Notes to Accounts of Indo Rama Synthetics (India) Ltd.
Mar 31, 2022
ii) The rights, preferences and restrictions attaching to each class of shares including restrictions on the distribution of dividends and the repayment of capital
The Company has only one class of equity shares having a par value of ?10 each. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
vi) The Company has not issued any share pursuant to a contract without payment being received in cash in the current year and preceding five years. The Company has not issued any bonus shares nor has there been any buy-back of shares in the current year and preceding five years.
vii) During the year ended 31 March 2020 Indorama Netherlands B.V. (''INBV'') acquired 38.56% shareholding in the Company through preferential allotment and open offer in accordance with SEBI Regulations. Pursuant to acquisition, INBV controls the Company through management control and also appointed additional key management personnel in the Company.
viii) The equity shares of the Company are listed on BSE Limited and National Stock Exchange of India Limited. During the previous year, one of the promoter has sold 1,75,38,645 equity shares to reduce promoter''s shareholding to 75% thereby complying with the requirement of 25% (twenty five percent) public shareholding as per Regulation 38 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 read with Rule 19A of the Securities Contracts (Regulation) Rules, 1957.
Capital reserve
Capital reserve comprises of money received against forfeiture of equity shares and preference share warrants. The reserve is not available for distribution as dividend. The reserve can be utilised in accordance with the specific provisions of Companies Act, 2013.
Securities premium
Securities premium comprises of the premium on issue of shares. The reserve can be utilised in accordance with the specific provision of the Companies
Act, 2013
General reserve
General reserve is a free reserve and is utilised from time to time for appropriate purposes.
Retained earnings
Retained earnings refer to the net profit/(loss) retained by the Company for its core business activities.
Other comprehensive income
Other comprehensive income comprise of re-measurement of defined benefit liability.
Details of rate of interest, terms of repayment and security for short-term loans from banks:
1. Short-term loans from banks amounting to nil [31 March 2021: ^35.50 cores] are secured by first pari-passu charge on current assets of the Company excluding the current assets pertaining to SGST/VAT incentive receivable from Government of Maharashtra and second pari-passu charge on the Company''s entire present and future block of assets, excluding those provided under schedule IV of the Memorandum of Entry dated 14 December 2020 and those provided under schedule III of the Memorandum of Entry dated 06 May 2021 in favour of respective banks. These are repayable within 6 months and carry an interest rate in the range from 8.25% p.a. to 8.50% p.a [31 March 2021 - 8.25% p.a. to 8.50% p.a].
2. ?49.99 crores [31 March 2021: ?35.68 crores] is backed by Stand By Letter of Credit (SBLC) by promotor group company, carry interest rate of 6.25% p.a [31 March 2021 - 6.25% p.a].
|
35. Contingent liabilities |
As at 31 March 2022 |
As at 31 March 2021 |
|
There are contingent liabilities in respect of: |
||
|
a) Claims against the Company not acknowledged as debt # [refer note 1 below] |
||
|
Income tax matters under dispute |
5.17 |
3.39 |
|
Excise/customs/service tax matters in dispute/under appeal Igross of amount paid under protest amounting to ?3.31 crores (31 March 2021 : ?3.18 crores)| |
46.09 |
46.47 |
|
Sales tax/value added tax matters in dispute/under appeal [gross of amount paid under protest amounting to ^0.54 crores (31 March 2021 : ^0.54 crores)] |
6.32 |
5.26 |
|
Others under dispute* Igross of amount paid under protest amounting to ?14.93 crores (31 March 2021 : ?14.93 crores)| |
22.91 |
22.91 |
|
b) Other money for which the Company is contingently liable # [refer note 1 below] Claims by ex-employees, vendors, customers and civil cases |
80.49 |
78.03 |
|
1.74 |
1.92 |
|
|
1.74 |
1.92 |
* Matter under dispute with Maharashtra State Electricity Distribution Company Limited and is pending for hearing with Nagpur bench, Bombay High Court.
# It is not practicable for the Company to estimate the timing of cash outflows, if any, in respect of the above pending resolution of respective proceedings.
(i) Out of the above litigations, the Company has provided ^38.30 crores (31 March 2021 : ^38.30 crores) against various litigations and remaining contingent liabilities is ?43.93 crores (31 March 2021 : ?41.65 crores).
(ii) Hon''ble Supreme Court of India has pronounced a ruling dated 28 February 2019 in which it is held that ''allowance'' paid to employees, will be included in the scope of ''basic wages'' and thus, will be subject to provident fund contributions. Petitions have been filed with Hon''ble Supreme Court of India seeking additional clarification with respect to the application of this ruling. As this ruling has not prescribed any clarification w.r.t. to its application, the Company is in the process of evaluating its impact. Management believes that this will not result in any material liability on the Company.
(iii) Customs duty claims (including penalties) against the Company aggregating to ^220.26 crores (31 March 2021 : ^220.26 crores) have not been considered contingent as favourable orders have been received, in some of the cases, by the Company from the Custom Excise and Service Tax Appellate Tribunal. The Company believes that its position is strong in this regard. The matter is pending with the Hon''ble Supreme Court.
Pending resolution of the respective proceedings, it is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgements/decisions pending with various forums/authorities."
(iv) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its standalone financial statements. The Company also believes that the above issues, when finally settled, are not likely to have any significant impact on the financial position of the Company. The Company does not expect any reimbursements in respect of the above contingent liabilities.
38. Employee benefitsa) Defined contribution plan
An amount of ?4.63 crores [31 March 2021 : ?4.07 crores] for the year has been recognised as an expense in respect of the Company''s contributions towards Provident Fund, an amount of ?0.14 crores [31 March 2021 : ?0.13 crores] for the year has been recognised as an expense in respect of Company''s contributions towards Employee State Insurance and an amount of ?0.12 crores [31 March 2021 : ?0.10 crores] for the year has been recognised as an expense in respect of the Company''s contributions towards National Pension Scheme, which are deposited with the government authorities and have been included under employee benefit expenses in the Statement of Profit and Loss.
b) Defined benefit plan 1) Gratuity
The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. Reconciliation of opening and closing balances of the present value of the defined benefit obligation:
These assumptions were developed by management with the assistance of independent actuarial appraisers. Discount factors are determined close to each year end by reference to government bonds of relevant economic markets and that have terms to maturity approximating to the terms of the related obligation. Other assumptions are based on management''s historical experience.
The above defined benefit plan exposes the Company to following risks:
The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.
Expected increases in salary will increase the defined benefit obligation.
This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.
This is an unfunded benefit plan for qualifying employees.
(vi) Sensitivity analysis for gratuity liability
The below sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same methods (present value of defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
(viii) Expected contribution
The expected future employer contributions for defined benefit plan ?3.14 crores as at 31 March 2022 [31 March 2021 : ?2.58 crores].
c) Other long-term employee benefits
An amount of ?3.59 crores [31 March 2021 : ?2.71 crores] pertains to expense towards compensated absences.
40. Segment information Basis of segmentation:
The Company''s primary business segment is reflected based on principal business activities carried on by the Company. Chairman and Managing Director has been identified as being the Chief Operating Decision Maker (''CODM'') and evaluates the Company''s performance and allocates resources based on analysis of the various performance indicators of the Company as a single unit. As per Indian Accounting Standard 108, Operating Segments, as notified under the Companies (Indian Accounting Standards) Rules 2015, the Company operates in one reportable business segment i.e., manufacturing and trading of polyester goods.
The geographical information analyses the Company''s revenue and trade receivables from such revenue in India and other countries. In presenting the geographical information, segment revenue and receivables has been based on the geographic location of customers.
The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The board of directors has established the risk management committee, which is responsible for developing and monitoring the Company''s risk management policies. The committee reports regularly to the board of directors on its activities.
The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities.
The Company''s risk committee oversees how management monitors compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company''s receivables from customers.
The carrying amounts of financial assets represent the maximum credit risk exposure.
The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk associated with the industry and country in which customers operate.
The Company limits its exposure to credit risk from trade receivables by establishing a credit period for all customer categories. In case of delay beyond credit period, the interest is generally recovered at the rate of 12% to 18%. Most of the Company''s customers have been transacting with the Company from past few years, and most of these customers'' balances are not credit-impaired at the reporting date except in few cases reported. Identifying concentrations of credit risk requires judgement in the light of specific circumstances. The Company monitors ageing of its trade receivables regularly and based on the same takes corrective action. Trade receivables having ageing more than 180 days is monitored individually and loss allowance is created based on such assessment.
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation. The Company uses activity-based costing to cost its products, which assists it in monitoring cash flow requirements and optimising its cash return on investments.
The Company has secured bank loans that contains certain loan covenants. A future breach of covenant may require the Company to repay the loan earlier than indicated in the above table. Covenants are monitored on regular basis by the treasury department and regularly reported to management to ensure compliance with the agreement. Further, there have been no default in repayment of loan and no breaches in the financial covenants of any interest-bearing loans and borrowing in the current year.
Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and commodity prices - 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.
Commodity price risk arises due to fluctuation in prices of crude oil. The Company has a risk management framework aimed at prudently managing the risk arising from the volatility in commodity prices and freight costs. The Company''s commodity risk is managed centrally through well-established control processes. In accordance with the risk management policy, the Company enters into various transactions using derivatives to hedge its exposure, as and when required. Further, selling price of finished goods and cost of raw materials fluctuates due to fluctuation in prices of crude oil and Company expects that the net impact of such fluctation would not be material.
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. The currencies in which these transactions are primarily denominated are US dollars, Japanese Yen and Euro. The Company uses forward exchange contracts to hedge its currency risk, most with a maturity of less than one year from the reporting date, as and when required.
Interest rate riski) Liabilities
The Company''s policy is to minimise interest rate cash flow risk exposures on long term financing. The Company is exposed to changes in market interest rates through bank borrowings at variable interest rates.
Lease payments not recognised as a liability
The Company has elected not to recognise a lease liability for short-term leases (leases with an expected term of 12 months or less) or for leases of low value assets. Payments made under such leases are expensed on a straight-line basis. The Company does not have any liability to make variable lease payments for the right-to-use the underlying asset recognised in the financials.
The expense relating to payments not included in the measurement of the lease liability for short-term leases and leases of low value is ?9.28 crores (31 March 2021 : ?7.01 crores).
At 31 March 2022, the Company was committed to short term-leases and leases of low value, and the total commitment as at that date was ?4.83 crores (31 March 2021 : ?5.24 crores).
Total cash outflow for short term-leases and leases of low value for the year ended 31 March 2022 was ?9.28 crores (31 March 2021 : ?7.23 crores).
Total cash outflow for leases for the year ended 31 March 2022 was ?15.86 crores (31 March 2021 : ?12.93 crores).
43. Particulars of investments made as required by clause (4) of Section 186 of the Companies Act, 2013 and as required by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been given under the investment schedule. Refer note 6(a).
a) the Company has made contribution towards Guardian Minister Assistance Fund Committee, Nagpur, Maharashtra
b) the Company has made contribution towards promotion of healthcare including preventive health care, disaster management and PM-Cares Fund to provide relief to those affected by emergency or distress situation of COVID-19.
47. In March 2020, World Health Organization (WHO) had declared the outbreak of Novel Corona virus "Covid-19" as a pandemic. Complying with the directives of Government, the plant and offices of the Company had been under lock-down impacting the operations for the previous year. However, the second wave of Covid-19 had resulted in re-imposition of partial lockdowns/restrictions, which impacted the Company''s performance during the quarter ended 30 June 2021.
