Mar 31, 2018
1. Reporting Entity
Dhunseri Petrochem Limited is a company limited by shares and incorporated and domiciled in India. The Company is primarily engaged in Treasury Operations and trading of PET Resin. Equity Shares of the Company are listed on Bombay Stock Exchange Ltd and National Stock Exchange Ltd.
The Standalone Financial Statements were approved and authorised for issue with the resolution of the Board of Directors on May 21, 2018.
Note: Investment Property (Buildings) includes three properties [Gross Carrying Amount and Net Carrying Amount amounting to Rs.1049.17 lakhs (31 March 2017 - Rs.1049.17 lakhs) and Rs.993.72 lakhs (31 March 2017 - Rs.1012.22 lakhs) respectively, asat31 March 2018], located at Kolkata which are not held in the name of the Company as the conveyance deeds are yet to be executed.
(B) Measurement of Fair Values
(i) Fair value hierarchy
The fair value of investment property has been determined by an external, independent property valuer, having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued
The fair value measurement for all the investment property has been categorised as a Level 3 fair value based on the inputs to the valuation technique used.
(ii) Valuation Technique
The fair valuation is based on current prices in the active market for similar properties. The main inputs used are quantum, area, location, demand, restrictive entry to the complex, age of building and trend of fair market rent in the area.
(D) Leasing arrangements
The Company has given certain investment properties on operating lease arrangements. These lease arrangements range for a period up to 2 years and are cancellable in nature. The leases are renewable for a further period on mutually agreeable terms.
(C) Equity shares designated at fair value through other comprehensive income
At 01 April 2017, the Company designated the investments shown below as equity shares at FVOCI because these equity shares represent investments that the Company intends to hold for long-term for strategic purposes.
(a) In March 2018, management committed to a plan to sell part of its majority stake in Tastetaria Private Limited, a subsidiary.
A Joint Venture agreement has been entered into between the Company, Choicest Enterprises Limited ("CEL") of Ambuja Neotia group and Tastetaria Private Limited ("Tastetaria") on March 29, 2018 for seffing up and operating restaurants for making and selling the well known "UNO" Brand of Chicago style deep-dish pizzas and such other business as may be decided in future. The JV Company chosen for this purpose is Tastetaria Private Limited ("JV Company" or "Tastetaria"), which was formed in 2016 and was already pursuing such business on its own as a wholly owned subsidiary of the Company. Pursuant to the said agreement, CEL will acquire 75% of the existing share capital of Tastetaria from the Company while the Company will retain 25% of the share capital in Tastetaria.
(b) At 31 March 2018, the asset has been stated at fair value less costs to sell (being lower of their carrying amount).
(b) Terms/ Rights attached to Equity Shares
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.
For details related to employee benefit expense, see Note 26
The Company has a defined gratuity plan in India with LICI, governed by the Payment of Gratuity Act, 1972. The plan entitles an employee, who has rendered at least five years of continuous service, to gratuity at the rate of fifteen days salary/wages for every completed year of service or part thereof in excess of six months, based on the rate of salary/wages last drawn by the employee concerned.
The defined benefit plan for gratuity is administered by a single gratuity fund that is legally separate from the Company. The board of the gratuity fund is required by law to act in the best interests of the plan participants and is responsible for setting certain policies (e.g. investment and contribution policies) of the fund.
These defined benefit plans expose the Company to actuarial risks, such as longevity risk, currency risk, interest rate risk and market (investment) risk.
A. Funding
The Plan is funded by the Company. The funding requirements are based on the gratuity fund''s actuarial measurement framework set out in the funding policies of the plan. The funding of the Plan is based on a separate actuarial valuation for funding purposes for which the assumptions may differ from the assumptions set out in (E). Employees do not contribute to the plan.
The Company expects to pay Rs.5.99 lakhs (31 March 2017- Rs.3.54 lakhs) in contribution to its defined benefit plans in 2018-19.
B. Reconciliation of the net defined benefit (asset)/ liability
The following table shows a reconciliation from the opening balances to the closing balances for the net defined benefit (asset) liability and its components
F. Contribution to Defined Contribution Plan comprising Rs.15.17 lakhs (31 March 2017- ''10.25 lakhs) on account of the Company''s Contribution to Superannuation fund and '' 18.54 lakhs (31 March 2017- Rs.11.69 lakhs) on account of the Company''s Provident Fund has been recognised as an expense and included in Note-26-Employee Benefit Expenses under the head "Contribution to provident and other funds" in the Statement of Profit and Loss.
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 to Rs.18,266.20 lakhs.
E. Unrecognised Deferred tax assets
Deferred tax assets in respect of MAT Credit Entitlement aggregating to Rs.6,761.75 lakhs have not been recognised because it is not probable that future taxable profit will be available against which the Company can use the benefits there from.
The tax credits for various years expire between the financial years 2023-24 and 2032-33.
On 29th February, 2016, the Company announced its intention to transfer the "Polyethylene Terephthalate" ("PET Resin") business of the Company in India to Dhunseri Petglobal Limited (now known as IVL Dhunseri Petrochem Industries Private Limited)
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" ("PET Resin") business of the Company in India ("Transferred Business") was 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 became operative on and from the said date.
