Mar 31, 2018
NOTE : 1
CORPORATE INFORMATION
Transpek Industry Limited (âTILâ, âthe Companyâ) is into the manufacturing and export of a range of chemicals servicing the requirements of customers from a diverse range of industries - Textiles, Pharmaceuticals, Agrochemicals, Advanced Polymers, etc.
The Financial Statements of the Company for the year ended 31st March, 2018 were authorized for issue in accordance with a resolution of the Board of Directors on 23rdMay, 2018.
NOTE: 2
BASIS OF PREPARATION
i. Compliance with Ind AS
The financial statements comply in all material aspects with Indian Accounting Standards (âInd ASâ) notified under section 133 of the Companies Act, 2013 (âthe Actâ), Companies (Indian Accounting Standards) Rules, 2015 as amended by Companies (Indian Accounting Standards) (Amendment) Rules, 2016 and other relevant provisions of the Act as applicable.
The financial statements up to year ended March 31, 2017 were prepared in accordance with the Accounting Standards notified under section 133 of the Act read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (âIndian GAAPâ) and other relevant provisions of the Act as applicable.
These financial statements are the Companyâs first Ind AS financial statements and are covered by Ind AS 101- First time Adoption of Indian Accounting Standards. The transition to Ind AS has been carried out from the accounting principles generally accepted in India (âIndian GAAPâ) which is considered as the âPrevious GAAPâ for purposes of Ind AS 101. An explanation of how the transition to Ind AS has affected the Companyâs financial position, financial performance and cash flows is provided in Note 46 of the financial statement.
ii. Historical cost convention
The financial statements have been prepared on a historical cost basis, except the following:
- Certain financial assets and liabilities that are measured at fair value;
- Defined benefit plans - plan assets measured at fair value.
iii. Functional and presentation currency
These financial statements are presented in Indian Rupees, which is the Companyâs functional currency, and all values are rounded to the nearest lakhs, except otherwise indicated.
3.1 USE OF JUDGEMENTS. ESTIMATES AND ASSUMPTIONS
The preparation of the Companyâs separate financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the separate financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
a. Determination of the estimated useful life of tangible assets
Useful life of tangible assets is based on the life prescribed in Schedule II of the Companies Act, 2013. In cases, where the useful life are different from that prescribed in Schedule II, they are based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers warranties and maintenance support.
b. Defined benefit plans (gratuity benefits)
A liability in respect of defined benefit plans is recognized in the balance sheet, and is measured as the present value of the defined benefit obligation at the reporting date less the fair value of the planâs assets. The present value of the defined benefit obligation is based on expected future payments which arise from the fund at the reporting date, calculated annually by independent actuaries. Consideration is given to expected future salary levels, experience of employee departures and periods of service.
c. Taxes
There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. Where the final tax outcome of these matters is different from the amounts initially recorded, such differences will impact the current and deferred tax provisions in the period in which the tax determination is made. The assessment of probability involves estimation of a number of factors including future taxable income.
d. Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
e. Provision against obsolete and slow-moving inventories
The Company reviews the condition of its inventories and makes provision against obsolete and slow-moving inventory items which are identified as no longer suitable for sale or use. Company estimates the net realizable value for such inventories based primarily on the latest invoice prices and current market conditions. The Company carries out an inventory review at each balance sheet date and makes provision against obsolete and slow-moving items. The Company reassesses the estimation on each balance sheet date.
f. Impairment of financial assets
The Company assesses impairment based on expected credit losses (ECL) model on trade receivables. The Company uses a provision matrix to determine impairment loss allowance on the portfolio of 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. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analyzed.
g. Impairment of non- financial assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the assetâs recoverable amount. An assetâs recoverable amount is the higher of an assetâs fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre- tax discount rate that reflects current market assessment of the time value of money and the risk specific to the asset. In determining fair value less cost of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used.
These calculations are corroborated by valuation multiples, quoted share price for publicly traded subsidiaries or other available fair value indicators.
h. Other Provisions
Significant estimates are involved in the determination of provisions. Legal proceedings often involve complex legal issues and are subject to substantial uncertainties. Accordingly, considerable judgment is part of determining whether it is probable that there is a present obligation as a result of a past event at the end of the reporting period, whether it is probable that such a Legal Proceeding will result in an outflow of resources and whether the amount of the obligation can be reliably estimated.
4. The list of standards issued but not yet notified as on 31st March 2018:
Ind AS 115. Revenue from contracts with Customers
On 28th March, 2018, Ministry of Corporate Affairs (MCA), has notified the Ind AS 115, Revenue from contracts with Customers. The core principal of new standard is that an Entity should recognise the revenue to depict the transfer of promised goods or services to Customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. Further, the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flow arising from the entityâs contracts with customers. The effective date for adoption of Ind AS 115 is financial period beginning on or after 1st April, 2018. The Company will adopt the standard on 1st April, 2018 using cumulative catchup transition method and accordingly comparative for the year ending or ended 31st March, 2018 will not be retrospectively adjusted. The effect on adoption of Ind AS 115 on the operation of the Company is not likely to be material.
Notes:
(i) The Company has adopted Previous GAAP as the deemed cost as per the exemption under Ind AS 101. Accordingly, the company has set the Net Block as per Previous GAAP as on April 1, 2016 as the Gross Block under Ind AS.
(ii) Assets pledge as security :
The free hold Land and Buildings except free hold land acquired during the year amounting to Rs. 93.23 Lakhs, all movable Plant and Machineries and other assets are pledge as security on pari passu basis to the bankers under a mortgage. The Company is not allowed to sell these assets to other entity.
(iii) Borrowing cost capitalized during the year amounts to Rs. 307.60 Lakhs.
(iii) The rights. preferences and restrictions attaching to each class of shares :
Equity shares with voting rights :
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 any remaining assets of the company, after distribution of all preferential amounts and repayment towards Preference share holders, if any.
*The Company Utkarsh Global Holdings Private Limited has amalgated with Anshul Speciality Molecules Private Limited vide Court order dated 23 rd August 2017, and thereby the Share Holding in the Company has also been transferred.
(v) Details of Shares bought back by the company in the immediately preceding five years from the date of Balance sheet
The Company has bought back 2,86,471 shares. The details of the same is as under:
(i) Nature of security:
The above Term loans/capex loans are secured by first charge by way of hypothecation of all the movable machinery financed or to be financed under the said term/capex loans by the respective banks. The above loans are further secured by first charge by way of an equitable mortgage on the whole of the immovable assets of the Company, both present and future, on pari passu basis. They are further secured by second charge by way of hypothecation over entire current assets including stock and book debts with current charge holders on pari passu basis. The Corporate working capital term loans are secured by way of pari passu first hypothecation charge over entire current assets of the company, present and future, ranking pari passu with other term lenders.
(iii) Deposits from members are repayable within a period of 2-3 years from the date of acceptance. The interest rate for the same ranges from 9.00% to 10.52 %
(iv) Deposits from members includes deposits from related parties amounting to As at 31 March 2018: Rs. 38.60 Lakhs (As at 31 March 2017: Rs. 28.36 Lakhs and As at 1 April 2016: Rs. 10.61 Lakhs)
(v) Intercorporate Deposits and unsecured Loan from Related Parties aggregating to Rs. 345.00 Lakhs (As at 31 March 2017 Rs. 160.00 Lakhs and 1st April, 2016 Rs. 175.00 Lakhs) are repayable within a period of 1-2 years. The interest rate for the same ranges from 8.75% to 11.25%.
(i) The above cash/Export credit facilities, short term loan, Buyers credit and Bills discounting from Consortium bankers i.e. State Bank of India, Axis Bank Limited, Bank of Baroda and IDBI Bank Limited are secured by first charge by way of hypothecation of stocks of raw materials, packing materials, consumable stores, finished goods, semi-finished goods and book debts of the company, on pari passu basis. The aforesaid credit facilities are further secured by way of charge on the all fixed assets of the company ranking second and subservient for the charges created in respect of borrowings obtained from them. The interest rate for the same ranges from 10.45 % to 13.50 %.
