Mar 31, 2023
12.2 Rights, preferences and restrictions attached to Equity Shares:
The Company has one class of Equity Shares having a par value of '' 5 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
12.5 Note on Issued, Subscribed and Paid up Equity Share Capital:
[a] During the year 2021-22, 1,40,35,087 Shares were issued through Qualified Institutions Placement at the issue price of '' 855 per Equity Share (including '' 850 towards share premium) to qualified institutional buyers.
[b] During the year 2021-22 17,42,34,474 Shares are issued as Bonus Shares in the ratio of 1:1 Equity Share of '' 5 each.
[c] During the year 2019-20 8,71,17,237 Shares are issued as Bonus Shares in the ratio of 1:1 Equity Share of '' 5 each.
[d] During the year 2019-20, 448,590 Shares were alloted to the shareholders of Nascent Chemical Industries Limited pursuant to the terms of the Scheme of Arrangement approved by the Honorable National Company Law Tribunal (NCLT), Ahmedabad Bench.
[e] During the year 2018-19, 53,68,647 Shares were issued through Qualified Institutions Placement at the issue price of '' 1,397 per Equity Share (including '' 1,392 towards share premium) to qualified institutional buyers.
a) The above Outstanding Term Loans/ECBs are secured by way of Pari Passu Hypothecation of the Moveable Plant & Machinery, Machinery Spares, Tools and Accessories and other movables, both present and future (except book debts, inventories and other current assets) wherever situated, excluding those charged exclusively to other Term Lenders/ Specifically excluded.
b) Vehicle loans from Banks/Financial Institutions are secured by way of hypothecation of respective vehicles.
The Company has received aforesaid advances for export commitments under the long term contracts (contracts with period more than five year) executed by the company with its customers. The advances shall be adjusted against the export sales/ supplies over a period of time, as per the terms of these contracts. Further, as per the terms of said contracts, the Company has issued a Bank Guarantee in favour of the customer as a security for the said advances.
(i) Working Capital Loans availed from Scheduled Banks, are secured/to be secured by way of Pari Passu first charge by hypothecation of Raw Materials, Stock-In-Process, Semi-Finished Goods, Finished Goods, Packing Materials and Stores and Spares, Bills Receivables and Book Debts and all other moveable, both present and future. Also by way of hypothecation of all moveable plant & machinery, machinery spares, tools and accessories and other movables, both present and future (except book debts & inventories) wherever situated, ranking second to the charge held by NCDs/ ECB/Other Term Lenders.
(ii) In respect of working capital borrowings from banks quarterly stock statements are submitted to the banks and there are no material discrepencies noted in comparision with the books of accounts.
There are no Micro and Small Enterprise, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2023. This information as required to be disclosed under the Micro, Small and Medium Enterprise Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.
31. CONTINGENT LIABILITIES AND COMMITMENTS: (to the extent not provided for) ('' In Crs) |
||
Particulars |
For the Year Ended 31st March, 2023 |
For the Year Ended 31st March, 2022 |
(i) Contingent Liabilities: |
||
(a) Claims against the company not acknowledged as Debts |
124.62 |
138.92 |
(b) Letters of Credit, Bank Guarantees & Bills Discounted |
336.81 |
450.92 |
461.43 |
589.84 |
|
(ii) Commitments: |
||
(a) Estimated amount of contracts remaining to be executed on capital account and not provided for, net of advances |
191.39 |
419.06 |
191.39 |
419.06 |
|
TOTAL |
652.82 |
1,008.90 |
36. DERIVATIVES & FORWARD CONTRACT INSTRUMENTS:
(A) The Company uses Forward Exchange Contract to hedge against its Foreign Exchange exposures relating to underlying transactions and firm commitments. The Company does not enter into any derivatives instruments for Trading or Speculative purposes.
During the Year Company had hedged in aggregate an amount of '' 477.65 Crs (previous year '' 255.13 Crs) out of its annual trade related operations (Exports & Imports) aggregating to '' 4,677.10 Crs (previous year '' 2,840.96 Crs).
The Company had hedged its currency risks to the tune of '' 66.70 Crs (previous year '' 123.20 Crs), in respect of its long term Foreign Currency Loans/Borrowings. Relating to the same, the Company had also swapped its floating interest rate borrowing of '' 370.69 Crs (previous year '' 556.53 Crs) into a fixed rate loan through an interest rate swap.
(B) Net foreign exchange gain arriving out of export and import activities of the Company of '' 48.67 Crs (previous year gain of '' 11.80 Crs) is included in Profit & Loss Account.
Company had entered into forward contracts to hedge its medium and long term exports contracts. Mark to Market loss on such contracts to the tune of '' 0.59 Crs (including loss of '' 0.84 Crs for contracts of more than one year) is recognised in the Profit & Loss Account. Company had further provided for Revaluation loss on long term borrowing (ECBs) to the extent of '' 54.77 Crs as at 31st March, 2023 and have recognised the same in the Profit & Loss Account.
The financial instruments are categorized into two levels based on the inputs used to arrive at fair value measurements as described below:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities; and
Level 2: Inputs other than the quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximise the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. Net Debt is calculated as loans and borrowings less cash & marketable securities.
40. FINANCIAL RISK MANAGEMENT:
The Company''s principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations.
The Company is exposed to credit risk, market risk and liquidity risk. The Company''s senior management oversees the management of these risks.
The company is exposed to credit risk from its operating activities (primarily for trade receivables) and from its financing activities (deposits with banks and other financial instruments).
Credit risk is the risk that a customer or counterparty to a financial instrument fails to perform or pay the amounts due causing financial loss to the company. Credit risk arises from company''s activities in investments, dealing in derivatives and outstanding receivables from customers.
The company has a prudent and conservative process for managing its credit risk arising in the course of its business activities. Sales made to customers on credit are generally secured through Letters of Credit, Bank Guarantees, Parent Company Guarantees, advance payments and factoring & forfaiting without recourse to AIL.
To manage the credit risk, the Company follows an adequate credit control policy and also has an external credit insurance cover with ECGC policy wherein the customers are required to make an advance payment before procurement of goods. Thus, the requirement of assessing the impairment loss on trade receivables does not arise, since the collectability risk is mitigated.
Bank balances are held with only high rated banks and majority of other security deposits are placed majorly with government/statutory agencies.
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. For the Company, liquidity risk arises from obligations on account of financial liabilities such as trade payables and other financial liabilities.
The Company''s corporate treasury department is responsible for liquidity and funding as well as settlement. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.
III. Market RiskForeign Currency Risk
The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities in exports and imports which is majorly in US dollars.
Hence, to combat the foreign currency exposure, the Company follows a policy wherein the net sales are hedged by forward Contract.
The Company has a risk management framework aimed at prudently managing the risk arising from the volatility in commodity prices and freight costs.
The Company''s commodity risk is managed centrally through well-established trading operations and control processes. In accordance with the risk management policy, the Company enters into various transactions using derivatives and uses Over the Counter (OTC) as well as Exchange Traded Futures, Options and Swap contracts to hedge its commodity and freight exposure.
Notes for Ratio:
a. Debt service coverage ratio declined because of lower profits and higher finance costs during the year.
b. Financials with reference to previous year included one time termination income resulting into higher revenue, earnings,
profit in previous financial year as a result the ratios in previous year were higher in respect to current financial year.
c. Trade payable Turnover ratio increased primarily due to increase in the pieces of feed stocks.
d. Net Capital turnover ratio increased due to decreased in current assets & increased in current liabilities.
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.
(ii) The Company do not have any transactions with companies struck off. under section 248 of Companies Act, 2013 or section 560 of Companies Act, 1956.
(iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period,
(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(vi) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Group shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
(vii) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
(viii) Events after the reporting period
Events after the reporting period are those events, favourable and unfavourable, that occur between the end of the reporting period and the date when the financial statements are approved by the Board of Directors in case of a company, and, by the corresponding approving authority in case of any other entity for issue. Two types of events can be identified:
(a) those that provide evidence of conditions that existed at the end of the reporting period (adjusting events after the reporting period); and
(b) those that are indicative of conditions that arose after the reporting period (non-adjusting events after the reporting period).
As on 8th May, 2023 there were no material subsequent events to be recognized or reported that are not already disclosed.
(ix) Standards Notified But Not Yet Effective
The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company''s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, as and when they become effective.
The Ministry of Corporate affairs (MCA) has notified certain amendments to Ind AS, through Companies (Indian Accounting Standards) Amendment Rules, 2023 on 31st March, 2023. The amendments have been made in the following standards:
a. Ind AS 1: Presentation of Financial Statements is amended to replace the term "significant accounting policies" with "material accounting policy information" and providing guidance relating to immaterial transactions, disclosure of entity specific transactions and more
b. Ind AS 8: Accounting Policies, Changes in Accounting Estimates and Errors to include the definition of accounting estimates as "monetary amounts in financial statements that are subject to measurement uncertainty."
c. Ind AS 12: Income Taxes relating to initial recognition exemption of deferred tax related to assets and liabilities arising from a single transaction.
d. Other Amendments in Ind AS 102 - Share based Payments, Ind AS 103 - Business Combinations, Ind AS 109 - Financial Instruments, Ind AS 115 - Revenue from Contracts with Customers which are mainly editorial in nature in order to provide better clarification of the respective Ind AS''s.
e. These amendments shall come into force with effect from April 01, 2023. The Company is assessing the potential effect of the amendments on its financial statements. The Company will adopt these amendments, if applicable, from applicability date.
(x) Scheme of Arrangement
Where the Scheme of Arrangements has been approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013, the company shall disclose that the effect of such Scheme of Arrangements have been accounted for in the books of account of the Company ''in accordance with the Scheme'' and ''in accordance with accounting standards'' and any deviation in this regard shall be explained.
43. The figures of previous year have been regrouped and rearranged wherever necessary.
Mar 31, 2022
(a) During the year 2021-22, 17,42,34,474 shares are issued as Bonus Shares in the ratio of 1:1 equity share of '' 5 each.
(b) During the year 2021-22, 1,40,35,087 Shares were issued through Qualified Institutions Placement at the issue price of '' 855 per Equity Share (including '' 850 towards share premium) to qualified institutional buyers.
(c) During the year 2019-20, 8,71,17,237 shares are issued as Bonus Shares in the ratio of 1:1 equity share of '' 5 each.
(d) During the year 2019-20, 448,590 Shares were alloted to the shareholders of Nascent Chemical Industries Limited pursuant to the terms of the Scheme of Arrangement approved by the Honorable National Company Law Tribunal (NCLT), Ahmedabad Bench.
(e) During the year 2018-19, 53,68,647 Shares were issued through Qualified Institutions Placement at the issue price of '' 1,397 per Equity Share (including '' 1,392 towards share premium) to qualified institutional buyers.
(f) During the year 2017-18, 820,383 Shares were brought back at a premium of '' 1,195/-.
11.1 a) Outstanding Term Loans/ECBs to the extent of '' 1,284.58 Crs are secured by way of Pari Passu Hypothecation of the Moveable Plant & Machinery, Machinery Spares, Tools and Accessories and other movables, both present and future (except book debts, inventories and other current assets) wherever situated, excluding those charged exclusively to other Term Lenders/Specifically excluded.
b) Vehicle loans from Banks/Financial Institutions are secured by way of hypothecation of respective vehicles.
