annual report - meghmani
TRANSCRIPT
ANNUALREPORT2018-2019 IND
MEGHMANI ORGANICS LIMITEDChemistry of success at work
Annexure- 18
PageNo:- 235
001 IND
CONTENTS
CONSOLIDATED BALANCE SHEET...........................................................................................................155
NOTES TO CONSOLIDATED FINANCIAL STATEMENT ............................................................................178
STANDALONE NOTES TO THE FINANCIAL STATEMENT .......................................................................102
INDEPENDENT AUDITOR’S REPORT (CONSOLIDATED) ........................................................................147
CONSOLIDATED CASH FLOW STATEMENT.............................................................................................157
CORPORATE INFORMATION .....................................................................................................................002
DIRECTORS’ REPORT................................................................................................................................008
NOTICE OF ANNUAL GENERAL MEETING ...............................................................................................228
SECRETARIAL AUDIT AND COMPLIANCE REPORT ...............................................................................030
PROXY FORM AND ATTENDANCE SLIP ...................................................................................................249
STANDALONE BALANCE SHEET...............................................................................................................080
STANDALONE STATEMENT ON SIGNIFICANT ACCOUNTING POLICIES..............................................085
STATEMENT ON SIGNIFICANT ACCOUNTING POLICIES TO CONSOLIDATED ACCOUNTS................160
STANDALONE CASH FLOW STATEMENT.................................................................................................082
STATEMENT PURSUANT TO SECTION 129(3) OF THE COMPANIES ACT, 2013 ...................................227
STANDALONE STATEMENT OF PROFIT & LOSS .....................................................................................081
CORPORATE GOVERNANCE.....................................................................................................................042
CHAIRMAN’S STATEMENT .........................................................................................................................006
MANAGEMENT DISCUSSION AND ANALYSIS ..........................................................................................035
INDEPENDENT AUDITOR’S REPORT (STANDALONE) ............................................................................070
CONSOLIDATED STATEMENT OF PROFIT AND LOSS ............................................................................156
002
CORPORATE INFORMATION
Mr. Chander Kumar Sabharwal Independent Director
COMPANY SECRETARY Mr. Kamlesh Mehta
BOARD OF DIRECTORS Mr. Jayantilal Patel Executive Chairman
Mr. Anand Patel Executive Director
Mr. Ramesh Patel Executive Director
Mr. Balkrishna Thakkar Member
Mr. Chander Kumar Sabharwal Member
NOMINATION COMMITTEE Mr. Balkrishna Thakkar Chairman
Mr. Manubhai Patel Member
REMUNERATION COMMITTEE Mr. Balkrishna Thakkar Chairman
Mr. Manubhai Patel Member
Mr. Bhaskar Rao Independent Director
SHARE TRANSFER COMMITTEE Mr. Ashish Soparkar Member
THE SHAREHOLDERS’ / INVESTORS’ Mr. Balkrishna Thakkar Chairman
COMMITTEE Mr. Ashish Soparkar Member
Mr. Natwarlal Patel Managing Director
Mr. BalkrishnaThakkar Independent Director
Mr. Jayantilal Patel Member
Mr. Natwarlal Patel Member
CHIEF EXECUTIVE OFFICER Mr. Ankit Patel
CHIEF FINANCIAL OFFICER Mr. Gurjant Singh Chahal
Mr. Ashish Soparkar Managing Director
Mr. Manubhai Patel Independent Director
Ms. Urvashi Shah Independent Director
AUDIT COMMITTEE Mr. Manubhai Patel Chairman
Ms. Urvashi Shah Member
Ms. Urvashi Shah Member
Mr. C. S. Liew Independent Director
GRIEVANCE, SHARE ALLOTMENT AND Mr. Manubhai Patel Member
CORPORATE SOCIAL RESPONSIBILITY Mr. Balkrishna Thakkar Chairman
Mumbai - 400083. Tel: +91 22 4918 6270
Fax: +91 22 4918 6060
REGISTRAR & SHARE TRANSFER AGENT- Link Intime India Private Limited
INDIA C 101, 247 Park, L. B. S. Marg, Vikhroli (West),
003 IND
CORPORATE INFORMATION
MUMBAI OFFICE A1& B1, Ground Floor,PRESENT OFFICE Kalamandir Co. Op. Housing Society, Chitrakar Ketakar Marg, Near Sathye College, Ville Parle [East], Mumbai – 400 057 Telephone No. 91 22 2612 2640
PERMANENT OFFICE Flat No. 22/23, Vellard View Co.op. Housing Society,(BUILDING UNDER RECONSTRUCTION) Tardeo Road, Mumbai.
«««
Telephone No. 91-79-25831210, Fax No. 91-79-25833403 E-mail : [email protected]
INVESTOR SERVICES E - MAIL ID [email protected]
CORPORATE OFFICE Meghmani House, B/h Safal Profitaire, Corporate Road, Prahalad Nagar, Ahmedabad 380 015 Telephone No. 91-79-2970 9600/ 7176 1000, Fax No. 91-79-2970 9605, E-mail : [email protected]
SINGAPORE DEPOSITORY SHARES (“SDSs”) Tricor Barbinder Share Registration ServicesREGISTRAR AND SDSs OFFICE 80 Robinson Road, #02-00, Singapore 068898 Telephone No. (65) 6236 3552, Fax No. (65) 6236 3405 E-mail : [email protected]
SINGAPORE SECRETARIAL AGENT Tricor Evatthouse Corporate Services 80 Robinson Road, #02-00, Singapore 068898 Telephone No. (65) 6236 3510, Fax No. (65) 6236 4399 E-mail : [email protected]
REGISTERED OFFICE Plot No. 184, Phase II, G.I.D.C. Vatva, Ahmedabad -382 445
004
CORPORATE INFORMATION
2. Pigment Blue Division Plot No. 21,21/1,
G.I.D.C. Panoli,
District :- Bharuch
Telephone No. 91-9879606337, 38, 39
E-mail : [email protected]
7. Agro Division – IV Plot No. 22/2,
G.I.D.C. Panoli,
District :- Bharuch
Telephone No. 91-2646- 276577
E-mail : [email protected]
5. Agro Division – II 5001/B,
G.I.D.C. Ankleshwar,
District :- Bharuch
Telephone No. 91-2646-222971
E-mail : [email protected]
6. Agro Division – III Plot No - Ch-1+2/A
GIDC Dahej, Taluka – Vagra
District :- Bharuch - 392130
Telephone No. 91-2641-291017
E-mail : [email protected]
PLANT LOCATION
4. Agro Division – I Plot No. 402,403,404 & 452,
Village Chharodi,
Taluka Sanand, District :- Ahmedabad
Telephone No. 91-2717-273251
E-mail : [email protected]
1. Pigment Green Division Plot No. 184, Phase II,
G.I.D.C. Vatva,
Ahmedabad -382 445
Telephone No. 91-79-25831210
Fax No. 91-79-25833403
E-mail : [email protected]
3. Pigment Blue – Division Plot No. Z-31, Z-32,
Dahej SEZ Limited, - Dahej
Taluka :- Vagra, District :- Bharuch
Telephone No. 91-7567144279
E-mail : [email protected]
005 IND
CORPORATE INFORMATION
Standard Chartered Bank,
Ground Floor, Abhijeet II,
Mithakhali Six Roads,
Ahmedabad – 380 006
«««
ICICI Bank Limited
JMC House, Opp. Parimal Garden,
Ambawadi,
Ahmedabad 380 009
Axis Bank Limited,
Corporate Banking Branch,
3rd Eye One, 2nd Floor, Nr. Panchawati Circle,
C. G. Road, Ahmedabad – 380 009.
HDFC Bank Limited
Mithakhali,
Ahmedabad 380 009
PRINCIPAL BANKERS State Bank of India,
CCG Branch,
58, Shreemali Society,
Navrangpura,
Ahmedabad 380 009
STATUTORY AUDITOR S R B C & CO LLP
Assurance Services
2nd Floor, Shivalik Ishan,
Near C.N. Vidhyalaya,
Ambawadi,
Ahmedabad – 380 015,
INTERNAL AUDITOR C N K Khandwala & Associates
Chartered Accountants,
2nd Floor, “HRISHIKESH”,
Vasantbaug Society,
Opposite Water Tank,
Gulbai Tekra,
Ahmedabad – 380006
006
CHAIRMAN’S STATEMENT
Agro Chemicals- Delivering strong revenue growth, led by improvement in realisation
Net sales in Pigments for the year were up 2.5% at INR 5893 million. Export sales stood at 81% in FY 2019. Sales volume were
at 15999 MT in FY 2019 compared to 16,090 MT in FY 2018. Utilization levels remain robust at 77% in FY 2019. EBITDA during
FY 2019 stood marginally declined to INR 818 million on the back of higher input cost. EBITDA margin slightly declined by 90
bps to 13.5% in FY 2019.
Consolidated revenue increased by 16% YoY to INR 20880 million in FY 2019 on the back of strong growth in Agro Chemicals
and Basic Chemicals segment while Pigment business remained stable. EBITDA for the period increased by 26% YoY to INR
5445 million,on the back of improved operational performance, product mix and better realization. This resulted in expansion of
EBITDA margin by 220 bps to 26.1%. Profit After Tax increased by 47% to INR 2513 million with the margin of 12%. The
company reported strong return ratios with Return on Equity of 26.3% and Return on Capital Employed of 29.2%.
Meghmani reported a strong performance in FY2019 and the net sales grew by 23%, to INR 7707 million from INR 6,273 million
in FY 2018.This was driven by robust growth of 36% in exports, favorable market conditions and better price realization.
Volumes for the year stood at 16430 MT. EBITDA was significantly increased by 83%, from INR 981 million in FY 2018 to INR
1796 million in FY 2019, On the back of our vertically integrated business model, we effectively managed fluctuating raw
material costs in the market and boosted our profitability. EBITDA margin has been improved by 760 bps to 22.7%.
Segmental Performance :
Pigments- Continued market leadership with growth momentum
Dear Shareholders,
Fire Incident during the year :
The financial year 2018-19 was another year of positive progress for Meghmani Organics Limited with the strong performance
across all three businesses i.e. Pigments, Agro Chemicals and Basic Chemicals. We will continue to build a strong position as a
leading Indian Chemical Company by diversifying the geographical presence as well as the product portfolio. In Agro
Chemicals, the Company is doubling the capacity of 2,4D (Herbicides) and expanding the share of value-added products
(Branded products). In Pigments, the Company is planning to add new pigments and in case of Basic Chemicals, the Company
is expanding the capacity of Caustic Soda, Captive Power Plant (CPP) and adding new products.
The accidental fire broke out in one of the manufacturing section of Agro Chemicals Plant at GIDC Dahej, District – Bharuch,
Gujarat, (India) on 26th March, 2019. The Company is taking all the appropriate safety measures to avoid recurrence of any
such eventuality in future. The Company has All Risk Insurance Policy (including Loss of Profit Policy) and is fully covered as far
as insurance is concerned.
Strategic investments to drive future growth :
Meghmani’s planned capex of INR 6.4 billion involving 3 projects for Basic Chemical business will be commissioned in FY 2020.
The first is the CMS project of 40,000 MTPA, which will result in captive consumption of Chlorine (co-product of company’s
Caustic Soda production). This will help the Company to improve the margins. This project is expected to be commissioned by
Q1 FY 2020. The Second project involves the capacity expansion of Caustic Soda to 2,71,600 MTPA and expansion of Captive
Power Plant (CPP) Capacity to 96 MW. The Third project is to set up a Hydrogen Peroxide plant with the capacity of 30,000
MTPA, which is used in pharma and Agro Chemicals industry. The expansion of Caustic Soda capacity along with Captive
Power Plant (CPP) and Hydrogen Peroxide projects expected to be commissioned by early Q3 FY 2020. The Company is also
planning for the capex of INR 1.27 billion in Agro Chemicals segment to increase the capacity of 2,4D by 10,800 MTPA, which is
expected to be commissioned by June 2020.
Significant improvement in profitability, led by better operational performance and revenue mix
007 IND
CHAIRMAN’S STATEMENT
Basic Chemicals - Delivering superior profitability
Our Basic Chemicals net sales for the year grew by 19% to reach INR 710.4 million on the back of strong demand in domestic.
Sales volumes remain stable at 156,298 MTPA, while realization improved by 14% to INR 41,702 per tonne. EBITDA for the
period grew by 22% to INR 3117 million and EBITDA margin was at 43.9% on account of better price realisations. Utilization
levels stood at 86%
The global pigment market was valued at $29 billion in 2017 and is expected to grow at 4.5% CAGR to reach $43 billion by 2026.
The global pigment market is driven by the rise in demand for packaging ink, paints & coatings and plastic industry.
Company Outlook: Strong FY 2020 expected as all our businesses are on a promising path
Meghmani Organics is one of the largest producers for the Copper Phthalocyanine Pigment. Going forward the Company is
looking to diversify by adding new kinds and colours of Pigments.
Global chemical-based crop protection sales increased by 4.2%, from $54.2 billion in 2017 to $56.5 billion 2018. Rising demand
for pesticides and increasing consumption of Agro Chemicals in liquid form are some of the key factors expected to boost the
demand for Agro Chemicals in the global market. Growing population, declining arable land and increasing pest concerns in the
face of a growing population are driving the Agro Chemicals market.
In Agro Chemicals, we are expecting more share in the domestic market in FY2020 as our backward integration can prove to be
a major competitive edge for pricing and margins. This will help in avoiding the drastic price increments of raw materials coming
from China. Going forward, the Company plans to double the capacity of 2, 4D by adding 10,800 MTPA with capex of ~ INR 1.27
billion and it is expected to be operational by Q1 FY 2021.
Basic Chemicals delivered a strong FY 2019 on the back of increasing demand for Caustic Soda and Chlorine which has led to
improvement in realization. The INR 6.4 billion on-going capex plan gives strong revenue visibility over coming year in Basic
Chemicals business.
Government’s emphasis on ‘Make in India’ initiative in the Indian Chemicals sector and its support from PMFAI (Pesticides
Manufacturers & Formulators Association of India), promises to curb the imports and boost domestic demand across all the
three segments in the future.
Acknowledgement
On behalf of the Board,
I take the opportunity to thank our customers, suppliers, bankers, business partners/associates, financial institutions and
government for their consistent support, faith and encouragement to the Company. I convey my sincere appreciation to the
employees and staff of the Company for their hard work and commitment. Their dedication and competence has ensured the
continued growth of the Company. I am also grateful to my fellow directors for their guidance, foresight and efforts that helped
steer the group’s business through an increasingly competitive industry landscape.
Thank you and best wishes.Jayantilal Patel
Executive Chairman
Globally, Chlor-Alkali market represents one of the largest chemical industries. Chlor-Alkali market is expected to reach $124.6
billion by 2022, growing at CAGR of 6.8% between 2016-2022. Major consuming industries are soaps & detergents, pulp &
paper and textile processing. The fact that products of Chlor-Alkali industry find increasing use in daily products shows the
potential for growth of this industry.
Industry Outlook :
008
DIRECTORS' REPORT
The Members,To,
1. FINANCIAL RESULTS
Meghmani Organics Limited
Your Directors have pleasure in presenting Twenty Fifth Annual Report and Audited Statement of Accounts of the Company for
the Financial Year ended on 31st March, 2019.
(` in Lakhs)
Payment and Provision of Current Tax 5390.00 3050.00
Revenue from Operations 141042.00 123800.19
Other Operating Revenue 3528.37 2822.01
st st 31 MARCH, 2019 31 MARCH, 2018
Depreciation 4629.04 4261.95
Revenue from Operations (excluding excise duty) 137513.63 120978.18
Finance Cost 4589.20 3087.17
PARTICULARS YEAR ENDED ON YEAR ENDED ON
Exceptional item (4328.51) 235.82
Deferred Tax Expenses/(Income) 33.84 1349.86
Profit Before Finance Cost and Depreciation 27108.85 19729.76
Profit After Tax 16869.07 7693.16
Profit Before Extra Ordinary Item & Tax 17890.61 12380.64
Other Income 3882.19 2610.59
Total Revenue 144924.19 126410.78
Profit Before Tax 22219.12 12144.82
(Excess)/Short provision of tax for earlier year (73.79) 51.80
2. COMPANY’S PERFORMANCE REVIEW
Sales:-
The Company is in the business of manufacturing of Pigments and Agrochemicals.
The Sales increased by Rs. 16,535.45 Lakhs (13.67%) i.e. from Rs. 1,20,978.18 Lakhs in FY 2018 to Rs. 1,37,513.63 Lakhs in FY 2019.
1) DOMESTIC SALES:-
The Domestic Sales decreased by Rs. 1,259.00 Lakhs (-3.93%) i.e. from Rs. 32,016.77 Lakhs in FY 2018 to Rs. 30,757.78 Lakhs in FY 2019.
The Sales of Pigment Division increased by Rs. 1,467.94 Lakhs (2.55%) i.e. from Rs. 58,247.16 Lakhs in FY 2018 to Rs. 58,934.91 Lakhs in FY 2019.
The Domestic Sales of Pigment Division decreased by Rs. (713.11) Lakhs (-6.34%) i.e. from Rs. 11,241.68 Lakhs in FY 2018 to Rs. 10,528.57 Lakhs in FY 2019.
The Domestic Sales of Agro Division decreased by Rs. (759.74) Lakhs (-3.66%) i.e. from Rs. 20,783.50 Lakhs in FY 2018 to Rs. 20,023.77 Lakhs in FY 2019.
The Sales of Agrochemical Division has increased by Rs. 14,341.10 Lakhs (22.86%) i.e. from Rs. 64,192.07 Lakhs in FY 2018 to Rs. 77,066.25 Lakhs in FY 2019.
009 IND
DIRECTORS' REPORT
2) EXPORT SALES :-
The Export Sales increased by Rs. 17,794.45 Lakhs (20.00%) i.e. from Rs. 88,961.42 Lakhs in FY 2018 to Rs.1,06,755.85 Lakhs in FY 2019.
The Export Sales of Pigment Division increased by Rs. 2,181.05 Lakhs (4.72 %) i.e. from Rs. 46,225.29 Lakhs in FY 2018 to Rs. 48,406.34 Lakhs in FY 2019.
The Export Sales of Agro Division increased by Rs. 15,100.84 Lakhs (36.00%) i.e. from Rs. 41,941.64 Lakhs in FY 2018 to Rs. 57,042.48 Lakhs in FY 2019.
3) OTHER INCOME :-
4) PROFIT :-
Profit Before Tax (PBT) increased by Rs. 10,074.30 Lakhs i.e. by (82.95%) while
Profit After Tax (PAT) increased by Rs. 9,175.91 Lakhs i.e. by (119.27 %)
Other income increased by Rs. 1,271.60 Lakhs mainly due to Dividend income from Subsidiary Company.
3. DIVIDEND:-
The Board of Directors on 08th March, 2019 declared an interim dividend of Rs. 0.60 (60%) per equity share of face value of Rs. 1/- each for the Financial year 2018-19. The above dividend was paid to the Shareholders on March 25, 2019. The Members are requested to approve the interim dividend paid by the Company.
No disclosure is required under Section 67(3)(c) of the Companies Act, 2013 (Act) in respect of voting rights not exercised directly by the employees of the Company as the provisions of the said Section are not applicable.
There is no qualification, reservation or adverse remarks or disclaimer made by the Auditors in their report on the financial statement of the Company for the Financial Year ended on 31st March, 2019.
Pursuant to the applicable provisions of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the shares on which dividends have not been claimed for 7 consecutive years were required to be transferred in favor of IEPF authority. Accordingly, the Company has transferred 36128 Equity shares in favor of IEPF Authority during the Financial Year 2018-19 with this total 102874 Equity shares have been transferred till FY 2018-19.
The Paid up Equity Share Capital as on March 31, 2019 was Rs. 2543.14 Lakhs. During the year under review, the Company has neither issued shares with differential rights as to dividend, voting or otherwise nor issued shares (including sweat equity shares) to the employees or Directors of the Company, under any Scheme. The Company has not issued any convertible instrument during the year.
4. AUDITORS’ REPORT :-
During the year, unclaimed dividend amount of Rs. 6,00,921.00 pertaining to financial year 2010-11 were transferred to Investor Education & Protection Fund (IEPF) established by the Central Government, while Unclaimed Dividend relating to Financial Year 2011-12 is due for transfer on 10.08.2019 to IEPF.
The dividend payout amount for the current year is Rs. 2,543.14 Lakhs as compared to Rs. 1,224.35 Lakhs in the previous year.
Further, your Directors have also recommended, a final dividend of Rs. 0.40 (40%) per equity share of face value of Rs 1/- each, for the Financial Year ended March 31, 2019 subject to approval of Shareholders at the Annual General Meeting. The final dividend, if approved, will be paid on or before August, 05th August, 2019.
Transfer of Shares in favor of Investor Education and Protection Fund (IEPF) Authority
5. SHARE CAPITAL :-
010
DIRECTORS' REPORT
Cash and Cash equivalent as at 31 March, 2019 was Rs. 177.16 Lakhs (Previous year Rs. 122.51 Lakhs). The Company’s working capital management is based on a well-organized process of continuous monitoring and controls on Receivables, Inventories and other parameters.
7. CREDIT RATING:-
6. FINANCIAL LIQUIDITY :-
CRISIL has reaffirmed Long Term Rating CRISIL A +/ Stable and Short Term Rating CRISIL A1 (Reaffirmed) to its total Bank facility of Rs. 70700 Lakhs vide its letter MEGORGN/206873/BLR/ 091800842 dated September, 24, 2018.
8. PURCHASE OF IFC STAKE: -
MOL funded Rs. 22,170.89 Lakhs to MACPL for purchase of IFC stake.
9. MERGERS AND AMALGAMATIONS: -
As per the Share Subscription agreement executed in 2008 between Meghmani Organics Limited (the Company or MOL) with International Finance Corporation (IFC) Washington, USA, Meghmani Finechem Limited and its Promoters, MOL was under obligation to purchase stake of IFC in MFL.
MOL Board decided not to increase its stake in MFL beyond 57.16%. Therefore, MOL purchased IFC stake through its Wholly Owned Subsidiary (WOS) viz., Meghmani Agrochemicals Private Limited (MACPL).
During the year on 11th February, 2019, the Hon’ble National Company Law Tribunal (“Hon’ble NCLT”), Ahmedabad Bench approved Scheme of Arrangement in the nature of Amalgamation of its two step down subsidiary Viz., Meghmani Agrochemicals Private Limited with Meghmani Finechem Limited and Restructure of share capital of Meghmani Finechem Limited.
The Company has All Risk Insurance Policy (including Loss of Profit Policy) and is fully covered as far as insurance is concerned.
10. UPDATES ON FIRE AT AGRO – III – DAHEJ ON 26TH MARCH,2019: -
The Management is in the process of submitting requisite information to Surveyor. Hence, preliminary assessment / claim report is not received from Surveyor. Accordingly, the loss on fire including Inventory, Property Plant and Equipment and other ancillary expenses of Rs 1,586.78 Lakhs as assessed by management is charged to statement of Profit and Loss for the quarter and year ended March 31, 2019 inline with requirements of Ind AS 16.
The Agrochemical Division – III situated at Plot No - Ch-1+2/A, GIDC Dahej, Dahej, Taluka – Vagra, District – Bharuch -392130, Gujarat, (India) has three Manufacturing Sections supported by other sub-sections. The accidental Fire broke out in one of the manufacturing Section B viz; Cypermethrin plant on Friday, 26th March, 2019.
(ii) Rs. 22,170.89 Lakhs in the form of 8% Non-Convertible Compulsorily Redeemable Preference Shares (NCRPS). The said NCRPS has been reedemed on 8th March, 2019.
The other two manufacturing Sections, A and C have not been affected and has started Production from 30th April 2019.
(I) Rs. 21,091.99 Lakhs in the form of 8% Optionally Convertible Redeemable Preference Shares (‘OCRPS’) against equity investment.
Consequent upon Scheme of Amalgamation, MFL issued the Preference shares as under:
The Order was taken on record by the Registrar of Companies on March 08, 2019, which being the effective date of Amalgamation.
The works to remove the debris and Plant & Machineries have been completed. The Surveyor has completed the assessment of loss of Raw Material Stock, Finished Goods and Work in Process. The Technical Inspection of Plant & Machineries to ascertain the condition (repairable/replaceable) is under process. The Structural Engineer report for damage to Civil construction is awaited. The Company is taking all appropriate safety measures to avoid recurrence of any such eventuality in future.
011 IND
DIRECTORS' REPORT
11. EXTRACT OF ANNUAL RETURN: -
12. MEETINGS: -
During the year, Five Board Meetings (26.05.2018,08.08.2018,29.10.2018,11.02.2019 and 08.03.2019) were convened and held, the details of which are given in the Corporate Governance Report.
13. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:-
As required by Section 92(3) of the Companies Act, 2013 and the Rules framed there under, the extract of the Annual Return in Form MGT 9 is annexed herewith as “Annexure B”.
BOARD MEETINGS: -
AUDIT COMMITTEE MEETINGS:-
During the year, Four Audit Committee Meetings (26.05.2018,08.08.2018,29.10.2018 and 11.02.2019) were convened and held, the details of which are given in the Corporate Governance Report.
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.
14. RELATED PARTY TRANSACTIONS (RPT):-
All contracts / arrangements / transactions entered into with Related Parties during the Financial Year were in the ordinary course of business and on an arm’s length basis. There were no Materially Related Party Transactions i.e. transactions exceeding 10% of the annual consolidated turnover as per the last audited financial statements. Hence, no transactions are required to be reported in Form AOC2.
The Company had also taken members’ approval at its Annual General Meeting held on 27th July, 2018 for entering into the transactions with Related Parties from 01/04/2018 till decided otherwise.
The Company has obtained prior Omnibus Approval of the Audit Committee for the transactions which are of foreseen and repetitive nature. The transactions entered into pursuant to the Omnibus Approval so granted are audited and a statement giving the details of all Related Party Transactions is placed before the Audit Committee for their approval on a Quarterly basis.
The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website may be accessed on the Company’s website.
15. MATERIAL CHANGES:-
16. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: -
The information pertaining to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure- A and is attached to this report.
No material changes or commitments have occurred between the end of the calendar year and the date of this report which affect the financial statements of the Company in respect of the reporting year.
As provided in Section 136 of the Act, the Balance Sheet, Statement of Profit and Loss and other documents of the Subsidiary companies are not being attached with the Balance Sheet of the Company.
17. SUBSIDIARY COMPANIES: -
The Consolidated Financial Statements presented by the Company include financial results of its subsidiary companies.
The Financial Statements of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company.
012
DIRECTORS' REPORT
4. Meghmani Finechem Limited Manufacturing Business
5. Meghmani Agrochemicals Private Limited * Manufacturing Business
3. Meghmani Overseas FZE - Sharjah - Dubai Distribution Business
2. P T Meghmani Organics Indonesia (Indonesia) Distribution Business
1. Meghmani Organics USA INC. (USA) Distribution Business
Sr. No. Name of the Subsidiary Business
The Company has following Five Subsidiaries.
* Pursuant to the Order of National Company Law Tribunal, Ahmedabad Bench, Meghmani Agrochemicals Private Limited has been dissolved by operation of law.
The Company will make available physical copies of these documents upon written request by any Shareholder of the Company.
The policy relating to material subsidiaries as approved by the Board may be accessed on the Company's website.
18. CONSOLIDATED FINANCIAL STATEMENT:-
In accordance with the Ind AS–110 on Consolidation of Financial Statements read with Ind AS–28 on Accounting for Investments in Associates and Joint Ventures and as provided under the provisions of the Companies Act, 2013 [hereinafter referred to as “Act”] read with Schedule III to the Act and Rules made thereunder and Accounting Standards and regulation as prescribed by Securities and Exchange Board of India (SEBI) under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Audited Consolidated Financial Statements are provided in the Annual Report, which show the financial resources, assets, liabilities, income, profits and other details of the Company, its associate companies and its subsidiaries after elimination of minority interest, as a single entity.
The Consolidated Financial Statements have been prepared on the Basis of the Audited Financial Statements of the Company and its Subsidiary Companies, as approved by their respective Board of Directors.
Pursuant to the provisions of Section 136 of the Companies Act, 2013, the Financial Statements of the Company, the Consolidated Financial Statements along with all relevant documents and the Auditor's Report thereon form part of this Annual Report. The Financial Statements as stated above are also available on the website www.meghmani.com of the Company.
19. DIRECTORS/ KEY MANAGERIAL PERSONNEL (KMP):-
APPOINTMENT OF DIRECTORS:-
The terms of appointment of Mr. Jayantilal Patel - Executive Chairman, Mr. Ashish Soparkar and Mr. Natwarlal Patel-Managing Directors, Mr. Rameshbhai Patel and Mr. Ananad Patel – Executive Directors of the Company expired on 31st March, 2019. The Remuneration Committee at its meeting held on 01st April, 2019 has considered and approved re-appointment and terms of remuneration for a period of 5 years beginning from 01st April, 2019 to 31st March, 2024. The Board of Directors accepting the recommendation of Remuneration Committee approved the reappointment and terms of remuneration on 24th May, 2019 subject to approval of Share holders.
As provided under Section 129[3] of the Act and Rules made thereunder a statement containing the salient features of the financial statements of its subsidiaries in the Form AOC-1 is attached to the financial statements in ANNEXURE-1.
The statutory period of appointment of Mr. Chander Sabharwal and Mr. B T Thakkar as Independent Director is expiring at this Annual General Meeting to be held on 25th July, 2019.
013 IND
DIRECTORS' REPORT
Your Company continued the social development schemes initiated in previous years. These projects covered the broad thematic areas of Livelihood, Education, Kanya Kelwani Nidhi and Vanvasi Kalyan Yojana that are in compliant with Companies Act 2013.
The Independent Directors hold office for a fixed term of five years and are not liable to retire by Rotation. In accordance with Section 149(7) of the Companies Act 2013, each Independent Director has given a written declaration to the Company confirming that he/she meets the criteria of Independence as mentioned under Section 149(6) of the Companies Act, 2013 and SEBI Regulations.
23. CORPORATE SOCIAL RESPONSIBILITY (CSR) :-
During Financial Year 2018-19, the Company has spent an amount of Rs. 245.88 Lakhs (Previous year Rs. 26.22 Lakhs) towards the CSR activities. CSR amount to be spent for Financial Year 2018-19 works out to Rs. 165.65 Lakhs and with previous year figures of Rs. 82.93 Lakhs the Company has to spent Rs. 250.22 Lakhs. The balance amount now to be spent is Rs. 4.34 Lakhs.
24. BOARD EVALUATION:-
Pursuant to the provisions of the Companies Act, 2013, SEBI Regulations, and Singapore Listing requirements, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees.
The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.
26. VIGIL MECHANISM / WHISTLE BLOWER POLICY:-
25. REMUNERATION POLICY:-
The Board has, on the recommendation of Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.
The Company has a WHISTLE BLOWER POLICY to deal with instance of unethical behaviour, actual or suspected fraud or violation of the Company’s code of conduct, if any. The details of the WHISTLE BLOWER POLICY are posted on the website of the Company.
27. CORPORATE GOVERNANCE:-
A Separate Section on Corporate Governance practices followed by the Company, together with a certificate confirming compliance forms an integral part of this report, as per SEBI Regulations. This report also forms part of Singapore Stock Exchange listing requirements.
1. Mr. Ankit Patel – Chief Executive Officer (CEO)
Pursuant to Section 2(51) of the Companies Act, 2013, read with the Rules framed there under, the following persons have been designated as Key Managerial Personnel of the Company:
KEY MANAGERIAL PERSONNEL:-
M/s. C N K Khandwala & Associates, Chartered Accountants has been reappointed as Internal Auditor for the Financial Year 2019-20.
20. INTERNAL AUDIT :-
2. Mr. Kamlesh Mehta – Company Secretary
The Internal Audit (IA) function reports to the Audit Committee of the Board, which helps to maintain its objectivity and independence. The scope and authority of the IA function is defined by Audit Committee. The Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.
3. Mr. Gurjant Singh Chahal – Chief Financial Officer (CFO)
During the year, the Company has not accepted deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Rules framed there under.
21. FIXED DEPOSITS:-
22. INDEPENDENT DIRECTORS- DECLARATION OF INDEPENDENCE:-
014
DIRECTORS' REPORT
28. AUDITORS:-
(A) STATUTORY AUDITORS:-
M/s. SRBC & Co LLP Chartered Accountants, Ahmedabad (Firm Regn. No. 324982E / E 300003) was appointed as Statutory Auditors at 23rd Annual General Meeting held on 27th July, 2017 to hold office from the conclusion of 23rd Annual General Meeting (AGM) till the conclusion of 28th AGM i.e. for a period of five years).
To meet with the Singapore Listing Rules requirement, the Company is required to appoint Joint Auditor based at Singapore to sign the Audit Report under International Finance Reporting Standard. The Company has therefore decided to appoint E&Y LLP Singapore as Joint Auditor for FY 2019-20 to comply with IFRS requirements of Singapore Listing Rules.
The Company on receipt of Rs. 22170 Lakhs has fully re-paid outstanding ICICI Bank term loan of Rs. 10938 Lakhs and is using the balance amount of Rs. 11232 Lakhs as Working Capital requirements.
During the Financial Year 2018-19 the Company has paid total term loan (including regular installment) of Rs. 16683 Lakhs from its internal accruals. After this repayment the outstanding term loan of the Company is Rs. 12746.60 Lakhs as on 31st March, 2019.
29. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:-
As per Clause 34(2) (e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report, is appended to this report.
30. INSURANCE: -
The Company’s Plant, Property, Equipments and Stocks are adequately insured under the Industrial All Risk Policy. The Company has insurance coverage for Product Liability, Public Liability, Marine coverage and Commercial General Liability (CGL). The Company has Directors’ and Officers' Liability Policy to provide coverage against the liabilities arising on them.
31. FINANCE:- RENEWAL OF WORKING CAPITAL FACILITY:-
The Consortium Bank Members viz., State Bank of India, ICICI Bank Limited, HDFC Bank Limited and Standard Chartered Bank has renewed Fund Based and Non Fund Based Working Capital Credit facilities up to Rs. 30000 Lakhs. The Company has executed Security Documents.
During the year MFL redeemed 8% Non-Convertible Redeemable Preference Shares (NCRPS) of Rs. 22170 Lakhs immediately on the Scheme of Arrangement being approved by NCLT.
During the year the Company has repaid term loan of Rs. 12500 Lakhs to ICICI Bank Limited.
32. REDEMPTION OF NON-CONVERTIBLE REDEEMABLE PREFERENCE SHARES (NCRPS).
(C) COST-AUDITOR:-
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Shah & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for FY 2018-19. The Secretarial Audit Report is appended to this report.
(B) SECRETARIAL AUDITOR:-
Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the Cost Audit records maintained by the Company in respect of Certain Pigment and Agrochemicals products are required to be audited by a Qualified Cost Accountant.
Your Directors have on the recommendation of the Audit Committee, appointed M/s. Kiran J Mehta & Co. Cost Accountants (Firm Registration number 00025) to audit the Cost Accounts of the Company for the Financial Year 2019-20.
A Resolution seeking appointment and remuneration payable to M/s. Kiran J Mehta & Co., Cost Accountants, is included in the Notice convening the Annual General Meeting.
015 IND
DIRECTORS' REPORT
The laboratory facility situated at Village Chharodi, Ahmedabad has been granted Certificate of GLP Compliance from National Good Laboratory Practice (GLP) Compliance Monitoring Authority (NGCMA), Department of Science and Technology, Government of India vide certificate No. GLP/C-106/2017 dated 18th October, 2017, for a period five years up to 17.10.2020.
35. ANNUAL LISTING FEE:-
36. ENVIRONMENT: -
33. AGROCHEMICAL REGISTRATION:-
To date, we have 274 export registrations including Co-partner Registrations world wide. The Company has 348 registrations of Central Insecticides Board (CIB), Faridabad, 35 registered Trade Marks and 238 Export registrations are in pipe line.
34. RESEARCH & DEVELOPMENT:-
Research and Development (R & D) Center of the Company at Village Chharodi, Taluka : Sanand, District : Ahmedabad is registered by Council of Scientific & Industrial Research (CSIR), New Delhi. R & D Center carries out Development of off-patent molecules, improvements in process parameters, time cycle optimization, and scale up of new technology from laboratory to production level. During the year the Company has spent Rs. 209.65 Lakhs (Previous year Rs. 191.29 Lakhs) as R & D expenses.
The Company has paid the Annual Listing Fees for the Financial Year 2019-20 to National Stock Exchange of India Limited, BSE Limited and Singapore Exchange.
37. INDUSTRIAL RELATIONS:-
The relationship with the workmen and staff remained cordial and harmonious during the year and management received full cooperation from employees.
38. PARTICULARS OF EMPLOYEES:-
I. ratio of remuneration of each Director to the median employee’s is 31.25
ii. percentage increase in remuneration of each Director, CFO, CEO, CS or Manager, if any
As a responsible corporate citizen and as a chemicals manufacturer, environmental safety has been one of the key concern of the Company. It is the constant endeavour of the Company to strive for compliant of stipulated pollution control norms. During the year the Company has spent Rs. 2165.87 Lakhs (Previous year Rs. 2084.08 Lakhs).
The applicable information required pursuant to Section 197 of the Companies Act, 2013 read with Rule (5) of the Companies (Appointment and Remuneration of Managerial Personnel), Rules 2014 in respect of the employees are as under.
iii. The percentage increase in the median remuneration of employees is 11.57%.
iv. The number of permanent employees on the rolls of Company is 1542.
6 Mr. Kamlesh Mehta Company Secretary 7%
Sr. No. Name Designation % increase
3 Mr. Natwarlal Patel Managing Director 81%
4 Mr. Ramesh Patel Executive Director 55%
1 Mr. Jayanti Patel Executive Chairman 82%
5 Mr. Anand Patel Executive Director 39%
2 Mr. Ashish Soparkar Managing Director & CEO 81%
016
DIRECTORS' REPORT
The remuneration paid to Working Directors is as per of the Companies Act, 2013 and as per remuneration policy of the Company.
viii. There is no employee receiving remuneration in excess of the highest paid Director.
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134 of the Companies Act (Act):—
d) The Directors had prepared the Annual Accounts on a Going Concern Basis;
a) In the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
vi. The Sales turnover of the Company has increased by 13.67% while the Net Profit by 119.27%. There is no direct relationship between average increase in remuneration of KMP and Company performance.
c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
v. The Sales turnover of the Company has increased by 13.67% while the Net Profit by 119.27%. There is no direct relationship between average increase in remuneration of employee and Company performance.
vii. The Price earning ratio as at 31.03.2019 is 27.70 and 31.03.2018 was 27.89.
The Market Capitalisation as on 31.03.2019 was Rs. 155895 Lakhs (Share Price Rs. 61.30 per Equity Share) while on 31.03.2018 was Rs. 214895 Lakhs (Share Price Rs. 84.50 per Equity Share)
The Company had made its IPO in 2007 at Rs. 19 /- per Equity Share of Rs. 1/- each. The Share price as on 31 March, 2019 was Rs. 61.30 per Equity Share of Rs. 1/- each. The percentage increase in the market quotation was 222.63%.
ix. All the components of the remuneration are fixed and no components are variable.
x. Particulars of Employees: - Employed throughout the financial year receiving remuneration in aggregate, not less than Rs. 60 lakhs.
xi. No Employee was employed for a part of the financial year at an aggregate salary of not less than Rs. 5 lakhs per month.
xii. No one was employed through out the financial year or part thereof receiving remuneration in excess of the amount drawn by Managing Director.
39. DIRECTORS' RESPONSIBILITY STATEMENT:-
b) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2019 and of the profit of the Company for the period ended on 31st March, 2019.
e) The Directors had laid down Internal Financial Controls (IFC) and that such Internal Financial Controls are adequate and have been operating effectively.
Total 30000000 3846033 60000000 93846033
1 Mr. Jayantilal Patel 6000000 788038 15000000 21788038
2 Mr. Ashish Soparkar 6000000 778692 15000000 21778692
4 Mr. Ramesh Patel 6000000 774859 9000000 15774859
3 Mr. Natwarlal Patel 6000000 767240 15000000 21767240
Annum in Rs. Annum in Rs. Bonus Rs.
5 Mr. Anand Patel 6000000 737204 6000000 12737204
Sr. No. Name Salary Per Perquisites Per Performance Total Rs.
017 IND
DIRECTORS' REPORT
Date: 24 May, 2019 Executive Chairman
For and on behalf of the Board Jayantilal Patel
Place: Ahmedabad DIN - 0007224
Your Directors thank various Central and State Government Departments, Organizations and Agencies for the continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. Customers, Members, Dealers, Vendors, Banks and other business partners for the excellent support received from them during the year.
f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems have been found adequate and operating effectively.
The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.
ACKNOWLEDGEMENT: -
018
ANNEXURE TO THE DIRECTORS’ REPORT
ANNEXURE-A
1. CONSERVATION OF ENERGY:
A Energy conservation measures taken
1. Installation of raw water pump for plant & cooling tower raw water pumping system.
2. Installation of new cooling water pumpset for 185 TR Voltas (Brine chiller) cooling water pumping system.
4. Refurbishment of existing raw water pump of boiler raw water pumping system.
5. Cable Loss Reduction by PF Improvement at Identified MCC's.
6. Application of Auto Delta Star Convertor for Under Loaded Motors.
7. Application of Energy Efficient IE3 Motors against Rewound Standard Motors.
9. Installation of VFD in cooling water pump for 100x2 TR brine chiller.
MOL - Dahej
1. Installation of new cooling water pumpset & change of pipeline from 4" to 6" for ejector circulation CW pump(Plant Cyper) As per Energy Audit Report
MOL - Ankleshwar
3. Installation of new cooling water pump for plant B+C cooling water pumping system.
8. Application of Auto voltage Regulator for Lighting MLDB.
2. Installation of new primary chilled water pumpset for 101 TR Mcquay water chiller (Plant : Cyper) As per Energy Audit Report
3. Insulation over VAM & SFD (Plant:2-4-D) condensate storage tank. As per Energy Audit Report.
4. Installation of new raw water pumpset for 2-4-D section & ETP raw water transfer pump. As per Energy Audit Report.
5. Stoppage of cooling water pump during stoppage of CW requirement in R-204 & R-206 reactors (Plant : MPB). As per Energy Audit Report.
PIGMENT - Panoli
1) Cable Loss Reduction by PF Improvement at Identified MCC's 0.995 to 0.999 lagging
4) Replaced Energy Efficient IE3 Motors against Rewound IE1 Motors 74 nos
3) Installed of Delta Star Convertor for Under Loaded Motors -11 Nos
5) Replaced of 74 Nos. 250W HPMV Fixtures by 100W LED Fixtures
2) Installed of Auto voltage Regulator for Lighting MLDB
019 IND
ANNEXURE TO THE DIRECTORS’ REPORT
A Energy conservation measures taken
B Additional investments and proposals if any being implemented for reduction of consumption of energy
C Impact of the measures at (A) & (B) above for reduction of the energy consumption and consequent impact on the cost of production of goods.
D Total energy consumption and energy consumption per unit of production
As per Form – A
****
15) Reduction of ID fan power consumption through excess air control – Boiler:1
6) Replaced 33 Nos. 150W HPMV Fixtures by 65W LED Fixtures
13) Replaced of existing pumps with new higher efficiency pumps for NCPC plant RVD cooling water system
8) Replacement of existing pump with new higher efficiency pump for old Beta plant Ball mill cooling water system
10) Replaced of existing pump with new higher efficiency pump for Alfa plant ball mill cooling water system
14) Performance improvement of Boiler-1 through excess air control
7) Energy saving through performance improvement in Alpha, New CPC, Old CPC, Warehouse & Gypsum air compressors
12) Replaced of existing pump with new higher efficiency pump for NCPC plant GLV cooling water system
11) Replaced of existing pump with new higher efficiency pump for Alfa plant GLV cooling water system
9) Replaced small impeller in existing pump of Old CPC GLV cooling water system
MOL - DahejTotal No of Proposals : 24 Nos. (Includes above 5)Implemented : 22 Nos.Investment : Rs. 26.37 Lacs
Pigment Panoli Plant : Rs. 58.95 Lakhs
Savings:- per AnnumAgro MOL - Dahej : Rs. 17.49 LacsMOL - Ankleshwar : Rs. 6.92 Lacs
Pigment Panoli Plant :Unit Saved 740529 KWH/ Annum
020
ANNEXURE TO THE DIRECTORS’ REPORT
FORM A
Production in (MT) 43,892 44,413
Consumption of Coal /Lignite /Others (MT) 77,397 55,014
2 Coal (Specify Quality and Used)
Unit KWH 1,15,152 2,80,574
(a) Purchase
Rate/Unit / KWH 4.81 6.22`
A Power Consumption
Total Amount 35,55,35,372 47,48,64,455`
(b) Own Generation through Diesel Generator
(c) Own Generation through steam Turbine/Generator
Particulars 2018-19 2017-18
Cost/Unit / KWH - -`
Cost / Unit / KWH 12.18 11.54`
3 Others/Internal Generations
B Consumption per unit of
1 Electricity Consumption
Total Amount KWH - -
Unit KWH - -
Gas Consumption (In 1000 Cubic Meter) 348 191
Unit KWH 7,38,77,811 7,63,73,315
Stem Generated (MT) 3,03,063 2,74,750
Total Amount 14,02,217 32.36,525`
Cost per Unit (KG) 1.27 1.05
Electricity ( /MT) 8,132 10,765`
Form for disclosure of particulars with respect to conservation of Energy
****
021 IND
ANNEXURE TO THE DIRECTORS’ REPORT
2. TECHNOLOGY ABSORPTION:
Form–BA. Form for disclosure of particulars with respect to Technology Absorption, Research & Development
1 Specific areas in which R & D is carried out by the Company.
2 Benefits derived as a result of the above R & D.
3 Future Plan of Action
4 Expenditure on R & D
To Reduce the Filter Pressure value of Alpha 15:1 BK-P
B. Technology Absorption, Adoption and Innovation:
A Efforts, in brief, made towards technology absorption, adaptation and innovation.
-
B Benefits derived as a result of the above efforts e.g. Product improvement, cost reduction, product development, import substitution etc.
-
C Imported technology (imported during the last 5 years reckoned from the beginning of the financial year.
During the last five years, no technology has been imported by way of foreign collaboration or otherwise for the existing products of the Company.
Foreign Exchange Earnings: - Rs. 105779.63 Lakhs
Foreign Exchange Outgo: - Rs. 19651.44 Lakhs
3. Foreign Exchange Earnings and Outgo:
For and on behalf of the Board of Directors Place : Ahmedabad (Jayantilal Patel)Date : 24.05.2019 Executive Chairman DIN-00027224
2. GLP Study – Generating Data
Agrochemicals:-
1. Improvement in existing manufacturing Process of Agrochemical Products
Agrochemicals:-
2. GLP Study data helps reduces the cost of overseas export registration.
1. Reduction in cost of production as a result of process improvement
To Reduce the Filter Pressure value of Alpha
Rs. 209.65 Lakhs
022
EXTRACT OF ANNUAL RETURN(As on the financial year ended 31.03.2019)
Companies (Management and Administration) Rules, 2014]
ANNEXURE- B
[Pursuant to Section 92(3) of the Companies Act, 2013, and Rule 12(1) of the
Whether Listed Company Yes
Registration Date 2nd January, 1995
Name, address and contact details of the Link Intime India Private Limited Registrar and Transfer Agent, if any C 101, 247 Park, L. B. S. Marg, Vikhroli (West), Mumbai - 400083. Tel: +91 22 4918 6270 Fax: +91 22 4918 6060
Name of the Company Meghmani Organics Limited
Category/Sub-category of the Company Company having Share Capital
Address of the Registered Office and Plot No. 184, Phase II, GIDC Vatva, Ahmedabad - 382 445, contact details Ph- 91-79-25831210
I. Registration and other details
FORM NO. MGT - 9
CIN L24110GJ1995PLC024052
Pigments 20114 42.86
Agro Chemicals 20211 56.04
Other - 01.10
All the Business Activities contributing 10% or more of the total turnover of the Company shall be stated.
