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Notes to Accounts of Dhunseri Petrochem Ltd.

Mar 31, 2017

1. Description

On 29th February 2016, the Company announced its intention to transfer the "PolyethyleneTerephthalate" ("PETResin") business of the Company in India to Dhunseri Petglobal Limited (now known as IVL Dhunseri Petrochem Industries Private Limited), the then subsidiary company.

Accordingly, pursuant to the Scheme of Arrangement (the Scheme), duly sanctioned by the Hon''ble High Court at Calcutta at the hearing held on 27th July 2016, with effect from the appointed date i.e. 1st April 2016, the "Polyethylene Terephthalate" ("PETResin") business of the Company in India ("Transferred Business") stands transferred to Dhunseri Petglobal Limited (now known as IVL Dhunseri Petrochem Industries Private Limited). Upon filing of the certified copy of the Court Order with the Registrar of Companies on 11th August 2016, the Scheme has become operative on and from the said date and accordingly the effect of the same has been given in these financial statements with effect from 1st April 2016, the appointed date.

In terms of the Scheme, the consideration for transfer of PET Resin business of the Company in India amounting to Rs.28,475.00 lakhs being the book value of the net assets of the said business as on the appointed date has been settled by Dhunseri Petglobal Limited by issue and allotment of 284,75,000 Optionally Convertible Debentures (OCDs) of Rs.100 each which have been fully redeemed during the year. The associated assets and liabilities were consequently presented as Assets classified as held for sale and Liabilities directly associated with assets classified as held for sale transfer directly in the Balance Sheet and the operation of the said Transferred Business has been considered as discontinued operation in these financial statements..

Exceptional items for the year ended 31st March, 2017 comprises loss on disposal of Controlling interest in "Egyptian Indian Polyester Company S.A.E.", a subsidiary company and associated adjustments in carrying value of the remaining stake in Egyptian Indian Polyester Company S.A.E. aggregating Rs. 18,266.20 lakhs (Previous Year Rs. Nil lakhs)

Exceptional item for Discontinued Operation (Refer Note 30) for the year ended 31st March 2016 amounting to Rs. 1,777.90 lakhs represents refunds of duty paid by the Company on Polyester Chips exported to and landed in the United States of America (USA) during the period from 01st August 2013 to 31st March 2015 which has arisen to the Company and accounted for during the year upon renewal of the Generalized System of Preference program with retroactive effect between 01st August 2013 to 28th July 2015 by a provision in the Trade Preference Extension Act of 2015 of the USA. The aforesaid item being attributable to discontinued operations, referred to in Note- 30, has been classified accordingly.

2- Revaluation of Property, Plant and Equipment

Ind AS 101 permits a first time adopter to elect to measure an item of property, plant and equipment and intangible assets at the date of transition to Ind AS at its fair value and use that fair value as its deemed cost at that date. Accordingly, the Company has elected to measure certain items of property, plant and equipment at its fair value as at the transition date (i.e. 1st April, 2015) and considered such value as deemed cost at that date. Fair value of such assets were carried out by an external valuer as on 1st April, 2015 using the following approach:

- Market approach for Leasehold Land

- Combination of direct/indirect cost approach in case of Building

- Indirect/ indexing method of the Cost Approach in case of Plant & Machinery, Furniture and Fixtures, Office Equipment, Vehicles and Computer Software.

Assets not revalued are being carried at historical cost determined in accordance with retrospective application of Ind AS. The aggregate of such fair values and the aggregate adjustment to such carrying amounts are as follows:

3- Disclosure on Specified Bank Notes (SBNs)*

During the year, the Company had no specified bank notes but had other denomination note as defined in the MCA notification G.S.R. 308(E) dated 31 March 2017. The details of Specified Bank Notes (SBN) held and transacted during the period from 08 November 2016 to 30 December 2016 and other notes as per the notification is given below:

The Company''s activities expose it to the following risks arising from financial instruments:

- Credit Risk

- Liquidity Risk

- Market Risk

4. Risk Management Framework

Risk management is integral to the whole business of the Company. The Company has a system of controls in place to create an acceptable balance between the cost of risks occurring and the cost of managing the risks. The management continually monitors the Company''s risk management process to ensure that an appropriate balance between risk and control is achieved.

5. Credit Risk

Credit Risk is the risk that the counterparty will not meet its obligations under a financial instrument or a customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily Trade Receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

Trade Receivables

The Company has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company''s standard payment and delivery terms and conditions are offered. Sale limits are established for each customer and reviewed quarterly. Any sales exceeding those limits require approval from the designated authorities of the management. The management mitigates the credit risk from some customer by accepting letter of credits from them.

The Company limits its exposure to credit risk from trade receivables by establishing a maximum payment period of three months for domestic transaction and four months for export customers respectively. On account of adoption of Ind AS109, the Company uses expected credit loss model to assess the impairment loss or gain.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 6(c).

The allowance for lifetime expected credit loss on customer balances for the year ended 31 March 2015 and 31 March 2016 was Nil.

Revenue from 3 customers of the Company is Rs.257.63 lakhs (01 April 2015- Rs.326.09 lakhs) which is more than 10% of the total revenue of the Company.

Other Financial Assets

Credit Risks for balances with banks and financial institutions is managed by the Company''s treasury department in accordance with the Company Policy. Investments of Surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. The limits are set to minimise the concentration of risk and therefore mitigate financial loss through counterparties potential failure to make payments. Such limits are reviewed from time to time.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 6(a), 6(b), 6(d), 6(e), 6(f), 6(g).

6. Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

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 Company treasury maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows.

7. Market Risk

Market risk is the risk that changes in market prices - such as prices of securities, foreign exchange rates and interest rates-will affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. The Company uses derivatives to manage market risks.

8. Price Risk Exposure

The Company''s exposure to equity securities and mutual funds price risk arises from investments held by the Company and classified in the Balance Sheet either at fair value through OCI or at fair value through profit or loss.

To manage its price risk arising from investments in equity securities and mutual funds, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.

The majority of the Company''s equity investments and mutual funds are publicly traded.

Sensitivity

The table below summarizes the impact of increases/decreases of the index on the Company''s equity and profit for the period. The analysis is based on the assumption that the equity index had increased by 5% or decreased by 5% with all other variables held constant, and that the Company''s equity instruments moved in line with the index.

9. Currency Risk:

The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchases and borrowings are denominated and the functional currency of the Company. The currencies in which these transactions are primarily denominated are SGD, USD, EURO, CHF and AED.

The Company uses forward exchange contracts in certain cases to hedge its currency risk, most with a maturity of less than one year from the reporting date.

Exposure to Currency Risk

The summary quantitative data about the Company''s exposure to currency risk on the reporting date:

10. Derivative Financial Instrument

The Company holds derivative financial instruments such as foreign currency forward contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally a bank or a financial institution.

d) Interest Rate Risk

The Company adopts a policy of ensuring that significant portion of its interest rate risk exposure is at a fixed rate. This is achieved partly by entering into fixed-rate instruments and partly by borrowing at a floating rate and using interest rate swaps as hedges of the variability in cash flows attributable to interest rate risk.

11-Capital Risk Management

12. Risk Management

The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimize returns to our shareholders.

The capital structure of the Company is based on management''s judgment of the appropriate balance of key elements in order to meet its strategic and day to day needs. We consider the amount of capital in proportion to risk and manage the capital structure in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.

The Company''s policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditors and market confidence and to sustain future development and growth of its business. The Company will take appropriate steps in order to maintain, or if necessary adjust, its capital structure.

13 : Fair value measurements (Contd.) (iii) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the use of quoted market prices or dealer quotes for similar instruments

- the fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield curves

- the fair value of forward foreign exchange contracts and principal swap is determined using forward exchange rates at the balance sheet date

- the fair value of the remaining financial instruments is determined using discounted cash flow analysis

14. Valuation processes

The finance department of the Company includes a team that performs the valuations of financial assets and liabilities required for financial reporting purposes and also takes the help of external experts in case Level 3 fair values are required to be determined.

The main level 3 inputs for valuation of Compulsorily Convertible Debentures were the discount rate of 13% and growth rate of 5%. A 5% increase or decrease in the discount rate will be have an impact of 8.5% and 9.2% on the valuation and a 5% increase or decrease in the growth rate will have an impact of 7.3% and 6.8% on the valuation respectively.

15. Enterprises over which KMP(s) are able to exercise significant influence and with whom transactions have taken place

Trimplex Investments Limited

Naga Dhunseri Group Limited

Mint Investments Limited

Dhunseri Overseas Private Limited

Dhunseri Tea & Industries Limited

Dhunseri Petrochem &Tea Pte. Limited

Khaitan & Co. LLP

Khaitan & Co. Kolkata

Khaitan & Co. Mumbai

Khaitan Consultants Limited

16. Post employment Benefit Plan Entity

Dhunseri Petrochem Limited Employees Gratuity Fund

17. Terms and Conditions

Transactions relating to dividends were on the same term and conditions that applied to other shareholders. Transactions relating to acquisitions and disposal of investment are made based on independent valuation report. Transactions relating to rental and royalty income and rent and service charges are as per terms of related agreements. All other transactions are made on normal commercial terms and conditions.

All related party transaction are reviewed by the Audit Committee of the Company.

All outstanding balances are unsecured and are receivable/ repayable in cash.

18. Leave Obligations

The Company provides for the encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment. The liability is provided based on the number of days of unutilized leave at each balance sheet date on the basis of year-end actuarial valuation. The Scheme is unfunded.

Based on past experience and keeping with Company''s practice, the company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months and accordingly, the total year end provision as aforesaid is classified between current and noncurrent.

19. Post employment obligations

20. Gratuity

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the Scheme, the Gratuity Trust Fund makes payment to vested employees at retirement, death/disability, withdrawal of an amount based on the respective employee''s eligible salary for specified number of days depending upon the tenure of service. Vesting occurs upon completion of five years of service. Liability with regard to the aforesaid gratuity plan is determined by actuarial valuation as set out in Note 1.21(ii) above, based upon which the Company makes annual contributions for Gratuity to the Trust Fund.

The following table sets forth the particulars in respect of the defined benefit plans of the Company for the year ended 31st March, 2017 and corresponding figures for the previous year:

- The expected return on plan assets is determined after taking into consideration composition of the plan assets held, assessed risks of asset management, historical results of the return on plan assets, the Company''s policy for plan asset management and other relevant factors.

- Plan assets for gratuity is funded with Life Insurance Corporation of India.

The expenses for the above mentioned benefits have been included and disclosed under the following line items:-Gratuity - under ''Employee Benefits Expense1 in Note 25

# The estimate of future salary increases takes into account inflation, seniority, promotion and other relevant factors, such as demand and supply in the employment

The Company ensures that the investment positions are managed within an Asset-Liability Matching (ALM) framework that has been developed to achieve investment that are in line with the obligation under the Gratuity Scheme. Within this framework, the Company''s ALM objective is to match asset with gratuity obligation. The Company actively monitors how the duration and the expected yield of instruments are matching the expected cash outflow arising from the gratuity obligations. The Company has not changed the process used to manage its risk from previous period. The Company does not use derivatives to manage its risk. The gratuity scheme funded with LIC which has good track record of managing fund.

21. Contribution to Defined Contribution Plan comprising Rs. 10.25 lakhs (31 March 2016-Rs.22.23 lakhs) on account of the Company''s Contribution to Superannuation fund and Rs.11.69 lakhs (31 March 2016-Rs.127.84 lakhs) on account of the Company''s Provident Fund has been recognized as an expense and included in Note-25 Employee Benefits Expense under the head "Contribution to provident and other funds'' in the Statement of Profit and Loss.