12.1 The Company has received advances of '' 295.58 Crs (previous year '' 401.30 Crs) for export commitments under the long term contracts (contracts with period more than five year) executed by the company with its customers. The advances shall be adjusted against the export sales/supplies over a period of time, as per the terms of these contracts. Further, as per the terms of said contracts, the Company has issued a Bank Guarantee to the extent of '' 265.27 Crs (previous year: '' 219.33 Crs) in favour of the customer.
14.1 Working Capital Loans availed from Scheduled Banks, are secured/to be secured by way of Pari Passu first charge by hypothecation of Raw Materials, Stock-In-Process, Semi-Finished Goods, Finished Goods, Packing Materials and Stores and Spares, Bills Receivables and Book Debts and all other moveable, both present and future. Also by way of Joint Equitable Mortgage of the Company''s immovable properties situated at Sarigam, Vapi, Jhagadia and Bhachau in the State of Gujarat and at Tarapur in the State of Maharashtra and further by way of hypothecation of all moveable plant & machinery, machinery spares, tools and accessories and other movables, both present and future (except book debts & inventories) wherever situated, ranking second to the charge held by NCDs/ECB/Other Term Lenders.
There are no Micro and Small Enterprise, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31, 2022. This information as required to be disclosed under the Micro, Small and Medium Enterprise Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.
27. Interest received of '' 12.72 Crs (Tax Deducted at Source '' 0.60 Crs) [previous year '' 13.15 Crs (Tax Deducted at Source '' 0.66 Crs)] is netted off against interest paid on Working Capital.
28. In the opinion of the Board, except as otherwise stated, the Current Assets and Loans and Advances have a value on realization at least equal to amounts at which they are stated in the Balance Sheet.
The estimate of rate of escalation in salary considered in actuarial valuation, takes into account inflation, seniority, promotion, other relevant factor''s including supply and demand in the employment market. The above information is certified by the actuary.
Leave Encashment:
Leave Encashment liability amounting to '' 27.10 Crs (previous year: '' 16.88 Crs) has been provided in the Books of Accounts.
33. DERIVATIVES & FORWARD CONTRACT INSTRUMENTS:
(A) The Company uses Forward Exchange Contract to hedge against its Foreign Exchange exposures relating to underlying transactions and firm commitments. The Company does not enter into any derivatives instruments for Trading or Speculative purposes.
During the Year Company had hedged in aggregate an amount of '' 255.13 Crs (previous year: '' 318.15 Crs) out of its annual trade related operations (Exports & Imports) aggregating to '' 4,222.82 Crs (previous year: '' 2,723.68 Crs).
The Company had hedged its currency risks to the tune of '' 123.20 Crs (previous year '' 179.63 Crs), in respect of its long term Foreign Currency Loans/Borrowings. Relating to the same, the Company had also swapped its floating interest rate borrowing of '' 556.53 Crs (previous year: '' 365.50 Crs) into a fixed rate loan through an interest rate swap.
(B) Net foreign exchange gain arriving out of export and import activities of the Company of '' 17.13 Crs (previous year gain of '' 20.22 Crs) is included in Profit & Loss Account.
Company had entered into forward contracts to hedge its medium and long term exports contracts. Mark to Market gain on such contracts to the tune of '' 17.18 Crs (including gain of '' 8.60 Crs for contracts of more than one year) is recognised in the Profit & Loss Account. Company had further provided for Revaluation loss on long term borrowing (ECBs) to the extent of '' 25.40 Crs as at March 31, 2022 and have recognised the same in the Profit & Loss Account.
The financial instruments are categorized into two levels based on the inputs used to arrive at fair value measurements as described below:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities; and
Level 2: Inputs other than the quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximise the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. Net Debt is calculated as loans and borrowings less cash & marketable securities.
37. FINANCIAL RISK MANAGEMENT:
The Company''s principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations.
The Company is exposed to credit risk, market risk and liquidity risk. The Company''s senior management oversees the management of these risks.
The company is exposed to credit risk from its operating activities (primarily for trade receivables) and from its financing activities (deposits with banks and other financial instruments).
Credit risk is the risk that a customer or counterparty to a financial instrument fails to perform or pay the amounts due causing financial loss to the company. Credit risk arises from company''s activities in investments, dealing in derivatives and outstanding receivables from customers.
The company has a prudent and conservative process for managing its credit risk arising in the course of its business activities. Sales made to customers on credit are generally secured through Letters of Credit, Bank Guarantees, Parent Company Guarantees, advance payments and factoring & forfaiting without recourse to AIL.
To manage the credit risk, the Company follows an adequate credit control policy and also has an external credit insurance cover with ECGC policy wherein the customers are required to make an advance payment before procurement of goods. Thus, the requirement of assessing the impairment loss on trade receivables does not arise, since the collectability risk is mitigated.
Bank balances are held with only high rated banks and majority of other security deposits are placed majorly with government/statutory agencies.
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. For the Company, liquidity risk arises from obligations on account of financial liabilities such as trade payables and other financial liabilities.
The Company''s corporate treasury department is responsible for liquidity and funding as well as settlement. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.
Foreign Currency Risk
The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities in exports and imports which is majorly in US dollars.
Hence, to combat the foreign currency exposure, the Company follows a policy wherein the net sales are hedged by forward Contract.
Commodity Price Risk
The Company has a risk management framework aimed at prudently managing the risk arising from the volatility in commodity prices and freight costs.
The Company''s commodity risk is managed centrally through well-established trading operations and control processes. In accordance with the risk management policy, the Company enters into various transactions using derivatives and uses Over the Counter (OTC) as well as Exchange Traded Futures, Options and Swap contracts to hedge its commodity and freight exposure.
Notes for Ratio
a. Current ratio has increased due to increase in current assets (viz inventory and trade receivables primarily due to increase in the input costs.
b. Debt Equity ratio had declined due to higher profits for the year and also on account of the equity raise by way of QIP in the year.
c. Debt service coverage ratio improved because of higher profits and lower finance costs during the year.
d. Return on Equity has increased due to higher profits or the year and also on account of the equity raise by way of QIP in the year.
e. Inventory turnover ratio increased primarily due to increase in the input costs.
f. Trade payable Turnover ratio increased primarily due to increase in the pieces of feed stocks.
g. Net Capital turnover ratio decreased due to increase in current assets (viz inventory and trade receivables primarily due to increase in the input costs.
h. Net profit ratio increased due to higher profit (also inclusive of the termination income) during the year.
i. Return on Capital employed increased due to higher operating profit (also inclusive of the termination income) during the year.
j. Return on Investment increased due to higher profits (also inclusive of the termination income) during the year.
39. The figures of previous year have been regrouped and rearranged wherever necessary.
Mar 31, 2021
9.4 Note on Issued, Subscribed and Paid up Equity Share Capital:
(a) During the year 2019-20, 8,71,17,237 shares are issued as Bonus Shares in the ratio of 1:1 equity share of '' 5 each.
(b) During the year 2019-20, 4,48,590 Shares were alloted to the shareholders of Nascent Chemical Industries Limited pursuant to the terms of the Scheme of Arrangement approved by the Honorable National Company Law Tribunal (NCLT), Ahmedabad Bench.
(c) During the year 2018-19, 53,68,647 Shares were issued through Qualified Institutions Placement at the issue price of '' 1,397 per Equity Share (including '' 1,392 towards share premium) to qualified institutional buyers.
(d) During the year 2017-18, 8,20,383 Shares were brought back at a premium of '' 1,195/-.
(e) During the year 2016-17, 12,00,000 Shares were brought back at a premium of '' 795/-.
11.1 a) Outstanding Term Loans/ECBs to the extent of '' 1,614.08 Crs are secured by way of Pari Passu Hypothecation of the Moveable Plant & Machinery, Machinery Spares, Tools and Accessories and other movables, both present and future (except book debts, inventories and other current assets) wherever situated, excluding those charged exclusively to other Term Lenders/Specifically excluded.
b) Vehicle loans from Banks/Financial Institutions are secured by way of hypothecation of respective vehicles.
12.1 The Company has received advances of '' 401.30 Crs (previous year '' 529.69 Crs) for export commitments under the long term contracts (contracts with period more than five year) executed by the company with its customers. The advances shall be adjusted against the export sales/supplies over a period of time, as per the terms of these contracts. Further, as per the terms of said contracts, the Company has issued a Bank Guarantee to the extent of ''219.33 Crs (previous year '' 138.30 Crs) in favour of the customer.
14.1 Working Capital Loans availed from Scheduled Banks, are secured/to be secured by way of Pari Passu first charge by hypothecation of Raw Materials, Stock-In-Process, Semi-Finished Goods, Finished Goods, Packing Materials and Stores and Spares, Bills Receivables and Book Debts and all other moveable, both present and future. Also by way of Joint Equitable Mortgage of the Companyâs immovable properties situated at Sarigam, Vapi, Jhagadia and Bhachau in the State of Gujarat and at Tarapur in the State of Maharashtra and further by way of hypothecation of all moveable plant & machinery, machinery spares, tools and accessories and other movables, both present and future (except book debts & inventories) wherever situated, ranking second to the charge held by ECB/Other Term Lenders.
26. There are no Micro and Small Enterprise, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2021. This information as required to be disclosed under the Micro, Small and Medium Enterprise Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.
27. Interest received of '' 13.15 Crs (Tax Deducted at Source '' 0.66 Crs) [previous year '' 26.64 Crs (Tax Deducted at Source '' 2.10 Cr)] is netted off against interest paid on Working Capital.
28. In the opinion of the Board, except as otherwise stated, the Current Assets and Loans and Advances have a value on realization at least equal to amounts at which they are stated in the Balance Sheet.
32. EMPLOYEE BENEFITS:Defined Benefit Plan
The employees'' gratuity fund scheme managed by Life Insurance of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.
Note:
The estimate of rate of escalation in salary considered in actuarial valuation, takes into account inflation, seniority, promotion, other relevant factor''s including supply and demand in the employment market. The above information is certified by the actuary.
*Actuarial Gain due to experience represents movement in the liability due to rectification of error of the salary data in the current year.
Leave Encashment liability amounting to '' 16.88 Crs (previous year '' 11.02 Crs) has been provided in the Books of Accounts.
33. DERIVATIVES & FORWARD CONTRACT INSTRUMENTS:
(A) The Company uses Forward Exchange Contract to hedge against its Foreign Exchange exposures relating to underlying transactions and firm commitments. The Company does not enter into any derivatives instruments for Trading or Speculative purposes.
During the Year Company had hedged in aggregate an amount of '' 318.15 Crs (previous year '' 488.07 Crs) out of its annual trade related operations (Exports & Imports) aggregating to '' 2,575.35 Crs (previous year '' 2,585.09 Crs).
The Company had hedged its currency risks to the tune of '' 179.63 Crs (previous year '' 240.90 Crs), in respect of its long term Foreign Currency Loans/Borrowings. Relating to the same, the Company had also swapped its floating interest rate borrowing of '' 365.50 Crs (previous year '' 323.59 Crs) into a fixed rate loan through an interest rate swap.
(B) Net foreign exchange gain arriving out of export and import activities of the Company of '' 20.22 Crs (previous year gain of '' 28.46 Crs) is included in Profit & Loss Account.
