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Notes to Accounts of Amal Ltd.
Mar 31, 2025
s) Provisions and contingent liabilities
Provisions are recognised when the Company has a present legal or constructive obligation as a result
of past events, it is probable that an outflow of resources will be required to settle the obligation and the
amount can be reliably estimated. These are reviewed at each year end and reflect the best current estimate.
Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is
determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood
of an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of best estimate of the expenditure required to settle the
present obligation at the end of the reporting period. The discount rate used to determine the present value
is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific
to the liability. The increase in the provision due to the passage of time is recognised as interest expense.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence
of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events
not wholly within the control of the Company or a present obligation that arises from past events where
it is either not probable that an outflow of resources will be required to settle the obligation or a reliable
estimate of the amount cannot be made.
t) Employee benefits
i) Defined benefit plan
Gratuity
Gratuity liability is a defined benefit obligation and is computed on the basis of an actuarial valuation by an
actuary appointed for the purpose as per projected unit credit method at the end of each financial year. The
liability or asset recognised in the Standalone Balance Sheet in respect of defined benefit gratuity plans, is
the present value of the defined benefit obligation at the end of the reporting period less the fair value of
plan assets. The liability so provided is paid to a trust administered by the Company, which in turn invests
in eligible securities to meet the liability as and when it become due for payment in future. Any shortfall
in the value of assets over the defined benefit obligation is recognised as a liability with a corresponding
charge to the Standalone Statement of Profit and Loss.
The present value of the defined benefit obligation is determined by discounting the estimated future cash
outflows with reference to market yields at the end of the reporting period on government bonds that have
terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate at the beginning of the period to the net
balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee
benefit expense in the Standalone Statement of Profit and Loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial
assumptions are recognised in the period in which they occur directly in other comprehensive income.
They are included in retained earnings in the Statement of changes in equity and in the Standalone
Balance Sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or
curtailments are recognised immediately in profit or loss as past service cost.
Defined contribution plan
Contributions to defined contribution schemes such as contribution to provident fund, superannuation fund,
employees'' state insurance corporation, national pension scheme and labour welfare fund are charged as
an expense to the Standalone Statement of Profit and Loss based on the amount of contribution required
to be made as and when services are rendered by the employees. The above benefits are classified as
defined contribution schemes as the Company has no further defined obligations beyond the monthly
contributions.
Short-term employee benefits
All employee benefits payable within 12 months of service such as salaries, wages, bonus, ex-gratia,
medical benefits, etc, are recognised in the year in which the employees render the related service and are
presented as current employee benefit obligations. Termination benefits are recognised as an expense as
and when incurred.
Short-term employee benefits are provided at undiscounted amount during the accounting period based
on service rendered by employees.
Other long-term employee benefits
The liabilities for earned leave is not expected to be settled wholly within 12 months after the end of the
period in which the employees render the related service. They are therefore measured as the present
value of expected future payments to be made in respect of services provided by employees up to the
end of the reporting period using the projected unit credit method. The benefits are discounted using the
market yields at the end of the reporting period that have terms approximating to the terms of the related
obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions
are recognised in profit or loss.
u) Earnings per share
Earnings per share (EPS) is calculated by dividing the net profit or loss for the period attributable to equity
shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted EPS, the net profit for the period attributable to equity shareholders
and the weighted average number of equity shares outstanding during the period are adjusted for the
effects of all dilutive potential equity shares.
Critical estimates and judgements
Preparation of the Standalone Financial Statements require use of accounting estimates, judgements and
assumptions, which by definition, will seldom equal the actual results. Appropriate changes in estimates
are made as the Management becomes aware of changes in circumstances surrounding the estimates.
Changes in estimates are reflected in the Standalone Financial Statements in the period in which changes
are made and, if material, their effects are disclosed in the notes to the Standalone Financial Statements.
This Note provides an overview of the areas that involve a higher degree of judgements or complexity
and of items that are more likely to be materially adjusted due to estimates and assumptions turning out
to be different than those originally assessed. Detailed information about each of these estimates and
judgements is included in relevant notes together with information about the basis of calculation for each
affected line item in the Standalone Financial Statements.
The areas involving critical estimates or judgements are:
i) Estimation for income tax: Note 1 (d)
ii) Estimation of useful life of tangible assets: Note 1 (f)
iii) Estimation of defined benefit obligations: Note 1 (t)
iv) Impairment: Note 1 (i)
Note 10 Equity share capital (continued)
a) Rights, preferences and restrictions:
The Company has one class of shares referred to as equity shares having a par value of '' 10 each.
i) Equity shares:
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any
of the remaining assets of the Company, after distribution of all preferential amounts and preference
shares. The distribution will be in proportion to the number of equity shares held by the shareholders.
Each holder of equity shares is entitled to one vote per share.
ii) Dividend:
The dividend proposed by the Board, if any, is subject to the approval of shareholders in the ensuing
Annual General Meeting, except in case of interim dividend.
Refer Standalone Statement of changes in equity for detailed movement in other equity balance.
Nature and purpose of reserves
a) Securities premium
Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance
with the provisions of the Companies Act, 2013.
b) Retained earnings
Retained earnings are the profits that the Company has earned till date, less, any transfers to general
reserve, any transfers from or to other comprehensive income, dividends or other distributions paid to
shareholders.
c) Other reserve
As per Modified Sanction Scheme MS-10 and MS-13 approved by the Board of Industrial Finance and
Reconstruction, the Company had issued 0% redeemable and non-convertible preference shares of
'' 1,000 lakh to Atul Ltd (promoter) and received interest free secured loan of '' 1,128.89 lakh and interest
free unsecured loan of '' 539.58 lakh from Atul Ltd. These financial liabilities are measured at amortised
cost and the initial fair value difference is recognised as capital contribution from Atul Ltd.
i) Information about individual provisions and significant estimates
a) Compensated absences:
The compensated absences cover the liability for earned leave. Out of the total amount disclosed above,
the amount of '' 0.73 lakh (March 31, 2024: '' 1.29 lakh) is presented as current, since the Company
does not have an unconditional right to defer settlement for any of these obligations. However, based
on past experience, the Company does not expect all employees to take the full amount of accrued
leave or require payment within the next 12 months.
Note 27.3 Related party disclosures (continued)
Note 27.3 (F) Terms and conditions
1. Sales to and purchases from related parties were made on normal commercial terms and conditions and
at prevailing market prices or where market price is not available, at cost plus margin.
2. Transactions relating to dividends were on the same terms and conditions that applied to other shareholders.
3. All outstanding balances are unsecured and are repayable in cash and cash equivalent.
Note 27.4 Current and deferred tax
The major components of income tax expense for the years ended March 31, 2025 and March 31, 2024,
are:
Note 27.5 Employee benefit obligations
Funded schemes
a) Defined contribution plans
Gratuity
The gratuity fund is maintained with the Life Insurance Corporation of India and Bajaj Allianz Life Insurance
under Group Gratuity scheme. Every employee is entitled to a benefit equivalent to the last drawn salary of
15 days for each completed year of service in line with the Payment of Gratuity Act, 1972 or the Company
scheme, whichever is more beneficial. Gratuity is payable at the time of separation or retirement from the
Company, whichever is earlier. The benefit vests after five years of continuous service.
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions
constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated.
When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the
same method (present value of the defined benefit obligation calculated with the projected unit credit
method at the end of the reporting period) has been applied while calculating the defined benefit liability
recognised in the Standalone Balance Sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change as compared
to the previous year.
Risk exposure
Through its defined contribution plans, the Company is exposed to a number of risks, the most significant
of which are detailed below:
i) Interest rate risk
A fall in the discount rate that 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.
ii) 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 plan liability.
iii) Investment risk
The present value of the defined benefit plan liability is calculated using a discount rate, which is
determined with 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.
Note 27.5 Employee benefit obligations (continued)
iv) Concentration risk
Plan is having a concentration risk as all the assets are invested with two 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.
The Company actively monitors how the duration and the expected yield of the investments are
matching the expected cash outflows arising from the employee benefit obligations. It has not changed
the processes used to manage its risks from previous periods. Investments are well diversified, such
that the failure of any single investment will not have a material impact on the overall level of assets.
A large portion of assets consists of insurance funds; it also invests in corporate bonds and special
deposit schemes. The plan asset mix is in compliance with the requirements of the respective local
regulations.
Expected contributions to post-employment benefit plans for the year ending March 31, 2026, are
'' 0.06 lakh.
The weighted average duration of the defined benefit obligation is 10 years (2023-24: 07 years). The
expected maturity analysis of gratuity is as follows:
b) Other long-term benefits
Leave encashment is payable to eligible employees who have earned leaves, during the employment and
| or on separation as per the policy of the Company. Valuation in respect of leave encashment has been
carried out by an independent actuary, as at the Standalone Balance Sheet date, based on the following
assumptions:
Note 27.5 Employee benefit obligations (continued)
c) Defined contribution plans:
Provident fund
State defined contribution plans
Employers'' contribution to employees'' state insurance
Employers'' contribution to employees'' pension scheme 1995
The provident fund and the state defined contribution plans are operated by the Regional Provident Fund
Commissioner. Under the scheme, the Company is required to contribute a specified percentage of payroll
cost to the retirement benefit scheme to fund the benefits. These funds are recognised by the income tax
authorities. The contribution of the Company to the provident fund and other contribution plans for all
employees is charged to the Standalone Statement of Profit and Loss.
The Company has recognised the following amounts in the Standalone Statement of Profit and Loss for
the year (refer Note 23):
1Excludes investments in subsidiary company which are carried at cost and hence are not required to be disclosed as per Ind
AS 107 âFinancial Instruments Disclosures".
a) Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial
instruments that are: a) recognised and measured at fair value and b) measured at amortised cost and for
which fair values are disclosed in the Standalone 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 in the Indian Accounting Standard. An explanation of each level follows
underneath the table:
There were no transfers between any levels during the year.
Level 1: This hierarchy includes financial instruments measured using quoted prices. The fair value of all
equity instruments that are traded on 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 (for example over-
the-counter derivatives) is determined using valuation techniques, which maximise the use of observable
market data and rely as little as possible on entity-specific estimates. The mutual fund units are valued using
the closing net assets value. 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.
b) Valuation techniques used to determine fair value
Specific valuation techniques used to value financial instruments include:
i) the use of quoted market prices or dealer quotes for similar instruments
ii) the fair value of the remaining financial instruments is determined using discounted cash flow
analysis
c) Valuation processes
The Finance department of the Company includes a team that performs the valuations of financial assets
and liabilities with assistance from independent external experts when required, for financial reporting
purposes, including level 3 fair values.
Note 27.7 Financial risk management
The business activities of the Company are exposed to a variety of financial risks, namely liquidity risk, market
risk and credit risk. Responsibility for the establishment and oversight of the risk management framework lies
with the Senior Management of the Company. The Company has constituted a Risk Management Committee,
which is responsible for developing and monitoring the risk management policies of the Company. The key risks
and mitigating actions are also placed before the Board of the Company. The risk management policies are
established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls
and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to
reflect changes in market conditions and the activities of the Company.
This note explains the risks which the Company is exposed to and how the Company manages the risks in the
Standalone Financial Statements.
a) Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty fails to meet its contractual
obligations. Credit risk arises from cash and cash equivalents, financial assets measured at amortised cost
or fair value through profit and loss and deposits with banks and financial institutions, as well as credit
exposures to trade | non-trade customers including outstanding receivables.
i) Credit risk management
Credit risk is managed through the policy surrounding Credit Risk Management.
ii) Provision for expected credit losses
The Company provides for expected credit loss based on the following:
Trade receivables
Credit risk with respect to trade receivables is limited. As trade receivables consist of few customers,
for which ongoing credit evaluation is performed on the financial condition of the account receivables.
Historical experience of collecting receivables of the Company is supported by low level of past default
and hence the credit risk is perceived to be low.
Of the trade receivables balance at the end of the year, '' 260.17 lakh (March 31, 2024: '' 178.26 lakh)
is due from related parties. Apart from this, the Company does not have significant credit risk exposure
to any single counterparty or any group of counterparties having similar characteristics. The Company
defines counterparties as having similar characteristics if they are related entities.
b) Liquidity risk
Ultimate responsibility for liquidity risk management rests with the Board of Directors, who has approved
an appropriate liquidity risk management framework for short, medium and long-term funding and liquidity
management requirements of the Company. The Management monitors rolling forecasts of the liquidity
position of the Company and cash and cash equivalents on the basis of expected cash flows and manages
liquidity risk by continuously monitoring forecast and actual cash flows and by matching the maturity profiles
of financial assets and liabilities.
The following table shows the maturity analysis of financial liabilities of the Company based on contractually
agreed undiscounted cash flows including contractual interest payment, as at the Standalone Balance Sheet
date:
c) Market risk
i) Cash flow and fair value interest rate risk
Maturity analysis of financial liabilities of the Company is based on contractually agreed undiscounted
cash flows as at the Balance Sheet date:
Borrowings of the Company was from Axis Bank Ltd and was mainly exposed to interest rate risk
due to its variable interest rate borrowings. The interest rate risk arises due to uncertainties about the
future market interest rate of these borrowings.
As an estimation of the approximate impact of the interest rate risk, with respect to financial instruments,
the Group has calculated the impact of a 25 bps change in interest rates. A 25 bps increase in interest
rates would have led to approximately an additional impact of '' Nil lakh (2023-24: '' Nil lakh). A 25
bps decrease in interest rates would have led to an equal but opposite effect.
ii) Price risk
Exposure
The Company is mainly exposed to the price risk due to its investments in mutual funds. The price risk
arises due to uncertainties about the future market values of these investments. In order to manage
its price risk arising from investments in equity instruments, the Company maintains its portfolio in
accordance with the framework set by the risk management policies.
Note 27.14 Capital management
The primary objective of capital management is to maximise shareholder value, safeguard business continuity
and support the growth of the Company. It determines the capital requirement based on annual operating plans
and long-term and other strategic investment plans. The funding requirements are met through equity and
operating cash flows generated. The Company is not subject to any externally imposed capital requirements
(refer Note 27.13 (b) for debt- equity ratio).