22. The Company uses derivative instrument to hedge its exposures in foreign currency related to firm commitments and highly probable forecasted transaction. Outstanding Forward Contracts as at 31st March 2017 taken to hedge various foreign currency receivables on underlying exposures basis is Rs. Nil lakhs (31 March 2016-Rs.6,339.45 lakhs, 1st April 2015-Rs. Nil lakhs). Interest rate swap contract outstanding for hedging of floating interest rate isRs. Nil lakhs(31 March 2016-Rs.26,068.39 lakh, 1st April 2015-Rs.30,708.10 lakh).

23. Foreign Currency Exposures (net) that are not hedged as at 31 March 2017 by a derivative instrument or otherwise is Rs.740.90 lakhs (31 March 2016-Rs.96,700.33 lakhs, 1st April 2015- Rs.1,06,170.32 lakhs)

24- Undertaking given to Lenders of Subsidiary Company

The Company had a subsidiary Egyptian Indian Polyester Company S.A.E. (EIPET), the controlling interest in which has been disposed during the year to Dhunseri Overseas Private Limited. EIPET had also taken loans from various lenders to fund its PET Resin manufacturing project in Egypt. As the then sponsor shareholder having majority stake in EIPET, the Company had given an undertaking to the lenders that in the event of the failure of EIPET to make any term loan repayment on due date and triggering of Market Redirection Event as specified in the agreement, which according to the Company are within its control, the Company will be required to pay to the lenders the amounts due by EIPET subject to a specified limit. Based on the information available with the Company, the loan amount outstanding in EIPET books ason 31st March 2016 amounts to US$ 1,618.32 lakhs, equivalenttoRs.1,07,347.66 lakhs (1 April 2015-US$1,705.72 lakhs equivalent to Rs.1,05,856.77 lakhs).

25- Segment Information

Consequent upon transfer of the business segment Polyester Chips with effect from 1st April, 2016 pursuant to the scheme referred to in Note 30, the Company is now engaged in treasury operations and is managed organizationally as a single unit in India. Accordingly, effective 1st April, 2016, the Company has a single reportable segment and earlier practice of segment reporting by primarily business segment is no longer applicable to the Company.

26: First-time adoption of Ind AS

These are the Company''s 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 31 March, 2017, the comparative information presented in these financial statements for the year ended 31 March 2016 and in the preparation of an opening Ind AS balance sheet at 01 April 2015 (the Company''s 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 Standard 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 Company''s financial position, financial performance and cash flows is set out in the following tables and notes.

27 . 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.

28. Ind AS Optional Exemptions

29. Deemed Cost

Ind AS 101 permits a first time adopter to elect to measure an item of property, plant and equipment at the date of transition to Ind AS at its fair value and use that fair value as its deemed cost at that date. The 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 certain class of property, plant and equipment at its fair value as at the transition date and considered such value as deemed cost at that date. While remaining class of assets are carried at historical cost determined in accordance with retrospective application of Ind AS.

30.Designation of previously recognized financial instruments

Ind AS 101 allows an entity to designate investments in equity instruments at FVOCI on the basis of the facts and circumstances at the date of transition to Ind AS.

The Company has elected to apply this exemption for its investment in equity instruments (other than its investment in subsidiaries).

31. Leases

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 not to be material.

The Company has elected to apply this exemption for such contracts/arrangements.

32. Investment in Subsidiaries

Ind AS 101 permits a first time adopter to measure its investment in subsidiaries at cost determined in accordance with Ind AS 27 or at deemed cost which shall be either its fair value or its carrying amount as per previous GAAP at the transition date.

Accordingly the Company has elected to measure its investment in Dhunseri Infrastructure Limited at fair value and investment in Egyptian Indian Polyester Company S.A.E. at its previous GAAP carrying amount as at the transition date and considered these as their deemed cost.

33. Long-term Foreign Currency Monetary Items

Under previous GAAP, exchange differences arising on reporting of long term foreign currency monetary items (i) relating to acquisition of depreciable capital assets were allowed to be adjusted to the carrying amount of such assets (to be adjusted over the balance life of the related asset) and (ii) in other cases were allowed to be accumulated in a ''Foreign Currency Monetary item Translation Difference Account'' (to be adjusted over the balance period of the related long term monetary asset/ liability). Ind AS 101 includes an optional exemption that allows a first time adopter to continue with the above accounting policy in respect of long term foreign currency monetary items recognized in the financial statements for the period ending immediately before the beginning of first Ind AS financial reporting period i.e. 01 April, 2016 or to discontinue with such policy.

The Company has availed of the aforementioned optional exemption and has decided to continue with the above policy.

34. Ind AS mandatory exceptions

35. Estimates

A Company''s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS adjustments as at 01 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.

36. Investment in equity instruments carried at FVPL or FVOCI

37. Impairment of financial assets based on expected credit loss model

38. De-recognition of Financial Assets and Liabilities

Ind AS 101 requires a first time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of company''s choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognized as a result of past transactions was obtained at the time of initial 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.

39. Classification and Measurement of Financial Assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

40. First Time Adoption of Ind-AS

41. Notes to first-time Adoption

42. Property, plant and equipment

Under the previous GAAP, property, plant and equipment were stated at cost of acquisition/construction less accumulated depreciation/ amortization, impairment loss, if any and inclusive of borrowing cost, where applicable, and adjustments for exchange difference arising on reporting of long term foreign currency monetary items relating to acquisition of depreciable capital assets.

Under Ind AS, the Company has elected to measure certain class of property, plant and equipment at its fair value as at the transition date and considered such value as deemed cost at that date. While remaining class of property, plant and equipment are carried at historical cost determined in accordance with retrospective application of Ind AS. (Refer Note 43.1.1.1)

The resulting fair value changes consequent to the measurement of property, plant and equipment at their fair value have been recognized in retained earnings as at the date of transition. This increased retained earnings by Rs. 22,227.97 Lakhs as at 31 March 2016 (01 April 2015 - Rs. 22,227.97 Lakhs)

Basis fair value changes in measurement of certain class of property, plant and equipment, depreciation on such increase have been charged to the statement of profit and loss for the year ended 31 March 2016 and profit on sale of Property, Plant and Equipment has been re-measured.

Consequent to the above, the total equity as at 31 March 2016 has increased by Rs. 21,227.20 lakhs (01 April 2015- Rs. 22,227.97 lakhs) and profit for the year ended 31 March 2016 decreased by Rs.1,000.77 lakhs.

43. Fair valuation of investment (other than investment in subsidiary)

Under the previous GAAP, investments in equity instruments and mutual funds were classified as long-term investments or current investments based on the intended holding period and reliability. Long-term investments were carried at cost less provision for other than temporary decline in the value of such investments, as determined by the Board of Directors based on periodical review.

Under Ind AS, these investments are required to be measured at fair value (except for investments in subsidiaries for which exemption with regard to deemed cost has been adopted).

Fair value changes with respect to investments in equity instruments (other than in subsidiaries) designated at FVOCI have been recognized in retained earnings as at the date of transition and subsequently in the other comprehensive income for the year ended 31 March 2016. This increased other reserves (FVOCI) by Rs. 221.81 lakhs as at 31 March 2016 (01 April 2015Rs. 320.02 lakhs).

As a result of fair valuation of equity instruments as on 01st April 2015, gain on disposal of equity instruments amounting to Rs. 130.08 lakhs recognized under previous GAAP has been reversed during the year ended 31 March 2016 and a loss is recognized in OCI amounting to Rs. 71.68 lakhs with a corresponding impact on the profit for the year ended 31 March 2016 and OCI for the year ended 31 March 2016. Also, a loss on fair valuation of equity instruments amounting to Rs.98.21 lakhs was recognized in OCI for the year ended 31 March 2016.

Under the previous GAAP, current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments have been recognized in the retained earnings as at the date of transition and subsequently in the statement of profit and loss for the year ended 31 March, 2016. This increased retained earnings by Rs. 864.23 lakhs (1 April, 2015 - Rs.205.95 lakhs). Also as a result of fair valuation of mutual fund as on 1st April, 2015, gain on disposal of mutual funds amounting to Rs.205.95 lakhs have been reversed during the year ended 31st March, 2016

Consequent to the above, the total equity as at 31 March 2016 increased by Rs. 864.23 lakhs (1 April 2015- Rs. 205.95 lakhs), profit for the year ended 31 March, 2016 increased by Rs. 658.66 lakhs.

44. Loan to subsidiary carried at amortized cost

Under the previous GAAP, financial assets are initially recognized and carried at cost. Under Ind AS, the Company has classified and measured interest free loan given by it to Dhunseri Infrastructure Limited, a subsidiary company at amortized cost. The resulting change in the carrying amount of this financial asset has been recognized in the investment in subsidiary as at the date of transition. Interest income from this financial asset measured using effective interest rate method have been credited to the statement of profit and loss for the year ended 31 March 2016 under interest income. This has decreased loan to related party as at 31 March 2016 by Rs. 427.06 lakhs (01 April 2015 - Rs. 427.06 lakhs) and increased investment in subsidiary by Rs. 427.06 lakhs (01 April 2015 - Rs. 427.06 lakhs) and this has no impact on the total equity as on 1st April, 2015.

Consequent to the above, total equity as at 31 March 2016 increased by Rs. 427.06 lakhs (01 April 2015- Rs. Nil lakhs) with a corresponding increase in profit for the year ended 31 March 2016 by an equivalent amount.

45. Fair Value of investment in subsidiary

Under the previous GAAP, investment in subsidiaries were carried at cost less provision for other than temporary decline in the value of such investments, as determined by the Board of Directors based on periodical review. Under Ind AS, the Company has elected to measure its investment in Dhunseri Infrastructure Limited at fair value and investment in Egyptian Indian Polyester Company S.A.E at its previous GAAP carrying amount as at the transition date and considered these as their deemed cost pursuant to optional exemption given under Ind AS 101.

The resulting fair value changes on measurement of investment in Dhunseri Infrastructure Limited at fair value have been recognized in retained earnings as at the date of transition. This decreased retained earnings and consequently total equity as at 31 March 2016 by Rs.427.06 lakhs (01 April, 2015 - Rs.427.06 lakhs).

46. Financial Instrument - Derivative Contract

Under the previous GAAP, forward contract cost were accounted for as prescribed under AS 11 "The Effects of Changes in Foreign Exchange Rates" under which forward premium was amortized over the period of forward contracts and forward contracts were stated at the yearend spot exchange rate and gains / losses on settlement on aforesaid contracts and mark to market loss relating to outstanding contracts as at the balance sheet date in respect of derivative contracts (other than forward exchange contract covered under Accounting Standard 11 on "The Effects of Changes in Foreign Exchange Rates"), were recognized in the statement of Profit and Loss.

Under Ind AS 109, all derivative financial instruments are to be marked to market and any resultant gain or loss on settlement as well as on outstanding contracts as at the balance sheet date is to be charged or credited to the statement of profit and loss.

Accordingly, the marked to market gain/loss has been recognized on all derivative contracts and unamortized forward premium balance and exchange gain / loss on reinstatement of forward contracts, if any, under aforesaid AS 11 has been reversed. As a result of this adjustments, the retained earnings and consequently total equity as at 31 March 2016 is higher by Rs.5.57 lakhs (01 April 2015 - Rs. 86.25 lakhs). The profit for the year ended 31 March, 2016 is lower by Rs.80.14 lakhs.