Company had entered into forward contracts to hedge its medium and long term exports contracts. Mark to Market gain on such contracts to the tune of '' 8.41 Crs (including gain of '' 4.24 Crs for contracts of more than one year) is recognised in the Profit & Loss Account. Company had further provided for Revaluation gain on long term borrowing (ECBs) to the extent of '' 12.96 Crs as at 31st March, 2021 and have recognised the same in the Profit & Loss Account.
For the purpose of the Companyâs capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders. The primary objective of the Companyâs capital management is to maximise the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. Net Debt is calculated as loans and borrowings less cash & marketable securities.
37. FINANCIAL RISK MANAGEMENT:
The Companyâs principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to finance the Companyâs operations. The Companyâs principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations.
The Company is exposed to credit risk, market risk and liquidity risk. The Companyâs senior management oversees the management of these risks.
I. Credit Risk
The company is exposed to credit risk from its operating activities (primarily for trade receivables) and from its financing activities (deposits with banks and other financial instruments).
Credit risk is the risk that a customer or counterparty to a financial instrument fails to perform or pay the amounts due causing financial loss to the company. Credit risk arises from companyâs activities in investments, dealing in derivatives and outstanding receivables from customers.
The company has a prudent and conservative process for managing its credit risk arising in the course of its business activities. Sales made to customers on credit are generally secured through Letters of Credit, Bank Guarantees, Parent Company Guarantees, advance payments and factoring & forfaiting without recourse to AIL.
Credit Risk Management
To manage the credit risk, the Company follows an adequate credit control policy and also has an external credit insurance cover with ECGC policy wherein the customers are required to make an advance payment before procurement of goods. Thus, the requirement of assessing the impairment loss on trade receivables does not arise, since the collectability risk is mitigated.
Bank balances are held with only high rated banks and majority of other security deposits are placed majorly with government/statutory agencies.
II. Liquidity Risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. For the Company, liquidity risk arises from obligations on account of financial liabilities such as trade payables and other financial liabilities.
(a) Liquidity Risk Management
The Companyâs corporate treasury department is responsible for liquidity and funding as well as settlement. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Companyâs net liquidity position through rolling forecasts on the basis of expected cash flows.
III. Market Risk
Foreign Currency Risk
The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities in exports and imports which is majorly in US dollars.
Hence, to combat the foreign currency exposure, the Company follows a policy wherein the net sales are hedged by forward Contract.
Commodity Price Risk
The Company has a risk management framework aimed at prudently managing the risk arising from the volatility in commodity prices and freight costs.
The Companyâs commodity risk is managed centrally through well-established trading operations and control processes. In accordance with the risk management policy, the Company enters into various transactions using derivatives and uses Over the Counter (OTC) as well as Exchange Traded Futures, Options and Swap contracts to hedge its commodity and freight exposure.
38. The figures of previous year have been regrouped and rearranged wherever necessary.
Mar 31, 2018
Corporate Information
Aarti Industries Limited (âThe Companyâ) is listed entity incorporated in India. The registered office of the Company is located at Plot No. 801,801/23 G.I.D.C. Estate, Phase III, Vapi, Dist. Valsad Gujarat 396 195 India.
The Company is engaged in manufacturing and dealing in Speciality Chemicals, Pharmaceuticals and Home & Personal Care intermediates.
1.1 Note on Issued, Subscribed and Paid up Equity Share Capital:
[a] During the year 2017-18, 820,383 Shares were brought back at a premium of Rs. 1,195/-.
[b] During the year 2016-17, 1,200,000 Shares were brought back at a premium of Rs. 795/-.
[c] During the year 2015-16, 5,271,304 Shares of the Company had been cancelled, on the net basis, pursuant to the Scheme of Amlagmation of Anushakti Chemicals & Drugs Limited, Anushakti Holdings Limited, Gogri and Sons Investments Private Limited and Alchemie Leasing & Financing Private Limited into the Company.
2.1 a) Secured, Redeemable, STRPPS NCDs bearing coupon rate of 11.75% p.a. Debentures of Rs. 200.00 Crs are secured by way of First Pari Passu Hypothecation of the Moveable Plant & Machinery, Machinery Spares, Tools and Accessories and other movable fixed assets, both present and future, wherever situated, excluding those charged exclusively to other Term Lenders. The NCDs are issued in the year 2014-15 and are redeemable in five equal installments commencing from the end of the 3rd year from the date of allotment of these Debentures.
b) Out of the total ECB/Term Loans from Banks/Financial Institutions of Rs. 898.77 Crs
i) Outstanding Term Loans/ECBs to the extent of Rs. 94.55 Crs are secured by way of Pari Passu Joint Equitable Mortgage of the Companyâs immovable properties situated at Sarigam, Vapi and Jhagadia, in the State of Gujarat, Pithampur in the State of Madhya Pradesh, Silvassa in the Union Teritorry of Silvassa, Tarapur in the State of Maharashtra and further by way of Pari Passu Hypothecation of the Moveable Plant & Machinery, Machinery Spares, Tools and Accessories and other movables, both present and future (except book debts, inventories and other current assets) wherever situated, excluding those charged exclusively to other Term Lenders.
ii) Outstanding Term Loans/ECBs to the extent of Rs. 804.22 crs are secured by way of Pari Passu Hypothecation of the Moveable Plant & Machinery, Machinery Spares, Tools and Accessories and other movables, both present and future (except book debts, inventories and other current assets) wherever situated, excluding those charged exclusively to other Term Lenders.
c) Vehicle loans from Banks/Financial Institutions are secured by way of hypothecation of respective vehicles.
3.1 Working Capital Loans availed from Scheduled Banks, are secured/to be secured by way of Pari Passu first charge by hypothecation of Raw Materials, Stock-In-Process, Semi-Finished Goods, Finished Goods, Packing Materials and Stores and Spares, Bills Receivables and Book Debts and all other moveable, both present and future. Also by way of Joint Equitable Mortgage of the Companyâs immovable properties situated at Sarigam, Vapi, Jhagadia and Bhachau in the State of Gujarat Pithampur in the State of Madhya Pradesh, Silvassa in the Union Teritorry of Silvassa, and at Tarapur in the State of Maharashtra and further by way of hypothecation of all moveable plant & machinery, machinery spares, tools and accessories and other movables, both present and future (except book debts & inventories) wherever situated, ranking second to the charge held by NCDs/ECB/Other Term Lenders.
4.1 Basic earnings per share has been computed by dividing the profit/loss for the year by the weighted average number of shares outstanding during the year.
Partly paid shares are included as fully paid equivalents according to the fraction paid up.
Diluted earnings per share has been computed using weighted average number of shares dilutive potential shares, except where the results would be anti-dilutive.
5. There are no Micro and Small Enterprise, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2018. This information as required to be disclosed under the Micro, Small and Medium Enterprise Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.
6. Interest received of Rs. 7.08 Crs (Tax Deducted at Source Rs. 0.36 Crs) [previous year Rs. 9.41 Crs (Tax Deducted at Source Rs. 0.38 Crs)] is netted off against interest paid on Working Capital.
7. In the opinion of the Board, except as otherwise stated, the Current Assets and Loans and Advances have a value on realization at least equal to amounts at which they are stated in the Balance Sheet.
8. RELATED PARTY DISCLOSURE UNDER ACCOUNTING STANDARD (Ind AS: 24):
I Following are the Subsidiaries of the Company
1. Aarti Corporate Services Limited
2. Nascent Chemical Industries Limited (Through it holding Company: Aarti Corporate Services Limited)
3. Shanti Intermediates Private Limited (Through it holding Company: Aarti Corporate Services Limited)
4. Innovative Envirocare Jhagadia Limited
5. Ganesh Polychem Limited
6. Alchemie (Europe) Limited
7. Aarti USA Inc.
8. Aarti Polychem Private Limited
II Following are the Enterprises/Firms over which controlling individuals/Key Management Personnel, of the Company along with their relatives, have significant influence
1. Alchemie Speciality Chemicals Private Limited
2. Alchemie Laboratories
3. Aarti Drugs Limited
4. Alchemie Dye Chem Private Limited
III Following are the individuals who with their relatives own Directly/indirectly 20% or more voting power in the Company or have significant influence or are Key Management Personnel
1. Shri Rajendra V. Gogri Director
2. Shri Rashesh C. Gogri Director
3. Shri Shantilal T. Shah Director
4. Shri Parimal H. Desai Director
5. Shri Manoj M. Chheda Director
6. Shri Kirit R. Mehta Director
7. Smt. Hetal Gogri Gala Director
8. Shri Renil R. Gogri Director
9. Shri Chetan Gandhi Chief Financial Officer
10. Smt. Mona Patel (upto Date 14/11/2017) Company Secretary
11. Shri Raj Sarraf (from Date 16/11/2017) Company Secretary
9. EMPLOYEE BENEFITS:
Defined Benefit Plan
The employeesâ gratuity fund scheme managed by Life Insurance of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.
The estimate of rate of escalation in salary considered in actuarial valuation, takes into account inflation, seniority, promotion, other relevant factorâs including supply and demand in the employment market. The above information is certified by the actuary.
Leave Encashment:
Leave Encashment liability amounting to Rs. 6.59 Crs (previous year Rs. 6.42 Crs) has been provided in the Books of Accounts.
10. DERIVATIVES & FORWARD CONTRACT INSTRUMENTS:
(A) The Company uses Forward Exchange Contract to hedge against its Foreign Exchange exposures relating to underlying transactions and firm commitments. The Company does not enter into any derivatives instruments for Trading or Speculative purposes.
As at 31st March, 2018 the Company has hedged in aggregate an amount of Rs. 1073.80 Crs (previous year Rs. 32.42 Crs) in respect of its short term and long term supply contracts. The annual value of its trade related operations (Exports & Imports) aggregates to Rs. 2171.92 Crs (previous year Rs. 1,976.60 Crs).
The Company has hedged its currency risks to the tune of Rs. 136.85 Crs (previous year Rs. 13.42 Crs), in respect of its long term Foreign Currency Loans/Borrowings. Relating to the same, the Company has also swapped its floating interest rate borrowing of Rs. 284.73 Crs (previous year Rs. 37.95 Crs) into a fixed rate loan through an interest rate swap.
(B) Net foreign exchange gain arriving out of export and import activities of the Company of Rs. 23.69 Crs (previous year gain of Rs. 16.41 Crs) is included in Profit & Loss Account.
Company had entered into forward contracts to hedge its medium and long term exports contracts. Mark to Market loss on such contracts to the tune of Rs. 10.68 Crs (including loss of Rs. 2.05 Crs for contracts of more than one year) is recognised in the Profit & Loss Account. Company had further provided for Revaluation loss on long term borrowing (ECBs) to the extent of Rs. 2.51 Crs as at 31st March, 2018 and have recognised the same in the Profit & Loss Account.
The financial instruments are categorized into two levels based on the inputs used to arrive at fair value measurements as described below:
Level 1 : Quoted prices (unadjusted) in active markets for identical assets or liabilities; and
Level 2 : Inputs other than the quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
11. CAPITAL MANAGEMENT:
For the purpose of the Companyâs capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders. The primary objective of the Companyâs capital management is to maximise the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. Net Debt is calculated as loans and borrowings less cash & marketable securities.