(ii) The Interest rate for unsecured short term loan and deposit from director is 9.90%.
(iii) The Interest rate for short term unsecured Deposits from members is 10.00% to 10.38%.
Note: With effect from 1st July, 2017 Goods and Services Tax (GST) was introduced and hence the revenue from operations for period 1st July 2017 to 31st March 2018 is net of GST. However, the revenue from operations for the period of 1st April 2017 to 30th June 2017 includes excise duty recovered on sales of Rs. 243.33 Lakhs and year ended 31st March 2017 includes excise duty recovered on sales of Rs. 1,112.26 Lakhs
5 Earnings per share (EPS)
Basic EPS amounts are calculated by dividing the profit for the year attributable to equity Share holders of the Company by the weighted average number of Equity shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit attributable to equity share holders of the Company by the weighted average number of Equity shares outstanding during the year.
6 Employee benefits
(a) Defined benefit plan:
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded. The following tables summaries the components of net benefit expense recognized in the Statement of profit and loss and the funded status and amounts recognized in the balance sheet for the gratuity plan.
Risks associated with defined benefit plan
Interest rate risk: A fall in the discount rate which is linked to the Government securities rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the planâs liability.
Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.
Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.
Characteristics of defined benefit plans
During the year, there were no plan amendments, curtailments and settlements.
The following table sets out the status of the gratuity plan and the amounts recognised in the Companyâs financial statements as at March 31, 2018. (â in lakhs)
Note 1: Discount rate is determined by reference to market yields at the balance sheet date on Government bonds, where the currency and terms of the Government bonds are consistent with the currency and estimated terms for the benefit obligation.
Note 2: The estimate of future salary increase takes into account inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.
Note 3: 100% of the plan assets are invested in group gratuity scheme offered by LIC of India.
The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
The sensitivity analysis presented above may not be representative of the actual change in the projected 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 projected benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the projected benefit obligation as recognised in the balance sheet.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
Based on the actuarial valuation obtained in this respect, the following table sets out the status of the gratuity plan and the amounts recognised in the Companyâs financial statements as at balance sheet date:
(b) Other long term Benefit:
The Companyâs Long Term benefits includes Leave Encashment payable at the time of retirement subject to, policy of maximum leave accumulation of company. The scheme is not funded.
7 Disclosures under Indian Accounting Standards
(A) Segment Information
The segment information is presented under the Notes forming part of the Consolidated Financial Statements as required under the Ind AS - 108 on âOperating Segmentâ.
(B) Operating Lease:
The Company has cancellable operating leasing arrangements related to office premises and equipments which are renewable by mutual consent and lease rentals payable are accordingly charged as rent. During the period, the Company has taken office premises under cancelable operating lease; the rentals for which are charged to the Statement of Profit and Loss for the period. The lease term is for 11 months for office premises and lease term for equipments range from one to three years and there are no sub-leases.
(v) Other Commitment with Related Party:
(a) The company has commitment to pay Rs. 6.00 Lakhs Per Month (subject to indexation) to Mr. Atul G. Shroff (Director) during his lifetime and thereafter Rs. 3.00 Lakhs Per Month to his spouse during her lifetime.
(b) The Company has entered into an agreement with TML Industries Limited whereby the company has to pay fixed amount of Rs. 60.00 Lakhs on monthly basis against the entire facility reserved by the above related party exclusively for the company for carrying manufacturing activities of its products.
8 Other Disclosures :
(A) Disclosures related to the Micro, Small and Medium Enterprises.
Based on the information available with the company, the company has identified Micro, Small and Medium enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006.The Company has made payments of dues to Micro, Small and Medium enterprises, generally within stipulated period of 45 days as prescribed under Micro, small and Medium Enterprises Development Act, 2006.
(a) Capital Expenditure incurred during the year on Research and Development Rs. 113.18 lakhs ( Previous Year Rs. 77.00 lakhs).
(b) The Company has been granted revised approval from 1st April 2016 to 31st March,2019 for claiming deduction u/s 35 (2AB) of the Income Tax Act, 1961. Accordingly, the company has considered weighted deduction u/s 35 (2AB) while computing the tax liability under the Income Tax Act, 1961.
(C) As per section 135 of the Companies Act, 2013, a CSR committee has been formed by the company. The areas for CSR activities are promoting education, art and culture, healthcare, destitute care and rehabilitation and rural development projects as specified in Schedule VII of the Companies Act, 2013.The details of amount required to be spent and actual expenses spent during the year is as under:
(a) Gross amount required to be spent by the company during the year: Rs. 63.11 lakhs (Previous Year Rs. 46.38 lakhs)
(b) Amount spent during the year on:
(c) Out of the above, Rs. 62.06 lakhs (Previous Year Rs. 33.29 lakhs) has been paid to Shroffs Foundation Trust towards Financial Assistance for operating mobile medical units and household sanitation programme.
(D) Donation includes donation made to Bhartiya Janata Party (Political party) Rs. 25.00 Lakhs PY (Nil)
(E) Disclosure as per section 186 (4) of Companies Act, 2013
The Company has made advances of Rs. 0.18 lakhs (Previous Year Rs. 23.00 lakhs) to its wholly owned foreign subsidiary Transpek Industry (Europe) Limited. The said advances is utilized by Transpek Industry (Europe) Limited to meet out its overall expenditure.
(i) Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognized and measured at fair value and (b) measured at amortized cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
There are no transfers between levels 1 and 2 during the year.
The Companyâs policy is to recognise transfers into and transfers out of fair value hierarchy levels at the end of the reporting period.
(ii) Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
- the use of quoted market prices or dealer quotes for similar instruments
- the fair value of the remaining financial instruments is determined using discounted analysis.
All of the resulting fair value estimates are included in level 1 or 2 except for unlisted equity securities where the fair values have been determined based on present values and the discount rates used were adjusted for counter party or own credit risk.
The carrying amounts of trade receivables, electricity deposit, employee advances, cash and cash equivalents and other short term receivables, trade payables, unclaimed dividend, borrowings, capital creditors and other current financial liabilities are considered to be the same as their fair values, due to their short-term nature.
9 FINANCIAL RISK MANAGEMENT
The companyâs activities expose it to market risk, liquidity risk and credit risk.
This note explains the sources of risk which the entity is exposed to and how the entity manages the risk.
The Companyâs board of directors has overall responsibility for the establishment and oversight of the Companyâs risk management framework. The board of directors has established the Risk Management Committee, which is responsible for developing and monitoring the Companyâs risk management policies. The committee reports to the board of directors on its activities.
The Companyâs 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 periodically to reflect changes in market conditions and the Companyâs activities. The Company, through its training, standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
The audit committee oversees how management monitors compliance with the companyâs risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.
(A) Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers and investment securities. Credit risk is managed through credit approvals, 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 incurred losses in respect of trade and other receivables and investments.
(i) Trade receivables
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, 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 also has credit insurance and ECGC for export supplier. In addition to above, there are no major delay in payment receipt from the trade receivables.
The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortized cost. For trade receivables, the Company applies the simplified approach permitted by Ind AS 109 Financial Instrument, which requires expected lifetime losses to be recognized from initial recognition of the receivables. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Company considers reasonable and relevant information that is available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Companyâs historical experience and informed credit assessment and including forward looking information.
Following table represent allowance for doubtful debts with the trade receivables over the years:
(iii) Cash and cash equivalents
As at the year end, the Company held cash and cash equivalents of Rs. 56.59 Lakhs (31.03.2017 Rs. 37.17 Lakhs, 01.04.2016 - Rs. 174.55 Lakhs). The cash and cash equivalents are held with bank and financial institution counterparties with good credit rating.
(iv) Loans and advances
In the case of loans to employees, the same is managed by establishing limits. (Which in turn based on the employees salaries and number of years of service put in by the concern employee)
(v) Derivatives
The derivatives are entered into with scheduled banks which have good credit ratings.
(vi) Other Financials Assets
Others Financial Assets are considered to be of good quality and there is no significant increase in credit risk.
