1. Non-Current Liabilities
i The Term Loans are secured by Hypothecation of movable properties (other than current assets) and registered mortgage on immovable properties of the Company on first pari passu charge basis with ECB lenders. It is further secured by second charge on the Current Assets of the Company. The Term Loans are further secured by personal guarantee of two directors of the company and by others.
ii The External Commercial Borrowings (ECB) is secured by Hypothecation of movable properties (other than current assets) and registered mortgage on immovable properties of the Company on first pari passu basis with Term Loan lenders. The ECB is payable in 17 equal semi annual instalments from 15thSeptember, 2013.
iii Car loans are secured by the assets acquired through such finance.
2. Tax Expenses
In view of the revised profitability projections, the MAT credit which were hitherto written down in the respective earlier years amounting to Rs.3957.22 lakhs has been recognised by the Company during the year , on a reassessment by the management at the year end ,based on convincing evidence that the Company would pay normal Income tax during the specified period and would therefore be able to utilise the MAT credit so recognised (which is in accordance with the recommendations contained in the Guidance Note issued by ICAI ),the said asset is created by way of Credit to the statement of Profit and Loss account and is shown as MAT credit entitlement.
Deferred Tax Liability provided during the year includes the deferred tax liability recalculated and provided on prudential basis on account of reduction of unabsorbed benefits.
3. Segment Information Primary Business Segment
The Company is exclusively engaged in a single business segment of manufacture and sale of organic chemicals and accordingly this is the only primary reportable segment.
Secondary segmental reporting is based on the geographical location of customers. The geographical segments have been disclosed based on revenues within India (sales to Customers within India) and revenues outside India (sales to customers located outside India). Secondary segment assets and liabilities are based on the location of such asset/liability.
Information about Secondary Geographical Segments
4. Employee Benefits
i. General Description of defined benefit plan
The Gratuity scheme is funded with an insurance company in the form of a qualifying insurance policy.
The following tables summarise the components of net benefit expense recognised in the statement of profit and loss account and the funded status and amounts recognized in the balance sheet.
a. Profit and Loss account
Net employee benefit expense (recognized in Personnel Expenses in Note 16)
b Balance sheet
Details of Provision for gratuity
c Changes in the present value of the defined benefit obligation are as follows:
d Changes in the fair value of plan assets are as follows:
e History of Asset values. Present Beneift Obligation, Surplus/Deficit & Experience Gains/Losses - Leave
History of Asset values. Present Beneift Obligation, Surplus/Deficit & Experience Gains/Losses - Gratuity
f The principal assumptions used in determining gratuity obligations for the Company’s plans are shown below:
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.
Pending the issuance of Guidance Note from the Actuarial Society of India, the Company’s Actuary has expressed his inability to reliably measure the Provident Fund Liability. There is no deficit in the fund as at 31st March, 2017 and no provision has been made.
ii Defined Contribution Plan
Employees Benefits Expenses in Note 17 includes the following contributions to defined contribution plan
5. Derivative Instruments and Unhedged Foreign Currency Exposure
The Company uses Forward Exchange Contracts to hedge its exposure in foreign currency. The Information on derivative instruments is as follows:
6. Disputed foreign Currency Liability
Foreign currency liability of Rs.3501.89 lakhs (Previous Year Rs.3797.62 lakhs) shown under Creditors ( current laibilities ) has been disputed, a counter claim has been made and is not likely to be settled in near future, however this liability has been convertetd by applying exchange rate at the close of the year as per Accounting Standard.
7. Research & Development
Research & Development Expenditure of Rs.49.86 lakhs (Previous Year Rs.39.49 lakhs) have been accounted for in the respective heads of the Statement of Profit and Loss.
Donation and Contribution to Charitable Institution includes payment of Rs.10 lakhs to Shiv Sena , a political party.
8. Commission to Directors
Commission payable to Managing Director, Chairman & Independent Directors totaling to 2.50% of profit, amounting to? 337.58 lakhs is subject to approval by shareholders in the ensuing annual general meeting.
9. Previous Year Comparatives
Previous year’s figures have been regrouped/reclassified wherever necessary to correspond with the current year’s classification/ disclosure.