Note 27.15 Borrowings
i) Security details:
Working capital loans repayable on demand from banks (March 31, 2025: '' Nil lakh, March 31, 2024:
'' Nil lakh) is secured by hypothecation of tangible current assets, namely, inventories and book debts of
the Company as a whole and also secured by second and subservient charge on immovable and movable
assets of the Company.
ii) Quarterly statement of current assets filed with banks during the year are in agreement with the books of
accounts.
iii) The carrying amount of assets hypothecated as security for borrowing limits are:
Note 27.16 Other statutory information (required by schedule III to the Companies Act, 2013)
a) The Company has not entered into any such transaction which is not recorded in the books of accounts
that has been surrendered or disclosed as income during the year in tax assessments under the Income
tax Act, 1961.
b) The Company has complied with the number of layers prescribed under Clause (87) of Section 2 of the Act
read with the Companies (Restriction on number of Layers) Rules, 2017.
c) The Company is not declared wilful defaulter by any bank or financial institution or other lender.
d) The Company has not traded or invested in crypto currency or virtual currency during the financial
year.
e) The Company has not revalued its property, plant and equipment (including Right-of-use assets) or intangible
assets or both during the year.
f) No proceedings have been initiated or are pending against the Company for holding any benami property
under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made there under.
g) No loans or advances in the nature of loans are granted to promoters, Directors, Key Managerial Personnel
and the related parties (as defined under the Companies Act, 2013) either severally or jointly with any other
person.
h) The Company does not have any charges or satisfaction of charges which is yet to be registered with
Registrar of Companies beyond the statutory period.
i) There were no loans, advances and investments made in intermediary company.
Note 27.17 Utilisation of loans, advances and equity investment in entities
The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign
entities (intermediaries) with the understanding that the intermediary shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the group (ultimate beneficiaries) or
b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries
The Company has not received any funds from any person(s) or entity(ies), including foreign entities (funding
party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the funding party (ultimate beneficiaries) or
b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries
Note 27.18 Relationship with struck off companies
There were no transactions or balances with struck off companies.
Note 27.19 Dividend on equity shares
The Board of Directors of the Company in its meeting held on April 18, 2025 has recommended a final dividend of
10% ('' 1.00 per share) for year 2024-25 (year 2023-24 '' Nil) which is subject to the approval of the shareholders
at the ensuing Annual General Meeting.
Note 27.20 Events occuring after Balance Sheet date
The Company evaluated subsequent events upto the date the financial statements were available for issuance,
and determined that there were no additional material subsequent events requiring disclosure.
Note 27.21 Foreign currency exposure
There was no foreign currency exposure as on March 31, 2025.
Note 27.22 Rounding off
Figure less than '' 500 have been shown as â0.00'' in the relevant notes in these Standalone Financial
Statements.
Note 27.23 Authorisation for issue of the Standalone Financial Statements
The Standalone Financial Statements were authorised for issue by the Board of Directors on April 18, 2025.
In terms of our report attached For and on behalf of the Board of Directors
For Deloitte Haskins & Sells LLP
Chartered Accountants
Sunil Lalbhai
Ketan Vora Yogesh Vyas Chairman
Partner Chief Financial Officer (DIN: 00045590)
Rajeev Kumar
Mumbai Ankit Mankodi Managing Director
April 18, 2025 Company Secretary (DIN: 07731459)
Mar 31, 2024
a) Rights, preferences and restrictions:
The Company has one class of shares referred to as equity shares having a par value of '' 10 each.
i) Equity shares
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts and preference shares. The distribution will be in proportion to the number of equity shares held by the shareholders.
Each holder of equity shares is entitled to one vote per share.
ii) Dividend
The dividend proposed by the Board, if any, is subject to the approval of shareholders in the ensuing Annual General Meeting, except in case of interim dividend.
b) Issue of shares under rights issue:
On December 14, 2022, the Board of Directors of the Company approved the rights issue of equity shares. Subsequently the Right Issue Committee approved the rights issue of 29,37,662 equity shares of the face value of '' 10 each at a price of '' 170 per share (including a security premium of '' 160) in the ratio of 24:77, i.e. 24 new shares for 77 existing equity shares held by the eligible shareholders on record date, i.e. February 21, 2023. On March 23, 2023, the Committee has approved the allotment of 29,37,662 equity shares of face value of '' 10 each to the eligible shareholders. The entire proceeds received from the rights issue during the year amounting to '' 4994.03 lakhs were used for the objects stated in the offer document of the rights issue.
Equity issue expenses of '' 56.87 lakhs have been adjusted against securities premium in the year ended on March 31, 2023.
Nature and purpose of reserves
a) Securities premium
Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.
b) Retained earnings
Retained earnings are the profits that the Company has earned till date, any transfers from or to other comprehensive income, dividends or other distributions paid to shareholders.
c) Other reserve
As per Modified Sanction Scheme MS-10 and MS-13 approved by the Board of Industrial Finance and Reconstruction, the Company issued 0% redeemable and non-convertible preference shares of '' 1,000 lakhs to Atul Ltd (promoter) and received interest-free secured loan of '' 1,128.89 lakhs and interest-free unsecured loan of '' 539.58 lakhs from Atul Ltd. These financial liabilities are measured at amortised cost and the initial fair value difference is recognised as a capital contribution from Atul Ltd.
i) Information about individual provisions and significant estimates
a) Compensated absences
The compensated absences cover the liability for earned leave. Out of the total amount disclosed above, the amount of '' 1.29 lakhs (March 31, 2023: '' 1.39 lakhs) is presented as current, since the Company does not have an unconditional right to defer settlement for any of these obligations. However, based on past experience, the Company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months.
b) Others
Regulatory and other claims:
The Company has provided for certain regulatory and other charges for which it has received claims. The provision represents the unpaid amount that it expects to incur | pay for which the obligating event has already arisen as on the reporting date.
i) Security details:
Working capital loans repayable on demand from banks (March 31, 2024: '' nil March 31, 2023: '' 0.62 lakhs) is secured by hypothecation of tangible current assets, namely, inventories and book debts of the Company as a whole and also secured by second and subservient charge on immovable and movable assets of the Company.
ii) Quarterly statements of current assets filed with banks during the year are in agreement with the books of account.
iii) The carrying amount of assets hypothecated as security for borrowing limits are:
|
Note 29.1 Contingent liabilities |
C lakhs) |
|
|
Particulars |
As at March 31, 2024 |
As at March 31, 2023 |
|
Claims against the Company not acknowledged as debts in respects of: |
||
|
i) Sales tax |
62.86 |
62.86 |
|
ii) Corporate guarantee |
5,100.00 |
5,800.00 |
|
Note 29.2 Commitments Capital commitments Capital expenditure contracted for at the end of the reporting period, but not recognised as liabilities, is as follows: C lakhs) |
||
|
Particulars |
As at March 31, 2024 |
As at March 31, 2023 |
|
Estimated amount of contracts remaining to be executed and not provided for (net of advances): |
||
|
Property, plant and equipment |
3.72 |
- |
during 2023-24, the loans aggregating '' 1,699 lakhs as of March 31, 2023, is converted into 1,69,90,000, 10.50% non-cumulative redeemable preference shares at '' 10 per share, amounting to '' 1,699 lakhs and an additional investment of '' 500 lakhs made into 50,00,000, 10.50% non-cumulative redeemable preference shares at '' 10 per share. During 2022-23, the loans aggregating '' 5,000.14 lakhs are converted into 27,19,000 equity shares at '' 110.34 per share amounting to '' 3,000.14 lakhs and 2,00,00,000, 10% non-cumulative redeemable preference shares at '' 10 per share, amounting to '' 2,000 lakhs.
Note 29.3 (F) Terms and conditions
1. Sales to and purchases from related parties were made on normal commercial terms and conditions and at prevailing market prices or where market price is not available, at cost plus margin.
2. Transactions relating to dividends were on the same terms and conditions that applied to other shareholders.
3. All outstanding balances are unsecured and are repayable in cash and cash equivalent.
Note 29.4 Current and deferred tax
The major components of income tax expense for the years ended March 31, 2024 and March 31, 2023, are:
a) Defined contribution plans Gratuity
The gratuity fund is maintained with the Life Insurance Corporation of India and Bajaj Allianz Life Insurance under Group Gratuity scheme. Every employee is entitled to a benefit equivalent to the last drawn salary of 15 days for each completed year of service in line with the Payment of Gratuity Act, 1972 or the Company scheme, whichever is more beneficial. Gratuity is payable at the time of separation or retirement from the Company, whichever is earlier. The benefit vests after five years of continuous service.
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied while calculating the defined benefit liability recognised in the Standalone Balance Sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change as compared to the previous year.
Through its defined contribution plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
i) Interest rate risk
A fall in the discount rate that 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.
ii) 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 the assumed level will increase the plan liability.
iii) Investment risk
The present value of the defined benefit plan liability is calculated using a discount rate, which is determined with 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.
iv) Concentration risk
The plan includes 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 low as insurance companies have to follow regulatory guidelines.
c) Defined contribution plans:Provident fund
State defined contribution plans
Employers'' contribution to employees'' state insurance Employers'' contribution to employees'' pension scheme 1995
The provident fund and the state defined contribution plans are operated by the Regional Provident Fund Commissioner. Under the scheme, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit scheme to fund the benefits. These funds are recognised by the income tax authorities. The contribution of the Company to the provident fund and other contribution plans for all employees is charged to the Standalone Statement of Profit and Loss.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are: a) recognised and measured at fair value and b) measured at amortised cost and for which fair values are disclosed in the Standalone 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 in the Indian Accounting Standard. An explanation of each
includes investments in BEIL Infrastructure Ltd (21,000 equity shares) and Narmada Clean Tech (4,06,686 equity shares), which are for operation purposes and the Company has to hold it till production at GIDC, Ankleshwar site continues. The Company estimates that the fair value of these investments are not materially different as compared to its cost.
There were no transfers between any levels during the year.
Level 1: This hierarchy includes financial instruments measured using quoted prices. The fair value of all equity instruments that are traded on 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 (for example over-the-counter derivatives) is determined using valuation techniques, which maximise the use of observable market data and minimise the reliance on entity-specific estimates. The mutual fund units are valued using the closing net assets value. 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.
b) Valuation techniques used to determine fair value
Specific valuation techniques used to value financial instruments include:
i) the use of quoted market prices or dealer quotes for similar instruments
ii) the fair value of the remaining financial instruments is determined using discounted cash flow analysis
The Finance department of the Company includes a team that performs the valuations of financial assets and liabilities with assistance from independent external experts when required, for financial reporting purposes, including level 3 fair values.
The carrying amounts of trade receivables, bank deposits with less than 12 months maturity, cash and cash equivalents, other receivables, trade payables, employee benefits payable, payable towards expenses and retention are considered to be the same as their fair values due to the current and short-term nature of such balances.
The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.
For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.
Note 29.7 Financial risk management
The business activities of the Company are exposed to a variety of financial risks, namely liquidity risk, market risk and credit risk. Responsibility for the establishment and oversight of the risk management framework lies with the Senior Management of the Company. The Company has constituted a Risk Management Committee, which is responsible for developing and monitoring the risk management policies of the Company. The key risks and mitigating actions are also placed before the Audit Committee of the Company. The risk management policies
Note 29.7 Financial risk management (continued)
are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the activities of the Company.
This note explains the risks which the Company is exposed to and how the Company manages the risks in the Standalone Financial Statements.
Credit risk is the risk of financial loss to the Company if a customer or counterparty fails to meet its contractual obligations. Credit risk arises from cash and cash equivalents, financial assets measured at amortised cost or fair value through profit and loss deposits with banks and financial institutions, as well as credit exposures to trade | non-trade customers including outstanding receivables.
i) Credit risk management
Credit risk is managed through the policy surrounding Credit Risk Management.
ii) Provision for expected credit losses
The Company provides for expected credit loss based on the following:
Trade receivables consist of a few customers, for which ongoing credit evaluation is performed on the financial condition of the account receivables. Historical experience of collecting receivables of the Company is supported by low-level of past default and hence the credit risk is perceived to be low.
The ultimate responsibility for liquidity risk management rests with the Board of Directors (Bord). The Board approves an appropriate liquidity risk management framework for short, medium and long-term funding and liquidity management requirements of the Company. The Management monitors rolling forecasts of the liquidity position of the Company and cash and cash equivalents on the basis of expected cash flows. Additionally, they manage liquidity risk by continuously monitoring the forecast and actual cash flows by matching the maturity profiles of financial assets and liabilities.
Note 29.7 Financial risk management (continued)
The following table shows the maturity analysis of financial liabilities of the Company based on contractually agreed undiscounted cash flows, including contractual interest payment, as at the Standalone Balance Sheet date:
i) Cash flow and fair value interest rate risk
Maturity analysis of financial liabilities of the Company is based on contractually agreed undiscounted cash flows as at the Balance Sheet date:
Borrowings of the Company was from Axis Bank Ltd and are mainly exposed to interest rate risk due to its variable interest rate borrowings. The interest rate risk arises due to uncertainties about the future market interest rate of these borrowings.
As an estimation of the approximate impact of the interest rate risk, with respect to financial instruments, the Group has calculated the impact of a 25 bps change in interest rates. A 25 bps increase in interest rates would have led to approximately an additional impact of '' nil lakhs (2022-23: '' 0.02 lakhs). A 25 bps decrease in interest rates would have led to an equal but opposite effect.
The Company operates in a single business segment that is the manufacturing of bulk chemicals. The Board is the Chief Operating Decision Maker (the âCODM'') of the Company and makes operating decisions, assesses financial
performance and allocates resources based on discrete financial information. Since the Company operates in a single operating segment, separate segment reporting has not been made under Indian Accounting Standard (âInd AS'') 108 - âOperating Segment''. Further, its operations are confined only to one geographical segment i.e. within India.
During 2023-24, the loans aggregating '' 1,699 lakhs as of March 31, 2023 is converted into 1,69,90,000, 10.50% non-cumulative redeemable preference shares at '' 10 per share, amounting to '' 1,699 lakhs and additional investment of '' 500 lakhs made into 50,00,000, 10.50% non-cumulative redeemable preference shares at '' 10 per share.
During 2022-23, the loans aggregating '' 5,000.14 lakhs are converted into 27,19,000 equity shares at '' 110.34 per share amounting to '' 3,000.14 lakhs and 2,00,00,000, 10% non-cumulative redeemable preference shares at '' 10 per share, amounting to '' 2,000 lakhs.
Above disclosures have been made based on information available with the Company, for suppliers who are registered as micro, small and medium enterprise under âThe Micro, Small and Medium Enterprise Development Act, 2006'' as at March 31, 2024. The auditors have relied upon in respect of this matter.
Note 29.12 Expenditure on Corporate Social Responsibility initiatives
a) Gross amount required to be spent by the Company during the year is '' 12.05 lakhs (March 31, 2023: '' 20.85 lakhs)
The primary objective of capital management is to maximise shareholder value, safeguard business continuity and support the growth of the Company. It determines the capital requirement based on annual operating plans, long-term plans and other strategic investment plans. The funding requirements are met through equity and operating cash flows generated. The Company is not subject to any externally imposed capital requirements (refer Note 29.13 (b) for debt-equity ratio).
