*In view of average loss of ''''115.69 crore during preceding three financial years, there is no requirement to spend towards CSR during the year as per Companies Act, 2013. The Company had opening CSR Reserve of Rs.5.26 crore in respect of unspent CSR budget as per DPE guidelines. The company has incurred an amount of Rs.1.25 crore during the year (Previous Year Rs.0.37 crore) towards Corporate Social Responsibility activities leaving balance CSR fund of Rs.4.01 crore as on 31.03.2016.
# As per Office Memorandum F. No. 3(3)-B(S)/2015 dated 5.01.2016 issued by Ministry of Finance, Department of Economic Affairs (DEA) (Budget Division) regarding Dividend Payment of Central Public Sector Enterprises (CPSEs), a CPSE would pay an annual dividend of 30% of Profit after Tax (PAT) or 30% of GOI’s equity, whichever is higher. However, in terms of the provisions contained in the said office Memorandum, Company has requested Department of Fertilizers for exemption from payment of dividend considering the various capex requirements and equity contribution in RFCL. Department of Fertilizers vide their OM No.18048/7/2016-FCA dated 27th April 2016 has recommended to Secretary, Department of Economic Affairs from exemption to NFL for payment of dividend for the next five years. Pending receipt of exemption from Government of India, dividend of 30.11% of PAT has been proposed.
# The Capital Grant from Govt. of India, Ministry of Chemicals & Fertilizers for Ammonia Feed Stock Conversion Project (AFCP) from ''''LSHS/FO’ to ''''Gas’ vide sanction letter no. 14016/2/2007-FP(Vol.II)(2) dated 8.02.2010 for Panipat Unit, sanction letter no.14016/2/2007-FP (Vol. II)(1) dated 8.02.2010 for Bathinda Unit and sanction letter no.14016/2/2007-FP (Vol. II)(3) dated 8.02.2010 for Nangal Unit has accrued since the conditions attached to the grant have been fulfilled by the Company. The grant has been accordingly accounted for as per para 6.1 of Accounting Standard -12 on ''''Accounting for Government Grants’. The Government would make payment of the above grant over a period of 5 years from the commencement of commercial production. The actual project cost that would be reimbursed shall be admitted after scrutiny by a team constituted by Government of India. The return on own funds shall be recognized on finalization of project cost by the Government.
Pending the finalization of Project Cost, the subsidy recoverable has been adjusted by the subsidy amount received based on notified adhoc special fixed cost rate. Adjustments, if any, on account of final settlement of LSTK (Lump Sum Turn Key) contracts and due to actual sales realization of the redundant assets discarded after conversion will be made in the year of occurrence. While arriving at the amount of grant accrued to the Company, the deduction has been made for the amount of disposable value of discarded assets, currently at the written down value of the assets concerned.
^Represents addition to fixed assets in respect of Ammonia Feed Stock Conversion Projects from ‘LSHS/FO’ to ‘Gas’ at Bathinda, Panipat and Nangal units.
* 1004 Nos 9.42% Secured Redeemable Non-Convertible Bonds (Previous Year 1004 Nos) of Rs.10,00,000/- each issued with five years tenor redeemable at par in three installments at the end of third year from issue date of 15th September, 2011 (30% at end of 3rd year, 30% at the end of 4th year and balance 40% at end of 5th year). These bonds are secured by mortgage/charge on land and building of Company located at Corporate Office, Noida. The final installment of Rs.40.16 crore due for payment on 15.09.2016 is disclosed in Note 11 ''''Other Current Liabilities''''.
# Rupee loan from Banks for Ammonia Feedstock Conversion Projects is secured by first charge ranking pari-passu inter-se on entire fixed assets, movable and immovable (present & future) properties related to Nangal, Bathinda & Panipat units and second charge over the entire current assets and subsidy (excluding reimbursement related to energy savings and interest expenses) of the Company. Repayment of sanctioned term loan would fall due for repayment in 20 quarterly installments of Rs. 192.50 crore starting from June 2013 and ending in March 2018. The rate of interest on the term loan is linked to the SBI base rate and during the period interest rate was between 10.80% to 11.50% p.a. The total borrowings is Rs.1540.00 crore out of which Rs.770.00 crore being payable in next year is disclosed in Note 11 ''''Other Current Liabilities''''.
$ Foreign Currency External Commercial Borrowing (ECB) loan from Bank, has been used for energy saving and urea capacity augmentation projects at Vijaipur and is secured by first ranking pari-passu charge on all movable and immovable fixed assets (both present and future) related to Vijaipur unit and second ranking pari-passu charge on the current assets (both present and future) and subsidy of the Vijaipur Unit.
ECB has been refinanced through DBS Bank, Singapore on 06.01.2016. The ECB was earlier drawn from SBI, NY at rate of interest of 6 months USD LIBOR plus margin of 3.05% p.a. and upfront arrangement fee of 1.58% of facility.