Post lifting of the lock down restrictions, the Company has carried out a comprehensive assessment of possible impact on its business operations, financial assets, contractual obligations and its overall liquidity position, based on the internal and external sources of information and application of reasonable estimates. The Company does not foresee any significant incremental risk to the recoverability of its assets or in its ability to meet its financial obligations over the foreseeable future, given early and required steps taken to contain, protect and mitigate the exposure. The management will continue to monitor any material change arising due to the impact of this pandemic on financial and operational performance of the Company and take necessary measures to address the situation.
48. Per transfer pricing legislation under section 92-92F of the Income-tax Act 1961, the Company is required to use certain specific methods in computing arm''s length price of international transactions with associated enterprises and maintains adequate documentation in this respect. The legislations require that such information and documentation to be contemporaneous in nature. The Company has appointed independent consultants for conducting the Transfer Pricing Study to determine whether the transactions with associated
enterprises undertake during the financial year are on an "arm''s length basis". The Company is in the process of conducting a transfer pricing study for the current financial year and expects such records to be in existence latest by the due date as required by law. However, in the opinion of the management the update would not have a material impact on these financial statements. Accordingly, these financial statements do not include any adjustments for the transfer pricing implications, if any
Reasons for variance
1. Lower ratio in the current year due to repayment of borrowings and higher earnings as compared to previous year
2. Increase in net profit in the current year in comparision to previous year resulting in improvement of ratio
3. Increase in business activity (increase in sales and corresponding net purchases) in comparision to previous year has resulted in improvement of ratio
4. Revenue growth along with increase in working capital has led to improvement in the ratio.
(i) Current ratio = Current assets/ current liabilities
(ii) Debt equity ratio = Total debt/ shareholders equity
(iii) Debt service coverage ratio = Earnings available for debt service/ debt service (refer point (A) below)
(iv) Return on equity ratio = Net profits after taxes - preference dividend (if any)/ average shareholder''s equity
(v) Inventory turnover ratio = sales (excluding other operating income) /average inventory
(vi) Trade receivables turnover ratio = net credit sales/ avg. accounts receivable
(vii) Trade payables turnover ratio = Net credit purchases (comprise of purchase of raw materials stores & spares packing materials) / average trade payables)
(viii) Net capital turnover ratio = net sales/ working capital
(ix) Net profit ratio= net profit/ net sales
(x) Return on capital employed (ROCE)= earning before interest and taxes/ capital employed (refer point (B) below)
(xi) Return on investment= income received from investments/ average investments. No income has been received on investment in the year ended 31 March 2022 and 31 March 2021 hence reported as nil.
(A) Earning for debt service = net profit after taxes non-cash operating expenses like depreciation and other amortizations Interest other adjustments like loss on sale of property, plant & equipment etc.
Debt service = interest & lease payments principal repayments
"Net profit after tax" means reported amount of "profit / (loss) for the period" and it does not include items of other comprehensive income.
(B) Capital employed = tangible net worth total debt deferred tax liability (asset)
50. Other statutory information
(a) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
(b) The Company do not have any transactions with companies struck off.
(c) The Company do not have any charges or satisfaction which is yet to be registered with Registrar of Companies beyond the statutory period.
(d) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.
(e) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries"
(f) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
(g) The Company have not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961
(h) The Company is not declared wilful defaulter by any bank or financial institution or government or any government authority.
51. Pursuant to changes notified in Schedule-III, during the year ended 31 March 2022, the Company has reclassified/regrouped certain previous year''s balances.
52. The standalone financial statements were approved for issue by the board of directors on 28 April 2022.
This is the summary of significant accounting policies and other explanatory information referred to in our report of even date
Mar 31, 2018
1. Equity shares of ''10 each include, 31 March 2018 Nil (31 March 2017 : 3,082,560) equity shares (representing Nil (31 March 2017 : 2.03%) of total number of shares), outstanding against Global Depository Receipts (GDR), each GDR comprising 8 underlying fully paid up equity shares of ''10 each, outstanding against Nil GDRs (31 March 2017 : 385,320). Since, the same were held by depository, details of individual beneficiaries was not available with the Company. During the current year, these GDRs have been duly converted into equity shares and the Depository Agreement entered into between the Company and the Bank of New York Mellon (the âDepositoryâ) has been terminated and accordingly the GDRâs program/facility, has been de-listed from the Luxembourg Stock Exchange with effect from 16 October 2017.
2. The Company does not have any holding/ultimate holding company.
Nature of reserves Capital reserve
I t comprises of money received against forfeiture of equity shares and preference share warrants. It is not available for distribution as dividend. It is utilized in accordance with the provisions of Companies Act 2013.
Securities premium account:
It is used to record the premium received on issue of shares. It is utilized in accordance with the provisions of Companies Act, 2013.
General reserve
Free reserve to be utilized as per provisions of Companies Act, 2013.
Retained Earning
Profit / (loss) that the Company has earned till date including actuarial gain / (loss) on measurement of defined plans, less any dividends or other distributions paid to shareholders.
3. Financial instruments - accounting classifications and fair value measurements
The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sales.
The following methods and assumptions were used to estimate the fair values:
1. Fair value of cash, trade and other short term receivables, intercompany receivables, payables, loans and advances and other current liabilities approximated their carrying amounts largely due to the short term maturities of these instruments.
2. The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique.
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data. Fair value is generally determined using discounted cash flow analysis.
A. Accounting classifications and fair values
The following tables show the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy.
B. Measurement of fair values Assets and liabilities are to be measured based on the following valuation techniques:
Market approach - Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.
Income approach - Converting the future amounts based on market expectations to its present value using the discounting methodology.
Cost approach - Replacement cost method.
Quoted market prices in active markets are available for investments in securities and, as such, these investments are classified within Level 1.
Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments which are traded in stock exchanges and valued using closing price at the reporting date.
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Company uses its judgments to select a variety of methods and make assumptions that are mainly based on the conditions existing at the end of each reporting period.
The following table shows the valuation techniques used in measuring Level 2 and Level 3 fair values for financial instruments measured at fair value in the balance sheet, as well as the significant unobservable inputs used. Related valuation processes are described in note 2(o).
# Amount estimated based on the estimated probability of the outcome of litigation based on the managementâs assessment supported by legal advice
* The fair value of the Security deposits is computed using the discounted cash flows based on the current lending rates which is unchanged and therefore fair value of deposits is same as its carrying amount. They are classified as level 3 fair values in the fair value hierarchy due to use of unobservable inputs.
** For some of the unquoted investments, the Company have determined the fair value as NIL which is based on the net worth of the Company which is either Nil or negative.
*** Financial liabilities include secured and unsecured bank loans, optionally convertible debentures liability component and other financial liabilities.
There have been no transfers between level 1, 2 and 3 during the current or previous financial year.
Financial risk management
The Company has exposure to the following risks arising from financial instruments:
- credit risk [see point no. (ii) below]
- liquidity risk - [see point no. (iii) below]; and
- market risk - [see point no. (iv) below]
(i) Risk management framework
The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The board of directors has established the risk management committee, which is responsible for developing and monitoring the Company''s risk management policies. The committee reports regularly to the board of directors on its activities.
The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities.
The Company''s risk committee oversees how management monitors compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.
(ii) Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers.
The carrying amounts of financial assets represent the maximum credit risk exposure.
Trade receivables
The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk associated with the industry and country in which customers operate.
The risk management committee 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. The Company review includes external informationâs, if they are available, financial statements, credit agency information, industry information and in some cases bank references. Sale limits are established for each customer and reviewed periodically. Any sales exceeding those limits require approval from the risk management committee
The Company limits its exposure to credit risk from trade receivables by establishing a maximum payment period of 10 days for all customer categories. In case of delay beyond 10 days, the interest is generally recovered at the rate of 18% up to 30 days from the date of invoice and if the delay in beyond 30 days, it is recovered at the rate of 24% from the date of invoice. Average recovery rate of interest from overdue trade receivables in past years was 12-14%. Most of the Company''s customers have been transacting with the Company from past few years, and most of these customers'' balances are not credit-impaired at the reporting date except in few cases. Identifying concentrations of credit risk requires judgments in the light of specific circumstances. The Company monitors ageing of its trade receivables regularly and based on the same takes corrective action. Trade receivables having ageing more than 180 days is monitor individually and loss allowance is created based on such assessment.
(iii) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation. The Company uses activity-based costing to cost its products, which assists it in monitoring cash flow requirements and optimizing its cash return on investments.
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:
As disclosed in note 16 and 17, the Company has a secured bank loan that contains a loan covenant. A future breach of covenant may require the Company to repay the loan earlier than indicated in the above table. Under the agreement, the covenant is monitored on a regular basis by the treasury department and regularly reported to management to ensure compliance with the agreement.
As at 31 March 2018 the Company has not complied with certain financial covenants mentioned under the terms of borrowings mainly due to paucity of working capital funds. To augment the additional fund requirement, the Company has taken certain initiative - Refer note 41 (b). Also, based on the past experience and the facts of the case the management believes that no financial obligation on part of the Company, is likely to arise in respect of the above matter and thus, no adjustments are required in these financial statements in this regard.
The interest payments on variable interest rate loans in the table above reflect spot interest rates at the reporting date and these amounts may change as market interest rates change. However, the Company doesnât expect significant different amount on account of change in market interest rate changes..
Capital Management
The Companyâs policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The primary objective of the Companyâs Capital Management is to maximize the shareholderâs value. Management also monitors the return on capital. The board of directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowing and the advantages and security afforded by a sound capital position.
iv. Market risk
Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and commodity prices - will affect the Companyâs 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.
Commodity Price Risk
Commodity Price Risk arises due to fluctuation in prices of crude oil. The Company has a risk management framework aimed at prudently managing the risk arising from the volatility in commodity prices and freight costs. The Companyâs commodity risk is managed centrally through well-established control processes. In accordance with the risk management policy, the Company enters into various transactions using derivatives to hedge its exposure.
Currency risk
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. The currencies in which these transactions are primarily denominated are US dollars, Japnese Yen, Euro and GBP. The Company uses forward exchange contracts to hedge its currency risk, most with a maturity of less than one year from the reporting date, as and when required.
Exposure to currency risk
The summary quantitative data about the Company''s exposure to currency risk (based on notional amounts) as reported to the management is as follows.
Sensitivity analysis
A reasonably possible strengthening (weakening) of the INR, USD, JPY, Euro, GBP against all other currencies at 31 March would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.
Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
Exposure to Interest Rate Risk
Company''s interest rate risk arises from borrowings
The following table demonstrates the sensitivity on the Company''s profit before tax, to a reasonably possible change in interest rates on that portion of loans and borrowings affected, with all other variables held constant:
5. Disclosure pursuant to Ind AS 19 on âEmployee benefitsâ
a. Defined contribution plans
An amount of '' 4.34 crores (31 March 2017: '' 4.58 crores) for the year has been recognized as an expense in respect of the Company''s contributions towards Provident Fund and an amount of '' 0.79 crores (31 March 2017: '' 0.62 crores) for the year has been recognized as an expense in respect of Company''s contributions towards Employee State Insurance, which are deposited with the government authorities and have been included under employee benefit expenses in the Statement of Profit and Loss.
b. Defined benefit plans
Gratuity is payable to all eligible employees of the Company on superannuation, death or permanent disablement in terms of the provisions of the Payment of Gratuity Act or as per the Company''s Scheme, whichever is more beneficial.
The following table sets forth the status of the gratuity plan of the Company and the amounts recognized in the Balance Sheet and Statement of Profit and Loss:
Discount rate: The discount rate is estimated based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of the obligation.