12. FINANCIAL RISK MANAGEMENT:
The Companyâs principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to finance the Companyâs operations. The Companyâs principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations.
The Company is exposed to credit risk, market risk and liquidity risk. The Companyâs senior management oversees the management of these risks.
I. Credit Risk
The company is exposed to credit risk from its operating activities (primarily for trade receivables) and from its financing activities (deposits with banks and other financial instruments).
Credit risk is the risk that a customer or counterparty to a financial instrument fails to perform or pay the amounts due causing financial loss to the company. Credit risk arises from companyâs activities in investments, dealing in derivatives and outstanding receivables from customers.
The company has a prudent and conservative process for managing its credit risk arising in the course of its business activities. Sales made to customers on credit are generally secured through Letters of Credit, Bank Guarantees, Parent Company Guarantees, advance payments and factoring & forfaiting without recourse to AIL.
Credit risk management
To manage the credit risk, the Company follows a adequate credit control policy and also has an external credit insurance cover with ECGC policy wherein the customers are required to make an advance payment before procurement of goods. Thus, the requirement of assessing the impairment loss on trade receivables does not arise, since the collectability risk is mitigated.
Bank balances are held with only high rated banks and majority of other security deposits are placed majorly with government/statutory agencies.
II. Liquidity risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. For the Company, liquidity risk arises from obligations on account of financial liabilities such as trade payables and other financial liabilities.
(a) Liquidity risk management
The Companyâs corporate treasury department is responsible for liquidity and funding as well as settlement. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Companyâs net liquidity position through rolling forecasts on the basis of expected cash flows.
III. Market risk
Foreign currency risk
The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities in exports and imports which is majorly in US dollars.
Hence, to combat the foreign currency exposure, the Company follows a policy wherein the net exposures are hedged by forward Contracts.
Commodity Price Risk
The Company has a risk management framework aimed at prudently managing the risk arising from the volatility in commodity prices and freight costs.
The Companyâs commodity risk is managed centrally through well-established trading operations and control processes. In accordance with the risk management policy, the Company enters into various transactions using derivatives and uses Over the Counter (OTC) as well as Exchange Traded Futures, Options and Swap contracts to hedge its commodity and freight exposure.
13. The figures of previous year have been regrouped and rearranged wherever necessary.
Mar 31, 2017
1. There are no Micro and Small Enterprise, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2017. This information as required to be disclosed under the Micro, Small and Medium Enterprise Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.
2. Interest received of RS,9.41 Crs out of which Rs, RS,3.62 Crs interest income provided on Income Tax refund from IT Dept. & RS,1.41 Crs interest income provided on sales tax refund from the Gujarat Sales Tax Dept. (Tax Deducted at Source RS,0.38 Crs) [previous year RS,4.61 Crs (Tax Deducted at Source RS,0.36 Cr)] is netted off against interest paid on Working Capital.
3. In the opinion of the Board, except as otherwise stated, the Current Assets and Loans and Advances have a value on realization at least equal to amounts at which they are stated in the Balance Sheet.
31. RELATED PARTY DISCLOSURE UNDER ACCOUNTING STANDARD (Ind AS 24):
I Following are the Subsidiaries of the Company
1. Aarti Corporate Services Ltd.
2. Nascent Chemical Industries Ltd. (Through its holding Company: Aarti Corporate Services Ltd.)
3. Shanti Intermediates Pvt. Ltd. (Through its holding Company: Aarti Corporate Services Ltd.)
4. Innovative Envirocare Jhagadia Ltd.
5. Ganesh Polychem Ltd
6. Alchemie (Europe) Ltd.
7. Aarti USA Inc.
II Following are the Enterprises/Firms over which controlling individuals/Key Management Personnel, of the Company along with their relatives, have significant influence.
1. Alchemie Industries
2. Alchemie Laboratories
3. Aarti Drugs Ltd.
4. Alchemie Dye Chem Pvt. Ltd.
4. EMPLOYEE BENEFITS: Defined Benefit Plan
The employees'' gratuity fund scheme managed by Life Insurance of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.
The estimate of rate of escalation in salary considered in actuarial valuation, takes into account inflation, seniority, promotion, other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.
Leave Encashment:
Leave Encashment liability amounting to RS,6.42 Crs (previous year RS,5.83 Crs) has been provided in the Books of Accounts.
5. DERIVATIVES & FORWARD CONTRACT INSTRUMENTS:
(A) The Company uses Forward Exchange Contract to hedge against its Foreign Exchange exposures relating to underlying transactions and firm commitments. The Company does not enter into any derivatives instruments for Trading or Speculative purposes.
As at 31st March, 2017 the Company had hedged in aggregate an amount of RS,32.42 Crs (previous year RS,102.86 Crs) out of its annual trade related operations (Exports & Imports) aggregating to RS,1,976.60 Crs (previous year RS,1,663.09 Crs).
The Company had hedged its currency risks to the tune of RS,13.42 Crs (previous year RS,30.30 Crs), in respect of its long term Foreign Currency Loans/Borrowings. Relating to the same, the Company had also swapped its floating interest rate borrowing of RS,37.95 Crs (previous year RS,78.55 Crs) into a fixed rate loan through an interest rate swap.
(B) Net foreign exchange gain arriving out of export and import activities of the Company of RS,16.41 Crs (previous year loss of RS,4.54 Crs) is included in Profit& Loss Account.
6. CAPITAL MANAGEMENT:
For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximize the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. Net Debt is calculated as loans and borrowings less cash & marketable securities.
(RS, in Crs)
7. FINANCIAL RISK MANAGEMENT:
The Company''s principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations.
The Company is exposed to credit risk, market risk and liquidity risk. The Company''s senior management oversees the management of these risks.
I. Credit Risk
The company is exposed to credit risk from its operating activities (primarily for trade receivables) and from its financing activities (deposits with banks and other financial instruments).
Credit risk is the risk that a customer or counterparty to a financial instrument fails to perform or pay the amounts due causing financial loss to the company. Credit risk arises from company''s activities in investments, dealing in derivatives and outstanding receivables from customers.
The company has a prudent and conservative process for managing its credit risk arising in the course of its business activities. Sales made to customers on credit are generally secured through Letters of Credit, Bank Guarantees, Parent Company Guarantees, advance payments and factoring & forfeiting without recourse to AIL.
Credit risk management
To manage the credit risk, the Company follows a adequate credit control policy and also has an external credit insurance cover with ECGC policy wherein the customers are required to make an advance payment before procurement of goods. Thus, the requirement of assessing the impairment loss on trade receivables does not arise, since the collectability risk is mitigated.
Bank balances are held with only high rated banks and majority of other security deposits are placed majorly with government/statutory agencies.
II. Liquidity risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. For the Company, liquidity risk arises from obligations on account of financial liabilities such as trade payables and other financial liabilities.
(a) Liquidity risk management
The Company''s corporate treasury department is responsible for liquidity and funding as well as settlement. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.
Commodity Price Risk
The Company has a risk management framework aimed at prudently managing the risk arising from the volatility in commodity prices and freight costs.
The Company''s commodity risk is managed centrally through well-established trading operations and control processes. In accordance with the risk management policy, the Company enters into various transactions using derivatives and uses Over the Counter (OTC) as well as Exchange Traded Futures, Options and Swap contracts to hedge its commodity and freight exposure.
Note:
1 Under previous GAAP, non-current Investments were stated at cost. Where applicable, provision was made to recognize a decline, other than temporary, in valuation of such Investments. Under Ind AS, financial assets in equity instruments have been classified as Fair Value through Other Comprehensive Income (FVTOCI) through an irrevocable election at the date of transition.
8. The figures of previous year have been regrouped and rearranged wherever necessary.
Mar 31, 2016
(a) I n terms of the Scheme of Arrangement approved by the Hon''ble High Courts at Ahmadabad and Mumbai, the companies M/s. Anushakti Chemicals and Drugs Ltd., M/s. Anushakti Holdings Ltd., M/s. Alchemie Leasing and Financing Pvt. Ltd. and M/s. Gogri & Sons Investments Pvt. Ltd. had been merged with the Company with effect from 1st April, 2015 on going concern basis.
(b) Pursuant to the Scheme being approved, the Assets and Liabilities of the amalgamating companies has taken into Company at its respective book values. All Intra Company transactions and balances are eliminated in the course of aforesaid Scheme of Arrangement.
(c) The Financial Statements of Aarti Industries Ltd. have been drawn using uniform accounting policies for like transactions and other events in similar circumstances.
(d) The difference, being the excess of the book value of the net assets of the amalgamating companies over the shares being allotted and pursuant to the cancellation of investments and share capital have been suitably adjusted into Amalgamation Reserve and Capital Reserves of the Company.
1. Note on Issued, Subscribed and Paid up Equity Share Capital:
[a] 843,649 (previous year 8,43,649) were issued to Shareholders of Surfactant Specialties Ltd. pursuant to its Merger with the Company.
[b] 42,000 (previous year 42,000) were issued to Shareholders of Avinash Drugs Ltd. pursuant to its Merger with the Company.
[c] 3,025,000 (previous year 3,025,000) were issued towards Preferential allotment at a premium of '' 30.65 paise to Warrant holders.
[d] 2,400,000 (previous year 2,400,000) have been issued towards Preferential allotment at a premium of Rs, 53/- to Warrant holders.
[e] 9,471,614 (previous year 9,471,614) were issued to Shareholders of Anushakti Chemicals & Drugs Ltd. pursuant to its Scheme of arrangement with the Company.
[f] 1,67,26,401 (previous year Nil) were issued to Shareholders of Anushakti Chemicals & Drugs Ltd., Anushakti Holdings Ltd., Gogri and Sons Investments Pvt. Ltd., and Alchemie Leasing & Financing Pvt. Ltd. pursuant to the Scheme of Amalgamation with the Company & 2,19,97,705 (previous year Nil) being held by them as investments had been cancelled. Hence on net basis 52,71,304 shares of the company has been cancelled.
2. (a) Secured, Redeemable, STRPPS NCDs bearing coupon rate of 11.75% p.a. Debentures of Rs, 200.00 Crs. are secured by way of First Pari Passu Hypothecation of the Moveable Plant & Machinery, Machinery Spares, Tools and Accessories and other movable fixed assets, both present and future, wherever situated, excluding those charged exclusively to other Term Lenders. The NCDs are issued in the year 2014-15 and are redeemable in five equal installments commencing from the end of the 3rd year from the date of allotment of these Debentures.
(b) Out of the total ECB/Term Loans from Banks/Financial Institutions to Rs, 381.49 Crs.
(i) Outstanding Term Loans/ECBs to the extent of Rs, 214.03 Crs. are secured by way of Pari Passu Joint Equitable Mortgage of the Company''s immovable properties situated at Sarigam, Vapi and Jhagadia, in the State of Gujarat, Pithampur in the State of Madhya Pradesh, Silvassa in the Union Teritorry of Silvassa, Tarapur in the State of Maharashtra and further by way of Pari Passu Hypothecation of the Moveable Plant & Machinery, Machinery Spares, Tools and Accessories and other movables, both present and future (except book debts, inventories and other current assets) wherever situated, excluding those charged exclusively to other Term Lenders.
