Notes to Accounts of NACL Industries Ltd.
Mar 31, 2023
i) Includes guarantee provided by the Company during the year to its wholly owned subsidiary NACL Spec-chem Limited, without charging any commission. The fair value of the gurantee commission is accounted as a deemed capital contribution to the subsidiary. Accordingly ?251 Lakh (March 31, 2022: ?239 Lakh) is accounted as deemed investments and added to the cost of investments held in the subsidiary.
ii) The Company subscribed Compulsory Convertible Debentures ?2,800 Lakh (March 31, 2022: ?3,500 Lakh) [comprising 2,800 (March 31, 2022: 3,500 number)] number of CCD of ^1,00,000 each) during the year.
iii) The Company subscribed Compulsory Convertible Debentures ?Nil (March 31,2022: ?50 Lakh) [comprising Nil (March 31,2022: 50 number)] number of CCD of ^1,00,000 each) during the year.
(i) Unclaimed dividend accounts
If the dividend has not been claimed within 30 days from the date of declaration, the Company is required to transfer the total amount of dividend which remains unpaid or unclaimed to a special account to be opened by the Company with a scheduled bank to be called Unpaid Dividend Account. The unclaimed dividend lying in such account is required to be transferred to the Investor Education and Protection Fund (IEPF), administered by the Central Government after a period of seven years from the date of declaration.
(ii) Margin money / deposit
Amounts in margin money represents deposit with bank against the bank guarantees issued by them.
14.2 Rights, preferences and restrictions attached to equity shares:
The Company has only one class of issued, subscribed and fully paid up equity shares having a face value of each per share. Each holder of equity shares is entitled to one vote per share. The dividend (other than interim dividend) proposed, if any, by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to number of equity shares held by the shareholders.
14.7 Nagarjuna Agrichem Limited-Employee Stock Option Scheme-2015
i) The Company set up the "Nagarjuna Agrichem Limited-Employee Stock Option Scheme-2015" (hereinafter referred to as "ESOS-2015") and earmarked 11,50,000 number of equity shares of ?1 each for issue to employees. The plan was approved in financial year 2015-16 and is administered by the Compensation Committee of the Board of Directors.
ii) Under the ESOS-2015 scheme, options are granted to eligible employees at an exercise price, which shall not be less than face value of the equity shares of the Company. These options vest over a period of one to five years and exercisable by the employees within two years of vesting.
iv) Fair value of shares granted during the year:
Options were priced using Black-Scholes Merton Options pricing model. Where relevant, the expected life used in the model has been adjusted based on management''s best estimate for the effects of non-transferability, exercise restrictions, and behavioural considerations. Expected volatility is based on the historical share price volatility over the past years.
14.7.1 "Nagarjuna Agrichem Limited-Employee Stock Option Scheme-2020"
i) The Company set up the "NACL Industries Limited-Employee Stock Option Scheme-2020" (hereinafter referred to as "ESOS-2020") and earmarked 25,00,000 number of equity shares of each for issue to employees. The plan was approved in financial year 2020-21 and is administered by the Compensation Committee of the Board of Directors.
ii) Under the ESOS-2020 scheme, options are granted to eligible employees at an exercise price, which shall not be less than the face value of the equity shares of the Parent Company. These options vest over a period of one to four years and exercisable by the employees within one year of vesting.
14.8 Allotment of equity shares upon conversion of share warrants:
The Board of Directors and the Shareholders, in their meetings held on August 12, 2020 and September 07, 2020 respectively, approved inter-alia issuance of 5,000,000 share warrants (of face value of ?1 each) on preferential basis to Mrs. K Lakshmi Raju, Promoter (hereinafter referred to as "Investor") in accordance with Section 42 and 62(1)(c) of the Companies Act, 2013 read with Chapter V of SEBI (Issue of Capital and Disclosure Requirement) Regulations, 2018. Consequently, the Company allotted 5,000,000 Warrants during the financial year 2020-21 to the aforesaid Investor against receipt of 25% of Issued price of ?39 per Warrant. i.e ?9.75 per Warrant aggregating ?488 Lakh.
During the previous year, warrant holder exercised their options of converting 1,580,000 warrants by submitting the necessary Warrant Exercise Application Form along with paying the balance consideration amount of ^29.25 per warrant (i.e. 75% of the issue price) aggregating ?462 Lakh). Accordingly, the Company has allotted 1,580,000 equity shares in the ratio of one Equity Share for each Warrant exercised, on April 8, 2021.
The total amount aggregating ?463 Lakh has been utilised by the Company before the previous year end.
14.9 No shares have been allotted without payment being received in cash or by way of bonus shares during the period of five years immediately preceding the balance sheet date. No shares have been bought back during the period of five years immediately preceeding the balance sheet date.
Nature of reserves:
(a) General Reserves: General reserve was created through an annual transfer of profits from retained earnings in accordance with applicable regulations. General reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013.
(b) Capital reserve: This represents capital subsidy received from government in earlier years for promotion of investment in backward areas.
(c) Security premium: Security premium represents the amount received in excess of the face value of the equity shares. The utilisation of the security premium reserve is governed by the relevant provisions of the Companies Act, 2013 ("Act").
(d) Reserve for equity instruments through other comprehensive income: This reserve represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through other comprehensive income, net of amounts reclassified to retained earnings when those assets have been disposed off.
(e) Share warrants: This represents the moneys received against the share warrants.
(f) Share Options Outstanding Account: This reserve relates to share options granted by the Company to its employees under its employee share option plans.
(g) Effective portion of cash flow hedge reserve: When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognised in other comprehensive income and accumulated in the cash flow hedging reserve. The cumulative gain or loss previously recognised in the cash flow hedging reserve is transferred to the Statement of Profit and Loss upon the occurrence of the related forecasted transaction.
(h) Retained earnings: Retained earnings represents the Company''s undistributed earnings after taxes.
1. In respect of the year ended March 31, 2023, the Board of directors recommended a final dividend of ?0.25 per share be paid on fully paid equity shares. The recommended equity dividend is subject to approval by the shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. The total estimated amount to be paid with respect to dividend is ?497 Lakh.
In respect of the year ended Mar 31,2022, the Board of directors recommended a final dividend of ?0.15 per share be paid on fully paid equity shares, which was approved by the shareholders at the Annual General Meeting held on September 29, 2022. The total amount paid with respect to the final dividend of FY 21-22 in FY 22-23 was ?298 Lakh.
2. FY 2022-23: The Board of Directors in its meeting held on October 21,2022 and on January 31,2023 approved interim dividend of ?0.30 and ?0.15 per Equity Share of ?1 each respectively. These amounts are paid within the financial year 2022-23.
FY 2021-22: The Board of Directors in its meeting held on August 5, 2021, October 29, 2021 and on January 28, 2022 approved interim dividend of ?0.10, ?0.15 and ?0.15 per Equity Share of ?1 each respectively. These amounts are paid within the financial year 2021-22.
Secured by: first ranking pari-passu charge on present and future property, plant and equipments of the Company, second ranking pari-passu charge on present and future stock and book debts of the company and is guaranteed by Smt. K. Lakshmi Raju, Director of the Company.
Loan is denominated in foreign currency - USD 1,109,375 (March 31, 2022: USD 1,996,875) Repayable in 16 quarterly instalments starting from August 2020 and the last installment being payable in May 2024.
Interest rate is determined based on 6 months LIBOR plus 400 basis points and is payable monthly. The same is hedged against variable to fixed rate interest swap contract for a fixed rate of 7.50% p.a. (March 31, 2022: 7.50% p.a.) with RBL Bank Limited.
(b) Loans repayable on demand:
Loans repayable on demand from banks (includes Cash Credit Facilities, Working capital demand loan and packing credit foreign currency facilities, buyers credit availed under non fund based limits) from HDFC Bank Limited, SVC Co-operative Bank Limited, RBL Bank Limited, Karnataka Bank Limited, Shinhan Bank Limited, Axis Bank Limited, Bandhan Bank Limited, Bank of Bahrain and Kuwait B.S.C., SBM Bank (India) Limited, Yes Bank Limited and Kotak Mahindra Bank Limited are secured by way of hypothecation of current assets comprising stock in trade, book debts and stores and spares both present and future. The aforesaid facilities are further secured by second charge on immovable and movable properties, both present and future, ranking pari-passu with other working capital lenders. The facilities availed from the Karnataka Bank Limited are guaranteed by Smt. K. Lakshmi Raju, Director of the Company.
Rate of interest on Rupee loans repayable on demand is in the range of 5.75% to 9.75% p.a. (March 31, 2022: 5.75% to 8.75% p.a.)