The rate of interest of refinanced ECB from DBS, Singapore is 6 months USD LIBOR plus margin of 1.49% p.a. Repayment of refinanced ECB loan will commence from FY 2016-17. Foreign Currency External Commercial Borrowing (ECB) loan from DBS Bank is secured by first ranking pari-passu charge on all movable and immovable fixed assets (both present and future) related to Vijaipur unit and second ranking pari-passu charge on the current assets (both present and future) and subsidy of the Vijaipur Unit. The security creation in respect of loan refinanced and drawn from DBS Bank is under process.
The repayment of ECB loan will fall due for Rs.32.14 crore in FY 2016-17, Rs.39.55 crore in FY 2017-18, Rs.56.85 crore in FY 2018-19, Rs.59.33 crore in FY 2019-20 and Rs.59.33 crore in FY 2020-21. A sum of Rs.247.20 crore (Rs.215.06 crore Rs.32.14 crore) is outstanding as on 31.03.2016 out of which the installments due for payment in FY 2016-17 amounting to of Rs.32.14 crore is disclosed in Note 11 ''''Other Current Liabilities''''.
# Deferred Tax Assets amounting to Rs.34.23 crore (net) have been recognized as on 31stMar, 2016 in respect of unabsorbed depreciation for setoff against taxable income in future based on Notification No. 12012/3/2010-FPP(II) dated 3rd April, 2014 of Modified New Pricing policy of urea by Government of India and New Urea Policy-2015 for existing gas based urea manufacturing units based on notification No. 12012/1/2015-FPP dated 25th May 2015 thereby having convincing evidence of certainty of utilization of deferred tax assets.
Urvarak Videsh Limited, a joint venture with Krishak Bharti Co-operative Limited and Rashtriya Chemicals & Fertilizers Limited has been setup for fertilizer business and rendering consultancy services in this regard. During the year Urvarak Videsh Limited has been declared Dormant Company.
Ramagundam Fertilizers & Chemicals Limited, a joint venture with Engineers India Limited and Fertilizer Corporation of India has been incorporated on 17.02.2015 for revival of closed Fertilizer Unit of FCIL at Ramagundam, Telengana.
* Being less than Rs.50,000/-, figures not given.
$ Out of Rs.24.44 crore invested in RFCL, Share application of Rs.9.00 crore are pending for allotment and is disclosed in Note 18: Other Current Assets.
# Capital Grant recoverable from Government of India of Rs.835.94 crore represents the grant to be disbursed by Government of India for Ammonia Feed Stock Conversion Project (AFCP) from ''''LSHS/FO’ to ''''Gas’ for the FY 2017-18. Capital Grant recoverable from GOI amounting to ''''Rs.1080.04 crore for the FY 2015-16 & FY 2016-17 is disclosed in Note 23: Other current assets. Details of Capital Grant for AFCP are disclosed in Note :4 Deferred Government Grant.
$ Capital grant includes cumulative foreign exchange losses of Rs.7.39 crore (net) in respect of outstanding liability of AFCP recoverable from GOI as part of project cost and such exchange losses shall be adjusted in the capital cost upon final settlement of liabilities.
# Includes an advance of Rs.130.69 crore (Previous year Rs.130.69 crore) given to a foreign supplier M/s. Karsan during the year 1995-96 against import of Urea, the supplies of which were not received and subsequently the contract was terminated. Pending litigation, the net advance of Rs.129.64 crore (after recovery of Rs.1.05 crore) has been fully provided for in the earlier years from the revenue reserve and surplus.
* As per direction of Court an amount of Rs.1.32 crore (Previous Year Rs.1.32 crore) is being kept as case property.
$ Includes amount recoverable on account of Gas Pooling amounting to Rs.147.94 crore (Previous year Nil).
* Capital Grant recoverable from Government of India represents the grant to be disbursed by Government of India for Ammonia feed stock conversion project from ''''LSHS/FO’ to ''''Gas’ as disclosed in Note 4.
** Assets held for sale includes Rs.13.55 crore (Previous Year Rs.13.55 crore) being the written down value of the assets discarded upon commissioning of changeover of feed stock from LSHS/FO to Gas projects as stated in Note 4.
$ Capital Grant recoverable from Government of India of Rs.1080.04 crore represents the grant to be disbursed by Government of India for Ammonia Feed Stock Conversion Project (AFCP) from ''''LSHS/FO’ to ''''Gas’ for the FY 2015-16 & FY 2016-17. Capital Grant recoverable from GOI amounting to Rs.835.94 crore for the FY 2017-18 is disclosed in Note 18: Other noncurrent assets.
1. Provident Fund:
The Provident Fund contributions are made to a Trust administered by the Company. The interest rate payable to the members of the Trust shall not be lower than statutory rate of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous Provisions Act, 1952.
During the year an amount of Rs.26.56 crore (P.Y. Rs.27.54 crore) has been charged to statement of Profit and loss towards contribution by the Company.