47. Deferred Tax

The Company has recognized deferred tax on the adjustments made on transition to Ind AS. The corresponding adjustments have been made in retained earnings. Deferred tax on Ind AS adjustments have been charged or credited subsequently to the statement of profit and loss for the year ended 31 March, 2016. This resulted into increase in deferred tax liabilities as at31 March 2016 by Rs.6,530.80 lakhs (01 April 2015 - Rs.6,591.40 lakhs) with a corresponding impact on retained earnings.

Consequent to the above, total equity as at 31 March 2016 has decreased by Rs.6,530.80 lakhs (01 April 2015 - Rs. 6,591.40 lakhs) and profit for the year ended 31 March 2016 has increased by Rs.58.60 lakhs.

48. Borrowings and Other financial liabilities

Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognized in the statement of profit and loss over the tenure of the borrowing as part of the other borrowing cost by applying the effective interest rate method.

Under previous GAAP, these transaction costs were charged to statement of profit and loss as and when incurred. Accordingly, non-current borrowings have been reduced by Rs. 406.44 lakhs as at 31st March, 2016 (01 April, 2015- Rs.564.33 lakhs) with a corresponding adjustment to retained earnings. The total equity increased by an equivalent amount. The profit for the year ended 31 March 2016 decreased by Rs.157.89 lakhs as a result of the additional other borrowing cost.

49. Proposed Dividend and Tax on Proposed Dividend

Under the previous GAAP, dividends proposed by the Board of Directors after the balance sheet date but before the approval of the same by the shareholders of the company were considered as adjusting events. Accordingly, provision for proposed dividend was recognized as a liability. Under Ind AS, such dividends are recognized when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend and tax on proposed dividend aggregating to Rs. 1,686.20 lakhs as at 31 March 2016 (01 April 2015 - Rs. 1,686.20 lakhs) included under provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity increased by an equivalent amount.

50. Security Deposits

Under the previous GAAP, interest free lease security deposits (that are refundable in cash on completion of the lease term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognized at fair value. Accordingly, the Company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognized as prepaid rent. Consequent to this change, the amount of security deposits decreased by Rs. Nil lakhs at 31 March 2016 (01 April 2015-Rs. 27.82 lakhs). The prepaid rent increased by Rs. Nil lakhs as at 31 March 2016 (01 April 2015- Rs.27.82 lakhs). The profit for the year and total equity as at 31 March 2016 decreased by Rs. 5.57 lakhs due to amortization of the prepaid rent which was partially off-set by the notional interest income of Rs.4.42 lakhs recognized on security deposits.

51. Re-measurements of Post-employment Benefit Obligations

Under Ind AS, re-measurements 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 recognized in other comprehensive income instead of statement of profit and loss. Under the previous GAAP, these re-measurements were forming part of the profit or loss for the year. As a result of this change, employee benefits expense for the year ended 31 March, 2016 has been increased by Rs.1.36 lakhs resulting into decrease in profit by an equivalent amount with the corresponding increase in the other comprehensive income. There is no impact on the total equity as at 31 March, 2016.

52. Gain/(Loss) on disposal of Property, Plant and Equipment

Under Ind AS, the company has elected to measure certain class of property, plant and equipment at its fair value as at the transition date and considered such value as deemed cost at that date (Refer Note 32 and 43.1.1.1). This has resulted into decrease in loss on disposal of property, plant and equipment during the year ended 31 March 2016 by Rs. 5.13 lakhs.

Consequent to the above, total equity as at 31 March, 2016 and profit for the year ended on that date has increased by Rs. 5.13 Lakhs

53. Retained earnings

Retained earnings as at 01 April 2015 has been adjusted consequent to the above Ind AS transition adjustments.

54. Other comprehensive income

Under Ind AS, all items of income and expense recognized 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 recognized in profit or loss but are shown in the statement of profit and loss as ''Other Comprehensive Income'' includes re-measurements of defined benefit plans and fair value gains or (losses) on FVOCI equity instruments. The concept of other comprehensive income did not exist under previous GAAP.


Mar 31, 2016

b) The Company has one class of equity share having a par value of Rs.10/- each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in the case of interim dividend. In the event of liquidation the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts in proportion to their shareholding.

(d) Shares allotted as fully paid pursuant to contracts without payment being received in cash (during five years immediately preceding 31st March, 2016)

- During the year 2010-11-23,313,859 Equity Shares of Rs. 10/- each were issued as fully paid up issued pursuant to a scheme of arrangement without payment being received in cash.

# General Reserve is a free reserve and is not meant for meeting any specific liability contingency or commitment

# After considering liability adjusted against General Reserve Rs. Nil crore (Previous Year Rs.6.11 crores) [Refer Note 38] and transferred pursuant to the scheme of arrangement Rs. Nil crore (Previous Year Rs.8.75 crores) [Refer Note 36]

Nature of Security

(a) Other Loans from Banks/Loans Repayable on demand from Banks

(i) To the extent of Rs.728.94 crores (Previous Year-Rs.670.61 crores):

First charge by way of hypothecation ranking pari-passu over all present and future inventories, book debts and all other current assets of Haldia Plants of the Company.

Secured/to be secured by joint mortgage on pari-passu second charge basis on all the immovable properties of the Haldia Plants of the Company situated at JL-126 Mouza- Basudevpur PS Durgachak & JL-145 Mouza Paranchak PS Bhabanipur Haldia Midnapore (East)West Bengal together with all the buildings and structures thereon including fixed plant and machinery and fixtures and fittings permanently fastened to the earth or fastened to anything attached to the earth and by joint hypothecation on all the moveable properties of Haldia Plants of the Company.

(ii) To the extent of Rs.12.00 crores (Previous Year- Rs. Nil crore):

Secured by way of lien against fixed deposit with banks.

(a) There are no amounts due for payment to the Investor Education and Protection Fund under Section 205C of the Companies Act, 1956 as at year end.

(a) Leasehold Land includes one plot of land [Gross Block and Net Block amounting to Rs.2.03 crores (Previous year Rs.1.87 crores) and Rs.1.96 crores (Previous Year Rs.1.86 crores) respectively as at 31st March 2016], located at Haldia , which is not held in the name of the Company as the deed of assignment is yet to be executed.

(b) Buildings include three properties [Gross Block and Net Block a mounting to Rs.11.68 crores (Previous Year Rs.11.68 crores) and Rs.10.31 crores (Previous Year Rs.10.49 crores) respectively, as at 31st March 2016], located at Kolkata which are not held in the name of the Company as the conveyance deeds are yet to be executed

(c) Other Adjustments column includes adjustment on account of exchange difference Rs.14.68 crores (Previous Year- Rs.11.97 crores)

(d) Disposals/Adjustments column includes Gross Block and Accumulated Depreciation on account of assets written off worth Rs.0.43 crore (Previous Year- Rs. Nil crore) and Rs.0.40 crore (Previous Year- Rs. Nil crore) respectively.

(a) Represents Polyester chips

(b) Represents Pet Barrier Resins

(a) Includes Rs. Nil crore (Previous Year- Rs.9.00 crores) under lien with bank.

(b) Earmarked for payment of dividend.

(c) Includes Rs.14.97 crores (Previous Year- Rs. Nil crore) under lien with bank.

@ Amount is below the rounding off norm adopted by the Company

Note 1 - Discontinuing Operations

The Board of Directors at its meeting held on 29th February 2016 approved a Scheme of Arrangement (the Scheme) for reconstruction by transfer of"PolyethyleneTerephthalate ("PET Resin") business of the Company in India" ("Transferred Business") to Dhunseri Petglobal Limited "DPGL" a Subsidiary Company with effect from the Appointed Date i.e. 1st April, 2016 in consideration for 28,475,000 Optionally Convertible Debentures for Rs.100/each credited as fully paid up in DPGL. The Company has also intimated to the Stock Exchanges about the Scheme on March 21, 2016.The PET Resin is a separate business segment as per AS-17"Segment Reporting". The Scheme is subject to and conditional upon the requisite approvals, including sanction of the Flon''ble Hig h Court at Calcutta which is pending and accordingly, although operative from the Appointed Date it would become effective on the Effective Date on which certified copies of the order of the Flon''ble High Court at Calcutta sanctioning the Scheme are filed with the Registrar of Companies. Accordingly, aforesaid PET Resin business has been considered as discontinuing operations.

Note 2 - Scheme of Arrangement

Pursuant to the Scheme of Arrangement (the Scheme), duly sanctioned by the Hon''ble High Court at Calcutta at the hearing held on 7th August, 2014, with effect from the appointed date i.e. 1st April, 2014, the "Tea Division" of the Company engaged in the business of cultivation, production and marketing of tea, together with all its assets .liabilities etc . stood transferred as a going concern by way of demerger to Dhunseri Tea & Industries Limited (DTIL) and the "IT SEZ Division"engaged in the business of providing infrastructure facilities in the Information Technology/ Information Technology Enabled Services units with Special Economic Zone status together with all its assets, liabilities etc. stood reorganized and transferred as a going concern to Dhunseri Infrastructure Limited (DIL). Upon filing of the certified copy of the Court Order with the Registrar of Companies on 1st September, 2014, the Scheme had become operative on and from the said date .And accordingly the effect of the same had been given at the time of previous year''s financial statements. In terms of the Scheme upon transfer to DTIL, the difference Rs. Nil crore (Previous Year Rs.275.02 crores )between the total assets of Rs. Nil crore (Previous Year Rs.341.62 crores) and total liabilities of Rs. Nil crore (Previous Year Rs.66.60 crores) of the Tea Division as on the appointed date had been adjusted against General Reserve (Note 3 -Reserves and surplus) in the books of the Company. Further, in terms of the Scheme, the consideration for transfer of IT SEZ Division amounting to Rs. Nil crore (Previous Year Rs.46.18 crores) being the book value of the net assets of the said Division as on the appointed date had been settled by DIL by issue of 50,00,000 Equity Shares of Rs.10/- each fully paid up in the previous year and the balance amount of Rs.41.18crores has been settled by cash in the current year.

Note 3 - Exceptional Item

Exceptional item amounting to Rs.17.78 crores (Previous Year Rs. Nil crore)represents refunds of duty paid by the Company on Polyester Chips exported to and landed in

in the United States of Americas (USA) during the period from 1st August, 2013 to 31st March, 2015 which has arisen to the Company and accounted for during the year upon renewal of the Generalized System of Preference program with retroactive effect between 1st August, 2013 to 28th July, 2015 by a provision in the Trade Preference Extension Act of 2015 of the USA. The aforesaid item being attributable to discontinuing operations, referred to in Note- 35, has been classified accordingly.

Note 4 - Revision in useful lives of Fixed Asset

Effective 1st April, 2014, the Company has started charging depreciation in keeping with the requirements of Schedule II to the Companies Act, 2013 and as a result of which the estimated useful lives of certain fixed assets had been revised in earlier year. Pursuant to the transitional provision set out in the said Schedule II, the carrying amount (after retaining the residual values) aggregating Rs. Nil crore (Previous Year Rs.17.98 crores) relating to Fixed assets, where the revised useful lives were Nil as on 1 st April, 2014, had been debited to General Reserve (Note 3). Further, related tax impact on such adjustment amounting to Rs. Nil crore (Previous Year Rs.6.11 crores)had also been credited to General Reserve.

Note 5

(a) Loans and advances to related parties under "Short term loans and advances" (Note 22) includes amount due from-

(i) From a Company in which Key Management Personnel is able to exercise Significant Influence-Rs. Nil crore (Previous Year -Rs.0.10 crore)

(ii) Subsidiary Companies amounting to Rs.3.83 crores ( Previous Year- Rs.3.62 crores).