(ii) Corporate social responsibility (CSR):
As per Section 135 of the Companies Act, 2013 (''Act), a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The focus areas of Company''s CSR activities are Education, Health & Wellness and Community Engagement. The CSR activities of the Company are in line with the Schedule VII of the Companies Act, 2013. A CSR committee has been formed by the company as per the Act. The funds were utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013.
a. Gross amount required to be spent by the company during the year is ?133 Lakh (March 31, 2022: ?59 Lakh)
|
(All amounts in ? Lakh, unless otherwise stated) 31. Contingent liabilities, Guarantee and Capital Commitments A. Contingent Liabilities |
||
|
S.No. Particulars |
As at March 31,2023 |
As at March 31,2022 |
|
(i) Claims against the Company not acknowledged as debts in respect of the matters under dispute: |
||
|
Excise duty (refer note (a) below) |
29 |
29 |
|
Service tax (refer note (b) below) |
15 |
15 |
|
Income tax (refer note (c) below) |
608 |
606 |
|
Sales tax (refer note (d) below) |
94 |
101 |
|
Goods and Service tax (refer note (e) below) |
31 |
31 |
|
Export benefits (MEIS) (refer note (f) below) |
1,231 |
1,032 |
|
(ii) Others (refer note (g) below) |
141 |
141 |
|
Total |
2,149 |
1,955 |
Transfer pricing:
In accordance with the applicable provisions of the Income Tax Act, 1961, the Company is required to use certain specified methods in assessing that the transactions with the related parties, are carried at an arm''s length price and is also required to maintain prescribed information and documents to support such assessment. The appropriate method to be adopted will depend on the nature of transactions / class of transactions, class of associated persons, functions performed and other factors as prescribed. Based on certain internal analysis carried out, management believes that transactions entered into with the related parties were carried out at arms length prices. The Company is in the process of carrying out the transfer pricing study for the financial year ended March 31, 2023. In opinion of the management, the same would not have an impact on these financial statements. Accordingly, these financial statements do not include the effect of the transfer pricing implications, if any.
Notes:
(a) The Company has disputed various demands raised by excise duty authorities for the Financial years 2004-05 to 2006-07 and
2008- 09 which are pending at various stages of appeals. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial position.
(b) The Company has disputed various demands raised by service tax authorities for the Financial years 2006-07 to 2010-11, which are pending at various stages of appeals. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial position.
(c) The Company has disputed various demands raised by income tax authorities for the assessment years 2004-05 to 2007-08;
2009- 10 and 2016-17 to 2018-19 which are pending at various stages of appeals. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial position.
(d) The Company has disputed various demands raised by sales tax authorities for the financial years 2012-13 to 2017-18, which are pending at various stages of appeals. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial position.
(e) The Company has disputed various demands raised by Goods and Service Tax authorities for the financial year 2017-2018 and 2019-20, which are pending at various stages of appeals. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial position.
(f) The Company has disputed the demands raised by Director general of foreign trade (DGFT) office for the excess exports benefits availed by the company for earlier years and these are pending at appeal stage. The company has also disputed the penalty levied by the Office of the Commissioner of Customs (Adjudication) in respect of the same matter and the appeal is pending before Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial position.
(g) Other contingent liability majorly pertains to demand for payment of alleged deficit of stamp duty, registration fees and penalty in respect of a sales deed. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial position.
B. Guarantee
The Company has given guarantee for the term loan availed by the NACL Spec-chem Limited (wholly owned subsidiary) to HDFC
Bank Limited and Axis Bank Limited of ^16,500 Lakh (March 31, 2022: ?8,466 Lakh).
|
C. Commitments |
||
|
S.No. Particulars |
As at March 31,2023 |
As at March 31,2022 |
|
Estimated amount of contracts, remaining to be executed on capital account and not provided for (net of advance) |
283 |
367 |
|
Total |
283 |
367 |
a) Contribution to provident fund and other funds
- Provident fund:
The Company makes provident fund contributions which are defined contribution plans for qualifying employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. These contributions are made to the fund administered and managed by the Government of India. The Company''s monthly contributions are charged to the Statement of Profit and Loss in the period they are incurred. Total expense recognised during the year aggregated ?649 Lakh (March 31, 2022: ?564 Lakh).
- Gratuity (funded):
Amount recognised in statement of profit and loss in respect of gratuity ?170 Lakh (March 31,2022: ?122 Lakh).
b) Gratuity
In accordance with the ''Payment of Gratuity Act, 1972'' of India, the Company, provides for Gratuity, a defined retirement benefit plan (the ''Gratuity Plan'') covering eligible employees. Liabilities with regard to such Gratuity plan are determined by an independent actuarial valuation and are charged to the Statement of Profit and Loss for the period determined. The Gratuity fund is administered through a scheme of Life Insurance Corporation of India.
The present value of the defined benefit obligation and the related current service cost and past service cost, were measured using the projected unit credit method. These defined benefit plans expose the Company to actuarial risks, such as longevity risk, currency risk, interest rate risk and market (investment) risk. The gratuity plan is funded. The funding requirements are based on the gratuity fund''s actuarial measurement framework set out in the funding policies of the plan and the Company contributes to LIC.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
34. Financial instruments 34.1 Capital management
The Company''s capital management objective is to maximise the total shareholder return by optimising cost of capital through flexible capital structure that supports growth. Further, the Company ensures optimal credit risk profile to maintain/enhance credit rating. The Company determines the amount of capital required on the basis of annual operating plan and long-term strategic plans. The funding requirements are met through internal accruals and long-term/short-term borrowings. The Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
Expected contribution to the post employee benefits plan during the next financial year is expected to be ?160 Lakh (March 31, 2022: ?120 Lakh)
The weighted average duration of the defined benefit obligation is 6.62 years (March 31, 2022: 7.97 years)
(c) Compensated absences:
The Company provides compensated absences benefits to the employees of the Company which can be carried forward to future years. Since the compensated absences do not fall due wholly within twelve months after the end of the year in which the employees render the related service and are also not expected to be utilised wholly within twelve months after the end of the year, the benefit is classified as a long-term employee benefit. During the year ended March 31, 2023, the Company has incurred an expense on compensated absences amounting to ?402 Lakh (March 31, 2022: ?213 Lakh). The Company determines the expense for compensated absences basis the actuarial valuation of the present value of the obligation, using the Projected Unit Credit Method.
(i) Borrowings include non-current and current borrowings (Refer Note 16)
(ii) The management assessed that fair value of cash and cash equivalents, trade receivables, other current financial assets, trade payables, current borrowings and other current financial liabilities approximate their carrying amounts largely due to the shortterm maturities of these instruments, and hence these are carried at amortised cost. For non-current borrowings, the valuation model considers the present value of expected payments discounted using the borrowing rate provided by the banks/ financial institutions. The own non-performance risk was assessed to be insignificant.
(iii) Investments (unquoted) are measured at fair value through initial designation in accordance with Ind AS 109.
Transfer between Level 1 and 2:
There have been no transfers from Level 2 to Level 1 or vice-versa in 2022-23 and no transfers in either direction in 2021 -22.
34.4 Financial risk management
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, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
The Company audit 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 Company 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.
The Company enters into derivative financial instruments with various counterparties principally, banks with investment grade credit ratings. Foreign exchange forward contracts and interest rate swaps are valued using valuation techniques, which employs the use of market observable inputs. The most frequently applied valuation techniques include forward pricing using present value calculations. The models incorporate various inputs including the credit quality of counterparties, foreign exchange spot and forward rates, yield curves of the respective currencies, etc. As at March 31, 2023 the mark-to-market value of derivative asset positions is net of a credit valuation adjustment attributable to derivative counterparty default risk. The changes in counterparty credit risk had insignificant impact on the hedge effectiveness assessment for derivatives designated in hedge relationships.
Financial risk factors
The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company''s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The Company has adequate internal processes to assess, monitor and manage financial risks. The Company''s exposure to credit risk is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers. The liquidity risk is measured by the Company''s inability to meet its financial obligations as they become due.
Market risk
The Company is exposed to foreign exchange risk through imports from overseas suppliers in various foreign currencies, exports to customers abroad, bill discounting, buyer''s credit, packing credit. The exchange rate between the rupee and foreign currencies has changed substantially in recent years and may fluctuate substantially in the future. Consequently, the results of the Company''s operations are adversely affected as the rupee appreciates/ depreciates against these currencies.
Foreign currency exposure
The Company monitors and manages its financial risks by analysing its foreign exchange exposures. The Company, in accordance with its Board approved risk management policies and procedures, enters into foreign exchange forward contracts to manage its exposure in foreign exchange rates.
Sensitivity analysis:
For the year ended March 31,2023 and March 31, 2022, every increase / decrease of ?1 in the respective foreign currencies compared to functional currency of the Company would impact profit before tax by ?81 Lakh/ (?81 Lakh) and ?87 Lakh/ (?87 Lakh) respectively and Impact Equity, net of tax by ?61 Lakh/ (?61 Lakh) and ?64 Lakh/ (?64 Lakh) respectively.
Interest rate risk:
The Company draws term loans, working capital demand loans, avails cash credit, foreign currency borrowings including buyer''s credit, packing credit etc. for meeting its funding requirements. The Company manages the interest rate risk by maintaining appropriate mix/portfolio of borrowings having fixed and floating rate of interest. The borrowings are serviced on a timely manner and repayments of the principal and interest amounts are made on a regular basis.
Expected credit loss (ECL):
(i) The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to whom the Company grants credit terms in the normal course of business. The credit period on sale of goods varies with seasons and markets and generally ranges between 30 to 180 days. Before accepting any new customer, the Company assesses the potential customer''s credit quality and defines credit limits by customer. Limits attributed to customers are reviewed annually.
As a practical expedient, the Company uses a provision matrix to determine impairment loss of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward looking estimates. The ECL allowance (or reversal) during the year is recognised in the statement of profit and loss.