Note 29.15 Other statutory information (required by schedule III to the Companies Act, 2013)
a) The Company has not entered into any such transaction which is not recorded in the books of account that has been surrendered or disclosed as income during the year in tax assessments under the Income Tax Act, 1961.
b) The Company has complied with the number of layers prescribed under Clause (87) of Section 2 of the Act read with the Companies (Restriction on Number of Layers) Rules, 2017.
c) The Company is not declared wilful defaulter by any bank or financial institution or other lender.
d) The Company has not traded or invested in cryptocurrency or virtual currency during the financial year.
e) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the year.
f) No proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made there under.
g) No loans or advances in the nature of loans are granted to Promoters, Directors, Key Managerial Personnel and the related parties (as defined under the Companies Act, 2013) either severally or jointly with any other person.
h) The Company does not have any charges or satisfaction of charges which is yet to be registered with Registrar of Companies beyond the statutory period.
i) There were no loans, advances and investments made in intermediary company.
Note 29.16 Relationship with struck off companies
There were no transactions or balances with struck off companies.
As per the requirements of Rule 3(1) of the Companies (Accounts) Rules 2014, the Company uses only such accounting software for maintaining its books of account that records the audit trail of all transactions, creates an edit log of all changes made in the books of account along with when such changes were made and by whom. This feature of recording audit trail has operated throughout the year and was not tampered with during the year. In respect of aforesaid accounting software, after thorough testing and validation, audit trail was not enabled for direct data changes at the database level in view of the possible impact on the efficiency of the system. In respect of audit trail at the database level, the Company has established and maintained an adequate internal control framework over its financial reporting and based on its assessment, has concluded that the internal controls for the year ended March 31, 2024, were effective. The Company is in the process of system upgradation to meet the database level audit trail requirement.
Note 29.18 Foreign currency exposure
There was no foreign currency exposure as on March 31, 2024.
Figure less than '' 500 have been shown as â0.00'' in the relevant notes in these Standalone Financial Statement. Note 29.20 Authorisation for issue of the Standalone Financial Statements
The Standalone Financial Statements were authorised for issue by the Board of Directors on April 19, 2024.
Mar 31, 2023
q) Provisions and contingent liabilities
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. These are reviewed at each year end and reflect the best current estimate. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense. Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.
r) Employee benefits Defined benefit plan
Gratuity:
Gratuity liability is a defined benefit obligation and is computed on the basis of an actuarial valuation by an actuary appointed for the purpose as per projected unit credit method at the end of each financial year. The liability or asset recognised in the Standalone Balance Sheet in respect of defined benefit gratuity plans, is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The liability so provided is paid to a trust administered by the Company, which in turn invests in eligible securities to meet the liability as and when it become due for payment in future. Any shortfall in the value of assets over the defined benefit obligation is recognised as a liability with a corresponding charge to the Standalone Statement of Profit and Loss.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows with reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate at the beginning of the period to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the Standalone Statement of Profit and Loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur directly in other comprehensive income. They are included in retained earnings in the Statement of changes in equity and in the Standalone Balance Sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit or loss as past service cost.
Defined contribution plan
Contributions to defined contribution schemes such as contribution to provident fund, superannuation fund, employees'' state insurance corporation, national pension scheme and labour welfare fund are charged as an expense to the Standalone Statement of Profit and Loss based on the amount of contribution required to
be made as and when services are rendered by the employees. The above benefits are classified as defined contribution schemes as the Company has no further defined obligations beyond the monthly contributions.
Short-term employee benefits
All employee benefits payable within 12 months of service such as salaries, wages, bonus, ex-gratia, medical benefits, etc, are recognised in the year in which the employees render the related service and are presented as current employee benefit obligations. Termination benefits are recognised as an expense as and when incurred.
Short-term employee benefits are provided at undiscounted amount during the accounting period based on service rendered by employees.
Other long-term employee benefits
The liabilities for earned leave is not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in profit or loss.
s) Earnings per share
Earnings per share (EPS) is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted EPS, the net profit for the period attributable to equity shareholders and the weighted average number of equity shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
Critical estimates and judgements
Preparation of the Standalone Financial Statements require use of accounting estimates, judgements and assumptions, which by definition, will seldom equal the actual results. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the Standalone Financial Statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the Standalone Financial Statements. This Note provides an overview of the areas that involves a higher degree of judgements or complexity and of items that are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the Standalone Financial Statements.
The areas involving critical estimates or judgements are:
i) Estimation for income tax: Note 1 (e)
ii) Estimation of useful life of tangible assets: Note 1 (g)
iii) Estimation of provision for inventories: Note 1 (l)
iv) Allowance for credit losses on trade receivables: Note 1 (j)
v) Estimation of claims | liabilities: Note 1 (q)
vi) Estimation of defined benefit obligations: Note 1 (r)
vii) Fair value measurements: Note 27.7
viii) Impairment: Note 1 (h)
Risk exposure
Through its defined contribution plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
i) Interest rate risk
A fall in the discount rate that 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.
ii) Salary risk
The present value of the defined benefit plan liability is calculated with reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan liability.
iii) Investment risk
The present value of the defined benefit plan liability is calculated using a discount rate, which is determined with 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.
iv) 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.
The weighted average duration of the defined benefit obligation is seven years (2021-22: seven years). The expected maturity analysis of gratuity is as follows:
includes investments in BEIL Infrastructure Ltd (formerly known as Bharuch Enviro Infrastructure Ltd) (21,000 equity shares) and Narmada Clean Tech (formerly known as Narmada Clean Tech Ltd) (4,06,686 equity shares), which are for operation purpose and the Company has to hold it till production at GIDC, Ankleshwar site continues. The Company estimates that the fair value of these investments are not materially different as compared to its cost.
There were no transfers between any levels during the year.
Level 1: This hierarchy includes financial instruments measured using quoted prices. The fair value of all equity instruments that are traded on 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 (for example over-the-counter derivatives) is determined using valuation techniques, which maximise the use of observable market data and rely as little as possible on entity-specific estimates. The mutual fund units are valued using the closing net assets value. 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.
b) Valuation techniques used to determine fair value
Specific valuation techniques used to value financial instruments include:
i) the use of quoted market prices or dealer quotes for similar instruments
ii) the fair value of the remaining financial instruments is determined using discounted cash flow analysis
c) Valuation processes
The Finance department of the Company includes a team that performs the valuations of financial assets and liabilities with assistance from independent external experts when required, for financial reporting purposes, including level 3 fair values.
The business activities of the Company are exposed to a variety of financial risks, namely liquidity risk, market risk and credit risk. Responsibility for the establishment and oversight of the risk management framework lies with the Senior Management of the Company. The Company has constituted a Risk Management Committee, which is responsible for developing and monitoring the risk management policies of the Company. The key risks and mitigating actions are also placed before the Audit Committee of the Company. The risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the activities of the Company.
a) Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty fails to meet its contractual obligations. Credit risk arises from cash and cash equivalents, financial assets measured at amortised cost or fair value through profit and loss and deposits with banks and financial institutions, as well as credit exposures to trade | non-trade customers including outstanding receivables.
i) Credit risk management
Credit risk is managed through the policy surrounding Credit Risk Management.
ii) Provision for expected credit losses
The Company provides for expected credit loss based on the following:
Trade receivables
Trade receivables consist of few customers, for which ongoing credit evaluation is performed on the financial condition of the account receivables. Historical experience of collecting receivables of the Company is supported by low level of past default and hence the credit risk is perceived to be low.
b) Liquidity risk
Ultimate responsibility for liquidity risk management rests with the Board of Directors, who has approved an appropriate liquidity risk management framework for short, medium and long-term funding and liquidity management requirements of the Company. The Management monitors rolling forecasts of the liquidity position of the Company and cash and cash equivalents on the basis of expected cash flows and manages liquidity risk by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.
c) Market risk
i) Cash flow and fair value interest rate risk
Maturity analysis of financial liabilities of the Company is based on contractually agreed undiscounted cash flows as at the Balance Sheet date:
Borrowings of the Company is from Axis Bank Ltd and is mainly exposed to interest rate risk due to its variable interest rate borrowings. The interest rate risk arises due to uncertainties about the future market interest rate of these borrowings.
As an estimation of the approximate impact of the interest rate risk, with respect to financial instruments, the Group has calculated the impact of a 25 bps change in interest rates. A 25 bps increase in interest rates would have led to approximately an additional impact of 0.02 lakhs (202122: Nil lakhs). A 25 bps decrease in interest rates would have led to an equal but opposite effect.
Note 27.8 Segment information
The Company operates in a single business segment that is manufacturing of bulk chemicals. Further, its operations are confined within India and the major customer of the Company is Atul Ltd. Accordingly, there are no separate reportable segments as per Ind AS - 108 on âOperating Segmentâ and no further disclosures are required.
Note 27.15 Other statutory information (required by Schedule III to the Companies Act, 2013)
a) The Company has not entered into any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in tax assessments under the Income tax Act, 1961.
b) The Company has complied with the number of layers prescribed under Clause (87) of Section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.
c) The Company is not declared wilful defaulter by any bank or financial institution or other lender.
d) The Company has not traded or invested in crypto currency or virtual currency during the financial year.
e) The Company has not revalued its property, plant and equipment (including Right-of-use assets) or intangible assets or both during the year.
f) No proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made there under.
g) No loans or advances in the nature of loans are granted to promoters, Directors, key managerial personnel and the related parties (as defined under the Companies Act, 2013) either severally or jointly with any other person.
h) The Company does not have any charges or satisfaction of charges which is yet to be registered with Registrar of Companies beyond the statutory period.
i) There were no loans, advances and investments made in intermediary company.
Note 27.16 Relationship with struck off companies
The Company does not have any transactions during the year and also does not have outstanding balance as at March 31, 2023, with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of the Companies Act, 1956.
Note 27.17 Foreign currency exposure
There was no foreign currency exposure as on March 31, 2023.
Note 27.18 Rounding off
All amounts are rounded off to the nearest thousand unless otherwise stated.
Note 27.19 Authorisation for issue of the Standalone Financial Statements
The Standalone Financial Statements were authorised for issue by the Board of Directors on April 20, 2023.
In terms of our report attached For and on behalf of the Board of Directors
For Deloitte Haskins & Sells LLP
Chartered Accountants
Sunil Lalbhai
Ketan Vora Yogesh Vyas Chairman
Partner Chief Financial Officer (DIN: 00045590)
Rajeev Kumar
Mumbai Ankit Mankodi Managing Director
April 20, 2023 Company Secretary (DIN: 07731459)
Mar 31, 2019
1. Background
Amal Ltd (the Company) is a public company limited by shares, incorporated and domiciled in India. The company is a subsidiary of Atul Ltd. Its registered office is located at Atul House, 310 B, Veer Savarkar Marg, Dadar (West), Mumbai 400 028, Maharashtra, India and its principal place of business is located at Ankleshwar 393 002, Gujarat, India.
The Company is engaged in manufacturing of bulk chemicals such as Sulphuric acid and Oleum and their downstream products such as Sulphur dioxide and Sulphur trioxide.
Notes:
''The lease term in respect of leasehold land is 99 years. The lease term in respect of land acquired under finance lease is up to 99 years with ability to opt for renewal of the lease term on fulfillment of certain conditions.
2Includes assets retired from active use.
3All property, plant and equipment are pledged as security {Refer Note 9(ii)}.
i) Inventories are given as security against the secured loan from a related party - (refer Note 9).
ii) Written-down value of inventories to net realisable value amounted to Rs. 9.32 lakhs. These were recognised as an expense during the year and included in repairs and maintenance in the Statement of Profit and Loss.
ii) Rights, preferences and restrictions:
The Company has one class of shares referred to as equity shares having a par value of Rs. 10 each.
a) Equity shares:
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts and preference shares. The distribution will be in proportion to the number of equity shares held by the shareholders.
b) Dividend:
There is currently restriction on payment of dividend. The dividend proposed by the Board is subject to the approval of the shareholders in the ensuing Annual General Meeting.
i) Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.
ii) As per Modified sanctioned Scheme MS-10 and MS-13 approved by the Board of Industrial Finance and Reconstruction, the Company had issued 0% Redeemable Preference shares of Rs. 1,000 lakhs to Atul Ltd (Promoter) and received interest free secured loan of Rs. 1,128.89 lakhs and interest free unsecured loan of Rs. 539.58 lakhs from Atul Ltd. These financial liabilities are measured at amortised cost and the initial fair value difference is recognised as Capital contribution from Atul Ltd.
i) The Company had reached one time settlement with the secured creditors (comprising of loans availed from the banks and financial institutions) under which the payments were made directly by the lender Company (Atul Ltd) to them. By way of execution of deed of assignment of debts owed by the Company, the lender Company has now acquired from these banks and financial institutions the debts and rights, title and interest in encumbrances, facility and underlying securities including inter alia comprised of all movable and immovable properties that have been charged by the Company in favour of these banks and financial institutions pursuant to the original deed of hypothecation entered into by the Company. The entire dues | debts against the banks and financial institutions have been fully satisfied for which ''no dues | debts certificates'' have been obtained from them and the charges have been modified and stands in favour of the lender Company as Secured loans.
ii) Security:
The secured loan from related party is secured by the whole immovable and movable properties including machinery, machinery spares, tools and accessories, inventory and other movable assets both present and future.
iii) Terms of repayment of term loans:
a. Secured loan from Atul Ltd does not carry any interest and shall be repaid in three installments, first installment of Rs. 200 lakhs in FY 2017-18 (paid in 2017-18), second installment of Rs. 300 lakhs in FY 2018-19 (paid during the year) and third installment will be of Rs. 628.89 lakhs in FY 2019-20 as per the approved modified sanctioned scheme MS-13.
b. Unsecured loan as on March 31, 2019 also does not carry any interest is repayable after March 31, 2019 upon terms and conditions which will be mutually decided between the Company and the lender Company (Atul Ltd).
iv) Terms | rights attached to preference shares:
The Company has only one class of 0% Redeemable preference shares having a par value of Rs. 10 per share. These shares are redeemable at par over a period of 7 years, starting Rs. 100 lakhs every year from financial year 2016-17 to 2019-20 and Rs. 200 lakhs every year from financial year 2020-21 to 2022-23.
v) Preference share capital
!Revenue from operations for periods up to June 30, 2017 includes excise duty Rs. 67.51 lakhs, which is discontinued effective July 01, 2017 upon implementation of Goods and Services Tax (GST) in India. In view of the aforesaid restructuring of indirect taxes, revenue from operations for the year ended March 31, 2019 is not comparable with the previous year.
2Contracts with customers are for short-term, at an agreed price basis having contracted credit period ranging up to 90 days. These contracts are mainly for sale of chemical products and steam besides sale of scrap and other goods. Delivery of goods are at ex-works. The contracts do not grant for any rights to return to the customer. Returns of goods are accepted by the company only on exception basis.
i) During 2018-19, unabsorbed depreciation has been used Rs. 978.93 lakhs to reduce tax liability of Rs. 272.34 lakhs
ii) The Company was declared sick by the BIFR under section 17(1) of SICA (Special Provisions), 1985 and hence there is no MAT liability under section 115JB of the Income Tax Act, 1961 for the current year.