(ii) Term Loan from Citibank to the extent of Rs, 16.56 Crs. is secured by way of Exclusive Charge on the Moveable Plant & Machinery, Machinery Spares, Tools and Accessories and other movables, both present and future (except book debts, inventories and other current assets) situated at the new hydrogenation unit at Jhagadia Unit II.
(iii) Term Loan of Rs, 150.90 Crs. from SVC Bank Ltd. and Aditya Birla Finance Ltd. is secured by way of Pari Passu Hypothecation of the Moveable Plant & Machinery, Machinery Spares, Tools and Accessories and other movables, both present and future (except book debts, inventories and other current assets) wherever situated, excluding those charged exclusively to other Term Lenders.
(c) Vehicle loans from Banks/Financial Institutions are secured by way of hypothecation of respective vehicles.
3. Working Capital Loans availed from Scheduled Banks, are secured/to be secured by way of Pari Passu first charge by hypothecation of Raw Materials, Stock-In-Process, Semi-Finished Goods, Finished Goods, Packing Materials and Stores and Spares, Bills Receivables and Book Debts and all other moveable, both present and future. Also by way of Joint Equitable Mortgage of the Company''s immovable properties situated at Sarigam, Vapi, Jhagadia and Bhachau in the State of Gujarat Pithampur in the State of Madhya Pradesh, Silvassa in the Union Teritorry of Silvassa, and at Tarapur in the State of Maharashtra and further by way of hypothecation of all moveable plant & machinery, machinery spares, tools and accessories and other movables, both present and future (except book debts & inventories) wherever situated, ranking second to the charge held by NCDs/ECB/ Term Lenders.
4. Gross Block of Plant & Equipment includes assets given on Lease with Gross Block ? 1.15 Crs. (previous year ? 1.15 Crs.)
5. Additions to Gross Block includes an amount of? 7.20 Crs. (previousyear? 10.36 Crs.) being the net foreign exchange loss, arising on account of restatement and repayments of Long-term Foreign Currency Loans during the year.
6. Current year depreciation includes ? 1.67 Crs. (previous year ? 1.19 Crs.) on Assets deployed for Research & Development.
7. In F.Y. 2014-15 the Company had changed the method of depreciation for one of its unit, taken on operating lease, from Written Down Value Method to Straight Line Method. Which had resulted into an accumulated surplus of ? 3,48 Crs, which was accounted as exceptional item in the Profit and Loss Statement for the year ended 31st March, 2015
8. Pursuant to the Scheme of Arrangement, Anushakti Holdings Ltd. and Anushakti Chemicals & Drugs Ltd. had been merged into Aarti Industies Ltd. w.e.f. 01.04.2015. Hence the investment stands eliminated.
9. Ganesh Polychem Ltd, formerly an Associate, became a Subsidiary w.e.f. 18.03.2016 by acquiring additional 30,000 equity shares.
10. Anushakti Speciality Limited Liability Partnership has been merged/absorbed into Aarti Industries Ltd.
11. There are no Micro and Small Enterprise, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2016. This information as required to be disclosed under the Micro, Small and Medium Enterprise Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.
12. Interest received of Rs, 4.61 Crs. (Tax Deducted at Source Rs, 0.36 Crs.) [previous year Rs,3.95 Crs. (Tax Deducted at Source Rs, 0.34 Cr.)] is netted off against interest paid on Working Capital.
13. In the opinion of the Board, except as otherwise stated, the Current Assets and Loans and Advances have a value on realization at least equal to amounts at which they are stated in the Balance Sheet.
14. RELATED PARTY DISCLOSURE UNDER ACCOUNTING STANDARD (AS: 18):
I Following are the Subsidiaries of the Company as defined in Para 3(a) of Accounting Standard - 18:
1. Aarti Corporate Services Ltd.
2. Nascent Chemical Industries Ltd. (Through its holding Company: Aarti Corporate Services Ltd.)
3. Shanti Intermediates Pvt. Ltd. (Through its holding Company: Aarti Corporate Services Ltd.)
4. Innovative Envirocare Jhagadia Ltd.
5. Ganesh Polychem Ltd.
6. Alchemie (Europe) Ltd.
7. Aarti USA Inc.
II Following are the Enterprises/Firms over which controlling individuals/Key Management Personnel, of the Company along with their relatives, have significant influence as defined in Para 3(e) of the Accounting Standard - 18:
1. Alchemie Industries
2. Alchemie Laboratories
3. Aarti Drugs Ltd.
4. Alchemie Dye Chem Pvt. Ltd.
* Excluding the payments made to Independent Directors & Relative of Directors as per Accounting Standard Interpretation 21 issued by the Institute of Chartered Accountants of India.
# Value of Perquisites includes non Cash Perquisites of Rs, 0.02 Crs. (previous year Rs, 0.02 Crs.).
15. EMPLOYEE BENEFITS:
Defined Benefit Plan
The employees'' gratuity fund scheme managed by Life Insurance of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.
The estimate of rate of escalation in salary considered in actuarial valuation, takes into account inflation, seniority, promotion, other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.
Leave Encashment:
Leave Encashment liability amounting to Rs, 5.83 Crs. (previous year Rs, 4.49 Crs.) has been provided in the Books of Accounts.
16. DERIVATIVES & FORWARD CONTRACT INSTRUMENTS:
(A) The Company uses Forward Exchange Contract to hedge against its Foreign Exchange exposures relating to underlying transactions and firm commitments. The Company does not enter into any derivatives instruments for Trading or Speculative purposes.
As at 31st March, 2016 the Company had hedged in aggregate an amount of Rs, 102.86 Crs. (previous year Rs, 157.48 Crs.) out of its annual trade related operations (Exports & Imports) aggregating to Rs, 1,663.09 Crs. (previous year Rs, 1,825.76 Crs.).
The Company had hedged its currency risks to the tune of Rs,595.99 Crs. (previous year Rs,98.39 Crs.), in respect of its long term Foreign Currency Loans/Borrowings. Relating to the same, the Company had also swapped its floating interest rate borrowing of Rs,78.55 Crs. (previous year Rs,136.23 Crs.) into a fixed rate loan through an interest rate swap.
(B) Net foreign exchange loss of Rs, 4.54 Crs. (previous year Rs, 17.43 Crs.) is included in Profit & Loss Account.
17. ADDITIONAL INFORMATION PURSUANT TO THE PROVISIONS OF PART II OF SCHEDULE III TO THE COMPANIES ACT, 2013.
18. The figures of previous year have been regrouped and rearranged wherever necessary
Mar 31, 2015
1. CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided
for):
(RS. in Lakhs)
As at As at
31st March,2015 31st March,2014
(i) Contingent Liabilities:
(a) Claims against the Company not
acknowledged as Debts 4,855.80 3,908.53
(b) Letters of Credit, Bank
Guarantees & Bills Discounted 3,318.44 7,539.89
8,174.24 11,448.42
(ii) Commitments:
(a) Estimated amount of contracts
remaining to be executed on capital 2,604.04 1,108.28
account and not provided for,
net of advances
2,604.04 1,108.28
TOTAL 10,778.28 12,556.70
2. There are no Micro and Small Enterprise, to whom the Company owes
dues, which are outstanding for more than 45 days as at 31st March,
2015. This information as required to be disclosed under the Micro,
Small and Medium Enterprise Development Act, 2006 has been determined
to the extent such parties have been identified on the basis of
information available with the Company.
3. Interest received of RS. 395.29 Lakhs (Tax Deducted at Source RS.
33.53 Lakhs) [previous year RS. 334.77 Lakhs (Tax Deducted at Source
RS. 29.14 Lakhs)] is netted off against interest paid on Working
Capital.
4.. In the opinion of the Board, except as otherwise stated, the
Current Assets and Loans and Advances have a value on realization at
least equal to amounts at which they are stated in the Balance Sheet.
5. RELATED PARTY DISCLOSURE UNDER ACCOUNTING STANDARD (AS: 18):
I Following are the Subsidiaries of the Company as defined in Para 3(a)
of Accounting Standard - 18.
1.Aarti Corporate Services Ltd. 2. Nascent Chemical Industries Ltd.
(Through its holding Company:Aarti
Corporate Services Ltd.)
3.Shanti Intermediates Pvt. Ltd. 4. Anushakti Specialities Limited
(Through its holding Company: Liability Partnership (LLP)
Company: Aarti Corporate
Services Ltd.)
5. Alchemie (Europe) Ltd. 6. Innovative Envirocare Jhagadia Ltd
II Following are the Associates of the Company as defined in Para 3(b)
of the Accounting Standard - 18.
1. Ganesh Polychem Ltd. 2. Anushakti Chemicals and Drugs Ltd.
3. Anushakti Holdings Ltd. 4. Aarti Biotech Ltd. (Through its holding
Company: Aarti Corporate Services Ltd.)
5. Aarti Intermediates Pvt. 6. Perfect Enviro Control Systems Ltd.
Ltd. (Through its holding (Through its holding Company: Aarti
Company: Aarti Corporate Corporate Services Ltd.)
Services Ltd.)
III Following are the Enterprises/Firms over which controlling
individuals/Key Management Personnel, of the Company along with their
relatives, have significant influence as defined in Para 3(e) of the
Accounting Standard - 18.
1. Alchemie Industries 2. Gogri and Sons Investments Pvt. Ltd.
3. Alchemie Leasing and 4. Alchemie Laboratories
Financing Pvt. Ltd.
5. Aarti Drugs Ltd. 6. Alchemie Dye Chem Pvt. Ltd.
IV Following are the individuals who with their relatives as defined in
Para 3(c) and 3(d) of the Accounting Standard - 18 own
Directly/indirectly 20% or more voting power in the Company or have
significant influence or are Key Management Personnel.
Sr.No. Name Status
1. Shri Rajendra V.Gogri Director
2. Smt. Hetal Gogri Gala Director
3. Shri Rashesh C.Gogri Director
4. Shri Shantilal T.Shah Director
5. Shri Parimal H.Desai Director
6. Shri Kirit R.Mehta Director
7. Shri Manoj M.Chheda Director
8. Shri Renil R.Gogri Director
9. Smt. Mona Patel Company Secretary
10. Shri Chetan Gandhi Chief Financial
Officer
6. EMPLOYEE BENEFITS:
Defined Benefit Plan
The employees'' gratuity fund scheme managed by Life Insurance
Corporation of India is a defined benefit plan. The present value of
obligation is determined based on actuarial valuation using the
Projected Unit Credit Method, which recognizes each period of service
as giving rise to additional unit of employee benefit entitlement and
measures each unit separately to build up the final obligation.
7. DERIVATIVES & FORWARD CONTRACT INSTRUMENTS:
(A) The Company uses Forward Exchange Contract to hedge against its
Foreign Exchange exposures relating to underlying transactions and firm
commitments. The Company does not enter into any derivatives
instruments for Trading or Speculative purposes.
As at 31st March, 2015 the Company had hedged in aggregate an amount of
RS. 15,747.61 Lakhs (previous year RS. 299.50 Lakhs) out of its annual
trade related operations (Exports & Imports) aggregating to RS.
182,575.79 Lakhs (previous year RS. 160,963.49 Lakhs).