Name & Description of main NIC Code of the Product/ Service % of total turnover of the
Products/Services Company
II. Principal Business Activities of the Company
III. Particulars of Holding, Subsidiary & Associate Companies
No. the Company Subsidiary/ held Section
2 PT Meghmani Organics Indonesia Foreign Company Subsidiary 100 2(87)
3 Meghmani Overseas FZE Foreign Company Subsidiary 100 2(87)
4 Meghmani Finechem Limited U24100GJ2007PLC051717 Subsidiary 57 2(87)
1 Meghmani Organics USA, Inc. Foreign Company Subsidiary 100 2(87)
Sr. Name & Address of CIN/GIN Holding/ % of shares Applicable
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026
year No. of % of total % of total No. of % of total % of total
ii) Shareholdings of Promoters
Shareholders Shareholding at the beginning of the Shareholding at the end of the % change Name year (April 01, 2018) year (March 31, 2019) during the
to total shares Company to total shares
Ashish Soparkar 24585628 9.67% - 24785628 9.75% - 0.08
Rameshbhai Patel 15402392 6.06% - 15660689 6.16% - 0.10
Natwarlal Patel 20539850 8.08% - 20739850 8.16% - 0.08
Anandbhai Patel 7768081 3.05% - 7843200 3.08% - 0.03
shares shares of the pledged/ shares shares of pledged/
Jayatilal Patel 17824390 7.01% - 18024390 7.09% - 0.08
Company encumbered the encumbered
No. of shares % of total shares No. of shares % of total shares of
At the beginning of the year
(iii) Change in Promoter’s Shareholding
of the Company the Company
At the end of the year
Shareholding at the beginning of the year Cumulative Shareholding during the year
Date wise Increase/ Decrease inPromoters Shareholding during the Refer ii) Shareholding of Promotersyear with reasons for change
Name of Shareholders Shareholding at the beginning Cumulative Shareholding at the of the year – April 01, 2018 end of the year- March 31, 2019
No. of Shares % of total shares No. of Shares % of total shares
1) DBS Nominees (Pvt.) Limited 13623540 5.36 12892190 5.07
2) VLS Finance Limited 6230000 2.23 6040000 2.38
Equity Portfolio 1502232 0.59 1262302 0.50
5) Dimensional Emerging Markets
Value Fund - - 950917 0.37
6) VLS Capital Limited 790611 0.31 790611 0.31
of the Company of the Company
7) Adesh Ventures LLP - - 644382 0.25
(iv) Shareholding Pattern of Top Ten Shareholders (Other than Directors, Promoters and Holders of GDR and ADRs)
3) Gadia Naveen Vishwanath 3140100 1.23 3170200 1.25
8) Progressive Global Finance Pvt. Ltd - - 618100 0.24
9) Dolly Khanna 939652 0.37 600187 0.24
10) ICICI Bank Limited 892656 0.35 415259 0.16
4) Emerging Markets Core
027 IND
i) Principal Amount 32652.96 - - 32652.96
Indebtedness of the Company Including interest outstanding/accrued but not due for payment
Net Change 1473.96 - - 1473.96
Secured Loans excluding Unsecured Loans Deposits Total Indebtedness
Reduction (16676.88) - - (16676.88)
Indebtedness at the end of the FY
Total (i+ii+iii) 32765.27 - - 32765.27
ii) Interest due but not paid - - - -
deposits (` In Lakhs) (` In Lakhs) (` In Lakhs) (` In Lakhs)
i) Principal Amount 31179.00 - - 31179.00
Indebtedness at the beginning of FY
iii) Interest accrued but not due 72.00 - - 72.00
Total (i+ii+iii) 31251.00 - - 31251.00
Addition 18150.84 - - 18150.84
iii) Interest accrued but not due 112.31 - - 112.31
Change in Indebtedness during FY
ii) Interest due but not paid - - - -
V. Indebtedness
For each of Directors and KMP Shareholding at the beginning of Cumulative Shareholding at end of
Mr. Jayantilal Meghjibhai Patel 17824390 7.01% 18024390 7.09%
Mr. Ashish Natwarlal Soparkar 24585628 9.67% 24785628 9.75%
Mr. Natubhai Meghjibhai Patel 20539850 8.08% 20739850 8.16%
Mr. Manubhai Patel - - - -
Mr. Bhaskar Rao - - - -
Mr. Chander Kumar Sabharwal - - - -
of the Company of the Company No. of Shares % of total shares No. of Shares % of total shares
the year April 01, 2018 the year March 31, 2019
Mr. Anandbhai Ishwarbhai Patel 7768081 3.05% 7843200 3.08%
Mr. Balkrishna Thakkar - - - -
Ms Urvashi Dhirubhai Shah - - - -
Mr. G. S. Chahal - - - -
Mr. C. S. Liew - - - -
Mr. Kamlesh D. Mehta - - - -
86120341 33.87% 87053757 34.24%
Mr. Rameshbhai Meghjibhai Patel 15402392 6.06% 15660689 6.16%
(v) Shareholding of Directors and Key Managerial Personnel
028
Stock Options - - - - - -
Gross Salary
VI. Remuneration of Directors and Key Managerial Personnel
Profit in lieu of salary under Section - - - - - -17(3) of the Income Tax Act, 1961
Salary as per provisions of Section 17(1) 60.00 60.00 60.00 60.00 60.00 300.00of the Income Tax Act, 1961
A. Remuneration to Managing Directors, Whole-time Directors and/or Manager
Particulars of Remuneration
Value of perquisites under Section 17(2) 7.89 7.79 7.67 7.75 7.37 38.46of the Income Tax Act, 1961
Commission (as % of Profit) - - - - - -
Others (Performance Bonus) 150.00 150.00 150.00 90.00 60.00 600
Total (A) 217.89 217.79 217.67 157.75 127.36 938.46
Sweat Equity - - - - - -
Mr. Jayantilal
Patel (Executive Chairman)
Mr. Ashish Soparkar
(Managing Director)
Mr. Natwarlal.
Patel (Managing Director)
Mr. Ramesh Patel
(Executive Director)
Mr. Anand Patel
(Executive Director)
Total Amount( In Lakhs)`
Total (B) 3.00 3.50 0.00 0.00 1.50 1.00 9.00
Fees for attending 3.00 3.50 0.00 0.00 1.50 1.00 9.00Board/ Committee Meetings
Commission - - - - - - -
Others, Please Specify - - - - - - -
Particulars of Name of Directors Remuneration
B. Remuneration to other Non –Executive Independent Directors
Total Amount(` In Lakhs)Mr.
Manubhai Patel
Mr.B. T.
ThakkarC. S.Liew
Mr.Bhaskar
Rao
Mr. Mr. Chander.
Sabharwal
Ms.Urvashi
Shah
029 IND
A. Company
Punishment None
B. Directors
Punishment None
Compounding
Penalty
C. Other Officers in Defaults
Compounding
Compounding
Type Section of the Brief Details of Authority Appeal Companies Act Description Penalty/Punishment/ (RD/NCLT/Court) made, Compounding fees imposed if any
Punishment None
VII. Penalties/ Punishment/ Compounding of Offences
Penalty
Penalty
****
Particulars of Remuneration Key Managerial Personnel (KMP)
Profit in lieu of salary under Section 17(3) of the 0.00 0.00 0.00
Income Tax Act, 1961
Sweat Equity 0.00 0.00 0.00
Commission ( as % of Profit) 0.00 0.00 0.00
Others 0.00 0.00 0.00
Chief Financial Officer (Rs. in Lakhs)
Value of perquisites under Section 17(2) of the 0.22 0.00 0.22
Income Tax Act, 1961
Stock Options 0.00 0.00 0.00
Total (C) 21.94 36.22 58.16
Gross Salary 0.00 0.00 0.00
Salary as per provisions of Section 17(1) of the 21.72 36.22 57.94
Income Tax Act, 1961
Mr. K. D. Mehta (CEO) Mr. G. S. Chahal, Total Amount
C. Remuneration to Key Managerial Personnel other than MDs/EDs
(CFO)
030
FORM NO. MR-3SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED ON 31.03.2019
d. The compliance of the provisions of the corporate and other applicable laws, rules, regulation, standards is the responsibility
of the management. Our examination was limited to the verification of procedures on test basis.
a. Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to express
an opinion on these secretarial records based on our audit.
[Pursuant to Section 204(1) of the Companies Act, 2013 and
Plot No. 184, Phase II,
We report that;
b. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the
correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct facts are
reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our
opinion.
c. We have not verified the correctness and appropriateness of the financial statement of the Company.
We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for stthe financial year ended on 31 March, 2019 according to the provisions of:
To,The Members,
GIDC Vatva, Ahmedabad-382 445
We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good
corporate practices by Meghmani Organics Limited (hereinafter called the Company). Secretarial Audit was conducted in a
manner that provided us a reasonable basis for evaluating the corporate conducts/ statutory compliances and expressing our
opinion thereon.
Rule No.9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014]
Meghmani Organics Limited
Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained
by the Company and also the information provided by the Company, its officers, agents and authorized representatives during
the conduct of Secretarial Audit, we hereby report that in our opinion, the Company has, during the audit period covering the
financial year ended on 31st March, 2019 (“Audit Period”), complied with the statutory provisions listed hereunder and also
that the Company has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to
the reporting made hereinafter:
1. The Companies Act, 2013 (the Act) and the Rules made there under;
2. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the Rules made there under;
3. The Depositories Act, 1996 and the Regulations and bye-laws framed there under;
4. Foreign Exchange Management Act, 1999 and the Rules and Regulations made there under to the extent of Foreign Direct
Investment, Overseas Direct Investment and External Commercial Borrowings;
e. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or
effectiveness with which the management has conducted the affairs of the Company.
5. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):
a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, as
amended from time to time;
b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, as amended from time
to time;
c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirement) Regulations, 2009 (Not
Applicable to the Company during the Audit Period) ;
031 IND
4. Merger / Amalgamation / Reconstruction etc.
We have also examined compliance with the applicable clauses of the followings:-
ii. Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015;
The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors
and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under
review were carried out in compliance with the provisions of the Act.
The Board decisions are carried out with unanimous consent and therefore, no dissenting views were required to be captured
and recorded as part of the minutes.
6. Other laws specifically applicable to the Company (As per Annexure-1)
We further report that there are adequate systems and processes in the Company commensurate with the size and operations
of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
5. Foreign Technical Collaborations.
We further report that during the audit period, there were no instances of:-
It is further to report that the “Company” has promoted Meghmani Agrochemicals Private Limited as Wholly owned subsidiary on
23rd August, 2017 and the said Company was merged with Meghmani Finechem Limited, and the said Wholly owned
subsidiary of the “Company” was dissolved vide order dated 11th February, 2019 by NCLT, Ahmedabad Bench.
d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase
Scheme) Guidelines, 1999 (Not Applicable to the Company during the Audit Period) ;
e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 (Not Applicable
to the Company during the Audit Period) ;
iii. Secretarial Standards (SS-1 & SS-2) issued by the Institute of Company Secretaries of India.
g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (Not Applicable to the
Company during the Audit Period) ; and
h) The Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998 (Not Applicable to the
Company during the Audit Period) ;
During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines,
Standards, etc. mentioned above.
f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993
regarding the Companies Act and dealing with client;
We further report that
Adequate notice is given to all Directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at
least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda
items before the meeting and for meaningful participation at the meeting.
1. Public / Rights / Preferential issue of Shares / Debentures / Sweat Equity.
2. Redemption/Buy Back of Securities.
i. The Listing Agreements entered into by the Company with National Stock Exchange of India Limited (NSE) and BSE
Limited (BSE).
3. Major decisions taken by the members in pursuance to Section 180 of the Companies Act, 2013. (As noted below)
thDate: 18 May, 2019 For, SHAHS & ASSOCIATES Place: Ahmedabad Company Secretaries Kaushik Shah Partner FCS No 2420 CP No-1414
032
ANNEXURE - 1
(15) THE MINIMUM WAGES ACT, 1946
(22) CUSTOMS ACT 1962
(10) THE INDUSTRIAL DISPUTE ACT, 1947
(18) INDIAN STAMP ACT, 1899
(7) NEGOTIABLE INSTRUMENT ACT, 1938
(2) ENVIRONMENT PROTECTION ACT, 1986
(12) THE PAYMENT WAGES ACT, 1965
(5) INCOME TAX ACT, 1961
(6) PROFESSIONAL TAX, 1976
(13) THE PAYMENT OF BONUS ACT, 1965
(16) THE TRADE UNION ACT, 1926
(9) THE APPRENTICE ACT, 1961
(17) THE EMPLOYMENT EXCHANGE ACT 1952
(19) THE TRADE MARKS ACT, 1999
(20) FOREIGN TRADE (DEVELOPMENT AND REGULATION )ACT, 1992
(8) THE FACTORIES ACT, 1948
(1) INSECTICIDES ACT , 1968
(21) ESSENTIAL COMMODITIES ACT 1955
(14) THE PAYMENT OF GRATUITY ACT, 1972
(4) INDIAN EXPLOSIVE ACT, 1952 – POISON ACT, 1884
(11) EMPLOYEES PROVIDENT FUND & MISC. PROVISIONS ACT
(23) INDUSTRIES (DEVELOPMENT AND REGULATION) ACT, 1951
(3) THE GOODS AND SERVICES TAX ACT, 2016
(24) COMPETITION ACT, 2002
Place: Ahmedabad For, SHAHS & ASSOCIATES thDate: 18 May, 2019 Company Secretaries
Kaushik Shah Partner FCS No 2420 CP No-1414
033 IND
ANNEXURE“A”SECRETARIAL COMPLIANCE REPORT OF MEGHMANI ORGANICS LIMITED
FOR THE YEAR ENDED 31ST MARCH, 2019To,
The Board of Directors,
Meghmani Organics Limited
Plot No. 184, Phase II,
GIDC Vatva, Ahmedabad - 382 445.
I, KAUSHIK JAYANTILAL SHAH, a partner of SHAHS & ASSOCIATES, COMPANY SECRETARIES, 305, Hrishikesh-II, Near
Navrangpura Bus-Stop, Ahmedabad-380 009 have examined:
(a) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;
(a) The MEGHMANI ORGANICS LIMITED has complied with the provisions of the above Regulations and circulars/
guidelines issued there under, except in respect of matters specified below:-
(a) all the documents and records made available to us and explanation provided by MEGHMANI ORGANICS LIMITED,
Plot No. 184, Phase II, GIDC Vatva, Ahmedabad-382 445 (“the listed entity”)
(f) Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; (Not Applicable to
the Company during the Audit Period);
(g) Securities and Exchange Board of India (Issue and Listing of Non-Convertible and Redeemable Preference Shares)
Regulations, 2013; (Not Applicable to the Company during the Audit Period);
for the year ended 31st March, 2019 (“Review Period”) in respect of compliance with the provisions of:
(d) any other document/ filing, as may be relevant, which has been relied upon to make this clarification,
(e) Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014; (Not Applicable to the
Company during the Audit Period);
The specific Regulations, whose provisions and the circulars/ guidelines issued there under, have been examined, include:
(b) the filings/ submissions made by the listed entity to the stock exchanges,
(b) Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018; (Not
Applicable to the Company during the Audit Period);
(h) Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;
(c) website of the listed entity,
(a) the Securities and Exchange Board of India Act, 1992 (“SEBI Act”) and the Regulations, circulars, guidelines issued
there under; and
(c) Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
(I) Other regulations as applicable and circulars/ guidelines issued there under;
And based on the above examination, I KAUSHIK JAYANTILAL SHAH, a partner of SHAHS & ASSOCIATES, COMPANY
SECRETARIES hereby report that, during the said Review Period:
(d) Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018; (Not Applicable to the Company
during the Audit Period);
(b) the Securities Contracts (Regulation) Act, 1956 (“SCRA”), rules made there under and the Regulations, circulars,
guidelines issued there under by the Securities and Exchange Board of India (“SEBI”);
1 Nil Nil Nil
Sr. No. Compliance Requirement Deviations Observations / Remarks (Regulations/circulars/ of Practicing guidelines including Company Secretary
034
(b) MEGHMANI ORGANICS LIMITED has maintained proper records under the provisions of the above regulations and
circulars/ guidelines issued there under in so far as it appears from my/our examination of those records.
(c) The following are the details of actions taken against MEGHMANI ORGANICS LIMITED / its promoters/ directors/
material subsidiaries either by SEBI or by Stock Exchanges (including under the Standard Operating Procedures
issued by SEBI through various circulars) under the aforesaid Acts/ Regulations and circulars/guidelines issued there
under:
(d) The MEGHMANI ORGANICS LIMITED has taken the following actions to comply with the observations made in our
previous reports:
later, debarment Secretary
1 Not Applicable Nil Nil Nil
Sr. No. Action taken by Details of violation Details of action taken Observations / remarks of e.g. fines, Warning the Practicing Company
Sr. No. Observations of the Observation made in the Action taken by Comments of the Practicing
Previous reports ended 31/3/2019 Organics Limited
Practicing Company Secretarial compliance the listed entity, Company Secretary on the
1 Not Applicable Nil Not Applicable Nil
Secretary in report for the Year if any action taken by Meghmani
thDate: 18 May, 2019 For, SHAHS & ASSOCIATES
Kaushik Shah
FCS No 2420 CP No-1414
Place: Ahmedabad Company Secretaries
Partner
035 IND
MANAGEMENT DISCUSSION AND ANALYSIS
High crop protection prices are mainly on the account of supply shortages, particularly higher prices of products originating from
China as a result of the environmental pressures from government, consolidation in the national industry and shifting of all
chemical production in chemical zone/parks. Higher prices have also driven higher tariffs imposed by the US on some Chinese
chemical products. As a result, industry has passed on the higher price to consumers.
Meghmani Organics delivered another year of strong performance with the consolidated growth of 16% YoY to INR 20880
million. Sale of high margin products and favourable demand supply situation has resulted in expansion of 220 bps in the
EBITDA margin reaching 26.1%. EBITDA for the period increased by 26% to INR 5445 million. The company reported the
highest ever PAT of INR 2513 million, increased by 47%. It is continuing to enjoy the strong return ratio, with Return on Equity of
26.3% and Return on Capital Employed of 29.2%.
After a strong growth in 2017 and early 2018, the second half of 2018 experienced a slowdown. Global economic growth
softened to 3.6% in 2018 and it is projected to decline further to 3.3% in 2019. International trade and investments are
moderating, trade tensions remain elevated, and financing conditions are tightening. Amid recent episodes of financial stress,
growth in emerging markets and developing economies have lost momentum, with a weaker-than-expected rebound in
commodity exporters accompanied by deceleration in commodity importers. Downside risks have become more acute.
Financial market pressures and trade tensions could escalate, denting global activity.
India’s GDP growth for FY2019 is expected at 7.2%. The Index of Industrial Production (IIP) grew by 3.6% in FY2019 and was
majorly driven by growth in Infrastructure/Construction goods sector. Furthermore, inflation has remained well in control. The
Wholesale Price Index (WPI) and Consumer Price Index (CPI) based inflation was at 3.18% and 3.41% respectively in FY2019.
Additionally, the Reserve Bank of India (RBI) announced multiple rate cuts to ease the liquidity tightening. The Repo rate now
stands at 6%.
The Indian economy grew steadily on account of various reforms like recapitalisation of public sector banks, amendments to
goods and service tax, clean-up of Non-performing assets through National Company Law Tribunal (NCLT), implementation of
Insolvency and bankruptcy code.
Meghmani Organics is a leading diversified chemical company poised for growth across its three (Pigment, Agro Chemicals and
Chlor- Alkali & Derivatives) high potential business. Across the three sectors, the Company is one of the leading global pigment
players along with a vertically-integrated Agro Chemical player and a leading low cost Caustic-Chlorine player in India. The
Company operates 7 facilities in Gujarat, including 3 major facilities for Pigments, Agro Chemicals and Chlor- Alkali &
Derivatives in Dahej, the chemicals zone of Gujarat. Over the years, the Company has built an extensive pan-India and global
footprint with presence in more than 75 countries and a portfolio of over 400 clients.
Agro Chemical Market
Indian Economy
Global Economy
However, growth is expected to pick up in the second half of 2019, driven by the absence of inflationary pressure and monetary
policy accommodations by major economies. Moreover, the fiscal and monetary policy stimulus by China has helped to counter
the looming negative effects of imposed trade tariffs, improving the outlook for US – China trade tensions.
Recovery in the Brazilian market (one of the largest Agro Chemical consumers in the world), is the major driver of growth in
2018. The excessive crop protection inventories, which resulted in the 2017 decline have been addressed and are no longer
such an issue.
Company Overview
Global chemical-based crop protection sales increased by 4.2%, from $54.2 billion in 2017 to $56.5 billion 2018. Rising demand
for pesticides and increasing consumption of Agro Chemicals in liquid form are some of the key factors expected to boost the
demand for Agro Chemicals in the global market.
036
MANAGEMENT DISCUSSION AND ANALYSIS
Asia Pacific
Latin America*
Europe
NAFTAMEA
4%
30%
24%
22%
20%
Region 2017 % change 2018
Asia Pacific 16,300 4.6% 17,050
Latin America 12,665 6.0% 13,425
Total (World) 54,210 4.2% 56,500
NAFTA 10,761 3.2% 11,105
Europe 12,374 3.2% 12,770
Middle East/Africa 2,110 1.9% 2,150
Agro Chemical worth $6.3 billion are going off patent between 2014-2020 and more Agro Chemical active ingredients (AIs) will
lose patent protection between 2019- 2026. With so many products coming off patent, industry players have the opportunity to
choose the right off-patent/generic AIs for their product development strategies.
Huge opportunity for Generic Pesticides players:
Key growth driver of pesticides:
India Agro Chemical Industry:
Indian pesticides market valued at INR 197 billion in 2018 and expected to reach INR 316 billion by 2024, growing at CAGR of
8.1% between 2019-2024. The significance of pesticides has been rising over the last few decades catalysed by the
requirement to enhance the overall agricultural production and the need to safeguard adequate food availability for the
continuously growing population in the country. In India, pests and diseases, on an average eat away around 20-25% of the total
food produced.
• Due to increasing urbanisation levels, per capita arable land has been reducing in recent years and expected to reduce
further in coming years. Driven by rising population levels, food demand is expected to continue increasing in the coming
years and pesticides to play a key role in increasing the average crop yields.
• Government initiatives to provide credit facilities to farmers is expected to provide a strong boost to the pesticides
industry. Increasing availability, low interest rates on farm loan and farm loans waivers are expected to encourage
farmers to use more pesticides in order to improve yields.
• Increasing awareness of pesticides among farmers.
• The penetration levels of pesticides in India are significantly lower than other major countries such as the US and China
and world average. This indicates that the market for pesticides is still un-penetrated India.
Product of Patent($ billion)
2014 2015 2016 2017 2018 2019 2020
0.91.2
1.6
0.40.2
0.7
1.3
037 IND
MANAGEMENT DISCUSSION AND ANALYSIS
GIDC Ankleshwar, (6,420 MTPA)
Meghmani reported a strong performance in FY2019 and the net sales grew by 23%, to INR 7707 million from INR 6,273 million
in FY 2018. This was driven by robust growth of 36% in exports. Volumes for the year stood at 16430 MT. EBITDA was
significantly increased by 83%, from INR 981 million in FY 2018 to INR 1796 million in FY 2019, on the back of positive market
conditions and better price realisations. EBITDA margin for the period also increased to 22.7% from 15.3% in FY 2018.
Utilisation level for the year stood at 66%. FY 2019 was a strong year on account of favourable market condition, better
realisation and product mix.
The Company has three state-of-the-art manufacturing facilities where capacities have been increased via debottlenecking.
These are located at:
Business Overview
GIDC Panoli, (7,200 MTPA)
GIDC Dahej, (14,640 MTPA)
Performance of Agro Chemical Segment:
Meghmani Organics is a leading vertically integrated Agro Chemicals player with the presence in entire value chain —
Intermediate, Technical grade and Formulations (bulk and branded). The Company’s vertical integration of business allows
Meghmani Organics to effectively manage raw material costs and assure a constant supply of consistent quality.
Major products include 2,4D, Cypermethrin, Bifenthrin, Permethrin, Chlorpyrifos and Profenophos. In branded formulations, the
Company has established a strong pan India presence with about 3000 stockists, agents, distributors, and dealers spread
across pan India. Key brands include Megastar, Megacyper, Megaban, Synergy, Courage, Correct and Mega Claim.
The Agro Chemicals industry is highly regulated, and the Company enjoys competitive advantage via presence in entire value
chain (less dependent on raw material) and 268 export registrations, 238 registrations in pipeline, 348 CIB registrations, and 35
registered trademarks. The Company has a strong global client base with exports accounting for 74% of its Agro Chemical
sales. The Company exports Technical as well as Formulation (bulk and branded) products to Africa, Brazil, Latam, the US and
European countries.
FY 2019 was a strong year for the Agro Chemicals segment on the back of favourable market conditions. FY 2020 shall also
sustain the same growth levels as the raw material prices from China has increased significantly affecting the margins, but,
Meghmani’s backwards integration facilities put it in an advantageous position and thus, we are constantly improving the
margins. Going forward, the Company plans to double the capacity of 2,4D by adding 10,800 MTPA with capex of ~INR 1.27
billion and it is expected to be operational by Q1 FY 2021.
Outlook and Strategy :
17,342 16,430
Fy18 Fy19
6,423
15%
Fy18 Fy19
Revenue(Rs. Mn.)
EBITDA Margin
23%
18,431 18,666
68%
Fy18 Fy19
Produc�on(MTs.)
U�liza�on
66%
Volume(MTs.)
7,905
Revenue up by 23%
038
MANAGEMENT DISCUSSION AND ANALYSIS
Risks, Concerns and Threats
Despite strong growth drivers, the Indian Agro Chemicals industry faces challenges in terms of dependenance on the monsoon.
Erratic rainfall affects crop acreages, pest application and overall productivity, directly impacting the Company’s sales
performance.
The Company exports its products to various countries. Thus, any adverse changes in the political, climatic, economic,
regulatory or social conditions of these countries might impact the Company’s business prospects in these countries. Any
change in the policies implemented by the Governments of these countries, which result in currency and interest rate
fluctuations, capital restrictions, changes in duties & taxes and a registration regime detrimental to the Company’s business
could adversely affect its operations and future growth. Increase in crude prices will also impact the costs and prices of various
products.
Pigment:
Industry Overview :
The global pigment market was valued at $29 billion (organic as well as inorganic Pigments) in 2017 and is expected to grow at
4.5% CAGR to reach $43 billion by 2026.
The global pigment market is driven by the rise in demand for packaging ink, paints & coatings and plastic industry. Paints and
coatings are used in various end-user industries such as aerospace, automotive, architectural & refinishing and building &
construction. Rise in population coupled with increase in per capita income has boosted the consumption of paints and coatings
in decorative and industrial paints, automotive, and consumer goods industries over the last few years. This, in turn, generated
considerable demand for pigments in the paints & coatings segment, making it the leading end-user segment.
Plastics are one of the major consumers of pigments. It imparts unique appearance and styling effect to plastic products. Hence,
rise in the production of plastics plays a key role in driving the demand for pigments. Consumption of plastics has increased
substantially in both developed and developing countries over the last few years. Factors such as economic growth, rise in
disposable income, and rapid urbanisation in developing countries such as China, India, Brazil, and South Africa are expected
to drive the demand for plastics.
In recent years, due to the rise of the Internet, global publications with organic pigments show a downward trend, but high-
performance pigments and packaging ink pigments are growing year by year. Global packaging and printing market are
expected to grow by 4.9% CAGR to reach $19.27 billion in 2026. Asia-Pacific region, such as China and India and other
emerging economies are the key drivers for the development of packaging and printing market.
GIDC Vatva, Ahmedabad, (2,940 MTPA) where Pigment Green is manufactured
Business Overview
Meghmani Organics is amongst the top 3 (capacity wise) global pigment manufacturers of Phthalocyanine-based Pigments.
The Company has vertically integrated facilities manufacturing CPC Blue (an upstream product, which too is sold to other
Pigments manufacturers) and end products — Pigment Green and Pigment Blue. These Pigments products are used in multiple
applications, including paints, plastics and printing inks.
Dahej SEZ Ltd, (12,600 MTPA) where CPC Blue, Alpha and Beta Blue are manufactured
The Company’s Pigments business enjoys strong global presence with exports accounting for 82% of net sales. The
Company’s relationship with its clients is consistent, with 90% business arising from repeat customers. The Company has
global presence in more than 65 countries with subsidiary in the US which helps in maintaining a front-end presence along with
the ability to work closely with end-user customers.
GIDC Panoli, near Ankleshwar, (17,400 MTPA), where CPC Blue, Alpha and Beta Blue are manufactured
Meghmani Organics has three dedicated manufacturing facilities for Pigments products. These are located at:
039 IND
MANAGEMENT DISCUSSION AND ANALYSIS
Performance of Pigments Segment :
Pigments business delivered net sales growth of 2.5% in FY 2019 and reached at INR 5893 million in FY 2019 from INR 5,747
million in FY 2018. Export sales stood at 81% in FY 2019. Sales volumes were at 15999 MT in FY 2019 compared to 16,090 MT
in FY 2018. Utilisation levels remain at 76.6% in FY 2019. EBITDA during FY 2019 stood at INR 818 million. EBITDA margin
slightly declined by 90 bps to 13.5% in FY 2019, primarily on account of higher prices of raw materials and competitive pressure
from industry, company was not able to fully transfer higher prices to end consumer.
16,090 15,999
Fy18 Fy19
Revenue up by 2.9%
5,8776,048
14.4%
Fy18 Fy19
Revenue(Rs. Mn.)
EBITDA Margin
13.5%
25,982 25,226
83.4%
Fy18 Fy19
Produc�on(MTs.)
U�liza�on
76.6%
Volume(MTs.)
Globally, Chlor- Alkali market represents one of the largest chemical industries. Chlor- Alkali market is expected to reach $124.6
billion by 2022, growing at CAGR of 6.8% between 2016-2022. The market is broadly categorised into three segments namely
Caustic Soda (NaOH), Chlorine & Soda Ash, which are collectively known as Chlor- Alkali chemicals. The main application
areas of Chlor- Alkali chemicals are in soap & detergent industry, paper and pulp, textiles, water treatment, plastic industry,
industrial solvents, alumina, pharmaceuticals etc.
Outlook and Strategy :
Meghmani Organics currently is one of the largest producers for the Copper Phthalocyanine Pigment and going forward, the
Company is looking to diversify by adding new Pigments. The Company continues to focus on increasing its domestic presence
and increase the market share, given the significant market opportunities.
Risks, Concerns and Threats
Drastic changes and continuous fluctuations in the prices of key raw materials are critical challenges to the growth of this
industry. As the Company’s revenue comprises a significant portion of business from exports, volatility of the rupees vis-à-vis
the Dollar and the Euro may affect realisations. The Company is engaged in a business involving different areas such as
procurement, backward and forward integration, quality, technical competence, logistics facilities, after-sales service and
customer relationship. Changing competitive landscape and emergence of new technologies may impact the Company’s
business and prospects.
Chlor Alkali Industry
27% Organic & Inorganic
17% Alumina
16% Pulp & Paper
23% Others
7% Soaps & Detergents
10% Textiles
Sector wise Global Caustic Soda Consumption (FY 2018)
040
MANAGEMENT DISCUSSION AND ANALYSIS
FY 2019 proved to be a much better year than FY 2018 with net sales of Basic Chemicals growing at 19% to INR 710.4 million in
FY 2019 from INR 5,975 million in FY 2018, driven by favourable demand and supply scenario, which has led to improvement in
ECU prices. Sales volumes for the year stood at 156298 MT. EBITDA increased by 22% YoY from INR 2,554 million in FY 2018
to INR 3117million in FY 2019. EBITDA margin also increased by 120bps to 43.9% in FY 2019.
Indian Chlor- Alkali Industry:
Significant growth potential for Alkali and Chlor-Vinyl industry in next 5 years as the alkalis are the basic building blocks that find
application in product of everyday use including aluminium, paper, textile and plastic. With growing aspirations of a rising middle
class, higher disposable income and currently low level of penetration, demand for these products is bound to grow. There is a
vast untapped market, which will significantly drive demand. India has one of the lowest per capita consumption of 1.9 kg caustic
soda, 2.3 kg soda ash and 2.0 kg PVC compared to 32.0 kg, 28.0 kg and 12.7 kg in the US and 12.0 kg, 11.0 kg and 10.0 kg in
China for caustic soda, soda ash and PVC respectively.
The Company’s planned capex of INR 6.4 billion involving 3 projects are in-line with its strategic intent of expanding the
chemicals business. The first is the CMS project of 40,000 MTPA, which will produce MDC, Chloroform and Carbon Tetra
Chloride. This is expected to be commissioned by Q1 FY 2020. The second project expand capacity of Caustic Soda plant to
2,71,600 MTPA and increase the Captive Power Plant capacity to 96MW from 60 MW and is expected to get operational by Q3
FY 2020. The third project is to set up a Hydrogen Peroxide capacity of 60,000 MTPA which will also be commissioned by Q3 FY
2020
Performance of Basic Chemicals
Business Overview
Meghmani Organics is one of the most efficient manufacturers of Caustic Soda with the Caustic soda capacity of 166,600 MTPA
and Caustic Potash capacity of 21,000 MTPA. The Company has its own integrated captive power plant of 60MW and
expanding it to 96MW. It is strategically located with proximity to the ports (importing coal) and customers (Caustic Soda and
Chlorine supplied via pipeline), leading to lower logistic cost. It uses the latest fourth generation ‘Membrane Cell Technology’
sourced from Asahi Kasei Chemical Corp, Japan, (one of the most established technology providers of Chlor Alkali products).
Since power cost accounts for 60% of total raw material cost in Caustic Soda production, Captive Power Plant provides power at
lower cost resulting in high margins.
The Indian alkali industry is regarded by global peers as among the most efficient, eco-friendly and progressive industries. It is to
the industry’s credit that its constituent units had taken a unified stand to move ahead of other countries in phasing out mercury
and adopting the latest energy-efficient and eco-friendly membrane cell technology for producing caustic soda.
During financial year 2018, caustic soda capacity stood at 3.8 MMTPA (Million Metric Tonne Per Annum) with capacity utilisation
of 84%. Over last 5 years, despite increase in capacity from 3.3 MMTPA to 3.9 MMTPA between FY 2014-2018, industry
continuously operating above 80% and demand remains higher than the production. Caustic soda capacity expected to
increase by 329,450 MTPA (up by 8.5%) and 205,950 MTPA (up by 4.9%) during FY19 and FY20 respectively.
8% Others
9% Chlorinated Solvent
12% Organic & Inorganic
6% Water Treatment
39% Vinyls
14% Synthesis HCI
12% Phosgene
Sector wise Global Chlorine Consumption (FY 2018)
041 IND
MANAGEMENT DISCUSSION AND ANALYSIS
Internal Control System
We operate in a competitive environment and compete with international as well as domestic players on various fronts, such as
quality, technical competence, distribution channels, logistics facilities, after-sales service and customer relationships. New
Capacity additions and dumping of Caustic Soda from neighbouring countries might impact realisations of the Electrochemical
Unit (ECU).
The Company has a proper and adequate system of Internal Controls commensurate with the size and nature of its operations
to ensure that all assets are safeguarded against unauthorised use or disposal, ensuring true and fair reporting and compliance
with all applicable regulatory laws and company policies. Internal Audit Reports are reviewed by the Audit Committee of the
Board.
Risks, Concerns and Threats
The following ratios reflect the consolidated financial performance for the year in relation to the previous year.
Outlook and Strategy
The Company’s strategic investment in three projects are progressing as per plan. CMS project is expected to be operational in
Q1 FY 2020. The basic advantage of CMS plant at Dahej facility is in-house availability of Chlorine, which will help to reduce the
cost of production and improve the profitability. Caustic soda capacity expansion and Hydrogen peroxide projects are expected
to be operational by Q3 FY 2020. Successful operation of all three projects and coupled with continued strong performance by
Caustic Soda, will be the key drivers for profitable growth of the Basic Chemicals.
1,57,313 1,56,165
Fy18 Fy19
5,975 7,104
43%
Fy18 Fy19
Revenue(Rs. Mn.)
EBITDA Margin
44% 1,61,674 1,61,473
86%
Fy18 Fy19
Produc�on(MTs.)
U�liza�on Volume(MTs.)
-
Revenue up by 19%
EBITDA Margin 24% 26%
PAT before Minority Interest 2,379 2,943
Net Sales Growth 27% 16%
Net Sales 18,034 20,880
EBITDA 4,312 5,445
ROCE 24% 29%
D/E ratio 0.35 0.62
Particulars (Rs mn) FY 2018 FY 2019
PBT 3,257 4,086
PAT after Minority Interest 1,713 2,513
Key Ratios
ROE 24% 26%
86%
042
CORPORATE GOVERNANCE
Non Executive & Independent Directors 6 55%
Category No. of Directors %
Executive Directors 5 45%
Total 11 100%
The Board is of the opinion that the current Board Comprises of persons who as a group, have core competencies such
as finance, accounting, legal, business and industry knowledge necessary to lead and manage the Company and given
the scope and the nature of the Company’s operations, the present size of the Board is appropriate for effective decision
making.
The Directors and Management of the Company and its Subsidiaries are committed to maintain high standards of
Corporate Governance in conducting its business and ensure that an effective self regulatory mechanism exists to
protect the interest of our Indian Stakeholders (Investors, Customers, Suppliers and Government) and Singapore
Depository Holders.
1. THE COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE
This report outlines the Company’s corporate governance practices with reference to the principles and guidelines of the
Singapore Code of Corporate Governance 2012 (the “Code”) for the financial year ended on 31st March, 2019 and the
Listing Manual of the Singapore Exchange Securities Trading Limited (the “Listing Manual of the SGX-ST”). The
Company has complied in all material aspects with the principles and guidelines of the Code, and where there were
deviations from the Code, appropriate explanations are provided.
The Board of Directors presents a composite Corporate Governance report on the compliance of the Indian and
Singapore Listing requirements in the following paragraphs.
The Directors present the Company’s Report on Corporate Governance which sets out systems and processes of the
Company, as prescribed in Regulation 17 to 27 of Securities and Exchange Board of India (SEBI) and the requirements
of the Corporate Governance in terms of Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015
(hereinafter referred to as “SEBI Regulations”) for the Financial Year ended on 31st March, 2019.
2. BOARD OF DIRECTORS
(a) BOARD COMPOSITION : SINGAPORE CORPORATE GOVERNANCE CODE PRINCIPLE : 2
The Composition of Board is in compliance with the SEBI Regulations, 2015.
Singapore Exchange: - Guide Line 2.2
The Composition of Board of the Company is also complying with the requirements of Singapore Exchange – Code of
Corporate Governance Guide Line 2.2. The Company has appointed two director’s Viz., Mr. Bhaskar Rao and
Mr. C. S. Liew as Director resident in Singapore to comply with the code.
(b) ATTENDANCE OF DIRECTORS AT BOARD & ANNUAL GENERAL MEETING:-
The Board meetings are normally held at Corporate Office of the Company situated at Meghmani House, B/h Safal
Profitaire, Corporate Road, Prahlad Nagar, Ahmedabad – 380 015.
The Board conducts regular scheduled meetings prescribed under the Companies Act on a quarterly basis. Ad-hoc
meetings will be convened when circumstances require. Details relating to the number of Board and Committee
meetings and the attendance of the Directors are disclosed in this Report.
The Company in consultation with the Directors prepares the annual calendar of meetings and circulates a tentative
Schedule for the meeting of the Board and Committee in order to facilitate the Directors to plan their schedules.
043 IND
CORPORATE GOVERNANCE
Limited other
Companies * Companies**
Name of Director Designation Category Directorship Committee
in other Public Membership of
Mr. Jayantilal Patel Executive Chairman Executive 1 Nil
Mr. Ramesh Patel Executive Director Executive 1 Nil
Mr. Chander Sabharwal Independent Director Non - Executive 1 Nil
Mr. Natwarlal Patel Managing Director Executive 3 Nil
Mr. Balkrishna Thakkar Independent Director Non – Executive 1 1
Mr. Manubhai Patel Independent Director Non - Executive 5 1
Mr. C. S. Liew Independent Director Non - Executive Nil Nil
Ms. Urvashi Shah Independent Director Non - Executive 1 Nil
Mr. Ashish Soparkar Managing Director Executive 1 Nil
Mr. Anand Patel Executive Director Executive Nil Nil
Mr. Bhaskar Rao Independent Director Non - Executive Nil Nil
Mr. Chander Sabharwal Independent Director 3 No
Mr. Natwarlal Patel Managing Director 4 Yes
Mr. Ramesh Patel Executive Director 4 Yes
Mr. Anand Patel Executive Director 4 No
Mr. Jayantilal Patel Executive Chairman 4 Yes
Mr. Ashish Soparkar Managing Director 5 Yes
Name of Director Position Board Meeting attended AGM Attended
Mr. Manubhai Patel Independent Director 5 No
Mr. Balkrishna Thakkar Independent Director 4 Yes
Mr. Bhaskar Rao Independent Director 2 No
Ms. Urvashi Shah Independent Director 3 Yes
Mr. C. S. Liew Independent Director 1 No
(c) DIRECTORSHIPS AND MEMBERSHIP ON COMMITTEES:-
** Committees considered are Audit Committee & Stakeholder’s Relationship Committee.
The total number of Directorships held by the Directors and the position of Membership / Chairmanship of Committees is
given below.
All the Directors are in compliant with the provisions of the Companies Act, 2013 and “SEBI Regulations” in this regard.
The details of attendance of the Directors at the Board Meeting during the year and at Annual General Meeting are given
below:
* Excludes Directorships held in Private Limited Companies, Foreign Companies and Section 8 Companies:
044
CORPORATE GOVERNANCE
Independent Directors play an important role in the governance processes of the Board. They bring with them their
expertise and experience for fruitful discussions and deliberations at the Board. This betters the decision making
process at the Board.
The Group has a director training policy that requires any newly appointed directors with no prior experience as a listed
company’s director to attend relevant directorship courses, such as directorship courses from the Singapore Institute of
Directors within 1 year from date of appointment. The Company would also provide existing directors to attend seminars
and trainings to enable them to keep pace with changes of regulatory and financial reporting standards that have a
material bearing on the Company and its industry. In FY 2018 -19, Mr. C S Liew and Mr. Bhaskar Rao Independent
Directors resident of Singapore attended directorship courses from the Singapore Institute.
The Independent Director is also explained in detail the compliances required under the Companies Act, 2013, SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015, Singapore List Rules and other relevant
regulations including amendments thereof from time to time and their affirmations are taken with respect to the same.
The Independent Directors have confirmed that they meet with the criteria of independence laid down under the Act, the
Code and SEBI Regulations, 2015.
(g) TRAINING OF INDEPENDENT DIRECTOR:-
i. Review the performance of Non-Independent Directors and the Board as a whole;
Newly appointed Director receives appropriate training, if required. In addition, the Board is provided with regular
updates with respect to new laws and regulations in order to adapt to the changing commercial risks relating to the
business and operations of the Group. The Management regularly updates and familiarizes the Directors on the
business activities of the Company during the Board meetings.
iii. Assess the quality, quantity and timeliness of flow of information between the Company management and the Board
that is necessary for the Board to effectively and reasonably perform their duties.
None of the Director of the Company is appointed in more than 10 Committees or is acting as Chairman in more than 5
(Five) Committees across all the Companies in which he is a Director.
The last Annual General Meeting of the Company was held on 27th July, 2018.
(e) LIMIT ON NUMBER OF DIRECTORSHIP:-
None of the Director of the Company is holding Directorship in more than 10 Public Limited Companies. None of an
Independent Directors serve as an Independent Director in more than 7 (Seven) Listed Companies.
During the financial year ended on 31st March, 2019, 5 (five) meetings of the Board of Directors were held and the gap
between two meetings did not exceed One hundred and Twenty (120) days. The Board meetings were held on
26.05.2018, 08.08.2018, 29.10.2018, 11.02.2019 and 08.03.2019.
The Independent Directors have been appointed for a fixed term of 5 (five) years from their respective dates of
appointment with an option to retire from the office at any time during the term of appointment. Their appointment has
been approved by the Members of the Company.
The Independent Directors had met on 10th February, 2019, without the attendance of Non-Independent Directors and
members of management to discuss the followings:-
(f) INDEPENDENT DIRECTOR:-
(h) SEPARATE MEETING OF INDEPENDENT DIRECTOR:-
ii. Review the performance of the Chairperson of the Company, taking into account the views of Executive Directors
and Non-Executive Directors;
(d) NUMBER OF BOARD MEETINGS HELD :-
SINGAPORE EXCHANGE – CODE OF CORPORATE GOVERNANCE GUIDE LINE 1.4
045 IND
CORPORATE GOVERNANCE
independence of judgement exercised by Independent Directors,
(4) set the Company’s values and standards (including ethical standards), and ensure that obligations to shareholders
and other stakeholders are understood and met;
The role and function of each committee is described in subsequent sections in this report. While these committees are
delegated with certain responsibilities, the ultimate responsibility for the final decision lies with the entire Board.
Pursuant to the provisions of the Act and the SEBI Regulations, the Board has carried out the Annual performance
evaluation of its own performance, as well as the evaluation of the working of its Committees.
A separate exercise was carried out to evaluate the performance of individual Directors. The Chairman of the Board of
Directors and the Chairman of Nomination and Remuneration Committee met all the Directors individually to get an
overview of the functioning of the Board and its constituents inter alia on the following broad criteria :-
A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering
various aspects of the Board functioning such as adequacy of the composition of the Board and its Committees, Board
Culture, execution and performance of specific duties, obligations and governance.
(j) PERFORMANCE EVALUATION OF THE BOARD & INDIVIDUAL DIRECTORS:- PRINCIPLE 5
(5) Consider sustainability issues, e.g. environmental, governance and social factors, as part of its strategic
formulations
attendance and level of participation,
To assist the Board in the execution of its responsibilities, the Board has constituted various Board committees, namely
the Audit Committee, Remuneration Committee, Nominating Committee and the Executive Committee.
(I) ISSUANCE OF LETTER OF APPOINTMENT:-
(k) BOARD’S ROLE:- SINGAPORE EXCHANGE CORPORATE GOVERNANCE -PRINCIPLE 1
A formal letter of appointment was issued to all Independent Directors.
Interpersonal relationship etc.
All newly appointed directors would be provided an induction program on his duties as a director and how to discharge
those duties. Briefings would also be provided by management on the Group’s history, business operations and
corporate governance practices.
Based on the valuable inputs received from the Directors, an action plan has been drawn up to encourage greater
engagement of the Independent Directors with the Company. Following the evaluation exercise, the Board is of the view
that the Board and its Committees operate effectively.
(1) provide entrepreneurial leadership, set strategic objectives, and ensure that the necessary financial and human
resources are in place for the Company to meet its objectives;
(2) establish a framework of prudent and effective controls which enables risks to be assessed and managed, including
safeguarding of shareholders’ interests and the Company’s assets;
The Board’s role is to:
(3) identify the key stakeholder groups and recognize that their perceptions affect the Company’s reputation;
(6) review and approve the recommended remuneration framework and packages for the Board and key management
personnel;
(7) review the performance of the Board, set the criteria for selection of directors and to nominate directors for
shareholders’ approval; and
(8) ensure communication with shareholders are accurate, adequate and timely.
All Board Committees are constituted with clear Terms of Reference to assist the Board in discharging its functions and
responsibilities.
046
CORPORATE GOVERNANCE
(l) CHAIRMAN AND CHIEF EXECUTIVE OFFICER/MANAGING DIRECTOR - SINGAPORE CORPORATE
GOVERNANCE PRINCIPLE -3
Of the view that accountability and independence have not been compromised despite the Chairman and Managing
Director not being the same person. The Chairman and Managing Director have defined responsibilities which, during
his tenure so far, have not conflicted with each other. Major business proposals are discussed at Board meetings before
decisions are made. The Board believes there is sufficient element of independence and adequate safeguards against a
concentration of power in one single person.
The Chairman is responsible to, among others:–
(g) facilitate the effective contribution of non-executive directors in particular; and
• Quarterly Results and its Operating Divisions or Business Segments.
(f) encourage constructive relations within the Board and between the Board and management;
The followings are generally tabled for information, review and approval of the Board.
• Minutes of meetings of Audit Committee and Other Committees of the Board of Directors.
• Sale of investments, subsidiaries, assets which are material in nature and not in normal course of business.
(e) ensure effective communication with shareholders;
(d) ensure that the directors receive complete, adequate and timely information;
(a) lead the Board to ensure its effectiveness on all aspects of its role;
• The information on recruitment and remuneration of Senior Officers just below the level of Board of Directors,
including Appointment or Removal of Chief Financial Officer and the Company Secretary.
SINGAPORE EXCHANGE – CODE OF CORPORATE GOVERNANCE GUIDE LINE 1.5
• Show cause, Demand, Prosecution Notices and Penalty Notices, which are materially important.
• Annual Operating Plans & Budgets.
Agenda and Notes on Agenda are circulated to the Directors in advance, in the defined Agenda format. All material
information is incorporated in the Agenda papers for facilitating meaningful discussion. Where it is not practicable the
same is tabled before the meeting.