(b) Receivable from Subsidiary under"-Other non-current assets"(Note 17) includes amount due from-

(i) Subsidiary Company amounting to Rs. Nil crore ( Previous Year- Rs.41.18 crores).

Note 6 - Employee Benefit Obligation

I. Gratuity

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme, the Gratuity Trust Fund make payment to vested employees at retirement, death/disability, withdrawal of an amount based on the respective employee''s eligible salary for specified number of days depending upon the tenure of service . Vesting occurs upon completion of five years of service. Liability with regard to the aforesaid gratuity plan is determined by actuarial valuation as set out in Note l(g)(ii) above, based upon which the Company makes annual contributions for Gratuity to the Trust Fund.

g) Contribution expected to be paid to the plan during the period 2015-16 is Rs.0.40 crore (Previous Year- Rs.0.37 crore)

(i) Actual Return on Plan Assets (Rs. in crores) 0.13 0.07

(ii) The estimate of future salary increase considered in actuarial valuation takes into account factors like inflation, seniority, promotion and other relevant factors. The expected return on plan assets is determined after taking into consideration composition of plan assets held, assessed risk, historical results on plan assets, the Company''s policy for plan asset management and other relevant factors.

II Contribution for Defined Contribution Plan comprising Rs.0.22 crore (Previous Year-Rs.0.14 crore) on account of the Company''s contribution to Superannuation fund and Rs.1.28 crores (Previous Year- Rs.1.23 crores) on account of the Company''s contribution to Provident funds has been recognized as an expense and included in Note 31- Employee benefits expenses under the head "Contribution to provident and other funds" in the Statement of Profit and Loss.

Note 7 - Segment reporting

Up to the previous year ended 31st March, 2015, the Company''s business was organized as a single business segment. However, pursuant to re organization of its business operations and related internal reporting/monitoring system with effect from 1st April, 2015, the Company has identified primary business segments namely "Polyester Chips"and "Treasury Operations" and has disclosed segment information accordingly As the Company was organized as a single business segment up to 31st March, 2015, it is not practicable to ascertain the comparative figures for the year ended 31st March, 2015.

Note 8 - Derivative Instruments and Unhedged Foreign Currency Exposures

a) The Company uses derivative instrument to hedge its exposures in foreign currency related to firm commitments and highly probable forecasted transaction. Outstanding Forward Contracts as at 31st March, 2016 taken to hedge various foreign currency receivables on underlying exposures basis is Rs.63.39 crores (Previous Year Rs. Nil crore) Interest Rate Swap contract outstanding for hedging of floating interest rate is Rs.260.68 crores (Previous year Rs.307.09 crores).

b) Foreign currency exposures(net) that are not hedged as at 31st March, 2016 by a derivative instrument or otherwise is Rs.967.00 crores (Previous year Rs.1061.70 crores).

Note 9 - Disclosure as per The Micro, Small and Medium Enterprise Development Act, 2006 (MSMED Act)

The Company has amounts due to suppliers under The Micro, Small and Medium Enterprise Development Act, 2006 (MSMED Act) as at 31st March, 2016. The disclosures pursuant to the said Act is as under:

This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

Note 10 - Lease Obligation

Operating Lease

The Company has taken various office premises under operating leases which are cancellable having tenures of 11 months / 9 years. There is no specific obligation for renewal of these agreements. Fease rent for the year amounts to Rs.0.85 crore (Previous Year- Rs.1.04 crores) debited to the Statement of Profit and Foss.

Note 11 - Undertaking given to Lenders of Subsidiary Company

The Company had invested an amount of Rs.196.26 crores (Previous Year- Rs.196.26 crores) by way of equity contribution up to 31st March, 2016, towards PET Resin manufacturing project in its subsidiary company, Egyptian Indian Polyester Company S.A.E. (EIPET). EIPET has also taken loans from various lenders to fund the project. As the sponsor shareholder having majority stake in EIPET, the Company has given an undertaking to the lenders that in the event of the failure of EIPET to make any term loan repayment on due date and triggering of Market Redirection Event as specified in the agreement, which according to the Company are within its control, the Company will be required to pay to the lenders the amounts due by EIPET subject to a specified limit. Based on the information available with the Company, the loan amount outstanding in EIPET books as on 31st March, 2016 amounts to US$ 16.18 crores, equivalent Rs.1073.48 crores (Previous Year - US$ 17.06 crores, equivalent Rs.1058.57 crores).

Note 12

In view of unfavorable financial performance of Egyptian Indian Polyester Company S.A.E (EIPET) for the year ended 31st December, 2014 the Company had waived the Royalty fee due from EIPET for the period upto 31 st March, 2015.Subsequent thereto the Company has agreed to extend such waiver till EIPET is able to service its debt obligation upon improvement of its financial performance. Such fee for the year ended 31st December, 2014 worked out to USD 0.15 crore ( Equivalent Rs.9.13 crores).

Note 13

The Company holds long term strategic investment in Egyptian Indian Polyester Company S.A.E ( EIPET), a subsidiary company in Egypt amounting to Rs.196.26 crores (Refer Note 15). EIPET commenced its operation in 2014. On account of loss in the initial period of operation, 100% net worth of EIPET has been eroded as at 31st December, 2015 and operation of the plant has temporarily ceased mainly due to shortage of working capital. The losses were primarily due to certain unprecedented business conditions. However, the management of the Company is confident that after the initial years of operations in which EIPET suffered loss, the subsidiary will recover as the plant is in proximity to developed markets with quality of product well accepted with the customers. Besides, the plant operations were also smooth in the production phase. To mitigate the temporary financial crisis a restructuring plan is under process with the lenders. Thus taking into account the actions being taken by the management and other factors as set out above, diminution in the value of the long term and strategic investment in EIPET is considered to be temporary in nature at this stage and no provisioning for diminution is considered necessary by management at this stage as per applicable accounting standards.

Note 14.

Previous Year''s figures have been rearranged/regrouped wherever necessary.


Mar 31, 2014

(Rs. in crores)

As at As at 31.03.2014 31.03.2013

Note 1 CONTINGENT LIABILITIES

(a) Claims against the Company not acknowledged as debts

(i) Customs Demand-matter under dispute @ @

(ii) Service Tax Demand-matter under dispute 0.18 0.18

(iii) Income Tax-matter under dispute 0.83 0.83

(iv) Entry Tax-matter under dispute 11.76 -

It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings.

(b) Standby Letters of Credit issued in connection with loan taken by Dhunseri Petrochem 79.33 71.79 & Tea Pte Limited, a wholly owned subsidiary, from a bank

(c) Bank Guarantee 2.33 -

(d) The Company does not expect any reimbursements in respect of the above contingent liabilities.

@ Amount is below the rounding off norm adopted by the Company.

Note 2 DISCONTINUING OPERATIONS

The Board of Directors at its meeting held on 28th January, 2014 approved a Scheme of Arrangement (the Scheme) for demerger of the "Tea Division" of the Company which is engaged in the business of cultivation, production and marketing of tea, by way of transfer to M/s Dhunseri Tea & Industries Limited and reorganisation of the "IT SEZ Division" which is engaged in the business of providing infrastructure facilities to the Information Technology/Information Technology Enabled Services (IT/ITES) units with special economic zone status, by transferring the same to M/s Dhunseri Infrastructure Limited with effect from the appointed date i.e. 1st April, 2014. The Company has also intimated to the Stock Exchanges about the Scheme on 28th January, 2014. The Tea Division is a separate business segment as per AS-17 "Segment Reporting" and IT SEZ division which is yet to start its operation was included in unallocated assets and liabilities in segment reporting. The Scheme is subject to requisite approvals, including sanction of the The Hon''ble High Court at Calcutta which is pending. Accordingly aforesaid Tea Division and IT SEZ Division have been considered as discontinuing operations.

Note 3 REVALUATION OF FIXED ASSETS

All fixed assets other than Computers and Furniture & Fixtures located at Ten tea estates and Eight factories in the state of Assam had been revalued by M/s S. R. Batliboi Consultants Pvt. Limited, Registered Valuer, on 1st April, 2009, to Rs. 183.19 crores (Previous Year- Rs. 183.19 crores ) resulting in increase in net book value of assets by Rs. 149.90 crores (Previous Year- Rs. 149.90 crores) which had been credited to the Revaluation Reserve. The Revaluation Reserve has been fully adjusted in earlier years.

Buildings, Plant & Machinery and Vehicles were revalued by the Net Replacement Value method whereas Freehold Land and Leasehold Land & Estate Development were revalued by Plantation Value method.

III FOREIGN CURRENCY CONVERTIBLE BONDS (FCCB)

The erstwhile South Asian Petrochem Limited (subsequently merged with Dhunseri Petrochem & Tea Limited) had issued 200 Zero Percent Unsecured Foreign Currency Convertible Bonds (FCCB) of US$ 100,000 each in the year 2007-08. Out of these FCCBs, outstanding bonds had been fully redeemed in the year 2012-13 and the premium on redemption amounting to Rs. Nil (Previous Year- Rs. 14.80 crores) had been adjusted with Securities Premium Account.

Note 4 LOANS AND ADVANCES

(a) Loans and advances to related parties under "Short-term loans and advances" (Note 22) includes amount due from

(i) A Private Limited Company in which Director of the Company is a director-Rs. Nil (Previous Year- Rs. 0.02 crore).

(ii) Subsidiary Companies amounting to Rs. 16.35 crores ( Previous Year- Rs. 5.57 crores ).

I Gratuity

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme, the Gratuity Trust Fund make payment to vested employees at retirement, death/disability, withdrawal of an amount based on the respective employee''s eligible salary for specified number of days depending upon the tenure of service subject to a maximum limit of Rs. 0.10 crores. Vesting occurs upon completion of five years of service. Liability with regard to the aforesaid gratuity plan is determined by actuarial valuation as set out in Note l(g)(ii) above, based upon which the Company makes annual contributions for Gratuity to the Trust Fund.

Note 5

DISCLOSURE OF RELATED PARTIES AND RELATED PARTY TRANSACTIONS IN KEEPING WITH ACCOUNTING STANDARD 18

Names of related parties and description of relationship: Where control exists

(A) Subsidiary Companies:

(1) Egyptian Indian Polyester Company S.A.E.

(2) Dowamara Tea Company Private Limited (up to 20th March,2014)

(3) Dhunseri Petrochem & Tea Pte Ltd.

(4) Dhunseri Tea & Industries Limited (formerly Dhunseri Services Limited) (acquired during the year ended 31.03.2014)

(5) Dhunseri Infrastructure Limited (formerly Dhanurveda Infrastructure Private Limited) (acquired during the year ended 31.03.2014)

(B) Subsidiaries of Dhunseri Petrochem & Tea Pte Ltd.