In terms of the guidance on implementing the revised AS-15 issued by the Accounting Standard Board of the Institute of Chartered Accountants of India, the Provident Fund Trust set up by the Company, is treated as Defined Benefit Plan since the Company has to meet the shortfall in the fund assets, if any. Further, having regard to the assets of the Fund and the Return on the Investments, the Company does not expect any deficiency in the foreseeable future. In terms of the guidance note issued by the Institute of Actuaries of India, the actuary has provided a valuation of provident fund liability and determined that there is no shortfall as at 31st March, 2016.The funds of the trust have been invested under various securities as prescribed by regulatory authorities. "
1. The company has funded the gratuity liability through a separate Gratuity Fund. The fair value of the plan assets is mainly based on the information given by the insurance companies through whom the investment has been made by the fund. Gratuity liability of Rs.49.38 crore (Previous year Rs.33.70 crore) is unfunded as on 31st March, 2016. Other defined benefit obligations are unfounded.
2. Other Employee Benefit Schemes:
Provision of Rs.(0.76) crore (Previous year Rs.1.87 crore) towards Employees’ Family Economic Rehabilitation Scheme and Social Security Benefits scheme has been made on the basis of actuarial valuation and charged to the Statement of Profit and Loss account. A net liability of Rs.15.06 crore (Previous year Rs.15.82 crore) has been recognized in the Balance Sheet as at 31st March 2016 on account of these schemes.
NOTE 3.: SEGMENT REPORTING Business Segments:
Company’s primary business segments are ''''Urea’ & ''''Other Products’(including Industrial Products, Bio Fertilizers and Traded Products) and are reportable segments under Accounting Standard-17 on ''''Segment Reporting’ issued by the Institute of Chartered Accountants of India.
4. Geographical Segment:
The operations of the company are conducted within India and there is no separate reportable geographical segment
C) Transactions with Related parties:
(i) During the year there were transactions of ''''25.38 crore (previous year Rs.2.44 crore) with Ramagundam Fertilizers & Chemicals Limited towards subscription of Share capital of Rs.22.00 crore (Previous Year Rs.2.44 crore) and others Rs.3.38 crore (Previous Year Nil).
(ii) Remuneration to Key Management Personnel at B) above is Rs.1.39 crore (Previous period Rs.1.42 crore). In addition to the above they are eligible for non monetary perquisites as per Government of India guidelines.
NOTE 5: AS-28: IMPAIRMENT OF ASSETS
In accordance with Accounting Standard (AS)-28, the carrying amount of fixed assets have been reviewed at year-end for indication of impairment loss, if any, by considering assets of entire one plant as Cash Generating Unit. As there is no indication of impairment, no loss has been recognized during the year.
NOTE 6: ASSETS TAKEN ON OPERATING LEASE:
The Company’s significant leasing arrangements are in respect of operating leases of premises for offices, godowns and residential use of employees & vehicles. These leasing arrangements are usually renewable on mutually agreed terms but are not non-cancellable. Employee benefit expense remuneration and benefits include Rs. 0.49 crore (Previous year Rs.0.13 crore) towards lease payments, net of recoveries, in respect of premises for residential use of employees. Lease payments in respect of premises for offices, godowns and vehicles, Rs.3.52 crore (Previous year Rs.3.52 crore) are shown in Rent (other expenses Note: 34).
NOTE 7 As per requirements of the listing agreements with the stock exchanges, the requisite details of loans and advances in the nature of loans given by the Company are as under:
(i) There are no loans and advances in the nature of loans to any subsidiary.
(ii) No loans have been given (other than loans to employees), wherein there is no repayment schedule or repayment is beyond seven years; and
(iii) There are no loans and advances in the nature of loans to firms/companies in which Directors are interested.
NOTE 8 REMITTANCE IN FOREIGN CURRENCIES FOR DIVIDENDS
The Company has not remitted any amount in foreign currencies on account of dividend during the year and does not have information as to the extent to which remittances, if any, in foreign currencies on account of dividends have been made by/on behalf of non-resident shareholders.
Note 9 In view of average loss of Rs.115.69 crore during preceding three financial years, there is no requirement to spend towards CSR during the year as per Companies Act, 2013. The Company had opening CSR Reserve of Rs.5.26 crore in respect of unspent CSR budget as per DPE guidelines. The company has incurred an amount of Rs.1.25 crore during the year (Previous Year Rs.0.37 crore) towards Corporate Social Responsibility activities leaving balance CSR fund of Rs.4.01 crore as on 31.03.2016.
Note 10 (a) Balance of subsidy recoverable of Rs.4629.17 crore (previous year Rs.4975.41) crore and Capital Grant recoverable of Rs.2030.58 crore (previous year Rs.3374.59 crore) is subject to confirmation by Government of India. In addition some of the Balances of trade/other payable and loans and advances are subject to confirmation/reconciliation. Adjustment if any will be accounted for on confirmation/reconciliation of the same which in the opinion of the management will not have a material impact.
(b) In the opinion of the management, the value of assets, other than fixed assets and non-current investments, on realization in the ordinary course of business, will not be less than the value at which these are stated in the balance sheet.
Note 11 Figures of previous period have been re-arranged / regrouped / re-cast, wherever necessary.
1Shri Vikram Srivastava ceased to be member of the Board and committee on 05.05.2016 on completion of his tenure. Committee met on 24.04.2015, 09.09.2015 and 12.01.2016