(b) set the agenda and ensure that adequate time is available for discussion of all agenda items, in particular strategic
issues;
• Fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems.
• Significant labour problems and their proposed solutions.
(h) promote high standards of corporate governance.
(c) promote a culture of openness and debate at the Board;
• Details of any Joint Venture or Collaboration Agreement.
• Any issue, which involves possible public or product liability claims of substantial nature, including any judgement or
order which, may have passed strictures on the conduct of the listed entity or taken an adverse view regarding
another enterprise that may have negative implications on the entity.
(9) AGENDA FOR BOARD MEETING:-
• Transactions that involve substantial payment towards goodwill, brand equity, or intellectual property.
• Quarterly details of foreign exchange exposures and the steps taken by management to limit the risks of adverse
exchange rate movement, if material.
• Non-compliance of any regulatory, statutory or listing requirements and shareholders service such as non-payment
of dividend, delay in share transfer etc.
047 IND
CORPORATE GOVERNANCE
The Company has an effective post meeting follow-up, review and reporting process mechanism for the decisions taken
by the Board/Committees. Important decisions taken at the Board/Committee meetings are communicated to the
concerned Functional Heads promptly. Action Taken Report on previous meeting(s) is placed at the immediately
succeeding meeting of the Board/Committee for noting by the Board/Committee members.
(p) SGX - GUIDELINE 6.1 OF THE CODE- ACCESS TO INFORMATION
Mr. Jayantilal Patel, Mr. Natwarlal Patel and Mr. Ramesh Patel are related as brothers. No other Directors are related to
each other. Mr. Anand Patel is the cousin of Mr. Jayantilal Patel, Mr. Natwarlal Patel and Mr. Ramesh Patel.
As per Secretarial Standard 1 (SS-1) issued by The Institute of Company Secretaries of India (ICSI), the Company
Secretary records the minutes of the proceedings of each Board and Committee meeting. The Draft minutes are
circulated to the members for their comments.
While preparing the Agenda adequate care is taken to ensure adherence to all applicable laws and regulations including
the Companies Act, 2013 read with the Rules made there under, Secretarial standard issued by ICSI. The Board
periodically reviews all statutory compliance reports of all laws applicable to the Company.
There should be a clear division of responsibilities between the leadership of the Board and the Executives responsible
for managing the Company’s business. No one individual should represent a considerable concentration of power.
(m) POST MEETING FOLLOW-UP MECHANISM:-
(n) RECORDING MINUTES OF PROCEEDINGS AT BOARD AND COMMITTEE MEETINGS:-
The Directors have separate and independent access to the Company’s management and the Company Secretary at all
times. Directors are entitled to request from management and should be provided with such information as needed to
make informed decisions in a timely manner. The Board is informed of all material events and transactions as and when
they occurred. Should the Directors, whether individually or collectively, require independent professional advice; such
professionals (who will be selected with the approval of the Chairman of the respective Committees requiring such
advice) will be appointed at the expenses of the Company.
The Company Secretary attends all the Board and Board Committee meetings and attends to the Corporate Secretarial
Administration matters, ensuring that the Board procedures are followed and that applicable rules and regulations are
complied with.
(o) COMPLIANCE REPORT:-
(q) RELATIONSHIP BETWEEN DIRECTORS:-
(r) CHAIRMAN AND GROUP CEO- SINGAPORE CORPORATE GOVERNANCE PRINCIPLE 3:
Mr. Jayantilal Patel - Executive Chairman, leads the Board to ensure effectiveness of all aspects of its role. The
Chairman sets the meeting agenda and ensures that the Directors are provided with complete, adequate and timely
information. The Chairman ensures that discussions and deliberations are effective and promote a culture of openness
and debate at Board meetings. The Chairman encourages constructive relations within the Board and between the
Board and Management. The Chairman also facilitates the effective contribution of the Non-Executive Directors and
promotes high standards of Corporate Governance.
Mr. Ankit Patel - CEO, is responsible for the day-to-day management affairs. He also executes the strategic plans set by
the Board and ensures that the Directors are regularly kept updated and informed of the Group’s business. The members
of the RC and NC are independent directors. Therefore, the Board believes that there are adequate safeguards for
checks which ensure a balance of power and authority such that no one individual represents a considerable
concentration of power.
There is a clear separation of the roles and responsibilities of the Chairman and the CEO to ensure a balance of power
and authority, increased accountability and greater capacity of the Board for independent decision-making.
• The Board works with management to achieve this objective and the management remains accountable to the
Board.
048
CORPORATE GOVERNANCE
(s) NUMBER OF SHARES HELD BY NON-EXECUTIVE DIRECTORS:-
Particulars of Equity Shareholding of Independent Directors: - 31.03.2019:
Mr. Balkrishna Thakkar Nil
Mr. Bhaskar Rao Nil
Mr. C. S. Liew Nil
Ms. Urvashi Shah Nil
Mr. Chander Sabharwal Nil
Name of Independent Director No. of Equity Shares of Rs. 1/- each
Mr. Manubhai Patel Nil
The terms of reference of the Audit Committee are as set out in Part C of Schedule II of SEBI (LODR) 2015 read with
Section 177 of the Companies Act 2013. The Audit Committee reviews the Financial Statements of all Subsidiaries of the
Company and also performs the following functions:
(1) Audit Committee.
(3) Remuneration Committee.
The terms of reference of the Committees are determined by the Board from time to time. The respective Chairman of the
Committees, also informs the Board about the summary of discussions held in the Committee Meetings. The Minutes of
the Committee Meetings are tabled at the respective Committee Meetings. The role and composition of these
Committees, including the number of meetings held during the financial year and the related attendance, are provided
below.
• to review the scope of internal audit procedures;
3.1 AUDIT COMMITTEE - TERMS OF REFERENCE :-
• to discuss nature and scope of audit before audit commences with statutory auditors;
• to nominate Statutory Auditors for re-appointment;
(4) Shareholders/ Investors Grievances Share Allotment, Share Transfer & Stake Holders Relationship Committee.
(5) Corporate Social Responsibility Committee.
• to review the financial statements of the Company before their submission to the Board;
The Risk Management Committee is not applicable to the Company. It is applicable to top 100 listed entities on the basis
of market Capitalisation as on 31.03.2018.
SINGAPORE EXCHANGE – CODE OF CORPORATE GOVERNANCE GUIDE LINE 11.8
• to review with management the quarterly financial statements of the Company before their submission to the Board;
The Audit Committee acts as a link between the Statutory Auditors, Internal Auditors and the Board. The Committee is
governed by regulatory requirements mandated by Section 177 of the Companies Act, 2013 (Act) and Regulation 18 of
SEBI (LODR) 2015. The Committee has full access to financial information.
(2) Nomination Committee.
• to review co-operation given by the Company’s officers to the Statutory Auditors and Internal Auditors during the
process of audit;
The Board has constituted the following five Committees:–
• to recommend appointment, remuneration and terms of appointment of auditors of the Company;
3. COMMITTEES OF THE BOARD OF DIRECTORS
• to review the audit plan and Company’s statutory auditors report;
049 IND
CORPORATE GOVERNANCE
• to ascertain valuation of undertakings or assets, wherever it is necessary;
• to grant omnibus approval for Related Party Transactions which are in the ordinary course of business and on an
arm’s length pricing basis and to review and approve such transactions.
3.2 COMPOSITION OF AUDIT COMMITTEE:-
3.3 MEETING AND ATTENDANCE :-
SINGAPORE EXCHANGE CODE OF CORPORATE GOVERNANCE GUIDE LINE 11.8
• to evaluate internal financial controls and risk management systems
• to approve or any subsequent modification of transactions with related parties;
• to review with management, performance of Statutory and Internal Auditors and adequacy of the internal control
system;
• to scrutinize inter-corporate loans and investments;
• to discuss with internal auditors of any significant findings and follow up action thereon.
• to review the functioning of the whistle blower mechanism;
• to approve appointment of Chief Financial Officer after assessing the qualifications, experience and background,
etc. of the candidate;
• to carry out any other function as mentioned in the terms of reference of the audit committee.
The Audit Committee comprises of three Independent Non Executive Directors. Mr. Manubhai Patel is the Chairman of
the Committee. All members of the Audit Committee are financially literate and having in expertise in the fields of
Finance, Taxation, Economics, Risk and International Finance. Mr. K. D. Mehta, Company Secretary, acts as the
Secretary of the Audit Committee
The Committee met four times during the year on 26.05.2018, 08.08.2018, 29.10.2018 and 11.02.2019.
Mr. Manubhai Patel Chairman - FCA - Institute of Chartered 4
Name of the Director Category of directorship Qualification No. of meetings attended
Independent Director Accountant of India (ICAI)
Mr. Chander Sabharwal Member - BA Honors (Economics) 3
Mr. Balkrishna Thakkar Member - FCA - Institute of Chartered 4
Independent Director
Independent Director Accountant of India (ICAI)
In addition to the above, the Committee meetings are also attended by Chief Executive Officers (CEO), Chief Financial
Officer (CFO), Statutory Auditors and Internal Auditors as permanent invitees to Audit Committee.
AC has reviewed and satisfied that the Company’s internal audit function is adequately resourced and has appropriate
standing within the Company. AC has also reviewed:-
(1) Management Discussion and Analysis of financial condition and results of operation:
3.4 REVIEW OF INFORMATION BY AUDIT COMMITTEE (AC):-
(2) Statement of significant Related Party Transactions submitted by management:
(3) Internal Audit Reports relating to internal control weaknesses:
The Company has outsourced the Internal Audit function to a professional firm M/s C N K Khandwala & Associates,
Chartered Accountants, Ahmedabad, Gujarat. The Internal Auditor reports directly to the Chairman of the Audit
Committee (“AC”) on internal audit matters.
3.5 INTERNAL AUDIT FUNCTION:-
050
CORPORATE GOVERNANCE
3.6 SGX LISTING RULE 1207(6):- NON AUDIT SERVICES
The Audit Committee has reviewed and confirmed that all non-audit services provided by the auditors have not affected
the independence of the auditors.
3.7 SGX LISTING RULE 1207 (10) :- (GUIDELINE 11.3 OF THE CODE).
Based on reports submitted by the external and internal auditors, the system of internal controls, including financial,
operational, compliance and information technology controls and risk management systems maintained by the
management that was in place throughout the financial year and up to date of this report, the Board, with the concurrence
of the Audit Committee and assurance of the management (including Chief Executive Officer and Chief Financial Officer)
as well as the Internal Auditors, are of the opinion that
(a) the financial records have been properly maintained and financial statements give a true and fair view of the
Company’s operations and finances and
(b) the Group’s system of internal controls, including financial, operational, compliance and information technology
controls, and risk management systems are adequate and effective as at the date of this report.
To ensure the adequacy of the internal audit function, the Audit Committee reviews and approves, on an annual basis,
the internal audit plans and the resources required to adequately performing this function.
However, the Board and management acknowledge that no system can provide absolute assurance against the
occurrence of material errors, poor judgement in decision- making, human errors, losses, fraud or other irregularities.
3.8 ASSURANCE FROM CEO AND CFO:-
The Board has received assurance from Chief Executive Officer (CEO) and Chief Financial Officer (CFO) to ensure that
the financial records have been properly maintained and the financial statements give a true and fair view of the
Company’s operations and finances; and the effectiveness of the Company’s risk management and internal control
systems are operating effectively in all material respects, based on the criteria for effective internal control established.
4. NOMINATION COMMITTEE (NC)-TERMS OF REFERENCE :-
(a) Make recommendations to the Board on the appointment of new Executive and Non-Executive Directors, Key
Managerial Personnel and other employees;
(h) Recommend to the Board internal guidelines to address the competing time commitments faced by directors who
serve on multiple boards;
(i) Assess the effectiveness of the Board as a whole and for assessing the contribution of each individual Director to
the effectiveness of the Board on an annual basis.
SINGAPORE EXCHANGE CODE OF CORPORATE GOVERNANCE GUIDE LINE 4.1
(g) Decide whether or not a Director is able to and has been adequately carrying out his duties as a Director of the
Company, particularly when he has multiple board representations;
(c) Assess nominees or candidates for appointment or election to the Board, determining whether or not such nominee
has the requisite qualifications and whether or not he/she is independent;
The Nomination Committee (NC) aims at establishing a formal and transparent process for the appointment/re-
appointment of Directors. The Nomination Committee is responsible to:
(e) Make recommendations to the Board for the continuation in services of any Executive Director who has reached
the age of 70 (Seventy) years;
(b) Review the Board structure, size and composition, having regard to the principles of the Code;
(f) Recommend Directors who are retiring by rotation to be put forward for re-election;
(d) Put in place plans for succession, in particular, for the Chairman of the Board and Chief Executive Officer of the
Group;
051 IND
CORPORATE GOVERNANCE
(2) Active participation in the proceedings and decision making process of the Board and Committee Meetings;
The Nomination Committee comprises of three Independent – Non Executive Directors. Mr. B T Thakkar is the Chairman
of the Committee. Mr. K. D. Mehta, Company Secretary acts as the Secretary of the Committee.
(k) Formulation of the criteria for determining qualifications, positive attributes and independence of a director; for
evaluation of performance of Independent Directors and the Board of Directors;
NC had performed a rigorous review to assess the independence of Mr. Balkrishna Thakkar - Independent Director
and considers that he is independent even though he has served on the Board beyond 10 years. The relevant factors
that were taken into consideration in determining the independence are:-
(5) Providing overall guidance to Management and act as safeguard for the protection of Company’s assets and
shareholders’ interests.
Determine, on an annual basis, whether a Director is independent taking into account the circumstances set forth in
Singapore Exchange Corporate Governance Code Guideline 2.1 and any other salient factors.
(1) Very rich experience and wealth of knowledge.
4.1 SGX CORPORATE GOVERNANCE CODE - GUIDELINE 2.1 :-
(j) Devising a policy on Board diversity;
GUIDELINE 5.1 :-
The search and nomination process for new Directors are through personal contacts and recommendations of the
Director. NC will review and assess candidates before making recommendation to the Board. NC will also take the lead in
identifying, evaluating and selecting suitable candidate for new Directorship. In its search and selection process, NC
considers factors such as commitment and the ability of the prospective candidate to contribute to discussions,
deliberations and activities of the Board and Board Committees.
4.2 SGX CORPORATE GOVERNANCE CODE 2.4
(3) Deep insight into the Business of the Company and possesses experience and knowledge of the business;
(4) Qualification and expertise which provides reasonable checks and balances for the Management;
(6) NC has adopted a formal system of evaluating Board performance as a whole and the contribution of each
individual Director. An evaluation of Board performance is conducted annually to identify areas of improvement and
as a form of good Board management practice.
Each member of NC shall abstain from voting any resolutions in respect of the assessment of his performance or re-
nomination as Director.
The results of the evaluation exercise were considered by NC which then makes recommendations to the Board aimed
at helping the Board to discharge its duties more effectively.
4.3 COMPOSITION OF NOMINATION COMMITTEE:-
4.4 MEETINGS AND ATTENDANCE DURING THE YEAR:-
The Committee met on 26.05.2018. The particulars of meeting attended by members of the Committee are given below:
Ms. Urvashi Shah Member – Independent Director 0
Mr. M K Patel Member – Independent Director 1
Name of the Director Status No. of Meetings held
Mr. Balkrishan Thakkar Chairman - Independent Director 1
052
CORPORATE GOVERNANCE
(d) Reviewing and enhancing on the compensation structure to incentive performance base for key executives;
(f) To facilitate the transparency, accountability and reasonableness of the remuneration of Director and Senior
Management Personnel.
Each member of the Remuneration Committee shall abstain from voting any resolutions in respect of his remuneration
package.
The Committee met on 26.05.2018 particulars of meeting attended by members of the Committee are given below:
5. REMUNERATION COMMITTEE – (RC) -TERMS OF REFERENCE :-
(b) Review the service contracts of the Executive Directors;
(c) Carry out its duties in the manner that it deems expedient, subject always to any regulations or restrictions that may
be imposed upon the RC by the Board of Directors from time to time;
(g) Remuneration Committee will recommend to the Board a framework of remuneration for the Directors,
(a) Recommend to the Board a framework of remuneration and specific remuneration packages for all Directors of the
Company, Key Managerial Personnel (KMP) and other Senior Management Personnel;
(e) Ensure that the remuneration packages are comparable within the industry and comparable Companies and
include a performance-related element coupled with appropriate and meaningful measures of assessing individual
executive Director’s performance.
(h) All aspects of remuneration, including but not limited to directors’ fees, salaries, allowances, bonuses, options and
benefits-in-kind shall be covered by the Remuneration Committee.
5.1 COMPOSITION OF COMMITTEE:- SINGAPORE CORPORATE GOVERNANCE PRINCIPLE - 7
The Remuneration Committee comprises of three Independent Non Executive Directors. Mr. Balkrishna Thakkar is the
Chairman of the Committee. Mr. K. D. Mehta, Company Secretary, acts as the Secretary of the Committee.
5.2 MEETINGS AND ATTENDANCE DURING THE YEAR:-
5.4 PAYMENT TO EXECUTIVE DIRECTORS:-
5.5 NON EXECUTIVE DIRECTORS’ COMPENSATION & DISCLOSURES:-
The Non-Executive Directors were not paid any Compensation except sitting fees. The Board has fixed the sitting fees
payable to Non-Executive Directors within the limits prescribed under the Companies Act, 2013 (hereinafter referred to
as Act). Therefore, requirement of obtaining prior approval of shareholders in General Meeting was not required.
REMUMERATION TO ALL THE DIRECTORS
The Remuneration committee at it’s meeting held on 01.04.2019 approved the reappointment and terms of
remuneration payable to working directors for period of 5 years from 01 April, 2019.
5.3 PECUNIARY RELATIONSHIP OR TRANSACTION:-
There is no other pecuniary relationship or transaction by the Company with Non-Executive Directors.
The members at the Annual General Meeting held on 28th July, 2014 has approved the re-appointment and terms of
remuneration payable to Mr. Jayantilal Patel Executive Chairman, Mr. Ashish Soparkar and Mr. Natwarlal Patel
Managing Directors, Mr. Ramesh Patel and Mr. Anand Patel – Executive Directors (Collectively referred as a working
Director) for period of 5 years from 01 April, 2014, which has expired on 1st April, 2019.
The Company pays remuneration to its Executive Chairman, Managing Directors and Executive Directors by way of
Salary, Perquisites and Performance Bonus.
Name of the Director Status No. of Meetings held
Mr. M K Patel Member – Independent Director 1
Mr. Balkrishna Thakkar Chairman – Independent Director 1
Ms. Urvashi Shah Member – Independent Director 0
053 IND
CORPORATE GOVERNANCE
In FY 2018-19, the Company has paid remuneration of Rs. 5,00,000/- per month (Rs. 60,00,000/- per annum) and
perquisites to Mr. Jayanti Patel, Mr. Ashish Soparkar and Mr. Natwarlal Patel, Mr. Ramesh Patel and Mr. Anand Patel.
The remuneration paid is within the overall limits approved by the Shareholders.
During the year, over and above salary, the Company has paid Performance Bonus to Mr. Jayanti Patel, Mr. Ashish
Soparkar, Mr. Natwarlal Patel, Mr. Ramesh Patel and Mr. Anand Patel for the financial year FY 2017-18.
The Company does not have any Employee Share Option Scheme or Employee Stock Option or any long-term incentive
scheme in place.
5.6 SITTING FEES PAID TO INDEPENDENT DIRECTORS DURING FY 2018-19:-
Total 900000
Name of Independent Director Sitting Fees (Rs.)
Mr. Chander Sabharwal 150000
Ms. Urvashi Shah 100000
Mr. Balkrishna Thakkar 350000
Mr. Manubhai Patel 300000
Mr. Ashish Soparkar 21778692
Mr. Natwarlal Patel 21767240
Name of Director Salary, Perquisites & Performance Bonus (Rs.)
Mr. Jayantilal Patel 21788038
Mr. Anand Patel 12737204
Mr. Ramesh Patel 15774859
Total 93846033
The Details of remuneration paid to the Directors are also given in Form MGT–9 (Annual Return) as a part of Directors’
report.
Remuneration paid during the FY 2018-19 to Working Directors are:-
5.7 SGX CORPORATE GOVERNANCE CODE - GUIDELINE 8.4
Currently, the Company does not have any contractual provisions to allow the Company to reclaim incentive from
Executive Directors and Key Management Personnel in exceptional cases of wrongdoings.
The Company is providing minimum remuneration to its Executive Directors in compliance with Section II of Part II of
Schedule V of the Indian Companies, Act, 2013.
Remuneration Bands of more than $ 250,000
5.8 SGX CORPORATE GOVERNANCE CODE - GUIDELINE 9.3
Name of Director Directors Salary Performance Other Total
Mr. Natwarlal Patel Nil 28% 69% 3% 100%
Fees Bonus benefits
Mr. Jayantilal Patel Nil 28% 69% 3% 100%
Mr. Ramesh Patel Nil 38% 53% 7% 100%
Mr. Ashish Soparkar Nil 28% 69% 3% 100%
Mr. Anand Patel Nil 47% 47% 6% 100%
054
CORPORATE GOVERNANCE
The Details of the name and aggregate remuneration paid to Key Managerial Personnel (who are not Directors or the
CEO) during the Financial Year ended 31 March 2019 is S$ 1,15,552 (Rs. 47.71 = S$1)
5.9 SGX CORPORATE GOVERNANCE CODE - GUIDELINE 9.3
Remuneration Bands of Less than S$ 250,000 – Key Managerial Personnel
Name Designation Salary Allowances Other Benefits Total
GOPAL ICHHANATH BHATT VICE 45% 30% 25% 100%
PRESIDENT-
SOURCING
VASANT G PATEL VICE 45% 30% 25% 100% PRESIDENT (OPERATION)
GURJANT SINGH CHAHAL CHIEF 45% 30% 25% 100% FINANCIAL
STRATEGIC
RAMANLAL TRIVEDI MANAGER
AMISH JAYESHKUMAR HEAD- 45% 30% 25% 100%
(AGRO MKTG)
TRIVEDI CORP.
OFFICER
JAYESHKUMAR GENERAL 45% 30% 25% 100%
AFFAIRS
iv. Issue of duplicate / split / consolidated share certificates;
6 SHAREHOLDERS’/INVESTORS’ GRIEVANCES, SHARE ALLOTMENT, SHARE TRANSFER AND STAKE HOLDER
RELATIONSHIP COMMITTEE
No employee of immediate family members of a Director or CEO has drawn remuneration exceeding S$ 50,000 during
financial year 2018-19.
6.1 TERMS OF REFERENCE:-
ii. Efficient transfer of shares; including review of cases for refusal of transfer / transmission of shares and debentures;
iii. Redressal of shareholder and investor complaints like transfer of shares, non-receipt of balance sheet, non-receipt
of dividends etc;
5.10 CORPORATE GOVERNANCE GUIDELINE 9.4 – CODE OF - SINGAPORE STOCK EXCHANGE-
i. To allot equity shares of the Company,
v. Allotment and listing of shares;
vi. Review of cases for refusal of transfer / transmission of shares and debentures;
vii. Reference to statutory and regulatory authorities regarding investor grievances;
viii. And to otherwise ensure proper and timely attendance and redressal of investor queries and grievances.
055 IND
CORPORATE GOVERNANCE
6.3 MEETINGS AND ATTENDANCE DURING THE YEAR:-
6.2 COMPOSITION OF SGS COMMITTEE:-
The Shareholders’ / Investors’ Grievances, Share Allotment Share Transfer and Stake Holder Relationship Committee
were held on 26.05.2018, 08.08.2018, 29.10.2018 and 11.02.2019.
The Shareholders’/Investors’ Grievances, Share Allotment, Share Transfer and Stake holder Relationship Committee
comprises of two Independent Non-Executive Directors and one Executive Director. Mr. Balkrishna Thakkar is the
Chairman of the Committee. Mr. K. D. Mehta Company Secretary acts as Secretary & Compliance officer of the
Committee.
The Company has always been mindful of its obligations vis-à-vis the communities it impacts and has been pursuing
various CSR activities long before it became mandated by law.
2) To provide guidance on various CSR activities to be undertaken by the Company and to monitor its progress.
7 CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE
The terms of reference of CSR broadly comprises:
The Compositions of the CSR Committee as on 31st March, 2019 are as under:
1) To review the existing CSR Policy and to make it more comprehensive so as to indicate the activities to be
undertaken by the Company as specified in Schedule VII of the Act;
During the year the Company has spent Rs. 245.88 Lakhs towards CSR activities.
Mr. Manubhai Patel Member - Independent Director 3
Name of the Director Status No. of Meetings
Mr. Balkrishna Thakkar Chairman - Independent Director 4
Mr. Ashish Soparkar Member – Executive Director 4
Name of Member Category
Mr. Balkrishna Thakkar Non-Executive/ Independent
Mr. Jayantilal Patel Executive / Non-independent
Mr. Natwarlal Patel Executive / Non-independent
Mr. Ashish Soparkar Executive / Non-independent
6.4 DETAILS OF SHAREHOLDERS’ COMPLAINTS :-
Detail of Complaints received Nos.
Number of Complaints received from Shareholders’ 01.04.2018 to 31.03.2019 0
Number of Pending Complaints on 31.03.2019 0
Number of Complaints not solved to the satisfaction of shareholder 0
056
CORPORATE GOVERNANCE
8 GENERAL BODY MEETINGS :-
The details of date, time and location of Annual General Meetings (AGM) held in last 3 years and Special resolutions
passed are as under :-
9.2 VIGIL MECHANISM / WHISTLE BLOWER POLICY:-
9 OTHER DISCLOSURES :-
9.1 DISCLOSURE OF MATERIAL TRANSACTIONS:- RELATED PARTY TRANSACTION :-
All transactions entered into with Related Parties as defined under the Companies Act, 2013 and SEBI (Listing
Obligations & Disclosure Requirement) Regulation, 2015 during the financial year were in the ordinary course of
business and on an arm’s length pricing basis and do not attract the provisions of Section 188 of the Companies Act,
2013.
No Special resolution was passed last year through Postal Ballot. At present the Company has not proposed any special
resolution through postal ballot.
9.3 ACCOUNTING TREATMENT:-
The Company has a Whistle Blower Policy to deal with instance of unethical behaviour, actual or suspected fraud or
violation of the Company’s code of conduct, if any. The Whistle Blower Policy is posted on the website of the Company.
There were no materially significant transactions with related parties during the financial year which were in conflict with
the interest of the Company. Suitable Disclosure as required by the Accounting Standards (AS18) has been made in the
notes to the Financial Statements in this Annual Report. The Policy on Related Party Transaction has been placed on the
Company’s website.
In the preparation of the financial statements, the Company has followed the Accounting Standards notified pursuant to
Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provision of the Companies Act, 2013
read with General Circular 8/2014 dated April 04, 2014, issued by the Ministry of Corporate Affairs. The significant
accounting policies which are consistently applied have been set out in the Notes to the Financial Statements.
Year Date & Time
2017-18 Annual General J B Auditorium Ahmedabad 1. Appointment of Mr. Manubhai Patel
Financial Category - Venue Special – Resolutions passed
2015-16 Annual General HT Parekh Convention Centre, Torrent 1. To Authorize Directors to Convert Meeting AMA Centre Ahmedabad Management Financial assistance into Fully Paid 26 July, 2016 Association, Dr. Vikram Sarabhai up Equity Shares of the Company Marg, Vastrapur, Ahmedabad
2016-17 Annual General HT Parekh Convention Centre, Torrent 1. Reclassification of Promoter Meeting AMA Centre Ahmedabad Management and Promoter Group 27 July, 2017 Association, Dr. Vikram Sarabhai at 10.00 a.m. Marg, Vastrapur, Ahmedabad
27 July, 2018 Sarabhai Marg, Vastrapur, Ahmedabad. 2. Appointment of Mr. Bhaskar Rao
3. Appointment of Mr. C S Liew as Independent Director.
transactions. 4. Authority for Related Party
at 10.00 a.m. as Independent Director.
Meeting Management Association, Dr. Vikram as Independent Director.
057 IND
CORPORATE GOVERNANCE
The Company has obtained a certificate from the Practicing Company Secretary regarding compliance of conditions of
Corporate Governance prescribed under the Listing agreement with Stock Exchanges which forms part of this report.
The Audited Annual Financial Statements of Subsidiary Companies are tabled at the Audit Committee and Board
Meetings. The copies of the Minutes of the Audit Committee / Board Meetings of Subsidiary Companies are tabled at the
subsequent Board Meetings. The Companies policy on ‘Material Subsidiary” is placed on the Company’s website.
The Subsidiaries of the Company are managed by experienced Board of Directors.
This Chapter read with the information given in the section titled General Shareholders’ information constitutes the
compliance report on Corporate Governance.
9.8 MANAGEMENT DISCUSSION AND ANALYSIS REPORT:-
This is given as the Separate chapter in the Annual Report which forms part of this report.
9.9 INSIDER TRADING :-
9.10 DISCLOSURES REGARDING RE-APPOINTMENT OF DIRECTORS
9.7 CODE OF CONDUCT :-
9.4 CORPORATE GOVERNANCE OF SUBSIDIARIES :-
As per the Articles of Association of the Company, one third of the Directors are liable to retire by rotation every year and if
eligible, they offer themselves for re-election by the shareholders at the General Meeting. All the Working Directors
retiring by rotation will be reappointed at this Annual General Meeting.
9.6 SHAREHOLDER’S INFORMATION:-
The Company has also announced closure of trading window to Stock Exchanges as per Securities and Exchange
Board of India (Prohibition of Insider Trading) Regulations, 2015 to the Indian Stock Exchanges time to time.
Pursuant to provision of Section 124(6) of Companies Act, 2013 read with Investor Education and Protection Fund
Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, Company has transferred 102874 Equity Shares to
IEPF Suspense account, who has not claimed dividend for seven consecutive years.
All the Directors and Senior Management Personnel have affirmed compliance with the Corporate Code laid down by the
Board of Directors of the Company.
Meghmani Finechem Limited (MFL) is the material subsidiary of the Company and needs to have on its Board two
Directors of Meghmani Organics Limited (MOL) who are independent. Mr. Balkrishna Thakkar and Mr. Manubhai Patel,
Independent Directors of MOL are appointed on the Board of MFL.
9.5 CERTIFICATE ON CORPORATE GOVERNANCE:-
The Executive Chairman, the Managing Directors and Company Secretary have made the necessary certification to the
Board of Directors of the Company.
9.11 TRANSFER OF SHARES TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF) :-
The Company has adopted a code of conduct for its Directors and designated Senior Management Personnel. All the
Board Members and Senior Management Personnel have agreed to follow compliance of code of conduct. The code has
been posted on the Company’s website.
There is no Alternate Director being appointed to the Board.
058
CORPORATE GOVERNANCE
9.12 IMMEDIATE FAMILY MEMBER OF DIRECTOR:-
The appointment and removal of the Company Secretary is subject to the approval of the Board.
9.14 REMINDERS TO UNPAID DIVIDEND:-
Reminders for Unpaid dividend are sent to the shareholders (as per records) every year.
9.15 OUTSTANDING SINGAPORE DEPOSITORY RECEIPT SHARES:-
9.13 APPOINTMENT & REMOVAL OF COMPANY SECRETARY:-
In accordance with terms and conditions of Depository agreement, each holder of SDSs is entitled to present SDSs for
cancellation and then receive the corresponding number of underlying shares at Custodian office, subject to all
regulatory approvals. This mechanism is under Operative guidelines for the limited two way fungibility under the "issue of
Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993".
25,784,380 SDSs each of Rs. 0.50 paise representing 12,892,190 Equity Shares of Rs. 1/-each is outstanding as on
31st March, 2019. The conversion of SDSs in to Equity shares will not have any impact on paid up capital or cash position
of the Company.
Mr. Maulik Patel, Ms. Deval Soparkar & Mr. Kaushal Soparkar, Mr. Ankit Patel, Mr. Karana Patel and Mr. Darshan Patel
are immediate family members of Mr. Jayanti Patel, Mr. Ashish Soparkar, Mr. Natwarlal Patel, Mr. Ramesh Patel and Mr.
Anand Patel Directors of the Company respectively.
9.16 PARTICULARS OF INTERESTED PERSON TRANSACTIONS UNDER RULE 920 OF SINGAPORE LISTING
MANUAL FOR THE YEAR ENDED 31ST MARCH, 2019 ARE AS UNDER:
Amount in Amount in Amount in Amount in
Ashish Chemicals (EOU) 29470500 572 - -
Total 289437976 5622 - -
Pancharatna Corporation 16142400 314 - -
approximately Rs. 5,148,000) and transactions less than
Name of Interested Person Aggregate value of all interested Aggregate value of all interested
shareholders’ mandate pursuant approximately Rs. 5,148,000)
Meghmani Industries Ltd 10465200 203 - -
financial year under review under shareholders’ mandate person transactions during the person transactions conducted
S$100,000 (equivalent to Listing Manual) (excluding (excluding transactions less than pursuant to Rule 920 of the
Rs. S$,000 Rs. S$,000
to Rule 920 of the Listing Manual)
Meghmani Dyes & Intermediates LLP 6324800 123 - -
transactions conducted under S$100,000 (equivalent to
Meghmani Pigments 157775536 3065 - -
Meghmani LLP 69259540 1345 - -
9.17 NO SUSPENSION OF SECURITIES :-
The Company has complied with the necessary requirements of SEBI, Stock Exchanges and Statutory authorities and
no penalties or strictures were imposed on any matter related to capital markets during the last three years.
Note: (1) Rs 51.48=SS1 ( Average Rate of Financial Year 2018-19)
(2) IPT Transaction are within threshold limit of 3% of the latest audited Consolidated NTA.
059 IND
CORPORATE GOVERNANCE
11 GENERAL SHAREHOLDER INFORMATION :-
10.1 QUARTERLY RESULTS:-
10 MEANS OF COMMUNICATION:-
The Unaudited Quarterly/Half yearly Financial Statements are announced within 45 (Forty Five) days of the end of the
Quarter.
The aforesaid Financial Statements reviewed by the Audit Committee are taken on record by the Board of Directors and
are communicated to the Indian and Singapore Stock Exchanges where the Company’s securities are listed.
10.2 ANNOUNCEMENT OF FINANCIAL RESULT:-
The Audited annual results are announced within 60 (Sixty) days from the end of last quarter i.e. 31st March to meet with ththe requirements of Stock Exchanges. The Audited Annual Financial Results were announced on 24 May, 2019.
The aforesaid Audited Annual Results are taken on record by the Board of Directors and are communicated to the Stock
Exchanges where the Company’s securities are listed.
10.3 WEBSITE DISPLAY:-
These results are then given by way of a press release to news agency and published within 48 hours in two leading daily
news papers one in English and one in Gujarati. The Audited financial results form a part of the Annual Report which is
sent to the Shareholders prior to the Annual General Meeting
Once the Stock Exchanges have been intimated, these results are given by way of a press release to news agency and
published within 48 hours in two leading daily news papers – one in English and one in Gujarati.
The Company’s Official news releases, presentation, policies, financial results, shareholder’s general information etc.
are displayed on the Company’s website www.meghmani.com. News Releases are placed on Stock Exchanges and
displayed on website. The presentations prepared for the investors and analysts are submitted to Stock Exchanges and
displayed on the Company’s website www.meghmani.com.
10.4 GREEN INITIATIVE FOR PAPERLESS COMMUNICATIONS:-
To support the “Green Initiative in the Corporate Governance”, an initiative has been taken by the Ministry of Corporate
Affairs (MCA). The Company will sent the soft copies of Annual Report 2018-19 to those members whose Email IDs were
registered with the Depository Participants (DP) after informing them suitably.
I. Annual General Meeting :-
Dr. Vikram Sarabhai Marg, Vastrapur, Ahmedabad
Date 25th July, 2019
Venue HT Parekh Convention Centre, Torrent AMA Centre Ahmedabad Management Association, Atira Campus,
Time 10.00 a.m.
Last date of receipt of Proxy Tuesday 23 July, 2019 (before 10.00. a.m.)
Posting of Annual Report On or before 01st July, 2019
060
CORPORATE GOVERNANCE
The financial year of the Company is from 01 April to 31 March. The Board Meetings for approval of Quarterly financial
results during the year ended 31 March, 2019 were held on the following dates:-
II. Financial Year :-
Financial Calendar 2018-19:-
Third Quarter Results 11th February, 2019
Second Quarter and Half yearly results 29th October, 2018
Fourth Quarter & Annual Results 24th May, 2019
First Quarter Results 8th August, 2018
Financial Calendar 2018-19:-
Fourth Quarter - 31.03.2020 Within 60 days from the close of quarter
First Quarter Results - 30.06.2019 Within 45 days from the close of quarter
Third Quarter Results - 31.12.2019 Within 45 days from the close of quarter
Second Quarter Result - 30.09.2019 Within 45 days from the close of quarter
Date of Book Closure:-
Book Closure Friday, 19 July, 2019 to Thursday, 25 July, 2019
The Board of Directors at their meeting held on 24th May, 2019 recommended a final dividend of Rs. 0.40 (40%) per
Equity Shares of the face value of Rs. 1/- each for the financial year 2018-19, subject to approval of the shareholders.
The information of unclaimed dividend is as under:-
III. Dividend payment :-
Un- paid dividend – 2018 40% 669472.29 11.08.2018 10.08.2025
Un- paid dividend – 2019 (Interim) 60% 9167034.40 25.03.2019 24.03.2026
Particulars Dividend 31/03/2019 Payment Transfer
Un paid Dividend - 2012 10% 222986.16 11.08.2012 10.08.2019
Un paid Dividend - 2013 10% 209732.20 07.08.2013 06.08.2020
Total 12296194.28
Un paid Dividend - 2015 40% 617659.20 27.02.2015 26.02.2022
Un- paid dividend – 2016 30% 628115.13 23.03.2016 22.02.2023
% Rs. Date Due date
Un paid Dividend - 2014 10% 196765.40 11.08.2014 10.08.2021
Un- paid dividend – 2017 40% 584429.50 07.08.2017 06.08.2024
IV. Stock Code :-
ISIN allotted to the Company’s equity shares of face value of Rs. 1/- each is INE974H01013.
061 IND
CORPORATE GOVERNANCE
V. Share Market Price data:-
National Stock Exchange of India Limited: - 31.03.2019
The Monthly High and Low prices and volumes of Meghmani Organics Limited (MOL) share at National Stock Exchange
of (India) Limited (NSE) and BSE Limited for the year ended on 31st March, 2019 are as under :-
Month Open Price High Price Low Price Close Price No. of Total Turnover
Sep-18 89.85 90.90 74.15 75.45 18445155 1563643861
Shares (Rs. In Lakhs)
Apr-18 85.10 107.40 84.50 103.50 34218937 3411243629
May-18 104.05 114.35 93.00 93.75 31078952 3209219372
Jun-18 93.95 96.50 75.05 82.05 24566103 2127331162
Jul-18 82.55 98.35 78.45 89.35 31137559 2732956704
Aug-18 89.70 99.00 86.06 89.25 34107284 3172222385
Oct-18 77.55 83.50 69.30 72.15 18292688 1382242692
Dec-18 59.50 63.90 52.30 60.10 11162176 6641041867
Mar-19 52.10 67.45 51.95 61.10 32469079 2031357523
Feb-19 55.50 57.20 42.15 51.75 19204496 982979838
Nov-18 70.00 71.20 56.60 59.35 41258812 8663700553
Jan-19 60.30 64.00 51.10 54.70 11105084 645998238
BSE Limited: - 31.03.2019
Month Open Price High Price Low Price Close Price No. of Total
Aug-18 90.00 99.05 86.70 89.25 4960484 461486581
Jun-18 94.50 96.75 74.65 82.10 3928294 340075057
Feb-19 55.60 56.90 42.10 51.80 4441139 225864748
Shares Turnover (Rs.)
Apr-18 85.85 107.40 84.80 103.45 4793896 477032306
Jul-18 82.50 98.20 78.00 89.35 4750645 416502616
Jan-19 59.90 63.90 51.70 54.80 2435246 141174317
May-18 103.80 114.40 93.10 93.55 4643048 478462249
Nov-18 70.00 71.30 55.00 59.45 7157652 464169538
Mar-19 51.90 67.55 51.90 61.30 6002537 374810222
Sep-18 90.00 91.00 74.35 75.75 3139564 266626756
Oct-18 75.85 83.40 69.45 72.35 3373030 255210434
Dec-18 60.00 63.85 52.35 60.20 2007161 119389689
062
CORPORATE GOVERNANCE
VI. Listing details of Equity shares:-
Name of Stock Exchange Address Stock Code
National Stock Exchange of India Limited Exchange Plaza, Bandra-Kurla Complex, MEGH.NS
BSE Limited Phiroze Jeejeebhoy Towers, 532865
SGX Centre Singapore 068804 Singapore Exchange 2 Shenton Way #19-00 MEGH.SI
Bandra (East), Mumbai - 400 051
Dalal Street,Mumbai - 400 001
VIII. Dematerialization of Shares: 31.03.2019:-
The listing fee for Financial Year 2019-20 has been paid to Stock Exchanges.
VII. Share Transfer System :-
Job of Share Registrar and Transfer Agents are carried out by Link Intime India Private Limited, Mumbai, Transfer and
Dematerialization of shares is processed by Link Intime India Private Limited, Mumbai. The transfer of shares in
Depository mode need not be approved by the Company. The Physical transfers of shares are approved by Share
Transfer Committee.
Share Capital No. of shares %
Listed Capital 254314211 100.00
National Securities Depository Limited (NSDL) 206836171 81.33
Central Depository Services (India) Limited (CDSL) 47377789 18.63
Held in Physical Form 100251 0.04
Total 254314211 100.00
Held in Dematerialized form :-
063 IND
CORPORATE GOVERNANCE
IX. Shareholding Pattern - 31.03.2019:-
Category No. of shares %
Financial Institutions 415259 0.16
Foreign Portfolio Investors (Corporate) 4444675 1.75
Singapore Depository Receipts 12892190 5.07
Investor Education & Protection Fund 102874 0.04
Hindu Undivided Family 5384353 2.12
Foreign Company 303500 0.12
Clearing Member 2377391 0.93
Foreign Inst. Investor 105000 0.04
NBFC Registered with RBI 90061 0.04
Mutual Fund 81 0.00
Relatives Of Director 27081560 10.65
Trusts 500 0.00
Promoters 95269357 37.46
Non Nationalized Banks 205270 0.08
Total 254314211 100.00
Non Resident (Non Repatriable) 784413 0.31
Public 83079769 32.67
Other Bodies Corporate 15063909 5.92
Non Resident Indians 6714049 2.64
VI. Listing details of Equity shares:-
Category Shareholders Total Shares of Rs. 1/- each
2001-3000 2098 1.82 5436111 2.14
3001- 4000 1002 0.87 3651637 1.44
Total 115467 100.00 254314211 100.00
5001-10000 1274 1.10 9518469 3.74
10001- & ABOVE 1145 0.99 196770000 77.37
1-500 91026 78.84 15391089 6.05
501-1000 11954 10.35 9924469 3.90
1001-2000 6113 5.29 9526111 3.75
Number Percent Number Percent
4001- 5000 855 0.74 4096325 1.61
064
CORPORATE GOVERNANCE
Twenty Largest Singapore Depository Shares ("SDS") Holders 12.06.2019 (As per Singapore rules):-
9 CHAN SIEW LIAN ANGELINE 6,14,000 2.38
11 RAFFLES NOMINEES (PTE) LIMITED 4,53,10 1.76
14 DBS NOMINEES PTE LTD 2,25,000 0.87
2 TEO CHIANG SONG 12,00,000 4.65
3 WU CHUNG SHOU 9,10,000 3.53
S.N. NAME OF SDS HOLDER NO. OF SDS %
5 INDIA INTERNATIONAL INSURANCE PTE LTD - SIF 8,00,000 3.10
4 DBS VICKERS SECURITIES (SINGAPORE) PTE LTD 8,30,000 3.22
1 WATERWORTH PTE LTD 95,00,000 36.84
6 SEE BENG LIAN JANICE 8,00,000 3.10
7 ANG LAY TENG OR TAN CHOON HUI 7,44,000 2.89
8 LIM LENG CHYE 7,00,000 2.71
10 PHILLIP SECURITIES PTE LTD 5,41,800 2.10
12 SOH DOLLY 4,41,000 1.71
13 WONG TZE CHYUAN 4,35,000 1.69
16 CHUA BENG CHENG 2,00,000 0.78
17 ONG YONG HWEE 2,00,00 0.78
19 TAN HAK YONG 1,90,000 0.74
20 LIM SIEW HWA 1,50,000 0.58
TOTAL 1,93,47,600 75.04
15 CHONG MUI KHIM 2,13,700 0.83
18 UOB KAY HIAN PTE LTD 2,00,000 0.78
Distribution of Shareholding: 12.06.2019 (As per Singapore rules):-
1,001 - 10,000 121 38.54 8,13,500 3.15
TOTAL 314 100.00 2,57,84,380 100.00
100 - 1,000 38 12.10 30,904 0.12
10,001 - 1,000,000 149 47.45 1,42,39,898 55.23
1,000,001 AND ABOVE 2 0.64 1,07,00,000 41.50
1 - 99 4 1.27 78 0.00
Size of SDS SDS Shareholders No. of SDS of Re. 0.50/- each
Number Percent Number Percent
065 IND
I. SGX CORPORATE GOVERNANCE RULE 1015 (5) – SUBSTANTIAL SHAREHOLDERS’ INTERESTS
The interests of the Directors and substantial shareholders of the Company in the issued Singapore Depository Shares
of the Company are as under:-
Tel: +91 22 4918 6270,
Link Intime India Private Limited
Mumbai - 400083.
Fax: +91 22 4918 6060
In compliance with SEBI guidelines, the Company has appointed Link Intime India Private Limited, as a common Share
Transfer agent for Physical and Electronic form of shareholding.
Vikhroli (West),
C 101, 247 Park, L. B. S. Marg,
SDSs held by the public are 63.16%. The Company has not issued any Treasury Shares. No subsidiary of the Company
is holding any Singapore Depository Shares.
II. OUTSTANDING SINGAPORE DEPOSITORY RECEIPTS :
153,165,300 Singapore Depository Shares were issued under Depository mechanism on 10th August, 2004 at a 28
Cent per SDS of Rs. 0.50 paisa on Singapore Stock Exchange.
As on 31st March, 2018 the number of SDS outstanding are 25,784,380 which represents 12,892,190 Equity Shares.
There is no conversion date fixed for SDS in to Equity Shares. There will be no impact on conversion of SDS in to equity
shares as the conversion takes place under two way fungibility guide lines issued by Reserve Bank of India.
III. SGX Rule 1204 (19) – TRADING WINDOW CLOSED
In compliance with Rule 1204(19), the Company has adopted policies to provide guidance to its Directors and officers on
dealings in the Company’s securities.
The Company prohibits its Directors and officers from dealing in the Company’s shares on short term considerations or
when they are in possession of unpublished price-sensitive information. The Directors and Officers are also not allowed
to deal in the Company’s shares during the period commencing two (2) weeks before the announcement of the
Company’s Financial Results for each of the first three quarters of its Financial Year and one month before the
announcement of the Company’s full-year Financial Results, and ending on the date of the announcement of the
relevant results.
IV. SGX Rule 730 A (1) – HOLDING OF ANNUAL GENERAL MEETING
As confirmed by SGX, Rule 730A (1) of the Listing Manual is not applicable to the Company. Consequently, the Company
will continue to hold its general meeting in India and not in Singapore. The Company has agreed to hold an annual
information meeting in Singapore every year so as to have as much information possible to Singapore Shareholders at
the time of such meeting.
V. REGISTRAR AND SHARE TRANSFER AGENT IN INDIA:-
Water worth Pte. Limited 9500000 36.84% Direct
Name of the Substantial SDS Holder No. of SDS % Interest Held
Director’s Interest Nil Nil -
CORPORATE GOVERNANCE
066
CORPORATE GOVERNANCE
VI. LOCATION OF MANUFACTURING FACILITY:-
6 Agro Division – III Plot No. CH-1+2/A GIDC Industrial Estate, Dahej, District :- Bharuch
1 Pigment Division - Green Plot No. 184, Phase II, G.I.D.C. Vatva, Ahmedabad -382 445.
4 Agro Division – I Plot No. 402,403,404 & 452, Village Chharodi,
5 Agro Division – II 5001/B, G.I.D.C. Ankleshwar, District :- Bharuch.
2 Pigment Division – Blue Plot No. 21, 21/1, G.I.D.C. Panoli, District :- Bharuch.
Taluka Sanand, District :- Ahmedabad.