(6) Makandi Tea & Coffee Estates Ltd. (acquired during the year ended 31.03.2013)

(7) Kawalazi Estate Company Ltd. (acquired during the year ended 31.03.2013)

Others

(C) Group Companies (i.e. Companies in which Key Management Personnel is able to exercise significant influence):

(8) Naga Dhunseri Group Limited

(9) Trimplex Investments Limited

(10) Mint Investments Limited

(11) Dhunseri Investments Limited

(D) Key Management Personnel

(12) Mr. C. K. Dhanuka ( Executive Chairman)

(13) Mr. M. Dhanuka (Vice Chairman and Managing Director)

(14) Mr. B. Chattopadhyay (Chief Executive Officer and Managing Director)

(15) Mr. R. K. Sharma (Executive Director, Finance)

Note M DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY EXPOSURES-

a)The Company uses Forward Exchange Contracts and Interest Rate Swaps to hedge its exposures in foreign currency related to firm commitments and highly probable forecasted transactions. Outstanding Forward Contracts as at 31st March, 2014 taken to hedge various foreign currency receivables on past performance basis is Rs. 24.63 crores (Previous Year- Rs. 38.86 crores) and foreign currency loan payable is Rs. Nil (Previous Year- Rs. 40.35 crores), Interest Rate Swap contracts outstanding as at year end is Rs. 353.53 crores (Previous Year- Rs. 55.83 crores).

b) Foreign Currency Exposures(net) that are not hedged as at 31st March, 2014 by a derivative instrument or otherwise is Rs. 1158.04 crores (Previous Year-Rs. 1016.31 crores).

Note 6 LEASE OBLIGATION

Operating Lease

The Company has taken various office premises under operating leases which are cancellable having tenures of 11 months/9 years. There is no specific obligation for renewal of these agreements. Lease rent for the year amounts to Rs. 1.84 crores (Previous Year- Rs. 1.76 crores) debited to the Statement of Profit and Loss.

Note 7 UNDERTAKING GIVEN TO LENDERS OF SUBSIDIARY COMPANIES

The Company had invested an amount of Rs. 196.26 crores (Previous Year - Rs. 156.62 crores) by way of equity contribution up to 31st March, 2014, towards PET Resin manufacturing project in its subsidiary company Egyptian Indian Polyester Company S.A.E. (EIPET). EIPET has also taken loans from various lenders to fund the project. As the sponsor shareholder having majority stake in EIPET, the Company has given an undertaking to the lenders that in the event of the failure of EIPET to make any term loan repayment on due date and triggering of Market Redirection Event as specified in the agreement, which according to the Company are within its control, the Company will be required to pay to the lenders the amounts due by EIPET subject to a specified limit. Based on the information available with the Company, the loan amount outstanding in EIPET books as on 31st March, 2014 amounts to US$ 16.13 crores equivalent Rs. 969.61 crores (Previous Year-US$ 8.09 crores, equivalent Rs. 440.00 crores), which is not due for payment.

Note 8

Miscellaneous expenses (Refer Note 34) include a donation of Rs. 1.00 crore (Previous Year Rs. Nil) for a political purpose to Satya Electoral Trust.

Note 9

Previous Year''s figures have been rearranged/regrouped wherever necessary.


Mar 31, 2013

NOTE 1 INSURANCE CLAIM

A major fire broke out in the raw material store at the Company''s Haldia plant on 14.03.2011 leading to destruction/ damage of certain fixed assets, spares, raw materials and packing materials. The items damaged being insured, insurance claims were filed by the Company. The impact of all related losses due to fire had been duly accounted for and an equivalent amount of Rs. 64.63 crores recognised as insurance claim receivable during the year 2010-11. After partial settlement of the claim in the previous year and giving effect to related adjustments an amount of Rs. 9.82 crores was receivable at the begining of the year. Upon final settlement of the claim during the year the Company received Rs. 7.52 crores (including Rs. 0.63 crore for loss of profit which has been recognised in the Statement of Profit and Loss during the year under the head ''''Other income'''') from the insurance company and charged off Rs. 2.93 crores in the Statement of Profit and Loss on account of short settlement of claim by the insurance company (included under the head ''''Other expenses'''').

NOTE 2

REVALUATION OF FIXED ASSETS

All fixed assets other than Computers and Furniture & Fixtures located at ten tea estates (Previous year eleven tea estates) and nine factories (Previous year eight factories) in the state of Assam had been revalued by M/s S. R. Batliboi Consultants Pvt. Limited, Registered Valuer, on 1st April, 2009, to Rs. 183.19 crores (Previous Year Rs. 200.47 crores) resulting in increase in net book value of assets by Rs. 149.90 crores (Prevous Year Rs. 162.50 crores ) which had been credited to the Revaluation Reserve.The Revaluation Reserve has been fully adjusted in earlier years.

Buildings, Plant & Machinery and Vehicles were revalued at the Net Replacement Value method whereas Freehold Land, Leasehold Land and Land & Estate Development were revalued at Plantation Value method.

NOTE 3 FOREIGN CURRENCY CONVERTIBLE BONDS (FCCB)

The erstwhile South Asian Petrochem Limited (since merged with Dhunseri Petrochem & Tea Limited) had issued 200 Zero Percent Unsecured Foreign Currency Convertible Bonds (FCCB) of USD 100,000 each in the year 2007-08. Out of these FCCBs, bonds amounting to USD 75,00,000 which were outstanding at the end of the previous year have been fully redeemed at 136.86% of their principal amount during the year. The premium on redemption amounting to Rs. 14.80 crores (Previous Year Rs. Nil ) has been adjusted with Securities Premium Account. (Refer Note 3)

NOTE 4 LOANS AND ADVANCES

(a) Loans and advances to related parties under "Short term loans and advances" (Note 22) includes amount due from- (i) A Private Limited Company in which Director of the Company is a director - Rs. 0.02 crore (Previous Year: Rs. - @ ).

(ii) A Subsidiary Company amounting to Rs. 5.57 crores ( Previous Year Rs. 3.63 crores ).

(b) Advance to Suppliers/Service Providers under "Short term loans and advances" (Note 22) includes amount due from- (i) A firm in which Director of the Company is partner- Rs. - @ (Previous Year: Rs. 0.01 crore).

@ Amount is below the rounding off norm adopted by the Company.

NOTE 5 EMPLOYEE BENEFIT OBLIGATION

I. Gratuity

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme, the Gratuity Trust Funds/Life Insurance Corporation of India (LICI) make payment to vested employees at retirement, death/disability, withdrawal, of an amount based on the respective employee''s eligible salary for specified number of days depending upon the tenure of service. Vesting occurs upon completion of five years of service. Liability with regard to the aforesaid gratuity plan is determined by actuarial valuation as set out in Note 1(g)(ii) above, based upon which, the Company makes annual contributions for Gratuity to a trust and LICI.

The estimates of future salary increases considered in the actuarial valuation takes into account factors like inflation, seniority, promotion and other relevant factors. The expected return on plan assets is determined after taking into consideration composition of the plan assets held, assessed risk,historical results on plan assets,the Company''s policy for plan asset management and other relevant factors.

II. Contribution for Defined Contribution Plan comprising Rs. 0.51 crore (Previous Year Rs. 0.06 crore) on account of the Company''s contribution to Super annuation fund and Rs. 3.37 crores (Previous Year: Rs. 3.06 crores) on account of the Company''s contribution to Provident funds has been recognised as an expense and included in Note 31- Employee benefits expense under the head "Contribution to provident and other funds” in the Statement of Profit and Loss.

NOTE 6 DISCLOSURE OF RELATED PARTIES AND RELATED PARTY TRANSACTIONS IN KEEPING WITH ACCOUNTING STANDARD 18

Names of related parties and description of relationship:

(A) Subsidiary Companies:

(1) Egyptian Indian Polyester Company S.A.E.

(2) Dowamara Tea Company Pvt. Ltd.

(3) Dhunseri Petrochem & Tea Pte Ltd.

(B) Subsidiaries of Dhunseri Petrochem & Tea Pte Ltd.

(1) Makandi Tea & Coffee Estates Ltd. (acquired during the year ended 31.03.2013)

(2) Kawalazi Estate Company Ltd. (acquired during the year ended 31.03.2013)

(C) Group Companies: (i.e. Companies in which Key Management Personnel is able to exercise significant influence)

(1) Madhuting Tea Private Ltd.

(2) Naga Dhunseri Group Ltd.

(3) Trimplex Investments Ltd.

(4) Mint Investments Ltd.

(5) Plenty Valley Intra Ltd.

(6) Dhunseri Investments Ltd.

(D) Key Management Personnel

(1) Mr.C.K.Dhanuka (Executive Chairman)

(2) Mr. M .Dhanuka (Vice Chairman and Managing Director)

(3) Mr. B. Chattopadhyay (Chief Executive Officer and Managing Director)

(4) Mr. R.K Sharma (Executive Director, Finance) (with effect from 1st April 2012)

(5) Mr. B K Biyani (Executive Director, Corporate) (upto 31st March 2012)

NOTE 7 FOREX EXPOSURE

a) The Company uses Forward Exchange Contracts and Interest Rate Swaps to hedge its exposures in foreign currency related to firm commitments and highly probable forecasted transaction. Outstanding Forward Contracts as on 31st March, 2013 taken to hedge various foreign currency receivables is Rs. 38.86 crores (Previous Year Rs. 1.87 crores) and foreign currency loan payable is Rs. 40.35 crores (Previous Year Rs. Nil), Interest Rate Swap contract outstanding as at year end is Rs. 55.83 crores (Previous Year Rs. Nil).

b) Foreign Currency Exposures that are not hedged by a derivative instrument or otherwise is Rs. 1016.31 crores (Previous Year Rs. 744.68 crore).

NOTE 8 DISCLOSURE AS PER THE MICRO, SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ACT, 2006 (MSMED ACT)

The Company has amounts due to suppliers under The Micro, Small and Medium Enterprise Development Act, 2006 (MSMED Act) as at 31st March 2013. The disclosure pursuant to the said Act is as under:

NOTE 9

The Company had invested an amount of Rs. 156.62 crores (Previous Year Rs. 156.62 crores) by way of equity contribution up to 31st March, 2013 , towards PET Resin manufacturing project in its subsidiary Company Egyptian Indian Polyester Co., S.A.E. (EIPET). During the year, EIPET has also taken loans from various lenders to fund the project. As the sponsor shareholder having majority stake in EIPET, the Company has given an undertaking to the lenders that in the event of the failure of EIPET to make any term loan repayment on due date and triggering of Market Redirection Event as specified in the agreement, which according to the Company are within its control, the Company will be required to pay to the lenders the amounts due by EIPET subject to a specified limit. Based on the information available with the Company, the loan amount outstanding in EIPET books as on 31st March, 2013 amounts to USD 8.09 crores [Equivalent rupee amount Rs. 440 crores] (Previous Year USD 3.79 crores, equivalent Rs. 193.64 crores), which is not due for payment.

NOTE 10

Miscellaneous expenses (Refer Note 34) include a donation of Rs. Nil (Previous Year Rs. 0.8 crore) to a Political Party - Assam Pradesh Congress Committee.

NOTE 11

Previous Year''s figures have been rearranged/regrouped wherever necessary.


Mar 31, 2012

(a) The Company has one class of equity share having a par value of Rs 10 each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in the case of interim dividend. In the event of liquidation the equity shareholders are eligible and receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

(b) Terms of securities/other liabilities convertible into equity shares : Refer Notes 39 and 54.

(c) Shares allotted as fully paid pursuant to contracts without payment being received in cash (during five years immediately preceding 31st March, 2012).

(i) During the year 2010-11- 23,313,859 Equity Shares of Rs 10/- each were issued as fully paid up, issued pursuant to the scheme of arrangement without payment being received in cash.

(ii) During the year 2008-09- 4,727,095 Equity Shares of Rs 10/- each were issued as fully paid up, issued pursuant to the scheme of amalgamation without payment being received in cash.

Nature of Security

(a) Loans Repayable on demand from Banks

(i) Amounting to Rs 15514.57 lacs (Previous Year Rs 14562.92 lacs):

First charge by way of hypothecation ranking pari-passu over all present and future inventories, consumables, stores and spares, book-debts and all other movables of petrochem division.