Salary escalation rate: The estimates of salary increases, considered in actuarial valuation, take account of inflation, promotion and other relevant factors.
c. Other long-term employee benefits
An amount of Rs, 1.04 crores (31 March 2017: Rs, 1.19 crores) pertains to expense towards compensated absences and included in âEmployee benefit expensesâ.
33. Segment information:
a. Basis of segmentation
An operating segment is a component that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the other components, and for which discrete financial information is available. The Company''s activities/business is reviewed regularly by the Company''s Board of Directors assisted by an executive committee from an overall business perspective, rather than reviewing its products/ services as individual standalone components. The Company recognizes âPolyester'' as the only operating segment since its operations consist of manufacturing of this product and related activities. Accordingly, âPolyester'' segment is the only segment comprising the basis of segmental information set out in these financial statements. Thus, the Company has only one operating segment, and no reportable segments in accordance with Ind AS-108 âOperating Segments''.
b. Geographical information
The geographical information analyses the Company''s revenue and trade receivables from such revenue in India and other countries. In presenting the geographical information, segment revenue and receivables has been based on the geographic location of customers.
34. Related parties
(i) Related parties where control exists:
(a) Wholly owned subsidiaries Indo Rama Renewables Jath Limited (IRRJL) (up to 16 May 2016)
(ii) Other related parties with whom Company had transactions or have closing balances:
(a) Key management personnel and their relatives Mr. Mohan Lal Lohia, Chairman Emeritus (upto 1 June 2017)
Mr. Om Prakash Lohia, Chairman cum Managing Director (''CMDâ) Mr. Vishal Lohia, Whole Time Director (''WtDâ)
Mr. Anant Kishore, Director (upto 8 August 2016)
Mrs. Urmila Lohia, Wife of CMD Mr. Aloke Lohia, Brother of CMD Mrs. Ritika Kumar, Daughter of CMD Ms. Aruna Goenka, Sister of CMD Mrs. Rimple Lohia, Wife of WTD
Mr. Ashok Kumar Ladha, Non-Executive Independent Director Ms. Ranjana Agarwal, Non-Executive Independent Director Mr. Suman Jyoti Khaitan, Non-Executive Independent Director Mr. Arvind Pandalai, Non-Executive Independent Director
(b) Enterprises over which key management personnel or their Indorama Petrochem Limited, Thailand relatives have significant influence
(c) Enterprises having significant influence on the Company Brookgrange Investments Limited
Other transactions
Personal guarantee has been given by Mr. Om Prakash Lohia (CMD) and Mr. Vishal Lohia (WTD) in respect of loan taken by the Company amounting to Rs, 41.59 crores (31 March 2017: Rs,34.97 crores).
The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company also believes that the above issues, when finally settled, are not likely to have any significant impact on the financial position of the Company. The Company does not expect any reimbursements in respect of the above contingent liabilities.
b. Commitments:
i) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is Rs, 1.19 crores (31 March 2017: Rs, 0.87 crores).
ii) The Company has commitments to export 68,710 MT (previous year 134,174 MT) of finished goods as per foreign trade policy pursuant to import of duty free material under advance license scheme.
38. Supplementary statutory information required to be given pursuant to Regulation 34(3) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, in respect of loans given
I nterest free loans to wholly owned subsidiary given for the purpose of setting up of renewable power project, are to be converted, on mutual agreement, into equity, quasi equity or debentures or repayable on or before 31 March 2017:
the year 2012-13 recorded the interest receivable amounting to Rs, 11.69 crores upto July 2012 (the date of order) and aligned the carrying amount of insurance claim. The Insurance Company had filed an appeal in the Delhi High Court against the same. On 20 January
2015, the Delhi High Court Single bench pronounced the order wherein the Court has remanded the matter back to Arbitral Tribunal for computation of claim on âturnover basisâ. Subsequently, the Company had filed an appeal with the Delhi High Court double bench and an interim stay has been awarded pending disposal. Currently, the case is pending with Delhi High Court.
(b) During the year ended 31 March 2018, the Company recognized interest of Rs, 2.92 crores (31 March 2017: Rs, 2.92 crores) on award decided by the arbitral tribunal, for the loss of certain assets and loss suffered due to business interruption under loss of profit policy relating to fire incidence at its plant in 2007-08 under ''Revenue from operationsâ. The carrying amount of interest on insurance claim recoverable as at 31 March 2018 is Rs, 16.79 crores (31 March 2017: Rs, 13.87 crores).
39. Insurance claim receivables:
(a) The Company had lodged claims with its Insurance Company for the loss of certain assets and loss suffered due to business interruption under loss of profit policy relating to a fire incidence at Butibori plant in 200708. Since, the matter has been under dispute with the Insurance Company, as per the terms and conditions of the above policy, the Company had, during the previous years, initiated the arbitration process for a claim of Rs, 72.94 crores for loss of business interruption and for the claim of Rs, 6.43 crores for loss of assets. While the said matter was pending conclusion by the Arbitral Tribunal, the Company, on a conservative basis, carried forward insurance recoverable (recorded in the financial year ended 31 March 2008) to the extent of Rs, 33.53 crores (net of receipt/adjustment) as advances recoverable, without prejudice to its right to claims aggregating Rs, 79.37 crores. On 1 August 2012, the Arbitral Tribunal decided the matter in the favour of the Company with an award of Rs, 32.44 crores (net off receipt/adjustment) and interest at 9% per annum from July 2008 till the date of payment. Pursuant to the above award, the Company had during
(c) Consequent to an incident of fire during the year 2011-12, the Company had spent Rs, 7.58 crores on refurbishment of the concerned plant and equipment, which had been recognized as a receivable from the Insurance Company under other current assets. During the earlier year, the claim was rejected by insurer on grounds of insufficient premium paid. The Company has filed the writ petition on 6 May 2016 against the Insurance Company.
Further, the Company strongly believes and is reasonably certain that the above cases do not have any significant impact on the financial position of the Company and it will be able to realize the above amounts in the normal course and, therefore, all the claims have been classified as current.
41. Going concern
(a) The Company''s business comprises of Polyester products, which had been highly competitive resulting into losses in the current as well as previous period but over the period the demand and supply in the industry has balanced, resulting in improved plant operating rate. This has resulted in improved profit margins in the industry. The Company has also taken several initiatives to improve its operational performance in terms of specialty products, cost control initiatives and addition of new customers. The Company has plans to secure additional working capital funds to ease the liquidity position and improve the capacity utilization. Based on the above, the Company believes that the profitability will improve over the next few
years. The Company is confident that the deferred tax assets carried at the end of the period is fully recoverable.
(b) The underutilization of plant capacity in the Company is mainly due to paucity of working capital funds and due to change in the macro economic scenarios led by demonetization and Goods and Service Tax (âGST'') regime. To augment the additional fund requirement, the Company has taken following steps:
A Allotted 20 (Twenty) 12% Optionally Convertible Debentures (OCDs) to promoter on 24 January 2018 bearing face value of Rs, 10,000,000 each as per Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009. The OCDs are unsecured and are convertible into equity at the option of OCD holder within a period of twelve months subject to maximum eighteen months from the date of allotment.
A Subsequent to the 31 March 2018, the Company has entered into arrangements with a non-banking finance company to source/bridge the working capital gap subject to completion of certain conditions.
In view of the aforementioned steps taken, the management believes that normal operations of the Company shall be sustained for the foreseeable future. Accordingly, the assets and liabilities are recorded on the basis that the Company will be able to use or realise its asset at least at the recorded amounts and discharge its liabilities in the usual course of business.
42.Investment in subsidiary was sold during the previous financial year
During the previous year ended 31 March 2017, Board of Directors of Indo Rama Renewables Limited by its resolution dated 10 February 2016, had entered into an agreement with Tata Power Renewable Energy Limited (TPREL) to sell 100% shares of its subsidiary Indo Rama
Renewables Jath Limited. Indo Rama Renewables Jath Limited operated 30 MW Wind Farm at Jath, in Maharashtra. The process of complying with the conditions stipulated in the agreement of sale were completed by 16 May 2016. The share transfer was effected on 16 May 2016.
Pursuant to scheme of amalgamation approved by NCLT, Indo Rama Renewables Jath Limited which was hitherto subsidiary of Indo Rama Renewables Limited, became wholly owned subsidiary of the Company.
43. Exceptional items
During the current year ended March 31, 2018, Rs, 7.36 crores incurred towards fees as per provisions of foreign trade policy.
In the previous year ended 31 March 2017, the Company had charged off Rs, 4.73 crores towards the net book value of property, plant and equipment, capital work-in-progress and capital advances (to the extent not recoverable) acquired from subsidiaries under the scheme of amalgamation.
44.CSR expenditure
(a) Gross amount required to be spent by the Company during the year: Rs, Nil (previous year Rs, Nil crores).
45. Business Combination
During the previous financial year, the board of directors approved the scheme for amalgamation of Indo Rama Renewables Limited, wholly owned subsidiary of the Company and its two step down subsidiaries viz. Indo Rama Renewables Ramgarh Limited and Indo Rama Renewables Porbandar Limited with the Company, in its meeting held on 31 August 2016. The National Company Law Tribunal (NCLT), Mumbai passed an order approving the merger effective from 1 April 2016 on 29 March 2017. Consequently, the assets and liabilities were merged with the Company by using pooling of interest method as per Ind AS 103, Business Combinations. As the order of NCLT was passed on 29 March 2017, the transactions of subsidiaries occurred during the period from 1 April 2016 to 29 March 2017 were incorporated in the financial statement for year ended 31 March 2017.
Mar 31, 2016
Contingent liabilities are disclosed in respect of possible obligations that have arisen from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of future events, not wholly within the control of the Company.
When there is an obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
Foot notes :
1. During the current year and in the previous year, there have been no movements in the number of outstanding equity shares.
2. The Company has only one class of equity shares, having a par value of''10 per share. Each shareholder is eligible to one vote per share held, except for shares held against Global Depository Receipts (GDR).The dividend proposed, if any, by the Board of Directors is subject to approval of shareholders in the ensuing Annual General Meeting, except in case of interim dividend. The repayment of equity share capital in the event of liquidation and buy back of shares are possible subject to prevalent regulations. In the event of liquidation, normally the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
3. Above equity shares of RS, 10 each include 10,290,560 equity shares (representing 6.78% of total number of shares), outstanding against 1,286,320 Global Depository Receipts (GDR), each GDR comprising 8 underlying fully paid up equity shares of RS, 10 each (previous year 10,290,560 equity shares (representing 6.78% of total number of shares), outstanding against 1,286,320 GDRs). Since, the same are held by depository, details of individual beneficiaries is not available with the Company.
Nature of security Terms of repayment
a) Rupee term loans from banks:
i) Amounting to RS, 2.67 crores(previous year RS, 8.00 crores) are Repayable in 18 equal quarterly installments of RS,1.33 crores each secured by specific charge over specific assets purchased under commencing from June 2012, along with interest at bank rate plus 1.50%. the loan agreement.
ii) Amounting to RS, 15.26 crores (previous year RS, 20.82 crores) Repayable in 18 equal quarterly installments of RS, 1.39 crores each are secured by exclusive charge on the captive power plant at commencing from 30 September 2014 along with interest at 3.25% over _Butibori, Maharashtra._base rate._
Nature of security Terms of repayment
iii) Amounting to RS, 53.12 crores (previous year RS,65.63 crores) are Repayable in 8 equal quarterly installments of RS, 3.12 crores each secured primarily by first pari-passu charge on the current assets commencing from 30 September 2014 and 10 equal quarterly installments and collaterally by first pari-passu charge on the fixed assets of RS, 5 crores thereafter, along with interestat3% over base rate.
gof the company. Further, the same is secured by the personal gaurantee of promoters, i.e., Mr. Om Prakash Lohia and Mr.Vishal Lohia.
iv) Aggregating to RS, 0.76 crores (previous year RS, 1.23 crores) are (a) RS, Nil (previous year RS, 0.05 crores) repayable in 36 monthly installments secured by hypothecation of specific vehicles. commencing from January 2013.