3 Pigment Division – Blue Plot No. Z-31 Z-32, Dahej SEZ Limited, District :- Bharuch.
7 Agro Division – IV Plot No. 20,G.I.D.C. Panoli, District :- Bharuch.
B/h Safal Profitaire, Corporate Road,
VII. INVESTOR CORRESPONDENCE :-
All enquiries, clarification and correspondence should be addressed to the Company Secretary and Compliance
Officer:-
Prahaladnagar, Ahmedabad 380 015
Telephone No. 91-79-2970 9600/ 7176 1000
Fax No. 91-79-2970 9605
E-mail : [email protected]
Mr. K D Mehta – V P (Company Affairs) & Company Secretary
Meghmani House,
****
067 IND
COMPLIANCE WITH CODE OF BUSINESS CONDUCT AND ETHICS
As provided under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board Members and Senior
Management Personnel have confirmed compliance with the Code of Conduct for the year ended 31st March, 2019.
Place: Ahmedabad Ashish Soparkar For Meghmani Organics Limited
thDate: 24 May, 2019 Managing Director
AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE
We have examined the compliance of conditions of Corporate Governance by Meghmani Organics Limited, for the year ended ston 31 March 2019, as stipulated in Chapter IV of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
pursuant to the Listing Agreement of the Company with Stock Exchanges.
We further state that such compliance is neither an assurance as to future viability of the Company nor of the efficiency or
effectiveness with which the management has conducted the affairs of the Company.
To The Members,
Meghmani Organics Limited
In our opinion and to the best of our information and according to the explanations given to us and based on the representations
made by the Directors and the Management, we certify that the Company has complied with the conditions of Corporate
Governance as stipulated in Chapter IV of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 pursuant
to the Listing Agreement of the said Company with Stock Exchanges.
The Compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination has been
limited to a review of the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the
conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the
Company.
thDate: 24 May, 2019 For, SHAHS & ASSOCIATES Place: Ahmedabad Company Secretaries Kaushik Shah Partner FCS No 2420 CP No-1414
068
CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS(Pursuant to Regulation 34(3) and Schedule V Para C clause (10) (i) of
the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015)
In our opinion and to the best of our information and according to the verifications (including Directors Identification Number
(DIN) status at the portal www.mca.gov.in as considered necessary and explanations furnished to us by the Company and its
officers, we hereby certify that none of the Directors on the Board of the Company as stated below for the Financial Year ending
on 31st March, 2019 have been debarred or disqualified from being appointed or continuing as Directors of companies by the
Securities and Exchange Board of India, Ministry of Corporate Affairs, New Delhi or any such other Statutory Authority.
To,
The Members,
Meghmani Organics Limited
Plot No. 184, Phase II,
GIDC Vatva, Ahmedabad - 382 445.
We have examined the relevant registers, records, forms, returns and disclosures received from the Directors of
Meghmanii Organics Limited having CIN L24110GJ1995PLC024052 and having registered office at Plot No. 184, Phase II,
GIDC Vatva, Ahmedabad-382 445 (hereinafter referred to as ‘the Company’), as produced before us by the Company for the
purpose of issuing this Certificate, in accordance with Regulation 34(3) read with Schedule V Para-C Sub clause 10(i) of the
Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
We further report that the ensuring the eligibility of for the appointment / continuity of every Director on the Board is the
responsibility of the management of the Company. Our responsibility is to express an opinion on these based on our verification.
This certificate is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which
the management has conducted the affairs of the Company.
7 MR. CHANDER KUMAR SABHARWAL 00368621 02/08/2013
8 MR. BALKRISHNA TULSIDAS THAKKAR 00430220 13/04/2000
10 MR. PALAKODETI VENKATRAMANA BHASKAR RAO 08058946 10/02/2018
5 MR. ANANDBHAI ISHWARBHAI PATEL 00027836 02/10/1995
Sr. No. Name of Director DIN Date of
in Company
1 MR. JAYANTILAL MEGHJIBHAI PATEL 00027224 02/01/1995
9 MS. URVASHI DHIRUBHAI SHAH 07007362 27/03/2015
appointment
3 MR. NATWARLAL MEGHJIBHAI PATEL 00027540 02/01/1995
6 MR. MANUBHAI KHODIDAS PATEL 00132045 10/02/2018
11 MR. CHING SENG LIEW 08065615 10/02/2018
2 MR. ASHISHBHAI NATAWARLAL SOPARKAR 00027480 02/01/1995
4 MR. RAMESHBHAI MEGHJIBHAI PATEL 00027637 01/04/2009
Partner Kaushik Shah
thDate: 18 May, 2019 For, SHAHS & ASSOCIATES
FCS No 2420 CP No-1414
Place: Ahmedabad Company Secretaries
069 IND
CEO and CFO certification in terms of Regulation 17 (8)of the SEBI (LODR) Regulations, 2015
[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014]
The Board of Directors,Meghmani Organics LimitedPlot No. 184, Phase II,
Dear Sir/Madam,
CEO/CFO Certification in terms of Regulation 17 (8) of the SEBI (LODR) Regulations, 2015.
A) We have reviewed the Financial Statements and the Cash Flow statement of the Company for the year ended March 31,
2019 and to the best of our knowledge and belief :
GIDC Vatva, Ahmedabad-382 445
To,
In terms of Regulation 17 (8) of the SEBI (LODR) Regulations, 2015, we hereby certify to the Board of Directors that :
I) These statements do not contain any materially untrue statement or omit any material fact or contain statements that
might be misleading;
ii) These statements together present a true and fair view of the Company’s affairs and are in compliance with existing
accounting standards, applicable laws and regulations.
B) There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which are
fraudulent, illegal or violative of the Company’s Code of Conduct.
C) We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated
the effectiveness of internal control systems of the Company pertaining to financial reporting and we have disclosed to the
Auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are
aware and the steps we have taken or propose to take to rectify these deficiencies.
ii) Significant changes in accounting policies during the year, if any, and that the same have been disclosed in the notes
to the financial statements; and
I) Significant changes in internal control, if any, over financial reporting during the year;
iii) Instances of significant fraud of which we have become aware and the involvement therein, if any, of the management
or an employee having a significant role in the Company’s internal control system over financial reporting wherever
needed.
D) We have indicated to the auditors and the Audit Committee :
thDate: 24 May, 2019 For, MEGHMANI ORGANICS LIMITED
Place: Ahmedabad ANKIT N. PATEL G. S. CHAHAL CEO CFO
070
INDEPENDENT AUDITOR'S REPORT
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing (SAs), as
specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ‘Auditor’s
Responsibilities for the Audit of the Standalone Ind AS Financial Statements’ section of our report. We are independent of the
Company in accordance with the ‘Code of Ethics’ issued by the Institute of Chartered Accountants of India together with the
ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules
thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of
Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion
on the standalone Ind AS financial statements.
To the Members of Meghmani Organics Limited
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS
financial statements give the information required by the Companies Act, 2013, as amended (“the Act”) in the manner so
required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of
affairs of the Company as at March 31, 2019, its profit including other comprehensive income its cash flows and the changes in
equity for the year ended on that date.
Key Audit Matters
Report on the Audit of the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Meghmani Organics Limited Company Limited
(“the Company”), which comprise the Balance sheet as at March 31, 2019, the Statement of Profit and Loss, including the
statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then
ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory
information. (hereinafter referred to as the standalone Ind AS financial statements).
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone
Ind AS financial statements for the financial year ended March 31, 2019. These matters were addressed in the context of our
audit of the standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in
that context.
Opinion
Basis for Opinion
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled
the responsibilities described in the Auditor’s responsibilities for the audit of the standalone Ind AS financial statements section
of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to
respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of
our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion
on the accompanying standalone Ind AS financial statements.
071 IND
INDEPENDENT AUDITOR'S REPORT
Other Information
The Company’s Board of Directors is responsible for the other information. The other information comprises the information
included in the management discussion and analysis and chairman statement, but does not include the standalone Ind AS
financial statements and our auditor’s report thereon.
Our opinion on the standalone Ind AS financial statements does not cover the other information and we do not express any form
of assurance conclusion thereon.
Responsibilities of Management for the Standalone Ind AS Financial Statements
The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the
preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial
performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the
accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section
133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also
In connection with our audit of the standalone Ind AS financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this
regard.
Key audit matters
Our audit procedures included the following:
• Understood the Company’s established processes and control mechanism for revenue recognition process, evaluated the key financial controls around such process.
• Performed tests of details, on a sample basis, and inspected the underlying, sales order, invoice copy, terms of delivery, lorry receipt, bill of lading, invoice, collection to assess whether revenue recorded is as per the contract.
• Performed test of controls, assisted by our IT specialists, over revenue recognition with specific focus on testing management controls on accuracy and timing of revenue recognition through inspection of evidence of performance of management controls.
• Considered the appropriateness of the Company's revenue recognition accounting policies in terms of Ind AS 115.
• Tested sales transactions near year end date as well as credit notes issued after the year end date.
• Performed product-wise and customer-wise substantive analytical procedures on revenue recognition.
• Verified that the revenue for the year are appropriately presented and disclosed in the standalone Ind AS financial statements.
(as described in note 2(b) of the standalone Ind AS financial statements)Revenue recognition
The Company majorly operates in two segments viz: Agro chemicals and Pigment. Export sales contributes approximately 77% of total sales of the Company. The Company recognises revenue from sales of goods in accordance with the requirements of Ind AS 115, Revenue from Contracts with Customers, measured at fair value of the consideration received in the ordinary course of the Company's activities. Revenue from sale of goods is recognised net of discounts, rebates and taxes.
Certain terms in sales arrangements relating to timing of transfer of risk and rewards, discount and rebates arrangements, delivery specifications including incoterms, involves significant judgment in determining whether the revenue is recognised in the correct period.
How our audit addressed the key audit matter
072
INDEPENDENT AUDITOR'S REPORT
• Evaluate the overall presentation, structure and content of the standalone Ind AS financial statements, including the
disclosures, and whether the standalone Ind AS financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.
In preparing the standalone Ind AS financial statements, management is responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative
but to do so.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout
the audit. We also:
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our
opinion on whether the Company has adequate internal financial controls system in place and the operating
effectiveness of such controls.
includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the
assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and
maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness
of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a
true and fair view and are free from material misstatement, whether due to fraud or error.
Our objectives are to obtain reasonable assurance about whether the standalone Ind AS financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these standalone Ind AS financial statements.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to
cease to continue as a going concern.
• Identify and assess the risks of material misstatement of the standalone Ind AS financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
Auditor’s Responsibilities for the Audit of the Standalone Ind AS Financial Statements
073 IND
INDEPENDENT AUDITOR'S REPORT
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, related safeguards.
Report on Other Legal and Regulatory Requirements
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the standalone Ind AS financial statements for the financial year ended March 31, 2019 and are
therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated
in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
(e) On the basis of the written representations received from the directors as on March 31, 2019 and taken on
record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 from being appointed
as a director in terms of Section 164 (2) of the Act;
(g) In our opinion, the managerial remuneration for the year ended March 31, 2019 has been paid / provided by the
Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company with
reference to these standalone Ind AS financial statements and the operating effectiveness of such controls,
refer to our separate Report in “Annexure 2” to this report;
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief
were necessary for the purposes of our audit;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards
specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as
amended;
2. As required by Section 143(3) of the Act, we report that:
(c) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income,
the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with
the books of account;
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears
from our examination of those books;
1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the Central Government of
India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure 1” a statement on the matters
specified in paragraphs 3 and 4 of the Order.
074
INDEPENDENT AUDITOR'S REPORT
(h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and
according to the explanations given to us:
ii. The Company did not have any long-term contracts including derivative contracts for which there were any
material foreseeable losses; and
I. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind
AS financial statements – Refer Note 39 to the standalone Ind AS financial statements;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and
Protection Fund by the Company.
ICAI Firm Registration Number: 324982E/E300003Chartered Accountants For S R B C & CO LLP
PartnerMembership Number: 101974Place of Signature: Ahmedabad
per Sukrut Mehta
Date: May 24, 2019.
075 IND
Annexure 1Referred to in Paragraph 1 of Report on Other Legal and Regulatory Requirements of our
report of even date of Meghmani Organics Limited for the year ended March 31, 2019.
vii. (a) According to the information and explanations given to us and on the basis of our examination of the records of
the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues
including provident fund, employees’ state insurance, income-tax, duty of custom, goods and service tax, cess
and other statutory dues are generally regularly deposited with the appropriate authorities though there has
been a slight delay in a few cases.
ii. The management has conducted physical verification of inventory at reasonable intervals during the year and
no material discrepancies were noticed on such physical verification.
iii. According to the information and explanations given to us, the Company has not granted any loans, secured or
unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained
under section 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3(iii) (a),(b) and (c) of the
Order are not applicable to the Company and hence not commented upon.
i. (a) The Company has maintained proper records showing full particulars, including quantitative details and
situation of Property, Plant and Equipment.
(b) All Property, Plant and Equipment have not been physically verified by the management during the year.
However, there is a regular programme of verification once in three years which, in our opinion, is reasonable
having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed
on such verification carried out in accordance with aforesaid plan.
(c) According to the information and explanations given by the management, the title deeds of immovable
properties included in property, plant and equipment are held in the name of the Company except for one
freehold land aggregating to INR 558.40 lakhs as at March 31, 2019 for which title deeds are not registered in
the name of the Company.
iv. In our opinion and according to the information and explanations given to us, provisions of section 186 of the Act
in respect of investments made and guarantees given have been complied with by the Company. Further, in our
opinion and according to the information and explanations given to us, since there are no loans and securities
given in respect of which provisions of section 185 and 186 of the Act are applicable and hence not commented
upon.
v. The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the
Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of
the Order are not applicable and hence not commented upon.
vi. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the
Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013,
related to the manufacture of agrochemicals and pigment products, and are of the opinion that prima facie, the
specified accounts and records have been made and maintained. We have not, however, made a detailed
examination of the same.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of
provident fund, employees’ state insurance, income-tax, service tax, duty of custom, good and service tax, cess
and other statutory dues were outstanding, at the year end, for a period of more than six months from the date
they became payable.
(c) According to the information and explanations given to us, there are no dues of income tax, sales tax, service
tax, duty of customs, duty of excise and value added tax which have not been deposited with the appropriate
authorities on account of any dispute, except for the following:
076
statue dues (INR lakhs) dispute is pending
2011 - 12 to 2015 - 16 Appellate Tribunal,
Name of Nature of Amount involved Period Forum where the
1994
Custom Act, Custom Duty 1,399.48 2016 - 17 Commissioner of
Act, 1961* demands 2009 - 10, 2012 - 13 to Apellate Tribunal,
The Finance Service Tax 43.00 2004 - 05 to 2015 - 16 Central Excise and Service
(Service Tax), Commissioner (Appeals)
1962 Customs
Act Tax Appellate Tribunal,
Commissioner (Appeals)
2014 - 15 Commissioner Appeals,
Central Excise duty 1,938.69 2002 - 03 to 2008 - 09 Gujarat Highcourt, Central
Income tax Income tax - 2002 - 03, 2007 - 08 to Gujarat High Court, Income tax
Income tax
Excise Act demand and Excise and Service Tax
viii. In our opinion and according to the information and explanations given by the management, the Company has
not defaulted in repayment of loans or borrowings from banks. The Company did not have any due payable to
the financial institutions, debenture holders and government during the year.
* Net of amount paid under protest amounting to INR 173.84 lakhs and adjustment of the amount of Income tax refunds
pertaining to other assessment years amounting to INR 851.15 lakhs.
x. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial
statements and according to the information and explanations given by the management, we report that no
fraud by the Company or no fraud on the Company by the officers and employees of the Company has been
noticed or reported during the year.
xi. According to the information and explanations given by the management, the managerial remuneration has
been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read
with Schedule V to the Companies Act, 2013.
ix. According to the information and explanations given by the management, the Company has utilized the monies
raised by way of term loans for the purposes for which they were raised. The Company has not raised money by
way of initial public offer, further public offer and debt instrument during the year.
xii. In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the order are not
applicable to the Company and hence not commented upon.
xiii. According to the information and explanations given by the management, on certain transactions entered with
related parties being of specialized nature, transaction with the related parties are in compliance with section
177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the
Ind AS financial statements, as required by the applicable accounting standards.
xiv. According to the information and explanations given to us and on an overall examination of the balance sheet,
the Company has not made any preferential allotment or private placement of shares or fully or partly
convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are
not applicable to the Company and, not commented upon.
xv. According to the information and explanations given by the management, the Company has not entered into
any non-cash transactions with directors or persons connected with him as referred to in section 192 of the Act.
Annexure 1Referred to in Paragraph 1 of Report on Other Legal and Regulatory Requirements of our
report of even date of Meghmani Organics Limited for the year ended March 31, 2019.
077 IND
xvi. According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank
of India Act, 1934 are not applicable to the Company.
per Sukrut Mehta
Place of Signature: AhmedabadDate: May 24, 2019.
For S R B C & CO LLPChartered Accountants ICAI Firm Registration Number: 324982E/E300003
Membership Number: 101974Partner
Annexure 1Referred to in Paragraph 1 of Report on Other Legal and Regulatory Requirements of our
report of even date of Meghmani Organics Limited for the year ended March 31, 2019.
078
Annexure 2To the Independent Auditor’s Report of even date on the Ind AS financial statements
of Meghmani Organics Limited
Report on the Internal Financial Controls under Clause (I) ofSub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
We have audited the internal financial controls over financial reporting of Meghmani Organcis Limited (“the Company”) as of
March 31, 2019 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.
The Company’s Management is responsible for establishing and maintaining internal financial controls based on the internal
control over financial reporting criteria established by the Company considering the essential components of internal control
stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered
Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial
controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the
Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and
completeness of the accounting records, and the timely preparation of reliable financial information, as required under the
Companies Act, 2013.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting with reference to
these standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on
Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing as specified
under section 143(10) of the Act , to the extent applicable to an audit of internal financial controls and, both issued by the Institute
of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial
reporting with reference to these standalone financial statements was established and maintained and if such controls operated
effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls over
financial reporting with reference to these standalone financial statements and their operating effectiveness. Our audit of
internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial
reporting with reference to these standalone financial statements, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the Ind AS
financial statements, whether due to fraud or error.
Management’s Responsibility for Internal Financial Controls
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the
internal financial controls over financial reporting with reference to these standalone financial statements.
Meaning of Internal Financial Controls Over Financial Reporting with reference to with reference to these standalone
financial statements
A company's internal financial control over financial reporting with reference to these standalone financial statements is a
process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial
control over financial reporting with reference to these standalone financial statements includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorisations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or
disposition of the company's assets that could have a material effect on the financial statements.
079 IND
Opinion
Inherent Limitations of Internal Financial Controls Over Financial Reporting with reference to these standalone
financial statements
Because of the inherent limitations of internal financial controls over financial reporting with reference to these standalone
financial statements, including the possibility of collusion or improper management override of controls, material misstatements
due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over with
reference to these standalone financial statements future periods are subject to the risk that the internal financial control over
financial reporting with reference to these standalone financial statements may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, the Company has, in all material respects, an adequate internal financial controls over financial reporting with
reference to these standalone financial statements and such internal financial controls over financial reporting with reference to
these standalone financial statements were operating effectively as at March 31, 2019, based on the internal control over
financial reporting criteria established by the Company considering the essential components of internal control stated in the
Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants
of India.
Chartered Accountants
Date: May 24, 2019.
Membership Number: 101974
ICAI Firm Registration Number: 324982E/E300003
For S R B C & CO LLP
per Sukrut Mehta
Place of Signature: Ahmedabad
Partner
Annexure 2To the Independent Auditor’s Report of even date on the Ind AS financial statements
of Meghmani Organics Limited
080
STBALANCE SHEET AS AT 31 MARCH 2019
PARTICULARS
(iii) Other Financial Liabilities 23 8,567.90 7,299.92 micro and small enterprise 20,993.14 16,440.06
(c) Provisions 25 591.22 5.06
Total Current Liabilities 53,296.27 41,720.98Total Liabilities 66,561.18 68,062.79 TOTAL EQUITY AND LIABILITIES 1,50,357.76 1,37,832.62Summary of Significant Accounting Policies 2
(d) Current Tax Liabilities (Net) 26 1,379.87 996.92
Total outstanding dues of creditors other than
(b) Other Current Liabilities 24 918.66 608.36
(ii) Other Financial Assets 6 559.70 607.22
(i) Trade Receivables 10 35,412.38 30,283.66
(e) Investments in Subsidiaries 4 18,246.55 23,314.77
ASSETS
(f) Financial Assets
Total Non-Current Assets 69,543.83 72,884.39
Liabilities
(a) Inventories 9 36,360.80 23,265.24
(b) Provisions 19 648.68 497.26
(d) Intangible Assets under development 3.2 491.27 271.85
(c) Current Tax Assets (Net) 7 278.85 -
Non-Current Assets (a) Property, Plant and Equipment 3.1 42,779.19 43,272.80 (b) Capital Work-in-Progress 3.2 4,442.48 2,189.25 (c) Other Intangible Assets 3.3 1,152.05 1,554.28
(i) Investments 5 57.41 57.41
(g) Non-Current Tax Assets (Net) 7 681.89 1,002.00 (h) Other Non-Current Assets 8 1,133.29 614.81
Current Assets
(b) Financial Assets
(ii) Cash and Cash Equivalents 11 177.16 122.51 (iii) Bank Balances other than (ii) above 12 136.25 65.73 (iv) Loans 13 22.99 16.20 (v) Other Financial Assets 14 4,069.29 6,714.39
(d) Other Current Assets 15 4,356.21 4,480.50 Total Current Assets 80,813.93 64,948.23
EQUITY AND LIABILITIES Equity (a) Equity Share Capital 16 2,543.14 2,543.14
TOTAL ASSETS 1,50,357.76 1,37,832.62
(b) Other Equity 17 81,253.44 67,226.69Total Equity 83,796.58 69,769.83
Non-Current Liabilities (a) Financial Liabilities (i) Borrowings 18 8,527.45 21,741.23
(c) Deferred Tax Liabilities (Net) 20 4,088.78 4,103.32 Total Non-Current Liabilities 13,264.91 26,341.81 Current Liabilities (a) Financial Liabilities (i) Borrowings 21 19,957.32 15,792.02 (ii) Trade Payables 22 Total outstanding dues of micro and small enterprise 888.16 578.64
(Rs. in Lakhs)Notes
st 31 March 2018 st31 March 2019
FOR S R B C & CO LLP, Chartered Accountants Meghmani Organics Limited ICAI Firm Regn. No. 324982E / E300003 (CIN NO-24110GJ1995PLC024052)
The accompanying notes are an integral part of these Standalone Financial Statements. AS PER OUR REPORT OF EVEN DATE For and on behalf of the Board of Directors of
Membership No : 101974 N.M.Patel - Managing Director (DIN - 00027540)Partner Chief Financial Officer A.N.Soparkar - Managing Director (DIN - 00027480)per Sukrut Mehta G S Chahal J.M.Patel - Executive Chairman (DIN - 00027224)
Place : Ahmedabad K. D. Mehta Place : Ahmedabad th thDate : 24 May 2019 Company Secretary Date : 24 May 2019
081 IND
STSTATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH 2019
PARTICULARS(Rs. in Lakhs)
Notes
st 31 March 2018st31 March 2019
VIII - Tax Expense 20
Items that will not be reclassified to profit or loss
31st March 2018 : Re 1 Each) (In Rs.)
Excise duty on sale of goods - 2,247.10
3 - Deferred Tax 33.84 1,349.86
Total Expenses (IV) 1,27,033.58 1,16,277.24
II - Other Income 28 3,882.19 2,610.59
Employee Benefits Expense 31 7,486.37 6,160.88
I - Revenue From Operations 27 1,41,042.00 1,26,047.29
Remeasurement gain / (loss) on defined benefit plans 35 (138.46) 15.40
VI - Exceptional Items 34 (4,328.51) 235.82
VII - Profit Before Tax (V-VI) 22,219.12 12,144.82
1 - Current Tax 5,390.00 3,050.00
Total Tax Expenses (VIII) 5,350.05 4,451.66
III - Total Income (I+II) 1,44,924.19 1,28,657.88
Purchase of Stock-in-Trade 4,162.57 2,714.02
IX. Profit For The Year (VII-VIII) 16,869.07 7,693.16
Other Expenses 33 29,251.99 29,844.88
Cost of Materials Consumed 29 87,954.61 68,750.86
V - Profit Before Exceptional items and Tax (III-IV) 17,890.61 12,380.64
X. Other Comprehensive Income
Income tax effect on above 48.38 (5.38)
Total other comprehensive income / (loss) for the year, net of tax (X) (90.08) 10.02
XII. Earnings Per Equity Share (Face Value Per Share - Re 1 Each, 36
Work-in-Progress and Stock-in-Trade Changes in Inventories of Finished Goods, 30 (11,040.20) (789.62)
Finance Costs 32 4,589.20 3,087.17
XI. Total Comprehensive Income For The Year (IX + X) 16,778.99 7,703.18
IV - Expenses
Depreciation and Amortization Expenses 3 4,629.04 4,261.95
2 - Adjustment of Tax Relating to Earlier Periods (73.79) 51.80
Basic and Diluted 6.63 3.03
Summary of Significant Accounting Policies 2
Membership No : 101974
J.M.Patel - Executive Chairman (DIN - 00027224)ICAI Firm Regn. No. 324982E / E300003
The accompanying notes are an integral part of these Standalone Financial Statements.
Company Secretary Place : Ahmedabad Place : Ahmedabad
AS PER OUR REPORT OF EVEN DATE For and on behalf of the Board of Directors ofFOR S R B C & CO LLP Meghmani Organics Limited Chartered Accountants (CIN NO-24110GJ1995PLC024052)
per Sukrut Mehta G S Chahal A.N.Soparkar - Managing Director (DIN - 00027480)
Partner Chief Financial Officer N.M.Patel - Managing Director (DIN - 00027540)
K. D. Mehta
th thDate : 24 May 2019 Date : 24 May 2019
082
STCASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2019
PARTICULARS(Rs. in Lakhs)
st 31 March 2018 st31 March 2019
Cash Generated from Operations 16,386.10 19,692.87
Direct Taxes Paid (Net of Refund) (4,892.00) (1,917.46)
Fixed Deposits & Margin Money 50.53 693.72
Purchase of Property, Plant & Equipment (7,534.21) (12,193.17)
B. Cash Flow from Investment Activities
Net Cash Generated from Operating Activities 11,494.10 17,775.41
Earmarked balances with Banks (100.86) 0.91
Investment in Preference shares of Subsidiary Company 22,170.89 -
Interest Received 5.82 411.22
Net Cash (Used in) Investing Activities (5,863.92) (21,755.71)
Redemption in Preference shares of Subsidiary Company (22,170.89) -
Investments in Equity Shares of Subsidiary Company - (10,986.54)
Proceeds from sale of Property, Plant & Equipment 179.24 316.12
Dividend Received 1,535.56 -
Proceeds from sale of Investments - 2.03
Working Capital Changes (11,023.05) (33.17)
A. Cash Flow from Operating Activities
Adjustment for :
Depreciation and Amortisation Expenses 4,629.04 4,261.95
Unrealised Foreign Exchange (Gain) / Loss (Net) 1,179.86 (1,199.35)
Mark to Market Loss on Derivative (Gain) / Loss (Net) (17.38) 145.81
Interest and Finance Charges 4,589.20 3,087.17
Interest Income (293.66) (408.68)
Provision for Doubtful Debt 393.19 247.62
Investment Written off - 124.12
Profit Before Tax 22,219.12 12,144.82
Exceptional Item - Loss Due to Fire 1,476.78 111.70
Sundry Balance Written off 25.70 262.38
Profit on Sale of Investment (5,915.29) (1.83)
License and certification fees - 231.58
Adjustment for:
(Increase) in Inventories (13,619.54) (2,361.63)
Dividend Income (1,535.56) -
(Increase) in Trade Receivables (7,306.30) (308.15)
Liability no longer Required written back (225.14) (99.65)
Bad Debts Written off 504.75 780.25
Loss on Sale of Property, Plant and Equipment (Net) 378.54 38.15
Operating Profit Before Working Capital Changes 27,409.15 19,726.04
(Increase)/Decrease in Other Non-Current Financial Assets 26.85 (60.45)
Increase in Other Current Financial Liabilities 1,338.90 705.02
(Increase)/Decrease in Short Term Loans and Advances (6.78) 5.82
Decrease in Other Current Financial Assets 2,907.73 2,047.93
(Increase)/Decrease in Other Current Assets 124.28 (1,748.81)
(Increase)/Decrease in Other Non-Current Assets (585.15) 305.88
Increase in Trade Payables 5,187.52 1,617.70
Increase/(Decrease) in Other Current Liabilities 310.31 (342.41)
Increase in Provisions 599.13 105.93
083 IND
AS PER OUR REPORT OF EVEN DATE For and on behalf of the Board of Directors of
Chartered Accountants (CIN NO-24110GJ1995PLC024052)
ICAI Firm Regn. No. 324982E / E300003
J.M.Patel - Executive Chairman (DIN - 00027224)
per Sukrut Mehta G S Chahal A.N.Soparkar - Managing Director (DIN - 00027480)
Company Secretary
FOR S R B C & CO LLP Meghmani Organics Limited
K. D. Mehta
Place : Ahmedabad Place : Ahmedabad
Partner Chief Financial Officer N.M.Patel - Managing Director (DIN - 00027540)
Membership No : 101974
th thDate : 24 May 2019 Date : 24 May 2019
PARTICULARS(Rs. in Lakhs)
st 31 March 2018 st31 March 2019
Cash and Cash Equivalent at the end of the year 177.16 122.51
Proceeds from Bank Borrowing (Term Loan) 3,000.00 18,700.00
Dividend Distribution Tax Paid (209.10) (207.09)
C. Cash Flow from Financing Activities
Proceeds from Short Term Borrowings 82,150.81 57,331.85
Dividend and Interim Dividend paid (2,442.28) (1,018.17)
Repayment of Short Term Borrowings (67,000.00) (65,000.00)
Repayment of Bank Borrowing (Term Loan) (16,683.33) (2,650.00)
Net Increase in Cash and Cash Equivalent (A+B+C) 54.65 17.18
Cash and Cash Equivalent Comprises as under :
Balance with Banks in Current Accounts 167.08 110.71
Interest and Finance Charges (4,391.63) (3,159.11)
Net Cash (Used in) / Generated from Financing Activities (5,575.53) 3,997.48
Cash and Cash Equivalent at the beginning of the year 122.51 105.33
Cash on Hand 10.08 11.80
Cash and Cash Equivalent at the end of the year (Refer Note 11) 177.16 122.51
The Cash Flow Statement has been prepared under the Indirect Method as set out in the Indian Accounting Standard 7 on
Statement of Cash Flows issued by the Institute of Chartered Accountants of India.
Notes to the Cash Flow Statement for the year ended on 31st March, 2019.
STCASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2019
084
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IC
AI F
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/ E
300003
(C
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hip
No
: 1
01974
N
.M.P
ate
l -
Man
ag
ing
Dir
ec
tor
(DIN
- 0
00
27
54
0)
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ner
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ief
Fin
an
cia
l O
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A.N
.So
park
ar
- M
an
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Dir
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tor
(DIN
- 0
00
27
48
0)
Pla
ce :
Ah
med
ab
ad
K
. D
. M
eh
ta
Pla
ce :
Ah
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ab
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Date
:
24
May 2
019
Co
mp
an
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ecre
tary
D
ate
:
24
May 2
019
NOTES TO THE STANDALONE FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
1. CORPORATE INFORMATION
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year, are described below. The Company based its assumptions and estimates on parameters available
when the financial statements were prepared. Existing circumstances and assumptions about future developments,
however, may change due to market changes or circumstances arising that are beyond the control of the Company.
Such changes are reflected in the assumptions when they occur.
There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate
tax determination is uncertain. Where the final tax outcome of these matters is different from the amounts initially
recorded, such differences will impact the current and deferred tax provisions in the period in which the tax
determination is made. The assessment of probability involves estimation of a number of factors including future
taxable income.
The financial statements were authorized for issue in accordance with a resolution passed in Board Meeting held on May
24, 2019.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 BASIS FOR PREPARATION OF ACCOUNTS
The Standalone financial statements have been prepared and presented in accordance with the Indian Accounting
Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies
(Indian Accounting Standards) Amendment Rules, 2016 (as amended from time to time) and presentation
requirements of Division II of schedule III to the Companies Act, 2013 (Ind As compliant Schedule III), as applicable to
the standalone financial statements.
The financial statements have been prepared on accrual basis and under historical cost basis, except for the following
assets and liabilities which have been measured at fair value:
• Certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial
instruments)
• Derivative financial instruments
2.2 SIGNIFICANT ACCOUNTING ESTIMATES, ASSUMPTIONS AND JUDGEMENTS
In addition, the standalone financial statements are presented in INR which is also the Company's functional currency
and all values are rounded to the nearest Lakh (INR 00,000), except when otherwise indicated.
The preparation of the Company’s financial statements requires management to make estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and
the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes
that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Estimates and assumptions
Meghmani Organics Limited (the Company) is a public company limited by shares domiciled in India, incorporated under
the provisions of Companies Act, 1956. Its shares are listed on Bombay Stock Exchange, and National Stock Exchange in
India and also on Singapore Exchange. The registered office of the company is located at Plot no 184 Phase II GIDC, Vatva
Ahmedabad- 382 445, Gujarat India. The company is engaged in manufacturing and selling of pigment and agrochemicals
products.
Taxes:
085 IND
086
NOTES TO THE STANDALONE FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
An asset is treated as current when it is:
• Expected to be realised or intended to be sold or consumed in normal operating cycle
A liability in respect of defined benefit plans is recognised in the balance sheet, and is measured as the present value
of the defined benefit obligation at the reporting date less the fair value of the plan’s assets. The present value of the
defined benefit obligation is based on expected future payments which arise from the fund at the reporting date,
calculated annually by independent actuaries. Consideration is given to expected future salary levels, experience of
employee departures and periods of service. Refer Note 37 for details of the key assumptions used in determining the
accounting for these plans.
a. CURRENT VS. NON-CURRENT CLASSIFICATION:
The Company presents assets and liabilities in the statement of Assets and Liabilities based on current/ non-
current classification.
• Expected to be realised within twelve months after the reporting period, or
Intangible Assets
Defined Benefit Plans (Gratuity Benefits)
Property, plant and equipment as disclosed in Note 3 are depreciated over their useful economic lives. Management
reviews the useful economic lives at least once a year and any changes could affect the depreciation rates
prospectively and hence the asset carrying values.
Useful economic lives of Property, Plant and Equipment
Intangible development costs are capitalised as and when technical and commercial feasibility of the asset is
demonstrated and approved by authorities, future economic benefits are probable. The costs which can be capitalised
include laboratory testing expenses that are directly attributable to development of the asset. Research costs are
expensed as incurred. Intangible assets are tested for impairment whenever events or changes in circumstances
indicate that their carrying amounts may not be recoverable. Refer Note 2.3 (e) for the estimated useful life of
Intangible assets. The carrying value of Intangible assets has been disclosed in note 3.4.
2.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Impairment of Non- Financial Assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any
indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s
recoverable amount. An asset’s recoverable amount is the higher of an asset’s fair value less costs of disposal and its
value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or group of assets. Where the carrying amount of an asset exceeds its
recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessment of the time value of money and the risk specific to the asset. In determining fair
value less cost of disposal, recent market transactions are taken into account. If no such transactions can be identified,
an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share
price for publicly traded subsidiaries or other available fair value indicators.
• Held primarily for the purpose of trading
• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period
NOTES TO THE STANDALONE FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The Company provides retrospective volume rebates to certain customers once the quantity of products
purchased during the period exceeds a threshold specified in the contract.
(ii) Contract assets
A contract asset is the right to consideration in exchange for goods transferred to the customer. If the
Company performs its obligation by transferring goods to a customer before the customer pays
consideration or before payment is due, a contract asset is recognised for the earned consideration that
is conditional.
Volume rebates:
A liability is treated as current when it is:
• Expected to be settled in normal operating cycle
• Held primarily for the purpose of trading
• Due to be settled within twelve months after the reporting period, or
• There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period
All other assets and liabilities are classified as non-current assets and liabilities. Deferred tax assets and liabilities
are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realization in cash and
cash equivalents. The Company has identified twelve months as its operating cycle.
b. REVENUE RECOGNITION
Revenue from contract with customer is recognised when control of the goods or services are transferred to the
customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for
those goods or services. Revenue is measured at the fair value of the consideration received or receivable, taking
into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the
government. The Company has generally concluded that it is the principal in its revenue arrangements because it
typically controls the goods or services before transferring them to the customer.
1) Sale of Products
Revenue from sale of goods is recognised at the point in time when control of the goods is transferred to the
customer, generally on dispatch/ delivery of the goods or terms as agreed with the customer. The normal
credit term is 30 to 180 days from the date of dispatch. The Company considers whether there are other
promises in the contract that are separate performance obligation to which a portion of the transaction price
needs to be allocated. In determining the transaction price for the sale of goods, the company considers the
effects of variable consideration, the existence of significant financing components, non-cash consideration,
and consideration payable to the customer (if any).
(i) Variable consideration
If the consideration in a contract includes a variable amount, the company estimates the amount of
consideration to which it will be entitled in exchange for transferring the goods to the customer. The
variable consideration is estimated at the time of completion of performance obligation and constrained
until it is highly probable that a significant revenue reversal in the amount of cumulative revenue
recognised will not occur when the associated uncertainty with the variable consideration is
subsequently resolved. Some contracts for the sale of goods provide customers with cash discount in
accordance with the company policy. The cash discount component gives rise to variable consideration.
087 IND
088
Claims receivable on account of insurance are accounted for to the extent the Company is virtually certain of
their ultimate collection
6) Rental income
3) Export Incentives
A receivable represents the Company’s right to an amount of consideration that is unconditional
(i.e., only the passage of time is required before payment of the consideration is due). Refer to
accounting policies of financial assets in (Financial instruments – initial recognition and subsequent
measurement.)
A contract liability is the obligation to transfer goods or services to a customer for which the Company has
received consideration (or an amount of consideration is due) from the customer. If a customer pays
consideration before the Company transfers goods to the customer, a contract liability is recognised
when the payment is made or the payment is due (whichever is earlier). Contract liabilities are
recognised as revenue when the Company performs under the contract.
a. Trade receivables
For all financial instruments measured at amortized cost, interest income is recorded using the Effective
Interest Rate (EIR). The EIR is the rate that exactly discounts the estimated future cash receipts over the
expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of
the financial asset. When calculating the effective interest rate, the Company estimates the expected cash
flows by considering all the contractual terms of the financial instrument (for example, prepayment,
extension, call and similar options) but does not consider the expected credit losses. Interest income is
included in other income in the statement of profit or loss
(iii) Contract liabilities
Export incentives under various schemes notified by government are accounted for in the year of exports
based on eligibility and when there is no uncertainty in receiving the same and is included in revenue in the
statement of profit and loss due to its operating nature.
2) Interest Income
4) Dividend
Dividend income is recognised when the right to receive the same is established, which is generally when
shareholders approve the dividend.
5) Insurance Claims
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot
rates of exchange at the reporting date.
Transactions in foreign currencies are initially recorded by the Company at the functional currency spot rates at
the date the transaction first qualifies for recognition. However, for practical reasons, the Company uses an
average rate if the average approximates the actual rate at the date of the transaction.
Rental income arising from operating leases is accounted on the basis of lease terms and is included in other
income in the statement of profit and loss.
c. FOREIGN CURRENCIES
The Company’s financial statements are presented in INR, which is also the Company’s functional currency.
Transactions and Balances
NOTES TO THE STANDALONE FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The Company's management determines the policies and procedures for both recurring fair value measurement,
such as unquoted financial assets measured at fair value, and for non-recurring measurement, such as assets
held for distribution in discontinued operations. The management comprises of the Managing Director, Chief
Executive Officer (CEO) and Chief Finance Officer (CFO).
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company
determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation
(based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each
reporting period.
• Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable.
• Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement
is directly or indirectly observable.
Exchange differences arising on settlement or translation of monetary items are recognized in profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rates at the dates of the initial transactions. non-monetary items measured at fair value in foreign
currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss
arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain
or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is
recognised in OCI or statement of profit or loss are also recognised in OCI or profit or loss, respectively).
The Company measures certain financial instruments at fair value at each balance sheet date.F air value is the
price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value measurement is based on the presumption that the
transaction to sell the asset or transfer the liability takes place either:
d. FAIR VALUE MEASUREMENT
• In the principal market for the asset or liability, or
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participants that
would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or
a liability is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest.
• In the absence of a principal market, in the most advantageous market for the asset or liability.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy, described as under, based on the lowest level input that is significant to the fair
value measurement as a whole:
• Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
NOTES TO THE STANDALONE FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
089 IND
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as prescribed under
Part C of Schedule II of the Companies Act 2013 except for Plant and Machinery pertaining to power generating
units which are based on independent technical evaluation, life has been estimated as 20 years (on single shift
basis) which is different from that prescribed in Schedule II of the Act.. Depreciation is not provided on freehold
land. Leasehold land is amortized over the available balance lease period. The management believes that these
estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be
used.
An item of property, plant and equipment and any significant part initially recognized is derecognized upon
disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-
recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount
of the asset) is included in the income statement when the asset is derecognized.
The residual values are not more than 5% of the original cost of the item of Property, Plant and Equipment. The
residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each
financial year end and adjusted prospectively, if appropriate.
At each reporting date, the management analyses the movements in the values of assets and liabilities which are
required to be re-measured or re-assessed as per the Company’s accounting policies. For this analysis, the
management verifies the major inputs applied in the latest valuation by agreeing the information in the valuation
computation to contracts and other relevant documents.
External valuers are involved for valuation of significant assets. Involvement of external valuers is decided upon
annually by the board of directors after discussion with and approval by the management. Selection criteria
include market knowledge, reputation, independence and whether professional standards are maintained.
Valuers are normally rotated every three years. The management decides, after discussions with the Company's
external valuers, which valuation techniques and inputs to use for each case.
The management, in conjunction with the Company's external valuers, also compares the change in the fair value
of each asset and liability with relevant external sources to determine whether the change is reasonable.
e. PROPERTY, PLANT AND EQUIPMENT
Property, Plant and Equipment (PPE) and capital work in progress is stated at cost, net of accumulated
depreciation and accumulated impairment losses, if any. When significant parts of plant and equipment are
required to be replaced at intervals, the Company depreciates them separately based on their specific useful
lives. All other repair and maintenance costs are recognized in profit or loss as incurred.
Capital work-in-progress comprises cost of fixed assets that are not yet installed and ready for their intended use
at the balance sheet date.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the
basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as
explained above.
• Disclosures for valuation methods, significant estimates and assumptions.
• Quantitative disclosures of fair value measurement hierarchy.
This note summarises accounting policy for fair value. Other fair value related disclosures are given in the relevant
notes. Refer note 41.
• Investment in equity shares.
• Financial instruments (including those carried at amortised cost).
NOTES TO THE STANDALONE FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
090
Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any
accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when
development is complete and the asset is available for use. It is amortised over the period of expected future
benefit. Amortisation expense is recognised in the statement of profit and loss unless such expenditure forms part
of carrying value of another asset.
• The ability to measure reliably the expenditure during development
f. INTANGIBLE ASSETS
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition,
intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses, if
any. Cost include acquisition and other incidental cost related to acquiring the intangible asset. Research costs
are expensed as incurred. Intangible development costs are capitalised as and when technical and commercial
feasibility of the asset is demonstrated and approved by authorities, future economic benefits are probable. The
costs which can be capitalised include laboratory testing expenses that are directly attributable to development of
the asset for its intended use.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment
whenever there is an indication that the intangible asset may be impaired. The amortisation period and the
amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each
reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic
benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and
are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is
recognised in the statement of profit and loss.
Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net
disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss
when the asset is derecognised.
Research and Development costs
• The technical feasibility of completing the intangible asset so that the asset will be available for use or sale
• The availability of resources to complete the asset
Research costs are expensed as incurred. Development expenditures on an individual project are recognised as
an intangible asset when the Group can demonstrate:
• Its intention to complete and its ability and intention to use or sell the asset
• How the asset will generate future economic benefits
NOTES TO THE STANDALONE FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Asset Estimated Useful life
Leasehold Land 99 Years
Plant & Machinery 15 Years
Power Generating units 20 Years
Computers 3 Years
Furniture and Fixtures 10 Years
Building 30 Years
Other equipments 5 Years
Vehicles 8 Years
091 IND
a) The asset is held within a business model whose objective is to hold assets for collecting contractual
cash flows, and
A 'debt instrument' is measured at its amortised cost if both the following conditions are met:
Debt instruments at amortised cost
After initial measurement, such financial assets are subsequently measured at amortised cost using the
Effective Interest Rate (EIR) method. Amortised cost is calculated by taking into account any discount or
premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included
in other income in the statement of profit or loss. The losses arising from impairment are recognised in the
statement of profit or loss.
Debt instrument at Fair Value Through Other Comprehensive Income (FVTOCI)
A 'debt instrument' is classified at FVTOCI if both of the following criteria are met:
b) Contractual terms of the asset give rise on specified dates to cash flows that are Solely Payments of
Principal and Interest (SPPI) on the principal amount outstanding.
b) The asset's contractual cash flows represent SPPI.
a) The objective of the business model is achieved both by collecting contractual cash flows and selling the
financial assets, and
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting
date at fair value. Fair value movements are recognized in the Other Comprehensive Income (OCI).
However, the company recognizes interest income, impairment losses & reversals and foreign exchange
gain or loss in the Profit and Loss. On derecognition of the asset, cumulative gain or loss previously
recognised in OCI is reclassified from the equity to Profit and Loss. Interest earned whilst holding FVTOCI
debt instrument is reported as interest income using the EIR method.
Debt instruments included within the FVTPL category are measured at fair value with all changes recognized
in the statement of profit and loss.
Equity investments
Debt instrument at Fair Value Through Profit or Loss (FVTPL)
In addition, the company may elect to designate a debt instrument, which otherwise meets amortized cost or
FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a
measurement or recognition inconsistency (referred to as 'accounting mismatch'). The Company has
designated certain debt instrument as at FVTPL.
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for
categorization as at amortized cost or as FVTOCI, is classified as FVTPL.
All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held
for trading are classified as at FVTOCI. For all other equity instruments, the company may make an
irrevocable election to present in other comprehensive income subsequent changes in the fair value. The
company makes such election on an instrument-by instrument basis. The classification is made on initial
recognition and is irrevocable.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the
instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to
statement of profit and loss, even on sale of investment. However, the company may transfer the cumulative
gain or loss within equity.
Equity instruments included within the FVTPL category are measured at fair value with all changes
recognized in the statement of profit and loss.
NOTES TO THE STANDALONE FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
092
A summary of the policies applied to the Company’s intangible assets is as follows:
During the period of development, the asset is tested for impairment annually.
NOTES TO THE STANDALONE FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
g. IMPAIRMENT OF NON- FINANCIAL ASSETS
Expenditure incurred on acquisition /development of intangible assets which are not ready for their intended use
at balance sheet date are disclosed under intangible assets under development.
Intangible assets under development
(A) Financial Asset
Initial Recognition and Measurement
h. FINANCIAL INSTRUMENT
The Company bases its impairment calculation on detailed budgets and forecast calculations, which are prepared
separately for each of the Company’s CGUs to which the individual assets are allocated. These budgets and
forecast calculations generally cover a period of five years. For longer periods, a long-term growth rate is
calculated and applied to project future cash flows after the fifth year.
Impairment losses of continuing operations, including impairment on inventories, are recognised in the statement
of profit and loss, except for properties previously revalued with the revaluation surplus taken to Other
Comprehensive Income (OCI). For such properties, the impairment is recognised in OCI upto the amount of any
previous revaluation surplus.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.
At initial recognition, the Company measures a financial asset or financial liability at its fair value plus or
minus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction
costs that are directly attributable to the acquisition or issue of the financial asset or financial liability.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no
such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated
by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If
any indication exists, or when annual impairment testing for an asset is required, the Company estimates the
asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or Cash-Generating Unit’s
(CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual
asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or
groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is
considered impaired and is written down to its recoverable amount.
Assets Amortisation Method Amortisation period
Software licenses On Straight-line basis 5 years
Product licenses On Straight-line basis 5 years
Usage right On Straight-line basis 5 years
093 IND
De-recognition
The rights to receive cash flows from the asset have expired, or The company has transferred its rights to
receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without
material delay to a third party under a 'pass-through' arrangement; and either the company has transferred
substantially all the risks and rewards of the asset, or (b) the company has neither transferred nor retained
substantially all the risks and rewards of the asset, but has transferred control of the asset.