Secured/ to be secured by joint mortgage on pari-passu second charge basis on all the immovable properties of the existing and new PET plant situated at Mouza Basudevpur, JLNo. 126, PS Durgachak & Mouza Paranchak, JL No. 145, PS Bhabanipur, Haldia, West Bengal together with all the buildings and structures thereon including fixed plant and machinery and fixtures and fittings permanently fastened to the earth or fastened to anything attached to the earth.

Secured by personal guarantee of two of the Promoter Directors of the Company.

(ii) Amounting toRs 2510.30 lacs (Previous YearRs 87.17 lacs):

Secured by a first hypothecation charge on the current assets of the Company's tea division namely, stocks of raw materials, stock- in-process, semi finished and finished goods, stores and spares not relating to plant and machinery, bills receivable, book debts and all other movables, both present and future wherever situated and equitable mortgage over the immovable properties by deposit of title deeds of tea estates and personal guarantee of the promoter director of the Company and to be secured by second pari-passu charge on the immovable property of the Company viz. Land being no. IT15A within notified SEZ in JL No. 35 in Mouza Gangapur at KITP Basanti Highway, within the jurisdiction of Kolkata Leather Complex police station.

(a) Quality Upgraded subsidy amounting to Rs 54.99 lacs (Previous Year: Rs 14.40 lacs) received during the year under Tea Board Quality Upgrade ration & Product Diversification has been adjusted against the cost of the respective assets.

(b) The Assam Government has acquired in total 793.05 hectares of land under the Assam Fixation of Ceiling on Land Holdings Act, 1956 and PW.D. has acquired 4 hectares of land for construction of public road. Pending the receipt/finalization of compensation money from the authorities in respect of the above acquisition, no adjustment in this regard has been made in these accounts.

(c) Disposal column includes Gross Block and Accumulated Depreciation of assets written off worth Rs 4.04 lacs (Previous Year Rs 1.81 lacs) & Rs 3.02 lacs (Previous Year Rs 1.49 lacs) respectively.

(d) Gross Block-Addition and Depreciation -Disposal column includes Rs 484.25 lacs and Rs 195.13 lacs respectively on account of assets reinstated/restored subsequent to Fire at Haldia Plant on 14.03.2011.

(e) Other adjustments column includes adjustments on account of exchange difference Rs 859.39 lacs (Previous Year - Rs Nil) (Refer Note- 38) and borrowing cost Rs Nil (Previous Year - Rs 361.71 lacs).

Note 1 CONTINGENT LIABILITIES

(a) Claims against the Company not acknowledged as debts

(i) Customs Demand - matter under dispute 148.61 148.61

(ii) Service Tax Demand - matter under dispute 18.13 18.13

(iii) Income Tax-matter under dispute 82.77 - It is not practicable for the Company to estimate the timings of cash outflows,

if any, in respect of the above pending resolution of the respective proceedings.

(b) The Company does not expect any reimbursements in respect of the above contingent liabilities.

Note 2 INSURANCE CLAIM

A major fire broke out in the raw material store at the Company's Haldia plant on 14.03.2011 leading to destruction/ damage of certain fixed assets, spares, raw materials & packing materials. The items damaged being insured, insurance claims were filed by the Company. The impact of all related losses for fixed assets, spares, raw materials and packing materials damaged/destroyed due to fire had been duly accounted for and an equivalent amount of Rs 6462.93 lacs (Rs 5157.66 lacs and Rs 1305.27 lacs on account of raw materials & packing materials and fixed assets & spares respectively) recognized as insurance claim receivables during the year 2010-11. During the current year upon settlement of claim pertaining to raw material and packing material by the insurance company, the Company has received Rs 3626.69 lacs (including reimbursement of expenses of Rs 23.82 lacs) from the insurance company and recovered Rs 532.91 lacs (net of tax) through disposal of salvage materials and the balance amount of related claim receivable being Rs 1023.92 lacs has been written off in these financial statements (Refer Note-34) under the head "Other expenses". Claims on account of destruction / damage of fixed assets & spares are yet to be settled by the insurance Company and the related claim amounting to Rs 982.08 lacs (net of salvage value and value of assets reinstated in books on restoration of certain assets-Rs 323.19 lacs) included in "Insurance Claim Receivable" (Refer note - 23) is outstanding at the year end. Further the Company has also lodged claims for loss of profits on account of loss suffered during the period of disruption in the operation of the plant due to fire which is pending settlement and has not been accounted for on prudent basis.

Note 3

Miscellaneous expenses (Note 34) include a donation of Rs 7.5 lacs (Previous Year- Rs Nil) to a Political Party-Assam Pradesh Congress Committee.

Note 4 REVALUATION OF FIXED ASSETS

All fixed asset other than Computers and Furniture & Fixtures located at eleven tea estates and nine factories in the state of Assam had been revalued by M/s S. R. Balboa Consultants Pvt. Limited, Registered Valuer, on 1st April, 2009, to Rs 20047.00 lacs resulting in increase in net book value of assets by Rs 16250.00 lacs which had been credited to the Revaluation Reserve. The Revaluation Reserve has been fully adjusted in earlier years.

Buildings, Plant & Machinery and Vehicles were revalued at the Net Replacement Value method whereas freehold land and leasehold land & estate development were revalued at Plantation Value method.

Note 5 CHANGE IN ACCOUNTING POLICY

The Company has exercised the option as set out in paragraph 46A of the Accounting Standard 11 on the effects of Changes in Foreign Exchange Rates, pursuant to the Notification dated 29th December 2011 .Accordingly, during the current financial year exchange differences arising on restatement of long term foreign currency loans obtained for the purpose of acquisition of depreciable capital assets, which were hitherto being recognized in the Statement of Profit and Loss, has been adjusted in the cost of depreciable assets, which would be depreciated over the balance lives of the assets.

Had the Company continued to follow the earlier accounting policy, the net foreign exchange loss recognized in the Statement of Profit and Loss would have been higher by Rs 3,785.03 lacs with corresponding decrease in net profit for the year and fixed assets would have been lower to the same extent.

Note 6 FOREIGN CURRENCY CONVERTIBLE BONDS (FCCB)

(a) The erstwhile South Asian Petrochem Limited (presently Dhunseri Petrochem & Tea Ltd) had allotted 200 Zero Coupon Unsecured Foreign Currency Convertible Bonds (FCCBs) of US $ 1,00,000 each for an aggregate amount of US $ 20,000,000 (i.e., Rs 7864.00 lacs) in the year 2007-08. After buyback bonds amounting to US $ 7,500,000 are outstanding as on date. The outstanding bonds are redeemable on January 23, 2013 at 136.86% of their principal amount. The bond holders have an option to convert these bonds into equity shares at the reset price of Rs 170.10 per share with a fixed rate of exchange on conversion of Rs 39.32 (US$ 1), subject to certain adjustments. The Bonds may also be redeemed, in whole but not in part, at the option of the Company at any time, subject to certain conditions. Also the Company has an option requiring mandatory conversion of all the outstanding bonds on or after January 16, 2011 and up to January 14, 2013.

The Company is of the view that the balance outstanding bonds may not ultimately be redeemed as the same may be converted into equity shares within the assigned date and hence has not considered the effect of realignment of the bond value as prescribed in the Accounting Standard (AS 11) on Effects of Changes in Foreign Exchange Rates' notified in the Companies (Accounting Standards) Rules 2006 and also not provided for premium on redemption of the said bonds. The future cash flows if any cannot be determined at this stage.

(b) Unutilized proceeds of Rs 2949.00 lacs lying as on 31.03.2011 in the form of Fixed Deposits have been fully utilized towards equity participation in the overseas project in Egypt.

Note 7 LOANS AND ADVANCES

Loans and advances to related parties under "Short term loans and advances" (Note 22) includes amount due from-

(i) Private Limited Company in which Director of the Company is a director - Rs 0.10 lacs (Previous Year Rs 0.39 lacs).

(ii) Subsidiary Company amounting to Rs 363.33 lacs (Previous Year Rs 24.44 lacs).

Advance to Suppliers/Service Providers under "Short term loans and advances" (Note 22) includes amount due from- (i) Firm in which Director of the Company is partner- Rs 0.55 lacs (Previous Year Rs 1.49 lacs).

Security Deposits under "Long-term loans and advances "(Note 16) includes amount due from

(i) A Limited Company in which Directors of the Company are interested as Director - Rs 127.50 lacs (Previous Year Rs 127.50 lacs) being deposit for use of office space with parking.

Note 8 BTEMPLOYEE BENEFIT OBLIGATION

Contribution for Defined Contribution Plan comprising Rs 6.72 lacs (Previous Year Rs 6.22 lacs) on account of the Company's contribution to Super annotation fund and Rs 306.57 lacs (Previous Year: Rs 263.19 lacs) on account of the Company's contribution to Provident funds has been recognized as an expense and included in Note 31- Employee benefits expense under the head "Contribution to provident and other funds" in the Statement of Profit and Loss.

(g) Contribution expected to pe paid to the plan during the period 2012-13 is Rs 132.19 lacs.

The estimates of future salary increases considered in the actuarial valuation takes into account factors like inflation, seniority, promotion and other relevant factors. The expected return on plan assets is determined after taking into consideration composition of the plan assets held, assessed risk, historical results on plan assets, the Company's policy for plan asset management and other relevant factors.

Note 9 SEGMENT REPORTING

The Company has considered business segment as the primary segment for disclosure. The components of these business segments are Polyester Chips and Tea.

The segment wise revenue, assets and liabilities relate to the respective amounts directly identifiable with each of the segments. There is no inter-segment revenue.

The geographical segments considered for disclosure as secondary segment is , based on location of customers.

# As per agreement of Zero Percent Unsecured Foreign Currency Convertible Bonds (FCCB) the bond holders have an option to convert these bonds into equity shares at a minimum price of Rs170.10 per share which has been taken as fair value for the purpose of calculating Diluted EPS.

Note SET DISCLOSURE OF RELATED PARTIES AND RELATED PARTY TRANSACTIONS IN KEEPING WITH ACCOUNTING STANDARD 18: Names of related parties and description of relationship:

A. Subsidiary Companies:

1. Egyptian Indian Polyester Company S.A.E.

2. Dowamara Tea Company Pvt. Ltd. (acquired during the year ended 31.03.2012)

3. Dhunseri Petrochem &Tea Pte Ltd. (formerly Dhunseri Holding (Singapore) Pte Ltd.) (set up during the year ended 31.03.2012)

B. Group Companies: (i.e Companies in which Key Management Personnel is able to exercise significant influence)

4. Madhuting Tea Private Ltd.

5. Naga Dhunseri Group Ltd.

6. Trimplex Investments Ltd.(formerly Trimplex Investments Private Ltd.)

7. Mint Investments Ltd.

8. Plenty Valley Intra Ltd.

9. Dhunseri Investments Ltd.

C. Key Management Personnel

10. Mr. C. K. Dhanuka. ( Executive Chairman)

11. Mr. M. Dhanuka (Vice Chairman and Executive Director)

12. Mr. B. Chattopadhyay (Executive Director and Chief Executive Officer)

13. Mr. B. K. Biyani (Executive Director, Corporate)

Note FOREX EXPOSURE

(a) Foreign Currency Exposures that are not hedged by a derivative instrument or otherwise is Rs 74468.17 lacs (Previous Year Rs 45286.96 lacs).

(b) Outstanding Forward Contracts as on 31st March, 2012 taken to hedge various foreign currency receivables is Rs 186.99 lacs (Previous Year Rs 827.82 lacs).