Interest rate swap contract:
Under Interest rate swap contracts, the Company agrees to exchange the difference between fixed and floating rate interest amounts calculated on agreed notional principal amount. Such contract enables Company to mitigate the risk of changing interest rates on the fair value of issued fixed rate debt and the cash flow exposures on the issued variable rate debt. The fair value of interest rate swaps at the end of the reporting period is determined by discounting the future cash flows using the curves at the end of the reporting period and the credit risk inherent in the contract, and is disclosed below. The average interest is based on the outstanding balances at the end of the reporting period.
Sensitivity analysis:
For the year ended March 31, 2023 and March 31, 2022, every increase / decrease of 1% in the respective interest rate compared to existing rate of interest of the Company would impact profit before tax by ?650 Lakh/ (?650 Lakh) and ?425 Lakh/ (?425 Lakh) respectively and Impact Equity, net of tax by ?486 Lakh/ (?486 Lakh) and ?318 Lakh/ (?318 Lakh) respectively.
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, deposits with banks, foreign exchange transactions and other financial instrument. Credit risk is managed through credit approvals, monitoring the creditworthiness and establishing credit limits of customers to which the Company grants credit terms in the normal course of business. The company collects security deposits from its dealer customers which act as security against the outstanding trade receivables from such dealer customers. In the event of default, these security deposits can be adjusted against the uncollectible trade receivables from such dealer customers. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of expected losses in respect of trade and other receivables and investments.
Other price risks
The Company is exposed to valuation of equity investment risks as the Company''s equity investments are held for strategic rather than trading purposes.
Liquidity risk management
The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. The Company''s principal sources of liquidity are cash & bank balances, credit facilities and cash generated from operations.
The Company leases office buildings and vehicles. The leases pertains to office buildings and vehicle leases typically run for a period of 3 to 5 years, with an option to renew the lease after that date. Lease payments are renegotiated at renewal date reflect market rentals except for vehicle leases.
The Company has certain leases with lease terms of less than 12 months or with low value. The Company applies short term lease and lease of low value assets recognition exemption for these leases. The incremental borrowing rate for lease liabilities is ranging from 7.62% to 9.67%.
The Company publishes the standalone financial statements of the Company along with the consolidated financial statements. In accordance with Ind AS 108, Operating Segments, the Company has disclosed the segment information in the consolidated financial statements.
An Appeal has been filed by the Insurance Company (The Oriental Insurance Company Limited) against the Arbitration Award in favour of the Company, before the Hon''ble High Court of Delhi. Pending final disposal of the above appeal, the Company has filed the Execution Petitions before Hon''ble High Court of Delhi for deposit of awarded amount in Material Damage (MD) Claim of ?1,048 Lakh (includes interest) and Business Interruption Policy claim of ^1,352 Lakh (includes interest) with the Court. With respect to the execution petition filed by the Company in both the cases, the Hon''ble High Court of Delhi has passed an order vide its order dated March 19, 2021 & April 9, 2021 directed the Insurance Company to deposit the awarded amount towards Material Damage claim & Business Interruption Policy respectively together with the interest upto the date of deposit with Court. During the previous year, the amount deposited by the Insurance Company has been released by the Court to the Company after submission of equivalent bank guarantee. As the matter is subjudice and as advised by its legal council, the Company has not recognized the deposit amount received as income and the interest cost, if any in the books of account.
(vii) The Company is not declared wilful defaulter by and bank or financials institution or lender during the year.
(viii) The Company does not have any charges which are yet to be registered with ROC beyond the statutory period. The Company does not have any satisfaction of charges which are yet to be registered with the ROC beyond the statutory period except for:
|
Charge Holder name and ID |
Amount |
Location of Registrar |
|
Bank of Baroda - 90261984 |
2,040 |
Hyderabad |
|
Canara Bank - 90247742 |
604 |
Hyderabad |
|
ICICI Bank limited - 90262175 |
150 |
Hyderabad |
43. Additional regulatory information
(i) The Company does not have any benami property, where any proceeding has been initiated or pending against the Company for holding any benami property.
(ii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(iii) The Company has 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:
(a) 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
(b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries."
(iv) The Company has 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:
(a) 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
(b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
(v) The Company does not have any 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.
(vi) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.
The satisfaction of above charges is pending for registration due to procedural delays at the ROC Hyderabad and the Company is currently following up with the ROC to complete the registration of such satisfaction.
(ix) Quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts.
(x) The Company has used the borrowings from banks and financial institutions for the specific purpose for which it was obtained.
(xi) The title deeds of all the immovable properties, (other than immovable properties where the Company is the lessee and the lease agreements are duly executed in favour of the Company) disclosed in the financial statements included in property, plant and equipment and capital work-in progress are held in the name of the Company as at the balance sheet date.
(xii) The Company has not revalued any of its property, plant and equipment (including right-of-use-assets) and intangible assets during the year.
(xiii) The Company does not have any transactions with companies which are struck off.
(xiv) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.
Mar 31, 2018
Note:
Exceptional items pertain to the net effect of insurance claim received against a fire accident that took place in prior year. The Company has contested the claim amount paid by the Insurer and initiated arbitration proceedings seeking additional claim for damages incurred.
1. Transition to Indian Accounting Standards (Ind AS)
These standalone financial statements of NACL Industries Limited (formerly Nagarjuna Agrichem Limited) year ended March 31, 2018 have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015. The adoption of Ind AS was carried out in accordance with Ind AS 101, using April 1, 2016 as the transition date. Ind AS 101 requires that all Ind AS standards and interpretations that are effective for the year ended March 31, 2018, be applied consistently and retrospectively for all fiscal years presented. All applicable Ind AS have been applied consistently and retrospectively wherever required. The resulting difference between the carrying amounts of the assets and liabilities in the financial statements under both Ind AS and Previous GAAP as at the transition date have been recognized directly in equity at the transition date:
The effect of the Companyâs transition to Ind AS is summarized as follows:
(i) Transition election
(ii) Reconciliation of equity as previously reported under Indian GAAP to Ind AS
(iii) Reconciliation of profit or loss as previously reported under Indian GAAP to Ind AS
(iv) Adjustments to the statement of cash flows
(i) Transition elections
The Company has prepared the opening Balance Sheet as per Ind AS as of April 1, 2016 (the transition date) by recognizing all assets and liabilities whose recognition is required by Ind AS, not recognizing items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognized assets and liabilities. However, this principle is subject to certain mandatory exceptions and optional exemptions availed by the Company as detailed below:
a. Share based payments:
In accordance with Ind AS transitional provisions, Ind AS 102 Share-based payment has not been applied to employee stock options that have vested before the transition date.
b. investments in subsidiaries and associate:
In accordance with Ind AS transitional provisions, the Company opted to consider previous GAAP carrying value of investments as deemed cost on transition date for investments in subsidiaries and associate in separate financial statement.
c. Designation of equity / preference investments at FVTOCI
The Company has designated investment in equity / preference share capital of the following entities at FVTOCI basis of facts and circumstances that existed at the transition date:
- New India Co-operative bank limited
- SVC co-operative bank limited
- Nagaarjuna Shubho Green Technologies Private Limitedâ
d. Derecognition of financial assets and financial liabilities:
The Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after the transition date.
e. Business combinations
The Company has elected not to apply Ind AS 103 Business Combinations retrospectively to business combinations that occurred before the date of the transition.
Notes:
a. Ind AS 101 allows an entity to measure property, plant and equipment on the transition date at its fair value or previous GAAP carrying value (book value) as deemed cost. The Company has elected to measure land at fair value and use these fair values as deemed cost on the date of transition. As a result of revaluation of land, the increase in value of property, plant and equipment, has been adjusted to opening reserves ('' 2,066 lakhs).
b. Under the previous GAAP, long term investments were measured at cost less diminution in value which is other than temporary. Under Ind AS, the Company has designated such investments at FVTOCI. Ind AS requires such investments to be measured at fair value and the gains/(losses) are recognized through Other Comprehensive Income (FVTOCI) as a separate component of equity. Accordingly, investment in Nagaarjuna Shubho Green Technologies Private Ltd has been fair valued and the impact of the same taken to opening reserves as a separate component of equity.
c. Under Previous GAAP, loss provision for trade receivables was created on incurred loss based on credit risk assessment of each customer. Under Ind AS, these provisions are based on Expected Loss model which factor the credit risk as well as payment delay risk. As a practical expedient, the Company has evaluated a matrix based approach based on past trends to arrive at the provision matrix for receivables outstanding as at each period end. Accordingly, the provision resulting from such evaluation has been adjusted to opening reserves (for receivables outstanding as at April 01, 2016) and the statement of profit and loss (receivables as at March 31, 2017).
d. Under previous GAAP, transaction costs incurred in connection with borrowings are charged upfront to statement of profit and loss. Under Ind AS, transaction costs are included in initial recognition amount of financial liability and charged to statement of profit and loss based on effective interest method.
e. Under previous GAAP, a liability is recognized in the period to which the dividend was recommended by the Board of Directors, even though the dividend may be approved by the shareholders subsequent to the reporting date. Under Ind AS, liability for dividend is recognized in the period in which the obligation to pay is established i.e. when declared by the members in a general meeting. The effect of this change has been adjusted to opening reserves, there is no impact on statement of profit and loss.
f. Under the previous GAAP, deferred sales tax liability is recorded at transaction value. Under Ind AS, the deferred sales tax liability is an incentive received by the Company from the government under a sales tax deferral scheme. Since the loan is interest-free in nature, its face value or the transaction price is not considered to represent fair value. The Company considered that the use of a present value technique based on the cash flows payable under the scheme is an appropriate method of determining fair value. The difference between the fair value of the loan and the amount payable represents the âother componentâ which is considered to be in the nature of a government grant since it represents an incentive received by the Company from the government. This is accounted for in accordance with Ind AS 20.
g The Company recognizes costs related to the post-employment defined benefit plan on an actuarial basis both under Indian GAAP and Ind AS. Under Indian GAAP, the entire cost including actuarial gains and losses are charged to statement of profit and loss. Under Ind AS, remeasurements are recognized immediately in the Balance Sheet with a corresponding debit or credit to retained earnings through OCI.
h Consequential deferred tax on all the above adjustments.