(B) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation.
Maturities of financial liabilities
The tables herewith analyse the Companyâs financial liabilities into relevant maturity groupings based on their contractual maturities for:
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
(C) Market risk
Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Companyâs income or the value of its holdings of financial instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. We are exposed to market risk primarily related to foreign exchange rate risk. Thus, our exposure to market risk is a function of revenue generating and operating activities in foreign currency. The objective of market risk management is to avoid excessive exposure in our foreign currency revenues and costs. The Company uses derivative to manage market risk. Generally, the Company seeks to apply hedge accounting to manage volatility in profit or loss.
Currency risk
The Company is exposed to currency risk on account of its operations in other countries. The functional currency of the Company is Indian Rupee. The exchange rate between the Indian rupee and foreign currencies has changed substantially in recent periods and may continue to fluctuate substantially in the future. Consequently, the Company uses both derivative instruments, i.e, foreign exchange forward contracts to mitigate the risk of changes in foreign currency exchange rates in respect of its highly probable forecasted transactions and recognized assets and liabilities.
The company enters into foreign currency forward contracts which are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency required or available at the settlement date of certain payables/receivables.
(D) CAPITAL MANAGEMENT
For the purpose of Companyâs Capital Management, equity includes equity share capital and all other equity reserves attributable to the equity holders of the Company. The Company manages its capital to optimise returns to the share holders and make adjustments to it in light of changes in economic conditions or its business requirements. The Companyâs objective is to safe guard continuity, maintain a strong credit rating and healthy capital ratios in order to support its business and provide adequate return to share holders through continuing growth and maximise the shareholders value. The Company funds its operations through internal accruals and long term borrowings competitive rate. The Management and Board of Directors monitor the return of capital as well as the level of dividend to share holders.
10 Disclosure as required by Ind AS 101 first time adoption of Indian Accounting Standards A Transition to Ind AS:
These are the Companyâs first Standalone Financial Statements prepared in accordance with Ind AS.
The accounting standards notified u/s 133 of the Companies Act, 2013 and the Accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended March 31, 2018, the comparative information presented in these financial statements for the year ended March 31, 2017 and in the preparation of an opening Ind AS balance sheet at April 1, 2016 (The Companyâs date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP).
An explanation of how the transition from previous GAAP to Ind AS has affected the Companyâs financial position, financial performance and cash flows is set out in the following tables and notes.
A.1 Explanation of transition to Ind AS
In preparing the financial statement, the Company has applied the below mentioned optional exemptions and mandatory exceptions.
A.1.1 Ind AS optional exemptions
Ind AS 101 permits a first time adopter to elect to continue with the carrying value for all of its Property, Plant and Equipment (PPE) as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets. Accordingly, the Company has elected to measure all of its PPE ,Intangible assets at their previous GAAP at its carrying value.
A.1.2 Designation of previously recognized financial instruments
Ind AS 101 allows an entity to designate investments in equity instruments at Fair Value through Other Comprehensive Income (FVOCI) on the basis of the facts and circumstances at the date of transition to Ind AS. The Company has elected to apply this exemption for its investment in equity investments.
A.1.3 Investments in subsidiary
If a first time adopter measures investments in subsidiary, joint venture or associate at cost in accordance with Ind AS 27, Ind AS 101 allows the entity to measure such investments at one of the following amounts in its separate opening Ind AS Balance Sheet (a) Cost determined in accordance with Ind AS 27; or (b) Deemed cost. The deemed cost of such an investment shall be its:(i) fair value at the entityâs date of transition to Ind ASs in its separate financial statements; or (ii) previous GAAP carrying amount at that date. The above options can be selected each investment wise. Accordingly the Company has elected to measure investment in its subsidiary at their previous GAAP carrying value.
A.2 Ind AS Mandatory Exceptions A.2.1 Estimates
An entityâs estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at April 1, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:
- Investment in equity instruments carried at FVOCI.
A.2.2 De-recognition of financial assets and liabilities
Ind AS 101 requires a first time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first time adopter to apply the derecognition requirements in Ind AS 109 retrospectively from a date of the entityâs choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognized as a result of past transactions was obtained at the time of initially accounting for those transactions. The Company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.
A.2.3 Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
C Notes to reconciliations:-
1 Stores and Spares and Capital Work in Progress (CWIP)
Under Indian GAAP machinery spares that are specific to a particular property, plant and equipment (PPE) are capitalised to the cost of the PPE. Spares acquired subsequently are charged to the Statement of Profit and Loss. Under Ind AS, spares with a useful life of more than one year shall be treated as PPE and depreciated from the date they are ready to use over the useful life of the spare part. Hence, spares which were erstwhile treated as inventory under IGAAP shall now be classified as part of PPE if recognition criteria are met and hence resulting into increase in carrying amount of PPE by Rs. 3.30 lakhs as at 31 March, 2017 and by Rs. 5.37 Lakhs as at 1 April, 2016 and simultaneously decrease in Carrying amount of Inventory of stores and spares.
2 Investments at Fair value through Other Comprehensive Income
Under the previous GAAP, the application of the relevant accounting standard resulted in all these investments being carried at cost less diminution in the value which is other then temporary. In accordance with Ind AS, financial assets representing investment in equity shares of entities have been fair valued. The company has designated investments as at fair value through other comprehensive income as permitted by Ind AS 109 resulting in increase in carrying amount by Rs. 12,549.64 lakhs as at 31 March, 2017 and by Rs. 8955.09 lakhs as at 1 April, 2016. The Corresponding deferred taxes have also been recognised as at 31 March, 2017 (Rs.2,684.97 lakhs) and as at 1 April, 2016 (Rs. 1,922.49 lakhs).
3 Loss allowance
On transition to Ind AS, the company has recognised impairment loss on trade receivables based on the expected credit loss model as required by Ind AS 109. Consequently, trade receivables have been reduced with a corresponding decrease in retained earnings on the date of transition and there has been an incremental provision for the year ended 31 March, 2017 resulting in decreased in carrying amount by Rs.9.40 lakhs as at 31 March, 2017 and by Rs.8.04 lakhs as at 1 April, 2016.
4 Derivative Contracts
Under Ind AS, all derivative contracts are required to be measured at fair value through profit or loss at each reporting period end. The Company has measured its outstanding derivative contracts at fair value through profit or loss and accordingly recognised a gain of Rs.3.12 lakhs and Rs.10.92 lakhs as on 31 March, 2017 and 1 April, 2016 respectively.
5 Retained Earnings
Retained earnings as at April 1, 2016 has been adjusted consequent to the above Ind AS adjustments.
6 Borrowing
Under Previous GAAP, transaction costs incurred in connection with borrowings were charged to statement of profit and loss account. Under Ind AS, borrowings are recorded initially at fair value less transaction costs and are subsequently measured at amortise cost as per Effecive Interest Rate (EIR) method.
7 Deferred Tax
Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind-AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind-AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP
8 Provision for Dividend
Under previous GAAP proposed dividend including tax thereon, were recognised as liability in the period in which they relate, as the same was cosidered as an adjusting event. Under Ind AS, proposed dividend is recognised as a liability in the period in which it is authorised.
9 Actuarial Gain/ Loss
Under the previous GAAP actuarial gains and losses were recognised in Statement of Profit and Loss. Under Ind AS, the actuarial gains and losses form part of remeasurement of the net defined benefit of liability / asset which is recognised in Other Comprehensive Income. Consequently, the tax effect of the same has also been recognised in Other Comprehensive Income under I nd AS instead of Profit and Loss.
10 Other Comprehensive Income
Under Ind AS, all items of income and expense recognized in a period should be included in Statement of Profit and Loss for the period, unless a standard requires or permits otherwise. Items of income and expenes that are not recognized in Statement of Profit and Loss but are shown in the Statement of Profit and Loss as âOther Comprehensive Incomeâ, includes remeasurement of Employee Benefit obligation and fair valuation of Equity Instruments through OCI and Income tax relating to these items. The concept did not exist under the previous GAAP
11 Events after the reporting period
Dividend would attract Dividend Distribution Tax when declared or paid. This proposed dividend is subject to the approval of shareholders in the ensuing annual general meeting and are not recognised as liability (including DDT thereon) as at March 31, 2018.