(b) RS, 0.56 crores (previous year RS, 0.91 crores) repayable in 36 monthly installments commencing from September 2014.
(c) RS, 0.08 crores (previous year RS, 0.14 crores) repayable in 36 monthly installments commencing from June 2014.
(d) RS, 0.05 crores (previous year RS, 0.08 crores) repayable in 36 monthly installments commencing from May 2014.
(e) RS, 0.03 crores (previous year RS, 0.05 crores) repayable in 36 monthly installments commencing from June 2014.
(f) RS, 0.04 crores (previous year RS, Nil) repayable in 36 monthly installments commencing from Nov 2015.
The outstanding amount of borrowings taken for vehicles isRS, 0.76 crores (previous year RS, 1.23 crores) out of which current maturity payable next year amounts to RS, 0.53 crores (previous year RS, 0.51 crores).
b) Foreign currency term loans from banks:
i) Amounting to RS, 46.40 crores (previous year RS, 45.46 crores), are The outstanding loan is repayable in 8 semi-annual installments in April and secured by specific charge on the equipment purchased under October every year with interest at six months EURIBOR plus 0.95%. The loan the loan agreement for the Company''s Polyester Expansion isto be repaid by 0ctober2019.
Project and a first charge on the land situated at Mehsana, Amount payable within one year amounts to RS, 11.60 crores (previous year _Gujarat._RS, 22.77 crores)._
ii) Amounting to RS, 25.50 crores (previous year RS, 26.46 crores) are The outstanding loan is repayable in 8 semi-annual installments in April and secured by specific charge on the equipment purchased under Octobers very year with interest at six months LIBOR plus 0.95%.The loan is the loan agreement for the Company''s Polyester Expansion to be repaid by October 2019.
Project and a first charge on the land situated at Mehsana, Amount payable within one year amounts to RS, 6.38 crores (previous year _Gujarat._RS,13.23 crores)._
* During the current year, the Company has declared a dividend of RS, 1 (previous year RS, 1) per equity share of RS, 10 each.
Nature of security
Cash credit and other working capital facilities from banks are secured byway of hypothecation of stocks of raw materials, work-in-progress, finished goods, stores and spares, packing material, goods at port/in transit/under shipment, outstanding money, book debts, receivables and other current assets of the Company, both present and future. These are further secured by a second charge on all the immovable properties of the Company, both present and future.
Note:
* There are no outstanding dues to be paid to Investor Education and Protection Fund.
** Including acceptances of RS, 5.19 crores(previous year RS, Nil).
# includes amounts payable to micro enterprises and small enterprises RS, Nil (previous year RS, Nil).
Discounting Rate: The discount rate is estimated based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of the obligation.
Salary Escalation Rate: The estimates of salary increases, considered in actuarial valuation, take account of inflation, promotion and other relevant factors.
c. Other long term benefits:
An amount of RS, 0.92 crores (previous year RS, 1.76 crores) pertains to expense towards compensated absences and included in "Employee benefits expense".
Note 4: Segment information:
(a) Information about primary business segment
The Company recognizes ''Polyester'' as its only primary segment since its operations consist of manufacturing of this product and related activities. Accordingly, ''Polyester" segment is the only segment comprising the primary basis of segmental information set out in these financial statements.
(b) Information on secondary/ geographical segment
The Company sells its products to various manufacturers within the country and also exports to other companies. Considering the size and proportion of exports to local sales, the Company considers sales made within the country and exports as two geographical segments. Information of geographical segment is based on the geographical location of the customers.
Note 34: Related party disclosures (As per Accounting Standard -18)
(i) Related parties where control exists:
(a) Wholly owned subsidiaries IndoRama Renewable Limited(''IRRL'')
Indo Rama Renewables Porbandar Limited Indo Rama Renewables Ramgarh Limited Indo Rama Renewablesjath Limited
(ii) Other related parties with whom Company had transactions:
(a) Key management personnel and their relatives Mr. Mohan Lai Lohia, Chairman Emeritus_
Mr. Om Prakash Lohia,Chairman cum Managing Director(''CMD'')
Mr.Vishal Lohia, Whole Time Director(''WTD'')
Mr. Anant Kishore, Executive Director Mrs. Urmila Lohia, Wife of CMD Mr. Aloke Lohia, Brother of CMD Mrs. Ritika Kumar, Daughter of CMD Ms. Aruna Goenka, Sister ofCMD Mrs. Rimple Lohia, Wife of WTD
(b) Enterprises over which key management personnel or their Indorama Petrochem Limited, Thailand relatives have significant influence TPT Petrochemicals Public Co. Limited, Thailand
PT. Indorama Petrochemicals, Indonesia Lohia Industries Private Limited Indorama Retail Holding Private Limited
(c) Enterprises having significant influence on the Company Brookgrange Investments Limited
*excludes expenditure towards gratuity and compensated absences, since the same are based on actuarial valuations for the Company as whole. Personal guarantee has been given by Mr. Om Prakash Lohia (CMD) and Mr.Vishal Lohia (WTD) in respect of loan taken by the Company amounting to RS, 53.12 crores (previous year RS, 65.63 crores).
Note: Previous year figures have been given in brackets.
- Customs duty claims (including penalties) against the Company aggregating to RS, 214.25 crores (previous year RS, 214.25 crores) have
not been considered contingent as favorable orders have been received, in some of the cases, by the Company from the CESTAT. The Company believes that its position is strong in this regard. The matter is pending with the Honorable Supreme Court. In addition during the previous year, the Company has also received a show cause notice amounting to RS, 6.01 crores.
The Company also believes that the above issues, when finally settled, are not likely to have any significant impact on the financial position of the Company.
- Commitments:
a) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is RS, 17.46 crores (previous year RS,25.48 crores).
b) The Company has commitments to export 191,549 MT (previous year 285,985 MT) of finished goods as per foreign trade policy pursuant to import of duty free material under advance license scheme.
Note 5: Supplementary statutory information required to be given pursuant to Regulation 34(3) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, in respect of the loans given
Interest free loans to wholly owned subsidiary given for the purpose of setting up of renewable power project, are to be converted, on mutual agreement, into equity, quasi equity or debentures or repayable on or before 31 March 2017:
Note 6: Insurance claim receivables:
(a) The Company had lodged claims with its insurance company for the loss of certain assets and loss suffered due to business interruption under loss of profit policy relating to a fire incidence at Butibori plant in 2007-08. Since, the matter has been under dispute with the insurance company, as per the terms and conditions of the above policy, the Company has, during the previous years, initiated the arbitration process for a claim of RS, 72.94 crores for loss of business interruption and for the claim of RS, 6.43 crores for loss of assets. While the said matter was pending conclusion by the Arbitral Tribunal, the Company, on a conservative basis, carried forward insurance recoverable (recorded in the financial year ended 31 March 2008) to the extent of RS, 33.53 crores (net of receipt/ adjustment) as advances recoverable, without prejudice to its right to claims aggregating RS, 79.37 crores. On 1 August 2012, the Arbitral Tribunal decided the matter in the favour of the Company with an award of RS, 32.45 crores (net off receipt/ adjustment) and interest at 9% per annum from July 2008 till the date of payment. Pursuant to the above award, the Company had during the year 2012-13 recorded the interest receivable amounting to RS, 11.69 crores up to July 2012 (the date of order) and aligned the carrying amount of insurance claim. The Insurance Company had filed an appeal in the Delhi High Court against the same. On 20 January 2015, the Delhi High Court Single bench pronounced the order wherein the Court has remanded the matter back to Arbitral Tribunal for computation of claim on "turnover basis". Subsequently, the Company had filed an appeal with the Delhi High Court double bench and an interim stay has been awarded pending disposal. Currently, the case is pending with Delhi High Court.
(b) During the year ended 31 March 2016, the Company has recognized interest of RS, 10.95 crore on award decided by the arbitral tribunal, for the loss of certain assets and loss suffered due to business interruption under loss of profit policy relating to fire incidence at its plant in 2007-08 under ''other operating incomeâ.
(c) Consequent to an incident of fire during the year 2011-12, the Company had spent RS, 7.58 crores on refurbishment of the concerned plant and machinery, which had been recognized as a receivable from the insurance company under other current assets. During the current year, the claim was rejected by insurer on grounds of insufficient premium paid. The Company has filed the writ petition on 6 May 2016 against the insurance company.
Further, the Company strongly believes and is reasonably certain that the above cases do not have any significant impact on the financial position of the Company and it will be able to realize the above amounts in the normal course and, therefore, all the claims have been classified as current.
* RS, 253 thousand (previous year RS, 24 thousand).
** RS, 1,421 thousand (previous year RS, 893 thousand).
# RS, 58 thousand (previous year RS, 15 thousand).
## RS, 158 thousand (previous year RS, 99thousand).
Note 7:
(a) The Company has internally assessed the operating margins and it''s set-off against accumulated Unabsorbed Depreciation as per the income tax laws. In the absence of virtual certainty and as a matter of prudence the Company has charged off MAT Credit entitlement amounting to RS, 57.30 crores during the year.
(b) Earlier, the Company had not recorded deferred tax assets in relation to unabsorbed depreciation as the same has been subject matter of litigation. Pursuant to the changes made by Finance Act, 2015 and based on opinion of legal counsel, the Company is reasonably certain that the litigation do not have any significant impact on recoverability of RS, 158.33 crore of unabsorbed depreciation to the extent of future reversal of deferred tax liabilities.
Note 8: The Company had made an early application, since the year 2010-11, of Accounting Standard 30 "Financial Instruments-Recognition and Measurement", issued by the Institute of Chartered Accountants of India for accounting for forward exchange contracts taken for highly probable / forecast transactions, which are not covered by Accounting Standard 11. An amount of RS, 5.09 crores has been recognized as income (previous year an expense of RS, 4.69 crores) in the financial statements for the year ended 31 March 2016 and included in exceptional items as an adjustment on the said application of Accounting Standard 30.
Note 9: Exceptional items :
(a) Inventory losses amounting to RS, 26.68 crore for the year ended March 31, 2016, which includes loss of RS, 4.62 crore (previous year RS, 20.75 crore) on account of write down of closing inventories, calculated on month on month basis, incurred by the Company due to crash in global crude oil prices and consequently impacting raw material prices, i.e., of PTA and MEG. The loss incurred has been primarily due to the timing difference in the prices at which material has been purchased and sold.
(b) Due to significant volatility in the foreign currency vis-a-vis local currency, the Company has considered the foreign exchange fluctuation as an exceptional item in the Statement of Profit and Loss.
(c) ''Others'' includes differential excise duty (including interest thereon) amounting to RS, 4.23 crore paid in compliance with the judgment of the Supreme Court.
Note 10: CSR expenditure
(a) Gross amount required to be spent by the Company during the year: RS, Nil (previous year RS, 0.36 crores).
Note 11: The figures relating to the previous year have been regrouped and reclassified, wherever necessary, to confirm to the current year''s classification.