(iv) Effect of adoption of Ind AS on the statement of cash flows for the year ended March 31, 2017:
Following is the impact on cash flows on transition from Previous GAAP to Ind-AS.
Notes:
(a) The Company has disputed various demands raised by excise duty authorities for the assessment years 2005-06 to 2009-10, which are pending at various stages of appeals. The Company is confident that these appeals will be decided in its favour.
(b) The Company has disputed various demands raised by service tax authorities for the assessment years 2012-13 to 2017-18, which are pending at various stages of appeals. The Company is confident that these appeals will be decided in its favour.
(c) The Company has disputed various demands raised by income tax authorities for the assessment years 2004-05 to 2009-10, which are pending at various stages of appeals. The Company is confident that these appeals will be decided in its favour.
(d) The Company has disputed various demands raised by sales tax authorities for the assessment years 2009-10 to 2016-17, which are pending at various stages of appeals. The Company is confident that these appeals will be decided in its favour.
(e) Guarantees given to bank for guarantees given by bank to third party in ordinary course of business.
(f) Other contingent liability majorly pertains to demand for payment of alleged deficit of stamp duty, registration fees and penalty in respect of a sales deed. The Company is confident that the case will be decided in its favour.
2. Financial Instruments
36.1 Capital management
The Companyâs capital management objective is to maximize the total shareholder return by optimizing cost of capital through flexible capital structure that supports growth. Further, the Company ensures optimal credit risk profile to maintain/ enhance credit rating. The Company determines the amount of capital required on the basis of annual operating plan and long-term strategic plans. The funding requirements are met through internal accruals and long-term/short-term borrowings. The Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
3 Fair Value by hierarchy
Valuation technique and key inputs Level 1
Quoted prices (unadjusted) in an active markets for identical assets or liabilities.
Level 2
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3
Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
Quantitative disclosures of fair value measurement hierarchy-Level 3 for financial instruments:
The fair values of the unquoted equity shares have been estimated using a Discounted Cash Flow model. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, earnings growth, discount rate, and probabilities of the various estimates within the range used in managementâs estimate of fair value for these unquoted equity investments.
Valuation inputs and relationships to fair value:
The following table summarizes the quantitative information about the significant unobservable inputs used in level 3 fair value measurements.
4.Financial risk management Financial risk factors
The Companyâs activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Companyâs primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The Company has adequate internal processes to assess, monitor and manage financial risks. The Companyâs exposure to credit risk is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers. The liquidity risk is measured by the Companyâs inability to meet its financial obligations as they become due.
Market risk
The Company is exposed to foreign exchange risk through imports from overseas suppliers in various foreign currencies, exports to customers abroad, bill discounting, buyerâs credit, packing credit. The exchange rate between the rupee and foreign currencies has changed substantially in recent years and may fluctuate substantially in the future. Consequently, the results of the Companyâs operations are adversely affected as the rupee appreciates/ depreciates against these currencies.
Sensitivity analysis:
For the year ended March 31, 2018 and March 31, 2017, every increase / decrease of '' 1 in the respective foreign currencies compared to functional currency of the Company would impact profit before tax by ('' 74 lakhs)/ '' 74 lakhs and ('' 16 lakhs)/ '' 16 lakhs respectively.
Interest rate risk:
The Company draws term loans, working capital demand loans, avails cash credit, foreign currency borrowings including buyerâs credit, packing credit etc. for meeting its funding requirements. The Company manages the interest rate risk by maintaining appropriate mix/portfolio of borrowings having fixed and floating rate of interest. The borrowings are serviced on a timely manner and repayments of the principal and interest amounts are made on a regular basis.
Credit risk :
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers, deposits with banks, foreign exchange transactions and other financial instrument. Credit risk is managed through credit approvals, insurance of trade receivables within the aging of 90 days to 180 days, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of expected losses in respect of trade and other receivables and investments.
Other price risks :
The Company is exposed to valuation of equity investment risks as the Companyâs equity investments are held for strategic rather than trading purposes.
Liquidity risk management :
The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. The Companyâs principal sources of liquidity are cash & bank balances, credit facilities and cash generated from operations.
The Company has unutilized credit limits from the banks of Rs, 5,929 lakhs, Rs, 3,739 lakhs and Rs, 1,470 lakhs as of March 31, 2018, March 31, 2017 and April 1, 2016 respectively.
The working capital position of the Company:
5. Leases:
The Company has entered into certain operating lease agreements and an amount of Rs, 315 lakhs (2017: Rs, 302 lakhs) paid under such agreements is charged to the statement of profit and loss. These leases are generally cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by such agreements.
6. Segment Reporting:
As the Companyâs business activities fall within a single primary segment viz-a-viz âmanufacture of products -pesticides, insecticides etc.), therefore the disclosure requirements of Indian Accounting Standard 108 - Operating Segments are not applicable. The Company sells its products mainly within India where the conditions prevailing are uniform. Since the sales outside India are below the threshold limit, no separate geographical segment disclosure is considered necessary.
7. Change in the name of Company :
During the year, the Company changed its name from Nagarjuna Agrichem Limited to NACL Industries Limited with effect from September 4, 2017.
8. Approval of financial statements :
The financial statements are approved for issue by the Board of Directors on May 19, 2018.
Mar 31, 2017
b) Rights, Preferences and Restrictions attached to Equity shares
The Company has only one class of Equity shares having a par value of Rs. 1/- per share. Each holder of Equity shares is entitled to one vote per share
In the event of liquidation of the Company, the holders of Equity shares will be entitled to receive 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.
c) The Board of Directors in the meeting held on 27th May,2017 has recommended a final dividend of Re.0.125 per Equity Share of Re.1 each, subject to the approval of members in the ensuing Annual General Meeting.
d) Shares in the Company held by the Holding Company and Other Share holders holding more than 5%
Notes :
a) Term Loan availed from State Bank of India is secured by way of first charge on fixed assets of the company and second charge on current assets of the company along with other working capital lenders
b) Working Capital Term Loans availed from New India Co-operative Bank Ltd are secured by way of first charge on fixed assets of the company and other movable assets on pari passu basis with other term loan lendors.
c) Term Loan availed from SVC Co-Op Bank Ltd is secured by way of first charge on fixed assets of the company and Second charge on current assets to be shared with other term lenders .
d) Corporate Loan from SVC Co-Operative Bank Ltd. outstanding at Rs.2667 lakhs included in Term Loans from Banks above, is guaranteed by Smt. K.Lakshmi Raju a Director of the company.
e) All Credit facilities extended by State Bank of India are further secured by pledge of Promoter Shareholding equal to 30% of the Companyâs equity.
g) Deferred payment liabilities.
Vide Revised order No.10/1/9/0023/0387/ID dated 31.01.2001 the Government of Andhra Pradesh had sanctioned Sales Tax Deferment to the Company in respect of Acephate and Profenofos for a period of fourteen years commencing from 28.09.1997 for Acephate and from 23.02.2000 for Profenofos subject to a maximum of Rs.1028.55 Lacs. The Sales Tax deferred in a year is payable at the end of 14th year without interest. Since financial year 2006-07 the company has decided not to avail the Sales Tax deferment. First repayment commenced from 25.09.2013 as prescribed in the order. Based on the Sales Tax Returns the sales tax so deferred aggregates to Rs.90.36 Lacs as at the balane sheet date. (Previous Year Rs. 165.41 Lacs).
* Loans Repayable on Demand from Banks (along with Non Fund Based Limits of Letters of Credit and Bank Guarantees) from the Consortirum i.e. State Bank of India, IDBI Bank Ltd, HDFC Bank Ltd & SVC Co-Operative Bank Ltd. are secured by way of hypothecation of current assets comprising stock in trade, book debts and stores and spares, both present and future. The aforesaid facilities are further secured by second charge on the companyâs immovable and hypothecation of movable properties, both present and future, ranking pari passu with other Working Capital Lenders. The facilities sanctioned by State Bank of India, IDBI Bank Ltd, HDFC Bank Ltd are guaranteed by Sri K.S.Raju. The facilities sanctioned by SVC Co-Operative Bank Ltd. are guaranteed by Smt.K.Lakshmi Raju a Director of the company.
Note:
a) The Company has not received confirmations for the current year about the status under The Micro, Small and Medium Enterprises Development Act, 2006, from various creditors, consequent to which, the classification of dues to such Enterprises can not be compiled as at the Balance Sheet date
Note:
a) As at the date of this Balance Sheet, there are no amounts of Unclaimed dividends due for remittance to the Investor Education & Protection Fund.