12 The standalone financial statements were authorized for issue in accordance with a resolution passed by the Board of Directors on 23rd May, 2018. The financial statements as approved by the Board of Directors are subject to final approval by its Shareholders.
13 The figures as on the transition date and previous year have been re-arranged and regrouped wherever necessary to make them comparable with those of the current year.
The accompanying notes (1 to 49) are an integral part of the financial statements.
Mar 31, 2015
1. Nature of Operations
Transpek Industry Limited ('TIL', 'the Company') is into the
manufacturing and export of a range of chemicals servicing the
requirements of customers from a diverse range of industries -
Textiles, Pharmaceuticals, Agrochemicals, advanced Polymers, etc.
Note no 2 (A) : The rights, preferences and restrictions attaching to
each class of shares :
Equity shares with voting rights :
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 any remaining assets of the company, after
distribution of all preferential amounts and repayment towards
Preference share holders, if any.
Note no 3 (B) : Details of Shares held by each Share Holder Holding
more than 5% Shares.
(i) Nature of security:
The above Term loans/capex loans are secured by first charge by way of
hypothecation of all the movable machinery financed or to be financed
under the said term/capex loans by the respective banks. The above
loans are further secured by first charge by way of an equitable
mortgage on the whole of the immovable assets of the Company, both
present and future, on pari passu basis. They are further secured by
second charge by way of hypothecation over entire current assets
including stock and book debts with current charge holders on pari
passu basis. The Corporate Working capital Term loans are secured by
way of pari passu first hypothecation charge over entire current assets
of the company, present and future, ranking pari passu with other term
lenders.
(iii) Deposits aggregating to Rs. 1361.87 Lacs are accepted from members
and are repayable within a period of next 2 to 3 years. The interest
rate for the same ranges from 10.00% to 10.50 %
(iv) Public deposits includes deposits from related parties amounting
to Rs. 4.50 Lacs /- (PY Rs. 2.21 Lacs)
(v) As required u/s 73(5) of the companies Act 2013 and the rules made
thereunder, the company has deposited on 4 May, 2015 an amount of Rs.
80 Lacs to the Deposit Repayment Reserve Account with the scheduled
bank.
(vi) Inter Corporate Deposits and unsecured Loan from Related Parties
aggregating to Rs. 225.00 Lacs are repayable after three years. The
company has accepted the above loans as per stipulation of banks. The
rate of interest is 12.00 %.
Note:
(i) The above cash/Export credit facilities, short term loan and Buyers
credit from Consortium bankers i.e. State Bank of India, Axis Bank
Limited, Bank of Baroda and IDBI Bank Limited are secured by first
charge by way of hypothecation of stocks of raw materials, packing
materials, consumable stores, finished goods, semi-finished goods and
book debts of the company, on pari passu basis. The aforesaid credit
facilities are further secured by way of charge on the whole of the
fixed assets of the company ranking second and subservient for the
charges created in respect of borrowings obtained from them. The
interest rate for the same ranges from 10.25 % to 13.50 %.
(ii) The Interest rate for short term unsecured public deposits is
10.00%.
(iii) Public deposits includes deposits from related parties amounting
to Rs. Nil (PY Rs. 0.61 Lacs).
(*) Notes :
(a) Includes Fixed deposits with Banks of Rs. Nil/- (PY Rs. 76.50 Lacs)
having maturity of more than 12 months.
(b) Fixed Deposits pledged with government authorities Rs. 1.05 Lacs (
Previous year Rs. 0.89 Lacs)
Note No. : 4 Additional information to the financial statements
(A) Contingent Liabilities and Commitments (to the extent not provided
for)
Particulars Year ended Year ended
31st March, 2015 31st March, 2014
Rs in Lacs Rs in Lacs
(a) Contingent Liabilities
(i) Claims against the company
not acknowledged as debts
(on account of outstanding
law suits) 264.25 264.25
(ii) Guarantees given by Banks to
third parties on behalf of the
company 26.15 40.83
(b) No provision has been made for
following demands raised by the
authorities since the company has reason
to believe that it would getrelief at the
appellate stage as the said demand are
excessive and erroneous
(i) Disputed Income tax Liability 165.78 205.55
- Against Which amount already paid Rs.
154.05 Lacs (PY Rs. 193.82 Lacs)
(ii) Disputed Sales tax Liability 39.51 39.51
(iii) Disputed Excise & Service
Tax Liability 589.52 372.53
- Against Which amount
already paid Rs. 12.02 lacs
(PY Rs. Nil Lacs)
Total 1085.21 922.67
(c) Commitments
(i) Estimated amount of contracts
remaining to be executed on capital
account & not provided for
- Tangible Assets 189.67 79.87
(ii) other Commitments - -
Total 189.67 79.87
*The above figures have been ascertained on the basis of opening stock
plus purchases less closing stock and therefore include the adjustments
of excesses and shortages ascertained on physical count, write off of
unserviceable items etc.
Above values of Raw Material consumed includes cost of Raw material
sold Rs. 3.31 lacs (Previous Year : Rs. 51.51 Lacs).
Note no. : 5 Disclosures under Accounting Standards as notified under
section 133 of the Companies Act, 2013 read with rule 7 of the
Companies (Accounts) Rules, 2014
(A) Disclosure as per Accounting Standard -13(Accounting for
Investments)
(a) The Company has an investment in equity shares of Excel Industries
Limited amounting to Rs. 226.76 lacs. In respect of this investment, the
Company had, in the earlier years, recognized a diminution in the value
of investment amounting to Rs. 88.63 lacs. The market value of this
investment at March 31,2015 is Rs. 445.20 lacs (Previous Year Rs.108.08
lacs). In view of substantial increase in market value of equity shares
of Excel Industries Limited, the company has reversed the entire
provision for diminution in the value of investment made in the earlier
year.
(b) As detailed in note 30(F), the company had provided for diminution
in shares of Sam Fine O Chem Limited in June 2014.
(B) Disclosure as per Accounting Standard -15 (Employee Benefits)
(a) Gratuity plan:
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of service gets a gratuity on departure at
15 days salary (last drawn salary) for each completed year of service.
The scheme is funded. The following tables summaries the components of
net benefit expense recognized in the profit and loss account and the
funded status and amounts recognized in the balance sheet for the
gratuity plan.
The Company expects to contribute Rs. 202.51 lacs (FI Y 71.35 lacs) to
gratuity in 2015-16
The overall expected rate of return on assets is determined based on
the market prices prevailing on that date, applicable to the period
over which the obligation is to be settled.
The estimates of future salary increases, considered in actuarial
valuation, take account of inflation, seniority, promotion and other
relevant factors, such as supply and demand in the employment market.
*In the absence of availability of relevant information, experience
adjustments on plan assets and liabilities have not been furnished
above.
(b) Other long term Benefit:
The Company's Long Term benefits included Leave Encashment payable at
the time of retirement subject policy of maximum leave accumulation of
company. The scheme is not Funded.
(C) Disclosure as per Accounting Standard - 17 (Segment Reporting)
Segment Information
As per para 4 of AS-17 "Segment Reporting", Segment information has
been disclosed in Consolidated Financial Statements.