Mar 31, 2015
1. General information
Indo Rama Synthetics (India) Limited (hereinafter referred to as 'the
Company' or 'IRSL') is a manufacturer of Polyester Filament Yarn (PFY),
Polyester Staple Fibre (PSF), Draw Texturised Yarn (DTY) and Chips. The
Company is also engaged in power generation, which is used primarily
for captive consumption. The Company's manufacturing facilities are
located at Butibori, Nagpur.
Note 2: Disclosure pursuant to Accounting Standard 15 on "Employee
Benefits"
a) Defined contribution plans
An amount of Rs.4.33 Crores (previous year Rs. 4.36 Crores) for the year
has been recognized as an expense in respect of the Company's
contributions towards Provident Fund which is deposited with the
government authorities and has been included under employee benefit
expenses in the Statement of Profit and Loss.
b) Defined benefit plans
Gratuity is payable to all eligible employees of the Company on
superannuation, death or permanent disablement in terms of the
provisions of the Payment of Gratuity Act or as per the Company's
Scheme, whichever is more beneficial.
The following table sets forth the status of the gratuity plan of the
Company and the amounts recognised in the Balance Sheet and Statement
of Profit and Loss:
Discounting Rate: The discount rate is estimated based on the
prevailing market yields of Indian Government securities as at the
balance sheet date for the estimated term of the obligation.
Salary Escalation Rate: The estimates of salary increases, considered
in actuarial valuation, take account of inflation, promotion and other
relevant factors.
c) Other long term benefits:
An amount of Rs. 1.76 Crores (previous year Rs.1.82 Crores) pertains to
expense towards compensated absences and included in "Employee
benefits expense."
Note 3: Segment information:
(a) Information about primary business segment
The Company recognises 'Polyester' as its only primary segment since
its operations consist of manufacturing of this product and related
activities. Accordingly, 'Polyester' segment is the only segment
comprising the primary basis of segmental information set out in these
financial statements.
(b) Information on secondary/ geographical segment
The Company sells its products to various manufacturers within the
country and also exports to other companies. Considering the size and
proportion of exports to local sales, the Company considers sales made
within the country and exports as two geographical segments.
Information of geographical segment is based on the geographical
location of the customers.
Note 4: Related party disclosures (As per Accounting Standard - 18)
(i) Related parties where control exists:
(a) Wholly owned subsidiaries
Indo Rama Renewables Limited ('IRRL') Indo Rama Renewables Porbandar
Limited Indo Rama Renewables Ramgarh Limited Indo Rama Renewables Jath
Limited
(ii) Other related parties with whom Company had transactions:
(a) Key management personnel and their relatives
Mr. Mohan Lal Lohia, Chairman Emeritus
Mr. Om Prakash Lohia, Chairman cum Managing Director ('CMD')
Mr. Vishal Lohia, Whole Time Director ('WTD')
Mr. Ashok Jagjivan Gupta (Executive Director till 30 June 2013)
Mr. Anant Kishore (Executive Director with effect from 8 August 2013)
Mrs. Urmila Lohia, Wife of CMD
Mr. Aloke Lohia, Brother of CMD
Mrs. Ritika Kumar, Daughter of CMD
Ms. Aruna Goenka, Sister of CMD
Mrs. Rimple Lohia, Wife of WTD
(b) Enterprises over which key management personnel or their relatives
have significant influence
Indorama Petrochem Limited, Thailand T P T Petrochemicals Public Co.
Limited, Thailand PT. Indorama Petrochemicals, Indonesia P.T. Indo Rama
Synthetics TBK, Jakarta
Note 5: Contingent liabilities and commitments (to the extent not
provided for)
Contingent liabilities:
- Claims against the Company not acknowledged as debts.
As at As at
Particulars 31 March 2015 31 March 2014
Excise / customs / service tax
matters in dispute/ under appeal 62.83 63.19
Income tax matters in dispute/
under appeal 11.88 15.52
Sales tax/ VAT matters in dispute/
under appeal 11.04 6.46
Claims by ex-employees, vendors,
customers and civil cases 0.84 0.71
- Customs duty claims (including penalties) against the Company
aggregating to Rs.214.25 Crores (previous year Rs.214.25 Crores) have not
been considered contingent as favourable orders have been received, in
some of the cases, by the Company from the CESTAT. The Company believes
that its position is strong in this regard. The matter is pending with
the Honorable Supreme Court. In addition, the Company has also received
a show cause notice amounting to Rs.6 Crores.
- The Company is in the process of finalizing a compensation
arrangement with its workers union for the past few years, starting
November 2011 and the matter is pending with the Labour Court of
Nagpur. During the previous year, the Company received an interim order
from the Court to pay an interim increment w.e.f. November 2013,
pending the final judgment. As and when the final judgment is received,
the Company would accrue and pay for any differential compensation.
The Company believes that the above issues, when finally settled, are
not likely to have any significant impact on the financial position of
the Company.
- Commitments:
a) Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) is Rs. 25.48 Crores
(previous year Rs. nil).
b) On 25 January 2012, the Company entered into a memorandum of
understanding ('MOU') with Indorama Ventures PCL, Thailand, for
manufacturing of Purified Terepthalic Acid (PTA) and downstream
products Polyethylene (PET) and Polyester Staple Fibre (PSF). As a part
of the above process, the Company has entered into a Memorandum of
Understanding (MOU) with the Government of Tamil Nadu to set up the
above project. The project continues to be at an initial stage of
conceptualization.
c) The Company has commitments to export 285,985 MT (previous year
264,077 MT) of finished goods as per foreign trade policy pursuant to
import of duty free material under advance license scheme.
Note 7: Insurance claim receivables:
(a) The Company had lodged claims with its insurance company for the
loss of certain assets and loss suffered due to business interruption
under loss of profit policy relating to a fire incidence at Butibori
plant in 2007- 08. Since the matter has been under dispute with the
insurance company, as per the terms and conditions of the above policy,
the Company has, during the previous years, initiated the arbitration
process for a claim of Rs.72.94 Crores for loss of business interruption
and for the claim of Rs.6.43 Crores for loss of assets. While the said
matter was pending conclusion by the Arbitral Tribunal, the Company, on
a conservative basis, carried forward insurance recoverable (recorded
in the financial year ended 31 March 2008) to the extent of Rs.33.53
Crores (net of receipt/adjustment) as advances recoverable, without
prejudice to its right to claims aggregating Rs. 79.37 Crores. On 1
August 2012, the Arbitral Tribunal decided the matter in the favour of
the Company with an award of Rs.32.45 Crores (net off
receipt/adjustment) and interest at 9% per annum from July 2008 till
the date of payment. Pursuant to the above award, the Company had
during the year 2012-13 recorded the interest receivable amounting to
Rs.11.69 Crores upto July 2012 (the date of order) and aligned the
carrying amount of insurance claim. The Insurance Company had filed an
appeal in the Delhi High Court against the same. On 20 January 2015,
the Delhi High Court Single bench pronounced the order wherein the Court
has remanded the matter back to Arbitral Tribunal for computation of
claim on "turnover basis". Subsequently, the Company had filed an
appeal with the Delhi High Court double bench and an interim stay has
been awarded pending disposal. As a matter of prudence, the Company has
not recognized the interest for the period after July 2012 based on the
earlier arbitral tribunal's favourable judgment and also as legally
advised, the Company is of the view that the amounts carried forward
are fully recoverable.
(b) Consequent to an incident of fire during the year 2011-12, the
Company had spent Rs.7.58 Crores on refurbishment of the concerned plant
and machinery, which has been recognized as a receivable from the
insurance company under other current assets. During the previous year,
the management has submitted the claims to the surveyor. The final
settlement is pending with insurance company.
Further, the Company strongly believes and is reasonably certain that
the above cases do not have any significant impact on the financial
position of the Company and it will be able to realize the above
amounts in the normal course and, therefore, all the claims have been
classified as current.
Note 7: The Company's business mainly comprises manufacture of
polyester.
During the past few years, there has been significant volatility in raw
material prices which are linked with crude oil prices and is subject
to foreign exchange fluctuations. In comparison, the sales realization
in the industry has been low in comparison to the raw material price
variations. In addition, stiff competition in certain products, low
capacity utilisation, high inflation, high interest rates and weakened
rupee has resulted in a temporary phase of low operating margins/losses
in the recent past and also accumulation of significant unabsorbed
depreciation as per tax laws. However, the Company's products command a
premium in the market due to cost competitiveness and quality standards
and its premium product lines are operating at full capacity. The
Company has internally assessed its position and the future outlook and
has also initiated various measures including strategic steps to ensure
profitable operations. To achieve the projected level of profitability,
the Company has initiated steps including increase in the capacity for
its premium products by making further investment in the product line
and is also confident of the market demand for the increased
production. These actions would be coupled with other initiatives which
include cost saving measures, exploration of new markets especially
exports, streamlined utilisation of export benefits, developing
backward integration facilities towards producing certain key input
materials. The Company is also arranging for funds to meet the above
plans. Accordingly, the Company believes that considering the expected
investment and resultant profitability over the next years & in future
years, no provision is required for impairment of assets and is
confident that the MAT Credits carried at the end of the year is fully
recoverable and there are no indications of impairment of assets.
Note 8: The Company had made an early application, since the year
2010-11, of Accounting Standard 30 "Financial Instruments-
Recognition and Measurement", issued by the Institute of Chartered
Accountants of India for accounting for forward exchange contracts
taken for highly probable / forecast transactions, which are not
covered by Accounting Standard 11. An amount of Rs.4.69 Crores has been
recognized as expense (previous year an expense of Rs.10.40 Crores) in
the financial statements for the year ended 31 March 2015 and included
in exceptional items as an adjustment on the said application of
Accounting Standard 30. During the current and previous year, due to
significant volatility in the foreign currency vis-a-vis local
currency, the Company has considered the foreign exchange fluctuation
as an exceptional item in the Statement of Profit and Loss.
Note 9: During the current year, due to unprecedented fall in global
prices of crude oil, the Company has incurred a loss of Rs.20.75 Crores
(i.e.Rs.15.26 Crores for raw material and Rs.5.49 Crores for finished
goods) on account of write down of inventories which has been
considered as an exceptional item.
Note 10: The Company has considered it as appropriate to include
interest of Rs.9.41 Crore (previous year Rs.8.33 Crore), received from
customers as other operating income which hitherto was considered as
other income upto the previous year.
Note 11: The figures relating to the previous year have been regrouped
and reclassified, wherever necessary, to confirm to the current year's
classification.
Mar 31, 2013
1. GENERAL INFORMATION
Indo Rama Synthetics (India) Limited (herein after referred to as
''the Company'' or ''IRSL'') is a manufacturer of Polyester
Filament Yarn (PFY), Polyester Staple Fibre (PSF), Draw Texturised Yarn
(DTY) and Chips. The Company is also engaged in power generation, which
is used primarily for captive consumption. The Company''s
manufacturing facilities are located at Butibori, Nagpur.
Foot notes:
1. During the current year and in the previous year, there have been
no movements in the number of equity shares outstanding.
2. The Company has only one class of equity shares, having a par value
of Rs. 10 per share. Each shareholder is eligible to one vote per share
held, except for shares held against Global Depository Receipts (GDR).
The dividend proposed, if any, by the Board of Directors is subject to
approval of shareholders in the ensuing Annual General Meeting, except
in case of interim dividend. The repayment of equity share capital in
the event of liquidation and buy back of shares are possible subject to
prevalent regulations. In the event of liquidation, normally the equity
shareholders are eligible to receive the remaining assets of the
Company after distribution of all preferential amounts, in proportion
to their shareholding.