1. Insurance Claim:
The company has recognized as income in the accounts the entire amount of claims received of Rs 45.65 Cr being the aggregate of insurance proceeds of Rs 32.44 Cr received during the year, Rs 10.00 Cr being the on-account insurance proceeds received and credited to Claims Receivable account and Rs 3.21 Cr being the sale proceeds of scrap credited to claims receivable account, in earlier years.
Consequently, the company has also recognized as expenses in the accounts Rs 20.08 Cr comprising fully damaged assets written off Rs 14.16 Cr, Work-in-progress written off Rs.1.31 crs and other expenses of Rs.0.66 crs arising out of the said accident and accounted under claims receivable so far. Further damages arising from the said accident assessed during the year at Rs.3.95 crs have also been expensed in these accounts. The net effect of Rs.25.57 crs has been disclosed as Exceptional Item.
The Company has contested the claim amount paid by the Insurance Company and initiated the Arbitration proceedings.
2. Borrowing Cost
Borrowing cost capitalized during the year is nil (Previous year nil)
37. Related Party Transactions (Disclosure as required by AS-18 âRelated Party Disclosures) :
A. Names of related parties and description of relationship.
3. The remuneration has been paid to the Managing Director in accordance with the Sections 196, 197and 198 and other applicable provisions of The Companies Act, 2013
4. Employee Benefit Obligations
A. Defined Contribution Plan:
The company makes Provident Fund contribution to defined contribution retirement benefit plan for qualifying employees. Under the scheme the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. Contribution to defined contribution plan is recognized and charged off for the year as follows:
The obligation of Leave Encashment is recognized based on actuarial valuation made by an independent actuary at the end of the financial year.
C) âNagarjuna Agrichem Ltd.-Employee Stock Option Scheme-2015â
i) The âNagarjuna Agrichem Ltd.-Employee Stock Option Scheme-2015â (hereinafter referred to as âESOS-2015â) was approved by the Shareholders in the 28th Annual General Meeting of the Company held on 28th September, 2015 and is being administered by the Compensation Committee of the Board of Directors, set up for the purpose
ii) Under the ESOS-2015, 11,50,000 options have been reserved to be issued to the eligible employees, with each option conferring a right upon such employee to apply for one equity share of Re.1/- each of the Company. The options granted under the Scheme would vest after a minimum period of one year from the date of grant and may spread over a maximum period of five years after the aforesaid one year. The options granted to the employees would be capable of being exercised within a period, of two years from the date of vesting;
iii) Pursuant to ESOS-2015, the Company, during the year 2015-16, has granted 9,30,000 (Nine Lakhs Thirty Thousand Only) options with a vesting period spread over maximum period of five years commencing after the aforesaid one year from the date of grant. The exercise price of Rs. 8/- (Rupees Eight Only) per share being less than the closing market price prevailing on the date prior to the date of grant, there arises deferred compensation cost which is to be suitably amortized over the period during which the vested options are to be exercised, in accordance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, and the Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants of India. Accordingly an amount of Rs.21.08 lakhs has been accounted in the books of account as deferred compensation cost.
iv) Summary of Stock Option
5. Disclosure on Specified Bank Notes (SBNs
Specified Bank Notes (SBN) and other denomination notes on hand as defined in the MCA notification G.S.R. 308(E) dated 31 March, 2017 on the details of SBN held and transacted during the period from 8 November, 2016to 30 December, 2016
6. Balances in the accounts of various debtors, loans and advances and creditors are subject to reconciliation and confirmation
7. Figures of the previous year have been re-grouped/recast wherever necessary to conform to the current yearâs presentation/ classification
8. Figures are rounded off to the nearest thousands.
Mar 31, 2016
b) Rights, Preferences and Restrictions attached to Equity shares
The Company has only one class of Equity shares having a par value of Rs. 1/- per share. Each holder of Equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of Equity shares will be entitled to receive 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.
Notes :
a) Term Loan availed from State Bank of India is secured by way of first charge on fixed assets of the Company and second charge on current assets of the Company along with other working capital lenders.
b) Working Capital Term Loans availed from New India Co-operative Bank Ltd are secured by way of first charge on fixed assets of the Company and other movable assets on pari passu basis with other term loan lendors.
c) Term Loan availed from SVC Co-Op Bank Ltd. is secured by way of first charge on fixed assets of the Company and Second charge on current assets to be shared with other term lenders .
d) Corporate Loan from State Bank of India outstanding at Rs. 250 lakhs included in Term Loans from Banks above, is guaranteed by Sri K.S. Raju a Director of the Company.
e) Corporate Loan from SVC Co-Operative Bank Ltd. outstanding at Rs. 3000 lakhs included in Term Loans from Banks above, is guaranteed by Smt. K. Lakshmi Raju a Director of the Company.
f) All Credit facilities extended by State Bank of India are further secured by pledge of Promoter Shareholding equal to 30% of the Company''s equity.
h) Deferred Payment Liabilities
Vide Revised order No.10/1/9/0023/0387/ID dated 31.01.2001 the Government of Andhra Pradesh had sanctioned Sales Tax Deferment to the Company in respect of Acephate and Profenofos for a period of fourteen years commencing from 28.09.1997 for Acephate and from 23.02.2000 for Profenofos subject to a maximum of Rs. 1028.55 Lacs. The Sales Tax deferred in a year is payable at the end of 14th year without interest. Since financial year 2006 07 the Company has decided not to avail the Sales Tax deferment. First repayment commenced from 25.09.2013 as prescribed in the order. Based on the Sales Tax Returns the sales tax so deferred aggregates to Rs. 165.41 Lacs as at the balane sheet date. (Previous Year Rs. 230.79 Lacs).
1. Employee Benefit Obligations:
A. Defined Contribution Plan:
The Company makes Provident Fund contribution to defined contribution retirement benefit plan for qualifying employees. Under the scheme the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. Contribution to defined contribution plan is recognized and charged off for the year as follows:
C. Nagarjuna Agrichem Ltd.-Employee Stock Option Scheme-2015â
i) The âNagarjuna Agrichem Ltd.-Employee Stock Option Schemeâ (hereinafter referred to as âESOS-2015â) was approved by the Shareholders in the 28th Annual General Meeting of the Company held on 28th September, 2015. The scheme is to be administered by the Compensation Committee of the Board of Directors, set up for the purpose.
ii) Under the Scheme, 11,50,000 options have been reserve0d to be issued to the eligible employees, with each option conferring a right upon such employee to apply for one equity share of Re.1/- each of the Company. The options granted under the Scheme would vest after a minimum period of one year from the date of grant and may spread over a maximum period of five years after the aforesaid one year. The options granted to the employees would be capable of being exercised within a period, commencing from the date of vesting and shall expire on completion of two years from the date of vesting;
iii) Pursuant to ESOS-2015, the Company has, during the year, granted 9,30,000 (Nine Lakhs Thirty Thousand Only) options with a vesting period spread over maximum period of five years commencing after the aforesaid one year from the date of grant. The exercise price of Rs. 8/- (Rupees Eight Only) per share being less than the closing market price prevailing on the date prior to the date of grant, there arises deferred compensation cost which is to be suitably amortized over the period during which the vested options are to be exercised, in accordance withSecurities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, and the Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants of India.
2. Figures of the previous year have been re-grouped/recast wherever necessary to conform to the current year''s presentation/classification.
3. Figures are rounded off to the nearest thousands.
Mar 31, 2015
1. During the year under review NACL entered into a marketing
agreement for Solar Products in India with a foreign Company. Pending
approvals from Government the said foreign Company unilaterally
violated the contracted terms and dispatched three unauthorized
consignments of unapproved solar products of a stated value of USD
2,803,625. NACL has refused to accept the said consignments and has
been legally advised that there would not be any liability towards the
same.
2. Based on the provisional insurance claim made by the Company in
connection with the damages to the assets in the fire accident on
30.06.2012 at Srikakulam plant, the insurance Company has made an
interim on-account payment of Rs. 10 crores. The Company has credited the
same to the claims receivable account which, at the beginning of the
year stood at Rs. 19.28 crores comprising Rs. 14.16 crores being the
written down value of the damaged fixed assets, Rs. 5.12 crores being
the estimated value of damaged inventories and others. The claim by the
Company under the reinstatement value basis with the insurance Company
continues to be under process as on 31.03.2015.
Pending final assessment of the damage to the partially damaged
assets, the value if any to be de-capitalised therefrom, continues to
be included in the gross block as on 31.03.2015.
Necessary adjustments in the accounts and the financial impact if any
in respect of the aforesaid will be made on completion of final
assessment.
3. Borrowing Cost
Borrowing cost capitalized during the year is nil (Previous year Rs.
254.51 Lacs
4. Minimum remuneration, in accordance with the provisions of
Schedule V to the Companies Act, 2013, has been paid to the Managing
Director, in the absence of Profits for the year.
5. Exceptional Item during the year is NIL (previous year amount Rs.
330.56 lakhs - Loss on Sale of Wind Mill Undertaking)
6. Provision has been made during the year for Minimum Alternate Tax
(MAT) in accordance with the provisions of The Income Tax Act, 1961. As
a prudent measure MAT Credit in respect of the said provision for the
current year has not been recognized and will be reviewed and
recognized at the appropriate time in subsequent years.