The Company has taken land on cancellable lease at Atul from Atul Ltd for 99 years from February 03, 1996 on annual lease rent of Rs. 8,000.
Note 2. Going Concern
The Company was declared sick by the BIFR on July 20, 2006 and the BIFR, vide its order dated July 16, 2009, sanctioned the revival scheme for the Company which was further modified in June 2010. Relevant adjustments as required by the scheme including recasting of creditors had been carried out in the books of account.
Subsequently, the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) vide its order dated March 22, 2011 allowed the appeal filed by one of the unsecured creditors and remanded the case back to the BIFR for considering revival scheme through Operating Agency (OA). IDBI Bank Ltd (IDBI), appointed as OA by BIFR, reviewed the Draft Rehabilitation Scheme (DRS) prepared by the Company and submitted it to BIFR on February 16, 2012. The Company revised the DRS with cut-off date as March 31, 2013 and the same was approved by BIFR in its meeting held on July 01, 2013 as modified sanctioned scheme MS-13.
The salient features of MS-13 include implementation of project, settlement of unsecured creditors at 30% of principal dues (as approved under earlier scheme) and issue of shares to promoter Company towards advance received against share application money. Further, the Company had applied to Central Board of Direct Taxes (CBDT) for carry forward of business losses beyond eight years which was approved subject to certain conditions specified in CBDT order.
Due to adverse market condition and change in regulatory norms in USA, the Company has proposed to shelve the plan of setting-up p-MPAA project as stated in MS-13. However, in order to turnaround, the Management has contemplated other alternatives and considered the Merger with its parent Company Atul Ltd.
The Board of Directors had approved the proposed merger of the Company with Atul Ltd at its meeting held on December 05, 2014. The Company had submitted the Modified Draft Rehabilitation Scheme (''Merger Scheme'') to the BIFR through OA on March 31, 2016, for obtaining their approval.
The Central Government has, vide notification dated November 28, 2016, notified ''The Sick Industrial Companies (Special Provisions) Repeal Act, 2003'' effective from December 01, 2016, as a result, the BIFR | AAIFR have been abolished and the Sick Industrial Companies (Special Provisions) Act 1985 is repealed. Pursuant to the same, all proceedings or appeals of whatever nature pending before BIFR | AAIFR have been abated. However, any scheme of revival, which has already been sanctioned by the BIFR in the past and is under implementation, will continue to be in force. Accordingly, the MS-13 approved by BIFR in its meeting held on July 01, 2013 continues to be in place. In view of the above, books of account have been prepared on going concern basis.
The merger scheme pending approval of BIFR, stands abated. Subsequently, the Board of Directors in its meeting held on March 24, 2017 decided not to proceed with merger scheme.
Note 3. Employee Benefit Obligation
a) Defined contribution plans:
i) Provident fund
ii) State defined contribution plans
Employers'' contribution to employees'' state insurance Employers'' contribution to employees'' pension scheme 1995
The provident fund and the state defined contribution plan are operated by the Regional Provident Fund Commissioner. Under the scheme, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit scheme to fund the benefits. These funds are recognised by the income tax authorities.The Company''s contribution to the provident fund and other contribution plans for all employees is charged to Statement of Profit and Loss.
b) Defined benefit plans:
Gratuity
The gratuity fund is maintained with the Life Insurance Corporation of India under Group Gratuity scheme.
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the Balance Sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change as compared to the prior year.
Risk exposure
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
i) 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.
ii) 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 plan''s liability.
iii) 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.
iv) 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.
c) Other long-term benefits
Long term compensated absences (Unfunded scheme)
Leave encashment is payable to eligible employees who have earned leaves, during the employment and | or on separation as per the policy of the Company. Valuation in respect of leave encashment have been carried out by independent actuary, as at the Balance Sheet date, based on the following assumptions:
Note 4. Capital Management
a) The Company was declared sick by the BIFR through its order dated July 31, 2006. Presently, the Modified Sanctioned Scheme (MS-13) approved by BIFR in its meeting held on July 01, 2013 continues to be in place. The management is taking all steps to maximise shareholder value as per approved MS-13 to revive the Company and make its net worth positive.
b) The Company has not declared any dividend.
b) Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised 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 and mutual fund units that have a quoted price. The fair value of all equity instruments which are traded on 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 (for example over-the-counter derivatives) 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. The mutual fund units are valued using the closing net assets value.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
c) Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
i) the use of quoted market prices
ii) the fair value of the remaining financial instruments is determined using discounted cash flow analysis
d) Valuation processes
The Company obtains assistance of independent and competent third party valuers to perform the valuations of financial assets and liabilities wherever required for financial reporting purposes, including level 3 fair values. These experts report to the financial risk management team, Chief Financial Officer (CFO) and the Audit Committee (AC). Discussions of valuation processes and results are held between the Chief Financial Officer and the Audit Committee.
The carrying amounts of trade receivables, bank deposits with more than 12 months maturity, cash and cash equivalents, trade payables, employee benefit payables, payable towards expenses and retention payables are considered to be the same as their fair values due to the current and short-term nature of such business.
The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.
Note:
i) For investment held by the Company in equity shares of Bharuch Enviro Infrastructure Ltd, its cost of acquisition has been considered as fair value, considering the statutory requirement of regulatory authorities relating to purchase and restriction on transfer. All other investments in unquoted equity shares held by the Company relate to non-operating | loss making entities which have been impaired in the past, and there are no factors which indicate upward valuation.
The business activities of the Company are exposed to a variety of financial risks, namely liquidity risk, market risk and credit risk. Responsibility for the establishment and oversight of the risk management framework lies with the senior management of the Company. The Company has constituted a Risk Management Committee, which is responsible for developing and monitoring the risk management policies of the Company. The key risks and mitigating actions are also placed before the Audit Committee of the Company. The risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. risk management policies and systems are reviewed regularly to reflect changes in market conditions and the activities of the Company.
The Risk Management Committee of the Company is supported by the Finance team and experts who provides assurance that the financial risk activities of the Company are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the policies and risk objectives of the Company. The activities are designed to protect the financial results and position from financial risks, maintain market risks within acceptable parameters, while optimising returns and protect the financial investments, while maximising returns.
A) Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty fails to meet its contractual obligations. Credit risk arises from cash and cash equivalents, financial assets measured at amortised cost or fair value through profit and loss and deposits with banks and financial institutions, as well as credit exposures to trade | non-trade customers including outstanding receivables.
i) Credit risk management
Credit risk is managed through the policy surrounding Credit Risk Management.
ii) Provision for expected credit losses
The Company provides for expected credit loss based on the following:
Trade receivables
Trade receivables consist of few customers, majorly of amount receivable from Atul Ltd, the Holding Company, for which ongoing credit evaluation is performed on the financial condition of the account receivables.
B) Liquidity risk
Ultimate responsibility for liquidity risk management rests with the Board of Directors, who has approved an appropriate liquidity risk management framework for short, medium and long term funding and liquidity management requirements of the company. The Management monitors rolling forecasts of the liquidity position of the Company and cash and cash equivalents on the basis of expected cash flows and manages liquidity risk by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
C) Market risk
i) Cash flow and fair value interest rate risk
Entire borrowings of the Company are from Atul Ltd (Holding Company) and are fixed rate borrowings that is 0% are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.
ii) Price risk
a) Exposure
The Company is mainly exposed to the price risk due to its investments in mutual funds. The price risk arises due to uncertainties about the future market values of these investments. In order to manage its price risk arising from investments in equity instruments, the Company maintains its portfolio in accordance with the framework set by the risk management policies.
The Company operates in a single business segment that is manufacturing of bulk chemicals. Further, its operations are confined within India and major customer of the Company is Atul Ltd. Accordingly, there are no separate reportable segments as per Ind AS-108 on ''Operating Segments'' and no further disclosures are required.
Note 5. Loans
During the year, the Company has not entered into any transaction in nature of loans and advances which falls within the purview of Regulation 34(3) read with para A of Schedule V to the SEBI (listing obligations and disclosure requirements) Regulations, 2015 read with Section 186(4) of the Companies Act, 2013.
Note 6. Regrouping Reclassification
Figures for previous year have been regrouped reclassified rearranged wherever necessary to make them comparable to those for the current year.
Note 7. Rounding off
All amounts are rounded off to the nearest thousand unless otherwise stated.
Note 8. Authorisation for issue of the Financial Statements
The Financial Statements were authorised for issue by the Board of Directors on April 18, 2019.
Mar 31, 2018
Background
Amal Ltd (the Company) is a public company limited by shares, incorporated and domiciled in India. The Company is a subsidiary of Atul Ltd. Its registered office is located at Atul House, 310 B, Veer Savarkar Marg, Mumbai 400 028, Maharashtra, India and its principal place of business is located at Ankleshwar 393 002, Gujarat, India.
The Company is engaged in manufacturing of bulk chemicals such as Sulphuric Acid and Oleum and their downstream products such as Sulphur Dioxide and Sulphur Trioxide.
i) Rights, preferences and restrictions:
The Company has one class of shares referred to as equity shares having a par value of Rs. 10 each.
a) Equity shares:
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts and preference shares. The distribution will be in proportion to the number of equity shares held by the Shareholders.
Each holder of equity shares is entitled to one vote per share.
b) Dividend:
The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board is subject to the approval of the Shareholders in the ensuing Annual General Meeting.
Notes:
i) Advance towards Equity share capital amounting to â NIL (March 31, 2017: Rs. 240 lakhs) refers to the amount received from the promoter Company towards share capital during the year 1996-97. During the year the Company has allotted 24 lakhs equity shares of Rs. 10 each at par on preferential allotment basis to the promoter - Atul Finserv Ltd against the share application money pending allotment pursuant to approved scheme by erstwhile BIFR | Insolvency and Bankruptcy Code, 2016.
ii) Securities premium pertains to the premium on issue of shares. It is utilised in accordance with the provisions of the Companies Act, 2013.
iii) As per Modified Sanctioned Scheme MS-10 and MS-13 approved by the BIFR, the Company had issued 0% redeemable preference shares of Rs. 1,000 lakhs to Atul Ltd (promoter) and received interest free secured loan of Rs. 1128.89 lakhs and interest free unsecured loan of Rs. 539.58 lakhs from Atul Ltd. These financial liabilities are measured at amortised cost and the Day 1 fair value difference is recognised as capital contribution from Atul Ltd.
1Current maturities of long term debt disclosed under other financial liabilities {refer Note 11(b)}
Notes:
i) The Company had reached one time settlement with the secured creditors comprising of corporate | term loans availed from the banks and financial institutions under which the payments were made directly by the lender Company (Atul Ltd) to them. By way of execution of deed of assignment of debts owed by the Company, the lender Company has now acquired from these banks and financial institutions the debts and rights, title and interest in encumbrances, facility and underlying securities including inter alia comprised of all movable and immovable properties that have been charged by the Company in favour of these banks and financial institutions pursuant to the original deed of hypothecation entered into by the Company. The entire dues | debts against the banks and financial institutions have been fully satisfied for which âNo dues | debts certificatesâ have been obtained from them and the charges have been modified and stands in favour of the lender Company as Secured loans.
ii) Security:
The secured loan from Related Party is secured by the whole immovable and movable properties including machinery, machinery spares, tools and accessories, inventory and other movable assets both present and future.
iii) Terms of repayment of term loans:
a. Secured loan from Atul Ltd does not carry any interest and shall be repaid in three instalments, first instalment of Rs. 200 lakhs in FY 2017-18 (paid during the year), second instalment will be of Rs. 300 lakhs in FY 2018-19 and third instalment will be of Rs. 628.89 lakhs in FY 2019-20 as per the approved modified sanctioned scheme MS - 13.
b. Unsecured loan as on March 31, 2018 which does not carry any interest is repayable after March 31, 2019 upon terms and conditions which will be mutually decided between the Company and the lender Company (Atul Ltd).
iv) Terms | rights attached to preference shares:
The Company has only one class of 0% Redeemable preference shares having a par value of Rs. 10 per share. These shares are redeemable at par over a period of 7 years, starting Rs. 100 lakhs every year from financial year 2016-17 to 2019-20 and Rs. 200 lakhs every year from financial year 2020-21 to 2022-23.
1Revenue from operations for periods up to June 30, 2017 includes excise duty, which is discontinued effective July 01, 2017 upon implementation of Goods and Services Tax (GST) in India. In accordance with Ind AS 18, âRevenueâ, GST is not included in revenue from operations. In view of the aforesaid restructuring of indirect taxes, revenue from operations for the year ended March 31, 2018 is not comparable with the previous year.
Notes:
i) During 2017-18, the unrecognised past tax losses of Rs. 1,192.92 lakhs (March 31, 2017: Rs. 888.66 lakhs) have been used to reduce the current year tax of Rs. 331.87 lakhs (March 31, 2017: Rs. 307.55 lakhs), after considering unabsorbed depreciation to the extent of Rs. 792.18 lakhs (March 31,2017: Rs. 996.47 lakhs)
ii) The Company was declared sick by the BIFR under Section 17(1) of SICA (Special Provisions), 1985 and hence MAT under Section 115JB of the Income Tax Act, 1961 is not applicable.
Note 1 Lease
The Company has taken land on cancellable lease at Atul from Atul Ltd for 99 years from February 03, 1996 on annual lease rent of Rs. 8,000.
Note 2 Going Concern
The Company was declared sick by the BIFR on July 20, 2006 and the BIFR, vide its order dated July 16, 2009, sanctioned the revival scheme for the Company, which was further modified in June 2010. Relevant adjustments as required by the scheme including recasting of creditors were carried out in the books of account.
Subsequently, the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) vide its order dated March 22, 2011 allowed the appeal filed by one of the unsecured creditors and remanded the case back to the BIFR for considering revival scheme through Operating Agency (OA). IDBI Bank Ltd (IDBI), appointed as OA by BIFR, reviewed the Draft Rehabilitation Scheme (DRS) prepared by the Company and submitted it to BIFR on February 16, 2012. The Company revised the DRS with cut-off date as March 31, 2013 and the same was approved by BIFR in its meeting held on July 01, 2013 as modified sanctioned scheme MS - 13.
The salient features of MS - 13 include implementation of project, settlement of unsecured creditors at 30% of principal dues (as approved under earlier scheme) and issue of shares to promoter Company towards advance received against share application money. Further, the Company had applied to Central Board of Direct Taxes (CBDT) for carry forward of business losses beyond eight years which was approved subject to certain conditions specified in CBDT order.