On 9 November 2010, the Company had allotted 20,000,000 Fully
Convertible Preferential warrants (FCPs) at Rs. 40.60 per warrant
(aggregating Rs. 81.20 Crores) as per Securities and Exchange Board of
India (SEBI) and other guidelines, as applicable. As per the terms of
the warrants, Rs. 10.15 per warrant (aggregating Rs. 20.30 Crores) have
been received and balance amount of Rs. 30.45 per warrant (aggregating
Rs. 60.90 Crores) was payable within 18 months of allotment of the
warrants. The warrants were convertible into equity shares within a
period of 18 months from the date of allotment of warrants at the
option of the warrant holders. Upon conversion, one warrant will be
converted into one fully paid equity share of Rs. 10 each and amount of
Rs. 30.60 will be adjusted towards share premium account. Subsequently,
the Company has received request from warrant holders for extending the
period upto May 2014 for payment of balance amount of Rs. 60.90 Crores.
Accordingly, the Company has requested for extension of time to
Securities and Exchange Board of India (SEBI) and is in the process of
filing application to Ministry of Corporate Affairs for approval.
* Excluding deferred tax assets aggregating Rs. 296.37 Crores (Previous
year Rs. 288.84 Crores) in relation to unabsorbed depreciation
amounting to Rs. 871.92 Crores (Previous year Rs. 890.25 Crores), which
have not been recorded. The same have been a subject matter of
litigation by the Income Tax Authorities and appeals in this regard are
pending with the higher authorities.
Nature of security
Cash credit and other working capital facilities from banks are secured
by way of hypothecation of stocks of raw materials, work-in- progress,
finished goods, stores and spares, packing material, goods at port/in
transit/under shipment, outstanding money, book debts, receivables and
other current assets of the Company, both present and future. These are
further secured by a second charge on all the immovable properties of
the Company, both present and future.
NOTE 2
DISCLOSURE PURSUANT TO ACCOUNTING STANDARD 15 ON "EMPLOYEE
BENEFITS"
Defined contribution plans
An amount of Rs. 4.47 Crores (Previous year Rs. 5.01 Crores) for the
year has been recognised as an expense in respect of the Company''s
contributions towards Provident Fund which is deposited with the
government authorities and has been included under employee benefit
expenses in the Statement of Profit and Loss.
Defined benefit plans
Gratuity is payable to all eligible employees of the Company on
superannuation, death or permanent disablement in terms of the
provisions of the Payment of Gratuity Act or as per the Company''s
Scheme, whichever is more beneficial.
The following table sets forth the status of the gratuity plan of the
Company and the amounts recognised in the Balance Sheet and Statement
of Profit and Loss:
NOTE 3
SEGMENTAL INFORMATION:
(a) Information about primary business segment
The Company recognises ''polyster'' as its only primary segment since
its operations consist of manufacturing of this product and related
activities. Accordingly, ''Polyster'' segment is the only segment
comprising the primary basis of segmental information set out in these
financial statements.
(b) Information on secondary/ geographical segment
The Company sells its products to various manufacturers within the
country and also exports to other companies. Considering the size and
proportion of exports to local sales, the Company considers sales made
within the country and exports as two geographical segments.
Information of geographical segment is based on the geographical
location of the customers.
For certain insurance claims, refer to note 41.
Commitments:
a) Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) Rs. 0.29 Crores
(previous year Rs. 21.12 Crores).
b) On 25 January 2012, the Company has entered into a memorandum of
understanding (''MoU'') with Indorama Ventures PCL, Thailand, for
manufacturing of Purified Terepthalic Acid (PTA) and downstream
products Polyethylene (PET) and Polyester Staple Fiber (PSF). The
project is at an initial stage of conceptualisation. As a part of the
above process, the Company has entered into a Memorandum of
Understanding (MoU) with Government of Tamil Nadu to set up the above
project.
c) The Company has commitments to export 343,010 MT (previous year
380,632 MT) of finished goods over a period of three years pursuant to
import of duty free material under advance license scheme.
NOTE 4
INSURANCE CLAIM RECEIVABLES:
(a) The Company had lodged claims with an insurance company for the
loss of certain assets and loss suffered due to business interruption
under loss of profit policy relating to the fire incidence at Butibori
plant in 2007-08. Since the matter has been under dispute with the
insurance company, as per the terms and conditions of the above policy,
the Company has, during the previous years, initiated the arbitration
process for the claim of Rs. 72.94 Crores for loss of business
interruption and for the claim of Rs. 6.43 Crores for loss of assets.
While the said matter was pending conclusion by the Arbitral Tribunal,
the Company , on a conservative basis, carried forward insurance
recoverable (recorded in the financial year ended 31 March 2008) to the
extent of Rs. 33.53 Crores (net of receipt/adjustment) as advances
recoverable, without prejudice to its right to claims aggregating Rs.
79.37 Crores. During the year, on 1 August 2012, the Arbitral Tribunal
has decided the matter in the favour of the Company with an award of
Rs. 32.45 Crores (net off receipt/adjustment) and interest at 9% per
annum from July 2008 till the date of payment. Pursuant to the above
award, the Company has recorded the interest receivable amounting to
Rs. 11.69 Crores upto July 2012 (the date of order) and aligned the
carrying amount of insurance claim. The Insurance Company had filed an
appeal in the Delhi High Court. Pending disposal by the High Court and
as a matter of prudence, the Company has not recognised the interest
for the period after July 2012.
(b) During the previous year, the Company has accrued income in regard
to insurance claims aggregating to Rs. 8.73 Crores (including interest
and compensation for cost) pertaining to the financial year ended 31
March 2000. The claim has been recorded based on the arbitration award
decided in the favour of the Company. The Delhi High Court has already
released the amount of Rs. 8.7 Crores in the favour of the Company
against a corporate guarantee.
(c) Consequent to an incident of fire during the year 2011-12, the
Company has during the year spent Rs. 7.58 Crores on refurbishment of
the concerned plant and machinery, which has been recognised as a
receivable under other current assets. The Company is in the process of
filing a claim with the insurance Company.
The Company strongly believes and is reasonably certain that it will be
able to realise the above amounts in the normal course and, therefore,
all the claims have been classified as current.
Hitherto, the exchange differences arising from foreign currency
borrowings to the extent that they are regarded as an adjustment to
interest cost, were treated as borrowing cost in terms of the
Accounting Standard (AS) -16, "Borrowing Costs" During the year,
pursuant to a clarification dated 9 August 2012 from the MCA, the
Company has changed the accounting policy, w.e.f from 1 April 2011 to
treat the same as "foreign exchange fluctuation" to be accounted as
per AS-11, "The Effects of Changes in Foreign Exchange Rates"
instead of the "borrowing costs". This change has resulted into
increase in other income by Rs. 2.75 Crores (pertaining to the year
ended 31 March 2012) for the year ended 31 March 2013 and the increase
in depreciation for the year ended 31 March 2013 by Rs. 0.15 Crores
(pertaining to the year ended 31 March 2012).
NOTE 5
During the past few years, there has been significant volatility in the
raw material prices which are linked with crude oil prices and is
subject to foreign exchange fluctuations. In comparison, the sales
realisation in the industry has not been encouraging to respond to the
raw material price variations. In addition, stiff competition, low
capacity utilisation, high inflation, high interest rates and weakened
rupee has resulted into a temporary phase of low operating
margins/losses in the recent past. However, the Company''s product
command a premium in the market due to cost competitiveness and quality
standards. Further, the Company has internally assessed its position
and the future outlook and also has initiated various measures
including strategic steps to ensure profitable operations. These
initiatives and business outlook include cost savings initiatives,
exploration of new markets, focussing on value added products,
developing backward integration facilities towards producing certain
key input materials.
NOTE 6
The Company had made an early application, since the year 2010-11, of
Accounting Standard 30 "Financial Instruments- Recognition and
Measurement", issued by Institute of Chartered Accountants of India
for accounting for forward exchange contracts taken for highly probable
/ forecast transactions, which are not covered by Accounting Standard
11. An amount of Rs. 21.11 Crores (previous year Rs. 27.09 Crores) has
been recognised as income in these financial statements for the year
ended 31 March 2013 and included in exceptional items as an adjustment
on the said application of Accounting Standard 30.
NOTE 7
During the current and previous year, due to significant volatility in
the foreign currency vis-a-vis local currency, the Company has
considered the foreign exchange fluctuation as an exceptional item in
the Statement of Profit and Loss.
NOTE 8
The figures relating to the previous year have been regrouped wherever
necessary to conform to the current years classification including-
Advance tax amounting to Rs. 12.55 Crores have been regrouped from
short term loans and advances to long term loan and advances.
Miscellaneous expenses amounting to Rs. 11.43 Crores have been
regrouped to repair and maintenance expenses.
Mar 31, 2012
1. During the current year and in the previous year, there have been
no movements in the number of equity shares outstanding.
2. The Company has only one class of equity shares, having a par value
of Rs.10 per share. each shareholder is eligible to one vote per share
held, except for shares held against Global Depository Receipts (GDR).
The dividend proposed, if any, by the Board of Directors is subject to
approval of shareholders in the ensuing Annual General Meeting, except
in case of interim dividend. The repayment of equity share capital in
the event of liquidation and buy back of shares are possible subject to
prevalent regulations. In the event of liquidation, normally the equity
shareholders are eligible to receive the remaining assets of the
Company after distribution of all preferential amounts, in proportion
to their shareholding.
3. Above equity shares of Rs.10 each include:
a) 20,000,000 (previous year 20,000,000) equity shares issued during
the year 2007-08 as fully paid-up shares to shareholders of
erstwhile Indo Rama Petrochemicals Limited, pursuant to a scheme of
amalgamation, for consideration other than cash.
b) 10,291,360 equity shares (representing 6.78% of total number of
shares) are outstanding against 1,286,420 Global Depository Receipts
(GDR), each GDR comprising 8 underlying fully paid up equity shares of
Rs. 10 each [previous year 10,531,360 equity shares (representing 6.94%
of total number of shares) against 1,316,420 GDRs].
During the previous year, pursuant to shareholders approval in Annual
General Meeting held on 25 October 2010, the Company had allotted
20,000,000 Fully Convertible Preferential warrants (FCPs) to promoter
group companies on 9 November 2010 at Rs.40.60 per warrant (aggregating
Rs.81.20 crore) as per Securities and exchange Board of India (SEBI) and
other guidelines, as applicable. As per the terms of the warrants, Rs.
10.15 per warrant (aggregating Rs.20.30 crore) have been received and
balance amount of Rs.30.45 per warrant (aggregating Rs.60.90 crore) would
be received within 18 months of allotment of the warrants. The warrants
would be convertible into equity shares within a period of 18 months
from the date of allotment of warrants at the option of the warrant
holders. upon conversion, one warrant will be converted into one fully
paid equity share of Rs.10 each and amount of Rs.30.60 will be adjusted
towards share premium account
a) Rupee term loans from banks:
i) amounting to Rs.23.00 crore (previous year Rs.40.50 crore) is
secured by equitable mortgage on all the immovable properties
(excluding land in the state of Gujarat) by way of deposit of title
deeds and hypothecation of movable assets of the Company (save and
except book debts and assets exclusively hypothecated to banks and
bodies corporate), including movable machinery, machinery spares, tools
and accessories, both present and future, ranking pari-passu with the
charges created/to be created in favour of banks and financial
institutions for securing rupee and foreign currency term loans.
ii) amounting to Rs. Nil (previous year Rs.33.94 crore) is secured by
equitable mortgage on all the immovable properties (excluding land in
the state of Gujarat) by way of deposit of title deeds and
hypothecation of movable assets of the Company ( save and except book
debts and assets exclusively hypothecated to banks and bodies
corporate), including movable machinery, machinery spares, tools and
accessories, both present and future, ranking pari-passu with the
charges created/to be created in favour of banks and financial
institutions for securing rupee and foreign currency term loans. The
loan has been repaid during the year and the Company is in the process
of vacating charges.
iii) amounting to Rs.6.87 crore (previous year Rs. 68.06 crore) is
secured by equitable mortgage on all the immovable properties
(excluding land in the state of Gujarat) by way of deposit of title
deeds and hypothecation of movable assets of the Company ( save and
except book debts and assets exclusively hypothecated to banks and
bodies corporate), including movable machinery, machinery spares, tools
and accessories, both present and future, ranking pari-passu with the
charges created/to be created in favour of banks and financial
institutions for securing rupee and terms of repayment and defaults
Repayable in 6 equal half yearly installments commencing from 31
January 2010 along with interest at State Bank Advance Rate ("SBAR").