A financial asset (or, where applicable, a part of a financial asset or part of a company of similar financial
assets) is primarily derecognised (i.e. removed from the Company's balance sheet) when:
When the company has transferred its rights to receive cash flows from an asset or has entered into a pass-
through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership.
When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor
transferred control of the asset, the company continues to recognise the transferred asset to the extent of the
Company's continuing involvement. In that case, the company also recognises an associated liability. The
transferred asset and the associated liability are measured on a basis that reflects the rights and obligations
that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower
of the original carrying amount of the asset and the maximum amount of consideration that the company
could be required to repay.
Impairment of financial assets
In accordance with Ind AS 109, the Company applies Expected Credit Loss (ECL) model for measurement
and recognition of impairment loss on the following financial assets and Credit Risk Exposure:
b) Trade receivables or any contractual right to receive cash or another financial asset that result from
transactions that are within the scope of Ind AS 18 (referred to as 'contractual revenue receivables' in
these financial statements)
a) Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt
securities, deposits, trade receivables and bank balance
• Trade receivables and
The company follows 'simplified approach' for recognition of impairment loss allowance on:
• Other receivables
The application of simplified approach does not require the company to track changes in credit risk. Rather, it
recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial
recognition.
For recognition of impairment loss on other financial assets and risk exposure, the company determines that
whether there has been a significant increase in the credit risk since initial recognition. Lifetime ECL are the
expected credit losses resulting from all possible default events over the expected life of a financial
instrument.
ECL is the difference between all contractual cash flows that are due to the Company in accordance with the
contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the
original EIR. When estimating the cash flows, an entity is required to consider:
• All contractual terms of the financial instrument (including prepayment, extension, call and similar
options) over the expected life of the financial instrument. However, in rare cases when the expected life
of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining
contractual term of the financial instrument.
NOTES TO THE STANDALONE FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
094
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss,
loans and borrowings, payables, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs.
Subsequent measurement of financial liabilities
The Company’s financial liabilities include trade and other payables, loans and borrowings.
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are
classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This
category also includes derivative financial instruments entered into by the Company that are not designated
as hedging instruments in hedge relationships as defined by Ind AS 109.
Financial liabilities at fair value through profit or loss
Loan and borrowings
Gains or losses on liabilities held for trading are recognised in the profit or loss.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost
using the Effective Interest Rate (EIR) method. Gains and losses are recognised in profit or loss when the
liabilities are derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit
and loss.
These amounts represent liability for good and services provided to the Company prior to the end of financial
year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade
and other payables are presented as current liabilities unless payment is not due within 12 months after the
reporting period. They are recognised initially at fair value and subsequently measured at amortised cost
using the effective interest method.
The Company uses derivative financial instruments, such as forward currency contracts, full currency swaps
and interest rate swaps contracts to hedge its foreign currency risks and interest rate risks respectively. Such
derivative financial instruments are initially recognised at fair value on the date on which a derivative contract
is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets
when the fair value is positive and as financial liabilities when the fair value is negative.
Trade and other payables
Derivatives and Hedging Activities
• Cash flows from the sale of collateral held or other credit enhancements that are integral to the
contractual terms.
• Financial assets measured as at amortised cost, contractual revenue receivables and lease
receivables: ECL is presented as an allowance, i.e., as an integral part of the measurement of those
assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-
off criteria, the company does not reduce impairment allowance from the gross carrying amount.
(B) Financial Liabilities
Initial recognition and measurement
NOTES TO THE STANDALONE FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
095 IND
De-recognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the derecognition of the original liability and the recognition of a new liability. The
difference in the respective carrying amounts is recognised in the statement of profit or loss.
Stores and spares, packing materials and raw materials are valued at lower of cost or net realisable value and for
this purpose, cost is determined on moving weighted average basis. However, the aforesaid items are not valued
below cost if the finished products in which they are to be incorporated are expected to be sold at or above cost.
J. BORROWING COSTS
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily
takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the
asset.
I. INVENTORIES
All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and
other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange
differences to the extent regarded as an adjustment to the borrowing costs.
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a
legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or
realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent
on future events and must be enforceable in the normal course of business and in the event of default,
insolvency or bankruptcy of the group or the counterparty.
Off-setting Financial Instrument
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of
completion and the estimated costs necessary to make the sale.
Semi-finished products, finished products and by-products are valued at lower of cost or net realisable value and
for this purpose, cost is determined on standard cost basis which approximates the actual cost. Cost of finished
goods includes excise duty, as applicable. Variances, exclusive of abnormally low volume and operating
performance, are adjusted to inventory.
Traded goods are valued at lower of cost and net realizable value. Cost includes cost of purchase and other costs
incurred in bringing the inventories to their present location and condition. Cost is determined on a weighted
average basis.
NOTES TO THE STANDALONE FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
096
The Company has other long-term employee benefits in the nature of leave encashment. The liability in respect of
leave encashment is provided for on the basis of an actuarial valuation on projected unit credit method made at the
end of the financial year. The aforesaid leave encashment is funded with an insurance Company in the form of a
qualifying insurance policy.
Liabilities for wages, salaries, including non-monetary benefits that are expected to be settled wholly within 12
months after the end of the period in which the employees render the related services are recognised in respect of
employees' services up to the end of the reporting period and are measured at the amounts expected to be paid
when the liabilities are to be settled. The liabilities are presented as current employee benefit obligations in the
balance sheet.
k. RETIREMENT AND OTHER EMPLOYEE BENEFITS
Provident Fund is a defined contribution scheme established under a State Plan. The contributions to the scheme
are charged to the statement of profit and loss in the year when employee rendered related services.
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of
service gets a gratuity on post-employment at 15 days salary (last drawn salary) for each completed year of
service as per the rules of the Company. The aforesaid liability is provided for on the basis of an actuarial valuation
on projected unit credit method made at the end of the financial year. The scheme is funded with an insurance
Company in the form of a qualifying insurance policy.
Re-measurements, comprising of acturial gains and losses, the effect of asset ceiling, excluding amounts
included in the net interest on the net defined benefit liability and the return on plan assets (excluding amounts
included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a
corresponding debit or credit to retained earnings through OCI in the period in which they occur. Re-
measurements are not reclassified to profit or loss in subsequent periods.
Income taxes
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities in accordance with the Income-tax Act, 1961. The tax rates and tax laws used to compute the
amount are those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in
other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying
transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns
with respect to situations in which applicable tax regulations are subject to interpretation and establishes
provisions where appropriate.
Deferred taxes
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes at the reporting date.
• When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss
• In respect of taxable temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it
is probable that the temporary differences will not reverse in the foreseeable future
l. ACCOUNTING FOR TAXES ON INCOME
Deferred tax liabilities are recognised for all taxable temporary differences, except:
NOTES TO THE STANDALONE FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
097 IND
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is
no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be
utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the
extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the
asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the reporting date.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable
profit will be available against which the deductible temporary differences, and the carry forward of unused tax
credits and unused tax losses can be utilised, except:
• When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition
of an asset or liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss.
Contingent liabilities and contingent assets are reviewed at each balance sheet date.
n. CONTINGENT LIABILITIES
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other
comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction
either in OCI or directly in equity.
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some
or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised
as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is
presented in the statement of profit and loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision
due to the passage of time is recognised as a finance cost.
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the
occurrence or non—occurrence of one or more uncertain future events not wholly within the control of the
Company or a present obligation that is not recognized because it is not probable that an outflow of resources will
be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability
that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent
liability but discloses its existence in the financial statements.
Provisions are not recognised for future operating losses.
The determination of whether an arrangement is (or contains) a lease is based on the substance of the
arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement
is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or
assets, even if that right is not explicitly specified in an arrangement.
o. LEASES
A contingent assets is not recognised unless it becomes virtually certain that an inflow of economic benefits will
arise. When an inflow of economic benefits is probable, contigent assets are disclosed in the financial statements.
m. PROVISIONS
NOTES TO THE STANDALONE FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
098
Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from
the Company to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the
Company’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a
constant periodic rate of return on the net investment outstanding in respect of the lease.
p. EARNING PER SHARE
Basic earnings per share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity
shareholders by the weighted average number of equity shares outstanding during the period.
Company as a lessee
A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers
substantially all the risks and rewards incidental to ownership to the Company is classified as a finance lease.
Company as a lessor
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with
an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
Finance leases are capitalised at the commencement of the lease at the inception date fair value of the leased
property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned
between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the
remaining balance of the liability. Finance charges are recognised in finance costs in the statement of profit and
loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance
with the Company’s general policy on the borrowing costs. Contingent rentals are recognised as expenses in the
periods in which they are incurred.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term
deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the
Company’s cash management.
The Company recognises a liability for dividends to equity holders of the Company when the dividend is
authorised and the dividend is no longer at the discretion of the Company. As per the corporate laws in India, a
dividend is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in
equity.
q. CASH AND CASH EQUIVALENTS
Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset
are classified as operating leases. Rental income from operating lease is recognised on a straight-line basis over
the term of the relevant lease.
Diluted earnings per share
r. DIVIDEND
A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the
Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the
estimated useful life of the asset and the lease term.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity
shareholders and the weighted average number of shares outstanding during the period are adjusted for the
effects of all dilutive potential equity shares.
Operating lease payments are recognised as an expense in the statement of profit and loss on a straight-line basis
over the lease term.
NOTES TO THE STANDALONE FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
099 IND
s. SEGMENT REPORTING
The Company prepares its segment information in conformity with the accounting policies adopted for preparing
and presenting the financial statements of the Company as a whole. Common allocable costs are allocated to
each segment on an appropriate basis.
t. NEW AND AMENDED STANDARD
Ind AS 115 Revenue from Contracts with Customers
Ind AS 115 was issued on 28 March 2018 and supersedes Ind AS 11 Construction Contracts and Ind AS 18
Revenue and it applies, with limited exceptions, to all revenue arising from contracts with its customers. Ind AS
115 establishes a five-step model to account for revenue arising from contracts with customers and requires that
revenue be recognised at an amount that reflects the consideration to which an entity expects to be entitled in
exchange for transferring goods or services to a customer.
Segment Policies:
Ind AS 115 requires entities to exercise judgement, taking into consideration all of the relevant facts and
circumstances when applying each step of the model to contracts with their customers. The standard also
specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a
contract. In addition, the standard requires extensive disclosures.
Based on "Management Approach" as defined in Ind AS 108 -Operating Segments, the Chief Operating Decision
Maker evaluates the Company's performance and allocates the resources based on an analysis of various
performance indicators by business segments. Inter segment sales and transfers are reflected at market prices.
Unallocable items includes general corporate income and expense items which are not allocated to any business
segment.
Amendment to Ind AS 20 government grant related to non-monetary asset
The amendment clarifies that where the government grant related to asset, including non-monetary grant at fair
value, shall be presented in balance sheet either by setting up the grant as deferred income or by deducting the
grant in arriving at the carrying amount of the asset. Prior to the amendment, Ind AS 20 did not allow the option to
present asset related grant by deducting the grant from the carrying amount of the asset. These amendments do
not have any impact on the financial statements as the Company continues to present grant relating to asset by
setting up the grant as deferred income.
The Company adopted Ind AS 115 using the modified retrospective method of adoption with the date of initial
application of 1 April 2018. Under this method, the standard can be applied either to all contracts at the date of initial
application or only to contracts that are not completed at this date. The Company elected to apply the standard to all
contracts as at 1 April 2018. The cumulative effect of initially applying Ind AS 115 is not material. Therefore, the
comparative information was not restated and continues to be reported under Ind AS 11 and Ind AS 18.
Appendix B to Ind AS 21 Foreign Currency Transactions and Advance Considerations
The appendix clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset,
expense or income (or part of it) on the de-recognition of a non-monetary asset or non-monetary liability relating to
advance consideration, the date of the transaction is the date on which an entity initially recognises the non-
monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or
receipts in advance, then the entity must determine the date of the transactions for each payment or receipt of
advance consideration. This Interpretation does not have any impact on the Company’s financial statements.
NOTES TO THE STANDALONE FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
100
On March 30, 2019, Ministry of Corporate Affairs has notified Ind AS 116, Leases. Ind AS 116 is effective for annual
periods beginning on or after April 1, 2019. Ind AS 116 will replace the existing leases Standard, Ind AS 17 Leases,
and related Interpretations. Ind AS 116 sets out the principles for the recognition, measurement, presentation and
disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar
to the accounting for finance leases under Ind AS 17. The standard includes two recognition exemptions for
lessees – leases of ‘low-value’ assets (e.g., personal computers) and short-term leases (i.e., leases with a lease
term of 12 months or less). At the commencement date of a lease, a lessee will recognise a liability to make lease
payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease
term (i.e., the right-of-use asset). Lessees will be required to separately recognise the interest expense on the
lease liability and the depreciation expense on the right-of-use asset. Lessees will be also required to remeasure
the lease liability upon the occurrence of certain events (e.g., a change in the lease term, a change in future lease
payments resulting from a change in an index or rate used to determine those payments). The lessee will
generally recognise the amount of the remeasurement of the lease liability as an adjustment to the right-of-use
asset. The effect of this amendment on the financial statements of the Company is being evaluated.
u. Standards issued but not yet effective
Ind AS 116 Leases
NOTES TO THE STANDALONE FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
101 IND
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nt &
Mac
hine
ry
32,
212.
14
3,9
13.7
6
1,6
82.6
3
34,
443.
27
8,3
43.8
6
3,1
97.4
1
692
.08
1
0,84
9.19
2
3,59
4.08
2
3,86
8.28
5
Fur
nitu
re &
Fix
ture
s 6
92.6
2
21.
94
8.3
5
706
.21
1
31.4
5
71.
03
3.1
8
199
.30
5
06.9
1
561
.17
1
Fre
ehol
d La
nd
558
.40
-
-
5
58.4
0
-
-
-
-
558
.40
558.
40
3
Bui
ldin
g 1
5,48
1.93
5
54.6
1
259
.17
1
5,77
7.37
1
,837
.90
6
40.6
7
33.
45
2,4
45.1
2
13,
332.
25
13,
644.
03
3
Usa
ge R
ight
s 2
14.4
1
-
-
214
.41
1
35.2
2
40.
63
-
1
75.8
5
38.
56
79.
19
Su
bTo
tal
54,
209.
74
4,9
82.5
2
2,0
38.9
2
57,
153.
34
10,
936.
94
4,1
80.7
8
743
.57
1
4,37
4.15
4
2,77
9.19
4
3,27
2.80
1
Sof
twar
e Li
cens
es
78.
31
46.
03
-
1
24.3
4
60.
71
11.
80
-
7
2.51
5
1.83
1
7.60
Tota
l 5
6,55
4.67
5
,028
.55
2
,038
.92
5
9,54
4.30
1
1,72
7.59
4
,629
.04
7
43.5
7
15,
613.
06
43,
931.
24
44,
827.
08
6
Veh
icle
s 1
,273
.86
7
2.06
2
8.79
1
,317
.13
3
67.2
8
146
.00
1
3.08
5
00.2
0
816
.93
9
06.5
8
2
Pro
duct
Lic
ense
s 2
,052
.21
-
-
2
,052
.21
5
94.7
2
395
.83
-
990
.55
1
,061
.66
1
,457
.49
Su
bTo
tal
2,3
44.9
3
46.
03
-
2
,390
.96
7
90.6
5
448
.26
-
1,2
38.9
1
1,1
52.0
5
1,5
54.2
8
3.3
In
tan
gib
le A
sset
s
8
Oth
er E
quip
men
ts
315
.84
4
9.99
-
365
.83
1
05.6
9
60.
46
-
1
66.1
5
199
.68
2
10.1
5
7
Com
pute
rs
118
.29
2
8.25
0
.69
1
45.8
5
56.
32
22.
91
0.2
3
79.
00
66.
85
61.
97
Sr.
No.
Part
icul
ars
As
atst
31 M
arch
, 201
9A
s at
st31
Mar
ch, 2
018
Gro
ss B
lock
Ope
ning
Add
ition
Ded
uctio
n /
Adj
ustm
ents
*
Bui
ldin
g 2
54.3
4
33.
21
221
.13
Pla
nt &
Mac
hine
ry
1,0
25.9
2
521
.79
5
04.1
3
Fur
nitu
re &
Fix
ture
s 5
.78
2
.70
3
.08
Tota
l 1
,286
.04
5
57.7
0
728
.34
Part
icul
ars
Gro
ss B
lock
A
ccum
ulat
edD
epre
ctia
tion
Net
Blo
ck
Ded
uctio
n /
Adj
ustm
ents
*C
losi
ngC
losi
ngO
peni
ngPr
ovis
ion
for t
he Y
ear
(Rs
. in
La
kh
s)
(Rs.
in L
akh
s)
(Rs
. in
La
kh
s)
Dep
reci
atio
n / A
mor
tisat
ion
Net
* In
cludes
Follo
win
g a
ssets
lost
due t
o f
ire.
3.2
C
ap
ital
Wo
rk I
n P
rog
ress/I
nta
ng
ible
s u
nd
er
de
ve
lop
me
nt
Co
st
As
at M
arch
31,
201
9 4
,442
.48
4
91.2
7
4,9
33.7
5
Cap
italis
atio
n 1
,701
.22
4
0.32
1
,741
.54
Ass
ets
lost
2
24.4
6
- 2
24.4
6 A
dditi
on
4,1
78.9
1
259
.74
4
,438
.65
As
at M
arch
31,
201
8
2,18
9.25
2
71.8
5
2,4
61.1
0
due
to fi
re
Part
icul
ars
Cap
ital W
ork
In P
rogr
ess
Tang
ible
Tota
lIn
tang
ible
Capita
l Work
-In-P
rogre
ss for
Tangib
le A
ssets
as a
t 31st
Marc
h 2
019 c
om
prise
s exp
enditu
re for
the P
lant and B
uild
ing in
the c
ours
e o
f co
nst
ruct
ion.
Inta
ngib
le A
ssets
under
Deve
lopm
ent as
at 31st
Marc
h 2
019 c
om
prise
s exp
enditu
re for
the d
eve
lopm
ent and r
egis
tratio
n o
f pro
duct
lice
nse
s.
102
No
te -
3
Pro
pert
y, P
lan
t an
d E
qu
ipm
en
t as o
n 3
1st
Marc
h 2
018
st
No
tes t
o t
he F
inan
cia
l S
tate
men
ts F
or
Th
e Y
ear
En
ded
31
Marc
h 2
019
Sr.
No.
Gro
ss B
lock
D
epre
ciat
ion
/ Am
ortis
atio
nN
et
O
peni
ng
Add
ition
D
educ
tion
C
losi
ng
Ope
ning
F
or th
e Ye
ar
Clo
sing
31st
Mar
ch
31st
Mar
ch
As
at
As
at
20
18
201
7
Part
icul
ars
5
Fur
nitu
re &
Fix
ture
s 6
41.5
1
68.
42
17.
31
692
.62
6
2.40
6
9.05
1
31.4
5
561
.17
5
79.1
1
4
Pla
nt &
Mac
hine
ry
24,
813.
34
7,5
90.8
7
192
.07
3
2,21
2.14
5
,395
.44
2
,948
.42
8
,343
.86
2
3,86
8.28
1
9,41
7.90
3.1
Ta
ng
ible
Ass
ets
3.3
In
tan
gib
le A
sset
s
1
Sof
twar
e Li
cenc
es
70.
48
7.8
3
-
7
8.31
5
4.45
6
.26
6
0.71
1
7.60
1
6.03
3
Bui
ldin
g
14,4
57.5
3
1,1
23.2
3
98.
83
15,
481.
93
1,2
07.9
0
630
.00
1
,837
.90
1
3,64
4.03
1
3,24
9.63
7
Com
pute
rs
103
.00
1
5.29
-
118
.29
3
2.02
2
4.30
5
6.32
6
1.97
7
0.98
1
Fre
ehol
d La
nd
558
.40
-
-
5
58.4
0
-
-
-
5
58.4
0
558
.40
6
Veh
icle
s
916.
11
394
.55
3
6.80
1
,273
.86
2
18.3
9
148
.89
3
67.2
8
906
.58
6
97.7
2
8
Oth
er E
quip
men
ts
274
.65
4
1.58
0
.39
3
15.8
4
51.
90
53.
79
105
.69
2
10.1
5
222
.75
2
Pro
duct
Lic
ence
s 1
,075
.28
9
85.8
0
8.8
7
2,0
52.2
1
293
.32
3
01.4
0
594
.72
1
,457
.49
7
81.9
6
2
Leas
ehol
d La
nd
2,7
54.5
8
802
.08
-
3,5
56.6
6
62.
38
32.
06
94.
44
3,4
62.2
2
2,6
92.2
0
To
tal
45,
879.
29
11,
029.
65
354
.27
5
6,55
4.67
7
,465
.64
4
,261
.95
1
1,72
7.59
4
4,82
7.08
3
8,41
3.65
3
Usa
ge R
ight
s 2
14.4
1
-
-
214
.41
8
7.44
4
7.78
1
35.2
2
79.
19
126
.97
S
ub
Tota
l 1
,360
.17
9
93.6
3
8.8
7
2,3
44.9
3
435
.21
3
55.4
4
790
.65
1
,554
.28
9
24.9
6
S
ub
Tota
l 4
4,51
9.12
1
0,03
6.02
3
45.4
0
54,
209.
74
7,0
30.4
3
3,9
06.5
1
10,
936.
94
43,
272.
80
37,
488.
69
(Rs
. in
La
kh
s)
i B
orr
ow
ing c
ost
capita
lised d
uring th
e y
ear R
s. N
il (3
1st
Marc
h 2
017 - R
s.77.6
1 L
akh
s) to
resp
ect
ive q
ualif
yin
g a
sse
ts.
Capita
l Work
-in-P
rogre
ss fo
r Tangib
le A
ssets
as
at 3
1st
Marc
h 2
018 c
om
prise
s exp
enditu
re fo
r the P
lant a
nd B
uild
ing
in th
e c
ou
rse
of c
on
stru
ctio
n.
Inta
ngib
le A
ssets
under deve
lopm
ent a
s at 3
1st
Marc
h 2
018 c
om
prise
s exp
enditu
re fo
r the d
eve
lopm
ent a
nd re
gis
tra
tion
of P
rod
uct
Lic
en
ses.
Cap
ital
Wo
rk i
n P
rog
ress
PA
RT
ICU
LA
RS
Tan
gib
le
Inta
ng
ible
To
tal
C
apita
lisatio
n
529.5
8
820.9
8
1,3
50.5
6
3.2
C
ap
ital W
ork
in
Pro
gre
ss / In
tan
gib
les u
nd
er
Develo
pm
en
t
A
s a
t M
arc
h 3
1, 2017
656.4
4
944.6
9
1,6
01.1
3
A
dd
ition
2,0
62.3
9
148.1
4
2,2
10.5
3
C
os
t
A
s a
t M
arc
h 3
1, 2018
2,1
89.2
5
271.8
5
2,4
61.1
0
(Rs.
in L
akh
s)
103 IND
st
No
tes t
o t
he F
inan
cia
l S
tate
men
ts F
or
Th
e Y
ear
En
ded
31
Marc
h 2
019
No
tes:
- A
dd
itio
n t
o R
esearc
h a
nd
De
velo
pm
en
t A
ssets
du
rin
g t
he P
revio
us Y
ear
are
as u
nd
er
(Rs
. in
La
kh
s)
Tan
gib
le A
sset
s
1
Bui
ldin
g
9.49
-
9.
49
0.3
2
0.1
6 0.
48
9.0
1
9.1
7
2
Pla
nt &
Mac
hine
ry
109
.41
7
4.23
18
3.64
2
8.55
1
7.51
46
.06
1
37.5
8
80.
86
4
Com
pute
rs
3.3
3
0.2
1 3.
54
0.7
3
1.0
9 1.
82
1.7
2
2.6
0
5
Oth
er E
quip
men
ts
2.1
0
2.5
3 4.
63
0.4
8
0.4
8 0.
96
3.6
7
1.6
2
Su
b T
ota
l 14
0.09
7
6.97
2
17.0
6
36.
73
22.
57
59.3
0
157
.76
1
03.3
6
3
Fur
nitu
re &
Fix
ture
s 1
5.76
-
15
.76
6
.65
3
.33
9
.98
5
.78
9
.11
Inta
ng
ible
Ass
ets
Su
b T
ota
l 52
.96
-
5
2.96
5
1.36
1
.60
52.
96
-
1
.60
Tota
l
193.
05
76.
97
270
.02
88.
09
24.
17
112
.26
1
57.7
6
104
.96
1
Pro
duct
Lic
ense
s 5
2.96
-
52.9
6
51.
36
1.6
0 5
2.96
-
1.6
0
Part
icul
ars
Sr.
No.
Ope
ning
Ope
ning
Add
ition
For t
he Y
ear
Clo
sing
Clo
sing
Gro
ss B
lock
D
epre
ciat
ion
/ Am
ortis
atio
nN
et
As
at31
st M
arch
20
18
As
at
31st
Mar
ch20
17
No
tes:
- A
dd
itio
n t
o R
esearc
h a
nd
Develo
pm
en
t A
ssets
du
rin
g t
he Y
ear
are
as u
nd
er
(Rs
. in
La
kh
s)
5
Oth
er E
quip
men
ts
4.6
3
0.2
8 4.
91
0.9
6
0.7
5 1.
71
3.2
0
3.6
7
1
Pro
duct
Lic
ense
s 5
2.96
-
52
.96
5
2.96
-
52
.96
-
-
4
Com
pute
rs
3.5
4
1.5
3 5.
07
1.8
2
1.4
1 3.
23
1.8
4
1.7
2
1
Bui
ldin
g
9.49
7
.54
17.0
3
0.4
8
0.3
3 0.
81
16.
22
9.0
1
Inta
ng
ible
Ass
ets
Tota
l
270.
02
51.
23
321.
25
112
.26
3
0.81
14
3.07
1
78.1
8
157
.76
Su
b T
ota
l 21
7.06
5
1.23
2
68.2
9
59.
30
30.
81
90.1
1
178
.18
1
57.7
6
Tan
gib
le A
sset
s
Su
b T
ota
l 52
.96
-
52
.96
5
2.96
-
52
.96
-
-
2
Pla
nt &
Mac
hine
ry
183
.64
4
1.79
22
5.43
4
6.06
2
5.00
71
.06
1
54.3
7
137
.58
3
Fur
nitu
re &
Fix
ture
s 1
5.76
0
.09
15.8
5
9.9
8
3.3
2 13
.30
2
.55
5
.78
Part
icul
ars
Sr.
No.
Ope
ning
Ope
ning
Add
ition
For t
he Y
ear
Clo
sing
Clo
sing
Gro
ss B
lock
D
epre
ciat
ion
/ Am
ortis
atio
nN
et
As
at31
st M
arch
20
19
As
at
31st
Mar
ch20
18
104
Aggregate value of Impairment of Investments in Subsidiary 123.30 123.30
st st PARTICULARS 31 March 2019 31 March 2018
Aggregate value of Investments in Subsidiaries 18,369.85 23,438.07
(Rs. in Lakhs)
TOTAL 18,246.55 23,314.77
(31st March, 2018 - Nil) (Refer Note 44)
PT Meghmani Organics Indonesia (Refer Note 34)
Preference Shares of Meghmani Finechem Limited of Rs. 10/- each
Investments in Preference Shares of Subsidiary (Unquoted)
210,919,871 (31st March 2018 - Nil) 8% Optionally Convertible Redeemable 10,986.54 -
st st PARTICULARS 31 March 2019 31 March 2018
4 INVESTMENTS IN SUBSIDIARIES
Meghmani Organics Inc., USA of USD 1 each
Meghmani Finechem Limited of Rs.10/- each (Refer Note 44)
(iv) Nil (31st March 2018 - 14,657,392) Equity Shares of - 10,986.54
Investment at cost
(I) 2,92,500 (31st March 2018 - 2,92,500) Equity Shares of 139.70 139.70
(iii) 1 (31st March 2018 - 1) Equity Shares of Meghmani Overseas FZE 4.56 4.56 of AED 35,000 each
Investments in Equity Shares of Subsidiaries (Unquoted)
Meghmani Agrochemicals Private Limited of Rs. 10 each (Refer Note 44)
(v) 2,50,000 (31st March 2018 - 2,50,000) Equity Shares of 123.30 123.30
(ii) 2,35,45,985 (31st March 2018 - 4,04,46,820) Equity Shares of 7,115.75 12,183.97
PT Meghmani Organics Indonesia of USD 1 each
Less - Impairment of Investments in Equity Shares of (123.30) (123.30)
(Rs. in Lakhs)
stNotes to the Financial Statements For The Year Ended 31 March 2019
105 IND
5 FINANCIAL ASSETS : INVESTMENTS
(ii) 5,17,085 (31st March 2018 - 5,17,085) Equity Shares of Narmada Clean Tech 51.71 51.71
(vi) 100 (31st March 2018 - 100) Equity Shares of Sanand Eco Project Limited 0.01 0.01
(vii) 2,000 (31st March 2018 - 2,000) Equity Shares of Suvikas Peoples Co-operative 1.00 1.00
st st PARTICULARS 31 March 2019 31 March 2018
(I) Investments in Equity Shares (Unquoted)
(i) 4 (31st March 2018 - 4) Equity Shares of Alaukik Owners Association 0 0
of Rs.100/- each #
of Rs.10/- each
Infrastructure Limited of Rs.10/- each
Co-operative Society Limited of Rs.10/- each
of Rs.10/- each
Investment at fair value through Other Comprehensive Income
(iii) 14,000 (31st March 2018 - 14,000) Equity Share of Bharuch Eco Enviro 1.40 1.40
(iv) 500 (31st March 2018 - 500) Equity Shares of Green Environment Services 0.05 0.05
(v) 30,000 (31st March 2018 - 30,000) Equity Shares of Panoli Enviro Technology 3.00 3.00
of Rs.10/- each
(viii) 10 (31st March 2018 - 10) Equity Shares of Vellard View Premises 0.01 0.01
Investment at Amortised Cost
(II) Investments in Government Securities (Unquoted) 0.23 0.23
National Savings Certificates
Total (II) 0.23 0.23
Total (I+II) 57.41 57.41
Total (I) 57.18 57.18
Co-operative Society Limited of Rs.50/- each
Bank Limited of Rs.50/- each
(Rs. in Lakhs)
st st PARTICULARS 31 March 2019 31 March 2018
Aggregate Value Of Investments in unquoted Investments 57.41 57.41
(Rs. in Lakhs)
st st 31 March 2019 31 March 2018
6 OTHER FINANCIAL ASSETS (NON CURRENT)
Unsecured, Considered Good
Bank Deposits with orignal maturity of more than 12 months 40.25 60.92 (including interest accrued) (Refer Note below)
TOTAL 559.70 607.22
(Rs. in Lakhs) PARTICULARS
Security Deposits 519.45 546.30
Note - # Amount is less than 0.01 Lakhs
stNotes to the Financial Statements For The Year Ended 31 March 2019
Note :Margin money deposits amounting Rs. 40.25 Lakhs are given as security against guarantees with Banks (31st March 2018-Rs. 60.92 Lakhs). These deposits are made for varying periods of 1 year to 10 years and earns interest ranging between 6.25% to 7.00%.
106
7 INCOME TAX ASSETS (NET)
Non-current
TOTAL 278.85 -
TOTAL 681.89 1,002.00
Current
st st 31 March 2019 31 March 2018
Advance payment of Income Tax (Net of Provision) 278.85 -
(Rs. in Lakhs) PARTICULARS
Advance payment of Income Tax (Net of Provision) 681.89 1,002.00
Finished Goods 10,755.17 6,262.57
Work In Process 1,376.52 1,115.51
Raw Materials 7,303.77 5,520.54
Stores and Spares 731.38 639.19
9 INVENTORIES (VALUED AT LOWER OF COST OR NET REALISABLE VALUE)
-
Finished Goods in Transit 14,857.69 8,574.23
Others (Packing Material and Fuel Stock) 915.13 804.37
(Rs. in Lakhs) PARTICULARS st st 31 March 2019 31 March 2018
Stock in Trade 47.96 44.83
Raw Materials in Transit 373.18 304.00
TOTAL 36,360.80 23,265.24
Unsecured, Considered Good
8 OTHER NON-CURRENT ASSETS
(Rs. in Lakhs) PARTICULARS
Capital Advances 182.86 249.53
st st 31 March 2019 31 March 2018
TOTAL 1,133.29 614.81
Balances with Government Authorities (Amount Paid Under Protest) 950.43 365.28
Notes : -The Company has written off inventory amounting to Rs.523.98 Lakhs which was destroyed in fire. The same has been debited to statement of Profit and Loss under exceptional item. Refer note 34.
stNotes to the Financial Statements For The Year Ended 31 March 2019
107 IND
11 CASH AND CASH EQUIVALENTS
(Rs. in Lakhs) PARTICULARS st st 31 March 2019 31 March 2018
Balance with Banks in Current Accounts 167.08 110.71
Cash on Hand 10.08 11.80
TOTAL 177.16 122.51
(Rs. in Lakhs) PARTICULARS st st 31 March 2019 31 March 2018
Deposits with Original Maturity of more than three months but less than 13.29 43.63 twelve months (Refer Note below)
Earmarked balances For Unclaimed Dividend 122.96 22.10
12 OTHER BANK BALANCES
TOTAL 136.25 65.73
st st 31 March 2019 31 March 2018
(Rs. in Lakhs) PARTICULARS
13 LOANS
Unsecured, Considered Good Loans to Employees (Refer Note below) 22.99 16.20
TOTAL 22.99 16.20
Unsecured, Considered Good 35,266.20 30,209.80
Trade Receivables
Trade receivables which have significant increase in credit risk - -
TOTAL 35,412.38 30,283.66
(Rs. in Lakhs) PARTICULARS
36,032.29 30,510.38
st st 31 March 2019 31 March 2018
Trade receivables - credit impaired (619.91) (226.72)
10 TRADE RECEIVABLES
Secured, Considered Good 146.18 73.86
Unsecured, Considered Good - -
Trade receivables - credit impaired 619.91 226.72
Impairment allowance (allowance for bad and doubtful debts)
Trade receivables which have significant increase in credit risk - -
Trade Receivable are secured to the extent of deposit received from the Customers.
For amounts due and terms and conditions relating to related party receivables, Refer Note 41.
Trade Receivables are non-interest bearing and are generally on terms of 30 to 180 days.
For information about Credit Risk and Market Risk related to Trade Receivables, Please Refer Note 42.
Note : Deposits amounting Rs. 13.29 Lakhs are given as security against guarantees with Banks (31st March 2018 - Rs. 43.63 Lakhs). These deposits are made for varying periods of 3 months to 12 months and earns interest ranging between 6.25% to 7.00%.
Note: The loans to employees are interest free and are generally for a tenure of 6 to 12 months. Since all the above loans given by the Company are unsecured and considered good, the bifurcation of loan in other
categories as required by schedule iii of companies Act, 2013 viz: a) Secured, b) Loans which have significant increase in credit risk and c) credit impared is not applicable.
stNotes to the Financial Statements For The Year Ended 31 March 2019
108
Balance with Government Authorities (GST Refund) 1,356.58 3,559.76
(Rs. in Lakhs) PARTICULARS st st 31 March 2019 31 March 2018
Unsecured, Considered Good Insurance Claim Receivable - 1,398.37 Export Benefit Receivable 2,419.43 1,722.78
Security Deposit 4.95 4.95
TOTAL 4,069.29 6,714.39
Interest Accrued on Deposits with Banks & Others 288.33 -
14 OTHER FINANCIAL ASSETS (CURRENT)
Reimbursement of Expenses Receivable from Subsidiary - 28.53
(Rs. in Lakhs) PARTICULARS
Unsecured, Considered Good
Advances to Suppliers 262.46 359.48
Others 145.42 64.44
Allowance for Doubtful Advances (20.90) (20.90)
15 OTHER CURRENT ASSETS
st st 31 March 2019 31 March 2018
Balance with Government Authorities (Refer Note below) 3,006.01 3,459.78
Prepaid Expenses 939.05 585.16 Advances to Employees 3.27 11.64
Unsecured, Considered Doubtful Advances to Suppliers 20.90 20.90
TOTAL 4,356.21 4,480.50
Note: Balance with Government Authorities includes VAT / Cenvat / Service Tax credit receivable and GST.
16 SHARE CAPITAL
Increase/(Decrease) during the year - -
Equity shares of Re. 1 each.
As at 1st April 2017 37,00,00,000 3,700.00
As at 31st March 2018 37,00,00,000 3,700.00
Equity shares of Re. 1 each. 25,43,14,211 2,543.14
AUTHORISED SHARE CAPITAL No. of shares Rs. in Lakhs
Increase/(Decrease) during the year - -
As at 31st March 2019 37,00,00,000 3,700.00
ISSUED, SUBSCRIBED AND FULLY PAID UP SHARE CAPITAL No. of shares Rs. in Lakhs
PARTICULARS No. of shares Rs. in Lakhs
As at 31st March 2018 25,43,14,211 2,543.14
Increase/(Decrease) during the year - -
Reconciliation of shares outstanding at the beginning and at the end of the reporting period
As at 1st April 2017 25,43,14,211 2,543.14
Increase/(Decrease) during the year - -
As at 31st March 2019 25,43,14,211 2,543.14
stNotes to the Financial Statements For The Year Ended 31 March 2019
109 IND
Mr. Ramesh Patel 1,56,60,689 6.16% 1,54,02,392 6.06%
No. of shares % Holding No. of shares % Holding
Details of Shareholders holding more than 5% Shares in the Company
PARTICULARS As at 31st March 2019 As at 31st March 2018
Mr. Jayantilal Patel 1,80,24,390 7.09% 1,78,24,390 7.01%
Mr. Natwarlal Patel 2,07,39,850 8.16% 2,05,39,850 8.08%
Mr. Ashish Soparkar 2,47,85,,628 9.75% 2,45,85,628 9.67%
TOTAL 9,21,02,747 36.22% 9,19,75,800 36.17%
DBS Nominees (P) Ltd. 1,28,92,190 5.07% 1,36,23,540 5.36%
As per records of the Company, including its register of shareholders/ members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.
Distribution made and proposed
(Rs. in Lakhs) PARTICULARS st st 31 March 2019 31 March 2018
Cash dividends on Equity shares declared and paid:
Final dividend for 31 March 2018: Rs. 0.40 per share
(31 March 2017: Rs. 0.40 per share) 1,017.26 1,017.26
Interim Dividend for 31 March 2019: Rs 0.60 per share ( 31 March 2018: Nil) 1,525.88 -
(31 March 2018: Rs. 0.40 per share) 1,017.26 1,017.26
Proposed cash dividend for 31 March 2019: Rs. 0.40 per share
Proposed dividends on Equity shares:
The Company has one class of Equity Shares having par value of Re 1 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
Terms / Rights attached to Equity shares
stNotes to the Financial Statements For The Year Ended 31 March 2019
110
(3) General Reserve
Balance as at the Beginning of the year 9,767.18 8,967.18
Add : Transferred from Retained Earnings 1,500.00 800.00
Balance as at the end of the year 11,267.18 9,767.18
(2) Capital Reserve
Balance as at the Beginning of the year 31.22 31.22
Balance as at the end of the year 31.22 31.22
(4) Capital Redemption Reserve
Balance as at the Beginning of the year 184.33 184.33
Balance as at the end of the year 184.33 184.33
st st 31 March 2019 31 March 2018
TOTAL 81,253.44 67,226.69
17 OTHER EQUITY
(1) Securities Premium
Balance as at the Beginning of the year 15,650.48 15,650.48
Balance as at the end of the year 15,650.48 15,650.48
(Rs. in Lakhs) PARTICULARS
(5) Retained Earning
Balance as at the Beginning of the year 41,593.48 35,914.65
Add : Profit for the Year 16,869.07 7,693.16
Add : Other Comprehensive Income for the Year (Net) (90.08) 10.02
58,372.47 43,617.83
Less : Appropriation
Transfer to General Reserve 1,500.00 800.00
Dividend Paid 2,543.14 1,017.26
Dividend Distribution Tax 209.10 207.09
Balance as at the end of the year 54,120.23 41,593.48
In cases where the Company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount of the premium received on those shares shall be transferred to “Securities Premium”. The Company may issue fully paid-up bonus shares to its members out of the securities premium and the Company can use this reserve for buy-back of shares.
Nature and purpose of reserves :
Capital Redemption Reserve was created for buy-back of shares.
The Capital Reserve represent change in depreciation of Property, Plant and Equipment.
Capital Redemption Reserve
Capital Reserve
General Reserve
Securities Premium
General Reserve is created out of the profits earned by the Company by way of transfer from surplus in the Statement of Profit and Loss. The Company can use this reserve for payment of dividend and issue of fully paid-up bonus shares
stNotes to the Financial Statements For The Year Ended 31 March 2019
111 IND
Secured borrowing 8,527.45 21,741.23
Total Non-Current borrowing 8,527.45 21,741.23
(Rs. in Lakhs) PARTICULARS st st 31 March 2019 31 March 2018
SECURED
Current maturity of long term borrowing clubbed under 4,168.19 4,606.02 current financial liabilities (refer note 23)
The above amounts includes:
In Indian Currency (Refer Note below) 12,695.64 26,347.25
TOTAL 12,695.64 26,347.25
18 BORROWINGS
Term Loan Facilities from Banks :
Unsecured borrowing - -
Refer Note No - 42 For Interest rate Risk and Liquidity Risk.
2 Seventeen quarterly instalments of Rs. 512.50 Lakhs each starting from 30.06.2016
Details of Security and Repayment Terms :
ii The Company has Rupee Term Loan facility of Rs. 10,675.00 Lakhs. The facility is secured by First charge on all the
Company's movable and immovable fixed assets and exclusive charge on specific movable and immovable fixed
assets. The loan carries floating interest rate linked to one year MCLR plus spread of 70 bps with monthly rests. Interest
rate was in the range of 8.20% to 8.85% during the year (31 March 2018: 9%). The Term Loan is repayable in 26
quarterly instalments starting from 31st December 2015 and ending on 31st March 2022, as per below mentioned
terms. The outstanding amount of loan as at March 31, 2019 is Rs. 3,875.00 (as at March 31, 2018: Rs. 5,925.00)
Lakhs.
i The Company has Rupee Term Loan facility of Rs. 3,000.00 Lakhs. The facility is secured by First Pari Passu charge on
specific movable and immovable fixed assets of the Company. Loan is repayable in 20 Quarterly installments of
Rs.150.00 Lakhs each commencing from 30th April 2016 and interest rate is linked to one year MCLR with monthly
rests. Interest rate was in the range of 8.20% to 8.75% during the year (31 March 2018: 9.45%). The outstanding
amount of loan as at March 31, 2019 is Rs. 1,200.00 (as at March 31, 2018: Rs. 1,800.00) Lakhs.
1 Two quarterly instalments of Rs. 325.00 Lakhs each starting from 31.12.2015
3 Seven quarterly instalments of Rs. 187.50 Lakhs each starting from 30.09.2020
iii The Company has Rupee Term Loan facility of Rs. 9,200.00 Lakhs. The Facility is secured by (a) Exclusive Charge on
Windmill (b) First Pari Passu charge by way of Hypothecation on the movable fixed assets of the Company (c)
Assignment of Lease Hold Land used for Windmill (d) First Pari Passu charge by way of mortgage on immovable fixed
assets of the Company (excluding the assets charged specifically to other lenders). The term Loan is repayable in 12
half yearly instalments of Rs.766 lakhs after a moratorium period of 12 months from the date of first disbursement. The
interest rate is linked to12 months G-Sec, which will be reset every year. Interest rate was in the range of 7.60% to
8.90% during the year (31 March 2018: 7.6%). The outstanding amount of loan as at March 31, 2019 is Rs. 7,666.67 (as
at March 31, 2018: Rs. 8,700.00) Lakhs.
stNotes to the Financial Statements For The Year Ended 31 March 2019
112
st st 31 March 2019 31 March 2018
19 PROVISIONS (NON CURRENT)
(Rs. in Lakhs) PARTICULARS
Provision for Employee benefits
Gratuity (Refer Note 38) 608.05 451.54
Compensated absences 40.63 45.72
TOTAL 648.68 497.26
20 TAX EXPENSE
(a) Amounts recognised in Profit and Loss
For the year ended For the year ended March 31, 2019 March 31, 2018
Current Income Tax 5,390.00 3,050.00
Deferred tax relating to origination & reversal of temporary differences 33.84 1,349.86
(Rs. in Lakhs) PARTICULARS
Tax expense for the year 5,350.05 4,451.66
Adjustment to tax related to earlier periods (73.79) 51.80
Remeasurements of the Defined Benefit Plans
Before Tax (138.46) 15.40
(Rs. in Lakhs) PARTICULARS
Tax (expense) / benefit 48.38 (5.38)
Net of Tax (90.08) 10.02
For the year ended For the year ended March 31, 2019 March 31, 2018
Items that will not be reclassified to statement of Profit and Loss
(b) Amounts recognised in Other Comprehensive Income
iv The Company has Rupee Term loan facility of Rs. 12,500.00 Lakhs. The Facility is secured by (a) First Pari Passu
charge by way of Hypothecation on the movable fixed assets of the Company excluding exclusively charged assets
(b) First Pari passu charge on immovable fixed assets of the Company (excluding exclusively charged assets to other
lenders) (c) Second Pari Passu Charge by way of Hypothecation over entire current assets. The Term Loan is
repayable in 16 quarterly instalments amounting to Rs.625 Lakhs after a moratorium period of 13 Months from the date
of first disbursement. The interest rate is linked to one year MCLR with 15 bps spread. Interest rate was in the range of
8.20% to 8.70% during the year (31 March 2018: 8.2%).
V Bank loans availed by the Company are subject to certain covenants relating to interest service coverage ratio, current
ratio, debt service coverage ratio, total outside liabilities to total net worth, fixed assets coverage ratio, ratio of total term
liabilities to net worth and return on fixed assets. The Company has complied with the covenants as per the terms of the
loan agreements.
The outstanding amount of loan as at March 31, 2019 is Rs. NIL (as at March 31, 2018: Rs. 10,000.00) Lakhs. The
Company has prepaid the entire Term loan on 26th March, 2019.
stNotes to the Financial Statements For The Year Ended 31 March 2019
113 IND
(d) Movement in Deferred Tax balances for the year ended March 31, 2019
Set off 550.26
Particular Net balance Recognised in Recognised Other Net Deferred Deferred Tax April 1, 2018 Profit or Loss in OCI Tax Asset Liability
Property, Plant andEquipment (4,403.95) (197.83) - - (4,601.78) - (4,601.78)
Trade Receivables - 223.92 - - 223.92 223.92 -
Loans and Borrowings (26.93) 11.08 - - (15.85) - (15.85)
Employee Benefits 348.26 (70.30) 48.38 - 326.34 326.34 -
Tax Assets/(Liabilities) (4,103.32) (33.84) 48.38 - (4,088.78) 550.26 (4,639.04)
Investment (20.70) (0.71) - - (21.41) - (21.41)
Net Tax Liabilities (4,088.78)
As at March 31, 2019
(Rs. in Lakhs)
Tax using the Company’s domestic tax rate 7,764.25 4,203.08
Non-Deductible Tax Expenses
Allowable Tax Expenditure
(Rs. in Lakhs) PARTICULARS
For the year ended For the year ended March 31, 2019 March 31, 2018
Profit Before Tax 22,219.12 12,144.82
(31 March 2019: 34.94% and 31 March 2018: 34.61%)
Investment Written Off - 42.96
Capital work-in-progress loss due to fire 100.74 -
Donation disallowed 78.43 -
Other 319.74 87.09
Additional R & D Expenses u/s - 35(2AB) (36.63) (33.10)
Income exempt from income taxes (u/s 10A) (199.06) (462.79)
Dividend Income on Preference shares (536.59) -
(Profit) on Sale of Investment (2,067.04) -
Others
Adjustment for Tax of Prior Periods (73.79) 51.80
Adjustment to Tax related to rectification of Deferred Tax of previous year - 576.41
Impact on account of change in the deferred tax rate - (13.79)
Total 5,350.05 4,451.66
Effective Tax Rate 24.08% 36.65%
(c) Reconciliation of Effective Tax Rate
stNotes to the Financial Statements For The Year Ended 31 March 2019
114
Movement in Deferred Tax balances for the year ended March 31, 2018
Tax Assets/(Liabilities) (2,748.08) (1,349.86) (5.38) - (4,103.32) 348.26 (4,451.58)
Employee benefits 136.69 216.95 (5.38) - 348.26 348.26 -
Inventories 576.40 (576.40) - - - - -
Investment (17.86) (2.84) - - (20.70) - (20.70)
Property, Plant and
Trade Receivables (94.21) 94.21 - - - - -
Set off 348.26
Particular Net balance Recognised in Recognised Other Net Deferred Deferred Tax April 1, 2017 Profit or Loss in OCI Tax Asset Liability
Loans and borrowings (22.78) (4.15) - - (26.93) - (26.93)
Equipment (3,326.32) (1,077.63) - - (4,403.95) - (4,403.95)
Net tax Liabilities (4,103.32)
As at March 31, 2018
(Rs. in Lakhs)
From Banks - In Indian Currency 10,158.51 2,851.23
(Refer Note below) Cash Credit, Packing Credit and working capital demand loan accounts Repayable on Demand
From Subsidiary Companies (Refer Note 41 and 44) - 10,985.54
(Rs. in Lakhs) PARTICULARS
Secured Loans
21 BORROWINGS
st st 31 March 2019 31 March 2018
From Banks - In Foreign Currency 9,798.81 1,955.25
Unsecured Loans
TOTAL 19,957.32 15,792.02
(c) Interest rates on working capital demand loans vary within the range of 8.05% to 8.60% (31 March 2018: 7.85% to
8.90%).