The Company had hedged its currency risks to the tune of RS. 9,839.14
Lakhs (previous year RS. 11,980.00 Lakhs), in respect of its long term
Foreign Currency Loans/Borrowings. Relating to the same, the Company
had also swapped its floating interest rate borrowing of RS. 13,622.89
Lakhs (previous year RS. 19,010.75 Lakhs) into a fixed rate loan
through an interest rate swap.
(B) Net foreign exchange loss of RS. 1,742.87 Lakhs (previous year RS.
2,121.63 Lakhs) is included in Profit & Loss Account.
8. The figures of previous year have been regrouped and rearranged
wherever necessary.
Mar 31, 2014
(Rs in Lakhs)
As at As at
March, 2014 31st March, 2013 31st
1. CONTINGENT LIABILITIES AND
COMMITMENTS (to the extent
not provided for):
(i) Contingent Liabilities:
(a) Claims against the Company not
acknowledged as Debts 3,908.533, 870.11
(b) Letters of Credit, Bank
Guarantees & Bills Discounted 7,539.898, 052.43
11,448.42 11,922.54
(ii) Commitments:
(a) Estimated amount of contracts
remaining to be executed on capital
accountand not provided for, net of
advances 1,108.28 3,697.63
1,108.28 3,697.63
TOTAL 12,556.70 15,620.17
2. There are no Micro and Small Enterprise, to whom the Company owes
dues, which are outstanding for more than 45 days as at 31st March,
2014. This information as required to be disclosed under the Micro,
Small and Medium Enterprise Development Act, 2006 has been determined
to the extent such parties have been identified on the basis of
information available with the Company.
3. Interest received ofRs 334.77 Lakhs (Tax Deducted at Source Rs 29.14
Lakhs) [previous year Rs 411.98 Lakhs (Tax Deducted at Source Rs 9.21
Lakhs)] is netted off against interest paid on Working Capital.
4. In the opinion of the Board, except as otherwise stated, the
Current Assets and Loans and Advances have a value on realization at
least equal to amounts at which they are stated in the Balance Sheet.
Note:
The Company is a multi-product and multi-faceted one. The performance
were earlier classified into four segments viz. Performance Chemicals,
Agri-Intermediates & Fertilisers, Pharmaceuticals and Home & Personal
Care Chemicals based on the end-use/applications.
In case of Performance Chemicals Segment and Agri Intermediates &
Fertilizers Segment, a majority of manufacturing facilities are common
and interlinked. As a result the segmental performance for these two
segments would fluctuate based on the product mix adopted at each
reporting period.
Thus for better interpretation of the operations resulting on account
of these interchangeable facilities, it is decided to merge these two
segments into a single reportable segment under the name of "Speciality
Chemicals". Hence the performance of the Company shall be reclassified
into three segments viz. Speciality Chemicals, Pharmaceuticals and Home
& Personal Care Chemicals. This also facilitates the disclosure of
Capital Employed for each segment, which earlier was not possible on
account of common manufacturing facilities. This change does not have
any financial impact.
5. RELATED PARTY DISCLOSURE UNDER ACCOUNTING STANDARD (AS: 18):
I Following are the Subsidiaries of the Company as defined in Para 3(a)
of Accounting Standard -18.
1. Aarti Corporate Services Ltd.
2. Nascent Chemical Industries Ltd.
(Through its holding
Company: Aarti Corporate Services Ltd.)
3. Shanti Intermediates Pvt. Ltd. (Through its holding Company: Aarti
Corporate Services Ltd.)
4. Anushakti Specialities Limited Liability Partnership (LLP)
5. Alchemie (Europe) Ltd.
6. Innovative Envirocare Jhagadia Ltd.
II Following are the Associates of the Company as defined in Para 3(b)
of the Accounting Standard -18.
1. Ganesh Polychem Ltd. 2. Anushakti Chemicals and Drugs Ltd.
3. Anushakti Holdings Ltd.
Ill Following are the Enterprises/Firms over which controlling
individuals/Key Management Personnel, of the Company along with their
relatives, have significant influence as defined in Para 3(e) of the
Accounting Standard -18.
1. Alchemie Pharma Chem Ltd.
2. Alchemie Industries
3. Gogh and Sons Investments Pvt. Ltd.
4. Alchemie Leasing and Financing Pvt. Ltd.
5. Alchemie Laboratories
6. Aarti Drugs Ltd.
7. Alchemie Dve Chem Pvt. Ltd.
IV Following are the individuals who with their relatives as defined in
Para 3(c) and 3(d) of the Accounting Standard -18 own
Directly/indirectly 20% or more voting power in the Company or have
significant influence or are Key Management Personnel.
Name Status
1.Shri Rajendra V. Gogh Director
2.Smt. Hetal Gogh Gala Director
3.Shri Rashesh C. Gogri Director
4.Shri ShantilalT Shah Director
5.Shri Parimal H. Desai Director
6.Shri Kirit R. Mehta Director
7.Shri Manoj M. Chheda Director
8.Shri Renil R. Gogri Director
6. EMPLOYEE BENEFITS:
Defined Benefit Plan
The employees'' gratuity fund scheme managed by Life Insurance
Corporation of India is a defined benefit plan. The present value of
obligation is determined based on actuarial valuation using the
Projected Unit Credit Method, which recognizes each period of service
as giving rise to additional unit of employee benefit entitlement and
measures each unit separately to build up the final obligation.
The estimate of rate of escalation in salary considered in actuarial
valuation, takes into account inflation, seniority, promotion, other
relevant factors including supply and demand in the employment
market.The above information is certified by the actuary.
Leave Encashment:
Leave Encashment liability amounting to Rs 346.88 Lakhs (previous year Rs
274.38 Lakhs) has been provided in the Books of Accounts.
7. DERIVATIVES & FORWARD CONTRACT INSTRUMENTS:
(A) The Company uses Forward Exchange Contract to hedge against its
Foreign Exchange exposures relating to underlying transactions and firm
commitments. The Company does not enter into any derivatives
instruments for Trading or Speculative purposes.
As at 31st March, 2014 the Company had hedged in aggregate an amount of
Rs 299.50 Lakhs (previous yearRs 4,887.00 Lakhs) out of its annual trade
related operations (Exports & Imports) aggregating toRs 160,963.49 Lakhs
(previous yearRs 128,851.98 Lakhs).
The Company had hedged its currency risks to the tune of Rs 11,980.00
Lakhs (previous year Rs Nil) in respect of its long term Foreign
Currency Loans/Borrowings. Relating to the same, the Company had also
swapped its floating interest rate borrowing of Rs 19,010.75 Lakhs
(previous yearRs 9,160.41 Lakhs) into a fixed rate loan through an
interest rate swap.
(B) Net foreign exchange loss ofRs 2,121.63 Lakhs (previous yearRs 154.14
Lakhs) is included in Profit & Loss Account.
Mar 31, 2013
(Rs. in Lakhs)
For the Year For the Year
Ended Ended
31st March'' 2013 31st March''
2012
1. CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided
for):
(i) Contingent Liabilities:
(a) Claims against the company not
acknowledged as Debts 3''870.11 2''198.28
(b) Letters of Credit'' Bank Guarantees
& Bills Discounted 8''052.43 4''401.76
11''922.54 6''600.04
(ii) Commitments:
(a) Estimated amount of contracts
remaining to be executed on capital
account and not provided for''
net of advances 3''697.63 1''112.03
3''697.63 1''112.03
TOTAL 15''620.17 7''712.07
2. There are no Micro and Small Enterprise'' to whom the Company owes
dues'' which are outstanding for more than 45 days as at 31st March''
2013. This information as required to be disclosed under the Micro''
Small and Medium Enterprise Development Act'' 2006 has been determined
to the extent such parties have been identifed on the basis of
information available with the Company.
3. Interest received of Rs. 411.98 Lakhs (Tax Deducted at Source Rs. 9.21
Lakhs) [previous year Rs. 104.17 Lakhs (Tax Deducted at Source Rs. 8.98
Lakhs)] is netted of against interest paid on Working Capital.
4. In the opinion of the Board'' except as otherwise stated'' the
Current Assets and Loans and Advances have a value on realization at
least equal to amounts at which they are stated in the Balance Sheet.
5. EMPLOYEE BENEFITS: Defned Beneft Plan
The employees'' gratuity fund scheme managed by Life Insurance of India
is a defned beneft plan. The present value of obligation is determined
based on actuarial valuation using the Projected Unit Credit Method''
which recognizes each period of service as giving rise to additional
unit of employee beneft entitlement and measures each unit separately
to build up the fnal obligation.
6. DERIVATIVES & FORWARD CONTRACT INSTRUMENTS:
(A) The Company uses Forward Exchange Contract to hedge against its
Foreign Exchange exposures relating to underlying transactions and frm
commitments. The Company does not enter into any derivatives
instruments for Trading or Speculative purposes.
As at 31st March'' 2013 the Company had hedged in aggregate an amount of
Rs. 4''887.00 Lakhs (previous year Rs. Nil) out of its annual trade related
operations (Exports & Imports) aggregating to Rs. 128''851.98 Lakhs
(previous year Rs. 85''928.24 Lakhs). The Company had hedged its currency
risks to the tune of Rs. Nil (previous year Rs. 587.02 Lakhs) in respect of
its long term Foreign Currency Loans/Borrowings. Relating to the same''
the Company had also swapped its foating interest rate borrowing of Rs.
9''160.41 Lakhs (previous year Rs. 4''734.74 Lakhs) into a fxed rate loan
through an interest rate swap.
(B) Net foreign exchange loss of Rs. 154.14 Lakhs (previous year Rs. 196.14
Lakhs) is included in Proft & Loss Account.
7. The fgures of previous year have been regrouped and rearranged
wherever necessary.
Mar 31, 2012
1.1 Note on Issued, Subscribed and Paid-up Equity Share Capital:
[a] 843,649 (As at 31st March, 2011 - 843,649) were issued to
Shareholders of Surfactant Specialities Ltd. pursuant to its Merger
with the Company.
[b] 42,000 (As at 31st March, 2011 - 42,000) were issued to
Shareholders of Avinash Drugs Ltd. pursuant to its Merger with the
Company.
[c] 3,025,000 (As at 31st March, 2011 - 3,025,000) were issued towards
Preferential allotment at a premium of Rs 30.65 paise to Warrantholders.
[d] 2,400,000 (As at 31st March, 2011 - NIL) have been issued towards
Preferential allotment at a premium of Rs 53/- to Warrantholders.
1.2 The Company has received balance money on conversion of 2,400,000
Equity Share Warrants issued on preferential basis into fully paid
Equity Shares of Rs 1,392.00 Lakhs, during the year and the money has
been utilized for the purposes as stated in the "Objects of the Issue"
i.e. to augment the Long Term Funds to meet on going Capital
Expenditure and Long Term Working Capital requirements of the Company.
2.1 a) ECB/Term Loans from Banks/Financial Institutions, are secured/to
be secured by way of Joint Equitable Mortgage of the Company's
immovable properties situated at Sarigam, Vapi and Jhagadia, in the
State of Gujarat and further by way of hypothecation of all moveable
plant & machinery, machinery spares,tools and accessories and other
movables, both present and future (except book debts & inventories)
wherever situated.
b) Vehicle Loans from Banks/Financial Institutions are secured by way
of hypothecation of respective vehicles.