The default in repayment at the end of the current year amounts to Rs.
9.50 crore pertaining to the period of 61 days. The default at the end
of the previous year amounted to Rs. Nil.
The loan has been repaid during the year. The default in repayment at
the end of the previous year amounted to Rs.33.94 crore pertaining to
the period from 6 months to 1 year 4 months.
As per rescheduled agreement, balance as at 18 February 2008 was
repayable in 14 equal quarterly installments commencing from November
2008, along with interest at SBAR. The default in repayment at the end
of the current year amounts to Rs.6.87 crore pertaining to the period of
59 days. The default at the end of the previous year amounted to Rs.
40.56 crore pertaining to the period from 58 days to 1 year 5 months.
nature of security
a) Rupee term loans from banks:
iv) amounting to Rs.20.00 crore (previous year Rs. 35.98 crore) is
secured by first specific charge over the specific assets purchased
under the loan agreement for thermal power project of the Company.
v) amounting to Rs.2.11 crore (previous year Rs. Nil) is
secured by first specific charge over the specific assets to be
purchased under the loan agreement.
vi) aggregating to Rs.0.50 crore (previous year Rs.0.17 crore) are
secured by hypothecation of specific vehicles.
vii) Working capital term loans aggregating Rs.17.83 crore (previous
year Rs.37.62 crore) are secured by way of first charge on the Company's
entire fixed assets, ranking pari-passu with other banks.
b) Foreign currency term loans from banks:
i) amounting to Rs128.76 crore (previous year Rs.146.10 crore), are
secured by first pari-passu specific charge on the equipment purchased
under the loan agreement for the Company's Polyester expansion Project
and a first charge on the land situated at Mehsana, Gujarat.
ii) amounting to Rs. 60.31 crore (previous year Rs.64.32 crore) is
secured by first pari-passu specific charge on the equipment purchased
under the loan agreement for the Company's Polyester expansion Project
and a first charge on the land situated at Mehsana, Gujarat.
Terms of repayment and defaults
As per rescheduled agreement, balance as at 4 February 2009 was
repayable in 15 equal quarterly installments commencing from 30
September 2009 along with interest at SBAR. The default in repayment at
the end of the current year amounts to Rs.4.00 crore pertaining to the
period of one day. The default in repayment at the end of the previous
year amounted to Rs.2.50 crore pertaining to the period of one day.
Repayable in 18 equal quarterly installments commencing from June 2012,
along with interest at BR plus 1% plus 0.50%.
(a) Repayable in 36 equated monthly installments commencing from July
2010.
(b) Repayable in 36 equated monthly installments commencing from August
2011.
(c) Repayable in 36 equated monthly installments commencing from
January 2012.
(a) Working capital term loan amounting to Rs.6 crore (previous year Rs.
10 crore) is repayable in 15 equal quarterly installments commencing
from January 2010 along with interest at SBAR.
(b) Working capital term loan amounting to Rs.11.83 crore (previous year
Rs.27.60 crore) is repayable in 12 equal quarterly installments
commencing from 21 January 2009 along with interest at Base Rate plus
3%.
Repayable in 20 equal half yearly installments commencing from April
2007 along with interest at six month euripi plus 0.95%. Further, two
installments due on 15 April 2009 and 15 October 2009 have been
rescheduled to be paid in 10 equal half yearly installments from 30
September 2009 along with interest at six month euripi plus 0.95%.
Repayable in 20 equal half yearly installments commencing from April
2007 along with interest at six month LIBOR plus 0.95%. Further, two
installments due on 15 April 2009 and 15 October 2009 have been
rescheduled to be paid in 10 equal half yearly installments from 30
September 2009 along with interest at six month LIBOR plus 0.95%.
nature of security
c) Rupee term loan from others:
amounting to Rs.12.49 crore (previous yearRs. 18.76 crore) is secured by
equitable mortgage on all the immovable properties (excluding land in
the state of Gujarat), by way of deposit of title deeds and
hypothecation of movable assets of the Company (save and except book
debts and assets exclusively hypothecated to banks and bodies
corporate), including movable machinery, machinery spares, tools and
accessories, both present and future, ranking pari-passu with the
charges created/to be created in favour of banks and financial
institutions for securing rupee and foreign currency term loans.
d) Foreign currency term loans from others: amounting to Rs. 58.14 crore
(previous year Rs. 72.46 crore) is secured by equitable mortgage on all
the immovable properties (excluding land in the state of Gujarat), by
way of deposit of title deeds and hypothecation of movable assets of
the Company (save and except book debts and assets exclusively
hypothecated to banks and bodies corporate) including movable
machinery, machinery spares, tools and accessories, both present and
future, ranking pari-passu with the charges created/to be created in
favour of banks and financial institution for securing rupee and
foreign currency term loans.
Terms of repayment and defaults
As per rescheduled agreement balance as on 1 July 2010 was repayable in
8 equal half yearly installments beginning 1 July 2010 along with
interest at 8.25 %.
As per rescheduled agreement, the balance as on 9 February 2010 is
repayable in 9 equal half yearly installments commencing from 15
November 2010 along with interest at arbor plus 2.35% p.a.
* excluding deferred tax assets aggregating Rs.288.84 crore (Previous
year Rs269.60 crore) in relation to unabsorbed depreciation amounting
to Rs890.25 crore (Previous year Rs.811.62 crore), which have not been
recorded. The same have been a subject matter of litigation by the
Income Tax Authorities and appeals in this regard are pending with the
appellate authorities.
nature of security
Cash credit and other working capital facilities from banks are secured
by way of hypothecation of stocks of raw materials, work-in-progress,
finished goods, stores and spares, packing material, goods at port/in
transit/under shipment, outstanding money, book debts, receivables and
other current assets of the Company, both present and future. These are
further secured by a second charge on all the immovable properties of
the Company, both present and future.
Defined contribution plans
An amount of Rs.5.01 Crore (Previous year Rs.4.46 Crore) for the year,
has been recognized as an expense in respect of the Company's
contributions towards Provident Fund, deposited with the government
authorities and have been included under employee benefit expense in
the Statement of Profit and Loss.
Defined benefit plans
Gratuity is payable to all eligible employees of the Company on
superannuation, death or permanent disablement in terms of the
provisions of the Payment of Gratuity Act or as per the Company's
Scheme, whichever is more beneficial.
The following table sets forth the status of the gratuity plan of the
Company and the amounts recognised in the Balance Sheet and Statement
of Profit and Loss:
Discount Rate: The discount rate is estimated based on the prevailing
market yields of Indian Government securities as at the balance sheet
date for the estimated term of the obligation.
Salary escalation Rate: The estimates of salary increases, considered
in actuarial valuation, take account of inflation, promotion and other
relevant factors.
note 35: Segmental information:
Hitherto, up to the previous year ended 31 March 2011, the Company
considered two reportable segments, viz Polyester and Power. During the
year ended 31 March
(a) information about primary business segment: Segment revenues,
results and other information 2012, the management reassessed its
reportable segments, taking into consideration the economic
environment; risks and returns; future business plans; and reporting
system. Management evaluated and concluded that power plant is being
used primarily for captive consumption with an insignificant portion
being sold to outside customers. Based on the current plan and
projections, the Company envisages that the power generation would
continue to be primarily for captive purposes only. Accordingly, the
Company has only one business segment, i.e., Polyester and, therefore,
segment reporting disclosures are no longer applicable. The figures
reported during the previous year have been disclosed as under:
note: The Company has common assets for producing goods for domestic
market and overseas markets. Hence, separate figures for other assets/
additions to other assets cannot be furnished.
The Company has taken office space on operating lease.
The lease rentals charged during the year in respect of cancellable and
non cancellable operating leases and maximum obligations on long term
non-cancellable operating lease payable as per the rentals stated in
the agreement are as follows:
a) estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) Rs. 21.12 Crore (previous
year Rs.86.53 Crore).
b) On 25 January 2012, the Company has entered into a memorandum of
understanding ('MOu') with Indorama Ventures PCL, Thailand, for
manufacturing of
Purified Terepthalic Acid (PTA) and downstream products Polyethylene
(PeT) and Polyester Staple Fiber (PSF). The project is at an initial
stage of conceptualization.
c) The Company has commitments to export 380,632 MT (previous year
333,085 MT) of finished goods over a period of three years pursuant to
import of duty free materials under advance license scheme.
note 40: insurance Receivables:
(a) The Company had lodged claims with an insurance company for the
loss of certain assets and loss suffered due to business interruption
under loss of profit policy relating to the fire incidence at Butibori
plant in 2007-08. Since the matter has been under dispute with the
insurance company, as per the terms and conditions of the above policy,
the Company has, during the previous year, initiated the arbitration
process for the claim of Rs.72.94 Crore for loss of business
interruption and for the claim of Rs.6.43 Crore for loss of assets.
While the said matter is pending conclusion by the Arbitral Tribunal,
the Company has on a conservative basis carried forward insurance
recoverable (recorded in the financial year ended 31 March 2008) to
the extent of Rs.33.53 Crore (net of receipt/adjustment) as advances
recoverable, without prejudice to its right to claims aggregating Rs.
79.37 Crore. Any adjustments consequent to Arbitral proceedings would
be accounted for on final settlement of the claim.
(b) During the current year, the Company has accrued income in regard
to insurance claims aggregating Rs.8.73 Crore (including interest and
compensation for cost) pertaining to the financial year ended 31 March
2000. The claim has been recorded based on the arbitration award
decided in the favour of the Company. The matter is subject to
litigation and is pending at the High Court, the income has been
accrued considering arbitration award in favour of the Company.
NOTE 41: Based on the information available, there are certain vendors
who have confirmed that they are covered under the Micro, Small and
Medium enterprises Development Act, 2006. Disclosures as required by
section 22 of The Micro, Small and Medium enterprises Development Act,
2006, are given below:
note 42: During the current year, due to significant volatility in the
foreign currency vis-ÃÂ -vis local currency, the Company has considered
the foreign exchange fluctuation as an exceptional item in the
statement of profit and loss. The foreign exchange fluctuations
pertaining to corresponding previous year ended 31 March 2011 have been
regrouped only to make them comparable.
Note] 43: The financial statements for the year ended 31 March 2011 had
been prepared as per the then applicable, pre-revised Schedule VI to
the Companies Act, 1956.