Note 10 LEASE OBLIGATION Operating Lease:

The Company has taken various office premises under operating lease having tenures of 11 months / 9 years. There is no specific obligation for renewal of these agreements. Lease rent for the year amounts to Rs 121.99 lacs (Previous Year Rs 91.58 lacs).

Apart from above the Company has taken a motor vehicle on non-cancellable operating lease and lease rent amounting to Rs 6.42 lacs (Previous Year Rs 6.92 lacs) has been charged in the Statement of Profit and Loss. The future minimum lease payments not later than one year as on 31.03.12 is Rs Nil (Previous Year-Rs 5.76 lacs)

Note 11 LIABILITY AGAINST PURCHASE OF SHARES

Other Long-term liabilities (Note-6) and other Current liabilities (Note 10) includes Rs Nil (Previous Year Rs 2184.02 lacs) and Rs 1284.03 lacs (Previous Year Rs Nil) respectively which is on account of purchase of 77.58 lacs (Previous Year: 131.95 lacs) Equity Shares of erstwhile South Asian Petrochem Limited, from certain group companies (sellers) whereby the purchase consideration is payable within five years from the purchase date (i.e., 31st March, 2008) at the option of the sellers, either in cash or by converting the consideration into Equity Shares of the Company at a value to be determined by an independent Chartered Accountant and as per SEBI Guidelines.

Note 12

The Company has invested an amount of Rs 15662.06 lacs byway of equity contribution up to 31st March 2012, towards PET Resin manufacturing project in its subsidiary company Egyptian Indian Polyester Company, S.A.E. (EIPET). During the year, EIPET has also taken loans from various lenders to fund the project. As the sponsor shareholder having majority stake in EIPET, the Company has given an undertaking to the lenders that in the event of the failure of EIPET to make any term loan repayment on due date and triggering of Market Redirection Event as specified in the agreement, which according to the Company are within its control, the Company will be required to pay to the lenders the amounts due by EIPET subject to a specified limit. Based on the information available with the Company, the loan amount outstanding in EIPET books as on 31st March 2012 amounts to USD 378.52 lacs [Equivalent rupee amount Rs 19363.67 lacs, (Previous Year Rs Nil)], which is not due for payment.

Note 13

Till the year ended 31 st March 2011 ,the Company was using pre-revised Schedule VI to the Companies Act 1956, for preparation of and presentation of its financial statement. During the year ended 31st March 2012,the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company. The Company has reclassified previous year's figures to conform to this years' classification in line with the revised Schedule VI to the Companies Act,1956.


Mar 31, 2011

1. Revaluation of Fixed Assets

a) All fixed asset except computers and furniture & fixtures located at eleven tea estates and nine factories in the state of Assam have been revalued by M/s S. R. Batliboi Consultants Pvt. Limited, Registered Valuer, on 1st April 2009, to Rs. 20,047.00 Lacs resulting in increase in net book value of assets by Rs. 16,250.00 Lacs which has been credited to the Revaluation Reserve. Buildings, plant & machinery and vehicles are revalued at the Net Replacement Value method whereas freehold land and leasehold land & estate development are revalued at Plantation Value method. b) Depreciation on revalued asset has been adjusted with the revaluation reserve to the extent available amounting to Rs. Nil (Previous Year Rs. 111.63 Lacs).

2. Preferential Issue of Equity Shares and Warrants:

During the year 2007-08, to meet the company's fund requirement for expansion including equity participation in overseas subsidiary, retirement of high cost borrowings and other business purposes the Company raised Rs. 7,416.23 Lacs by preferential allotment of equity shares and equity share warrants. Net proceeds have been fully utilised towards equity participation/other expenses in the overseas project in Egypt.

3. Foreign Currency Convertible Bonds (FCCB):

a) The erstwhile South Asian Petrochem Ltd (presently Dhunseri Petrochem & Tea Ltd) had allotted 200 Zero Coupon Unsecured Foreign Currency Convertible Bonds (FCCBs) of USD 1,00,000 each for an aggregate amount of USD 2,00,00,000 (i.e., Rs. 7,864.00 Lacs) in the year 2007-08. After buyback bonds amounting to USD 75,00,000 are outstanding as on date. The outstanding bonds are redeemable on 23rd January 2013 at 136.86% of their principal amount. The bond holders have an option to convert these bonds into equity shares at the reset price of Rs. 170.10 per share with a fixed rate of exchange on conversion of Rs. 39.32 (USD 1), subject to certain adjustments. The Bonds may also be redeemed, in whole but not in part, at the option of the Company at any time, subject to certain conditions. Also the company has an option requiring mandatory conversion of all the outstanding bonds on or after 16th January 2011 and up to 14th January 2013. The company is of the view that the balance outstanding bonds may not ultimately be redeemed as the same may be converted into equity shares within the assigned date and hence has not considered the effect of realignment of the bond value as prescribed in the Accounting Standard (AS 11) on 'Effects of Changes in Foreign Exchange Rates' notified in the Companies (Accounting Standards) Rules 2006 and also not provided for premium on redemption of the said bonds. The future cash flows if any cannot be determined at this stage.

b) The balance net proceeds of Rs. 2,949.00 Lacs from the issue of the FCCB, pending utilisation has been included in Cash and Bank Balances.

4. (i) Contingent liability for the Petrochem Division in respect of show cause notices received from the Custom and Service Tax Departments amounts to Rs. 166.74 Lacs (Previous Year Rs. 599.43 Lacs) which is being contested by the company. A part of the demand pertaining to interest and penalty is not quantifiable and the future cash flows if any cannot be determined at this stage.

Other contingent liabilities for the Tea Division not provided for in respect of certain possible obligations which may arise at a later date, with respect to:

a) obtaining renewal of lease of a tea estate from the Government.

b) a title suit pending in the district civil court over a certain portion of land. c) claims that may arise in future towards post employment benefits of certain employees.

Liabilities in respect of the above are not ascertainable at this stage and the future cash flows on account of the above cannot be determined unless the judgement/decisions/demand are received from the appropriate forums.

(ii) Estimated amount of contracts remaining to be executed on capital account Rs. 22,156.94 Lacs. (Previous Year Rs. 1,019.24 Lacs).

5. Advances recoverable in cash or in kind or for value to be received under Loans & Advances includes amount due from:

a. Firm in which Director of the company is partner is Rs. 1.49 Lacs (Previous Year: Rs. 1.25 Lacs). Maximum amount outstanding at any point of time during the year is Rs. 1.49 Lacs (Previous Year: Rs. 8.10 Lacs).

b. Directors of the company Rs. Nil (Previous Year: Rs. 2.60 Lacs). Maximum amount outstanding at any point of time during the year is Rs. 2.60 Lacs (Previous Year: Rs. 2.60 Lacs).

c. Private limited company in which Director of the company is director is Rs. 0.39 Lacs (Previous Year: Rs. 0.75 Lacs). Maximum amount outstanding at any point of time during the year is Rs. 1.76 Lacs (Previous Year: Rs. 0.75 Lacs).

d. Subsidiary Company amounting to Rs. 281.88 Lacs (Previous Year Rs. 2,348.40 Lacs). Maximum amount outstanding at any point of time during the year is Rs. 6,578.41 Lacs (Previous Year: Rs. 2,348.40 Lacs).

6. Deposits with Govt. Authorities and others include Rs. 127.50 Lacs (Previous Year: Rs. 127.50 Lacs) being deposit for use of office space with parking, with a private limited company in which Directors of the Company are interested as Director.

7. A major fire broke out in the raw material store at the Company's Haldia plant on 14.03.2011 leading to destruction/damage of certain fixed assets, spares & raw materials. The impact of all related losses for fixed assets, raw materials & spares damaged/destroyed due to fire have been duly accounted for amounting to Rs. 6,462.93 Lacs under respective heads during the year. The items damaged were adequately insured so the amount of Rs. 6,462.93 Lacs towards the loss as stated above has been recognised as income under the head "Other Income" and the insurance claim for the same has been submitted to the insurance company, which is under their active consideration.The Insurance Policies are in full force. The Company is also having Loss of Profits (LOP) policy on account of fire to cover the loss suffered during the period of disruption in the operation of the plant for which claim will be lodged at a later date.

8. Employee Benefit Obligation

Contribution for Defined Contribution Plan amounting to Rs. 273.65 Lacs (Previous Year: Rs. 248.97 Lacs) has been recognised as an expense and included in Schedule 16 "Contribution to Provident Fund and Other Funds" in the Profit & Loss Account.

9. Basic and Diluted Earnings Per Share

* After considering 2,33,13,859 Equity Shares of Rs. 10/- each fully paid up and ranking pari-passu with the existing equity shares to be issued by the company to the ordinary shareholders of SAPL. #As per agreement of Zero Percent Unsecured Foreign Currency Convertible Bonds (FCCB) the bond holders have an option to convert these bonds into equity shares at a minimum price of Rs. 170.10 per share which has been taken as fair value for the purpose of calculating Diluted EPS.

10. Disclosure of related parties and related party transactions: Names of related parties and description of relationship:

A. Subsidiary Company:

1 Egyptian Indian Polyester Company S.A.E.

B. Group Companies:

2 Madhuting Tea Private Limited

3 Naga Dhunseri Group Ltd.

4 Trimplex Investment Private Limited

5 Mint Investments Limited

6 Plenty Valley Intra Limited

7 Dhunseri Investments Ltd (formerly DI Marketing Ltd.)

C. Key Management Personnel

8 Mr. C. K. Dhanuka (Executive Chairman)

9 Mr. M. Dhanuka (Vice Chairman & Executive Director)

10 Mr. B. Chattopadhyay (Executive Director & CEO)

11 Mr. B. K. Biyani (Executive Director, Corporate)

11. a) Foreign Currency Exposures that are not hedged by a derivative instrument or otherwise is Rs. 45,286.96 Lacs (Previous Year Rs. 31,536.03 Lacs).

b) Outstanding Forward Contracts as on 31st March 2011 taken to hedge various Foreign Currency Receivables is Rs. 827.82 Lacs (Previous Year Rs. 4,743.06 Lacs).

12. Lease Obligation

Operating Lease:

The company has taken various office premises under operating lease having tenures of 11 months/5 years. There is no specific obligation for renewal of these agreements. Lease rent for the year amounts to Rs. 91.58 Lacs (Previous Year Rs. 72.31 Lacs).

Apart from above the company has taken a motor vehicle on non-cancelable operating lease and lease rent amounting to Rs. 6.92 Lacs (Previous Year Rs. 6.92 Lacs) has been charged to Profit and Loss account. The future minimum lease payments as on 31.03.11 are as under:

13. Other Liabilities include Rs. 2,184.03 Lacs (Previous Year: Rs. 3,782.03 Lacs) on account of purchase of 131.95 Lacs (Previous Year: 228.52 Lacs) Equity Shares of South Asian Petrochem Ltd. from certain group companies (sellers) whereby the purchase consideration is payable within five years from the purchase date (i.e., 31st March 2008) at the option of the sellers, either in cash or by converting the consideration into Equity Shares of the company at a value to be determined by an independent Chartered Accountant and as per SEBI Guidelines.