(D) Disclosure as per Accounting Standard - 18 (Related Party
Disclosures)
(a) Names of related parties and description of relationship with whom
transactions have taken place:
Subsidiary Companies Transpek Industry (Europe) Limited
Sam Fine O Chem Limited ( Upto 3rd
January 2015 )
Enterprises owned or
significantly Excel Industries Limited
influenced by Key
Managerial Excel Crop Care Limited
Personnel or their
relatives TML Industries Limited
Shroffs Engineering Limited Anshul Specialty Molecules Limited Anshul
Life Science Madison Investments Private Limited Agrocel Industries
Limited Transchem Agritech Limited Hyderabad Chemical Products Limited
Kamaljyot Investments Limited Shroffs Foundation Trust C.C. Shroff
Research Institute
Key Managerial Personnel
Atul G. Shroff (Managing Director)
Bimal V. Mehta (Executive Director)
Relatives of Key Managerial Personnel
Ashwin C. Shroff
Dipesh K. Shroff
Vishwa A. Shroff
Shruti A. Shroff
Chaitanya D. Shroff
Ravi A. Shroff
Kumud V. Mehta
(b) Transactions with related parties for the year ended March 31, 2015
are as follows: (Previous Year's figures are shown in brackets)
(E) Disclosures under Accounting Standard 19 (Leases)
The Company has cancelable operating leasing arrangements relate to
office premises and equipments which are renewable by mutual consent
and lease rentals payable are accordingly charged as rent. During the
period, the Company has taken office premises under cancelable
operating lease; the rentals for which are charged to the Profit and
Loss statements for the period. The lease term is for 11 months for
office premises and lease term for equipments range from one to three
years and there are no sub-leases.
Note No. 6 Other Disclosures :
(A) Disclosures required under Section 22 of the Micro, Small and
Medium Enterprises Development Act, 2006.
The amount of trade payables includes Rs. 191.76 lacs(PY Rs. 139.30 Lacs)
outstanding to Micro, Small and Medium enterprises as defined under
Micro, Small and Medium Enterprises Development Act, 2006 based on the
information available with the company. The amount of interest payable
to such parties is not significant and the company is of the opinion
that such Interest will be provided as and when it is demanded by the
respective parties.
(B) Research and Development costs ( as certified by the management)
debited to the profit and loss account are as under:
(a) Capital Expenditure incurred during the year on Research and
Development Rs.50.38 Lacs (Previous Year Rs. 81.99 Lacs).
(b) The Company has been granted approval upto 31st March, 2016 for
claiming deduction u/s 35 (2AB) of the Income Tax Act,1961. Thus, the
company has considered weighted deduction u/s 35 (2AB) while computing
the tax liability under the Income Tax Act, 1961.
(C) Details of foreign currency exposures as at balance sheet date:
(i) Derivative Instruments and hedged foreign currency exposures.
Note: Figures in bracket relate to the previous year.
(E) In the past the Company was eligible for a Sales tax incentive
scheme amounting to Rs. 1084.03 lacs (Previous Year Rs. 1084.03 lacs). Post
completion of such incentive scheme, the Company has re-paid the amount
of Sales tax deferred during the period the scheme was in force, and
has applied to the Sales tax Department for a No dues certificate.
Pending reconciliation of the amount with sales tax department, the
balance of Rs. 49.61 lacs (Previous Year Rs. 49.61 lacs) has been included
in other current liabilities.
(F) The company had made total investment of Rs. 876.57 lacs in Equity
Shares of Sam Fine O Chem Limited (earlier called Sam Fine Chem Ltd)
(hereinafter referred to as "Sam") in the year 2010-11. The company had
in the year 2012-13 also invested Rs. 334.00 lacs in Preference shares of
Sam. Pursuant to the above agreement, the said preference shares held
in Sam were also divested and the entire investment of Rs. 334 lacs
recovered there against. Since the performance of Sam was not as
expected, in respect of this investment, the company had in the
previous years, recognized a diminution in value of Investment
amounting to Rs. 705.00 lacs. A further diminution of Rs. 168.65 lacs was
provided on 30th June 2014 on the said investment. In the current year,
Pursuant to the agreement dated 2nd September, 2014, the Company
divested its entire holding of 2,92,919 Equity shares of Rs. 10/- each in
Sam Fine O Chem Limited to the other shareholders at a nominal
consideration of Rs. 1/- per share i.e at Rs. 2,92,919/-. A diminution,
loss of Rs. 168.65 lacs was already provided in June 2014. The ensuing
loss has been charged to the statement of profit and loss.
"In addition to above, the Company has also recovered consideration of
Rs. 525.29 lacs as against total receivables of Rs. 744.02 lacs from Sam
Fine O Chem Ltd. As a result, the difference of Rs. 218.73 lacs is
charged as bad debts to the statement of profit & loss for the year
ended 31st March, 2015."
(G) "As per Section 135 of the Companies Act, 2013, a CSR committee has
been formed by the company. The areas for CSR activities are promoting
education, art and culture, healthcare, destitute care and
rehabilitation and rural development projects as specified in Schedule
VII of the Companies Act, 2013.As against an obligation to spend Rs. 4.98
lacs for CSR Activities, the company has spent Rs.7.18 Lacs towards CSR
activities for Promoting health care, Education and ensuring
environmental sustainability."
(H) Provision for Taxation includes provision for Wealth Tax amounting
to Rs. 1.55 lacs (Previous Year Rs. 1.33 lacs)
(I) Donation includes Donation made to Bhartiya Janata Party (Political
Party) Rs.20.00Lacs (Previous Year Rs. NIL)
(J) "Disclosure as per section 186 (4) of Companies Act, 2013
The Company has made advances of Rs. 2.85 lacs to its wholly own foreign
subsidiary Transpek industry (Europe) Limited. The said advances is
utilized by Transpek industry (Europe) Limited to meet out its overall
expenditure. "
(K) Remuneration of Rs.25.83 Lacs to the managing director is subject to
approval of the Central Government.
(L) "As on 31st March 2015, the company had one subsidiary viz.
Transpek Industry (Europe) Limited which is incorporated outside India.
In view of the 4th proviso to section 129(3) of the Companies Act,
2013, the company is not required to prepare and present Consolidated
Financial Statements for the financial year 2014-15. However, as
required by clause 41 of the Listing agreement, the company has
prepared Consolidated Financial Statements."
Note No.: 7 Previous Year's Figures
Previous year's figures have been regrouped wherever necessary to
correspond with the current year's disclosure.
Mar 31, 2014
1. Nature of Operations
Transpek Industry Limited (''TIL'', ''the Company'') is into the
manufacturing and export of a range of chemicals servicing the
requirements of customers from a diverse range of industries -
Textiles, Pharmaceuticals, Agrochemicals, advanced Polymers, etc.
Note No. : 2 Additional information to the financial statements
(A) Contingent Liabilities and Commitments (to the extent not provided
for).
Rs. in Lacs
Particulars Year Year
ended 31st ended 31st
March, 2014 March, 2013
(a) Contingent Liabilities
(i) Claims against the company not
acknowledged as debts (mainly on
account of outstanding law suits) 264.25 264.25
(ii) Guarantees given by Banks to third
parties on behalf of the company 40.83 17.97
(b) No provision has been made for following demands raised by the
authorities since the company has reason to believe that it would get
relief at the appellate stage as the said demand are excessive and
erroneous
(i) Disputed Income tax Liability 205.55 213.22
- Against Which amount already paid Rs. 193.82 Lacs ( P.Y Rs. 189.57 Lacs )
(ii) Disputed Sales tax Liability 39.51 34.11
(iii) Disputed Excise & Service Tax Liability 372.53 0.00
Total 922.67 529.55
*The above figures have been ascertained on the basis of opening stock
plus purchases less closing stock and therefore include the adjustments
of excesses and shortages ascertained on physical count, write off of
unserviceable items etc.
Above values of Raw Material consumed includes cost of Raw material
sold Rs.51.51 lacs (Previous Year : Rs.149.12 Lacs).
Note No. : 3 Disclosures under Accounting Standards as notified under
the Companies (Accounting Standard) Rules, 2006
(A) Disclosure as per Accounting Standard -13(Accounting for
Investments)
(a) The Company has an investment in equity shares of Excel Industries
Limited amounting to Rs. 226.76 lacs. In respect of this investment, the
Company had, in the earlier years, recognized a diminution in the value
of investment amounting to Rs. 88.63 lacs. The market value of this
investment at March 31, 2014 is Rs. 108.08 lacs.(Previous Year Rs.93.99
lacs) In view of the long-term nature of this investment and having
regard to the book value of the equity shares, the management does not
consider provision for any further diminution in the carrying value of
this investment, as at March 31, 2014.