Consequent to the notification of Revised Schedule VI under the
Companies Act, 1956, the financial statements for the year ended 31
March 2012 are prepared as per the Revised Schedule VI. Accordingly,
the previous year figures have also been reclassified to conform to
this year's classification. The adoption of Revised Schedule VI for the
previous year figures does not impact recognition and measurement
principles followed for preparation of financial statements. The
following is a summary of significant effects that revised Schedule VI
has primarily on presentation of Balance Sheet of the Company as at 31
March 2011.
Mar 31, 2011
1. Nature of operations
Indo Rama Synthetics (India) Limited (hereinafter referred to as the
Company or IRSL) is a manufacturer of Polyester Filament Yarn (PFY),
Polyester Staple Fibre (PSF), Draw Texturised Yarn (DTY) and Chips. The
Company is also engaged in power generation, which is used for captive
consumption and surplus power is sold through grid. The Companys
manufacturing facilities are located at Butibori, Nagpur.
2. During the current year, pursuant to shareholders approval in
Annual General Meeting held on 25 October 2010, the Company has
allotted 20,000,000 Fully Convertible Preferential warrants (FCPs) to
promoter group companies on 9 November 2010 at Rs. 40.60 per warrant
(aggregating Rs. 81.20 Crore) as per Securities and Exchange Board of
India (SEBI) and other guidelines, as applicable. As per the terms of
the warrants, Rs. 10.15 per warrant (aggregating Rs. 20.30 Crore) have
been received and balance amount of Rs. 30.45 per warrant (aggregating
Rs. 60.90 Crore) would be received within 18 months of allotment of the
warrants. The warrants would be convertible into equity shares within a
period of 18 months from the date of allotment of warrants at the
option of the warrant holders. Upon conversion, one warrant will be
converted into one fully paid equity share of Rs.10 each and amount of
Rs. 30.60 will be adjusted towards share premium account. (Refer note
9 of schedule 18)
3. The Company had lodged claims with an insurance company for the
loss of certain assets and loss
suffered due to business interruption under loss of profit policy
relating to the fire incidence at Butibori plant in 2007-08. Since the
matter has been under dispute with the insurance company, as per the
terms and conditions of the above policy, the Company has, during the
year, initiated the arbitration process for the claim of Rs. 72.94
Crore for loss of business interruption and for the claim of Rs. 6.43
Crore for loss of assets. While the said matter is pending
conclusion by the Arbitral Tribunal, the Company has on a conservative
basis carried forward insurance recoverable (recorded in the financial
year ended 31 March 2008) to the extent of Rs. 33.53 Crore (net of
receipt/adjustment) as advances recoverable, without prejudice to its
right to claims aggregating Rs. 79.37 Crore. Any adjustments consequent
to Arbitral proceedings would be accounted for on final settlement of
the claim.
4.1 Particulars in respect of goods manufactured
Notes:
i) The Company manufactures varying denier/ qualities of fibers/ yarn.
The above capacity is calculated based on a mix of product range as
certified by the management and relied on by the auditors being a
technical matter.
ii) Delicensed vide notification no. 477 (E) dated 27 July 1991 and
press note No 1 (1998 series) dated 8 June 1998.
iii) TPA-Tonnes per annum
iv) MWPH-Mega watt per hour
v) Pursuant to press note no. 2/2011 dated 8 February 2011, issued by
Ministry of Corporate Affairs, disclosures required by part - II, paras
3(i) (a), 3(ii)(a) and 3(ii)(b) of Schedule VI to the Companies Act,
1956, have not been given.
5.1 Managerial remuneration
As the future liability for gratuity and leave encashment is provided
on an actuarial basis for the Company as a whole, the amount pertaining
to the managing director/whole time director is not ascertainable and,
therefore, not included above.
6. Disclosure pursuant to Accounting Standard 15 on "Employee
Benefits"
Defined contribution plans
An amount of Rs. 4.46 Crore (Previous year Rs. 3.64 Crore) for the
year, has been recognised as an expense in respect of the Companys
contribution for Provident Fund and Employees State Insurance deposited
with the government authorities and have been included under operating
and other expenditure in the Profit and Loss Account.
Defined benefit plans
Gratuity is payable to all eligible employees of the Company on
superannuation, death or permanent disablement in terms of the
provisions of the Payment of Gratuity Act or as per the Companys
Scheme, whichever is more beneficial.
Discount Rate: The discount rate is estimated based on the prevailing
market yields of Indian Government securities as at the balance sheet
date for the estimated term of the obligation.
Salary Escalation Rate: The estimates of salary increases, considered
in actuarial valuation, take account of inflation, promotion and other
relevant factors.
7. Segmental information:
(a) Information about primary business segment:
The Company primarily deals in polyester business and, considering the
risks and rewards and reporting systems, has viewed Polyester Staple
Fibre (PSF), Polyester Filament Yarn (PFY) and Draw Texturised Yarn
(DTY) as one integrated business. The Company is also engaged in sale
of surplus power. Accordingly, the Company has organised its operations
into two major business segments, i.e., Polyester and Power.
8. Related party disclosures
(i) Related parties where control exists: None
(ii) Other related parties with whom Company had transactions:
Key management personnel Mr. O.P. Lohia, Chairman cum
Managing Director
Mr. Vishal Lohia, Whole Time Director
Enterprises over which key
management personnel or Indo Rama Retail Holdings Private Limited
(IRRHPL)
their relatives have
significant influence Indo Rama Petrochem Limited (IRPL),
Thailand
T P T Petrochemicals PCL (TPT Petro),
Thailand
Lohia Industries (Pvt.) Ltd (LIPL)
9. Deferred tax liability
* Above excludes deferred tax asset aggregating Rs. 269.60 Crore
(Previous year Rs. 258.36 Crore) in relation to unabsorbed depreciation
amounting to Rs. 811.62 Crore, which have not been recorded. The same
has been a subject matter of litigation by the Income Taxes Authorities
and appeals in this regard are pending with the appellate authorities.
10. Capital commitments
Estimated amount of contracts remaining to be executed on capital
account and not provided for (Net of advances) Rs. 86.53 Crore
(Previous year Rs. 34.35 Crore).
11. Contingent liabilities not provided for :
(Rs. crore)
As at 31 March As at 31 March
2011 2010
Excise / customs / service tax
matters in dispute/ under appeal 66.84 62.86
Income tax matters in dispute/
under appeal 6.47 12.25
Sales tax matters in dispute/
under appeal 22.68 4.64
Claims by ex-employees, vendors,
customers and civil cases 1.72 1.24
12. During the year, reschedulement arrangements have been reached with
all the banks and financial institution for its long term borrowings
except for a bank. The Company has initiated steps to comply with the
terms and conditions, where applicable, of these reschedulement
arrangements. In respect of a bank, an understanding has been reached
to make the payment to the said bank of its dues in monthly
instalments.
13. There are no amounts due to be deposited with the Investor
Education and Protection Fund in respect of unclaimed dividends
(Previous year Nil).
14. The figures relating to previous year have been regrouped,
wherever necessary, to conform to the current years classification.
Mar 31, 2010
1. Nature of operations
Indo Rama Synthetics (India) Limited (hereinafter referred to as the
Company or IRSL) is a manufacturer of Polyester Filament Yarn (PFY),
Polyester Staple Fibre (PSF), Draw Texturised Yarn (DTY) and Chips. The
Company is also engaged in power generation, which is used for captive
consumption and surplus power is sold through grid. The Companys
manufacturing facilities are located at Butibori, Nagpur.
2. Hitherto, upto the previous year, the Company followed a policy of
recognising mark to market losses, and not gains, in relation to
foreign exchange forward contracts taken for highly probable/ forecast
transactions. During the current year, the Company has followed the
principles of AS 30 "Financial Instruments: Recognition and
Measurement", which has been recommendatory for the accounting periods
commencing on or after 1 April 2009, and has recognised mark to market
gain of Rs. 42,432 thousand. This change has resulted in the profit for
the year and the reserves and surplus at the end of the year being
higher by Rs. 42,432 thousand.
3. The Company had lodged claims with an insurance company for the
loss of asset and loss suffered due to business interruption under loss
of Profit policy relating to the fire incidence at Butibori plant in
2007-08.
During the year, the Company has filed an application with Insurance
Regulatory Development Authority (IRDA) to appoint second surveyor to
reassess the loss since the methodology adopted by surveyor appointed
by the insurance Company for assessing the loss was incorrect. The
Company is of the view, supported by legal advice, that the receipt of
amounts as recognized in the books as recoverable is reasonably
certain. (Also refer to note 9 in schedule 22 of financial statements
for the year 2007-08).
4. Disclosure pursuant to Accounting Standard 15 on "Employee
Benefits"
Defined contribution plans
An amount of Rs. 36,391 thousand (Previous year Rs. 34,699 thousand)
for the year, have been recognized as an expense in respect of the
Companys contribution for Provident Fund, deposited with the
government authorities and have been included under operating and other
expenditure in the Profit and Loss Account.
Defined benefit plans
Gratuity is payable to all eligible employees of the Company on
superannuation, death or permanent disablement in terms of the
provisions of the Payment of Gratuity Act or as per the Companys
Scheme, whichever is more beneficial.
The following table sets forth the status of the gratuity plan of the
Company and the amounts recognised in the balance sheet and profit and
loss account:
Discount Rate: The discount rate is estimated based on the prevailing
market yields of Indian government securities as at the balance sheet
date for the estimated term of the obligation.
Salary Escalation Rate: The estimates of salary increases, considered
in actuarial valuation, take account of inflation, promotion and other
relevant factors.
5. Segmental information:
(a) Information about primary business segment:
The Company primarily deals in polyester business and considering the
risks and rewards and reporting systems, has viewed Polyester Staple
Fibre (PSF), Polyester Filament Yarn (PFY) and Draw Texturised Yarn
(DTY) as one integrated business. The Company is also engaged in sale
of surplus power. Accordingly, the Company has organised its operations
into two major business segments, i.e., Polyester and Power.
6. Related party disclosure
(i) Related parties where control exists : None
(ii) Other related parties with whom Company had transactions:
Key management personnel
Relative of key management personnel
Enterprises over which key management personnel
or their relatives have significant influence
Mr. O. P. Lohia, Chairman cum Managing Director
Mr. Vishal Lohia, Whole Time Director
Mrs. Ritika Kumar
Indo Rama Retail Holdings Private Limited (IRRHPL)
Indo Rama Petrochem Limited (IRPL)
7. Capital commitments
Estimated amount of contracts remaining to be executed on capital
account and not provided for (Net of advances) Rs. 343,481 thousand
(Previous year Rs. 186,424 thousand).
8. Contingent liabilities not provided for :
(Rs. 000)
As at As at
31 March 2010 31 March 2009
Excise matters in dispute/ under appeal 628,613 613,413
Income tax matters in dispute/ under
appeal 122,451 37,168
Sales tax matters in dispute/
under appeal 46,378 5,605
Claims by ex-employees, vendors,
customers etc. 12,391 15,733
9. During the year, the Company had applied to banks and financial
institutions for reschedulement of certain long term borrowings.
Subsequent to the year end, the banks and financial institutions have
approved the reschedulement in principle with certain terms and
conditions and the Company has initiated steps either to comply with
such conditions or is in the process of renegotiating the same with the
respective lenders.
10. There are no amounts due to be deposited with the Investor
Education and Protection Fund in respect of unclaimed dividends
(Previous year Nil).
11. During the previous year, buyers line of credit was shown under
the unsecured loans. However, during the current year on account of
reconsideration of facts by the management, the same has been shown
under the secured loans.
12. The figures relating to previous year have been regrouped,
wherever necessary, to conform to the current years classification.
As per our report attached to the Balance Sheet.
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