7. Employee Benefit Obligations
A. Defined Contribution Plan:
The Company makes Provident Fund contribution to defined contribution
retirement benefit plan for qualifying employees. Under the scheme the
Company is required to contribute a specified percentage of the
payroll costs to fund the benefits.
B. Defined Benefit Plan:
Liability for retiring gratuity as on March 31, 2015 is Rs. 411.65 Lacs
(as on March 31, 2014 Â Rs. 416.21 Lacs) of which Rs. 300.73 Lacs (as on
March 31, 2014- Rs. 292.01 Lacs) is funded with Life Insurance
Corporation of India the balance is included in provision for Gratuity.
Liability for Gratuity has been actuarially determined and provided in
the books. The details of the Company's post-retirement benefit plans
for its employees are given below which is certified by the actuary.
8. Balance of debtors, loans and advances and creditors are subject
to reconciliation and confirmation.
9. Figures of the previous year have been re-grouped/recast wherever
necessary to conform to the current year's presentation/classifi
cation.
10. Figures are rounded off to the nearest thousands.
Mar 31, 2014
1. Corporate Information
NAGARJUNA AGRICHEM LTD, is a Public Limited Company listed with Bombay
Stock Exchange. It is part of the Nagarjuna group based at Hyderabad.
The Company is in the business of Crop Protection and manufactures both
Technicals (Active Ingredient -AI) and Formulations. It manufactures
all kinds of Pesticides, Insecticides, Acaricides, Herbicides,
Fungicides and other Plant Growth Chemicals. The Company''s Formulation
Business is mainly in the Indian Market and sells through its large
retail dealer network of nearly 11,000 dealers, spread across India.
The Company has an impressive range of Branded Formulations. It also
exports Technicals and Formulations and does toll Manufacture for
various Multinational Companies.
2. Commitments/ Contingent Liabilities:
Sl. As at 31.03.2014 As at 31.03.2013
Particulars
No. Rs.in Lakhs Rs.in Lakhs
a. Commitments/ Contingent
Liabilities
(i) Letters of Credit 6,797.91 4,119.62
(ii) Counter Guarantees 414.01 451.09
b. Claims against the Company
not acknowledged as debts in
respect of
(i) Disputed Excise Duty,
Service Tax Demands 23.41 27.96
(Net of payments made under
protest Rs.9.11 Lakhs)
(ii) Disputed Income Tax Demands - -
(Net of payments made under
protest Rs.430.40 Lakhs)
(iii) Disputed SalesTax Demands - -
(Net of payments made under
protest Rs.8.51 Lakhs)
c. Others 239.73 244.71
d. Estimated amount of contracts,
remaining to be executed on Capital 1,453.09 899.59
account and not provided for
(Net of advance)
3. Borrowing Cost
Borrowing cost incurred during the year for acquisition of assets
aggregated to Rs.254.51 Lakhs (Previous year Rs.13.05Lakhs)
4. In compliance with clause 40A of the Listing Agreement read with
relevant Securities & Exchange Board of India''s (SEBI) circulars with
regard to Minimum Public Shareholding in a listed entity, pursuant to
the approval by the Shareholders in the Extra-ordinary General Meeting
held on 22nd May, 2013, the Company has allotted 69,29,938 Equity
Shares of Rs.1/- each on 03rd June, 2013 as Bonus shares by way of
capitalisation of Securities Premium Account, to Public Shareholders
only (to the exclusion of Promoter Shareholders).
5. There was a fire incident on 30.06.2012 in Block-5 of the
Company''s Srikakakulam plant. The Company had made a provisional
assessment of the loss in the said incident and as per the terms of the
insurance policy and duly lodged provisional claims with the Insurance
Company covering the totally damaged assets, partially damaged assets,
damaged inventories and other covered risks.
Accordingly in the books of account, the gross block value of the
totally damaged assets aggregating to Rs.29.05 crores, was de-capitalised
and its written down value of Rs.14.16 crores was included under "claim
receivable" from the Insurance Company in the financial statement for
the year ended 31.03.2013 and continues as such as on 31.03.2014.
Pending completion of the final assessment of damage to the partially
damaged assets, the value if any to be decapitalised therefrom,
continues to be included in the gross block as on 31.03.2014. On
completion of the final assessment, appropriate treatment in the books
of account will be made to the value of these assets.
The estimated value of the damaged inventories and other claims
aggregating to Rs.4.56 crores was also included under "claim receivable"
from the Insurance Company in the financial statements for the year
ended 31.03.2013 and continues as such as on 31.03.2014.
The provisional claims made with the Insurance Company continue to be
under process as at 31.03.2014. The Regional Claims Committee of the
Insurance Company, has recommended for approval of its head office, for
an on account interim payment towards the Company''s claims.
Necessary adjustments in the accounts and the financial impact if any
in respect of the aforesaid will be made on completion of final
assessment.
6. Related Party Transactions:
A. Names of related parties and description of relationship:
Sl. Relationship Party
No.
1. Subsidiary Company Nagarjuna Agrichem (Australia) Pty Limited,
Australia, LR Research Laboratories Pvt.Ltd.
2. Holding Company KLR Products Limited (Formerly GSR Products
Limited)
3. Associate Nasense Labs Pvt.Ltd. (Formerly USP Organics Pvt Ltd.)
4. Key Management Personnel (KMP) Mr.V.Vijay Shankar, Managing
Director
5. Enterprises over which Key Managerial Personnel are able to exercise
significant influence
Indo International Fertilizers Ltd. Shubho-Tech Pvt. Ltd.
6. a) Individuals who, indirectly have control on the voting power in
the company.
b) Relatives of (a) above
Mrs.K Lakshmi Raju, Director Mr.K.S.Raju (Father)
7. Enterprises under the significant influence of persons having
significant influence over this company
Nagarjuna Fertilizers & Chemicals Ltd. Bhagiradha Chemicals &
Industries Ltd.
7. Employee Benefit Obligations A. Defined Contribution Plan:
The Company makes Provident Fund contribution to defined contribution
retirement benefit plan for qualifying employees. Under the scheme the
Company is required to contribute a specified percentage of the payroll
costs to fund the benefits.
B. Defined Benefit Plan:
Liability for retiring gratuity as on March 31, 2014 is Rs.416.21 Lakhs
(as on March 31, 2013 - Rs.319.33 Lakhs) of which Rs.292.00 Lakhs (as on
March 31, 2013- Rs.279.21 Lakhs) is funded with Life Insurance
Corporation of India the balance is included in provision for Gratuity.
Liability for Gratuity has been actuarially determined and provided in
the books. The details of the Company''s post-retirement benefit plans
for its employees are given below which is certified by the actuary.
8. Balance of debtors, loans and advances and creditors are subject
to reconciliation and confirmation.
9. Figures of the previous year have been re-grouped/recast wherever
necessary to conform to the current year''s presentation/classification.
10. Figures are rounded off to the nearest thousands.
Mar 31, 2013
1. Corporate Information
NAGARJUNA AGRICHEM LTD, is a Public Limited Company listed with Bombay
Stock Exchange. It is part of the the Nagarjuna Group based at
Hyderabad. The Company is in the business of Crop Protection and
manufactures both Technicals (Active Ingredient -AI) and Formulations.
It manufactures all kinds of pesticides, insecticides, acaricides,
herbicides, fungicides and other plant growth chemicals. The
Company''s Formulation Business is mainly in the Indian Market and
sells through it''s large retail dealer network of nearly 13000 dealers,
spread across India. The Company has an impressive range of branded
Formulations. It also exports Technicals and Formulations and does Toll
manufacture for various Multinational Companies.
2. Commitments/ Contingent Liabilities
As at
31.03.2013 As at
31.03.2012
Sl.
No. Particulars Rs. In Lakhs Rs.In Lakhs
a. Commitments/ Contingent Liabilities
(i) Letters of Credit 4119.62 6458.55
(ii) Counter Guarantees * 451.09 222.20
b. Claims against the Company not acknowledged as debts in respect of
(i) Excise Duty, Service Tax Demands - Company has 27.96 24.83
appealed against orders raised the demands
(ii) Income Tax Demands - Company has
appealed against - 73.21
orders raised the demands. (Net of payments made
under protest)
c. Estimated amount of contracts, remaining to be 899.59 982.09
executed on Capital account and not provided
for (net of advance)
d. Others 244.71 250.78
3. Borrowing Cost
Borrowing Cost incurred during the year for acquisition of assets
aggregated to Rs.13.05 Lakhs (Previous year Rs.10.54 Lakhs)
4. In compliance with the requirement of clause 40A of the Listing
Agreement to raise public shareholding of the Company to not less than
25%, the Board of Directors of the Company at a meeting held on 27th
April, 2013, recommended issue of bonus shares only to public
shareholders (otherthan Promoters) of the Company in the ratio of 3
equity shares for every 14 equity shares held by them, which is subject
to the approval of the Shareholders in the ensuring EGM to be held on
22nd May, 2013.
5. The Management has made a provisional assessment of the loss in
fire incident in Block 5 at Srikakulam. The Company has lodged
provisional claim with the Insurance Company covering the totally
damaged assets and partially damaged assets. In addition, claim is made
for damaged inventories and other risks covered as per the terms of the
insurance policies.
The gross block value of the totally damaged assets, as per the books
of account, aggregating to Rs.29.05 Crores, has been de-capitalised and
included in the provisional claim receivable from the Insurance
Company.