(a) Interest rates on cash credit loans vary within the range of 9.20% to 10.50% (31 March 2018: 8.15% to 10.45%).
(b) Interest rates on packing credit loans vary within the range of Libor + 1.50% to Libor + 2.70% (31 March 2018:
Libor +2.00%).
Note:The Company has availed Cash credit, packing credit and working capital demand loans of Rs 40,000 lakhs (31 March
2018: Rs 40,000 lakhs) as sanctioned limit from State Bank of India, HDFC Bank Limited, Standard Chartered Bank
and ICICI Bank Limited (Collectively known as Consortium Bankers). The present consortium is lead by State Bank of
India. These loans are secured by first pari passu charge by way of hypothecation of the entire Stock of Raw Materials,
Work in Process, Finished Goods, Stores and Spares and Receivables and first pari passu charge on immovable
Fixed Assets of the Company as a collateral security. Interest rate on these loans are as follows:
stNotes to the Financial Statements For The Year Ended 31 March 2019
115 IND
Expenses Payable 147.66 -
TOTAL 8,567.90 7,299.92
Interest accrued but not due on borrowings 112.31 72.05
st st 31 March 2019 31 March 2018
Derivative Contracts - 17.38
Employee Benefits Payable 2,343.47 1,306.33
Current maturities of Non Current Borrowings (Refer Note 18) 4,168.19 4,606.02
Financial liabilities carried at fair value through profit and loss
(Rs. in Lakhs) PARTICULARS
Payables for Capital Goods 935.07 855.70
23 OTHER FINANCIAL LIABILITIES (CURRENT)
Financial liabilities carried at amortised cost
Interest as per MSMEDA, 2006 (Refer Note 37) 408.51 280.88
Payable for retention money 47.92 11.75
Security Deposits Payable 281.81 127.71
Unclaimed Dividend 122.96 22.10
(Rs. in Lakhs) PARTICULARS st st 31 March 2019 31 March 2018
Advance from Customers 681.86 378.99
Statutory Dues Payable 236.80 229.37
TOTAL 918.66 608.36
24 OTHER CURRENT LIABILITIES
(Rs. in Lakhs) PARTICULARS st st 31 March 2019 31 March 2018
Provision for amount paid under Dispute (MEIS) 585.33 -
Provisions for Employee Benefits
Leave Encashment 5.89 5.06
TOTAL 591.22 5.06
25 PROVISIONS (CURRENT)
(Rs. in Lakhs) PARTICULARS st st 31 March 2019 31 March 2018
Outstanding Dues of Micro, Small and Medium Enterprises (Refer note 37) 888.16 578.64
Outstanding Dues of Creditors other than Micro, Small and Medium Enterprises 20,993.14 16,440.06
TOTAL 21,881.30 17,018.70
22 TRADE PAYABLES
(Refer Note below)
Terms and Conditions of the above Outstanding Dues :
Trade payables are non-interest bearing and are normally settled on 30-360 days terms. For amounts due to related parties
and terms and conditions with Related Parties, Refer Note 41. Refer Note 42 for Company’s Credit Risk Management
processes.
stNotes to the Financial Statements For The Year Ended 31 March 2019
116
27 REVENUE FROM OPERATIONS
(Rs. in Lakhs) PARTICULARS
Sale of Products i - Manufactured Goods 1,32,780.49 1,20,406.44 ii - Traded Goods 4,733.14 2,818.85
Other Operating Revenue
ii - Scrap Sales 146.98 22.91
st st 31 March 2019 31 March 2018
Total Other Operating Revenue 3,528.37 2,822.00
Total Sale of Products 1,37,513.63 1,23,225.29
TOTAL 1,41,042.00 1,26,047.29
i - Export benefits and other incentives 3,381.39 2,799.09
(Rs. in Lakhs) PARTICULARS
Current Tax Payable (Net) 1,379.87 996.92
26 CURRENT TAX LIABILITIES (NET)
st st 31 March 2019 31 March 2018
TOTAL 1,379.87 996.92
Total revenue from contracts with Customers 1,37,513.63 1,20,978.19
Type of goods Pigments 58,934.91 58,247.16
Timing of revenue recognition
Others (Merchant Trading) 1,512.47 786.06
Set out below is the disaggregation of the Company’s revenue from contracts with customers:
st st 31 March 2019 31 March 2018
Outside India 1,06,755.85 88,961.42
Agro Chemicals 77,066.25 64,192.07
Goods transferred at a point in time 1,37,513.63 1,20,978.19
India 30,757.78 32,016.77
Total revenue from contracts with Customers 1,37,513.63 1,20,978.19
(Rs. in Lakhs) PARTICULARS
Total revenue from contracts with Customers 1,37,513.63 1,23,225.29
Geographical location of Customer
27.1 Disaggregated revenue information
27.2 Sale of Products includes excise duty collected from customers of Rs. Nil (31 March 2018: Rs. 2247.10 Lakhs). Sale of Pigment, Agro Chemicals and Others net of excise duty is Rs. 137,513.63 Lakhs (31 March 2018: Rs. 120,978.18 Lakhs). Revenue from operations for previous periods up to 30 June 2017 included excise duty. From 1 July 2017 onwards the excise duty and most indirect taxes in India have been replaced with Goods and Service Tax (GST). The Company collects GST on behalf of the Government. Hence, GST is not included in Revenue from operations. In view of the aforesaid change in indirect taxes, Revenue from operations for the year ended 31 March 2019 is not comparable with 31 March 2018.
stNotes to the Financial Statements For The Year Ended 31 March 2019
117 IND
Trade receivables are non-interest bearing and are generally on terms of 30 to 180 days. Trade receivable are secured to the
extent of deposit received from the customers. There is no significant movement during the year. In March 2019, Rs.619.91
Lakhs (March 2018: Rs.226.72 Lakhs) was recognised as provision for expected credit losses on trade receivables
Contract liabilities includes short term advance received for sale of products.
The Company has recognised the following revenue-related contract asset and liabilities
(Rs. in Lakhs) PARTICULARS
27.3 Contract Assets and contract Liabilities
Advance from customers 681.86 378.99
st st 31 March 2019 31 March 2018
Trade Receivables 35,412.38 30,283.66
27.4 Reconciling the amount of revenue recognised in the statement of Profit and Loss with the contracted price
Adjustments
st st 31 March 2019 31 March 2018
Revenue as per contracted price 1,38,805.46 1,24,299.85
Trade and Cash Discount (628.46) (754.03)
Sales return (663.37) (320.53)
(Rs. in Lakhs) PARTICULARS
Revenue from contract with Customer 1,37,513.63 1,23,225.29
The performance obligation is satisfied upon dispatch of goods from the company's premises / delivery of goods to the customer in accordance with the terms of contract with customer.
27.5 Performance obligation Information about the Company’s performance obligations are summarised below:
27.6 Information about major customers For information about major customers Refer Note 40.
- Bank Deposits 45.25 40.19
Interest Income on
st st 31 March 2019 31 March 2018
- Others 248.42 368.49
Fair Value Gain on Derivative Instruments held at Fair
Value Through Profit or Loss 17.38 -
Net Gain on Foreign Currency transactions 1,684.42 1,969.66
Liabilities No Longer Required Written Back 225.14 99.65
Miscellaneous Income 125.74 132.60
(Rs. in Lakhs) PARTICULARS
TOTAL 3,882.19 2,610.59
28 OTHER INCOME
Dividend Income on Redeemable Preference Shares 1,535.84 -
stNotes to the Financial Statements For The Year Ended 31 March 2019
118
(iii) Stock in Trade 44.83 38.75
TOTAL (A) 15,997.14 15,207.52
st st 31 March 2019 31 March 2018
(A) Inventories at the beginning of the Year
(Rs. in Lakhs) PARTICULARS
(ii) Finished Goods in Transit 8,574.23 7,561.77
30 CHANGES IN INVENTORIES OF FINISHED GOODS, WIP AND STOCK IN TRADE
(i) Finished Goods 6,262.57 6,401.50
(iv) Work-in-Progress 1,115.51 1,205.50
(i) Finished Goods 10,755.17 6,262.57
(ii) Finished Goods in Transit 14,857.69 8,574.23
(iii) Stock in Trade 47.96 44.83
(iv) Work-in-Progress 1,376.52 1,115.51
TOTAL (B) 27,037.34 15,997.14
TOTAL (A - B) Change in Inventories (11,040.20) (789.62)
(B) Inventories at the end of the Year
st st 31 March 2019 31 March 2018
(Rs. in Lakhs) PARTICULARS
Salary, Wages and Bonus 4,732.01 4,156.45
Directors Remuneration (Refer Note 41) 1,888.46 1,338.06
Staff Welfare Expenses 406.45 377.13
31 EMPLOYEE BENEFIT EXPENSES
Contribution to Provident and Other Funds (Refer Note 38) 459.45 289.24
TOTAL 7,486.37 6,160.88
- Term Loans 2,366.75 1,501.26
- Others 390.05 270.67
32 FINANCE COSTS
(Rs. in Lakhs) PARTICULARS st st 31 March 2019 31 March 2018
Interest Expense on:
- Cash Credit and Working Capital Demand Loan 1,292.19 1,065.17
TOTAL 4,589.20 3,087.17
Other borrowing Costs (Includes Bank charges, etc.) 540.21 250.07
TOTAL 87,954.61 68,750.86
29 COST OF MATERIALS CONSUMED
(Rs. in Lakhs) PARTICULARS st st 31 March 2019 31 March 2018
Pigments 34,921.41 32,204.63
Agro Chemicals 53,033.20 36,546.23
stNotes to the Financial Statements For The Year Ended 31 March 2019
Note : The above amount comprises of raw material consumption generated from the accounting system and related adjustments there to.
119 IND
(Rs. in Lakhs) PARTICULARS
33 OTHER EXPENSES
Rates and Taxes 603.69 79.98
Water Changes 664.22 502.81
st st 31 March 2019 31 March 2018
Rent (Refer Note - i below) 212.84 207.21
Loss on Sale / Discarded Property, Plant and Equipment 378.54 133.71
Freight Expenses 2,642.67 2,864.10
Bad Debts 504.75 780.25
Provision For Doubtful Debts and Advances 393.19 247.62
Power and Fuel 8,573.05 9,048.88
Repairs and Maintenance :
Research & Development Expenses (Refer Note - ii below) 209.65 191.29
Consumption of Stores and Spares 1,378.45 1,354.03
- Buildings 200.33 161.06
Excise Duty Expenses 10.35 370.90
Labour Contract Charges 2,117.48 2,175.21
Pollution Control Expenses 2,165.87 2,084.08
- Plant and Machinery 1,160.76 1,009.83
Insurance 708.90 845.77
Consumption of Packing Materials 3,025.39 3,424.59
Loss on Derivatives - 145.81
Miscellaneous Expenses 4,025.42 4,165.10
TOTAL 29,251.99 29,844.88
Expenditure towards Corporate Social Responsibility (Refer Note - iii below) 245.88 26.22
Payments to the Auditors (Refer Note - iv below) 30.56 26.43
(Rs. in Lakhs) Particulars st st 31 March 2019 31 March, 2018
Raw Material Consumption 23.29 17.61 Consumables & Spares and Others 2.04 2.52 Electricity Expenses 10.46 12.62 Annual Maintenance Contract & Repairing 11.29 13.67
Stationery Expenses - 0.99 Telephone,Mobile & Internet Expenses 0.10 0.61
Vehicle Expense 4.91 8.06 Conveyance Expense 1.54 2.23 Miscellaneous Expense - 1.72
Travelling Exepense 0.47 2.91
Computer Maintenance - 0.05
Salary & Wages 155.55 128.30
TOTAL 209.65 191.29
ii Expenses includes Research & Development related expenses as follows
i The Company has entered into lease rent agreement for nine years for office premises. The leasing agreement is cancellable and renewable on a periodic basis by mutual consent on mutually accepted terms including escalation of lease rent. Lease payments recognised in the Statement of Profit and Loss for the year amounts to Rs 212.84 Lakhs (March 31, 2018: Rs.207.21 Lakhs).
Notes
stNotes to the Financial Statements For The Year Ended 31 March 2019
120
iii Corporate Social Responsibility Expenditure - spent during the year is Rs.245.88 Lakhs (31st March 2018 -
Rs. 26.22 Lakhs)
i Construction / Acquisition of an Assets - -
(Rs. in Lakhs) PARTICULARS
Amount Spent in cash during the year on :
ii On Purposes other than (i) above 245.88 26.22
Amount Required to be spent as per Section 135 of the Act 165.65 98.26
st st 31 March 2019 31 March 2018
(a) The exceptional gain for year is of Rs. 5,915.29 Lakhs pertains to gain on sale of 16,900,835 shares (i.e. 23.88% stake) of Meghmani Finechem Limited ("MFL") to Meghmani Agrochemicals Private Limited (“MACPL”). Refer Note 44.
(b) The exceptional loss for the year includes loss on account of fire on March 26, 2019 at a manufacturing facility of the Company in Dahej. Management is in the process of compiling and submitting requisite information to Surveyor considering which Preliminary assessment / claim report is not received. Accordingly, the loss on fire including inventory, Property Plant and Equipment (including Capital Work in Progress) and other ancillary expenses of Rs.1,586.78 Lakhs as per table below. As assessed by management is charged to statement of Profit and Loss for the year ended March 31, 2019 in line with requirements of Ind AS 16. The Company has All Risk Insurance Policy (including Loss of Profit Policy) and is fully covered for insurance claim.
The exceptional loss for year ended March 31, 2018 of Rs.112.52 Lakhs pertained to loss on account of fire at Dahej SEZ manufacturing facility of the Company. Against the outstanding insurance claim receivable of Rs. 2,942.04 lakhs as at March 31, 2018, the Company had received Rs. 2,783.02 Lakhs and charged the differential amount of Rs.112.52 Lakhs to the Statement of Profit and Loss Account.
(C) Exceptional loss for the year ended March 31, 2018 pertained to impairment of investment in Subsidiary PT Meghmani Organics Indonesia.
iv Payments to Auditors (Excluding taxes)
st st 31 March 2019 31 March 2018
(b) for Other Services 0.60 -
TOTAL 30.56 26.43
(a) as Auditors 28.50 26.00
(c) for Reimbursement of Expenses 1.46 0.43
(Rs. in Lakhs) PARTICULARS
Details of Corporate Social Responsibility (CSR Expenditure)
34 EXCEPTIONAL ITEMS
(Rs. in Lakhs) PARTICULARS st st 31 March 2019 31 March 2018
Gain on Sale of Investment in Subsidiary Company (Refer Note (a) below) (5,915.29) -
TOTAL (4,328.51) 235.82
Impairment of Investment in Subsidiary Company (Refer Note (c) below) - 123.30
Loss due to Fire (refer note (b) below) 1,586.78 112.52
Amount (Rs. in Lakhs) PARTICULARS
Other ancillary cost 110.00
Property, plant and equipment (including Capital work in progress) 952.80
Inventory 523.98
TOTAL 1,586.78
stNotes to the Financial Statements For The Year Ended 31 March 2019
121 IND
(Rs. in Lakhs) PARTICULARS st st 31 March 2019 31 March 2018
Profit attributable to Equity Shareholders 16,869.07 7,693.16 Weighted Average number of Equity Shares outstanding (Nos) 25,43,14,211 25,43,14,211 Basic and Diluted Earnings Per Share (Rs.) 6.63 3.03 Face value per Equity Share 1 1
37 The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated August 26, 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance with the ‘Micro, Small and Medium Enterprises Development Act, 2006’ (‘the MSMED Act').
Accordingly, the disclosure in respect of the amounts payable to such Enterprises as at March 31, 2019 has been made in the Financial Statements based on information received and available with the Company. Further in view of the Management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any Supplier as at the Balance Sheet date.
(Rs. in Lakhs) PARTICULARS
The amount of interest paid by the buyer under the MSMED Act along with the NIL NIL amounts of the payment made to the amounts of the payment made to the supplier
st st 31 March 2019 31 March 2018
The principal amount and the interest due thereon remaining unpaid to any supplier as at the end of accounting year; Principal Amount 888.16 578.64 Interest Amount 408.51 280.88
The amount of interest due and payable for the year (where the principal has been paid but interest under the MSMED Act not paid) 127.63 113.80
The amount of interest accrued and remaining unpaid at the end of accounting - 3.78 year; and
The amount of further interest due and payable even in the succeeding period, 408.51 280.88 until such date when the interest dues as above are actually paid to the Small Enterprise, for the purpose of disallowance as a deductible expenditure under Section 23
beyond the appointed day during each accounting year
On the basis of information and records available with the Company, the above disclosures are made in respect of amount due to the Micro, Small and Medium enterprises, which have been registered with the relevant competent authorities. This has been relied upon by the auditors.
35 OTHER COMPREHENSIVE INCOME
(i) Remeasurement gain / (loss) on defined benefit plans (138.46) 15.40
st st 31 March 2019 31 March 2018
Total (90.08) 10.02
Statement of Other Comprehensive Income
(ii) Income tax effect on above 48.38 (5.38)
(Rs. in Lakhs) PARTICULARS
Basic and Diluted EPS amounts are calculated by dividing the profit for the year attributable to equity shareholders by the weighted average number of Equity shares outstanding during the year.
36 EARNINGS PER SHARE
The following reflects the income and share used in the basic and diluted EPS computation:
stNotes to the Financial Statements For The Year Ended 31 March 2019
The details as required by MSMED Act are given below:
122
Opening Balance of Defined Benefit Obligation 829.87 759.60
Table 1: Reconciliation of Defined Benefit Obligation (DBO)
Service Cost
a. Current Service Cost 104.30 74.41
c. Actuarial Loss/(Gain) from experience over the past period 3.89 (21.42)
st st 31 March 2019 31 March, 2018
b. Past Service Cost - 1.21
Interest Cost 60.58 53.93
Benefits Paid (31.29) (30.12)
Re-measurements
a. Actuarial Loss/(Gain) from changes in Demographic assumptions (36.10) -
b. Actuarial Loss/(Gain) from changes in Financial assumptions 179.56 (7.74)
Closing Balance of Defined Benefit Obligation 1,110.81 829.87
(Rs. in Lakhs)
st st 31 March 2019 31 March, 2018
Closing Balance of Fair Value of Plan Assets 502.76 393.74
Table 2: Reconciliation of Fair Value of Plan Assets
Contributions by Employer 102.17 16.32
Benefits Paid (31.29) (30.12)
Re-measurements
a. Actuarial (Loss)/Gain from changes in Financial assumptions - 2.31
Actual Return on Plan Assets 38.14 13.60
Interest Income on Plan Assets 29.25 27.36
b. Return on Plan Assets excluding amount included in net interest on the net 8.89 (16.07) Defined Benefit Liability/(Asset)
Opening Balance of Fair Value of Plan Assets 393.74 393.94
Expected Employer Contributions for the coming period 100.00 100.00
(Rs. in Lakhs)
Service Cost
st st 31 March 2019 31 March, 2018
Table 3: Expenses recognised in the Profit and Loss Account
Net Interest on net Defined Benefit Liability/(asset) 31.33 26.57
a. Current Service Cost 104.30 74.41
b. Past Service Cost - 1.21
Employer Expenses 135.63 102.19
(Rs. in Lakhs)
The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five
years of service is entitled to specific benefit. The level of benefits provided depends on the member’s length of service
and salary at retirement age. The following tables summaries the components of net benefit expense recognised in the
statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:
(a) Retirement Benefits
38 GRATUITY EXPENSES
stNotes to the Financial Statements For The Year Ended 31 March 2019
123 IND
Experience Adjustment on Plan Assets: Gain/(Loss) 8.89 (16.07)
Fair Value of Plan Assets 502.76 393.74
Experience Adjustment on Plan Liabilities: (Gain)/Loss 3.89 (21.42)
Table 4: Net Liability/ (Asset) recognised in the Balance Sheet
Liability/ (Asset) recognised in the Balance Sheet 608.05 436.13
st st 31 March 2019 31 March, 2018
Funded Status [Surplus/(Deficit)] (608.05) (436.13)
Present Value of DBO 1,110.81 829.87
(Rs. in Lakhs)
Investment Funds with Insurance Company 100% 100%
Of which, Traditional/ Non-Unit Linked 86% 90%
Table 5: Percentage Break-down of Total Plan Assets st st 31 March 2019 31 March, 2018
Of which, Unit Linked 14% 10%
Total 100% 100%
Note: None of the assets carry a quoted market price in an active market or represent the Entity’s own transferable financial
instruments or are property occupied by the Entity.
Mortality IALM 2012-14 Ult. IALM 2006-08 Ult.
Table 6: Actuarial Assumptions
Expected weighted average remaining working life 4 years 5 years
Discount Rate 6.9% p.a. 7.3% p.a.
Expected Return on Plan Assets 7.3% p.a. 7.7% p.a.
Withdrawal Rate 12% p.a. 8% p.a.
Salary Growth Rate 10% p.a. 6% p.a.
st st 31 March 2019 31 March, 2018
Re-measurements on DBO
b. Actuarial (Loss)/Gain from changes in Financial assumptions (179.56) 7.74
st st 31 March 2019 31 March, 2018
Opening Balance (Loss) (7.49) (22.89)
Table 7: Movement in Other Comprehensive Income
a. Actuarial (Loss)/Gain from changes in demographic assumptions 36.10 -
b. Return on Plan assets, excluding amount included in net interest on the net 8.89 (16.07) Defined Benefit Liability/(Asset)
a. Actuarial (Loss)/Gain from changes in Financial assumptions - 2.31
Closing Balance (Loss) (145.95) (7.49)
Re-measurements on Plan Assets
c. Actuarial (Loss)/Gain from experience over the past period (3.89) 21.42
(Rs. in Lakhs)
stNotes to the Financial Statements For The Year Ended 31 March 2019
124
Financial Year ended March 31, 2018, in Rs Increases 1% Decreases 1%
Salary Growth Rate DBO increases by Rs 40.87 Lakhs DBO decreases by Rs 37.83 Lakhs
Discount Rate DBO decreases by Rs 37.05 Lakhs DBO increases by Rs 40.75 Lakhs
Withdrawal Rate DBO increases by Rs 0.94 Lakhs DBO decreases by Rs 1.14 Lakhs
Mortality (increase in expected lifetime by 3 years) DBO decreases by Rs 0.26 Lakhs
Mortality (increase in expected lifetime by 1 year) DBO decreases by Rs 0.13 Lakhs
Note: The sensitivity is performed on the DBO at the respective valuation date by modifying one parameter whilst retaining other parameters constant. There are no changes from the previous period to the methods and assumptions underlying the sensitivity analysis.
Table 9: Movement in Surplus / (Deficit)
Current Service Cost (104.30) (74.41)
st st 31 March 2019 31 March, 2018
Surplus/ (Deficit) at end of period (608.05) (436.13)
Net Interest on net DBO (31.33) (26.57)
Contributions 102.17 16.32
Past Service Cost - (1.21)
Surplus / (Deficit) at start of period (436.13) (365.66)
Actuarial gain / (loss) (138.46) 15.40
Movement during the period
(Rs. in Lakhs)
(b) Defined Contribution Plans
The Company makes Provident Fund contributions to defined contribution plans for qualifying employees. Under the
schemes, the Company is required to contribute a specified percentage of payroll costs to fund the benefits. The Company
has recognised provident fund contribution of Rs. 205.87 Lakhs (March 31, 2018 Rs. 193.91 Lakhs) as expense in Note 31
under the head ‘Contributions to Provident and Other Funds’.
Withdrawal Rate DBO decreases by Rs 7.54 Lakhs DBO increases by Rs 8.21 Lakhs
Table 8: Sensitivity Analysis
Discount Rate DBO decreases by Rs 47.38 Lakhs DBO increases by Rs 52.25 Lakhs
Salary Growth Rate DBO increases by Rs 50.23 Lakhs DBO decreases by Rs 46.51 Lakhs
Financial Year ended March 31, 2019, in Rs Increases 1% Decreases 1%
Mortality (increase in expected lifetime by 3 years) DBO increases by Rs 0.60 Lakhs
Mortality (increase in expected lifetime by 1 year) DBO increases by Rs 0.30 Lakhs
stNotes to the Financial Statements For The Year Ended 31 March 2019
125 IND
A Claims against the Company not acknowledged as debts (Excluding interest and penalty)
39 CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS
Disputed Income-Tax Liability 87.83 109.51
(In respect of the above matters, future cash outflows in respect of contingent liabilities
(Rs. in Lakhs) PARTICULARS
- Corporate Guarantee Given - 2,500.00
are determinable only on receipt of judgements pending at various forums /authorities)
Disputed Value Added Tax Liability 87.04 87.04
In respect of Letter of Credit 1,139.88 308.79
In respect of Guarantee
Disputed Excise Duty Liability 1,938.69 1965.67
Disputed Labour Law Compliance Liabilities 42.11 63.88
st st 31 March 2019 31 March 2018
Disputed Service Tax Liability 216.84 291.16
stNotes to the Financial Statements For The Year Ended 31 March 2019
(Rs. in Lakhs) PARTICULARS
Estimated amount of Contracts pending execution on Capital Accounts and not 1,600.99 894.91 provided for (net of Advances)
st st 31 March 2019 31 March 2018
B. CAPITAL COMMITMENTS
C. PROVIDENT FUND LIABILITY
There are numerous interpretative issues relating to the Supreme Court (SC) judgment on PF dated 28th February, 2019. As a matter of caution, the company decided to assess the impact on a prospective basis from the date of SC order. The impact on the account is not material. The Company will update its provision, on receiving further clarity on the subject.
126
Financial Year ended on 31st March 2019:
Profit After Tax 16,869.07
Profit before Exceptional Items 17,890.61
Exceptional Items - (1,586.78) - 5,915.29 4,328.51
Income tax Expenses (5,316.21)
Deferred Tax (33.84)
Profit Before Tax 22,219.12
Extraordinary Items -
Revenue
Other Operating Revenue 1,545.32 1,983.02 0.03 - 3,528.37
Particulars Pigments Agro Chemicals Others * Unallocable Total
External Sales 58,934.91 77,066.25 1,512.47 - 1,37,513.63
Segment Results 6,923.61 16,809.98 83.59 - 23,817.18
Total Revenue 60,480.23 79,049.27 1,512.50 - 1,41,042.00
Un-allocable (Expenses)/Income (2,873.21) (2,873.21)
Results
Profit from Operation 20,943.97
Finance Cost (4,589.20)
Investments Income 1,535.84 1,535.84
Non-Cash Items (280.98) 1,922.22 21.12 (0.25) 1,662.10
Capital Addition 2,287.20 5,159.14 - 54.88 7,501.22
Depreciation (2,197.11) (2,228.27) (0.24) (203.42) (4,629.04)
Other information Pigments Agro Chemicals Others Unallocable Total
40. SEGMENT REPORTING
stNotes to the Financial Statements For The Year Ended 31 March 2019
Balance sheet Pigments Agro Chemicals Others Unallocable Total
Un-allocable Assets - - - - 20,560.39
Total assets 1,50,357.76
Deferred Tax Liabilities 4,088.78
Total Liabilities 66,561.18
Segment Assets 59,014.93 70,586.53 195.91 - 1,29,797.37
Assets
Liabilities
Unallocable Liabilities 1,743.61
Segment Liabilities 24,603.62 35,777.95 347.22 - 60,728.79
*Others includes Merchant Trading Activity.
(Rs. in Lakhs)
(Rs. in Lakhs)
(Rs. in Lakhs)
127 IND
Financial Year ended on 31st March 2018:
Total Revenue 59,545.79 65,690.01 811.49 - 1,26,047.29
Results
Interest Income
Segment Results 7,554.56 8,492.97 (128.92) - 15,918.61
Un-allocable (Expenses)/Income (450.80)
Finance Cost (3,087.17)
Income tax Expenses (3,101.80)
Profit from Operation 15,467.81
Other Operating Revenue 1,298.63 1,497.95 25.43 - 2,822.01
Deferred Tax (1,349.86)
External Sales 58,247.16 64,192.06 786.06 - 1,23,225.28
Profit Before Tax 12,144.82
Particulars Pigments Agro Chemicals Others * Unallocable Total
Profit After Tax 7,693.16
Exceptional Items (235.82)
Revenue
Profit before exceptional items 12,380.64
Other information Pigments Agro Chemicals Others* Unallocable Total
Depreciation (2,086.10) (1,971.89) (0.12) (203.84) (4,261.95)
Capital Addition 5,272.22 6,166.95 0.16 450.31 11,889.64
Non-Cash Items 355.08 (664.02) (103.12) (5.98) (418.04)
stNotes to the Financial Statements For The Year Ended 31 March 2019
Assets
Segment Assets 61,435.64 51,452.30 362.63 - 1,13,250.57
Total Assets 1,37,832.62
Liabilities
Segment Liabilities 26,394.29 24,986.12 432.83 - 51,813.24
Un-allocable Assets 24,582.05
Unallocable Liabilities 12,146.23
Balance sheet Pigments Agro Chemicals Others* Elimination Total
Deferred Tax Liabilities 4,103.32
Total Liabilities 68,062.79
*Others includes Merchant Trading Activity
(Rs. in Lakhs)
(Rs. in Lakhs)
(Rs. in Lakhs)
128
Notes
(1) Based on “management approach” defined under Ind AS 108 - Operating Segments, the Chief Operating Decision Maker evaluates the company’s performance and allocates resources based on an analysis of various performance indicators by business segments. Accordingly information has been presented along these segments.
a) Agro Chemicals - The Company’s operation includes manufacture and marketing of technical, intermediates and formulation of Crop Protection Chemicals.
b) Pigment Business - The Company’s operation includes manufacture and marketing of Phthalocynine Green 7, Copper Phthalocynine Blue (CPC), Alpha Blue and Beta Blue.
The Company has one customer based outside India who has accounted for more than 10% of the Company's revenue. Total amount of revenue from this customer is Rs.16,024.94 Lakhs for the year ended March 31, 2019 and Rs. 15,144.36 Lakhs March 31, 2018.
(3) Segment Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.
(2) The Company's operations are divided into two segments. These segments are the basis for management control and hence form the basis for reporting. The business of each segment comprises of :
2018-2019 2017- 2018 Revenue:
Outside India 1,10,137.25 91,760.51
(Rs. in Lakhs) PARTICULARS
Within India 30,904.75 34,286.78
Total 1,41,042.00 1,26,047.29
The following is an analysis of the carrying amount of Non - Current Assets, which do not include Deferred Tax assets, Income Tax Assets and Financial Assets analysed by the Geographical area in which the Assets are located.
Segment revenue is analysed based on the location of customers regardless of where the goods are produced. The following provides an analysis of the Company's sales by geographical Markets:
Segment Revenue:
B - ANALYSIS BY GEOGRAPHICAL SEGMENT
2018-2019 2017- 2018 Carrying amount of segment assets
Within India 49,998.28 47,902.99
Outside India - -
(Rs. in Lakhs) PARTICULARS
stNotes to the Financial Statements For The Year Ended 31 March 2019
129 IND
Navratan Specialty Chemicals LLP
Subsidiaries of the Company : Meghmani Organics USA, Inc.(MOL-USA)
Meghmani Overseas FZE-Dubai
Meghmani Agrochemicals Private Limited (MACPL)
Meghmani Finechem Limited (MFL)
41 RELATED PARTIES DISCLOSURES :-
Enterprises in which Key Managerial Meghmani Pigments
significant influence : Tapsheel Enterprise
Meghmani Dyes & Intermediates LLP
Meghmani Industries Limited
PT Meghmani Organics Indonesia(MOL-INDONESIA)
(Mergered with Meghmani Finechem Limited w.e.f. 11.02.2019)
Meghmani Chemicals Limited
Vidhi Global Chemicals Limited
Panchratna Corporation
Meghmani LLP (Formerly Meghmani Unichem LLP)
Personnel [KMP] & their relatives have Ashish Chemicals
Matangi Industries LLP
Mr. Ashish Soparkar
Mr. Ankit Patel (CEO)
Mr. Darshan Patel (COO)
w.e.f.10.02.2018)
Mr. Ramesh Patel
Mr. Anand Patel
w.e.f.22.05.2017 to 31.12.2017)
Independent Directors: Mr. Balkrishna Thakkar
Mr. Chinubhai Shah (up to 14.05.2018)
Mr. Kamlesh Mehta (Company Secretary)
Mr. Bhaskar Rao (From 10.02.2018)
Meghmani Exports Limitada S.A.De CV
Key Managerial Personnel : Mr. Jayantilal Patel
Mr. Natwarlal Patel
Mr. Karana Patel (COO)
Mr. C S Liew (From 10.02.2018)
Mr. Chander Kumar Sabharwal
Mr. Kantibhai Patel (up to 10.02.2018)
Mr. A L Radhakrishnan (w.e.f. 20.10.2017 to 10.02.2018)
Mr. Manubhai Patel (w.e.f. 10.02.2018)
Mr. G.S. Chahal (Chief Financial Officer
Mr. Jayaraman Vishwanathan (up to 08.11.2017)
Ms. Urvashi Shah
Relatives of Key Managerial Personnel: Ms. Deval Soparkar
Mr. Rajkumar Mehta (Chief Financial Officer
Mr. Maulik Patel
Mr. Kaushal Soparkar
Ms. Taraben Patel
stNotes to the Financial Statements For The Year Ended 31 March 2019
130
st
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7.43
-
S
ale
of M
EIS
Lic
ence
s 4
82.7
6
155
.04
-
-
-
-
-
-
4
82.7
6
155
.04
Inve
stm
ent i
n M
AC
PL
22,
170.
89
10,
986.
54
-
-
-
-
-
-
22,
170.
89
10,
986.
54
Div
iden
d P
aid
-
-
-
- 1
,024
.41
4
06.6
8
73.
60
29.
44
1,0
98.0
1
436
.12
purs
uant
to m
erge
r sc
hem
e
Div
iden
d R
ecei
ved
on N
CR
PS
1
,535
.56
-
- -
- -
- -
1,5
35.5
6
-
Rei
mbu
rsem
ent o
f Exp
ense
s
OC
RP
S o
f MF
L re
ceiv
ed p
ursu
ant
NC
RP
S o
f MF
L re
ceiv
ed p
ursu
ant t
o
Rec
eiva
ble
from
Sub
sidi
ary
-
2
8.53
-
-
-
-
-
-
-
28
.53
from
Sub
sidi
ary
28.
53
-
-
-
-
-
-
-
2
8.53
-
to s
chem
e of
mer
ger
(ref
er n
ote
44)
10,
986.
54
-
-
-
-
-
-
-
1
0,98
6.54
-
Rei
mbu
rsem
ent o
f Exp
ense
s R
ecei
ved
Tota
l
1,34
,449
.22
3
1,74
1.88
3
,076
.49
4
,106
.47
2
,979
.03
1
,823
.92
9
3.09
4
2.34
1
,40,
597.
83
37,
714.
61
Out
stan
ding
Bal
ance
s W
ritte
n of
f -
4.2
9
-
-
-
-
-
-
-
4
.29
Red
empt
ion
of N
CR
PS
2
2,17
0.89
-
-
-
-
-
-
-
22,
170.
89
-
sche
me
of m
erge
r (r
efer
not
e 44
) 2
2,17
0.89
-
-
-
-
-
-
-
22,
170.
89
-
* P
ert
ain
s to
ava
iling o
f serv
ices
from
an in
dependent D
irect
or.
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Mar
ch 2
019
st31
Mar
ch 2
018
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Mar
ch 2
019
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ch 2
018
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ch 2
019
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ch 2
018
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ch 2
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ch 2
018
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ch 2
019
st31
Mar
ch 2
018
131 IND
Term
s a
nd
Co
nd
itio
ns o
f tra
nsacti
on
s w
ith
Rela
ted
Part
ies
(2)
F
or th
e y
ear ended 3
1 M
arc
h 2
019
, the C
om
pany
has
not r
eco
rded a
ny
impairm
ent o
f rece
ivable
s re
latin
g to
am
ou
nts
ow
ed
by
rela
ted
pa
rtie
s (3
1 M
arc
h 2
018: I
NR
Nil)
. This
ass
ess
ment i
s undert
ake
n e
ach
financi
al y
ear th
rough e
xam
inin
g th
e fi
na
nci
al p
osi
tion
of t
he
re
late
d p
art
y a
nd
th
e m
ark
et i
n w
hic
h th
e re
late
d p
art
y opera
tes.
A
ll th
e tra
nsa
ctio
ns
pert
ain
ing to e
xpense
s ente
red w
ith M
eghm
ani A
gro
Chem
icals
Priva
te L
imite
d a
re a
dju
ste
d a
ga
inst
re
imb
urs
em
en
t o
f exp
ense
s. H
ence
, the n
et a
mount o
f reim
burs
em
ent h
as
been d
erive
d c
onsi
dering th
e tr
ansa
ctio
ns
en
tere
d in
to b
etw
ee
n th
e p
art
ies
du
rin
g th
e
year.
(1)
T
he C
om
pany’
s tr
ansa
ctio
ns
with
rela
ted p
art
ies
are
at
arm
’s le
ngth
. M
anagem
ent
belie
ves
that
the
co
mp
an
y’s
Do
me
stic
an
d I
nte
rna
tion
al
transa
ctio
ns
with
rela
ted p
art
ies
post
Marc
h 3
1, 2018 c
ontin
ue to b
e a
t arm
’s le
ngth
and that th
e tra
nsf
er
prici
ng
leg
isla
tion
will
no
t h
ave
an
y im
pact
on th
e fi
nanci
al s
tate
ments
part
icula
rly
on th
e a
mount o
f the ta
x exp
ense
for th
e y
ear and th
e a
mo
un
t of t
he
pro
visi
on
for ta
xatio
n a
t th
e
period e
nd. O
uts
tandin
g b
ala
nce
s at t
he y
ear-
end a
re u
nse
cure
d a
nd in
tere
st fr
ee a
nd s
ett
lem
ent o
ccu
rs in
ca
sh.
Co
mm
itm
en
ts w
ith
Rela
ted
Part
ies
T
he C
om
pany
has
not p
rovi
ded a
ny
com
mitm
ent t
o th
e rela
ted p
art
y as
at M
arc
h 3
1, 2
019 (M
arc
h 3
1, 2
01
8: R
s.N
il). T
he
Co
mp
an
y h
ave
giv
en
co
rpora
te g
uara
nte
e o
n b
ehalf
of i
ts s
ubsi
dia
ry (M
eghm
ani F
inech
em
Lim
ited),
fair v
alu
e o
f com
mis
sio
n fo
r su
ch c
orp
ora
te g
ua
ran
tee
Rs.
2.0
3
lakh
s (3
1st
Marc
h 2
018 :
8.1
3 la
khs)
have
been reco
rded a
s in
com
e fo
r the y
ear.
OU
TS
TA
ND
ING
BA
LA
NC
ES
WIT
H R
EL
AT
ED
PA
RT
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Su
bsi
dia
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ey M
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gn
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uen
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ativ
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tal
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2
8.53
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28.
53
Rec
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1
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1
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3
11.6
8
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-
-
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-
1
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2
,314
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Pay
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77.7
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850
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7
81.0
8
636
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-
0.2
9
-
-
1,1
58.7
8
1,4
87.0
3 R
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-
-
-
-
1
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6
18.6
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0.3
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1
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Loan
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ubsi
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10,9
85.5
4
-
-
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1
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5.54
R
eim
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1
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1
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1
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1
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6
18.9
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0.8
1
4,2
00.7
2
15,
434.
82
st
No
tes t
o t
he F
inan
cia
l S
tate
men
ts F
or
Th
e Y
ear
En
ded
31
Marc
h 2
019
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ch 2
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ch 2
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ch 2
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ch 2
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ch 2
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(Rs
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kh
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132
Tapa
shee
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erpr
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3.8
9
5.3
9
-
-
-
-
-
-
4
,677
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4
,326
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6
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5
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(
28.5
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28.
53
-
4
.29
Dev
al S
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kar
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-
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ish
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294
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4
21.4
9
15.
93
-
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Kar
an P
atel
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89.
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En
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wh
ich
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Ram
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-
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5
60.2
5
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56.8
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Meg
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Key
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176
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77.7
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Man
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6
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Meg
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Meg
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2
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R K
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Ash
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Rel
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Meg
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1,5
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PT
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Pan
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172
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12.
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63
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Nat
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Tara
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Mau
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Kau
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Chi
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Sha
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-
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Jaya
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8.0
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Ank
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Bal
kris
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Dar
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Man
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8.0
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Ind
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den
t D
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Ms.
Urv
ashi
Sha
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-
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-
41.
RE
LA
TE
D P
AR
TIE
S D
ISC
LO
SU
RE
S :
-
Mat
eria
l Tra
nsa
ctio
ns
wit
h R
elat
ed P
arti
es
Nam
e o
f R
elat
ed P
arti
esst
31 M
arch
201
9st
31 M
arch
201
9st
31 M
arch
201
9st
31 M
arch
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9st
31 M
arch
201
8st
31 M
arch
201
8st
31 M
arch
201
8st
31 M
arch
201
8
Ou
tsta
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ing
Bal
ance
sW
ritt
en o
ff
Rei
mb
urs
emen
t o
f E
xpen
ses
Rec
eiva
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/ (P
aid
)fr
om
Su
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Pu
rch
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of
Go
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ervi
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Sal
e o
fG
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/ Ser
vice
s /
ME
IS L
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Par
ticu
lars
(Rs
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La
kh
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st
No
tes t
o t
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cia
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tate
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31
Marc
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133 IND
En
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wh
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Meg
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22,
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1
0,98
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Meg
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Su
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Meg
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455
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Ana
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22
9.4
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2
1.94
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2.08
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1
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1
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-
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Rel
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Tara
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Ram
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an P
atel
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Dar
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Ind
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Rel
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(C
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)
Nam
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No
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inan
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tate
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or
Th
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ear
En
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31
Marc
h 2
019
135 IND
(Rs. in Lakhs)
41. RELATED PARTIES DISCLOURES :-
Outstanding Balance
Ashish Chemicals EOU Unit - II 54.16 150.33
Meghmani Pigments 475.02 503.91
Payable
Meghmani LLP 266.32 68.93
G.S Chahal 1.90 2.81
Meghmani Agrochemicals Private Limited - 10,985.54
Meghmani Industries Ltd. 31.49 51.08
Matangi Industries LLP 0.65 -
Meghmani Chemicals Limited - 10.40
Receivables
Particular 31st March 2019 31st March 2018
Meghmani Dyes & Intermediate LLP - 11.29
Meghmani Industries Ltd. 2.01 109.74
Meghmani LLP 3.05 0.23
Panchratna Corporation 5.41 -
Meghmani Finechem Ltd. - 850.04
Meghmani Overseas FZE 377.70 -
Navratan Speciality Chemical LLP 1.95 1.95
Meghmani Chemicals Limited 21.78 35.61
Meghmani Organics Usa Inc 1,124.16 1,884.56
Navratan Speciality Chemical LLP 17.07 5.14
Meghmani Industries Ltd - Sez Unit 104.77 -
Tapasheel Enterprise - 2.91
Vidhi Global Chemicals Limited - 5.61
Meghmani Exports Limitada S.A.De CV 108.84 108.84
Loan Payable to Subsidiary
Reimbursement of Expenses Receivable from Subsidiary
Meghmani Agrochemicals Private Limited - 28.53
Remunaration Payable
Jayantilal Patel 390.21 152.71
Natwarlal Patel 390.21 150.11
Meghmani Dyes & Intermediate Ltd. 0.23 0.44
Ashish Soparkar 390.21 152.71
Ramesh Patel 235.20 92.71
Anand Patel 157.71 62.71
K D Mehta 1.53 4.90
Meghmani Overseas Fze 38.78 -
Deval Soparkar 0.35 0.81
stNotes to the Financial Statements For The Year Ended 31 March 2019
136
42 - FINANCIAL INSTRUMENTS – FAIR VALUE HIERARCHY
The significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 2 to the Financial Statements.
A. CATEGORY-WISE CLASSIFICATION OF FINANCIAL INSTRUMENT
The carrying value of financial instruments by categories as of March 31, 2019 is as follows:
31st March 2019 Fair value Fair value Amortised Total
through profit through other Cost
and loss comprehensive
income
Financial Assets
Non-Current Investments (Refer Note 5) - 57.41 - 57.41
Non-Current Other Financial Assets - - 559.70 559.70
Carrying amount
(Refer Note 6)
Cash and Cash Equivalents (Refer Note 11) - - 177.16 177.16
Bank Balances (Other than above) - - 136.25 136.25
(Refer Note 12)
Loans (Refer Note 13) - - 22.99 22.99
Other Financial Asset (Refer Note 14) 4,069.29 4,069.29
Trade Receivables (Refer Note 10) - - 35,412.38 35,412.38
Total Financial Assets - 57.41 40,377.77 40,435.18
Non-Current Borrowings (Refer Note 18) - - 8,527.45 8,527.45
Total Financial Liabilities - - 58,933.97 58,933.97
Trade Payables (Refer Note 22) - - 21,881.30 21,881.30
Other Financial Liabilities (Refer Note 23) - - 8,567.90 8,567.90
Current Borrowings (Refer Note 21) - - 19,957.32 19,957.32
Financial Liabilities
(Rs. in Lakhs)
stNotes to the Financial Statements For The Year Ended 31 March 2019
137 IND
The carrying value of financial instruments by categories as of March 31, 2018 is as follows:
Non-Current Borrowings (Refer Note 18) - - 21,741.23 21,741.23
(Refer Note 6)
Cash and Cash Equivalents (Refer Note 11) - - 122.51 122.51
Total Financial Assets - 57.41 37,809.71 37,867.12
Carrying amount
and loss comprehensive
31st March 2018 Fair value Fair value Amortised Total
Non-Current Investments (Refer Note 5) - 57.41 - 57.41
Bank Balances (Other than above) - - 65.73 65.73
income
(Refer Note 12)
Loans (Refer Note 13) - - 16.20 16.20
Other Financial Asset (Refer Note 14) 6,714.39 6,714.39
Financial Assets
Non-Current Other Financial Assets - - 607.22 607.22
Trade Receivables (Refer Note 10) - - 30,283.66 30,283.66
through profit through other Cost
Financial Liabilities
Current Borrowings (Refer Note 21) - - 15,792.02 15,792.02
Trade Payables (Refer Note 22) - - 17,018.70 17,018.70
Other Financial Liabilities (Refer Note 23) 17.38 - 7,299.92 7,317.30
Total Financial Liabilities 17.38 - 61,851.87 61,869.25
Fair value hierarchy: The fair value of the Financial Assets and Liabilities is included at the amount at which the instrument could be exchanged in a
current transaction between willing parties, other than in a forced or liquidation sale. The Company uses the following hierarchy for determining and/or disclosing the fair value of Financial Instruments by valuation techniques:(i) Level 1: quoted prices (unadjusted) in active markets for identical Assets or Liabilities.(ii) Level 2: inputs other than quoted prices included within Level 1 that are observable for the Assets or Liabilities, either directly (i.e., as prices) or indirectly (i.e., derived from prices).(iii) Level 3: inputs for the Assets or Liabilities that are not based on observable market data (unobservable inputs).