Note 2- Merger of IVL Dhunseri Petrochem Industries Pvt Ltd and Micro Polypet Pvt Ltd
A Scheme of Amalgamation ("the Scheme") of Micro Polypet Private Limited, Eternity Infrabuild Private Limited and Sanchit Polymers Private Limited (the "Transferor Companies") with IVL Dhunseri Petrochem Industries Private Limited (formerly known as Dhunseri Petglobal Limited) (the "Transferee Company") was filed in 2016-17 before the National Company Law Tribunal ("NCLT") under section 230 to 232 of the Companies Act, 2013.
On receipt of the order dated, 4 December 2017 from NCLT sanctioning the Scheme and upon filing the same with the Registrar of Companies on 18 December 2017, the Scheme became effective and the Transferor Companies amalgamated with the Transferee Company.
The Company held 50,00,000 equity shares of Face value of Rs.10 each and 10,25,000 compulsorily convertible debentures of Rs. 1,000 each in Mircro Polypet Private Limited. Pursuant to the aforesaid scheme of amalgamtion the company recevied 10,00,000 equity shares of Face value of Rs.10 each and 2,10,000 compulsorily convertible debentures of Rs. 1,000 each in IVL Dhunseri Petrochem Industries Private Limited.
*lt represents Corporate Guarantee given by the company amounting to Rs.675.91 lakhs to Standard Chartered Bank in respect of the loan taken by its step down subsidiary, Twelve Cupcakes Pte Ltd. The guarantee is given for working capital borrowings taken by the subsidiary. Total Guarantee given outstanding as at the beginning of the year amounts to Rs. Nil lakhs, Guarantee given during the year Rs.675.91 lakhs (31 March 2017: Rs. Nil lakhs), Total Guarantee given outstanding as at the end of the year amounts to Rs.675.91 lakhs (31 March 2017: Rs. Nil lakhs). The Company does not expect any reimbursements in respect of the above contingent liabilities.
See accounting policies in note 1.8
A) Company as Lessee
The Company has taken on lease, premises at various loaction under operating leases. The lease period ranges from 5 years to 9 years, with an option to renew the lease after that period. Lease rentals are increased periodically as per the terms of the agreement.
The lease arrangements are cancellable by either of the parties after giving a notice of 3 months.
Note 3- Financial Risk Management
The Company''s activities expose it to the following risks arising from financial instruments:
- Credit Risk (See 39 (ii));
- Liquidity Risk (See 39 (iii));
- Market Risk (See 39 (iv));
i. Risk Management Framework
The Company is exposed to normal business risks from changes in market interest rates and currency exchange rates and from nonperformance of contractual obligations by counterparties. The Company does not hold or issue derivative financial instruments for speculative or trading purposes.
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.
ii. 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 analysed 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 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 11.
The allowance for lifetime expected credit loss on customer balances for the year ended 31 March 2018 was Nil.
Revenue from 1 customer of the Company is Rs.8,617.71 lakhs (31 March 2017- Rs. Nil 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.
Credit risks for loans are covered through collateral securities, which are pledged / hypothecated at the time of loan disbursement.
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), 7, 8, 9, 10, 11.
iii. 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.
As of 31 March 2018, the Company had cash and bank balances of Rs.5,640.10 lakhs. As of 31 March 2017, the Company had cash and bank balances of Rs.1,058.46 lakhs.
Exposure to Liquidity Risk
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include contractual interest payments and exclude the impact of setting agreements:
iv. 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 optimising the return. The Company uses derivatives to manage market risks.
a) 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 summarises 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.
Profit for the period would increase/decrease as a result of gains/losses on mutual funds and equity securities classified as at fair value through profit or loss. Other Components of equity would increase/decrease as a result of gains/losses on equity securities classified as fair value through other comprehensive income.
b) 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 USD and EURO.
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:
Note 4-Capital Risk Management
(a) Risk Management
The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimise returns to our shareholders.
The capital structure of the Company is based on management''s judgement 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.
B. Measurement of Fair Values
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments that have quoted/ published price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period.
Level 2: Level 2 hierarchy includes financial instruments measured using unquoted prices. The mutual funds are valued using the closing NAV.
Level 3: Level 3 hierarchy includes financial instruments that are not based on observable market data (unobservable inputs).
(6) 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.
The Company has presented segment information in the consolidated financial statements which are presented in the same financial report. Accordingly, in terms of Paragraph 4 of Ind AS 108 "Operating Segments", no disclosure related to segments are presented in standalone financial statements.
Note 6- Disclosure of Specified Bank Notes (SBNs)*
The disclosures regarding details of specified bank notes held and transacted during 8 November 2016 to 30 December 2016 has not been made since the requirement does not pertain to financial year ended 31 March 2018. Corresponding amounts as appearing in the audited Standalone Ind AS financial statements for the period ended 31 March 2017 have been disclosed.
Note 6- Subsequent Events
The company, post 31 March 2018, has acquired majority stake in Egyptian Indian Polyester Company S.A.E. ("EIPET"), through acquisition of 65% shares of EIPET from Dhunseri Overseas Private Limited.
The company has also entered into a share purchase agreement on 20th May 2018 with Egyptian Petrochemicals Holding Company ("ECHEM") for the purchase of its 23% shares of EIPET.
Note 7-
Figures for the previous year ended 31 March 2017 have been audited by a firm of Chartered Accountants other than BSR& Co. LLP.
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 (Ãthe
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, ÃAccounting 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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