Due to adverse market condition and change in regulatory norms in USA, the Company has proposed to shelve the plan of setting-up p-MPAA project as stated in MS-13. However, in order to turnaround, the Management has contemplated other alternatives and considered the Merger with its parent Company Atul Ltd.
The Board of Directors had approved the proposed merger of the Company with Atul Ltd at its meeting held on December 05, 2014. The Company had submitted the Modified Draft Rehabilitation Scheme (âMerger Schemeâ) to the BIFR through OA on March 31, 2016, for obtaining their approval.
The Central Government has, vide notification dated November 28, 2016, notified âThe Sick Industrial Companies (Special Provisions) Repeal Act, 2003â effective December 01, 2016, as a result, the BIFR and AAIFR have been abolished and the Sick Industrial Companies (Special Provisions) Act, 1985 is repealed. Pursuant to the same, all proceedings or appeals of whatever nature pending before BIFR | AAIFR have been abated. However, any scheme of revival, which has already been sanctioned by the BIFR in the past and is under implementation, will continue to be in force. Accordingly, the MS - 13 approved by BIFR in its meeting held on July 01, 2013 continues to be in place. In view of the above, books of account have been prepared on going concern basis.
The merger scheme pending approval of BIFR, stands abated. Subsequently, the Board of Directors in its meeting held on March 24, 2017 decided not to proceed with the merger scheme.
Note 3 Micro and small enterprise dues
The Company has certain dues to suppliers (trade and capital) registered under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act). The disclosures pursuant to the said MSMED Act are as follows:
Note 4 Employee Benefit Obligation
a) Defined contribution plans:
i) Provident fund
ii) State defined contribution plans
Employersâ contribution to employeesâ state insurance Employersâ contribution to employeesâ pension scheme 1995
The provident fund and the state defined contribution plan are operated by the Regional Provident Fund Commissioner. Under the scheme, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit scheme to fund the benefits. These funds are recognised by the income tax authorities.The Companyâs contribution to the provident fund and other contribution plans for all employees is charged to the Statement of Profit and Loss.
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the Balance Sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change as compared to the prior year.
Risk Exposure
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
i) Interest rate risk
A fall in the discount rate which is linked to the G Sec. 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.
ii) 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.
iii) 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.
iv) 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.
The weighted average duration of the defined benefit obligation is 5 years (March 31, 2017: 5 years). The expected maturity analysis of gratuity is as follows:
c) Other long-term benefits
Long term compensated absences (Unfunded scheme)
Leave encashment is payable to eligible employees who have earned leaves, during the employment and | or on separation as per the policy of the Company. Valuation in respect of leave encashment have been carried out by independent actuary, as at the Balance Sheet date, based on the following assumptions:
Note 5 Expenditure on Corporate Social Responsibility initiatives
Gross amount required to be spent by the Company during the year is Rs. 6.46 lakhs (March 31, 2017: Nil)
Note 6 Capital Management
a) The Company was declared sick by the BIFR through its order dated July 31, 2006. Presently, the Modified Sanctioned Scheme (MS-13) approved by BIFR in its meeting held on July 01, 2013 continues to be in place. The management is taking all steps to maximise Shareholder value as per approved MS-13 to revive the Company and make its net worth positive.
b) The Company has not declared any dividend.
Note 7: Fair value measurements
a) Financial instruments by category
b) Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised 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 3 levels prescribed under the Accounting Standard. An explanation of each level follows underneath the table.
There were no transfers between any levels during the year.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments and mutual fund units that have a quoted price. The fair value of all equity instruments which are traded on the Stock Exchanges is valued using the closing price as at the reporting period. The mutual fund units are valued using the closing net assets value.
Level 2: The fair value of financial instruments that are not traded in an active market (for example over-the-counter derivatives) 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.
c) Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
i) the use of quoted market prices
ii) the fair value of the remaining financial instruments is determined using discounted cash flow analysis
d) Valuation processes
The Company obtains assistance of independent and competent third party valuers to perform the valuations of financial assets and liabilities wherever required for financial reporting purposes, including level 3 fair values. These experts report to the financial Risk Management team, Chief Financial Officer (CFO) and the Audit Committee (AC). Discussions of valuation processes and results are held between the Chief Financial Officer and the Audit Committee.
The carrying amounts of trade receivables, bank deposits with more than 12 months maturity, cash and cash equivalents, trade payables, employee benefit payables, payables towards expenses and retention payables are considered to be the same as their fair values due to the current and short-term nature of such business.
The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.
Note:
i) For investment held by the Company in equity shares of Bharuch Enviro Infrastructure Ltd, its cost of acquisition has been considered as fair value, considering the statutory requirement of regulatory authorities relating to purchase and restriction on transfer. All other investments in unquoted equity shares held by the Company relate to non operating | loss making entities which have been impaired in the past, and there are no factors which indicate upward valuation.
Note 8: Financial Risk Management
The business activities of the Company are exposed to a variety of financial risks, namely liquidity risk, market risk, and credit risk. Responsibility for the establishment and oversight of the Risk Management framework lies with the Senior Management of the Company. The Company has constituted a Risk Management Committee, which is responsible for developing and monitoring the Risk Management policies of the Company. The key risks and mitigating actions are also placed before the Audit Committee of the Company. The Risk Management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk Management policies and systems are reviewed regularly to reflect changes in market conditions and the activities of the Company.
The Risk Management Committee of the Company is supported by the Finance team and experts who provide assurance that the financial risk activities of the Company are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the policies and risk objectives of the Company. The activities are designed to protect the financial results and position from financial risks, maintain market risks within acceptable parameters, while optimising returns and protecting the financial investments, while maximising returns.
This note explains the sources of risk which the Company is exposed to and how the Company manages the risk in the Financial Statements.
A) Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty fails to meet its contractual obligations. Credit risk arises from cash and cash equivalents, investments carried at amortised cost or fair value through profit and loss and deposits with banks and financial institutions, as well as credit exposures to trade | non-trade customers including outstanding receivables.
i) Credit Risk Management
Credit risk is managed through the policy surrounding Credit Risk Management.
ii) Provision for expected credit losses
The Company provides for expected credit loss based on the following:
Trade receivables
Trade receivables consist of few customers, majorly of amount receivable from Atul Ltd, the Holding Company, for which ongoing credit evaluation is performed on the finanical condition of the account receivables.
B) Liquidity risk
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for short, medium and long term funding and liquidity management requirements of the Company. The Management monitors rolling forecasts of the liquidity position of the Company and cash and cash equivalents on the basis of expected cash flows and manages liquidity risk by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
The following table shows the maturity analysis of financial liabilities of the Company based on contractually agreed undiscounted cash flows including contractual interest payment, as at the Balance Sheet date:
C) Market risk
i) Cash flow and fair value interest rate risk
Entire borrowings of the Company are from Atul Ltd (Holding Company) and are fixed rate borrowings at 0% carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.
ii) Price risk a) Exposure
The Company is mainly exposed to the price risk due to its investments in equity instruments. The price risk arises due to uncertainties about the future market values of these investments. In order to manage its price risk arising from investments in equity instruments, the Company maintains its portfolio in accordance with the framework set by the Risk Management policies.
Note 9 Segment information
The Company operates in a single business segment that is manufacturing of bulk chemicals. Further, its operations are confined within India and major customer of the Company is Atul Ltd. Accordingly, there are no separate reportable segments as per Ind AS 108 on âOperating Segmentsâ and no further disclosures are required.
Note 10 Loans
During the year, the Company has not entered into any transaction in nature of loans and advances which falls within the purview of Regulation 34(3) read with para A of Schedule V to the SEBI (listing obligations and disclosure requirements) Regulations, 2015 read with Section 186(4) of the Companies Act, 2013.
Note 11 Rounding off
All amounts are rounded off to the nearest thousand unless otherwise stated.
Note 12 Authorisation for issue of the Financial Statements
The Financial Statements were authorised for issue by the Board of Directors on April 20, 2018.
Mar 31, 2017
1 * The Company has availed the deemed cost exemption under Para D7AA of IND AS 101 in relation to the property, plant and equipment on the date of transition that is April 01, 2015 and hence the net carrying value as per Indian GAAP of block as on April 01, 2015 has been considered as deemed cost on that date. Refer note below for the carrying value of gross block and the accumulated depreciation as on April 01, 2015 under Indian GAAP (IGAAP)
2. Leasehold land
The lease term in respect of leasehold land is 97 years. The lease term in respect of land acquired under finance lease is up to 97 years with ability to opt for renewal of the lease term on fulfillment of certain conditions.
3. All Property, plant and equipments are pledged as security (refer note 9)
ii) Terms | rights attached to Equity Shares
a) The Company has only one class of Equity Shares having a par value of Rs. 10 per share. Each holder of Equity Shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of Equity Shares held by the shareholders.
b) Dividend - Nil
Note
a) Advance towards Share Capital amounting to Rs. 240 lakhs refers to the amount received from the Promoter Company towards Share Capital during the year 1996-97. The Company to issue 24 lakhs equity shares of Rs. 10/- each to the Promoter Company at par as per the Modified Sanctioned Scheme (MS - 13) approved by the BIFR on July 01, 2013. The Company has applied for in-principle approval from BSE and SEBI which is pending. Considering the above, the advance has been shown as Share application money pending allotment.
b) Securities premium reserve is used to record the premium on issue of shares. The reserve is utilized in accordance with the provisions of the Companies Act, 2013.
c) As per Modified Sanctioned Scheme (MS-10 and MS-13) approved by the Board for Industrial and Financial Reconstruction (BIFR), the Company had issued 0% redeemable Preference shares of Rs.10 crore to Atul Ltd (Promoter) and received interest free secured loan of Rs. 11.29 crore and interest free unsecured loan of Rs. 5.39 crore from Atul Ltd. These financial liabilities are measured at amortized cost and the Day 1 fair value difference is recognized as Deemed Capital contribution from Atul Ltd.
* Current maturities of long term debt disclosed under other financial liabilities (refer note 11(b))
Note
(i) The Company had reached a One Time Settlement with the secured creditors comprising of Corporate | Term loans availed from the banks and financial institutions under which the payments were made directly by the lender company (Atul Ltd) to them. By way of execution of deed of assignment of debts owed by the Company, the lender company has now acquired from these banks and financial institutions the debts and rights, title and interest in encumbrances, facility and underlying securities including inter alia comprised of all movable and immovable properties that have been charged by the Company in favour of these banks and financial institutions pursuant to the original deed of hypothecation entered into by the Company. The entire dues | debts against the banks and financial institutions have been fully satisfied for which '' No dues | debts certificates '' have been obtained from them and the charges have been modified and stands in favour of the lender company as Secured loans.
(ii) Security: The secured loan from related party is secured by the whole immovable and movable properties including machinery, machinery spares, tools and accessories, inventory and other movables both present and future.
(iii) Terms of repayment of term loans:-
a. Secured loan from Atul Ltd does not carry any interest and shall be repaid in three installments, first installment will be of Rs. 200.00 lakhs in FY 2017-18, second installment will be of Rs. 300.00 lakhs in FY 2018-19 and third installment will be of Rs. 628.89 lakhs in FY 2019-20 as per the approved modified sanctioned scheme (MS - 13).
b. Unsecured loan as on March 31, 2017 which does not carry any interest is repayable after March 31, 2020 upon terms and conditions which will be mutually decided between the Company and the lender Company (Atul Ltd).
(iv) Terms | rights attached to Preference Shares
The Company has only one class of 0% Redeemable Preference Shares having a par value of Rs. 10 per share. These shares are redeemable at par over a period of 7 years, starting Rs. 100 lakhs every year from financial year 2016-17 to 2019-20 and Rs. 200 lakhs every year from financial year 2020-21 to 2022-23. Further extension of 1 year was granted by Atul Ltd as per the request of the Company for installment due on March 31, 2017.
(v) Preference Share Capital
Note 4 Lease
The Company has taken land on cancellable lease at Atul from Atul Ltd for 97 years from February 03, 1996 on annual lease rent of Rs. 8,000/-.
Note 5 Going concern
The Company was declared sick by the Board for Industrial and Financial Reconstruction (BIFR) on July 20, 2006 and the BIFR, vide its order dated July 16, 2009, sanctioned the revival scheme for the Company which was further modified in June 2010. Relevant adjustments as required by the scheme including recasting of creditors had been carried out in the books of account.
Subsequently, the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) vide its order dated March 22, 2011 allowed the appeal filed by one of the unsecured creditors and remanded the case back to the BIFR for considering revival scheme through Operating Agency (OA). IDBI Bank Ltd (IDBI), appointed as OA by BIFR, reviewed the Draft Rehabilitation Scheme (DRS) prepared by the Company and submitted it to BIFR on February 16, 2012. The Company revised the DRS with cut-off date as March 31, 2013 and the same was approved by BIFR in its meeting held on July 01, 2013 as modified sanctioned scheme (MS - 13). The salient features of MS - 13 include implementation of project, settlement of unsecured creditors at 30% of principal dues (as approved under earlier scheme) and issue of shares to promoter company towards advance received against share application money. Further, the Company has applied to Central Board of Direct Taxes for carry forward of business losses beyond eight years which is approved subject to certain conditions specified in CBDT order.
Due to adverse market condition and because of the change in regulatory norms in USA, the Company has proposed to shelve the plan of setting-up pMPAA project as stated in MS-13. However, in order to turnaround, the Management has contemplated other alternatives and considered the Merger with its parent company Atul Ltd.
The Board of Directors had approved the proposed merger of the Company with Atul Ltd at its meeting held on December 05, 2014. The Company had submitted the Modified Draft Rehabilitation Scheme (''Merger Scheme'') to the BIFR through IDBI Bank Ltd (Operating Agency) on March 31, 2016, for obtaining their approval. The Central Government has, vide notification dated November 28, 2016, notified ''The Sick Industrial Companies (Special Provisions) Repeal Act, 2003'' effective December 01, 2016. As a result, the BIFR and Appellate Authority for Industrial and Financial Reconstruction (AAIFR) have been abolished and the Sick Industrial Companies (Special Provisions) Act, 1985 is repealed. Pursuant to the same, all proceedings or appeals of whatever nature pending before BIFR | AAIFR have been abated. However, any scheme of revival, which has already been sanctioned by the BIFR in the past and is under implementation, will continue to be in force. Accordingly, the modified sanctioned scheme (MS - 13) approved by BIFR in its meeting held on July 01, 2013 continues to be in place. In view of the above, books of account have been prepared on going concern basis.
The Merger Scheme pending approval of BIFR, stands abated. Subsequently, the Board of Directors in its meeting held on March 24, 2017 decided not to proceed with Merger Scheme.
Note 6 Micro and small enterprise dues
The Company has certain dues to suppliers (trade and capital) registered under Micro, Small and Medium Enterprises Development Act, 2006 (''MSMED Act''). The disclosures pursuant to the said MSMED Act are as follows:
Above disclosures have been made based on information available with the Company, for suppliers who are registered as Micro, Small and Medium Enterprise under "The Micro, Small and Medium Enterprise Development Act, 2006 as at March 31, 2017. The auditors have relied upon in respect of this matter.