(b) The Company has an investment in equity shares of Sam Fine O Chem
limited amounting to Rs. 621.58 Lacs (net of diminution of Rs. 255.00 lacs
provided for in earlier year). The net worth of Sam Fine O Chem Limited
is completely eroded as on 31st March 2014 and accordingly, the company
has recognized further diminution in the value of investment amounting
to Rs. 450.00 Lacs during the year ended 31st March 2014. The
evaluation of the diminution involves usage of assumptions and
significant judgements based on valuation methodologies. (Refer note
no. 30(F))
(B) Disclosure as per Accounting Standard - 15 (Employee Benefits)
(a) Gratuity plan :
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of service gets a gratuity on departure at
15 days salary (last drawn salary) for each completed year of service.
The scheme is funded. The following tables summaries the components of
net benefit expense recognized in the profit and loss account and the
funded status and amounts recognized in the balance sheet for the
gratuity plan.
(C) Disclosure as per Accounting Standard - 17 (Segment Reporting)
Segment Information
As per para 4 of AS-17 "Segment Reporting", Segment information has
been disclosed in Consolidated Financial Accounts.
(D) Disclosure as per Accounting Standard - 18 (Related Party
Disclosures)
(a) Names of related parties and description of relationship:
Subsidiary Companies Transpek Industry (Europe) Limited
Sam Fine Chem Limited
Enterprises owned or significantly Excel Industries Limited influenced
by key management Excel Crop Care Limited personnel or their relatives
TML Industries Limited
Shroffs Engineering Limited Anshul Specialty Molecules Limited Anshul
Life Sciences
Madison Investments Private Limited Agrocel Industries Limited
Transchem Agritech Limited Hyderabad Chemical Products Limited
Kamaljyot Investments Limited Shroffs Foundation Trust C.C. Shroff
Research Institute
Key Management Personnel Atul G. Shroff (Managing Director)
Bimal V. Mehta (Executive Director)
Relatives of key management Ashwin C. Shroff
personnel Dipesh K. Shroff
Vishwa A. Shroff Shruti A. Shroff Chaitanya D. Shroff Ravi A. Shroff
Note No. 4 Other Disclosures :
(A) Disclosures required under Section 22 of the Micro, Small and
Medium Enterprises Development Act, 2006.
The amount of trade payables includes Rs. 139.30 lacs(P.Y. Rs. 105.63 Lacs)
outstanding to Micro, Small and Medium enterprises as defined under
Micro, Small and Medium Enterprises Development Act, 2006 based on the
information available with the company. The amount of interest payable
to such parties is not significant and the company is of the opinion
that such Interest will be provided as and when it is demanded by the
respective parties.
(a) Capital Expenditure incurred during the year on Research and
Development Rs. 81.99 Lacs (Previous Year Rs. 24.68 Lacs).
(b) The Company has been granted approval for claiming deduction u/s 35
(2AB) of the Income Tax Act,1961. Thus, the company has considered
weighted deduction u/s 35 (2AB) of the Income Tax Act, 1961.
(E) In the past the Company was eligible for a Sales tax incentive
scheme amounting to Rs. 1084.03 lacs (Previous Year Rs. 1084.03 lacs). Post
completion of such incentive scheme, the Company has re-paid the amount
of Sales tax deferred during the period the scheme was in force, and
has applied to the Sales tax Department for a No dues Certificate.
Pending reconciliation of the amount with sales tax department, the
balance of Rs. 49.61 lacs (Previous Year Rs. 49.61 lacs) has been included
in other current liabilities.
(F) Pursuant to Memorandum of Understanding (MOU), dated 16.03.2010 and
the Shareholders'' Agreement and Share Purchase-cum-Subscription
Agreement, both dated 20.11.2010, entered into between the company and
Sam Fine O Chem Limited., the company has acquired 2,92,919 number of
equity shares representing 50% of the total equity share capital of Sam
Fine Chem Limited (now known as Sam Fine O Chem Limited).
In terms of the aforesaid Agreements, the company also has an
irrevocable Call Option for a period of 5 years commencing from
20.11.2010 to increase its shareholding in the Sam Fine O Chem Limited
by purchasing from the Promoters such number of additional Equity
Shares so as to increase the shareholding percentage of the company by
additional 26% (twenty six per cent) of the Paid-up Capital of Sam Fine
O Chem Limited at a price to be determined in terms of the said
agreements.
Also, in terms of the aforesaid Agreements, the Promoters of the Sam
Fine Chem Ltd. have an irrevocable Put Option for a period of 5 (five)
years commencing from the date of exercise by the Company of its Call
Option to sell to the company all the Equity Shares then held by them
and their Affiliates in Sam Fine O Chem Limited at a price to be
determined in terms of the said Agreements.
(G) Provision for Taxation includes provision for Wealth Tax amounting
to Rs. 1.33 lacs (Previous Year Rs. 1.05 lacs).
(H) Donation includes Donation made to Bhartiya Janata Party (Political
Party) Rs. Nil (Previous Year Rs. 1.50 Lacs)
(I) The Ministry of Corporate Affairs, Govt. of India, vide General
Circular No. 2 & 3 dated 8th February, 2011 & 21st February, 2011,
respectively has granted a general exemption from compliances with
Section 212 of the Companies Act, 1956, subject to fulfillment of
conditions stipulated in the circulars. The Company has satisfied the
conditions stipulated in the circulars and hence it is entitled to the
exemptions. Necessary information relating to the subsidiaries has been
included in the consolidated Financial Statements.
Note No.: 5 Previous Year''s Figures
Previous year''s figures have been regrouped wherever necessary to
correspond with the current year''s disclosure.
Mar 31, 2013
NOTE NO. 1: CORPORATE INFORMATION
The Company was Incorporated on 11.02.1991 and Fresh Certificate of
Registration from Reserve Bank of India on 20.05.2004 as Non Banking
Finance Company (Not Accepting Public Deposits ).
At present the Company is engaged in the following activities.
(a) Non Banking Finance activities consisting of Investment activities
and funding activities.
2-A Contingent Liabilities & Commitments Particulars
(i) Contigent Liabilities
(a) Demand made by Income Tax Authority as follow, against which
company has preferred appeals.
Note No : 3 Disclosures under Accounting Standards as notified under
the Companies (Accounting Standards) Rules, 2006
(A) Disclosures under Accounting Standard - 15 (Employee Benefits)
Accounting Standard 15 on ''Employee Benefits'' as notified by Companies
(Accounting Standard) Rules 2006 has been adopted by the company
effective from April 1, 2007.
(a) Defined Contribution Plans:
The Company makes Provident Fund andcontributions to 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. The contributions payable to these plans by
the Company are at rates specified in the rules of the schemes. The
company has recognized the following amounts in the Profit and Loss
Account for the year.
(b) Defined Benefit Plans:
The Company has policy of giving gratuity to its employees who complete
period of qualifying service which is 5 years.
This amount is payable at time of death / retirement or at the time of
employee leaving the job after completion of qualifying period of
service. The company has formed a Gratuity Trust and taken policy from
Life Insurance Corporation of India (LIC) for managing their group
gratuity scheme. The company makes contribution to Life Insurance
Corporation of India at end of every year based on actuarial valuation
carried by them for which data is given by the company. Major
Assumptions made for determination of Defined Benefit Liability are as
under:
Note No. : 4 Other Disclosures
(a) Disclosures required under Section 22 of the Micro, Small and
Medium Enterprises Development Act, 2006.
The Company has made payments of dues to Micro, Small and Medium
enterprises generally within stipulated period of 45 days as prescribed
under Micro, small and Medium Enterprises Development Act. The Company
has not made any payment of interest nor provided interest payable if
any on dues to any supplier.
(b) Earning and expenditure in forein corrency - Rs. NIL.
(c) The Company is not to have afull time Company Secretary during the
year as required by Section 383A of the Companies Act, 1956, as per
notification dated 15.03.2009 of the Department of Company affairs. The
Compliance Report of the Practicing Company Secretary is obtained.