B. Measurement of Fairvalues and Sensitivity analysis
The cost of unquoted investments included in Level 3 of fair value hierarchy approximate their fair value because there is a wide range of possible fair value measurements and the cost represents estimate of fair value within that range
Investment at FVTOCI (Unquoted) (Refer Note 8) 57.41 57.41 Level 3
Financial assets / financial liabilities Fair value as at Fair value hierarchy 31 March 2019 31 March 2018
MTM Derivative Liability - 17.38 Level 2
Financial instrument measured at amortised cost The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.
(Rs. in Lakhs)
stNotes to the Financial Statements For The Year Ended 31 March 2019
Financial instrument measured at fair value (Rs. in Lakhs)
138
Opening balance on 1 April 2018 57.41 58.43 Particulars 31 March 2019 31 March 2018
Purchases - - -Impairment in value of investments - - Disposal during the year - 1.02 Closing balance on 31 March 2019 57.41 57.41
The Company’s Board of Directors have overall responsibility for the establishment and oversight of the Company’s risk management framework. The Company manages market risk through treasury operations, which evaluates and exercises independent control over the entire process of market risk management. The finance team recommends risk management objectives and policies. The activities of this operations include management of cash resources, hedging of foreign currency exposure, credit control and ensuring compliance with market risk limits and policies.
Financial Risk Management Framework
The Company’s principal Financial Liabilities, other than Derivatives, comprises of Long Term and Short Term Borrowings, Trade and Other Payables, and Financial Liabilities. 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, Cash and Cash Equivalents, Other Bank Balances and other Financial Assets that derive directly from its operations.
The Company has an effective risk management framework to monitor the risks controls in key business processes. In order to minimise any adverse effects on the bottom line, the Company takes various mitigation measures such as credit control, foreign exchange forward contracts to hedge foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.
The Company has exposure to the following risks arising from financial instruments.
- Credit risk
- Market risk.
- Liquidity risk and
Reconciliation of level 3 fair values The following table shows a reconciliation from the opening balance to the closing balances for level 1 fair values
Trade Receivables
The carrying amount of following Financial Assets represents the maximum credit exposure:
i. Credit Risk
Credit risk is the risk that counter party will not meet its obligation leading to a financial loss. The Company is exposed to credit risk arising from its operating activities primarily from trade receivables and from financing activities primarily relating to parking of surplus funds as Deposits with Banks. The Company considers probability of default upon initial recognition of assets and whether there has been a significant increase in credit risk on an ongoing basis throughtout the reporting period.
Financial instruments and cash deposit
Credit risk from balances with Banks and Financial Institutions is managed by the Company’s treasury department. Investments of surplus funds are made only with approved counter parties and within credit limits assigned to each counter party. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counter party’s potential failure to make payments.
The Sales Department has established a Credit Policy under which each new customer is analysed individually for creditworthiness before the Company’s standard payment and delivery terms and conditions are offered. The Company’s review includes external ratings, if they are available, and in some cases bank references. Sale limits are established for each customer and reviewed periodically. Any sales exceeding those limits require approval from the Board of Directors.
stNotes to the Financial Statements For The Year Ended 31 March 2019
(Rs. in Lakhs)
139 IND
Particulars 31st March 2019 31st March 2018
35,412.38 30,283.66 Other Regions 20,118.38 18,136.72 Domestic 15,294.00 12,146.94
Age of Receivables
Total 35,412.38 30,283.66
Past due1–90 days 10,601.03 6,598.74 Past due 91–180 days 1,481.09 2,568.35
Neither due nor impaired 22,420.19 19,041.34
More than 180 days 910.07 2,075.23
Particulars 31st March 2019 31st March 2018
Management believes that the unimpaired amounts that are past due by more than 180 days are still collectible in full, based on historical payment behavior and extensive analysis of customer Credit Risk, including underlying customers’ credit ratings if they are available.
Management estimates that the amount of provision of Rs. 619.91 Lakhs (March 31, 2018: Rs. 226.72 Lakhs) is appropriate
The Company measures the expected credit loss of trade receivables and loan from individual customers based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends.
Trade Receivables of the Company are typically unsecured ,except to the extent of the security deposits received from the customers or financial guarantees provided by the market organizers in the business.Credit risk is managed through credit approvals and periodic monitoring of the creditworthiness of customers to which rompany grants credit terms in the normal course of business. The Company performs ongoing credit evaluations of its customers’ financial condition and monitors the creditworthiness of its Customers to which it grants credit terms in the normal course of business. The allowance for impairment of Trade receivables is created to the extent and as and when required, based upon the expected collectability of accounts receivables. The Company evaluates the concentration of risk with respect to trade receivables as low, as its Customers are located in several jurisdictions and industries and operate in largely independent markets.
The maximum exposure to Credit Risk for Trade Receivables by geographic region are as follows:
stNotes to the Financial Statements For The Year Ended 31 March 2019
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in a foreign currency).
Note to the financial statements
Financial instruments – Fair Values and Risk Management (continued)
ii. Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk such as equity price risk. Financial instruments affected by market risk include loans and borrowings, deposits, FVTOCI and amortised cost investments and derivative financial instruments.
Foreign Currency Risk
The Company manages its foreign currency risk by hedging transactions that are expected to occur within a maximum 12-month period for hedges of actual sales and purchases and 12-month period for foreign currency loans. When a derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match the terms of the hedged exposure. For hedges of forecast transactions the derivatives cover the period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency.
(Rs. in Lakhs)
(Rs. in Lakhs)
140
Trade and Other Receivables 35,412.38 16,383.27 3,717.06 15,312.05
Long Term Borrowings - - - -
Financial Liabilities
Total to USD to Euro
Particulars 31st March 2019 INR Equivalent to INR Equivalent INR
Financial Assets
Total 35,412.38 16,383.27 3,717.06 15,312.05
Short Term Borrowings 19,957.32 1,210.21 8,588.60 10,158.51
Trade and Other Payables 21,881.30 3,922.54 17.98 17,940.78
Total 41,838.62 5,132.75 8,606.58 28,099.29
(Rs. in Lakhs)
Selling Foreign Currency
Trade and Other Receivables 30,283.66 13,727.13 4,243.16 12,313.37
Less - Forward Contract For (14,227.60) (10,590.94) (3,636.66) -
Financial Liabilities
Financial Assets
Total 16,056.06 3,136.19 606.50 12,313.37
Particulars 31st March 2018 31st March 2018 31st March 2018 INR TOTAL to USD to Euro
Trade and Other Payables- - 1,163.64 27.63 ( 1,191.27)
Total 15,792.02 3,118.89 27.63 12,645.50
Short Term Borrowings 15,792.02 1,955.25 - 13,836.77
stNotes to the Financial Statements For The Year Ended 31 March 2019
Sensitivity analysis
A reasonably possible strengthening (weakening) of the Indian Rupee against US dollars and Euro at March 31 would have affected the measurement of financial instruments denominated in US dollars and Euro and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.
(Rs. in Lakhs)
Effect in INR Strengthening Weakening Strengthening Weakening
31st March 2019
5% movement
USD 562.53 (562.53) 365.96 (365.96)
Profit or (Loss) Equity, net of tax
EUR (244.48) 244.48 (159.05) 159.05
Effect in INR Strengthening Weakening Strengthening Weakening
Profit or (Loss) Equity, net of tax
(Rs. in Lakhs)
31st March 2018
USD 0.86 (0.86) 0.57 (0.57)
5% movement
EUR 28.94 (28.94) 18.93 (18.93)
(Rs. in Lakhs)
(Rs. in Lakhs)
The currency profile of financial assets and financial liabilities as at March 31, 2019 and March 31, 2018 are as below:
Exposure to Currency Risk
The Company's exposure to foreign currency risk at the end of the reporting period expressed in Rs, are as follows
141 IND
Company’s Interest Rate Risk arises from Borrowings Obligations. Borrowings issued exposes to fair value interest rate risk. The interest rate profile of the Company’s interest-bearing Financial Instruments as reported to the management of the Company is as follows.
Financial instruments – Fair Values and Risk Management (continued)
Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a Financial Instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s Long-term Debt Obligations with floating interest rates. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings.
Exposure to Interest Rate Risk
(Rs. in Lakhs)
Variable-rate instruments 31st March 2019 31st March 2018
Non Current - Borrowings 8,527.45 21,741.23
Current portion of Long Term Borrowings 4,168.19 4,606.02
Total 12,695.64 26,347.25
Cash Flow sensitivity analysis for variable-rate instruments
A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased /(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.
Equity Price Risk:
The Company’s listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The investment in listed and unlisted equity securities are not significant.
Particulars Profit or (Loss) Equity, Net of Tax
Non Current - Borrowings (85.27) 85.27 (55.48) 55.48
Current portion of Long Term (41.68) 41.68 (27.12) 27.12
Borrowings
Total (263.47) 263.47 (172.29) 172.29
Total (126.96) 126.96 (82.59) 82.59
100 bp increase 100 bp decrease 100 bp increase 100 bp decrease
Borrowing
31st March 2019
Non Current - Borrowings (217.41) 217.41 (142.17) 142.17
31st March 2018
Current portion of Long Term (46.06) 46.06 (30.12) 30.12
stNotes to the Financial Statements For The Year Ended 31 March 2019
(Rs. in Lakhs)
Financial instruments – Fair Values and Risk Management (continued)
iii. Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities
when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the
Company’s reputation.
142
Contractual Cash Flows
Carrying amount
Total 1 Year or Less
1-2 years 2-5 years More than 5 years
st31 March, 2019
Trade and Other Payables 21,881.30 21,881.30 21,881.30 - - -
Non-Derivative Financial Liabilities
Rupee Term Loans from Banks
HDFC Bank Limited 1,200.00 1,200.00 600.00 600.00 - -
Total 12,695.64 12,695.63 4,168.19 3,177.44 5,350.00 -
Working Capital loans from banks 19,957.32 19,957.32 19,957.32 - - -
SBI Bank Limited 3,828.97 3,828.96 2,034.85 1,044.11 750.00 -
Foreign Currency Term Loans from banks
AXIS Bank Limited 7,666.67 7,666.67 1,533.34 1,533.33 4,600.00 -
(Rs. in Lakhs)
Contractual Cash Flows
Carrying amount
Total 1 Year or Less
1-2 years 2-5 years More than 5 years
st31 March, 2018
SBI Bank Limited 5,847.26 5,847.26 1,972.26 2,050.00 1,825.00 -
HDFC Bank Limited 1,800.00 1,800.00 600.00 600.00 600.00 -
Non-Derivative Financial Liabilities
Trade and Other Payables 17,018.70 17,018.70 17,018.70 - - -
ICICI Bank Limited 10,000.00 10,000.00 1,250.00 2,500.00 6,250.00 -
Working Capital loans from banks 15,792.02 15,792.02 15,792.02 - - -
Rupee Term Loans from Banks
AXIS Bank Limited 8,700.00 8,700.00 725.00 1,450.00 6,525.00 -
Total 26,347.26 26,347.26 4,547.26 6,600.00 15,200.00 -
(Rs. in Lakhs)
Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same
geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly
affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company’s
performance to developments affecting a particular industry
Excessive risk concentration
The gross inflows/(outflows) disclosed in the above table represent the contractual undiscounted cash flows relating to
derivative financial liabilities held for risk management purposes and which are not usually closed out before contractual
maturity. The disclosure shows net cash flow amounts for derivatives that are net cash-settled and gross cash inflow and outflow
amounts for derivatives that have simultaneous gross cash settlement.
Exposure to Liquidity Risk
The Company manages liquidity risk by maintaining adequate reserves, by continuously monitoring forecast and actual
cash flows and matching the maturity profiles of the financial assets and liabilities. The table below summarises the
remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and
include estimated interest payments and exclude the impact of netting agreements.
stNotes to the Financial Statements For The Year Ended 31 March 2019
143 IND
The Company monitors capital using a ratio of ‘Adjusted Net Debt’ to ‘Adjusted Equity’. For this purpose, adjusted net debt is
defined as total Liabilities, comprising Interest-bearing Loans and Borrowings and obligations under Finance Leases, less
Cash and Cash Equivalents. Adjusted Equity Comprises all components of Equity.
43 CAPITAL MANAGEMENT
Capital includes equity attributable to the equity holders to ensure that it maintains an efficient capital structure and healthy
capital ratios in order to support its business and maximise shareholder value. The Company manages its capital structure
and makes adjustments to it, in light of changes in economic conditions or its business requirements. To maintain or adjust
the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue
new shares. No changes were made in the objectives, policies or processes during the year ended March 31, 2019 and
March 31, 2018.
As at March 31, 2019 As at March 31, 2018
Adjusted equity 83,796.58 69,769.83
(Rs. in Lakhs) PARTICULARS
Adjusted net debt 32,475.80 42,016.76
Total Interest bearing liabilities 32,652.96 42,139.27
Less : Cash and cash equivalent 177.16 122.51
Total equity 83,796.58 69,769.83
Adjusted net debt to adjusted equity ratio 0.39 0.60
44 SALE OF INVESTMENT IN SUBSIDIARY:
Additional investment in subsidiary:
The Board of Directors of the Company in their meeting held on February 10, 2018 approved further investment Rs.
22,119.66 Lakhs in Redeemable Preference Share (RPS) of MACPL. The RPS were redeemable anytime within a period of
20 years at the option of MACPL and carried coupon rate of 8.00%. The dividend being non-cumulative and declaration of
dividend is at the option of MACPL. MACPL acquired 1,76,66,050 (24.97%) shares in MFL from International Financial
Corporation (IFC) on April 26, 2018 from the investment received from the Company.
During the Current year, the Company cancelled the SPA with MACPL on May 19, 2018 considering which risk and rewards
on investment in shares of MFL got transferred to MACPL. The Company accounted for sale of investment in MFL adjusting
consideration received from MACPL which was accounted as loan. Also gain of Rs. 5,915.29 Lakhs on sale of investment in
subsidiary is recognised as an exceptional item in the statement of profit and loss.
During the previous year, the Board of Directors of the Company in their meeting held on August 8, 2017 approved sale of
16,900,835 (23.88%) shares in Meghmani Finechem Limited (MFL) to Meghmani AgroChemicals Private Limited (MACPL)
at total consideration amounting to Rs. 10,985.54 Lakhs. The shares were sold at a value of Rs. 65 per share derived as per
the book value computation prescribed under Rule 11UA of the Income-Tax Rules. Further to the sale of shares of MFL to
MACPL, the Company entered into a Share Purchase Agreement (SPA) with MACPL on October 1, 2017 which gave right to
Company to purchase the shares at same value and right to revoke the transaction within 12 months. Also as per terms of
SPA, Since the Company retained substantially all the risk and rewards on shares of MFL and was exposed to all the
economic risks and rewards for 12 months, the Company has continued to recognise the investment in MFL its books, and
the consideration received from MACPL on sale of shares was considered as a loan.
In order to avoid excessive concentrations of risk, the policies and procedures include specific guidelines to focus on the
maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.
Selective hedging is used within the company to manage risk concentrations at both the relationship and industry levels
stNotes to the Financial Statements For The Year Ended 31 March 2019
Financial instruments – Fair Values and Risk Management (continued)
144
During the current year, the Board of Directors of subsidiary companies MFL and MACPL approved merger of MACPL with
MFL. As per the scheme of merger, MFL would take over all the assets and liabilities of MACPL including its investment in
equity shares of MFL. The merger scheme was approved by NCLT on February 11, 2019. The Company, as per the share
swap ratio approved in merger scheme, received 21,09,19,871 OCRPS and 22,17,08,925 NCRPS in MFL on March 5, 2019
for its investment in equity and preference shares in MACPL. The OCRPS and NCRPS issued by MFL is as per the following
terms:
Merger of subsidiaries:
Years from the
Particulars Coupon rate Tenure
OCRPS 8% Within Twenty
date of issue
NCRPS 8% Within Five years
Non-cumulative, dividend declaration is subject to approval by board of MFL i.e. issuer. Redeemable or Convertible at any time within a period of 20 years from the date of issue. MFL shall have the right to exercise the option of redemption or conversion. In case redemption does not happen within 20 years, it will be compulsorily converted into 10 equity shares for every 125 OCRPS. OCRPS, if redeemed, will be at face value
Redeemable at any time within a period of 5 years from the date of issue at the option of the holder. NCRPS will be redeemed at face value. Dividend will be paid cumulative however, declaration is at the option of MFL.
Redeemable/Non-redeemable
45 EVENTS OCCURRED AFTER THE BALANCE SHEET DATE
46 Previous year figures have been regrouped wherever necessary to make them comparable with those of the current year.
The Company evaluates events and transactions that occur subsequent to the balance sheet date but prior to approval of
financial statement to determine the necessity for recognition and/or reporting of any of these events and transactions in the
financial statements. As of 24th May 2019 there were no material subsequent events to be recognized or reported that are
not already previously disclosed.
The NCRPS amounting to Rs. 22,170.89 Lakhs were redeemed by the Company on March 8, 2019 along with dividend
amounting to Rs. 1,535.56 Lakhs. Dividend was paid by MFL with effect from April 26, 2018 which is the date of preference
shares issued by MACPL to MOL. The OCRPS are valued at original cost of investment in equity shares of MFL plus gain on
sale of investment at Rs. 10,986.54 Lakhs.
AS PER OUR REPORT OF EVEN DATE For and on behalf of the Board of Directors of
FOR S R B C & CO LLP Meghmani Organics Limited
J.M.Patel - Executive Chairman (DIN - 00027224)
per Sukrut Mehta G S Chahal A.N.Soparkar - Managing Director (DIN - 00027480)
Chartered Accountants (CIN NO-24110GJ1995PLC024052)
ICAI Firm Regn. No. 324982E / E300003
Partner Chief Financial Officer N.M.Patel - Managing Director (DIN - 00027540)
Membership No : 101974
Place : Ahmedabad Place : Ahmedabad th thDate : 24 May 2019 Date : 24 May 2019
K. D. Mehta
Company Secretary
stNotes to the Financial Statements For The Year Ended 31 March 2019
145 IND
CONSOLIDATEDACCOUNTS
146
INDEPENDENT AUDITOR'S REPORT
Opinion
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated
Ind AS financial statements for the financial year ended March 31, 2019. These matters were addressed in the context of our
audit of the consolidated Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in
that context.
Key Audit Matters
We have audited the accompanying consolidated Ind AS financial statements of Meghmani Organics Limited (hereinafter
referred to as “the Holding Company”), its subsidiaries (the Holding Company and its subsidiaries together referred to as “the
Group”) comprising of the consolidated Balance sheet as at March 31, 2019, the consolidated Statement of Profit and Loss,
including other comprehensive income, the consolidated Cash Flow Statement and the consolidated Statement of Changes in
Equity for the year then ended, and notes to the consolidated Ind AS financial statements, including a summary of significant
accounting policies and other explanatory information (hereinafter referred to as “the consolidated Ind AS financial
statements”).
To the Members of Meghmani Organics Limited
Report on the Audit of the Consolidated Ind AS Financial Statements
We conducted our audit of the consolidated Ind AS financial statements in accordance with the Standards on Auditing (SAs), as
specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ‘Auditor’s
Responsibilities for the Audit of the Consolidated Ind AS Financial Statements’ section of our report. We are independent of the
Group in accordance with the ‘Code of Ethics’ issued by the Institute of Chartered Accountants of India together with the ethical
requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder,
and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the consolidated
Ind AS financial statements.
Basis for Opinion
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled
the responsibilities described in the Auditor’s responsibilities for the audit of the consolidated Ind AS financial statements
section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures
designed to respond to our assessment of the risks of material misstatement of the consolidated Ind AS financial statements.
The results of our audit procedures, performed by us and by other auditors of components not audited by us, as reported by
them in their audit reports furnished to us by the management, including the procedures performed to address the matters
below, provide the basis for our audit opinion on the accompanying consolidated Ind AS financial statements.
In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of
reports of other auditors on separate financial statements and on the other financial information of the subsidiaries, the
aforesaid consolidated Ind AS financial statements give the information required by the Companies Act, 2013, as amended (“the
Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in
India, of the consolidated state of affairs of the Group as at March 31, 2019, their consolidated profit including other
comprehensive income, their consolidated cash flows and the consolidated statement of changes in equity for the year ended
on that date.
147 IND
INDEPENDENT AUDITOR'S REPORT
Key audit matters
• Considered the appropriateness of the Group's revenue recognition accounting policies in terms of Ind AS 115.
Our audit procedures included the following:
• Understood the Group’s established processes and control mechanism for revenue recognition process, evaluated the key financial controls around such process.
• Performed tests of details, on a sample basis, and inspected the underlying, sales order, invoice copy, terms of delivery, lorry receipt, bill of lading, invoice, collection to assess whether revenue recorded is as per the contract.
• Tested sales transactions near year end date as well as credit notes issued after the year end date.
• Performed product-wise and customer-wise substantive analytical procedures of revenue recognition.
• Performed test of controls, assisted by our IT specialists, over revenue recognition with specific focus on testing management controls on accuracy and timing of revenue recognition through inspection of evidence of performance of management controls.
• Verified that the revenue for the year are appropriately presented and disclosed in the consolidated Ind AS financial statements.
Other Information
The Holding Company’s Board of Directors is responsible for the other information. The other information comprises the
information included in the management discussion and analysis and chairman statement, but does not include the
consolidated Ind AS financial statements and our auditor’s report thereon.
Our opinion on the consolidated Ind AS financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the consolidated Ind AS financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or
our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed,
we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing
to report in this regard.
Responsibilities of Management for the Consolidated Ind AS Financial Statements
The Holding Company’s Board of Directors is responsible for the preparation and presentation of these consolidated Ind AS
financial statements in terms of the requirements of the Act that give a true and fair view of the consolidated financial position,
consolidated financial performance including other comprehensive income, consolidated cash flows and consolidated
statement of changes in equity of the Group in accordance with the accounting principles generally accepted in India, including
the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting
(as described in note 2(b) of the consolidated Ind AS financial statements)Revenue recognition
The Group majorly operates in three segments viz: Agro chemicals, Pigment and Basic chemicals. Export sales contributes approximately 49% of total sales of the Group. The Group recognises revenue from sales of goods in accordance with the requirements of Ind AS 115, Revenue from Contracts with Customers, measured at fair value of the consideration received in the ordinary course of the Group's activities. Revenue from sale of goods is recognised net of discounts, rebates and taxes.
Certain terms in sales arrangements relating to timing of transfer of risk and rewards, discount and rebates arrangements, delivery specifications including incoterms, involves significant judgment in determining whether revenue is recognised in the correct period.
How our audit addressed the key audit matter
148
INDEPENDENT AUDITOR'S REPORT
Standards) Rules, 2015, as amended. The respective Board of Directors of the companies included in the Group are
responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the
assets of the Group and for preventing and detecting frauds and other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and
maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness
of the accounting records, relevant to the preparation and presentation of the consolidated Ind AS financial statements that give
a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose
of preparation of the consolidated Ind AS financial statements by the Directors of the Holding Company, as aforesaid.
In preparing the consolidated financial statements, the respective Board of Directors of the companies included in the Group are
responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to
cease operations, or has no realistic alternative but to do so.
Those respective Board of Directors of the companies included in the Group are also responsible for overseeing the financial
reporting process of the Group.
Auditor’s Responsibilities for the Audit of the Consolidated Ind AS Financial Statements
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the ability of the Group to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated Ind AS
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the
Group to cease to continue as a going concern.
• Identify and assess the risks of material misstatement of the consolidated Ind AS financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our
opinion on whether the Holding Company has adequate internal financial controls system in place and the operating
effectiveness of such controls.
Our objectives are to obtain reasonable assurance about whether the consolidated Ind AS financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these consolidated Ind AS financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout
the audit. We also:
• Evaluate the overall presentation, structure and content of the consolidated Ind AS financial statements, including
the disclosures, and whether the consolidated Ind AS financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
149 IND
150
INDEPENDENT AUDITOR'S REPORT
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group of which we are the independent auditors and whose financial information we have audited, to
express an opinion on the consolidated Ind AS financial statements. We are responsible for the direction,
supervision and performance of the audit of the financial statements of such entities included in the consolidated
financial statements of which we are the independent auditors. For the other entities included in the consolidated
financial statements, which have been audited by other auditors, such other auditors remain responsible for the
direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit
opinion.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the consolidated Ind AS financial statements for the financial year ended March 31, 2019 and are
therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated
in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Other Matter
(a) We did not audit the financial statements and other financial information, in respect of one subsidiary, whose Ind AS
financial statements include total assets of Rs. 569.85 lakhs as at March 31, 2019, and total revenues of Rs. 686.31
lakhs and net cash outflows of Rs. 62.41 lakhs for the year ended on that date. These financial statement and other
financial information have been audited by other auditor, which financial statements, other financial information and
auditor’s report have been furnished to us by the management. Our opinion on the consolidated Ind AS financial
statements, in so far as it relates to the amounts and disclosures included in respect of this subsidiary and our report
in terms of sub-sections (3) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiary is based solely
on the reports of such other auditor.
(b) We did not audit the financial statements and other financial information, in respect of one subsidiary, whose Ind AS
financial statements include total assets of Rs. 1,962.41 lakhs as at March 31, 2019, and total revenues of Rs.
5,819.91 lakhs and net cash outflows of Rs. 1.43 lakhs for the year ended on that date. These financial statement
and other financial information have been reviewed by other auditor, which financial statements, other financial
information and review report have been furnished to us by the management. Our opinion on the consolidated Ind
AS financial statements, in so far as it relates to the amounts and disclosures included in respect of this subsidiary
and our report in terms of sub-sections (3) of Section 143 of the Act, in so far as it relates to the aforesaid
subsidiaries is based solely on the reports of such other auditor.
(c) Certain of these subsidiaries are located outside India whose financial statements and other financial information
have been prepared in accordance with accounting principles generally accepted in their respective countries and
which have been audited / reviewed by other auditors under generally accepted auditing standards applicable in
their respective countries. The Company’s management has converted the financial statements of such
subsidiaries located outside India from accounting principles generally accepted in their respective countries to
accounting principles generally accepted in India. We have audited these conversion adjustments made by the
Company’s management. Our opinion in so far as it relates to the balances and affairs of such subsidiaries located
outside India
We communicate with those charged with governance of the Holding Company and such other entities included in the
consolidated Ind AS financial statements of which we are the independent auditors regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
INDEPENDENT AUDITOR'S REPORT
(f) With respect to the adequacy and the operating effectiveness of the internal financial controls over financial
reporting with reference to these consolidated Ind AS financial statements of the Holding Company and its
subsidiary companies incorporated in India, refer to our separate Report in “Annexure” to this report;
is based on the report of other auditors and the conversion adjustments prepared by the management of the
Company and audited by us.
(c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss including the Statement of Other
Comprehensive Income, the Consolidated Cash Flow Statement and Consolidated Statement of Changes in
Equity dealt with by this Report are in agreement with the books of account maintained for the purpose of
preparation of the consolidated Ind AS financial statements;
(b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidation of
the financial statements have been kept so far as it appears from our examination of those books and reports of the
other auditors;
As required by Section 143(3) of the Act, based on our audit and on the consideration of report of the other auditors on separate
financial statements and the other financial information of subsidiaries, as noted in the ‘other matter’ paragraph we report, to the
extent applicable, that:
(g) In our opinion and based on the consideration of reports of other statutory auditor of the subsidiary incorporated in
India, the managerial remuneration for the year ended March 31, 2019 has been paid / provided by the Holding
Company and its subsidiary incorporated in India to their directors in accordance with the provisions of section 197
read with Schedule V to the Act.
Our opinion above on the consolidated Ind AS financial statements, and our report on Other Legal and Regulatory
Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the
reports of the other auditors and the financial statements and other financial information certified by the Management.
(a) We/the other auditors whose report we have relied upon have sought and obtained all the information and
explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the
aforesaid consolidated Ind AS financial statements;
(e) On the basis of the written representations received from the directors of the Holding Company as on March 31,
2019 taken on record by the Board of Directors of the Holding Company and the reports of the statutory auditors
who are appointed under Section 139 of the Act, of its subsidiary companies, none of the directors of the Group’s
companies, incorporated in India is disqualified as on March 31, 2019 from being appointed as a director in terms of
Section 164 (2) of the Act;
(d) In our opinion, the aforesaid consolidated Ind AS financial statements comply with the Accounting Standards
specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as
amended;
(d) The accompanying consolidated Ind AS financial statements include unaudited financial statements and other
unaudited financial information in respect of two subsidiaries, whose financial statements and other financial
information reflect total assets of Rs Nil as at March 31, 2019, and total revenues of Rs Nil and net cash
outflows/(inflows) of Rs 0.56 lakhs for the year ended on that date. These unaudited financial statements and other
unaudited financial information have been furnished to us by the management. Our opinion, in so far as it relates
amounts and disclosures included in respect of these subsidiaries, and our report in terms of sub-sections (3) of
Section 143 of the Act in so far as it relates to the aforesaid subsidiaries, is based solely on such unaudited financial
statement and other unaudited financial information. In our opinion and according to the information and
explanations given to us by the Management, these financial statements and other financial information are not
material to the Group.
Report on Other Legal and Regulatory Requirements
151 IND
INDEPENDENT AUDITOR'S REPORT
i. The consolidated Ind AS financial statements disclose the impact of pending litigations on its consolidated
financial position of the Group in its consolidated Ind AS financial statements – Refer Note 39 to the
consolidated Ind AS financial statements;
(h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies
(Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the
explanations given to us and based on the consideration of the report of the other auditors on separate financial
statements as also the other financial information of the subsidiaries, as noted in the ‘Other matter’ paragraph
ii. The Group did not have any material foreseeable losses in long-term contracts including derivative contracts
during the year ended March 31, 2019;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and
Protection Fund by the Holding Company during the year ended March 31, 2019.
Chartered Accountants ICAI Firm Registration Number: 324982E/E300003
per Sukrut Mehta
Place of Signature: Ahmedabad
PartnerMembership Number: 101974
For S R B C & CO LLP
Date: May 24, 2019.
152
Annexure to the Independent Auditor’s report of even date on theseconsolidated Ind AS Financial Statements of Meghmani Organics Limited
Report on the Internal Financial Controls under Clause (I)of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls over
financial reporting with reference to these consolidated Ind AS financial statements and their operating effectiveness. Our audit
of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over
financial reporting with reference to these consolidated Ind AS financial statements, assessing the risk that a material weakness
exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The
procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of
these financial statements, whether due to fraud or error.
In conjunction with our audit of the consolidated Ind AS financial statements of Meghmani Organics Limited as of and for the year
ended March 31, 2019, we have audited the internal financial controls over financial reporting of Meghmani Organics Limited
(hereinafter referred to as the “Holding Company”) and its subsidiary companies, which are companies incorporated in India, as
of that date.
Auditor’s Responsibility
The respective Board of Directors of the Holding Company and its subsidiary companies, which are companies incorporated in
India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial
reporting criteria established by the Holding Company considering the essential components of internal control stated in the
Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants
of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that
were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective
company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and
completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting with reference to
these consolidated Ind AS financial statements based on our audit. We conducted our audit in accordance with the Guidance
Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing both
issued by the Institute of Chartered Accountants of India and deemed to be prescribed under section 143(10) of the Act, to the
extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial
controls over financial reporting with reference to these consolidated Ind AS financial statements was established and
maintained and if such controls operated effectively in all material respects.
We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors in terms of their
reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on
the internal financial controls over financial reporting with reference to the consolidated Ind AS financial statements.
Management’s Responsibility for Internal Financial Controls
153 IND
In our opinion, the Holding Company and its subsidiary companies which are companies incorporated in India, have, maintained
in all material respects, an adequate internal financial controls over financial reporting with reference to these consolidated Ind
AS financial statements and such internal financial controls over financial reporting with reference to these consolidated Ind AS
financial statements were operating effectively as at March 31, 2019, based on the internal control over financial reporting
criteria established by the Holding Company considering the essential components of internal control stated in the Guidance
Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
Because of the inherent limitations of internal financial controls over financial reporting with reference to these consolidated Ind
AS financial statements, including the possibility of collusion or improper management override of controls, material
misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial
controls over financial reporting with reference to these consolidated Ind AS financial statements to future periods are subject to
the risk that the internal financial control over financial reporting with reference to these consolidated financial statements may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
Inherent Limitations of Internal Financial Controls over Financial Reporting with reference to these consolidated Ind
AS financial statements
Meaning of Internal Financial Controls over Financial Reporting with reference to these consolidated Ind AS financial statements
A company's internal financial control over financial reporting with reference to these consolidated Ind AS financial statements is
a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal
financial control over financial reporting with reference to these consolidated Ind AS financial statements includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the company are being made only in accordance with authorisations of management and directors
of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition,
use, or disposition of the company's assets that could have a material effect on the financial statements.
Opinion
Annexure to the Independent Auditor’s report of even date on theseconsolidated Ind AS Financial Statements of Meghmani Organics Limited
Report on the Internal Financial Controls under Clause (I)of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
per Sukrut Mehta
Date: May 24, 2019.
For S R B C & CO LLPChartered Accountants ICAI Firm Registration Number: 324982E/E300003
PartnerMembership Number: 101974Place of Signature: Ahmedabad
154
STCONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2019
PARTICULARS
(c) Current Tax Assets (Net) 6 278.85 -
Total Current Assets 1,07,135.23 83,916.68
EQUITY AND LIABILITIES
(a) Equity Share Capital 16 2,543.14 2,543.14
Non-Current Assets
(c) Other Intangible Assets 3.3 1,152.05 1,555.40
(e) Financial Assets
Current Assets (a) Inventories 8 41,093.90 26,773.92
(vi) Other Financial Assets 14 4,176.66 6,810.80
(ii) Other Financial Assets 5 1,045.17 1,078.06
Total Non-Current Assets 1,30,540.61 97,924.62
(i) Investments 4 57.41 57.41
ASSETS
(f) Deferred Tax Assets (Net) 21 28.06 751.78 (g) Non-Current Tax Assets (Net) 6 1,030.30 1,051.77
(v) Loans 13 58.62 37.82
(b) Financial Assets
(b) Capital Work-in-Progress 3.2 51,267.31 7,469.51
(i) Investments 9 - 7,141.81 (ii) Trade Receivables 10 43,135.33 37,450.16 (iii) Cash and Cash Equivalents 11 13,329.63 425.50 (iv) Bank Balances other than (iii) above 12 136.25 566.72
(a) Property, Plant and Equipment 3.1 72,504.68 77,933.48
(d) Intangible Assets under development 3.2 491.27 2,871.85
(h) Other Non-Current Assets 7 2,964.36 5,155.36
(d) Other Current Assets 15 4,925.99 4,709.95
TOTAL ASSETS 2,37,675.84 1,81,841.30
Equity
Equity attributable to Shareholders of the Company 1,00,360.03 87,053.66
(a) Financial Liabilities
(b) Other Equity 17 97,816.89 84,510.52
(i) Borrowings 18 45,061.50 21,831.23
(c) Deferred Tax Liabilities (Net) 21 5,041.81 5,055.14
Non-Current Liabilities
Total Non-Current Liabilities 51,644.87 27,409.74 Current Liabilities (a) Financial Liabilities
(iii) Other Financial Liabilities 24 22,171.09 15,136.15 (b) Other Current Liabilities 25 1,177.65 1,037.24 (c) Provisions 26 596.23 9.01 (d) Current Tax Liabilities (Net) 27 1,414.70 1,410.81 Total Current Liabilities 70,747.12 45,241.15
(ii) Trade Payables 23 25,193.51 19,506.15
Total Liabilities 1,22,391.99 72,650.89 TOTAL EQUITY AND LIABILITIES 2,37,675.84 1,81,841.30
(b) Provisions 20 760.25 523.37
Non-controlling Interests 14,923.82 22,136.75 Total Equity 1,15,283.85 1,09,190.41 Liabilities
(ii) Other Financial Liabilities 19 781.31 -
(i) Borrowings 22 20,193.94 8,141.79
Summary of Significant Accounting Policies 2
(Rs. in Lakhs)
Notes
st 31 March 2018 st31 March 2019
AS PER OUR REPORT OF EVEN DATE For and on behalf of the Board of Directors ofThe accompanying notes are an integral part of these Consolidated Financial Statements.
FOR S R B C & CO LLP, Chartered Accountants Meghmani Organics Limited
Partner Chief Financial Officer A.N.Soparkar - Managing Director (DIN - 00027480)
ICAI Firm Regn. No. 324982E / E300003 (CIN NO-24110GJ1995PLC024052)
Place : Ahmedabad K. D. Mehta Place : Ahmedabad th thDate : 24 May 2019 Company Secretary Date : 24 May 2019
Membership No : 101974 N.M.Patel - Managing Director (DIN - 00027540)
per Sukrut Mehta G S Chahal J.M.Patel - Executive Chairman (DIN - 00027224)
155 IND
CONSOLIDATED STATEMENT OF PROFIT AND LOSSSTFOR THE YEAR ENDED ON 31 MARCH 2019
PARTICULARS Notes st 31 March 2018st31 March 2019
Total Tax Expenses (VIII) 11,319.24 8,778.76
VII Profit Before Tax (V-VI) 40,855.96 32,571.47 VIII Tax Expenses 21 1 Current Tax 10,654.56 7,222.60 2 Adjustment of Tax Relating to Earlier Periods (61.52) 113.54 3 Deferred Tax (1,814.53) 2,746.97 Less - (Credit) / Utilisation of MAT 2,540.73 (1,304.35)
Remeasurement gain / (loss) on defined benefit plans (196.33) 23.35
B (i) Items that will be reclassified to Profit or Loss - (ii) Income tax effect on above 68.61 (8.16)
X. Other Comprehensive Income 36 IX. Profit For The Year (VII-VIII) 29,536.72 23,792.71
A (i) Items that will not be reclassified to Profit or Loss -
Changes in Inventories of Finished Goods, Work-in-Progress and
Cost of Materials Consumed 30 1,08,891.28 88,524.48 Purchase of Stock-in-Trade 5,687.38 3,114.92
Stock-in-Trade 31 (11,283.36) (607.87) Excise duty on Sale of goods - 3,984.61 Employee Benefits Expense 32 12,467.47 9,980.94
Depreciation and Amortization Expenses 3 9,725.94 9,477.26 Other Expenses 34 38,585.57 36,204.21
Finance Costs 33 5,599.21 3,987.14
Total Expenses (IV) 1,69,673.49 1,54,665.69 V Profit Before Exceptional Items and Tax (III-IV) 42,442.74 32,683.99 VI Exceptional Items 35 1,586.78 112.52
IV Expenses
I Revenue From Operations 28 2,08,795.85 1,84,317.01
III Total Income (I+II) 2,12,116.23 1,87,349.68 II Other Income 29 3,320.38 3,032.67
Other Comprehensive Income For the Year Attributable to:
Owners of the Company 25,031.42 17,147.35
Non-Controlling Interests (9.68) 2.21
(ii) Income tax effect on above (11.93) (1.17)
Total Comprehensive Income For the Year Attributable to:
Owners of the Company 25,127.25 17,132.18 Non-Controlling Interests 4,409.47 6,660.53
Basic and Diluted 9.88 6.74
Total Other Comprehensive Income / (Loss)
Owners of the Company (95.83) 15.17
XI. Total Comprehensive Income For The Year (IX + X) 29,431.21 23,810.09
Non-Controlling Interests 4,399.79 6,662.74
Summary of Significant Accounting Policies 2
XII. Earnings Per Equity Share (Face Value Per Share - Re 1 Each, 37
Profit For the Year Attributable to:
For The Year, Net of Tax (X) (105.51) 17.38
31st March 2018 : Re 1 Each)
Foreign Currency Translation of Foreign Operations 34.14 3.36
per Sukrut Mehta G S Chahal J.M.Patel - Executive Chairman (DIN - 00027224)
The accompanying notes are an integral part of these Consolidated Financial Statements.
th thDate : 24 May 2019 Company Secretary Date : 24 May 2019
AS PER OUR REPORT OF EVEN DATE For and on behalf of the Board of Directors of
Partner Chief Financial Officer A.N.Soparkar - Managing Director (DIN - 00027480)
FOR S R B C & CO LLP, Chartered Accountants Meghmani Organics Limited
Place : Ahmedabad K. D. Mehta Place : Ahmedabad Membership No : 101974 N.M.Patel - Managing Director (DIN - 00027540)
ICAI Firm Regn. No. 324982E / E300003 (CIN NO-24110GJ1995PLC024052)
(Rs. in Lakhs)
156
STCONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2019
PARTICULARS
(Rs. in Lakhs)
st 31 March 2018 st31 March 2019
Interest and Finance Charges 5,599.21 3,987.14
Operating Profit Before Working Capital Changes 58,729.80 45,877.02
(Increase) in Inventories (14,843.97) (2,605.85)
Profit Before Tax 40,855.96 32,571.47
Mark to Market Loss on Derivative (Gain) / Loss (Net) (17.38) 145.81
Dividend Income (3.75) (1.54)
Interest Income (433.61) (437.69) Bad Debts Written off 504.75 780.25 Provision for Doubtful Debt 393.19 247.62
Profit on Sale of Investment (585.83) (371.69)
Exceptional Item - Loss Due to Fire 1,476.78 111.70
Loss on Sale of Property, Plant and Equipment (Net) 378.38 44.82
Depreciation and Amortisation Expenses 9,725.94 9,477.26
A. Cash Flow from Operating Activities
Unrealised Foreign Exchange (Gain) / Loss (Net) 1,094.41 (1,076.62)
Adjustment for :
Liability no longer Required written back (320.89) (99.65)
Currency Translation Reserve 34.14 3.36
Investment Written off - 0.82
Sundry Balance Written off 28.50 262.38
License and certification fees - 231.58
Adjustment for:
Decrease in Other Current Financial Assets 2,853.78 2,012.22
Increase in Trade Payables 6,193.48 4,151.65
Increase/(Decrease) in Other Current Liabilities 140.41 (348.76)
Cash Generated from Operations 48,334.10 46,215.74
(Increase) in Trade Receivables (7,862.76) (4,900.07)
(Increase)/Decrease in Other Non-Current Assets (585.15) 421.79
(Increase) in Short Term Loans and Advances (20.80) (9.33)
Increase in Other Current Financial Liabilities 3,300.95 2,732.03
Increase in Provisions 627.78 105.83 Working Capital Changes (10,395.70) 338.72
B. Cash Flow from Investment Activities Purchase of Property, Plant & Equipment (37,798.65) (24,562.10) Proceeds from sale of Property, Plant & Equipment 181.74 414.88
Fixed Deposits redeemed 84,400.00 2,400.00 Earmarked balances with Banks (100.86) -
Direct Taxes Paid (Net of Refund) (10,845.18) (5,726.68)
(Increase) in Other Current Assets (216.04) (1,163.67) (Increase)/Decrease in Other Non-Current Financial Assets 16.62 (57.12)
Fixed deposits made (83,925.77) (2,219.56)
Net Cash Generated from Operating Activities 37,488.92 40,489.06
Interest Received 382.47 432.20 Dividend Received 3.75 1.54
Investment in Mutual Fund (Net) (26,003.08) (3,919.15) Proceeds from Redemption of Investment 33,730.72 - Proceeds from Sale of Investments - 2.03
Net Cash (Used in) Investing Activities (29,129.68) (27,450.16)
157 IND
PARTICULARS
( ` in Lakhs)
st 31 March 2018 st31 March 2019
Dividend and Interim Dividend paid (2,442.28) (1,018.17)
Repayment of Short Term Borrowings (67,000.00) (65,000.00)
Proceeds from Bank Borrowing (Term Loan) 42,613.00 18,700.00
Dividend Distribution Tax Paid (524.74) (207.09)
Interest and Finance Charges (5,306.36) (4,063.61)
C. Cash Flow from Financing Activities
Proceeds from Short Term Borrowings 79,052.15 48,180.58
Proceeds from Issue of Share Capital to Non Controlling Interest 1,500.00 -
Payment towards Acquistion of Stake from Non Controlling Interest (22,119.66) -
Net Cash (Used in) / Generated from Finanacing Activities 4,510.75 (12,822.86)
Net Increase in Cash and Cash Equivalent (A+B+C) 12,869.99 216.04
Cash and Cash Equivalent at the beginning of the year 425.50 206.10
Total Cash and Bank Balance as per Balance Sheet 13,329.63 425.50
Less - Fixed Deposit with Bank not Consider as Cash and Cash Equivalent
Cash and Cash Equivalent Comprises as under :
Cash on Hand 11.91 14.32
Reconciliation of Cash and Cash Equivalent
Fixed Deposit with Bank 12,000.00 -
Balance with Banks in Current Accounts 1,317.72 411.18
Cash and Cash Equivalent at the end of the year 13,295.49 422.14
Cash and Cash Equivalents (Refer Note 11) 13,329.63 425.50
Net effect of Unrealised Exchange Difference (34.14) (3.36)
Cash and Cash Equivalent at the end of the year 13,295.49 422.14
Repayment of Bank Borrowing (Term Loan) (21,261.36) (9,414.57)
The Cash flow statement has been prepared under the indirect method as set out in the Indian Accounting Standard 7 on
Statement of Cash Flows issued by the Institute of Chartered Accountants of India.
Notes to the Cash Flow statement for the year ended on 31 March, 2019.
STCONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2019
Place : Ahmedabad K. D. Mehta Place : Ahmedabad
Membership No : 101974 N.M.Patel - Managing Director (DIN - 00027540)
ICAI Firm Regn. No. 324982E / E300003 (CIN NO-24110GJ1995PLC024052)
th thDate : 24 May 2019 Company Secretary Date : 24 May 2019
FOR S R B C & CO LLP, Chartered Accountants Meghmani Organics Limited
per Sukrut Mehta G S Chahal J.M.Patel - Executive Chairman (DIN - 00027224)
AS PER OUR REPORT OF EVEN DATE For and on behalf of the Board of Directors of
Partner Chief Financial Officer A.N.Soparkar - Managing Director (DIN - 00027480)
The accompanying notes are an integral part of these Consolidated Financial Statement.
158
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Acq
uisi
tion
of S
take
from
(
9,00
6.95
) -
-
-
-
-
-
(
9,00
6.95
) (
13,1
12.7
2)
(22
,119
.67)
Add
ition
/ (D
educ
tion)
dur
ing
the
year
to N
CI
-
-
-
6,6
62.7
4
6,6
62.7
4
Non
-con
trol
ling
Inte
rest
(N
CI)
(R
efer
Not
e 45
)Is
sue
of S
hare
s to
NC
I (R
efer
Not
e 45
) -
-
-
-
-
-
-
-
1
,500
.00
1
,500
.00
Div
iden
d P
ropo
sed
/ Pai
d -
-
-
-
(
1,01
7.26
) -
-
(
1,01
7.26
) -
(1,
017.
26)
Bal
ance
at
Mar
ch 3
1, 2
019
(8,
971.
77)
15,
650.
48
184
.33
1
1,25
5.58
7
9,72
4.90
(
26.6
3)
-
9
7,81
6.89
1
4,92
3.82
1
,12,
740.
71
(Rs
. in
La
kh
s)
159 IND
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
1. Corporate information
The consolidated financial statements comprise financial statements of Meghmani Organics Limited (the company) and its
subsidiaries (collectively, the Group) for the year ended 31st March 2019. Meghmani Organics Limited (the Company) is a
public company limited by shares domiciled in India, incorporated under the provisions of Companies Act, 1956. Its shares
are listed on Bombay Stock Exchange and National Stock Exchange in India and on Singapore Exchange as well. The
registered office of the company is located at at Plot no 184 Phase II GIDC, Vatva, Ahmedabad- 382 445, Gujarat, India.
The Group is engaged in manufacturing and selling of Pigments, Agrochemicals and Basic Chemicals products.
Information on the Group’s structure is provided in Note 44.
The financial statements were authorized for issue in accordance with a resolution of the directors on May 24, 2019.
2. Significant Accounting Policies
2.1 Basis for Preparation of Accounts
The consolidated financial statements have been prepared and presented in accordance with the Indian Accounting
Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies
(Indian Accounting Standards) Amendment Rules, 2016 (as amended from time to time) and presentation
requirements of Division II of schedule III to the Companies Act, 2013 (Ind As compliant Schedule III), as applicable to
the consolidated financial statements.
The consolidated financial statements have been prepared on accrual basis and under historical cost basis, except for
the following assets and liabilities which have been measured at fair value:
• Certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial
instruments)
In addition, the consolidated financial statements are presented in INR which is also the Group's functional
currency and all values are rounded to the nearest Lakh (INR 00,000), except when otherwise indicated.