Note 7 Employee Benefit Obligation
(a) Defined contributions plans:
(i) Provident fund
(ii) State defined contribution plans
- Employers'' contribution to employees'' state insurance
- Employers'' contribution to employees'' pension scheme 1995
The provident fund and the state defined contribution plan are operated by the Regional Provident Fund Commissioner. Under the scheme, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit scheme to fund the benefits. These funds are recognized by the income tax authorities.
(b) Defined benefit plans:
Gratuity
The Gratuity fund is maintained with the LIC of India under Group Gratuity scheme.
Valuation in respect of Gratuity have been carried out by independent actuary, as at the Balance Sheet date, based on the following assumptions and sensitivity:
Sensitivity analysis produces the results by varying a single parameter & keeping all the other parameters unchanged. Sensitivity analysis fails to focus on the interrelationship between underlying parameters. Hence, the results may vary if two or more variables are changed.
There are no changes from the previous period in the methods and assumptions used in preparing the sensitivity analysis.
(c) Other Long term benefits
Long term compensated absences (Unfunded scheme)
Leave encashment is payable to eligible employees who have earned leaves, during the employment and | or on separation as per the company''s policy
Valuation in respect of leave encashment have been carried out by independent actuary, as at the Balance Sheet date, based on the following assumptions:
Note 8 First time adoption of IND AS Transition to Ind AS
These are the Company''s first Standalone Financial Statements prepared in accordance with Ind AS.
The Company has adopted Indian Accounting Standards (Ind AS) as notified by the Ministry of Corporate Affairs with effect from April 01, 2016, with a transition date of April 01, 2015. These Financial Statements for the year ended March 31, 2017 are the first the Company has prepared under Ind AS. For all periods up to and including the year ended March 31, 2016, the Company prepared its Financial Statements in accordance with the previously applicable Indian GAAP (hereinafter referred to as ''IGAAP''). The adoption of Ind AS has been carried out in accordance with Ind AS 101, First-time adoption of Indian Accounting Standards. Ind AS 101 requires that all Ind AS standards and interpretations that are issued and effective for the first Ind AS Financial Statements be applied retrospectively and consistently for all financial years presented. Accordingly, the Company has prepared Financial Statements which comply with Ind AS for year ended March 31, 2017, together with the comparative information as at and for the year ended March 31, 2016. The Company has prepared opening Ind AS balance sheet as at April 01, 2015, the date of transition to Ind AS. 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 IGAAP. An explanation of how the transition from IGAAP to Ind AS has affected the financial position, financial performance and cash flows of the Company is set out in the following tables and notes:
A. Exemptions and exceptions availed
In preparing these Ind AS Financial Statements, the Company has availed certain exemptions and exceptions in accordance with Ind AS 101, as explained below. The resulting difference between the carrying values of the assets and liabilities in the Financial Statements as at the transition date under Ind AS and IGAAP have been recognized directly in equity (retained earnings or another appropriate category of equity). This note explains the adjustments made by the Company in restating its IGAAP Financial Statements, including the Balance Sheet as at April 01, 2015 and the Financial Statements as at and for the year ended March 31, 2016.
a) Ind AS optional exemptions
Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous IGAAP to Ind AS.
i) Deemed cost
Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognized in the Financial Statements as at the date of transition to Ind AS, measured as per the IGAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible assets and investment property covered by Ind AS 40 Investment properties. Accordingly, the Company has elected to measure all of its property, plant and equipment, property at their IGAAP carrying value.
ii) Business combinations
Ind AS 101 provides the option to apply Ind AS 103 "Business Combinations" prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date.
The Company elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated.
iii) Designation of previously recognized financial instruments
Ind AS 101 allows the Company to designate investments in equity instruments at FVTPL 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
b) Ind AS mandatory exceptions:
i) Estimates
Estimates in accordance with Ind AS at the transition date shall be consistent with estimates made for the same date in accordance with IGAAP (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 01, 2015 are consistent with the estimates as at the same date made in conformity with IGAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under IGAAP:
9) Investment in equity instruments carried at FATPL
10) Impairment of financial assets based on expected credit loss model.
ii) Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
B. Reconciliations between IGAAP and Ind AS
Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from IGAAP to Ind AS.
i) Reconciliation of equity as at March 31, 2016 and April 01, 2015
* The IGAAP figures have been reclassified to confirm to Ind AS presentation requirements for the purposes of this note.
C Notes to the reconciliations
11. Under previous GAAP, preference shares were shown as part of equity and carried at cost. Redeemable preference shares contain a contractual obligation to deliver cash to the holders. Under Ind AS the same is classified as liability and current portion of preference shares amounting to Rs. 8,617 thousand has been classified as part of other financial liability.
12. As per Modified Sanctioned Scheme (MS-10 and MS-13) approved by the Board for Industrial and Financial Reconstruction (BIFR), the Company had issued 0% redeemable Preference shares of Rs. 1,00,000 thousand to Atul Ltd (Promoter) and received interest free secured loan of Rs. 1,12,900 thousand and interest free unsecured loan of Rs. 53,900 thousand from Atul Ltd. Under the Previous GAAP, borrowings are measured at the transaction price. Under IND AS, the initial recognition of all financial liabilities is at fair value and subsequently at amortized cost. As the Company has obtained interest free borrowings from the Holding company (Atul Limited) which had resulted in the fair value at initial recognition of these interest free borrowings to be lower than transaction price. This Day 1 gain has been recognized by the company as a deemed capital contribution from the holding company (Atul Ltd) under IND AS since it is a transaction with the parent in its capacity as such. Subsequently, the interest free borrowings has been recognized at amortized cost resulting in recognition of interest expense based on market rate of interest determined at inception of the transaction. The net effect of this is an increase in other equity as at March 31, 2016 of Rs. 112,428 thousand, increase as at April 01, 2015 of Rs. 135,975 thousand, and an increase in loss (finance cost) for the year ended March 31, 2016 of Rs. 23,548 thousand."
13. Excise duty
Under IGAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented on the face of the statement of profit and loss as part of expenses. This change has resulted in an increase in total revenue and total expenses for the year ended March 31, 2016 by Rs. 26,500 thousand. There is no impact on the total equity and profit.
14. Remeasurements of post-employment benefit obligations
Under Ind AS, remeasurements that is actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognized in other comprehensive income instead of profit or loss. Under the IGAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended March 31, 2016 decreased by Rs. 161 thousand. There is no impact on the total equity as at March 31, 2016.
15. Cash discount
Under IGAAP, revenue from sale of products was measured at transaction price. Under Ind AS, revenue from sale of goods is measured at fair value of consideration received or receivable. Hence, cash discount is reduced from revenue to present the same at its fair value. This change has resulted in a decrease in total revenue and total expenses for the year ended March 31, 2016 by Rs. 201 thousand. There is no impact on the total equity and profit.
Note 15 Capital Management
a) The Company declared sick by BIFR through its order dated July 31, 2006.
Presently, the modified sanctioned scheme (MS-13) approved by BIFR in its meeting held on July 01, 2013 continued to be in place.
The Management is taking all steps to increase shareholder values as per approved BIFR Scheme (MS-13) to revive the Company and make its net worth positive.
b) Dividends
The Company has not declared any dividend.
Note 16: Fair value measurements
(b) Fair value hierarchy
This section explains the judgments 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.
There were no transfers between any levels during the year.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes Mutual Funds that have a quoted price(NAV) and are valued using the closing NAV
Level 2: The fair value of financial instruments that are not traded in an active market (for example over-the-counter derivatives) is determined using valuation techniques which maximize 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.
(c) Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
i) the use of quoted market prices.
ii) the fair value of the remaining financial instruments is determined using discounted cash flow analysis.
(d) Valuation Processes
The company obtains assistance of independent and competent third party valuers to perform the valuations of financial assets and liabilities wherever required for financial reporting purposes, including level 3 fair values. This experts report to the financial risk management team, chief financial officer (CFO) and the audit committee (AC). Discussions of valuation processes and results are held between the CFO and AC .
(e) Fair value of financial assets and liabilities measured at amortized cost.
The carrying amounts of trade receivables, bank deposits with more than 12 months maturity, cash and cash equivalents, Trade payables, employee benefit payable, provision for expenses and retention payable are considered to have their fair values approximately equal to their carrying values.
The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own and counter party credit risk.
(f) Valuation inputs and relationships to fair value
Note17: All investment in Unquoted Equity shares held by the company have been fully impaired, except for investment in equity shares of Bharuch Enviro Infrastructure Ltd for which, its cost of acquisition has been considered as fair value, Considering the statutory requirement of regulatory authorities relating to purchase and restriction on transfer.
*The change in the unobservable inputs for unquoted equity instruments does not have a significant impact in its value.
Note 18 Financial Risk Management
The Company''s business activities expose it to a variety of financial risks, namely liquidity risk, market risks and credit risk. The Company''s senior management has overall responsibility for the establishment and oversight of the Company''s risk management framework. The Company has constituted a Risk Management Committee, which is responsible for developing and monitoring the Company''s risk management policies. The key risks and mitigating actions are also placed before the Audit Committee of the Company. The Company''s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities.
The Risk Management Committee of the Company is supported by the Finance team and experts who provides assurance that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. The activities are designed to: -protect the Company''s financial results and position from financial risks; -maintain market risks within acceptable parameters, while optimizing returns; and -protect the Company''s financial investments, while maximizing returns.
This note explains the sources of risk which the Company is exposed to and how the Company manages the risk in the financial statements.
(A) Credit risk
The Company is exposed to credit risk, which is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. Credit risk arises from cash and cash equivalents, investments carried at amortized cost or fair value through profit & loss and deposits with banks and financial institutions, as well as credit exposures to trade/non-trade customers including outstanding receivables.
(i) Credit risk management
Credit risk is managed at corporate level depending on the policy surrounding credit risk management.
(ii) Provision for expected credit losses Trade receivables
Trade receivables consist of major amount receivable from Atul Ltd, the Holding company, for which no credit risk is involved.
(B) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. This is generally carried out at corporate level in accordance with practice and limits set by the management. These limits vary by taking into account the liquidity of the market in which the entity operates. In addition, the Company''s liquidity management policy involves projecting cash flows and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory | operating requirements."
(i) Maturities of financial liabilities
The tables below analyze the Company''s financial liabilities into relevant maturities based on their contractual maturities for:
The following are contractual maturity of financial liability at the reporting date. The amount are gross and undiscounted, and includes contractual interest payment.
(C) Market risk
(i) Cash flow and fair value interest rate risk
The Company''s entire borrowings, are from Atul Ltd (Holding Company) and are fixed rate borrowings that is 0%, are carried at amortized cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.
(ii) Price risk
(a) Exposure
The Company''s exposure to equity securities price risk arises from unquoted equity investments and quoted mutual funds held by the Company and classified in the balance sheet as fair value through profit and loss. To manage its price risk arising from investments in equity securities, the Company invests only in accordance with the limits set by the Company.
(b) Sensitivity
Note 19
The Board of directors of Amal limited has appointed the Managing Director (''MD'') to assess the financial performance and position of the Company, and make strategic decisions. The MD has been identified as being the Chief Operating Decision Maker for corporate planning.
The Company operates in a single business segment that is manufacturing of bulk chemicals. Further, it''s operations are confined within India. Accordingly, there are no separate reportable segment as per Ind AS - 108 on '' Operating Segments '' and no further disclosures are required.
Note 20
During the year, the Company has not entered into any transaction in nature of loans and advances which falls within the purview of Regulation 34(3) & 53(f) of SEBI(LODR) Regulation, 2015.
Note 21
Figures for previous year have been regrouped | reclassified | rearranged wherever necessary to make them comparable to those for the current year.
Note 22
All amounts are rounded of to the nearest thousands unless otherwise stated. Figures less than '' 50 has been shown at actuals in bracket
Mar 31, 2016
1) Terms | rights attached to Preference shares
The Company has only one class of 0% Redeemable Preference shares having a par value of Rs. 10 per share. These shares are redeemable at par over a period of 7 years, starting Rs. 100 lakhs every year from financial year 2013-14 to 2016-17 and Rs. 200 lakhs every year from financial year 2017-18 to 2019-20 as per the Modified Sanctioned Scheme (MS - 13) approved by BIFR. Extension of 3 years was granted by the Board of Atul Ltd as per the request of Monitoring Committee formed under the Scheme whereby the repayment will now start from 2016-17.
2) Terms | rights attached to Equity shares
The Company has only one class of Equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of Equity shares held by the Shareholders.
Note:3
Advance towards Share capital amounting to Rs. 240 lakhs refers to the amount received from the Promoter Company towards Share capital during the year 1996-97. The Company is to issue 24 lakhs equity shares of Rs. 10/- each to the Promoter Company at par as per the Modified Sanctioned Scheme (MS - 13) approved by the BIFR on July 01, 2013. The Company has applied for in-principle approval from ASE, BSE and SEBI which is pending. Considering the above, the advance has been shown as Share application money pending allotment. Further, as per Modified Draft Rehabilitation Scheme (MDRS) ("Merger Scheme") submitted to BIFR for approval, upon the merger scheme becoming effective, the above Advance towards Share capital shall stand cancelled and extinguished.
Note:
(4) The Company had reached a One Time Settlement with the secured creditors comprising of Corporate | Term loans availed from the banks and financial institutions under which the payments were made directly by the lender company (Atul Ltd) to them. By way of execution of deed of Assignment of debts owed by the Company, the lender company has now acquired from these banks and financial institutions the debts and rights, title and interest in encumbrances, facility and underlying securities including inter alia comprised of all movable and immovable properties that have been charged by the Company in favour of these banks and financial institutions pursuant to the original deed of hypothecation entered into by the Company. The entire dues | debts against the banks and financial institutions have been fully satisfied for which '' No dues | debts certificates'' have been obtained from them and the charges have been modified and stands in favour of the lender company as Secured loans.
(5) Security:
The secured loan from related party is secured by the whole immovable & movable properties including machinery, machinery spares, tools and accessories, inventory & other movables both present & future.
(6) Terms of repayment of term loans:-
7. Secured loan from Atul Ltd does not carry any interest and shall be repaid in three installments, first installment will be of Rs. 200.00 lakhs in FY 2017-18, second installment will be of Rs. 300.00 lakhs in FY 2018-19 and third installment will be of Rs. 628.89 lakhs in FY 2019-20 as per the approved modified sanctioned scheme (MS - 13).
8. Unsecured loan which does not carry any interest is repayable after March 31, 2017 upon terms and conditions which will be mutually decided between the Company and the lender company (Atul Ltd) subject to prior approval of the BIFR.