Note No. : 5 Previous year''s figures
(a) Previous year''s figures have been regrouped / reclassified wherever
necessary to correspond with the current year''s classification /
disclosure.
Mar 31, 2012
NOTE NO. 1: CORPORATE INFORMATION
The Company was Incorporated on 11.02.1991 and Fresh Certificate of
Registration from Reserve Bank of India on 20.05.2004 as Non Banking
Finance Company (Not Accepting Public Deposits). .
At present the Company is engaged in the following activities.
(a) Non Banking Finance activities consisting of Investment activities
and funding activities.
Note No.: 2 Other Disclosures as per Revised Schedule-VI Contingent
Liabilities & Commitments
Particulars
(i) Contingent Liabilities
(a) Demand made by Income Tax Authority as follow, against which
company has preferred appeals.
Assessment Year Demand
AY: 1997-98 (Interest Tax) 3,424,442 3,424,442
Advance paid against the demand 2,507,504 2,507,504
(A) Disclosures under Accounting Standard -15 (Employee Benefits)
Accounting Standard 15 on' Employee Benefits' as notified by Companies
(Accounting Standard) Rules 2006 has been adopted by the company
effective from April 1,2007.
(a) Defined Contribution Plans:
The Company makes Provident Fund and contributions to 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. The contributions payable to these plans by
the Company are at rates specified in the rules of the schemes. The
company has recognized the following amounts in the Profit and Loss
Account for the year.
Return on plan Assets are not recorded since no information made
available.
The company does not have any further information about fair value of
plan assets under the plan, accordingly disclosures related to Planned
assets and underlying assumptions has not been disclosed.
Note No.: 3 Other Disclosures
(a) Disclosures required under Section 22 of the Micro, Small and
Medium Enterprises Development Act, 2006.
The Company has made payments of dues to Micro, Small and Medium
enterprises generally within stipulated period of 45 days as prescribed
under Micro, small and Medium Enterprises Development Act. The Company
has not made any payment of interest nor provided interest payable if
any on dues to any supplier.
(b) Earning and expenditure in fore in currency - Rs. NIL.
(c) The Company is not to have a full time Company Secretary during the
year as required by Section 383A of the Companies Act, 1956, as per
notification dated 15.03.2009 of the Department of Company affairs. The
Compliance Report of the Practicing Company Secretary is obtained.
Note No.: 4 Previous year's figures
(a) The Revised Schedule VI has become effective from 1 April, 2011 for
the preparation of financial statements. This has significantly
impacted the disclosure and presentation made in the financial
statements. Previous year's figures have been regrouped / reclassified
wherever necessary to correspond with the current year's classification
/ disclosure.
Mar 31, 2011
(1) CONTINGENT LIABILITIES :
I. Disputed Interest Tax Demand in Appeal Rs.34.24 Lacs {Previous Year
25.08 Lacs) for which company is in appeal.
(2) In view of inadequate profits in current year, no commission is
payable to Directors. Hence, the computation u/s.349 read with Section
309 (5) and Section 198 of the Companies Act, 1956 is not given. The
fixed remuneration paid to the Managing Director & Executive Director
is, however, shown as per note no.3 above.
(3) There are no dues outstanding to Micro, Small and Medium
Enterprises as per the Micro, Small and Medium Enterprises Development
Act, 2006, for more than 45 days at the Balance Sheet date.The Micro,
Small and Medium Enterprises, if any, have been identified on the basis
of information available with the company.This has been relied upon by
the auditor.
(4) In accordance with "Accounting Standards 22""Accounting Taxes on
Income "issued by the Institute of Chartered Accountants of India, the
Company has unabsorbed losses and depreciation which gives rise to
Deferred Tax Asset (DTA). In the year in which the Deferred tax
liability would arise, the benefit of unabsorbed losses and
depreciation would be available to the Company.
(5) RELATED PARTY OISCLOUSERS
Disclosures of relationship and transactions with the related parties
as required by Accounting Standard 18 issued by the Institute of
Chartered Accountants of India are given below.
1. Relationships:
(a) Subsidiary of the Company:
Nil
(b) Associate:
Universal Esters Ltd.
Infinity Consultants Ltd.
Oneiro Chemicals Ltd.
(c) Related parties where control exist:
Torrential Investments Private Limited
(d) Key Management Personnel:
Mr.M.D.Patel
Mr. D. D. Patel
(e) Relatives of key management personnel and their enterprises where
transactions have taken place:
Nil
Note: Related party relationship is as identified by the company and
relied upon by the Auditors.
(6) Disclosure regarding Earnings per share (EPS)
The basic EPS is calculated as under:
Loss attributed to Equity Shareholders (Rs7,47,418/-)
No. of Equity shares (of Rs.10 each) 3572300
Earning per share Rs. (0.21)
(7) The appeal preferred by the company against the order of CIT (A),
Baroda before the Hon ITAT,Ahmedabad have been restored to the files of
A.O.The disputed liability of Interest Tax of Rs.25,07,504/- is fully
deposited. However,on fresh assessment demand of Rs.9,16,938 has been
raised against which an application u/s 154 of the Income Tax Act has
been preferred, which is pending.
In case of the Department Appeals for penalty for A.Y 1996-97
Rs.49,35,948/- the same has been decided in favour of the company by
Hon.lTAT, Ahmedabad.
(8) Information as required by accounting Standard 15 on "Employee
Benefit "as notified by Companies (Accounting Standard) Rules, 2006 is
as under.
b) Defined Benefit Plans:
The Company has policy of gratuity of its employees who complete period
of qualifying service which is 5 years. This amount is payable at the
time of death / retirement or at the time of employee leaving the job
after completion of qualifying period of service. The company has
formed a Gratuity Trust and taken policy from Life Insurance
Corporation of India for managing their group gratuity scheme. The
company makes
contribution to Life Corporation of India at end of every year based on
actuarial valuation carried by them for which data is given by the
company. Accordingly, contribution made by the company of Rs. 22020/-
is charged to Profit and Loss account.
The company does not have any further information about fair value of
plan assets under the plan, accordingly disclosures related to planned
assets and underlying assumptions has not been disclosed.
c) As per the requirement of AS -15 "Employee Benefit", the Company has
made provision of Leave Encashment of its employees during the year for
the leave up to last year and of the current year. The Total provision
includes Rs.2,96,400/- up to the year ended 31.03.2010and Rs.1,48,200/-
for the current year.
(9) The Company is not required to have a full time Company Secretary
during the year as required by Section 383A of The Companies Act, 1956,
as per notification dated 15.03.2009 of the Department of Company
Affairs. The Compliance Report of the Practicing Company Secretary is
obtained.
(10) IN THE OPINION OF DIRECTORS
(I) All current assets, loans and advances are approximately of the
value stated if realized in the ordinary course of business.
(ii) The Provision for all known liabilities have been made except
contingent liabilities stated as such.
(11) The Company is engaged primarily in the business of finance and
accordingly there are no separate reportable segments as per Accounting
Standard - 17 dealing with Segment Reporting.
(12) Earning and expenditure in foreign currency:- NIL.
(13) Previous years figures have been regrouped/rearranged wherever
necessary.
Mar 31, 2010
1. Loans on Cash Credit Accounts from State Bank of India, Bank of
Baroda and Axis Bank Limited (hereafter collectively referred to as
"Consortium of Banks") are secured by first charge by way of
hypothecation of stocks of raw materials, packing materials, consumable
stores, finished goods, semi- finished goods and book-debts.The
aforesaid cash credit facilities are further secured by way of charge
on the whole of the fixed assets of the Company ranking second and
subservient for the charges created in respect of borrowings obtained
from them.
2. Term Loan from Axis Bank Limited amounting to Rs. 87.61 Lacs
(Previous Year: Rs. 296.68 Lacs) or equivalent in foreign currency is
secured by first charge by way of hypothecation of all machinery
financed or to be financed under the said term loan. It is further
secured by second charge by way of hypothecation over entire current
assets including stock and book-debts with the current charge holders
on pari passu basis. The said loan is also further secured by first
charge by way of an equitable mortgage on the whole of the fixed assets
of the Company, both present and future, on pari passu basis with
existing second and subservient charge holders.