3.1 Working Capital Loans availed from Scheduled Banks, are secured/to
be secured by hypothecation of Raw Materials, Stock- In-Process,
Semi-Finished Goods, Finished Goods, Packing Materials and Stores and
Spares, Bills Receivables and Book Debts and all other moveable, both
present and future. Also by way of Joint Equitable Mortgage of the
Company's immovable properties situated at Sarigam, Vapi and Jhagadia,
in the State of Gujarat being second to the charge held by ECB/Term
Lenders and further by way of hypothecation of all moveable plant &
machinery, machinery spares, tools and accessories and other movables,
both present and future (except book debts & inventories) wherever
situated.
4.1 Gross Block of Plant & Machinery includes assets given on Lease
with Gross Block Rs 163.95 Lakhs as on 31st March, 2012 (previous year Rs
163.95 Lakhs)
4.2 Additions to Gross Block includes an amount of Rs 668.81 Lakhs
being the net foreign exchange loss, arising on account of restatement
of Long-term Foreign Currency Loans outstanding as at 31st March, 2012.
4.3 Process Development is being amortized over a period of 5 years
(The balance shall be amortized in next financial year, it being the
last year of amortization).
4.4 Current year depreciation includes Rs 87.44 Lakhs (previous year Rs
88.74 Lakhs) on Assets deployed for Research & Development.
For the
Year For the
Year
Ended Ended
31st March,
2012 31st March,
2011
5. CONTINGENT LIABILITIES AND COMMITMENTS
(to the extent not provided for):
(i) Contingent Liabilities
(a) Claims against the Company not
acknowledged as Debts 2,198.28 1,215.18
(b) Letters of Credit, Bank Guarantees
& Bills Discounted 4,401.76 4,024.46
6,600.04 5,239.64
(ii) Commitments
(a) Estimated amount of contracts
remaining to be executed on
capital account and not provided for,
net of advances 1,112.03 1,278.96
1,112.03 1,278.96
TOTAL 7,712.07 6,518.60
6. There are no Micro and Small Enterprise, to whom the Company owes
dues, which are outstanding for more than 45 days as at 31st March,
2012. This information as required to be disclosed under the Micro,
Small and Medium Enterprise Development Act, 2006 has been determined
to the extent such parties have been identified on the basis of
information available with the Company.
7. Interest received of Rs 104.17 Lakhs (Tax Deducted at Source Rs 8.98
Lakhs) [previous year Rs 11.50 Lakhs (Tax Deducted at Source Rs 1.38
Lakhs)] is netted off against interest paid on Working Capital.
8. In the opinion of the Board, except as otherwise stated, the
Current Assets and Loans and Advances have a value on realization at
least equal to amounts at which they are stated in the Balance Sheet.
1 Segmental Capital Employed:
Fixed assets used in the Company's business or liabilities contracted
have not been identified to any of the reportable segments, as the
fixed assets and services are used interchangeably between segments.
The Company believes that it is currently not practicable to provide
segment disclosures relating to capital employed.
2 Re-Classification of Business Segments:
For better understanding of businesses, the Company has reclassified
its business segments based on the nature of product and their
respective end-uses. Based on the same, the Company has reclassified
its business segments into Performance Chemicals, Agri-Intermediates &
Fertilizers, Pharmaceuticals and Home & Personal Care. This change does
not have any financial impact.
9. EMPLOYEE BENEFITS:
Defined Benefit Plan
The employees' gratuity fund scheme managed by Life Insurance
Corporation of India is a defined benefit plan. The present value of
obligation is determined based on actuarial valuation using the
Projected Unit Credit Method, which recognizes each period of service
as giving rise to additional unit of employee benefit entitlement and
measures each unit separately to build up the final obligation.
10. DERIVATIVES & FORWARD CONTRACT INSTRUMENTS:
(A) The Company uses Forward Exchange Contract to hedge against its
Foreign Exchange exposures relating to underlying transactions and firm
commitments. The Company does not enter into any derivatives
instruments for Trading or Speculative purposes.
As at 31st March, 2012 the Company had hedged in aggregate an amount of
Rs Nil (previous year Rs Nil) out of its annual trade related operations
(Exports & Imports) aggregating to Rs 85,928.24 Lakhs (previous year Rs
74,868.90 Lakhs).
The Company had hedged its currency risks to the tune of Rs 587.02 Lakhs
(previous year Rs 1,900.00 Lakhs) in respect of its long term Foreign
Currency Loans/Borrowings. Relating to the same, the Company had also
swapped its floating interest rate borrowing of Rs 4,734.74 Lakhs
(previous year Rs 4,906.00 Lakhs) into a fixed rate loan through an
interest rate swap.
(B) Net foreign exchange loss of Rs 196.14 Lakhs (previous year net
foreign exchange loss of Rs 220.27 Lakhs) is included in Statement of
Profit & Loss.
11. The figures of previous year have been regrouped and rearranged
wherever necessary.
Mar 31, 2011
1. CONTINGENT LIABILITIES:
a) Claims against the Company not acknowledged as Debts Rs. 1,215.18
Lakhs (previous year Rs. 1,671.36 Lakhs).
b) In respect of Letters of Credit, Bank Guarantees issued and Bills
discounted by the Company's Bankers Rs. 4,024.46 Lakhs (previous year
Rs. 4,836.78 Lakhs).
c) Estimated amount of Contracts remaining to be executed on capital
account and not provided for, net of advances, Rs. 1,278.96 Lakhs
(previous year Rs. 121.43 Lakhs).
2. SECURED LOANS:
Security for Loans taken from Banks:
a) Outstanding Term Loans aggregating to Rs. 10,352.98 Lakhs (previous
year Rs. 2,451.89 Lakhs) from banks subject to (c) and (d) below, are
secured/to be secured by way of Joint Equitable Mortgage of the
Company's immovable properties situated at Sarigam, Vapi and Jhagadia,
in the State of Gujarat further by way of hypothecation of all moveable
plant & machinery, machinery spares, tools and accessories and other
movables, both present and future (except book debts & inventories)
wherever situated.
b) In case of vehicle loans from banks/NBFC of Rs. 23.02 Lakhs
(previous year Rs. 21.81 Lakhs) against hypothecation of the vehicles.
c) External Commercial Borrowings (ECB) of JPY 462.50 Million availed
from Royal Bank of Scotland (earlier known as ABN AMRO Bank N.V.)
Singapore and of USD 11.00 million availed from Standard Chartered
Bank, London, both aggregating to Rs. 6,498.40 Lakhs (previous year Rs.
3,016.13 Lakhs) are secured/to be secured by way of Joint Equitable
Mortgage of the Company's immovable properties situated at Sarigam,
Vapi and Jhagadia, in the State of Gujarat and further by way of
hypothecation of all moveable plant & machinery, machinery spares,
tools and accessories and other movables, both present and future
(except book debts & inventories) wherever situated.
d) Working Capital Loans of Rs. 28,501.01 Lakhs (previous year Rs.
24,610.70 Lakhs) availed from Scheduled Banks, are secured by
hypothecation of Raw Materials, Stock-In-Process, Semi-Finished Goods,
Finished Goods, Packing Materials and Stores and Spares, Bills
Receivables and Book Debts and all other moveable, both present and
future. Further, by way of Joint Equitable Mortgage of the Company's
immoveable properties situated at Sarigam, Vapi and Jhagadia in the
State of Gujarat, ranking second to that of Banks mentioned in (a) and
(c) above. These loans are personally guaranteed by three Directors of
the Company.
3. In the opinion of the Board, except as otherwise stated, the
Current Assets and Loans and Advances have a value on realization at
least equal to amounts at which they are stated in the Balance Sheet.
4. Interest received of Rs. 11.50 Lakhs (Tax Deducted at Source Rs.
1.38 Lakhs) [previous year Rs. 54.72 Lakhs (Tax Deducted at Source Rs.
7.05 Lakhs)] is netted off against interest paid on Working Capital.
5. Sales and other sales incomes are inclusive of conversion charges
amounting to Rs. 89.11 Lakhs (previous year Rs. 194.62 Lakhs), export
benefits amounting to Rs. 85.56 Lakhs (previous year Rs. 142.88 Lakhs),
Fertilizer subsidy amounting to Rs. 2,422.57 Lakhs (previous year Rs.
1,106.06 Lakhs) and insurance claim on goods lost by fire Rs. 64.58
Lakhs (previous year Rs. Nil).
6. Revenue Expenditure of Rs. 417.35 Lakhs (previous year Rs. 265.49
Lakhs) [including depreciation of Rs. 23.83 Lakhs (previous year Rs.
30.45 Lakhs)] on Research & Development activities at the Company's R &
D Centre is charged to Profit and Loss Account for the year. Capital
Expenditure includes Rs. 46.74 Lakhs (previous year Rs. 235.16 Lakhs)
towards Fixed Assets purchased for Research & Development activities at
the Company's R & D centre. Of the above, Revenue Expenditure of Rs.
171.75 Lakhs (previous year Rs. 167.49 Lakhs) [including depreciation
of Rs. 23.83 Lakhs (previous year Rs. 30.45 Lakhs)] is in respect of
the Research & Development activities carried on at the Company's
recognized R & D Centre at Vapi. Similarly, Capital Expenditure
includes Rs. 23.20 Lakhs (previous year Rs. 35.65 Lakhs ) towards Fixed
Assets purchased for Research & Development activities at the Company's
recognized R & D centre at Vapi.
7. There are no Micro and Small Enterprise, to whom the Company owes
dues, which are outstanding for more than 45 days as at 31st March,
2011. This information as required to be disclosed under the Micro,
Small and Medium Enterprise Development Act, 2006 has been determined
to the extent such parties have been identified on the basis of
information available with the Company.
Segmental Capital Employed :
Fixed Assets used in the Company's business or liabilities contracted
have not been identified to any of the reportable segments, as the
Fixed Assets and services are used interchangeably between segments.
The Company believes that it is currently not practicable to provide
segment disclosures relating to Capital employed.
8. RELATED PARTY DISCLOSURE UNDER ACCOUNTING STANDARD (AS: 18):
I. Following are the Subsidiaries of the Company as defined in Para
3(a) of Accounting Standard à 18.
1. Aarti Healthcare Limited
2. Aarti Corporate Services Limited
3. Alchemie (Europe) Limited (upto 30th March, 2011)
4. Shanti Intermediates Private Limited (Through its holding Company:
Aarti Corporate Services Limited)
II. Following are the associates of the Company as defined in Para
3(b) of the AS - 18, with which there were transactions during the
year.
1. Ganesh Polychem Limited
2. Anushakti Chemicals and Drugs Limited
3. Alchemie (Europe) Limited (w.e.f. 31st March, 2011)
4. Nascent Chemical Industries Limited (Associate of 100%
Subsidiary: Aarti Corporate Services Limited)
III. Following are the Enterprises/Firms over which controlling
individuals/key Management Personnel, of the Company along with their
relatives, have significant influence as defined in para 3(e) of the AS
- 18 and with which there were transactions during the year.
1. Alchemie Pharma Chem Limited
2. Alchemie Industries
3. Gogri and Sons Investments Private Limited
4. Alchemie Leasing and Financing Private Limited
5. Alchemie Laboratories
6. Aarti Drugs Limited
7. Spack Chemicals Private Limited
IV. Following are the individuals who with their relatives as defined
in the para 3(c) and 3(d) of the AS - 18 own Directly/indirectly 20% or
more voting power in the Company or have significant influence or are
Key Management Personnel.
