs.3,235,000 /- (Previous Year Rs. 3,235,000/-) towards disputed penal charges for delay in meeting delivery deadlines.
Penalty proposed to be levied by the Securities and Exchange Board of India Rs. 175,000/- (Previous Year Rs.l75,000/-) for alleged violation of regulation 6 and 8 of SEBI (Substantial acquisition of shares and takeovers) Regulations 1997 (pending before the Adjudicating Officer) notice dated 21.07.2004.
The Company is confident of defending the above demands and expects no liability on these counts.
iii. Appeal by the Income Tax Dept against the order of Income Tax Appellate Tribunal (ITAT)- amount shown in the appeal Rs.37,329,969/- (Previous year Rs. 37,329,969/-)
The Income Tax Department has gone in appeal against the Order of the ITAT in respect of depreciation not claimed by the Company in
Assessment Year 1990-91, the income tax liability on which is stated to be computed by the department at Rs. 3,732,996 which, due to a typographical error, has been shown as Rs. 37,329,969/- in the appeal.
The Company is confident of defending the above demand and expects no liability on this count.
iv. Disputed demand of Rs. 1,000,000/- (Previous year Rs. 1,000,000/-) as and by way of damages, for alleged breach of agreement to sell the Bungalow situated at Panaii.Goa.
Appeal pending before High Court of Bombay at Goa
v. Bills discounted with a bank Rs.729,614,768/- (Previous year Rs.548,413,885/-)
The above remuneration excludes contribution to gratuity and leave encashment as the incremental liability has been accounted for the company as a whole.
The above remuneration is in excess of the limits specified in Schedule XIII of the Companies Act, 1956 and hence is subject to approval of Central Government under Section 198/309 of the Companies Act, 1956.The company is in the process of making the application to the Central Government.
2 Computation of net profits as per Section 349 read with Section 309(5} and Section 198 of the Companies Act, 1956.
3 Operating Lrase Rentals;
The company has taken certain sheds and residential premises on cancelable operating lease basis. Amount of lease rentals charged to Profit and loss account in respect of such cancelable operating leases are Rs.2,024,483/- (Previous Year Rs. 1,927,605/-).
(a) Segment information for primary segment reporting (by business segment)
The Company has two business segments:-
i) Pressing Division - Manufacturing of pressed parts, components, sub-assemblies and assemblies for various range of automobiles.
ii) Bus body Building Division - Manufacturing of Bus bodies and component parts for Bus bodies.
(b) Inter-segment Transfer Pricing
Inter-segment transfers are made at transfer price.
(c) Common Expenses
Common Expenses are allocated to different segments on reasonable basis as considered appropriate.
4 The Company has exported bus bodfes and component parts thereof of the sales value of Rs. 506,997,266/- (Previous year Rs. 1,826,448,746/-) through a merchant exporter.
5 The excise duty related to the difference between the opening and closing stock of finished goods is disclosed separately in the "Schedule 12 - Other Income" as "Excise Duty".
6 Warranty Provision
Warranty pertains to replacement of defective parts and expenses incurred in relation to rectification of workmanship defects.
7 In the financial year ending 31st March 2007,the company issued 1,481,913 equity shares of Rs. 10 each on Rights basis at a premium of Rs.465/- per share aggregating to Rs. 703,908,675/- The objects of the issue were to substantially increase capacity, upgrade and modernise the Bus Body building facilities and shift the existing presses from the main Sheet Metal Pressing unit (at Honda,Goa) to a location in or around Pune.
The Rights issue closed for subscription on 20th Apn1,2007 and shares were allotted on 19th May,2007. The management had then decided to shift the pressing unit to Dharwar (Karnataka) instead of Pune.
Further, at the AGM held on 8th August, 2009, the members have approved utilisation of the unspent amount as on the date of AGM for other purposes such as funding incremental working capital needs, new business opportunities, in-organic growth and to invest in group companies.
The statement of proceeds from the Rights Issue and utilisation thereof is as under:
8 The company had opted for sales tax deferral scheme under the 1988 Package Scheme of incentive of Bombay Sales Tax Act, 1959 under certificate of entitlement No 412302/S/R-31B/1069 dated 4/2/2000. The total sales tax collected and deferred under the said scheme aggregated to Rs 48,428,000/-. The repayment under the scheme was due from 2010 onwards. During the previous year the Company settled the full liability by paying an amount of Rs.20,830,269/- being the NPV (Net Present Value) calculated in accordance with the provisions of the said act. The differential amount of Rs. 27,597,731/- had been accounted as income and disclosed as an "exceptional item" in the Profit and loss account.
9 Hitherto, the company was valuing the inventory of Components, Stores and Spares on FIFO Basis. During the year, the company has changed the method to weighted average. The impact of the change is not material.
10 Figures of the previous year have been regrouped wherever necessary to correspond with those of the current year.