Note 9. Lease
The Company has taken land on cancellable lease at Atul from Atul Ltd for 97 years from February 03, 1996 on annual lease rent of Rs. 8,000.
Note 10. Going concern
The Company was declared sick by the Board for Industrial and Financial Reconstruction (BIFR) on July 20, 2006 and the BIFR, vide its order dated July 16, 2009, sanctioned the revival scheme for the Company which was further modified in June 2010. Relevant adjustments as required by the scheme including recasting of creditors had been carried out in the books of account.
Subsequently, the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) vide its order dated March 22, 2011 allowed the appeal filed by one of the unsecured creditors and remanded the case back to the BIFR for considering revival scheme through Operating Agency(OA). IDBI Bank Ltd (IDBI), appointed as OA by BIFR, reviewed the Draft Rehabilitation Scheme (DRS) prepared by the Company and submitted it to BIFR on February 16, 2012. The Company revised the DRS with cut-off date as March 31, 2013 and the same was approved by BIFR in its meeting held on July 01, 2013 as modified sanctioned scheme (MS - 13). The salient features of MS - 13 include implementation of project, settlement of unsecured creditors at 30% of principal dues (as approved under earlier scheme) and issue of shares to promoter company towards advance received against share application money. Further, the Company has applied to Central Board of Direct Taxes for carry forward of business losses beyond eight years which is approved subject to certain conditions specified in CBDT order.
Due to adverse market condition and because of the change in regulatory norms in USA, the Company has proposed to shelve the plan of setting-up p-MPAA project as stated in MS-13. However, in order to turnaround, the Management has contemplated other alternatives and considered the Merger with its parent company i.e. M/s. Atul Ltd.
The Board of Directors ("The Board") has approved the Proposed Merger of the Company with Atul Ltd. The Board has approved share swap ratio of 1 equity share of the face value of Rs. 10 each fully paid up of Atul Ltd for every 50 equity shares of the face value of Rs. 10 each fully paid up of Amal Ltd at its meeting held on December 05, 2014. The Company has submitted the Modified Draft Rehabilitation Scheme (MDRS) ("Merger Scheme") to the Board for Industrial and Financial Reconstruction (BIFR) through IDBI Bank Ltd (Operating Agency) on 31st March 2016 for obtaining their approval. Under the proposed scheme, the entire undertaking of Amal Ltd together with all assets and liabilities will be transferred to Atul Ltd. In view of the above, books of account have been prepared on going concern basis. The appointed date of the proposed scheme is April 1, 2014. However, pending approval of scheme by BIFR, no effect of the scheme has been given in the books of account.
Note 11 Micro and small enterprise dues
Trade payables include '' Nil due to Micro and small enterprise. The disclosure as required under Schedule III of the act and Micro, Small and Medium Enterprise Development Act, 2006.
Note 12. Employee Benefits
(13) Defined contributions plans:
(14) Provident fund
(15) State defend contribution plans
- Employers'' contribution to employees'' state insurance
- Employers'' contribution to employees'' pension scheme 1995
The provident fund and the state defined contribution plan are operated by the Regional Provident Fund Commissioner. Under the scheme, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit scheme to fund the benefits. These funds are recognized by the income tax authorities.
The Company has recognized The following amounts in The Statement of Profit and Loss for the year:
(16) Defined benefit plans:
(17) Gratuity
The Gratuity fund is maintained with the LIC of India under Group Gratuity scheme.
Valuation in respect of Gratuity have been carried out by independent actuary, as at the Balance Sheet date, based on the following assumptions:
(c) Other Long term benefits
Long term compensated absences (Unfunded scheme)
Leave encashment is payable to eligible employees who have earned leaves, during the employment and | or on separation as per the company''s policy Valuation in respect of leave encashment have been carried out by independent actuary, as at the Balance Sheet date, based on the following assumptions:
Note 18
The Company operates in a single segment that is manufacturing of Bulk Chemicals. Further, it''s operations are confined within India. Accordingly, there are no separate reportable segment as per Accounting Standard - 17 on ''Segment Reporting'' and no further disclosures are required.
Note 19
During the year, the Company has not entered into any transaction in nature of loans and advances which falls within the purview of Regulation 34(3) & 53(f) of SEBI (LODR) Regulation, 2015.
Note 20
Figures for previous year have been regrouped | reclassified | rearranged wherever necessary to make them comparable to those for the current year.
Mar 31, 2015
Note 1
Advance towards share capital amounting to Rs. 240 lacs refers to the
amount received from the promoter company towards share capital during
the year 1996-97 which has not been refunded. The Company has to issue
the Equity shares of Rs. 10/- each to the promoter company at par as per
the Modified Sanctioned Scheme (MS - 13) approved by the BIfR on July
01, 2013. The Company has applied for in-principle approval from ASE |
BSE SEBI, which is pending. Considering the above, the advance has
been shown as share application money pending allotment.
Note 2
i) The Company had reached a One Time Settlement with the secured
creditors comprising of Corporate | Term loans availed from the banks
and financial institutions under which the payments were made directly
by the lender company (Atul Ltd) to them. By way of execution of Deed
of Assignment of debts owed by the Company, the lender company has now
acquired from these banks and financial institutions the debts and
rights, title and interest in encumbrances, facility and underlying
securities including inter alia comprised of all movable and immovable
properties that have been charged by the Company in favour of these
banks and financial institutions pursuant to the original deed of
hypothecation entered into by the Company. The entire dues | debts
against the banks and financial institutions have been fully satisfied
for which ' No dues | debts certificates ' have been obtained from them
and the charges have been modified and stands in favour of the lender
company as secured loans.
ii) Terms of repayment of term loans:
a. Secured loan from Atul Ltd does not carry any interest and shall be
repaid in three installments, first installment will be of Rs. 200.00
lacs in 2017-18, second installment will be of Rs. 300.00 lacs in 2018-19
and third installment will be of Rs. 628.89 lacs in 2019-20 as per the
approved modified sanctioned scheme (MS - 13).
b. Unsecured loan which does not carry any interest is repayable after
March 31, 2016 upon terms and conditions which will be mutually decided
between the Company and the lender company (Atul Ltd) subject to prior
approval of the BIfR.
NOTE 3 LEASE
The Company has taken land on cancellable lease at Atul from Atul Ltd
for 97 years from february 03, 1996 on annual lease rent of Rs. 8,000/-.
NOTE 4 GOING CONCERN
The Company was declared sick by the Board for Industrial and financial
Reconstruction (BIfR) on July 20, 2006 and the BIfR, vide its order
dated July 16, 2009, sanctioned the revival scheme for the Company
which was further modified in June 2010. Relevant adjustments as
required by the Scheme including recasting of creditors had been
carried out in the books of account.
Subsequently, the Appellate Authority for Industrial and financial
Reconstruction (AAIfR) vide its order dated March 22, 2011 allowed the
appeal filed by one of the unsecured creditors and remanded the case
back to the BIfR for considering revival scheme through Operating
Agency (OA). IDBI Bank Ltd (IDBI), appointed as OA by BIfR, reviewed
the Draft Rehabilitation Scheme (DRS) prepared by the Company and
submitted it to BIfR on february 16, 2012. The Company revised the DRS
with cut-off date as March 31, 2013 and the same was approved by BIfR
in its meeting held on July 01, 2013 as Modified Sanctioned Scheme (MS
- 13). The salient features of MS - 13 include implementation of
project, settlement of unsecured creditors at 30% of principal dues (as
approved under earlier scheme) and issue of shares to promoter company
towards advance received against share application money. further, the
Company has applied to Central Board of Direct Taxes for carry forward
of business losses beyond eight years which is approved subject to
certain conditions specified in CBDT order.
Due to adverse market condition and because of the change in regulatory
norms in USA, the Company has proposed to shelve the plan of setting-up
pMPAA project as stated in MS-13. However, in order to turnaround, the
Management has contemplated other alternatives and considered the
Merger with its parent company; Atul Ltd.
The Board of Directors (Board) has approved the proposed merger of the
Company with Atul Ltd. The Board has approved share swap ratio of 1
Equity share of the face value of Rs. 10 each fully paid up of Atul Ltd
for every 50 Equity shares of the face value of Rs. 10 each fully paid up
of Amal Ltd at its meeting held on December 05, 2014. The Company is in
the process of submitting the Modified Draft Rehabilitation Scheme
(MDRS) (Merger Scheme) to the Board for Industrial and financial
Reconstruction (BIfR) through the Operating Agency for obtaining their
approval. Under the proposed Scheme, the entire undertaking of Amal Ltd
together with all assets and liabilities will be transferred to Atul
Ltd. In view of the above, books of account have been prepared on going
concern basis. The appointed date of the proposed Scheme is April 1,
2014. Upon approval of Scheme by the BIfR, effect of the Scheme will be
given in the books of account.
Above disclosures have been made based on information available with
the Company, for suppliers who are registered as Micro, Small and
Medium Enterprise under. The Micro, Small and Medium Enterprise
Development Act, 2006 as at March 31, 2015. The auditors have relied
upon in respect of this matter.
a) Defined contribution plan:
i) Provident fund
ii) State defined contribution plans
- Employers' contribution to Employees' State Insurance
- Employers' contribution to Employees' Pension Scheme 1995
The Provident fund and the state defined contribution plan are operated
by the Regional Provident fund Commissioner. Under the scheme, the
Company is required to contribute a specified percentage of payroll
cost to the retirement benefit scheme to fund the benefits. These funds
are recognized by the income tax authorities.
b) Defined benefit plans:
i) Gratuity
ii) Leave encashment
As per the Policy of the Company, Gratuity fund is maintained with Life
Insurance Corporation of India Ltd under Group Gratuity Scheme.
Leave encashment is payable to eligible employees who have earned
leaves during the employment and or on separation as per the Policy
of the Company.
a) During 2014-15 the Company has revised the useful life of its fixed
assets and provided depreciation as per the useful life and in the
manner prescribed in Schedule II to the Companies Act 2013.
Accordingly, depreciation charge for the year is higher by Rs. 2,39,000.
b) Till 2013-14, the depreciation provided on revalued portion of fixed
assets was debited to Statement of Profit and Loss and corresponding
amount was withdrawn from Revaluation Reserve and credited to the
Statement of Profit and Loss. However, from current year, pursuant to
Application guide on the provisions of Schedule II to the Companies
Act, 2013, withdrawal from Revaluation Reserve into Statement of Profit
and Loss is not permissible and the amount standing to the credit of
Revaluation Reserve will be credited to General Reserve on retirement
or disposal of revalued asset. As a result of above, Loss for the year
is higher by Rs. 38,000.
NOTE 5
The Company operates in a single segment; manufacturing of Specialty
Chemicals. further, the operations of the Company are confined within
India. Accordingly, there are no separate reportable segment as per
Accounting Standard - 17 on ' Segment Reporting ' and no further
disclosures are required.
NOTE 6
During the year, the Company has not entered into any transaction in
nature of loans and advances which falls within the purview of Clause
32 of Listing Agreements.
NOTE 7
figures for previous year have been regrouped reclassified rearranged
wherever necessary to make them comparable to those for the current
year.
Mar 31, 2014
Corporate information
Amal Ltd is a public company domiciled in India and incorporated on
July 04, 1974 with the Registrar of Companies, Maharashtra under the
provisions of the Companies Act, 1956. It''s shares are listed on ASE
and BSE. Amal was incorporated under the name Piramal Rasayan Ltd on
July 04, 1974. Its name was subsequently changed to Amal Rasayan Ltd by
the said Registrar of Companies on November 10, 1986 and further to
Amal Products Ltd on November 23, 1995 and further to its present name
viz. Amal Ltd on September 11, 2003. The Company is engaged in the
manufacturing of Speciality Chemicals (Sulphuric Acid Oleum).
Basis of preparation
These Financial Statements have been prepared on an accrual basis and
under historical cost convention and in compliance, in all material
aspects, with the applicable Accounting Principles in India, the
applicable Accounting Standards notified under Section 211 (3C) and the
relevant provisions of the Companies Act, 1956. The significant
Accounting Policies adopted by the Company are detailed below.
(Rs. 000)
NOTE 1 CONTINGENT LIABILITIES AND COMMITMENTS
2013-14 2012-13
(a) Claims against the Company not acknowledged
as debts in respects of:
Sales tax 6,668 6,668
Service tax
Excise duty 123 -
Labour matter 1,500 -
Unsecured creditors 4,152 -
(b) Estimated amount of contracts remaining
to be executed on capital
accounts and not provided for (net
of advances) 2,258 -
The Company has taken land on cancellable lease at Atul from Atul Ltd
for 97 years from February 03, 1996 on annual lease rent of Rs. 8,000/-.
NOTE 2 GOING CONCERN
The Company was declared sick by the Board for Industrial and Financial
Reconstruction (BIFR) on July 20, 2006 and the BIFR, vide its order
dated July 16, 2009, sanctioned the revival scheme for the Company
which was further modified in June 2010. Relevant adjustments as
required by the scheme including recasting of creditors had been caried
out in the books of account. Subsequently, the Appellate Authority for
Industrial and Financial Reconstruction (AAIFR) vide its order dated
March 22, 201 1 allowed the appeal filed by one of the unsecured
creditors and remanded the case back to the BIFR for considering
revival scheme through Operating Agency (OA). IDBI Bank Ltd (IDBI),
appointed as OA by the BIFR, reviewed the Draft Rehabilitation Scheme
(DRS) prepared by the Company and submitted it to the BIFR on February
16, 2012. The Company revised the DRS with cut-off date as March 31,
2013 and the same was approved by the BIFR in its meeting held on July
01,2013 as modified sanctioned scheme (MS - 13). The salient features
of MS - 13 include implementation of project, settlement of unsecured
creditors at 30% of principal dues (as approved under earlier scheme)
and issue of shares to promoter company towards advance received
against share application money. Further, the Company has applied to
Central Board of Direct Taxes for carry forward of business losses
beyond eight years.
MS - 13 envisages revival plan which is a multi faceted approach for
improving the operational and financial strength of the Company. The
Management believes that MS - 13 will further facilitate the revival
and will have no adverse effects on the state of affairs of the
Company. Further, necessary steps for revival as envisaged under the
Scheme are being taken. In view of above, the books of account have
been prepared on going concern basis.
NOTE 3 MICRO, SMALL AND MEDIUM ENTERPRISE DUES
Sundry creditors include Rs. Nil due to Micro, Small and Medium
Enterprise. Following is the information, required to be furnished as
per Section 22 of the Micro, Small and Medium Enterprise Development
Act, 2006.
Above disclosures have been made based on information available with
the Company, for suppliers who are registered as Micro, Small and
Medium Enterprise under ''The Micro, Small and Medium Enterprise
Development Act, 2006'' as at March 31, 2014. The auditors have relied
upon in respect of this matter.