Sr. No. Name Status
1. Shri Chandrakant V. Gogri Director
2. Shri Rajendra V. Gogri Director
3. Smt. Hetal Gogri Gala Director
4. Shri Rashesh C. Gogri Director
5. Shri Shantilal T. Shah Director
6. Shri Parimal H. Desai Director
7. Shri Kirit R. Mehta Director
8. Shri Manoj M. Chheda Director
Leave Encashment:
Leave Encashment liability amounting to Rs. 160.07 Lakhs (previous year
Rs. 139.74 Lakhs) has been provided in the Accounts.
9. DERIVATIVES & FORWARD CONTRACT INSTRUMENTS:
(A) The Company uses Forward Exchange Contract to hedge against its
Foreign Exchange exposures relating to underlying transactions and firm
commitments. The Company does not enter into any derivatives
instruments for Trading or Speculative purposes.
The Company had hedged in aggregate an amount of Rs. Nil (previous year
Rs. 705.60 Lakhs) out of its Trade related operations (Exports &
Imports) aggregating to Rs. 74,868.90 Lakhs (previous year Rs.
73,107.76 Lakhs).
The Company had hedged its currency risks to the tune of Rs. 1,900.00
Lakhs (previous year Rs. 4,200.00 Lakhs) in respect of its long term
Foreign Currency Loans/Borrowings. Relating to the same, the Company
had also swapped its floating interest rate borrowing of Rs. 4,906.00
Lakhs (previous year Rs. 1,100.00 Lakhs) into a fixed rate loan through
an interest rate swap.
(B) Exchange gain net of exchange loss of Rs. 220.27 Lakhs (previous
year net exchange gain of Rs. 408.96 Lakhs) is included in Profit &
Loss Account.
10. The figures of previous year have been regrouped and rearranged
wherever necessary.
Mar 31, 2010
1. CONTINGENT LIABILITIES:
a) Claims against the Company not acknowledged as Debts Rs. 1,671.36
Lakhs (Rs. 129.77 Lakhs as on 31.03.2009).
b) In respect of Letters of Credit, Bank Guarantees issued and Bills
discounted by the Companys Bankers Rs. 4,836.78 Lakhs (Rs. 2151.13
Lakhs as on 31.03.2009).
c) Estimated amount of Contracts remaining to be executed on capital
account and not provided for, net of advances, Rs. 121.43 Lakhs (Rs.
174.76 Lakhs as on 31.03.2009).
2. The Company has received Rs. 970.57 Lakhs on the conversion of
Preferential Warrants into Equity Shares during the year. The total
amount of Rs. 1078.41 Lakhs which includes the applicationmoney for
the Preferential Warrants of Rs. 107.84 Lakhs, has been utilized for
the purpose of augmenting the long term funds to meet on-going capital
expenditure and long term working capital requirements of the Company.
3. SECURED LOANS:
Security for Loans taken from Banks:
a) In case of the Non Convertible Debentures of Rs. 10,000.00 Lakhs
(Rs.10,000.00 Lakhs as on 31.03.2009) are secured by way of Joint
Equitable Mortgage of the Companys immovable properties situated at
Sarigam, Vapi and Jhagadia, in the State of Gujarat and further by way
of hypothecation of all moveable plant & machinery, machinery spares,
tools and accessories and other movables, both present and future
(except book debts & inventories) wherever situated. The NCDs are
issued in the year 2008-09 and are redeemable in five equal
installments commencing from the end of the 3rd year from the date of
allotment of these Debentures.
b) Outstanding Term Loans aggregating to Rs. 2,451.89 Lakhs (Rs.
5,109.78 Lakhs as on 31.03.2009) from banks subject to (c) and (d)
below, are secured by way of Joint Equitable Mortgage of the Companys
immovable properties situated at Sarigam, Vapi and Jhagadia, in the
State of Gujarat further by way of hypothecation of all moveable plant
& machinery, machinery spares, tools and accessories and other
movables, both present and future (except book debts & inventories)
wherever situated. Out of the above,Term Loans aggregating to Rs.
1,601.89 Lakhs (Rs. 3,156.49 Lakhs as on 31.3.2009) are also personally
guaranteed by three Directors of the Company.
c) In case of vehicle loans from banks/NBFC of Rs. 21.81 Lakhs (Rs.
30.21 Lakhs as on 31.03.2009) against hypothecation of the vehicles.
d) External Commercial Borrowing (ECB) of JPY 832.50 Million equivalent
to Rs. 3,016.13 Lakhs (Rs. 4,780.58 Lakhs as on 31.03.2009) availed
from Royal Bank of Scotland (earlier known as ABN AMRO Bank N.V.)
Singapore are secured by way of Joint Equitable Mortgage of the
Companys immovable properties situated at Sarigam, Vapi and Jhagadia,
in the State of Gujarat and further by way of hypothecation of all
moveable plant & machinery, machinery spares, tools and accessories and
other movables, both present and future (except book debts &
inventories) wherever situated.
e) Working Capital Loans of Rs. 24,610.70 Lakhs (Rs. 23,519.91 Lakhs as
on 31.03.2009) availed from Scheduled Banks, are secured by
hypothecation of Raw Materials, Stock-In-Process, Semi-Finished Goods,
Finished Goods, Packing Materials and Stores and Spares, Bills
Receivables and Book Debts and all other moveable, both present and
future. Further, by way of Joint Equitable Mortgage of the Companys
immoveable properties situated at Sarigam, Vapi and Jhagadia in the
State of Gujarat, ranking second to that of Banks mentioned in (a), (b)
and (d) above. These loans are personally guaranteed by three Directors
of the Company.
4. DEFERRED TAX LIABILITIES: (Rs. in Lakhs)
5. In the opinion of the Board, except as otherwise stated, the
Current Assets and Loans and Advances have a value on realization at
least equal to amounts at which they are stated in the Balance Sheet.
6. Interest received of Rs. 54.72 Lakhs (Tax Deducted at Source Rs.
7.05 Lakhs) [previous year Rs. 79.35 Lakhs (Tax Deducted at Source Rs.
11.78 Lakhs)] is netted off against interest paid on Working Capital.
7. Sundry Debtors, Loans and Advances include amounts due from -
(figures in bracket relate to previous year)
8. Sales and other sales incomes are inclusive of conversion charges
amounting to Rs. 194.62 Lakhs (previous year Rs. 307.80 Lakhs), export
benefits amounting to Rs. 142.88 Lakhs (previous year Rs. 627.93
Lakhs), Fertilizer subsidy amounting to Rs. 1,106.06 Lakhs (previous
year Rs. 2213.74 Lakhs) and insurance claim on goods lost by fire Rs.
Nil (previous year Rs. 49.78 Lakhs).
9. STAFF COSTS (FACTORY AND OFFICE) INCLUDE:
10. Revenue Expenditure of Rs. 265.49 Lakhs (previous year Rs. 166.47
Lakhs) [including depreciation of Rs. 30.45 Lakhs (previous year Rs.
29.74 Lakhs)] on Research & Development activities at the Companys R&D
Centre is charged to Profit and Loss Account for the year. Capital
Expenditure includes Rs. 235.16 Lakhs (previous year Rs. 540.00 Lakhs)
towards Fixed Assets purchased for Research & Development activities at
the Companys R&D centre.
11. DIRECTORSREMUNERATION INCLUDES:
Note: The above figures include Rs. 20.85 Lakhs (previous year Rs.
18.80 Lakhs) paid towards Research & Development activities at the
Companys R&D centre. The above figure does not include contributions
made to Group Gratuity Fund, Group Mediclaim & Group Personal Accident
as separate figures are not available for the Directors. Value of
Perquisites includes non Cash Perquisites of Rs. 1.83 !.:-.khs
(previous year Rs. Nil)
12. PRIOR YEARS ADJUSTMENT INCLUDES:
13. There are no Micro and Small Enterprise, to whom the Company owes
dues, which are outstanding for more than 45 days as at 31st March,
2010. This information as required to be disclosed under the Micro,
Small and Medium Enterprise Development Act, 2006 has been determined
to the extent such parties have been identified on the basis of
information available with the Company.
14. RELATED PARTY DISCLOSURE UNDER ACCOUNTING STANDARD (AS: 18):
I. Following are the Subsidiaries of the Company as defined in Para
3(a) of Accounting Standard - 18.
1. Aarti Healthcare Limited 2. Aarti Corporate Services Limited
3. Alchemie Europe Limited
II. Following are the associates of the Company as defined in Para
3(b) of the AS -18, with which there were transactions during the year.
1. Ganesh Polychem Limited 2. Anushakti Chemicals & Drugs Limited
III. Following are the Enterprises/Firms over which controlling
individuals/key Management Personnel, of the Company along with their
relatives, have significant influence as defined in para 3(e) of the AS
-18 and with which there were transactions during the year.
1. Alchemie Pharma Chem Limited 2. Alchemie Industries
3. Gogri and Sons Investments Private
Limited 4. Shanti Intermediates
Private Limited
5. Alchemie Leasing and Financing Private
Limited 6. Nascent Chemical
Industries Limited
7. Alchemie Laboratories 8. Aarti
Drugs Limited
15. EMPLOYEE BENEFITS:
Defined Benefit Plan
The employees gratuity fund scheme managed by Life Insurance of India
is a defined benefit plan. The present value of obligation is
determined based on actuarial valuation using the Projected Unit Credit
Method, which recognizes each period of service as giving rise to
additional unit of employee benefit entitlement and measures each unit
separately to build up the final obligation.
The estimate of rate of escalation in salary considered in actuarial
valuation, take into account inflation, seniority, promotion, other
relevant factors including supply and demand in the employment market.
The above information is certified by the actuary.
Leave Encashment:
Leave Encashment liability amounting to Rs.139.74 Lakhs (previous year
Rs. 98.36 Lakhs) has been provided in the Accounts.
16. DERIVATIVES & FORWARD CONTRACT INSTRUMENTS:
(A) The Company uses Forward Exchange Contract to hedge against its
Foreign Exchange exposures relating to underlying transactions and firm
commitments. The Company does not enter into any derivatives
instruments for Trading or Speculative purposes.
The Company had hedged in aggregate an amount of Rs. 705.60 Lakhs
(previous year Rs. 3,950.00 Lakhs) out of its Trade related operations
(Exports & Imports) aggregating to Rs. 73,107.76 Lakhs (previous year
Rs. 81,335.21 Lakhs).
The Company had hedged its currency risks to the tune of Rs. 4,200.00
Lakhs (previous year Rs. 5,000.00 Lakhs) in respect of its long term
Foreign Currency Loans/Borrowings. Relating to the same, the Company
had also swapped its floating interest rate borrowing of Rs. 1,100.00
Lakhs (previous year Rs. 2,000.00 Lakhs) into a fixed rate loan through
an interest rate swap.
(B) Exchange gain net of exchange loss of Rs. 408.96 Lakhs (previous
year net exchange loss of Rs. 559.94 Lakhs) is included in Profit &
Loss Account.
17. Additional information pursuant to the Provisions of Paragraph
3,4C, 4D and Part II of Schedule VI to the Companies Act, 1956 (figures
in brackets relate to previous year).