14. Previous Year's figures have been rearranged/regrouped wherever necessary.


Mar 31, 2010

1. a) Demerger of Jaipur Packet Factory and Investment Division (Demerged Undertaking) of Dhunseri Tea And Industries Limited (DTIL) To DI Marketing Limited (DIML)

i) Pursuant to Scheme of Arrangement (the Scheme) approved by the Shareholders and sanctioned by the Honble High Court of Calcutta vide its order dated 6th May, 2010, Jaipur Packet Factory and Investment division of DTIL has been transferred to and vested in DIML with effect from 1st April, 2009 (the Appointed Date) and accordingly the Scheme has been given effect to in these accounts.

ii) In accordance with the Scheme, 5,855,447 Equity Shares of Rs 10/- fully paid up and ranking pari passu with existing Equity Shares are to be issued by the DIML to the equity shareholders of DTIL in the ratio of 1 (One) Equity Shares of Rs 10/- each fully paid up of the DIML for every 2 (Two) Equity Shares of Rs 10 each fully paid up held by them in the capital of DTIL.

The existing shares held by DTIL in DIML i.e. 50,000 Equity Shares of Rs 10/- each shall stand cancelled upon the new Equity Shares being issued by DIML to the shareholders of DTIL as on the Record Date and until such cancellation shall continue to be held by DTIL.

iii) Pursuant to the Scheme all assets and liabilities of Demerged Undertaking as on the date immediately preceding the Appointed Date have been transferred to at their respective book value.

2. b) Pursuant to the Scheme of Arrangement (the Scheme) approved by the shareholders and sanctioned by the Honble High Court at Calcutta on 6th May, 2010, under the provisions of the Companies Act, 1956 (‘the Act), the undertakings of South Asian Petrochem Limited (hereafter referred to as SAPL) and Dhunseri Polycarbonate Limited (hereafter referred to as DPL), the transferor companies was transferred to and vested in the company as a going concern with effect from 1st April, 2009 (the Appointed Date) and accordingly the Scheme had been given effect to in these accounts. According to the said Scheme, with effect from the Appointed Date, SAPL and DPL have carried out all their business and activities in trust for the Company till the Scheme becomes effective.

In accordance with the scheme 23,313,859 Equity Shares of Rs. 10/- each fully paid up and ranking pari passu with the existing equity shares are to be issued by the company to the ordinary shareholders of SAPL in the ratio of 1(one) equity share of Rs. 10/- each of the company for every 10 (Ten) equity shares of Rs. 10/- each fully paid up held in SAPL.

The entire share capital of DPL was held by SAPL. Hence, all shares held by SAPL in the share capital of DPL have been cancelled consequent to the amalgamation and in lieu thereof no allotment of any new shares shall be made to any person whatsoever.

The amalgamation has been accounted for in the books of account of DTIL according to the pooling of interests method under Accounting Standard (AS) 14, ‘Accounting for Amalgamations issued by the Institute of Chartered Accountants of India.

Accordingly on and from the Appointed Date all assets, liabilities and reserves of SAPL and DPL have been transferred to DTIL under the Scheme and recorded in the books of accounts of DTIL at their respective book value and in the same form and manner as recorded in the books of accounts of SAPL and DPL.

The difference between the amount recorded as additional share capital issued by DTIL on amalgamation to the shareholders of SAPL (other than DTIL) and the aggregate face value of the shares of SAPL in lieu whereof such additional share capital is issued has been adjusted against and reflected in the General Reserves of DTIL.

Pursuant to the Scheme of Arrangement the amount standing under capital works in progress amounting to Rs 645 .30 lacs in the books of DPL has been adjusted against the Revaluation Reserves of DTIL.

Due to differences in accounting policy between SAPL, DPL and DTIL for providing depreciation on certain assets, the amount of Rs 6.49 lacs has been adjusted in the General Reserves of DTIL to ensure that the financial statements of DTIL reflect the financial position on the basis of consistent accounting policy.

Pending completion of relevant formalities of transfer of certain assets and liabilities acquired/transferred pursuant to the Scheme of Arrangement, such assets and liabilities remain included in the books of the company under the name of the transferor /transferee companies.

3. Revaluation of Fixed Assets

a) All fixed asset except computers and furniture & fixtures located at eleven tea estates and nine factories in the state of Assam have been revalued by M/s S. R. Batliboi Consultants Pvt. Limited, Registered Valuer, on 1st April, 2009, to Rs 20,047 lacs resulting in increase in net book value of assets by Rs 16,250 lacs which has been credited to the Revaluation Reserve. Buildings, plant & machinery and vehicles are revalued at the Net Replacement Value method whereas freehold land and leasehold land & estate development are revalued at Plantation Value method.

b) Depreciation on revalued asset has been adjusted with the revaluation reserve to the extent available amounting to Rs 111.63 lacs (Previous Year Nil).

4. Preferential Issue of Equity Shares and Warrants:

During the year 2007-08, to meet the companys fund requirement for expansion including equity participation in overseas subsidiary, retirement of high cost borrowings and other business purposes the Company raised Rs 7,177 lacs by preferential allotment of 2,30,86,419 and 1,91,06,400 fully paid up Equity Shares to International Finance Corporation and Promoters respectively on a preferential basis at Rs.17.01per share.

Out of the net proceeds Rs 1,501.81 lacs has been utilized as an advance towards equity participation/expenses in new overseas project. The balance unutilized money stands deposited with banks.

International Finance Corporation and Promoters had subscribed to 76,95,473 and 63,68,800 partly paid equity share warrants respectively, on a preferential basis, with an option to subscribe to the Equity shares of Rs. 10/- each of the Company at a price of Rs. 17.01 per share within 18 months from the date of allotment, i.e. 20th December, 2007. The period for exercising the option for the conversion of the said convertible warrants to equity shares expired on June 19, 2009 and none of the allottees have exercised the option for conversion. The entire proceeds received on allotment amounting to Rs 239.23 lacs has been forfeited by the company.

5. Foreign Currency Convertible Bonds (FCCB):

a) The erstwhile South Asian Petrochem Ltd.(SAPL) had allotted 200 Zero Coupon Unsecured Foreign Currency Convertible Bonds (FCCBs) of US$1, 00,000 each for an aggregate amount of US$20,000,000 (i.e., Rs.7,864.00 Lacs) in the year 2007- 08. Out of this FCCBs amounting to US$12,500,000 have been bought back at a discount on the face value. Bonds amounting to US$7,500,000 are outstanding as on date.The outstanding bonds are redeemable on January 23, 2013 at 136.86% of their principal amount. The bond holders have an option to convert these bonds into equity shares at the reset price of Rs.17.01 per share as against initial conversion price of Rs.22.50 per share, with a fixed rate of exchange on conversion of Rs.39.32 (US$1), subject to certain adjustments. In view of the amalgamation of (SAPL) with the Company, the Company will issue and allot to the shareholders of SAPL, 1 Equity Shares of Rs.10/- each in the Company credited as fully paid up for every 10 Equity Share of Rs.10/- each fully paid-up held by them in the capital of SAPL. Based on the above Share Exchange ratio, the conversion price for the Bonds would be Rs 170.10 per share of the Company. The Bonds may also be redeemed, in whole but not in part, at the option of the Company at any time, subject to certain conditions. Also the company has an option requiring mandatory conversion of all the outstanding bonds on or after January 16, 2011 and up to January 14, 2013.

The company is of the view that the balance outstanding bonds may not ultimately be redeemed as the same may be converted into equity shares within the assigned date and hence has not considered the effect of realignment of the bond value as prescribed in the Accounting Standard ( AS 11 ) on Effects of Changes in Foreign Exchange Rates notified in the Companies (Accounting Standards) Rules 2006 and also not provided for premium on redemption of the said bonds.

The future cash flows if any cannot be determined at this stage.

b) The balance net proceeds of Rs.2,949.00 lacs from the issue of the FCCB, pending utilization has been included in Cash and Bank Balances.

6. i ) Contingent liability for the Petrochem Division in respect of show cause notices received from the Customs Department amounts to Rs 599.43 lacs (Previous Year 6,875.78 lacs) which is being contested by the company. A part of the demand pertaining to interest and penalty is not quantifiable and the future cash flows if any cannot be determined at this stage. Other contingent liabilities for the Tea Division not provided for in respect of certain possible obligations which may arise at a later date, with respect to:

a) obtaining renewal of lease of a tea estate from the Government.

b) a title suit pending in the district civil court over a certain portion of land.

c) claims that may arise in future towards post employment benefits of certain employees .

Liabilities in respect of the above are not ascertainable at this stage and the future cash flows on account of the above cannot be determined unless the judgement / decisions / demand are received from the appropriate forums.

ii) Estimated amount of contracts remaining to be executed on capital account Rs.1,019.24 lacs. (Previous year Rs. 2,845.99 lacs).

7. Advances recoverable in cash or in kind or for value to be received under Loan and Advances includes amount due from:

a. Firm in which Director of the company is partner is Rs. 1.25 lacs (Previous Year: Rs. Nil). Maximum amount outstanding at any point of time during the year is Rs. 8.10 lacs (Previous Year: Rs. Nil).

b. Directors of the company Rs. 2.60 lacs (Previous Year: Rs. Nil). Maximum amount outstanding at any point during the year is Rs. 2.60 lacs (Previous Year: Rs. Nil).

c. Private limited company in which Director of the company is director is Rs. 0.75 lacs (Previous Year: Rs. Nil). Maximum amount outstanding at any point of time during the year is Rs. 0.75 lacs (Previous Year: Rs. Nil).

d. Subsidiary amounting to Rs. 2,348.40 lacs (Previous Year Nil) Maximum amount outstanding at any point of time during the year is Rs. 2,348.40 lacs (Previous Year: Rs. Nil).

8. Deposits with Govt. Authorities and others include Rs 127.50 Lacs (Previous Year: Rs.79.10 Lacs) being deposit for use of office space with parking, with a private limited company in which Directors of the Company are interested as Director.

9. Disclosure of related parties and related party transactions: Names of related parties and description of relationship:

A. Subsidiary Company:

1. Egyptian Indian Polyester Company S.A.E.

B. Group Companies:

2. Madhuting Tea Private Limited

3. Naga Dhunseri Group Ltd.

4. Trimplex Investment Private Limited

5. Mint Investments Limited

6. Plenty Valley Intra Limited

7. DI Marketing Ltd.

C. Key Management Personnel

8. Mr.C.K.Dhanuka. ( Executive Chairman)

9. Mr. M .Dhanuka (Vice Chairman and Executive Director)

10. Mr. B. Chattopadhyay (Executive Director and Chief Executive Officer)

10. a) Foreign Currency Exposures that are not hedged by a derivative instrument or otherwise is Rs 31536.03 Lacs (Previous year Rs. 917.10 Lacs).

b) Outstanding Forward Contracts as on 31st March, 2009 taken to hedge various foreign currency Receivables is Rs 4743.06 Lacs (Previous Year 8054.01 Lacs).

11. Other Liabilities include Rs. 3,782.03 Lacs (Previous Year: 3,782.03 Lacs) on account of purchase of 228.52 Lacs (Previous Year: 228.52 Lacs) Equity Shares of South Asian Petrochem Ltd. from certain group companies (sellers) whereby the purchase consideration is payable within five years from the purchase date (i.e., 31st March, 2008) at the option of the sellers, either in cash or by converting the consideration into Equity Shares of the company at a value to be determined by an independent Chartered Accountant and as per SEBI Guidelines.

12. The Companys Petrochem Division was finally debonded from 100 % EOU scheme w.e.f. 1st April 2010 (cut off date for debonding was 16th October 09) pursuant to the order received from Development Commissioner, Falta Special Economic Zone.

13. The figures for the current year are not comparable with those of the previous year as the figures of the current year include transactions arising from scheme of arrangement as referred to in Note 2.a and 2.b above.

14. Previous years figures have been rearranged regrouped wherever necessary.

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