In the case of partially damaged assets, the Company has made a claim
with Insurance Company. Pending completion of the repairs and final
assessment, the value of the partially damaged assets continues to be
included in the gross block.
The estimated value of the damaged inventories of Rs.4.46 Crores is
exhibited under provisional claims receivable from the Insurance
Company.
The provisional claims made with the Insurance Company are under
process and on completion of final assessment and its acceptance,
necessary adjustments in the accounts and the financial impact if any
will be accounted.
The obligation of Leave Encashment is recognized based on actuarial
valuation made by an independent actuary at the end of the financial
year.
6. Balance of Debtors, Loans and Advances and Creditors are subject
to reconciliation and confirmation.
7. Figures of the previous year have been re-grouped/recast wherever
necessary to conform to the current year''s
presentation/classification.
8. Figures are rounded off to the nearest thousands.
Mar 31, 2012
Notes :
a) The Term Loans (except Term Loan for Wind Energy project) availed
from State Bank of India, IDBI Bank Ltd & HDFC Bank Ltd are secured by
way of equitable Mortgage by deposit of Title Deeds of the Company's
immovable properties both present and future and by way of first charge
of all Fixed Assets of the Company as a primary security and
hypothecation of movable properties of the Company ranking pari passu
and borrowings from State Bank of India and IDBI Bank Ltd are further
secured by a second charge on the current assets of the Company
consisting of stock in trade, book debts, stores and spares.
b) Term Loan availed from State Bank of India for Wind Power project is
secured by way of mortgage by deposit of Title Deeds of the project's
immovable properties and
by way of first charge of all project fixed assets as a primary
security.
c) Working Capital Term Loan availed from New India Co-operative Bank
Ltd is secured by way of first charge on Company's fixed assets
including other movable assets on pari passu basis.
d) Term Loans from Banks (except Term Loan from HDFC Bank Ltd &
Corporate Loan from State Bank of India and Working Capital Term Loan
from New India Co-operative Bank Ltd availed during the FY 2009-10) and
Working Capital Loans from Banks are personally guaranteed by Sri K.S.
Raju, a Director of the Company.
e) Terms of Repayments are given below:
i) Loan taken from HDFC Bank is repayable in 12 Quarterly Installments
of Rs. 200 Lakhs each. commencing from August 2010; Interest Rate
@12.56%
ii) Loan taken from IDBI Bank is repayable in 54 monthly Installments
of Rs. 55.55 Lakhs each commencing from January, 2011; Interest Rate
14.25%
iii) Loan taken from SBI Corporate Term Loan is repayable in 8
Quarterly Installments of Rs. 250 Lakhs each. commencing from June, 2010;
Interest Rate 15.00% and Outstanding Balance as on 31st March 2012 Rs.
Nil.
iv) Loan taken from New India Working Capital Term Loan is repayable in
5 yearly installments of Rs. 480 Lakhs each. commencing from March, 2011;
Interest Rate 11%
v) Loan taken from SBI Term Loan-Wind Power Project is repayable in 24
quarterly Instalments of Rs. 90 Lakhs each commencing from September,
2011; Interest Rate 13.75%
f) Deferred Payment Liabilities.
i) Sales Tax Deferment: Vide order No.10/1/5/0564/0696 dated 26th
April, 1995 the Government of Andhra Pradesh had sanctioned Sales Tax
Deferment to the Company in respect of Monocrotophos for a period of
Ten Years commencing from 1.7.1994; subject to a maximum of Rs.1330.27
Lakhs. Based on the Sales Tax Returns, the sales tax so deferred
aggregates net of repayments to Rs.147.99 Lakhs. (Previous Year Rs. 262.85
Lakhs). The repayment of deferred Sales Tax has commenced from July,
2004 as prescribed in the said order.
ii) Further vide Revised order No.10/1/9/0023/0387/ ID, dated
31.01.2001, the Government of Andhra Pradesh had sanctioned Sales Tax
Deferment to the Company in respect of Acephate and Profenofos for a
period of fourteen years commencing from 28.09.1997 for Acephate and
from 23.02.2000 for Profenofos, subject to a maximum of Rs.1028.55 Lakhs.
The Sales Tax deferred in a year is payable at the end of 14th Year
without interest. First payment will commence from 25.09.2013 as
prescribed in the order. Since financial year 2006-07, the Company has
decided not to avail the Sales Tax deferment and opted to pay the Sales
Tax henceforth. Based on the Sales Tax Returns, the Sales Tax so
deferred aggregates to Rs. 293.73 Lakhs. (Previous Year Rs. 301.62 Lakhs).
* Cash Credits, Working Capital Demand Loan including Non Fund Based
Limits of Letters of Credit and Bank Guarantees from State Bank of
India, IDBI Bank Ltd & HDFC Bank Ltd and Corporate Loan availed from
State Bank of India are secured by way of hypothecation of current
assets comprising of stock in trade, book debts and stores and spares,
both present and future. The aforesaid facilities are further secured
by second charge of the Company's immovable and hypothecation of
movable properties, both present and future, ranking pari passu with
the Term Loans.
Note: a) Out of the said amount Rs. 249.82 Lakhs (Previous year Rs. 114.32
Lakhs) pertains to Micro, Small and Medium Enterprises as defined under
Micro, Small and Medium Enterprises Developmenent Act, 2006 based on
the information available with the Company. There is no interest
payable to such parties as at 31st March 2012. (March 31, 2011: Rs. Nil)
b) Dues to Micro and Small Industrial Undertakings, exceeding 45 days -
Rs. 52.69 Lakhs (Previous year - Rs. 24.88 Lakhs)
Note: a) The Company has been regularly transferring Unclaimed Dividend
to the Investor Education and Protection Fund after the expiry of the
prescribed period. For current year the Company is yet to receive full
information from some Banks. Pending receipt of such information the
Company is in process of reconciling the Unclaimed Dividend Account.
Note No. 1 :
Borrowing Cost incurred during the year for acquisition of assets
aggregated to Rs. 10.54 Lakhs (Previous year Rs. 172.93 Lakhs)
Note No. 2 :
During the year, the Company has incorporated a Wholly Owned
Subsidiary, limited by shares viz. LR Research Laboratories Pvt. Ltd.
under the Companies Act, 1956. The Company has also a Wholly Owned
Subsidiary in Australia viz. Nagarjuna Agrichem (Australia) Pty.
Limited. As operations are yet to commence in these Companies, no
consolidation of Financial Statements is required.
Note No. 3 : Current Tax
It is decided by the Management that, even though the Wind Energy
Business is entitled for deduction u/s-80 IA for the FY 2010-11, (AY
2011-12) would not be treated as the initial assessment year.
For the year, the Company is obliged to pay current tax of Rs. 285.10
Lakhs under the MAT provisions of Section - 115JB of Income Tax Act,
1956. At this stage, Management is of opinion that there is no virtual
certainty to recognize MAT Credit entitlement as an asset for the
current year as per the Guidance Note issued by ICAI.
Note No. 4 : Employee Benefit Obligations: A. Defined Contribution
Plan:
The Company makes Provident Fund contribution to defined contribution
retirement benefit plan for qualifying employees. Under the scheme the
Company is required to contribute a specified percentage of the payroll
costs to fund the benefits.
Contribution to Defined Contribution Plan is recognized and charged off
for the year as follows:
B. Defined Benefit Plan:
Liability for retiring gratuity as on March 31, 2012 is Rs. 269.22 Lakhs
(as on March 31, 2011 - Rs. 248.18 Lakhs) of which Rs. 249.19 Lakhs (as on
March 31, 2011-Rs. 226.16 Lakhs) is funded with Life Insurance
Corporation of India/ ING Vysya Life Insurance Company Private Limited
and the balance is included in provision for Gratuity. Liability for
Gratuity has been actuarially determined and provided in the books. The
details of the Company's post-retirement benefit plans for its
Employees are given below which is Certified by the Actuary.
Note No. 5 :
Balance of Debtors, Loans and Advances and Creditors are subject to
Reconciliation and Confirmation.
Note No. 6 :
Figures of the previous year have been re-grouped/recast wherever
necessary to conform to the current year's presentation/classification.
Note No. 7 :
Figures are rounded off to the nearest Thousands.
Mar 31, 2011
1. a. Estimated amount of contracts, remaining to be executed on
Capital account and not provided for (net of advances) Rs. 897.18 Lacs
(Previous year Rs. 2183.23 Lacs).
b. Contingent Liabilities
As at As at
Particulars 31.03.2011 31.03.2010
Rs.ln Lacs Rs.in Lacs
Letters of Credit 2670.00 2378.39
Counter Guarantees * 774.19 631.35
Excise Duty, Service
Tax Demands - Company
has appealed against 28.23 54.11
orders raised the
demands
Income Tax Demands -
Company has appealed
against orders raised 90.50 120.79
the demands
* Includes renewal of guarantee provided on behalf of Nagarjuna Hydro
Energy Pvt Ltd for an amount of Rs. 475.37 Lacs (Previous year Rs.
463.88 Lacs).
2. Secured Loans:
The Term Loans (except Wind energy project term loan) availed from
State Bank of India, IDBI Bank Ltd & HDFC Bank Ltd and the External
Commercial Borrowing (ECB) from ICICI Bank Limited are secured by way
of equitable mortgage by deposit of title deeds of the Company's
immovable properties both present and future and by way of first charge
of all fixed assets of the Company as a primary security and
hypothecation of movable properties of the company ranking pari passu
and borrowings from State Bank of India, IDBI Bank Ltd and ICICI Bank
Ltd are further secured by a second charge on the current assets of the
company consisting of stock in trade, book debts and stores and spares.