NOTE 4 EMPLOYEE BENEFITS
(a) Defined contribution plans:
(i) Provident fund
(ii) State defined contribution plans
- Employers'' contribution to employees'' state insurance
- Employers'' contribution to employees'' pension scheme 1995
The provident fund and the state defined contribution plan are operated
by the Regional Provident Fund Commissioner. Under the scheme, the
company is required to contribute a specified percentage of payroll
cost to the retirement benefit scheme to fund the benefits. These funds
are recognised by the income tax authorities.
The company has recognised the following amounts in the Statement of
Profit and Loss for the year:
(b) Defined benefit plans:
(i) Gratuity
(ii) Leave encashment
The Gratuity fund is maintained with the LIC of India under Group
Gratuity Scheme.
Leave encashment is payable to eligible employees who have earned
leaves, during the employment and | or on separation as per the
Company''s policy.
Valuation in respect of Gratuity and Leave encashment have been carried
out by independent actuary, as at the Balance Sheet date, based on the
following assumptions:
NOTE 5
The Company operates in a single segment i.e. manufacturing of
Speciality Chemicals. Further, it''s operations are confined with in
India. Accordingly, there are no separate reportable segment as per
Accounting Standard - 17 on ''Segment Reporting'' and no further
disclosures are required.
NOTE 6
During the year, the Company has not entered into any transaction in
nature of loans and advances which falls within the purview of clause
32 of listing agreement.
NOTE 7
Figures for previous year have been regrouped reclassified rearranged
wherever necessary to make them comparable to those for the current
year.
Mar 31, 2013
1 Corporate Information
Amal Limited is a public company domiciled in India and incorporated on
July 04 ,1974 with the Registrar of Companies, Maharashtra under the
provisions of the Companies Act, 1956. It''s shares are listed on ASE
and BSE. Amal was incorporated under the name Piramal Rasayan Limited
on July 04, 1974. Its name was subsequently changed to Amal Rasayan
Limited by the said Registrar of Companies on November 10,1986 and
further to Amal Products Limited on November 23, 1995 and further to
its present name viz. Amal Limited on September 11, 2003. The company
is engaged in the manufacturing ofSpeciality Chemicals (Sulphuric Acid
Oleum).
2 Basis of preparation
These financial statements have been prepared on an accrual basis and
under historical cost convention and in compliance, in all material
aspects, with the applicable accounting principles in lndia,the
applicable accounting standards notified under Section 211 (3C) and the
relevant provisions of the Companies Act, 1956.The significant
accounting policies adopted by the Company are detailed below.
3. CONTINGENT LIABILITIES
(Rs.in ''000)
Particulars 2012-13 2011-12
Contingent liabilities not
provided for in respect of
(a) Sales tax matters under appeal 6,668 6,668
(b) Estimated amount of contract remaining to be executed on capital
accounts and not provided for (net of advances)
4. EARNINGS PER SHARE
Earnings per Share (EPS) -The numerators and denominators used to
calculate basic and diluted Earnings per Share:
5. LEASE
The Company has taken land on cancellable lease at Atul from M/s Atul
Ltd for 97 years from February 3, 1996 on annual lease rent of Rs.
8,000/-.
6. GOING CONCERN
The Company was declared sick by Board of Industrial and Financial
Reconstruction (BIFR) on July 20,2006 and BIFR vide its order dated
July 16, 2009 sanctioned the revival scheme for the Company which was
further modified in June 18,2010. Relevant adjustments as required by
the scheme including recasting of creditors had been carried out in
books of account.
Subsequently, the Appellate Authority of Industrial and Financial
Reconstruction (AAIFR) vide its order dated March 22,2011 allowed the
appeal filed by one of the unsecured creditors and remanded the case
back to the BIFR for considering revival scheme through operating
agency. BIFR vide its order dated October 11,2011 appointed IDBI bank
as operating agency. IDBI has reviewed the Draft Rehabilitation Scheme
(DRS) prepared by the Company and submitted the same to BIFR on
February 16, 2012. The Company has revised the DRS with cut-off date as
March 31,2013 and the same is under review with BIFR for approval.
The DRS envisages revival plan which is a multi faceted approach for
improving the operational and financial strength of the Company.The
management believes that DRS will further facilitate the revival and
will have no adverse effects on the state of affairs of the company if
approved as proposed.Consequential adjustments, if any, will be made in
books of account upon approval of scheme by BIFR. Further, the Company
has also completed its capacity expansion of Sulphuric Acid plant at
Ankleshwar from 120TPDto 140TPD.In view of above developments, the
accounts have been prepared on a going concern basis.
7. MICRO,SMALLAND MEDIUM ENTERPRISE DUES
Sundry creditors include Rs. Nil due to Micro, Small and Medium
Enterprise. Following is the information, required to be furnished as
per Section 22 of the Micro, Small and Medium Enterprise Development
Act, 2006.
8. EMPLOYEE BENEFITS
(a) Defined contribution plans:
(i) Provident fund
(ii) State defined contribution plans
- Employers'' contribution to Employees'' state insurance
- Employers'' contribution to Employees'' Pension Scheme 1995
The provident fund and the state defined contribution plan are operated
by the Regional Provident Fund Commissioner. Under the scheme, the
company is required to contribute a specified percentage of payroll
cost to the retirement benefit scheme to fund the benefits.These
fundsare recognized by the income tax authorities.
The company has recognized the following amounts in the Statement of
Profit and Loss for the year:
(b) Definad benefit plans: u
(i) Gratuity
(ii) Leave Encashment
The Gratuity Fund is maintained with the L1C of India under Group
Gratuity Scheme.
Leave Encashment is payable to eligible employees who have earned
leaves,during the employment and j or on separation as perthe Company''s
policy.
Note: Since the Company had adopted AS -15 (Revised) - "Employee
Benefits" for the first time during the financial year ended March
31,2011, hence the disclosure for gratuity and leave encashment figures
as required by Para 120(n) have not been presented for thefinancial
year priorto 2010-11.
9. In the opinion of the management, the Company is presently engaged
in manufacturing of Speciality chemicals & others.The products included
being related and not subject to different risks and returns, as per
management''s contention, no separate reportable segment needs to be
identified. And hence no separate segment information disclosure as per
the requirement of AS 17 on Segment Reporting is applicable to the
Company.
10. During the year, the Company has not entered into any transaction
in nature of loans and advances which falls within the purview of
clause 32 of listing agreement.
Mar 31, 2012
1. Corporate Information
AMAL Limited is a public company domiciled in India and incorporated on
July 4, 1974 with the Registrar of Companies, Maharashtra under the
provisions of the Companies Act, 1956. Its shares are listed on ASE and
BSE. AMAL was incorporated under the name PIRAMAL Rasayan Limited on
July 4, 1974. Its name was subsequently changed to AMAL Rasayan Limited
by the said Registrar of Companies on November 10, 1986 and further to
AMAL Products Limited on November 23, 1995 and further to its present
name viz AMAL Limited on September 1 1, 2003. The Company is engaged in
the manufacturing of Specialty Chemicals (Sulphuric Acid | Oleum).
2. Basis of preparation
These financial statements have been prepared on an accrual basis and
under historical cost convention and in compliance, in all material
aspects, with the applicable accounting principles in India, the
applicable accounting standards notified under Section 211(3C) and the
relevant provisions of the Companies Act, 1956. The significant
accounting policies adopted by the Company are detailed below.
a) Terms rights attached to preference shares
The Company has only one class of 0% redeemable preference shares
having a par value of Rs10 per share. These shares are redeemable over a
period of 5 years starting from 2013-2014 as per the Draft
Rehabilitation Scheme (DRS) submitted to BIFR. The scheme is subject to
approval of BIFR.
b) Terms | rights attached to equity shares
The Company has only one class of equity shares having a par value of
Rs10 per share. Each holder of equity shares is entitled to one vote per
share. The Company declares and pays dividend in Indian rupees. The
dividend proposed by the Board of Directors is subject to the approval
of the shareholders in the ensuing Annual General Meeting. In the event
of liquidation of the Company, the holders of equity shares will be
entitled to receive the remaining assets of the Company, after
distribution of all preferential amounts. The distribution will be in
proportion to the number of equity shares held by the shareholders.
Note
1. The Company had reached a One Time Settlement with the secured
creditors comprising of Corporate | Term loans availed from the banks
and financial institutions under which the payments were made directly
by the lender Company (Atul Limited) to them. By way of execution of
deed of Assignment of debts owed by the Company, the lender Company has
now acquired from these banks and financial institutions the debts and
rights, title and interest in encumbrances, facility and underlying
securities including inter alia comprised of movable and immovable
properties that have been charged by the Company in favour of these
banks and financial institutions pursuant to the original deed of
hypothecation entered into by the Company. The entire dues | debts
against the banks and financial institutions have been fully satisfied
for which "No dues | debts certificates" have been obtained from them
and the charges have been modified and stands in favour of the lender
Company (Atul Limited) as Secured loans.
2. Terms of repayment of term loans:
a. Secured loan from Atul Limited shall be repaid in six yearly
installments, five installments will be of Rs 200.00 lacs w.e.f FY
2016-17 and last sixth installment will be of Rs 128.89 lacs will be
repaid in the FY 2021-22 as per the Draft Rehabilitation Scheme (DRS)
submitted to BIFR. The scheme is subject to approval of BIFR.
b. Unsecured loan is repayable after March 31, 2013 upon terms and
conditions which will be mutually decided between the Company and the
lender.
3. CONTINGENT LIABILITIES
(Rs.in '000)
Particulars 2011-12 2010-11
Contingent liabilities not
provided for in respect of
i. Sales tax matter under appeal 6,668 6,454
ii. Estimated amount of contract
remaining to be executed on capital
accounts and not provided for
(net of advances) - 3,230
4. LEASE
The Company has taken land on lease at Atul from M/s. Atul Ltd. for 97
years from February 03, 1996 on annual lease rent of Rs 8,000/-.
5. GOING CONCERN
The Company was declared sick by Board of Industrial and Financial
Reconstruction (BIFR) on July 20, 2006 and BIFR vide its order dated
July 16, 2009 sanctioned the revival scheme for the Company which was
further modified in June 2010. Relevant adjustments as required by the
scheme including recasting of creditors had been carried out in books
of account.
Subsequently, the Appellate Authority of Industrial and Financial
Reconstruction (AAIFR) vide its order dated March 22, 201 1 allowed the
appeal filed by one of the unsecured creditors and remanded the case
back to the BIFR for considering revival scheme through operating
agency. BIFR vide its order dated October 11, 2011 appointed IDBI bank
as operating agency. IDBI has reviewed the Draft Rehabilitation Scheme
(DRS) prepared by the Company and submitted the same to BIFR on
February 16, 2012.
The DRS envisages revival plan which is a multi faceted approach for
improving the operational and financial strength of the Company. The
management believes that DRS will further facilitate the revival and
will have no adverse effects on the state of affairs of the company if
approved as proposed. Consequential adjustments, if any, will be made
in books of account upon approval of scheme by BIFR. Further, the
Company has also completed its capacity expansion of Sulphuric Acid
plant at Ankleshwar from 120 TPD to 140 TPD. In view of above
developments, the accounts have been prepared on a going concern basis.
6. EMPLOYEE BENEFITS
(A) Defined contribution plans:
a. Provident fund
b. State defined contribution plans
- Employers' contribution to Employees' State Insurance
- Employers' contribution to Employees' Pension Scheme, 1995
The provident fund and the state defined contribution plan are operated
by the Regional Provident Fund Commissioner. Under the scheme, the
Company is required to contribute a specified percentage of payroll
cost to the retirement benefit scheme to fund the benefits. These funds
are recognized by the income tax authorities.
Note: Since the Company had adopted AS - 15 (Revised) - "Employee
Benefit" for the first time during the financial year ended March 31,
2011, hence the disclosure for gratuity and leave encashment figures as
required by Para 120(n) have not been presented for the financial year
prior to 2009-10.
7. In the opinion of the management, the Company is being presently
engaged in manufacturing of Specialty chemicals & others. The product
included being related and not subject to different risks and returns,
as per management's contention, no separate reportable segment to be
identified. And hence no separate segment information disclosure as per
the requirement of AS 17 on Segment Reporting is applicable to the
Company.
8. During the year, the Company has not entered into any transaction
in nature of loans and advances which falls within the purview of
Clause 32 of Listing Agreement.
Mar 31, 2010
1. Related party information
(a) name of related party and nature of relationship:
Name of the related party Description of relationship
1. Atul Ltd Associated Company
2. Atul Europe Ltd Associated Company
3. Ameer Trading Corporation Ltd Associated Company
4. Mr S S Lalbhai Key management personnel
5. Mr V Koppaka Key management personnel
6. Mr T R Gopi Kannan Key management personnel
2. Going Concern
The Company has at March 31, 2010, accumulated losses of Rs.
388,425.35 (thousands) resulting in a negative net worth of Rs.
203,888.70 (thousands). During the year the current liabilities exceed
current assets by Rs. 15,496.86 (thousands). The Company has restarted
its manufacturing operations at Ankleshwar site and as such, it is
considered as a going concern. In view of the complete erosion of the
net worth, a reference was made to the Board for Industrial and
Financial Reconstruction (BIFR) which was registered by BIFR in
September 2005 and the Company was declared sick by BIFR on July 20,
2006. However, all potential losses and expenses have been booked
during the year.
3. The Company has recasted the creditors as per the guidelines of
BIFR, vide its sanctioned scheme 2009 (SSÃ09) dated July 17, 2009 by
writing back 70% of the unsecured creditors pertaining prior to the cut
off date March 31, 2009, amounting to Rs. 46,701.64 (in thousands). The
said amount has been transferred to the Profit and Loss Account.
4. Suppliers and customers balances are subject to confirmation.
5. Manufacturing plants of Ankleshwar and Atul units were not
operational with effect from February 2004, except Sulfuric Acid |
Oleum plant at Ankleshwar, for which your Company had undertaken job
work activity. The capacity of the plant was enhanced from 100 tons per
day (tpd) to 120 tpd. The Company undertook job work activity from July
2009 till August 2009. Now, your Company has started manufacturing and
sales activities for Sulfuric Acid | Oleum plant effective from
September, 2009.
6. In view of introduction of Accounting Standard 28 on Impairment of
Assets (AS 28) by the Institute of Chartered Accountants of India, the
Company had reviewed the recoverable value of all its assets at its
Bulk Chemical and Dye Intermediate divisions as on April 01, 2004 and
March 31, 2005. Due to non remunerative prices for the products of its
two divisions and the increasing costs of operations the viability of
the businesses was affected and accordingly the Company had recognized
an impairment loss for the assets of the two divisions in the year
2004-05.
7. Previous Years figures have been regrouped and recasted wherever
necessary.
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