3. Term loan from Bank of Baroda amounting to Rs.351.08 Lacs (Previous
Year : Rs. 662.08 Lacs) is secured by first charge by way of
hypothecation of all movable machinery financed or to be financed under
the said term loan. The Bank of Baroda has agreed and ceded second pari
passu charge in favour of State Bank of India and Axis Bank Limited, on
the said movable machinery financed / to be financed out of the said
term loan, for their respective working capital limits sanctioned to
the Company. The said loan is also further secured by first charge by
way of an equitable mortgage on the whole of the immovable assets of
the Company, both present and future, on pari passu basis with existing
first charge holders viz. State Bank of India and Axis Bank Limited.
4. Term loan from State Bank of India amounting to Rs. 620.80 Lacs
(Previous Year: Rs. 933.29 Lacs) is secured by first charge by way of
hypothecation of all movable machinery financed or to be financed under
the said term loan. The State Bank of India has agreed and ceded second
pari passu charge in favour of Bank of Baroda and Axis Bank Ltd. on the
said movable machinery financed/to be financed out of ths said term
loan, for their respective working capital limits sanctioned to the
Company. The said loan is also further secured by first charge by way
of an equitable mortgage on the whole of the immovable assets of the
Company, both present and future, on pari passu basis with existing
first charge holders viz. Bank of Baroda and Axis Bank Limited.
5. Term loan from Axis bank Ltd. amounting to Rs 562.50 lacs (Previous
Year: Rs 459.55 lacs) is secured by first charge by way of
hypothecation of all movable machinery financed or to be financed under
the said term loan and also yet to be secured by first charge by way of
an equitable mortgage on the whole of the immovable assets of the
Company, both present and future , on pari passu basis with existing
first charge holders viz. State Bank of India and Bank of Baroda.
1. Nature of Operation
Transpek Industry Limited (TIL, the Company) is into the manufacture
and export of a range of chemicals servicing the requirements of
customers from a diverse range of industries - Textiles,
Pharmaceuticals, Agrochemicals, advanced Polymers, etc.
2. In the past the Company was eligible for a Sales tax incentive
scheme amounting to Rs. 1084.03 lacs (Previous Year: Rs. 1084.03 lacs).
Post completion of such incentive scheme, the Company has re-paid the
amount of Sales tax deferred during the period the scheme was in force,
and has applied to the Sales tax Department for a No Dues certificate.
Pending reconciliation of the amount with sales tax department, the
balance of Rs. 49.61 lacs (Previous Year: Rs. 49.61 lacs) has been
disclosed as Deferred Payment Liabilities.
3. (a) The Company has prepared its fixed asset register during the
year. On completion of th*e same it was observed that excess
depreciation amounting to Rs. 9.93 lacs had been charged in earlier
years, which now have been credited to the Profit and Loss account.
(b) Moreover, on physical verification of part of the Plant & Machinery
during the year, differences were observed between the assets
physically available and as per books amounting to Rs.151.37 lacs
(gross block) and Rs. 94.97 lacs (net block), which have been written
off during the year.
The net amount of Rs. 85.04 lacs arising out of (a) and (b) above, has
been charged off to the Profit and Loss account as an exceptional item.
(Rs. in Lacs)
4. (a) Contingent Liabilities
(to the extent not provided for)
Sr. Particulars As on As on
No March 31, 2010 March 31, 2009
(a) Disputed Income Tax Liability 848.09 843.85
(b) Disputed Sales Tax Liability 259.06 261.07
(c) Guarantees given by Banks to
third parties on 23.05 26.88
behalf of the Company
(d) Claims against the Company
not acknowledged 134.25 376.50
as debts (mainly on account
of outstanding law suits )
(e) Counter Guarantees given to
The Housing Development - 0.49
Finance Corporation Limited
in respect of housing loans
taken by employees.
(b) The Company has undertaken export obligation of eight times of the
CIF value of machineries imported, to be fulfilled over a period of
eight years. The obligation outstanding on the date of Balance Sheet
amounts to Rs. Nil (Previous Year: Rs. 103.45 lacs).
5. Capital Commitment
The estimated amount of contracts, net of advances remaining to be
executed on capital account at March 31, 2010 is Rs.111.83 lacs
(Previous Year: Rs. 61.93 lacs).
6. Excise duty on sales amounting to Rs. 432.23 lacs (Previous Year:
Rs. 810.10 lacs) has been reduced from sales in profit & loss account
and excise duty on increase/(decrease) in stock amounting to Rs. 6.95
lacs (Previous Year: Rs. 14.65 lacs) has been considered as income in
Schedule 19 of financial statements.
7. The Company had issued 7,99,000 share warrants to promoters and
others on preferential allotment basis at a
price of Rs. 65 per share on 5th February, 2008 which were convertible
into equal number of equity shares of Rs.10 each. Of the above 519,984
share warrants had been converted into equity shares of Rs. 10 each
fully paid-up till 31st March, 2009. The balance 279,016 share warrants
have been converted into equity shares in the current year. The said
equity shares shall rank pari-passu with the other equity shares.
8. The Company has an investment in equity shares of Excel Industries
Limited amounting to Rs. 226.76 lacs. In respect of this investment,
the Company had, in the previous year, recognized a diminution in the
value of investment amounting to Rs.88.63 lacs. The market value of
this investment at March 31,2010 is Rs. 91.85 lacs (Previous Year: Rs.
41.43 lacs). In view of the long-term nature of this investment and
having regard to the book value of the equity shares, management does
not consider any further diminution in the carrying value of this
investment, as at March 31,2010.
9. Provision for Taxation includes provision for Wealth Tax amounting
to Rs. 0.79 lacs (Previous Year: Rs. 1.02 lacs).
10. Gratuity plan:
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of service gets a gratuity on departure at
15 days salary (last drawn salary) for each completed year of service.
The scheme is funded with insurance companies in the form of a
qualifying insurance policy. The following tables summarise the
components of net benefit expense recognised in the profit and loss
account and the funded status and amounts recognised in the balance
sheet for the gratuity plan.
11. Related Party Disclosure
a) Names of related parties and description of relationship:
Subsidiary Company Transpek Industry (Europe) Limited
Enterprises owned or significantly influenced by key Excel Industries
Limited
management personnel or their relatives Excel Crop Care Limited
TML Industries Limited Shroffs Engineering Limited Anshul Speciality
Molecules Limited Anshul Agencies Agrocel Industries Limited Shroffs
Foundation Trust Transchem Agritech Limited Hyderabad Chemical Products
Limited C.C. Shroff Research Institute
Key Managemment Personnel Atul G. Shroff
Relatives of key management personnel
Ashwin C. Shroff
Dipesh K. Shroff
Vishwa A. Shroff
Shruti A. Shroff
Chaitanya D. Shroff
12. Lease Commitments
The Company has cancelable operating leasing arrangements relate to
office premises which are renewable by mutual consent and lease rentals
payable are accordingly charged as rent under Schedule 19. During the
period, the Company has taken office premises under cancelable
operating lease; the rentals for which amounting to Rs. 2.58 lacs
(Previous Year: Rs.12.24 lacs)are charged to the Profit and Loss
Account for the period. The lease term is for 11 months and there are
no sub-leases.
13. Segment Information
Identification of Segments
I. Primary Segment-Business Segment
The Companys operations predominantly comprise of only one segment
i.e. chemicals. In view of the same, separate segmental information is
not required to be disclosed as per the requirements of Accounting
Standard 17.
ii. Secondary Segment-Geographical Segment
The analysis of geographical segment is based on the geographical
location of the customers. The geographical segments considered for
disclosure are as follows:
Sales within India include sales to customers located within India.
Sales outside India include sales to customers located outside India.
14. Previous period figures have been regrouped/rearranged wherever
necessary.