Term Loan availed from State Bank of India for Wind power project is
secured by way of mortgage by deposit of title deeds of the project's
immovable properties and by way of first charge of all project fixed
assets as a primary security.
Working Capital Term Loan availed from New India Co-operative Bank Ltd
is secured by way of first charge, ranking pari passu, of all movable
fixed assets of the company as a primary security.
Cash Credits, Working Capital Demand Loan including Non Fund Based
Limits of Letters of Credit and Bank Guarantees from State Bank of
India, IDBI Bank Ltd & HDFC Bank Ltd and Corporate Loan availed from
State Bank of India are secured by way of hypothecation of current
assets comprising of stock in trade, book debts and stores and spares,
both present and future. The aforesaid facilities are further secured
by second charge of the company's immovable and hypothecation of
movable properties, both present and future, ranking pari passu with
the term loan lenders.
Term loans from banks (except Term Loan from HDFC Bank Ltd & Corporate
Loan from State Bank of India and Working Capital Term Loan from New
India Co-operative Bank Ltd availed during the financial year 2009-10)
and working capital loans from banks are personally guaranteed by Sri
K.S. Raju, a Director of the company.
3. Unsecured Loans:
Sales Tax Deferral:
Sales Tax Deferment: Vide order No.10/1/5/0564/0696 dated 26th April,
1995 the Government of Andhra Pradesh had sanctioned Sales Tax
Deferment to the Company in respect of Monocrotophos for a period of
ten years commencing from 1.7.1994; subject to a maximum of Rs.1330.27
Lacs. Based on the Sales Tax Returns, the sales tax so deferred
aggregates net of repayments to Rs.262.85 Lacs. (Previous Year Rs.
331.24 Lacs). The repayment of deferred Sales Tax has commenced from
July, 2004 as prescribed in the said order.
Further vide Revised order No. 10/1/9/0023/0387/1D, dated 31.01.2001,
the Government of Andhra Pradesh had sanctioned Sales Tax Deferment to
the Company in respect of Acephate and Profenofos for a period of
fourteen years commencing from 28.09.1997 for Acephate and from
23.02.2000 for Profenofos, subject to a maximum of Rs.1028.55 Lacs. The
Sales Tax deferred in a year is payable at the end of 14th year without
interest. First payment commence from 25.09.2013 as prescribed in the
order. Since financial year 2006-07, the company has decided not to
avail the Sales Tax deferment and opted to pay the sales tax
henceforth. Based on the Sales Tax Returns, the sales tax so deferred
aggregates to Rs.301.62 Lacs. (Previous Year Rs. 301.62 Lacs).
4. Borrowing cost incurred during the year for acquisition of assets
aggregated to Rs.172.93 Lacs (Previous year Rs. 110.18 Lacs) plus
expenditure pending allocation opening balance of Rs.53.15 lacs against
which an amount Rs. 226.08 Lacs (Previous year Rs. 57.03 Lacs) has been
capitalized against qualifying assets and the balance Rs. Nil (Previous
year Rs. 53.15 Lacs) is included under Expenditure pending allocation.
5. During the year, the company has commissioned Wind energy project
with a capacity of 6.3 MW in the month of Sep'10.
6. During the year, the company has incorporated a wholly owned
subsidiary as a proprietary company limited by shares viz., Nagarjuna
Agrichem (Australia) Pty Limited in Australia under Corporations Act
2001 as on 30.03.2011. As operations are yet to commence in this
company, no consolidation of financial statements is required.
7. During the year, the company has written off the expenditure
incurred on certain project related activities for Rs.303.03 lacs under
the head "CWIP written off" and grouped under "Administrative, Selling/
Distribution and Other Expenses".
8. Segment Reporting
a. Primary Segment Information:
The Company's main business segment is Agro Chemicals, Wind energy
business does not fall under reportable business segment as per
Accounting Standard-17. Hence there is no separate reportable business
segment as per "Segment Reporting - Accounting Standard-17".
b. Secondary Segment Information:
Secondary Segment reporting is based on the geographical location of
customers. The management views India and Outside India markets as
distinct geographical segments.
9. Related Party Transactions:
A. Names of related parties and description of relationship.
Relationship Party
Subsidiary Company Nagarjuna Agrichem (Australia) Pty Limited,
Australia
Holding Company KLR Products Limited (Formerly GSR Products
Limited)
Associates iKisan Limited
Indo International Fertilizers Ltd.
Nagarjuna Fertilizers & Chemicals Ltd
Bhagiradha Chemicals & Industries Ltd
Nagarjuna Hydro Energy Pvt Ltd
Key Management
Personnel (KMP) Mr.Ashok Muni, Director & COO (part
of the year)
Mr.Vijaya Raghavan, Whole time Director
Mrs.K Lakshmi Raju, Director (having
significant influence)
Relatives of Dir
ectors Mr KS Raju (Father of Mrs.K Lakshmi Raju,
Director)
Mrs.K Lakshmi Raju (Sister of Mr.KS Raju,
Director)
10. Current Tax
It is decided by the management that, even though the wind energy
business is entitled for deduction u/s-80 IA for the FY 2010-11, the
current AY 2011-12 would not be treated as the initial assessment year.
For the year, the company is obliged to pay current tax of Rs. 128.56
Lacs under the MAT provisions of Section - 115JB of Income-tax Act,
1956. At this stage, Management is of opinion that there is no virtual
certainty to recognize MAT Credit entitlement as an asset for the
current year as per the Guidance note issued by ICAI.
11. Deferred Tax
Deferred Tax is accounted in respect of the timing differences on a
liability method. Deferred Tax Asset has been recognised to the extent
where the management is reasonably certain that the realisation is more
likely than not.
12. Employee Benefit Obligations
A. Defined Contribution Plan:
The company makes Provident Fund contribution to defined contribution
retirement benefit plan for qualifying employees. Under the scheme the
Company is required to contribute a specified percentage of the payroll
costs to fund the benefits.
B. Defined Benefit Plan:
Liability for retiring gratuity as on March 31, 2011 is Rs.248.18 Lacs
(as on March 31, 2010 - Rs. 238.51 Lacs) of which Rs.226.16 Lacs (as on
March 31, 2010-Rs. 210.50 Lacs) is funded with Life Insurance
Corporation of India/ ING Vysya Life Insurance Company Private Limited
and the balance is included in provision for Gratuity. Liability for
Gratuity has been actuarially determined and provided in the books.
The details of the Company's post-retirement benefit plans for its
employees are given below which is certified by the actuary.
13. The company has been regularly transferring unclaimed dividend to
the Investor Education and Protection Fund after the expiry of the
prescribed period. In respect of previous years the company has
obtained details of the account and noticed certain discrepancies which
are under reconciliation. For current year the company is yet to
receive full information from some banks. Pending receipt of such
information the company is in process of reconciling the unclaimed
dividend account.
14. Balance of debtors, loans and advances and creditors are subject
to reconciliation and confirmation.
15. Figures of the previous year have been re-grouped/recast wherever
necessary to conform to the current year's presentation/classification.
16. Figures are rounded off to the nearest rupee.
Mar 31, 2010
Form for disclosure of Particulars with respect to technology absorption.
A.RESEARCH AND DEVELOPMENT (R&D)
1 Specific areas in which R&D
carried out by the Company
a.R&D Work on the existing processes to
make them environmentally friendly and
cost effective.
b.Indigenous process developments for new
products.
2.Benefits derived as a result of the
above R&D
Increased export business and improved
product quality.
3.Future plans of action
Introduction of new products through
indigenously developed technology.
4.Expenditure on R&D
a.Capital Rs.0.99 lakhs
b.Recurring Rs.109.36 lakhs
c.Total Expenditure as a percentage of 0.17%
total turnover
B.TECHNOLOGY ABSORPTION,ADAPTATION AND INNOVATION
1 Efforts in brief,made towards technology
absorption,adaptation and innovation.
Increased size of R&D process development,
purchase of new equipments and generation
of process technical for new products.
2.Benefits derived as a result of the above
effort eg.Product improvement,cost
reduction product development,import
substitution etc.,
a.The plants operate effectively with new
addition of products,
b.Exports started growing.
3.In case of imported technology (imported
during the last 5 years reckoned from the
beginning of the technical year)following
information may be furnished
a.Technology imported None
b.Year of import Not Applicable
c.Has technology been fully absorbed Not Applicable
d.If not fully absorbed,areas where this
has not taken place,reasons therefore
and future plans of action Not Applicable
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article
More Information on NACL Industries Ltd.
-
NACL Industries Ltd. Tools
- Bulk Deals
-
NACL Industries Ltd. Company Details
- Company Profile
- Company History
- Management Team
- Capital Structure
- Product Mix
- Banker/Auditor/Registrar
-
Company History
- Bonus
- Rights
- BSE Price History
- NSE Price History
-
NACL Industries Ltd. Key Financial Ratios
- Ratios
-
NACL Industries Ltd. Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
-
NACL Industries Ltd. Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
-
NACL Industries Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
-
NACL Industries Ltd. Corporate Announcements
- Book Closure
- Dividend
- Board Meetings
- Change of Name