2.2 Basis of consolidation
• Derivative financial instruments
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at 31
March 2019. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with
the investee and has the ability to affect those returns through its power over the investee.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group
loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during
the year are included in the consolidated financial statements from the date the Group gains control until the date the
Group ceases to control the subsidiary. The proportion of ownership interest in each subsidiary of the parent is as
follows:
Name of the Subsidiaries Country of domicile Proportion of ownership interest
Meghmani Agrochemicals Private Limited India 100%
(Upto February 11, 2019)
Meghmani Organics USA Inc. USA 100%
Meghmani Overseas FZE Dubai 100%
Meghmani Finechem Limited India 57%
PT Meghmani Organics Indonesia Indonesia 100%
160
Consolidation procedure:
Estimates and assumptions
Consolidated financial statements are prepared using uniform accounting policies for like transactions and other
events in similar circumstances. If a member of the group uses accounting policies other than those adopted in the
consolidated financial statements for like transactions and events in similar circumstances, appropriate adjustments
are made to that group member’s financial statements in preparing the consolidated financial statements to ensure
conformity with the group’s accounting policies. The financial statements of all entities of the Group (including parent)
used for the purpose of consolidation are drawn up to same reporting date as that of the parent company, i.e., year
ended on 31st March 2019.
When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related
non-controlling interests and other components of equity. Any interest retained in the form of subsidiary is measured at fair
value at the date the control is lost. Any resulting gain or loss is recognised in the statement of profit and loss.
(b) Offset (eliminate) the carrying amount of the parent’s investment in each subsidiary and the parent’s portion of
equity of each subsidiary. Business combinations policy explains how to account for any related goodwill.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent
of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into
line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows
relating to transactions between members of the Group are eliminated in full on consolidation.
(a) Combine like items of assets, liabilities, equity, income, expenses and cash flows of the parent with those of its
subsidiaries. For this purpose, income and expenses of the subsidiary are based on the amounts of the assets
and liabilities recognised in the consolidated financial statements at the acquisition date.
(c) Eliminate in full intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions
between entities of the group (profits or losses resulting from intragroup transactions that are recognised in
assets, such as inventory and fixed assets, are eliminated in full). Intragroup losses may indicate an impairment
that requires recognition in the consolidated financial statements. Ind AS 12 Income Taxes applies to temporary
differences that arise from the elimination of profits and losses resulting from intragroup transactions.
The preparation of the Group’s consolidated financial statements requires management to make estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying
disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in
outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year, are described below. The Group based its assumptions and estimates on parameters available when
the consolidated financial statements were prepared. Existing circumstances and assumptions about future
developments, however, may change due to market changes or circumstances arising that are beyond the control of
the Group. Such changes are reflected in the assumptions when they occur.
Taxes:
There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax
determination is uncertain. Where the final tax outcome of these matters is different from the amounts initially recorded,
such differences will impact the current and deferred tax provisions in the period in which the tax determination is made.
The assessment of probability involves estimation of a number of factors including future taxable income.
2.3 Significant accounting estimates, assumptions and judgements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
161 IND
Useful economic lives of Property, Plant and Equipment
Intangible assets
The Group presents assets and liabilities in the statement of Assets and Liabilities based on current/ non-current
classification.
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any
indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s
recoverable amount. An asset’s recoverable amount is the higher of an asset’s fair value less costs of disposal and its
value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or group of assets. Where the carrying amount of an asset exceeds its
recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessment of the time value of money and the risk specific to the asset. In determining fair
value less cost of disposal, recent market transactions are taken into account. If no such transactions can be identified,
an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share
price for publicly traded subsidiaries or other available fair value indicators.
Defined benefit plans (gratuity benefits)
A liability in respect of defined benefit plans is recognised in the balance sheet, and is measured as the present value of
the defined benefit obligation at the reporting date less the fair value of the plan’s assets. The present value of the
defined benefit obligation is based on expected future payments which arise from the fund at the reporting date,
calculated annually by independent actuaries. Consideration is given to expected future salary levels, experience of
employee departures and periods of service. Refer Note 39 for details of the key assumptions used in determining the
accounting for these plans.
Property, plant and equipment as disclosed in Note 3.1 are depreciated over their useful economic lives. The residual
values, useful lives and methods of depreciation of Property, Plant and Equipment are reviewed at each financial year
end and adjusted prospectively, if appropriate.
• Expected to be realised within twelve months after the reporting period, or
2.4 Summary of Significant Accounting Policies
(a) Current Vs. Non-Current classification:
Intangible development costs are capitalised as and when technical and commercial feasibility of the asset is
demonstrated and approved by authorities, future economic benefits are probable. The costs which can be capitalised
include laboratory testing expenses that are directly attributable to development of the asset. Research costs are
expensed as incurred. Intangible assets are tested for impairment whenever events or changes in circumstances
indicate that their carrying amounts may not be recoverable. Refer accompanying notes for the estimated useful life of
Intangible assets. The carrying value of Intangible assets has been disclosed in Note 3.3.
• Expected to be realised or intended to be sold or consumed in normal operating cycle
Impairment of non- financial assets
An asset is treated as current when it is:
• Held primarily for the purpose of trading
• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
162
Revenue from contract with customer is recognised when control of the goods or services are transferred to the
customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for
those goods or services. Revenue is measured at the fair value of the consideration received or receivable, taking
into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the
government. The Group has generally concluded that it is the principal in its revenue arrangements because it
typically controls the goods or services before transferring them to the customer.
A liability is treated as current when it is:
• Expected to be settled in normal operating cycle
• Held primarily for the purpose of trading
• Due to be settled within twelve months after the reporting period, or
• There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period
All other assets and liabilities are classified as non-current assets and liabilities. Deferred tax assets and liabilities
are classified as non-current assets and liabilities.
b. Revenue recognition
1) Sale of Goods
If the consideration in a contract includes a variable amount, the Group estimates the amount of
consideration to which it will be entitled in exchange for transferring the goods to the customer. The
variable consideration is estimated at the time of completion of performance obligation and constrained
until it is highly probable that a significant revenue reversal in the amount of cumulative revenue
recognised will not occur when the associated uncertainty with the variable consideration is
subsequently resolved. Some contracts for the sale of goods provide customers with cash discount in
accordance with the Group policy. The cash discount component gives rise to variable consideration.
Volume rebates
The Group provides retrospective volume rebates to certain customers once the quantity of products
purchased during the period exceeds a threshold specified in the contract.
Revenue from sale of goods is recognised at the point in time when control of the goods is transferred to the
customer, generally on dispatch/ delivery of the goods or terms as agreed with the customer. The normal
credit term is 30 to 180 days from the date of dispatch. The Group considers whether there are other promises
in the contract that are separate performance obligations to which a portion of the transaction price needs to
be allocated. In determining the transaction price for the sale of goods, the Group considers the effects of
variable consideration, the existence of significant financing components, non-cash consideration, and
consideration payable to the customer (if any).
(I) Variable consideration
(ii) Contract assets
A contract asset is the right to consideration in exchange for goods transferred to the customer. If the
Group performs its obligation by transferring goods to a customer before the customer pays
consideration or before payment is due, a contract asset is recognised for the earned consideration that
is conditional.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
163 IND
(a) Trade receivables
A contract liability is the obligation to transfer goods or services to a customer for which the Group has
received consideration (or an amount of consideration is due) from the customer. If a customer pays
consideration before the Group transfers goods to the customer, a contract liability is recognised when
the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as
revenue when the Group performs under the contract.
Transactions in foreign currencies are initially recorded by the Group at the functional currency spot rates at the
date the transaction first qualifies for recognition. However, for practical reasons, the Group uses an average rate
if the average approximates the actual rate at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot
rates of exchange at the reporting date.
A receivable represents the Group’s right to an amount of consideration that is unconditional (i.e.,
only the passage of time is required before payment of the consideration is due). Refer to
accounting policies of financial assets in (Financial instruments – initial recognition and subsequent
measurement.)
Transactions and Balances
Export incentives under various schemes notified by government are accounted for in the year of exports
based on eligibility and when there is no uncertainty in receiving the same and is included in Other Operating
Revenue in the statement of profit and loss due to its operating nature
Rental income arising from operating leases is accounted on the basis of lease terms and is included in other
income in the statement of profit and loss.
For all financial instruments measured at amortized cost, interest income is recorded using the Effective
Interest Rate (EIR). The EIR is the rate that exactly discounts the estimated future cash receipts over the
expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of
the financial asset. When calculating the effective interest rate, the Group estimates the expected cash flows
by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call
and similar options) but does not consider the expected credit losses. Interest income is included in other
income in the statement of profit or loss
c. Foreign Currencies
5) Insurance Claims
2) Interest Income
4) Dividend
Dividend income is recognised when the right to receive the same is established, which is generally when
shareholders approve the dividend.
The Group’s consolidated financial statements are presented in INR, which is also the Group’s functional
currency. For each entity the Group determines the functional currency and items included in the financial
statements of each entity are measured using that functional currency.
(iii) Contract liabilities
3) Export Incentives
Claims receivable on account of insurance are accounted for to the extent the Group is virtually certain of their
ultimate collection
6) Rent income
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
164
On consolidation, the assets and liabilities of foreign operations are translated into INR at the rate of exchange
prevailing at the reporting date and their statements of profit and loss are translated at exchange rates prevailing
at the dates of the transactions. The exchange differences arising on translation for consolidation are recognised
in OCI. On disposal of a foreign operation, the component of OCI relating to that particular foreign operation is
reclassified in statement of profit and loss.
Non-monetary items which are carried in terms of historical cost denominated in foreign currency are reported
using the exchange rate at the date of transaction. Exchange differences arising as a result of the above are
recognized as income or expenses in the statement of profit and loss except for exchange differences arising on a
monetary item which, in substance, forms part of the Group’s net investment in a non-integral foreign operation
which is accumulated in a Foreign Currency Translation Reserve until the disposal of the net investment.
Exchange difference arising on the settlement of monetary items at rates different from those at which they were
initially recorded during the year, or reported in previous financial statements, are recognised as income or
expenses in the year in which they arise.
Non-monetary items measured at fair value in foreign currency are translated using the exchange rates at the date
when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair
value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation
differences on items whose fair value gain or loss is recognised in OCI or statement of Profit and Loss are also
recognised in OCI or profit or loss, respectively).
d. Fair Value Measurement
The Group measures certain financial instruments at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability takes place either:
• In the principal market for the asset or liability, or
• In the absence of a principal market, in the most advantageous market for the asset or liability.
• Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
• Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participants that
would use the asset in its highest and best use.
The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a
liability is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest.
All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are
categorised within the fair value hierarchy, described as under, based on the lowest level input that is significant to
the fair value measurement as a whole:
• Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement
is directly or indirectly observable.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
165 IND
For assets and liabilities that are recognised in the consolidated financial statements on a recurring basis, the
Group determines whether transfers have occurred between levels in the hierarchy by re-assessing
categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the
end of each reporting period.
The Group's management determines the policies and procedures for both recurring fair value measurement,
such as unquoted financial assets measured at fair value. The management comprises of the Managing Director,
Chief Executive Officer (CEO) and Chief Finance Officer (CFO).
External valuers are involved for valuation of significant assets. Involvement of external valuers is decided upon
annually by the board of directors after discussion with and approval by the management. Selection criteria
include market knowledge, reputation, independence and whether professional standards are maintained.
Valuers are normally rotated every three years. The management decides, after discussions with the Group's
external valuers, which valuation techniques and inputs to use for each case.
At each reporting date, the management analyses the movements in the values of assets and liabilities which are
required to be re-measured or re-assessed as per the Group’s accounting policies. For this analysis, the
management verifies the major inputs applied in the latest valuation by agreeing the information in the valuation
computation to contracts and other relevant documents.
The management, in conjunction with the Group's external valuers, also compares the change in the fair value of
each asset and liability with relevant external sources to determine whether the change is reasonable.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of
the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained
above.
This note summarises accounting policy for fair value. Other fair value related disclosures are given in the relevant
notes. Refer note for:
• Disclosures for valuation methods, significant estimates and assumptions.
Cost comprisess the purchase price and any attributable cost of bringing the asset to its working condition for its
intended use. Such cost includes the cost of replacing part of the plant and equipment and borrowing costs for
long-term construction projects if the recognition criteria are met. Subsequent expenditure related to an item of
fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its
previously assessed standard of performance. When significant parts of plant and equipment are required to be
replaced at intervals, the Group depreciates them separately based on their specific useful lives. All other repair
and maintenance costs are recognised in statement of profit and loss as incurred. In respect of additions to
/deletions from the Property, Plant and Equipment depreciation is provided on pro-rata basis with reference to the
month of addition/ deletion of the Assets.
• Investment in equity shares.
• Financial instruments (including those carried at amortised cost).
Capital work-in-progress comprises cost of Property, Plant and Equipment that are not yet installed and ready for
their intended use at the balance sheet date.
• Quantitative disclosures of fair value measurement hierarchy.
e. Property, Plant and Equipment
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
166
An item of Property, Plant and Equipment and any significant part initially recognized is derecognized upon
disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-
recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount
of the asset) is included in the income statement when the asset is derecognized.
The residual values are not more than 5% of the original cost of the item of Property, Plant and Equipment. The
residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each
financial year end and adjusted prospectively, if appropriate.
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as prescribed under
Part C of Schedule II of the Companies Act 2013 except for Plant and Machinery pertaining to power generating
units which are based on independent technical evaluation, life has been estimated as 20 years (on single shift
basis) which is different from that prescribed in schedule II of the Act. Depreciation is not provided on freehold
land. Leasehold land is amortized over the available lease period. The management believes that these
estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be
used.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Power Generating units 20 Years
Building 30 Years
Leasehold Land 99 Years
Plant & Machinery 15 Years
Furniture and Fixtures 10 Years
Other equipments 5 Years
Vehicles 8 Years
Asset Estimated Useful life
Computers 3 Years
f. Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition,
intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses, if
any. Cost include acquisition and other incidental cost related to acquiring the intangible asset. Research costs
are expensed as incurred. Intangible development costs are capitalised as and when technical and commercial
feasibility of the asset is demonstrated and approved by authorities, future economic benefits are probable. The
costs which can be capitalised include laboratory testing expenses that are directly attributable to development of
the asset for its intended use.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment
whenever there is an indication that the intangible asset may be impaired. Changes in the expected useful life or
the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify
the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The
amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss. The
amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at
least at the end of each reporting period. Gains or losses arising from derecognition of an intangible asset are
measured as the difference between the net disposal proceeds and the carrying amount of the asset and are
recognised in the statement of profit and loss when the asset is derecognised.
167 IND
Research and Development costs
Research costs are expensed as incurred. Development expenditures on an individual project are recognised as
an intangible asset when the Group can demonstrate:
• Its intention to complete and its ability and intention to use or sell the asset
• How the asset will generate future economic benefits
• The availability of resources to complete the asset
• The technical feasibility of completing the intangible asset so that the asset will be available for use or sale
• The ability to measure reliably the expenditure during development
Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any
accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when
development is complete and the asset is available for use. It is amortised over the period of expected future
benefit. Amortisation expense is recognised in the statement of profit and loss unless such expenditure forms part
of carrying value of another asset. During the period of development, the asset is tested for impairment annually.
A summary of the policies applied to the Group’s intangible assets is as follows:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Intangible assets under development
Expenditure incurred on acquisition /development of intangible assets which are not ready for their intended use
at balance sheet date are disclosed under intangible assets under development.
g. Impairment of non- financial assets
The Group bases its impairment calculation on detailed budgets and forecast calculations, which are prepared
separately for each of the Group’s CGUs to which the individual assets are allocated. These budgets and forecast
calculations generally cover a period of five years. For longer periods, a long-term growth rate is calculated and
applied to project future cash flows after the fifth year.
Impairment losses of continuing operations, including impairment on inventories, are recognised in the statement
of profit and loss, except for properties previously revalued with the revaluation surplus taken to Other
Comprehensive Income (OCI). For such properties, the impairment is recognised in OCI upto the amount of any
previous revaluation surplus.
The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any
indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s
recoverable amount. An asset’s recoverable amount is the higher of an asset’s or Cash-Generating Unit’s (CGU)
fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset,
unless the asset does not generate cash inflows that are largely independent of those from other assets or groups
of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no
such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated
by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
Software licenses On Straight-line basis 5 years
Product licenses On Straight-line basis 5 years
Usage rights On Straight-line basis 5 years
Assets Amortisation Method Amortisation period
168
h. Financial instrument
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.
(A) Financial Asset
Initial Recognition and Measurement
a) The asset is held within a business model whose objective is to hold assets for collecting contractual
cash flows, and
At initial recognition, the Group measures a financial asset or financial liability at its fair value plus or minus, in
the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that
are directly attributable to the acquisition or issue of the financial asset or financial liability.
After initial measurement, such financial assets are subsequently measured at amortised cost using the
Effective Interest Rate (EIR) method. Amortised cost is calculated by taking into account any discount or
premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included
in other income in the statement of Profit and Loss. The losses arising from impairment are recognised in the
statement of Profit and Loss.
Debt instrument at FVTOCI
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting
date at fair value. Fair value movements are recognized in the other comprehensive income (OCI). However,
the Group recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in
the Profit and Loss. On derecognition of the asset, cumulative gain or loss previously recognised in OCI is
reclassified from the equity to Profit and Loss. Interest earned whilst holding FVTOCI debt instrument is
reported as interest income using the EIR method.
b) Contractual terms of the asset give rise on specified dates to cash flows that are Solely Payments of
Principal and Interest (SPPI) on the principal amount outstanding.
b) The asset's contractual cash flows represent SPPI.
Debt instrument at FVTPL
a) The objective of the business model is achieved both by collecting contractual cash flows and selling the
financial assets, and
Debt instruments at amortised cost
Debt instruments included within the FVTPL category are measured at fair value with all changes recognized
in the statement of profit and loss.
In addition, the Group may elect to designate a debt instrument, which otherwise meets amortized cost or
FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a
measurement or recognition inconsistency (referred to as 'accounting mismatch'). The Group has
designated certain debt instrument as at FVTPL.
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for
categorization as at amortized cost or as FVTOCI, is classified as FVTPL.
A 'debt instrument' is measured at its amortised cost if both the following conditions are met:
A 'debt instrument' is classified at FVTOCI if both of the following criteria are met:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
169 IND
In accordance with Ind AS 109, the Group applies Expected Credit Loss (ECL) model for measurement and
recognition of impairment loss on the following financial assets and credit risk exposure:
a) Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt
securities, deposits, trade receivables and bank balance
All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held
for trading are classified as at FVTOCI. For all other equity instruments, the Group may make an irrevocable
election to present in other comprehensive income subsequent changes in the fair value. The Group makes
such election on an instrument-by instrument basis. The classification is made on initial recognition and is
irrevocable.
If the Group decides to classify an equity instrument as at FVTOCI, then all fair value changes on the
instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to
statement of profit and loss, even on sale of investment. However, the Group may transfer the cumulative
gain or loss within equity.
De-recognition
Equity investments
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower
of the original carrying amount of the asset and the maximum amount of consideration that the Group could
be required to repay.
The rights to receive cash flows from the asset have expired, or
Impairment of financial assets
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-
through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership.
When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor
transferred control of the asset, the Group continues to recognise the transferred asset to the extent of the
Group's continuing involvement. In that case, the Group also recognises an associated liability. The
transferred asset and the associated liability are measured on a basis that reflects the rights and obligations
that the Group has retained.
b) Trade receivables or any contractual right to receive cash or another financial asset that result from
transactions that are within the scope of Ind AS 115 (referred to as 'contractual revenue receivables' in
these consolidated financial statements)
Equity instruments included within the FVTPL category are measured at fair value with all changes
recognized in the statement of profit and loss.
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets)
is primarily derecognised (i.e. removed from the Group's balance sheet) when:
The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay
the received cash flows in full without material delay to a third party under a 'pass-through' arrangement; and
either the Group has transferred substantially all the risks and rewards of the asset, or the Group has neither
transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the
asset.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
170
Subsequent measurement of financial liabilities
(B) Financial Liabilities
ECL is the difference between all contractual cash flows that are due to the Group in accordance with the
contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the
original EIR. When estimating the cash flows, an entity is required to consider:
• Trade receivables and
• Cash flows from the sale of collateral held or other credit enhancements that are integral to the
contractual terms.
The application of simplified approach does not require the Group to track changes in credit risk. Rather, it
recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial
recognition.
Financial liabilities at fair value through profit or loss
The Group’s financial liabilities include trade and other payables, loans and borrowings.
Gains or losses on liabilities held for trading are recognised in the profit or loss.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs.
The measurement of financial liabilities depends on their classification, as described below:
• All contractual terms of the financial instrument (including prepayment, extension, call and similar
options) over the expected life of the financial instrument. However, in rare cases when the expected life
of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining
contractual term of the financial instrument.
• Other receivables
• Financial assets measured as at amortised cost, contractual revenue receivables and lease
receivables: ECL is presented as an allowance, i.e., as an integral part of the measurement of those
assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-
off criteria, the Group does not reduce impairment allowance from the gross carrying amount.
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss,
loans and borrowings, payables, as appropriate.
The Group follows 'simplified approach' for recognition of impairment loss allowance on:
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are
classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This
category also includes derivative financial instruments entered into by the Group that are not designated as
hedging instruments in hedge relationships as defined by Ind AS 109.
Initial recognition and measurement
For recognition of impairment loss on other financial assets and risk exposure, the Group determines that
whether there has been a significant increase in the credit risk since initial recognition. Lifetime ECL are the
expected credit losses resulting from all possible default events over the expected life of a financial
instrument.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
171 IND
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost
using the Effective Interest Rate (EIR) method. Gains and losses are recognised in profit or loss when the
liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by
taking into account any discount or premium on acquisition and fees or costs that are an integral part of the
EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.
These amounts represent liability for good and services provided to the Group prior to the end of financial
year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade
and other payables are presented as current liabilities unless payment is not due within 12 months after the
reporting period. They are recognised initially at fair value and subsequently measured at amortised cost
using the effective interest method.
Trade and other payables
Loan and Borrowings
Derivatives and Hedging activities
Off-setting financial instrument
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the derecognition of the original liability and the recognition of a new liability. The
difference in the respective carrying amounts is recognised in the statement of Profit and Loss.
Semi-finished products, finished products and by-products are valued at lower of cost or net realisable value and
for this purpose, cost is determined on standard cost basis which approximates the actual cost. Cost of finished
goods includes excise duty, as applicable. Variances, exclusive of abnormally low volume and operating
performance, are adjusted to inventory.
Traded goods are valued at lower of cost and net realizable value. Cost includes cost of purchase and other costs
incurred in bringing the inventories to their present location and condition. Cost is determined on a weighted
average basis.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of
completion and the estimated costs necessary to make the sale.
The Group uses derivative financial instruments, such as forward currency contracts, full currency swaps and
interest rate swaps contracts to hedge its foreign currency risks and interest rate risks respectively. Such
derivative financial instruments are initially recognised at fair value on the date on which a derivative contract
is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets
when the fair value is positive and as financial liabilities when the fair value is negative.
Stores and Spares, Packing Materials and Raw Materials are valued at lower of cost or net realisable value and for
this purpose, cost is determined on moving weighted average basis. However, the aforesaid items are not valued
below cost if the finished products in which they are to be incorporated are expected to be sold at or above cost.
De-recognition
i. Inventories
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a
legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or
realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent
on future events and must be enforceable in the normal course of business and in the event of default,
insolvency or bankruptcy of the group or the counterparty.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
172
Income taxes
The Group has other long-term employee benefits in the nature of leave encashment. The liability in respect of
leave encashment is provided for on the basis of an actuarial valuation on projected unit credit method made at the
end of the financial year. The aforesaid leave encashment is funded with an insurance Company in the form of a
qualifying insurance policy.
Liabilities for wages, salaries, including non-monetary benefits that are expected to be settled wholly within 12
months after the end of the period in which the employees render the related services are recognised in respect of
employees' services up to the end of the reporting period and are measured at the amounts expected to be paid
when the liabilities are to be settled. The liabilities are presented as current employee benefit obligations in the
balance sheet.
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities in accordance with the Income-tax Act, 1961. The tax rates and tax laws used to compute the
amount are those that are enacted or substantively enacted, at the reporting date.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily
takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the
asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest
and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes
exchange differences to the extent regarded as an adjustment to the borrowing costs..
k. Retirement and other employee benefits
Provident Fund is a defined contribution scheme established under a State Plan. The contributions to the scheme
are charged to the statement of profit and loss in the year when employee rendered related services.
Re-measurements, comprising of actuarial gains and losses, the effect of asset ceiling, excluding amounts
included in the net interest on the net defined benefit liability and the return on plan assets (excluding amounts
included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a
corresponding debit or credit to retained earnings through OCI in the period in which they occur. Re-
measurements are not reclassified to profit or loss in subsequent periods.
j. Borrowing costs
The Group has a defined benefit gratuity plan. Every employee who has completed five years or more of service
gets a gratuity on post-employment at 15 days salary (last drawn salary) for each completed year of service as per
the rules of the Group. The aforesaid liability is provided for on the basis of an actuarial valuation on projected unit
credit method made at the end of the financial year. The scheme is funded with an insurance company in the form
of a qualifying insurance policy.
l. Accounting for taxes on income
Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in
other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying
transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns
with respect to situations in which applicable tax regulations are subject to interpretation and establishes
provisions where appropriate.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
173 IND
Deferred tax liabilities are recognised for all taxable temporary differences, except:
Deferred taxes
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes at the reporting date.
• In respect of taxable temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it
is probable that the temporary differences will not reverse in the foreseeable future
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable
profit will be available against which the deductible temporary differences, and the carry forward of unused tax
credits and unused tax losses can be utilised, except:
• In respect of deductible temporary differences associated with investments in subsidiaries deferred tax
assets are recognised only to the extent that it is probable that the temporary differences will reverse in the
foreseeable future and taxable profit will be available against which the temporary differences can be utilised
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is
no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be
utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the
extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the
asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the reporting date.
• When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss
• When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition
of an asset or liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other
comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction
either in OCI or directly in equity.
m. Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation. When the Group expects some or
all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as
a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is
presented in the statement of profit and loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision
due to the passage of time is recognised as a finance cost.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
174
Provisions are not recognised for future operating losses.
n. Contingent liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the
occurrence or non—occurrence of one or more uncertain future events not wholly within the control of the Group
or a present obligation that is not recognized because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability
that cannot be recognized because it cannot be measured reliably. The Group does not recognize a contingent
liability but discloses its existence in the consolidated financial statements.
The determination of whether an arrangement is (or contains) a lease is based on the substance of the
arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement
is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or
assets, even if that right is not explicitly specified in an arrangement.
Group as a lessee
Finance leases are capitalised at the commencement of the lease at the inception date fair value of the leased
property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned
between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the
remaining balance of the liability. Finance charges are recognised in finance costs in the statement of profit and
loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance
with the Group’s general policy on the borrowing costs. Contingent rentals are recognised as expenses in the
periods in which they are incurred.
Leases in which the Group does not transfer substantially all the risks and rewards of ownership of an asset are
classified as operating leases. Rental income from operating lease is recognised on a straight-line basis over the
term of the relevant lease.
A contingent assets is not recognised unless it becomes virtually certain that an inflow of economic benefits will
arise. When an inflow of economic benefits is probable, contigent assets are disclosed in the consolidated
financial statements.
Group as a lessor
o. Leases
Contingent liabilities and contingent assets are reviewed at each balance sheet date.
A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the
Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated
useful life of the asset and the lease term.
A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers
substantially all the risks and rewards incidental to ownership to the Group is classified as a finance lease.
Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from
the Group to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the
Group’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a
constant periodic rate of return on the net investment outstanding in respect of the lease.
Operating lease payments are recognised as an expense in the statement of profit and loss on a straight-line basis
over the lease term.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
175 IND
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity
shareholders by the weighted average number of equity shares outstanding during the period.
Diluted earnings per share
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity
shareholders and the weighted average number of shares outstanding during the period are adjusted for the
effects of all dilutive potential equity shares.
q. Cash and cash equivalents
p. Earnings per share
Basic earnings per share
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with
an original maturity of three months or less, which are subject to an insignificant risk of changes in value. .
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term
deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the
Group’s cash management. .
Segment Policies:
The Group recognises a liability for dividends to equity holders of the Group when the dividend is authorised and
the dividend is no longer at the discretion of the Group. As per the corporate laws in India, a dividend is authorised
when it is approved by the shareholders. A corresponding amount is recognised directly in equity.
s. Segment reporting
Ind AS 115 requires entities to exercise judgement, taking into consideration all of the relevant facts and
circumstances when applying each step of the model to contracts with their customers. The standard also
specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a
contract. In addition, the standard requires extensive disclosures.
Based on "Management Approach" as defined in Ind AS 108 -Operating Segments, the Chief Operating Decision
Maker evaluates the Group's performance and allocates the resources based on an analysis of various
performance indicators by business segments. Inter segment sales and transfers are reflected at market prices.
The Group prepares its segment information in conformity with the accounting policies adopted for preparing and
presenting the consolidated financial statements of the Group as a whole. Common allocable costs are allocated
to each segment on an appropriate basis.
Ind AS 115 was issued on 28 March 2018 and supersedes Ind AS 11 Construction Contracts and Ind AS 18
Revenue and it applies, with limited exceptions, to all revenue arising from contracts with its customers. Ind AS
115 establishes a five-step model to account for revenue arising from contracts with customers and requires that
revenue be recognised at an amount that reflects the consideration to which an entity expects to be entitled in
exchange for transferring goods or services to a customer.
Unallocable items includes general corporate income and expense items which are not allocated to any business
segment.
t. New and Amended Standard
r. Dividend
Ind AS 115 Revenue from Contracts with Customers
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
176
Ind AS 116 Leases
Amendment to Ind AS 20 Government Grant related to non-monetary asset
u. Standards issued but not yet effective
The amendment clarifies that where the government grant related to asset, including non-monetary grant at fair
value, shall be presented in balance sheet either by setting up the grant as deferred income or by deducting the
grant in arriving at the carrying amount of the asset. Prior to the amendment, Ind AS 20 did not allow the option to
present asset related grant by deducting the grant from the carrying amount of the asset. These amendments do
not have any impact on the financial statements as the Group continues to present grant relating to asset by
setting up the grant as deferred income.
On March 30, 2019, Ministry of Corporate Affairs has notified Ind AS 116, Leases. Ind AS 116 is effective for annual
periods beginning on or after April 1, 2019. Ind AS 116 will replace the existing leases Standard, Ind AS 17 Leases,
and related Interpretations. Ind AS 116 sets out the principles for the recognition, measurement, presentation and
disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar
to the accounting for finance leases under Ind AS 17. The standard includes two recognition exemptions for
lessees – leases of ‘low-value’ assets (e.g., personal computers) and short-term leases (i.e., leases with a lease
term of 12 months or less). At the commencement date of a lease, a lessee will recognise a liability to make lease
payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease
term (i.e., the right-of-use asset). Lessees will be required to separately recognise the interest expense on the
lease liability and the depreciation expense on the right-of-use asset. Lessees will be also required to remeasure
the lease liability upon the occurrence of certain events (e.g., a change in the lease term, a change in future lease
payments resulting from a change in an index or rate used to determine those payments). The lessee will
generally recognise the amount of the remeasurement of the lease liability as an adjustment to the right-of-use
asset. The effect of this amendment on the financial statements of the Group is being evaluated.
The Group adopted Ind AS 115 using the modified retrospective method of adoption with the date of initial
application of 1 April 2018. Under this method, the standard can be applied either to all contracts at the date of
initial application or only to contracts that are not completed at this date. The Group elected to apply the standard
to all contracts as at 1 April 2018. The cumulative effect of initially applying Ind AS 115 is not material. Therefore,
the comparative information was not restated and continues to be reported under Ind AS 11 and Ind AS 18.
Appendix B to Ind AS 21 Foreign Currency Transactions and Advance Considerations
The appendix clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset,
expense or income (or part of it) on the de-recognition of a non-monetary asset or non-monetary liability relating to
advance consideration, the date of the transaction is the date on which an entity initially recognises the non-
monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or
receipts in advance, then the entity must determine the date of the transactions for each payment or receipt of
advance consideration. This Interpretation does not have any impact on the Group’s financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSSTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
177 IND
No
te -
3
Pro
pert
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lan
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qu
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1st
Marc
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019
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on
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31
Marc
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019
Bui
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21
221
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3
Fur
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Part
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Part
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for
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3.1
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98.
98
3.1
8
0.5
1
282
.70
6
95.3
6
774
.66
6
Veh
icle
s 1
,410
.16
1
34.4
4
30.
92
1.4
0
1,5
15.0
8
398
.49
1
69.2
4
13.
08
0.9
5
555
.60
9
59.4
8
1,0
11.6
7
7
Com
pute
rs
135
.53
3
4.96
0
.69
0
.14
1
69.9
4
67.
91
26.
71
0.2
3
0.1
3
94.
52
75.
42
67.
62
8
Oth
er E
quip
men
ts
338
.71
5
5.21
0
.22
0
.05
3
93.7
5
117
.02
6
5.14
-
(1.
06)
181
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2
12.6
5
221
.69
Su
b T
ota
l 1
,03,
337.
68
5,1
45.0
1
2,0
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7
2.1
0
1,06
,443
.52
2
5,40
4.20
9
,277
.68
7
43.5
7
0.5
3
33,
938.
84
72,
504.
68
77,
933.
48
3.3
In
tan
gib
le A
sset
s
1
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ehol
d La
nd
558
.40
-
-
-
558
.40
-
-
-
-
-
55
8.40
5
58.4
0
1
Sof
twar
e Li
cenc
es
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33
46.
03
-
-
124
.36
6
0.71
1
1.80
-
-
7
2.51
5
1.85
1
7.62
2
Pro
duct
Lic
ence
s 2
,071
.54
-
-
1
.03
2
,072
.57
6
04.1
2
395
.83
-
2.1
1
1,0
02.0
6
1,0
70.5
1
1,4
67.4
2
3
Usa
ge R
ight
s 2
26.9
4
-
0
.04
-
226
.90
1
56.5
8
40.
63
-
-
197
.21
2
9.69
7
0.36
Su
b T
ota
l 2
,376
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4
6.03
0
.04
1
.03
2
,423
.83
8
21.4
1
448
.26
-
2.1
1
1,2
71.7
8
1,1
52.0
5
1,5
55.4
0
Tota
l 1
,05,
714.
49
5,1
91.0
4
2,0
41.3
1
3.1
3
1,08
,867
.35
2
6,22
5.61
9
,725
.94
7
43.5
7
2.6
4
35,
210.
62
73,
656.
73
79,
488.
88
Sr.
No.
Part
icul
ars
As
atst
31 M
arch
2019
As
atst
31 M
arch
2018
Gro
ss B
lock
Ope
ning
Ope
ning
Add
ition
Ded
uctio
n /
Adj
ustm
-en
ts*
Ded
uctio
n /
Adj
ustm
-en
ts*
Exc
hang
e R
ate
Flu
ctua
tion
Exc
hang
e R
ate
Flu
ctua
tion
Clo
sing
Clo
sing
For t
heYe
arDep
reci
atio
n / A
mor
tisat
ion
Net
178
Pro
pert
y, P
lan
t an
d E
qu
ipm
en
t as o
n 3
1st
Marc
h 2
018
st
No
tes t
o t
he C
on
so
lid
ate
d F
inan
cia
l S
tate
men
ts F
or
Th
e Y
ear
En
ded
31
Marc
h 2
019
No
te -
3
(Rs
.in
La
kh
s)
(Rs.i
n L
akh
s)
3.2
C
ap
ital W
ork
In
Pro
gre
ss/In
tan
gib
les u
nd
er
develo
pm
en
t
As
at M
arch
31,
201
7 9
65.8
4
944
.69
1
,910
.53
Add
ition
7
,033
.24
2
,748
.15
9
,781
.39
Co
st
As
at M
arch
31,
201
8 7
,469
.50
2
,871
.86
1
0,34
1.36
Cap
italis
atio
n 5
29.5
8
820
.98
1
,350
.56
Part
icul
ars
Cap
ital W
ork
In P
rogr
ess
Tang
ible
Tota
lIn
tang
ible
I B
orr
ow
ing c
ost
capita
lised d
uring the y
ear
Rs.
Nil
(31st
Marc
h 2
017 : R
s.77.6
1 L
akh
s) to r
esp
ect
ive q
ualif
ying a
ssets
.
3.1
Ta
ng
ible
Ass
ets
Su
b T
ota
l 9
3,16
9.96
1
0,59
6.39
4
50.8
3
22.
16
1,0
3,33
7.68
1
6,28
4.91
9
,119
.37
-
(0.
08)
25,
404.
20
77,
933.
48
76,
885.
05
3
Usa
ge R
ight
s 2
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1
-
8
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-
226
.94
1
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0
47.
78
-
-
156
.58
7
0.36
1
27.0
1
7
Com
pute
rs
117
.94
1
7.70
-
(0.
11)
135
.53
3
9.57
2
8.45
-
(0.
11)
67.
91
67.
62
78.
37
8
Oth
er E
quip
men
ts
295
.01
4
4.12
0
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(
0.03
) 3
38.7
1
59.
38
57.
67
-
(
0.03
) 1
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2
221
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2
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3
2
Lea
seho
ld L
and
3,7
58.3
9
802
.08
-
-
4
,560
.47
8
8.52
4
5.13
-
-
1
33.6
5
4,4
26.8
2
3,6
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7
Su
b T
ota
l 1
,393
.29
9
93.6
2
8.8
7
(1.
23)
2,3
76.8
1
464
.67
3
57.8
9
-
(
1.15
) 8
21.4
1
1,5
55.4
0
928
.62
6
Veh
icle
s 9
79.9
7
470
.76
4
0.68
0
.11
1
,410
.16
2
38.8
7
159
.55
-
0.0
7
398
.49
1
,011
.67
7
41.1
0
3.3
In
tan
gib
le A
sset
s
1
Fre
ehol
d La
nd
558
.40
-
-
-
558
.40
-
-
-
-
-
558
.40
5
58.4
0
4
Pla
nt &
Mac
hine
ry
61,
998.
97
8,0
36.5
2
293
.62
2
2.21
6
9,76
4.08
1
3,65
7.84
7
,626
.03
-
-
21
,283
.87
4
8,48
0.21
4
8,34
1.13
1
S
oftw
are
Lice
nces
7
0.50
7
.83
-
-
7
8.33
5
4.45
6
.26
-
-
6
0.71
1
7.62
1
6.05
2
Pro
duct
Lic
ence
s 1
,086
.98
9
85.7
9
-
(
1.23
) 2
,071
.54
3
01.4
2
303
.85
-
(1.
15)
604
.12
1
,467
.42
7
85.5
6
5
Fur
nitu
re &
Fix
ture
s 9
01.1
9
77.
19
17.
31
(0.
02)
961
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8
7.17
9
9.23
-
(0.
01)
186
.39
7
74.6
6
814
.02
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l 9
4,56
3.25
1
1,59
0.01
4
59.7
0
20.
93
1,0
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4.49
1
6,74
9.58
9
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-
(1.
23)
26,
225.
61
79,
488.
88
77,
813.
67
3
Bui
ldin
g 2
4,56
0.09
1
,148
.02
9
8.83
-
25,
609.
28
2,1
13.5
6
1,1
03.3
1
-
-
3,2
16.8
7
22,
392.
41
22,
446.
53
Sr.
No.
Part
icul
ars
As
atst
31 M
arch
2018
As
atst
31 M
arch
2017
Gro
ss B
lock
Ope
ning
Ope
ning
Add
ition
Ded
uctio
n /
Adj
ustm
-en
ts*
Ded
uctio
n /
Adj
ustm
-en
ts*
Exc
hang
e R
ate
Flu
ctua
tion
Exc
hang
e R
ate
Flu
ctua
tion
Clo
sing
Clo
sing
For t
heYe
arDep
reci
atio
n / A
mor
tisat
ion
Net
Blo
ck
Inta
ngib
le A
ssets
under
deve
lopm
ent as
at 31
st M
arc
h 2
018 c
om
prise
s exp
enditu
re for
the d
eve
lopm
ent and r
egis
tratio
n o
f P
roduct
Lic
ense
s.
Capita
l Work
-in-P
rogre
ss for
Tangib
le A
ssets
as
at 31st
Marc
h 2
018 c
om
prise
s exp
enditu
re for
the P
lant and B
uild
ing in
the c
ours
e o
f co
nst
ruct
ion.
179 IND
No
tes:
- A
dd
itio
n t
o R
esearc
h a
nd
Develo
pm
en
t assets
fo
r th
e y
ear
31 M
arc
h 2
018
(Rs
. in
La
kh
s)
4
Com
pute
rs
3.3
3
0.2
1 3.
54
0.7
3
1.0
9 1.
82
1.7
2
2.6
0
Tan
gib
le A
sset
s
5
Oth
er E
quip
men
ts
2.1
0
2.5
3 4.
63
0.4
8
0.4
8 0
.96
3
.67
1
.62
1
Bui
ldin
g
9.4
9
-
9.49
0
.32
0
.16
0.48
9
.01
9
.17
2
Pla
nt &
Mac
hine
ry
109
.41
7
4.23
18
3.64
2
8.55
1
7.51
46
.06
1
37.5
8
80.
86
3
Fur
nitu
re &
Fix
ture
s 1
5.76
-
15
.76
6
.65
3
.33
9.98
5
.78
9
.11
S
ub
To
tal
140
.09
7
6.97
21
7.06
3
6.73
2
2.57
59
.30
1
57.7
6
103
.36
Inta
ng
ible
Ass
ets
1
Pro
duct
Lic
ence
s 5
2.96
-
52
.96
5
1.36
1
.60
52.9
6
-
1
.60
S
ub
To
tal
52.
96
-
52.9
6
51.
36
1.6
0 52
.96
-
1.6
0
To
tal
193
.05
7
6.97
27
0.02
8
8.09
2
4.17
11
2.26
1
57.7
6
104
.96
Part
icul
ars
Sr.
No.
Ope
ning
Ope
ning
Add
ition
For t
he Y
ear
Clo
sing
Clo
sing
Gro
ss B
lock
D
epre
ciat
ion
/ Am
ortis
atio
nN
et
As
at31
st M
arch
20
18
As
at
31st
Mar
ch20
17
No
tes:
- A
dd
itio
n t
o R
esearc
h a
nd
Develo
pm
en
t assets
fo
r th
e y
ear
31 M
arc
h 2
019
(Rs
. in
La
kh
s)
Tan
gib
le A
sset
s
3
Fur
nitu
re &
Fix
ture
s 1
5.76
0
.09
15.8
5
9.9
8
3.3
2 13
.30
2
.55
5
.78
5
Oth
er E
quip
men
ts
4.6
3
0.2
8 4.
91
0.9
6
0.7
5 1.
71
3.2
0
3.6
7
Inta
ng
ible
Ass
ets
1
Bui
ldin
g
9.49
7
.54
17.0
3
0.4
8
0.3
3 0.
81
16.
22
9.0
1
2
Pla
nt &
Mac
hine
ry
183
.64
4
1.79
22
5.43
4
6.06
2
5.00
71
.06
1
54.3
7
137
.58
4
Com
pute
rs
3.5
4
1.5
3 5.
07
1.8
2
1.4
1 3.
23
1.8
4
1.7
2
1
Pro
duct
Lic
ence
s 5
2.96
-
52
.96
5
2.96
-
52
.96
-
-
S
ub
To
tal
52.
96
-
52.9
6
52.
96
-
52.9
6
-
-
S
ub
To
tal
217
.06
5
1.23
26
8.29
5
9.30
3
0.81
90
.11
1
78.1
8
157
.76
To
tal
270
.02
5
1.23
32
1.25
1
12.2
6
30.
81
143.
07
178
.18
1
57.7
6
Part
icul
ars
Sr.
No.
Ope
ning
Ope
ning
Add
ition
For t
he Y
ear
Clo
sing
Clo
sing
Gro
ss B
lock
D
epre
ciat
ion
/ Am
ortis
atio
nN
et
As
at31
st M
arch
20
19
As
at
31st
Mar
ch20
18
st
No
tes t
o t
he C
on
so
lid
ate
d F
inan
cia
l S
tate
men
ts F
or
Th
e Y
ear
En
ded
31
Marc
h 2
019
180
Aggregate Value Of Investments in unquoted Investments 57.41 57.41
st st PARTICULARS 31 March 2019 31 March 2018
(Rs. in Lakhs)
(vii) 2,000 (31st March 2018 - 2,000) Equity Shares of
Investment at fair value through Other Comprehensive Income
(iv) 500 (31st March 2018 - 500) Equity Shares of
Panoli Enviro Technology of Rs.10/- each 3.00 3.00
Total (I) 57.18 57.18
National Savings Certificates 0.23 0.23
4 FINANCIAL ASSETS : INVESTMENTS
Suvikas Peoples Co-operative Bank Limited of Rs.50/- each 1.00 1.00
(i) 4 (31st March 2018 - 4) Equity Shares of Alaukik Owners Association of
(ii) 5,17,085 (31st March 2018 - 5,17,085) Equity Shares of
Green Environment Services Co-operative Society Limited of Rs.10/- each 0.05 0.05
(v) 30,000 (31st March 2018 - 30,000) Equity Shares of
st st PARTICULARS 31 March 2019 31 March 2018
Narmada Clean Tech of Rs.10/- each 51.71 51.71
Vellard View Premises Co-operative Society Limited of Rs.50/- each 0.01 0.01
Sanand Eco Project Limited of Rs.10/- each 0.01 0.01 (vi) 100 (31st March 2018 - 100) Equity Shares of
(iii) 14,000 (31st March 2018 - 14,000) Equity Share of
Investment at Amortised Cost
Rs.100/- each # 0 0
(II) Investments in Government Securities (Unquoted)
Total (I+II) 57.41 57.41
(I) Investments in Equity Shares (Unquoted)
Bharuch Eco Enviro Infrastructure Limited of Rs.10/- each 1.40 1.40
(viii) 10 (31st March 2018 - 10) Equity Shares of
(Rs. in Lakhs)
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
Note - # Amount is less than 0.01 Lakhs
TOTAL 1,045.17 1,078.06
5 OTHER FINANCIAL ASSETS (NON CURRENT)
(Rs. in Lakhs) PARTICULARS st st 31 March 2019 31 March 2018
Security Deposits 678.97 696.57
Bank Deposits with orignal maturity of more than 12 months 366.20 381.49 (including interest accrued) (Refer Note below)
Unsecured, Considered Good
Note:Margin money deposits amounting Rs. 366.20 Lakhs are given as security against guarantees with Banks (31st March 2018 - Rs. 381.49 Lakhs). These deposits are made for varying periods of 1 year to 10 years and earns interest ranging between 6.25% to 7.00%.
181 IND
6 INCOME TAX ASSETS (NET)
Advance payment of Income Tax (Net of Provision) 1,030.30 1,051.77
TOTAL 278.85 -
Current
(Rs. in Lakhs) PARTICULARS
Advance payment of Income Tax (Net of Provision) 278.85 -
st st 31 March 2019 31 March 2018
Non-current
TOTAL 1,030.30 1,051.77
Stores and Spares 2,205.94 1,955.17
Raw Materials 9,458.06 6,869.40
st st 31 March 2019 31 March 2018
TOTAL 41,093.90 26,773.92
Finished Goods 11,062.41 6,494.75
Others (Packing Material and Fuel Stock) 956.51 828.50
(Rs. in Lakhs) PARTICULARS
Work In Process 1,376.51 1,115.51
Stock in Trade 746.84 632.36
8 INVENTORIES (VALUED AT LOWER OF COST OR NET REALISABLE VALUE)
Finished Goods in Transit 14,914.45 8,574.23
Raw Materials in Transit 373.18 304.00
The Company has written off inventory amounting to Rs. 523.98 Lakhs which was destroyed in fire. The same has been debited to statement of profit and loss under exceptional item Refer Note 35.
Note :
Balances with Government Authorities (Amount Paid Under Protest) 1,011.63 426.48
st st 31 March 2019 31 March 2018
(Rs. in Lakhs) PARTICULARS
TOTAL 2,964.36 5,155.36
Unsecured, Considered Good Capital Advances 1,952.73 4,728.88
7 OTHER NON-CURRENT ASSETS
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
182
11 CASH AND CASH EQUIVALENTS
(Rs. in Lakhs) PARTICULARS st st 31 March 2019 31 March 2018
Balance with Banks
TOTAL 13,329.63 425.50
Cash on Hand 11.91 14.32
- Deposits with original maturity of less than three months (Refer Note below) 12,000.00 -
- on Current Accounts 1,317.72 411.18
10 TRADE RECEIVABLES
(Rs. in Lakhs) PARTICULARS st st 31 March 2019 31 March 2018
Trade receivables
Trade receivables which have significant increase in credit risk - -
Trade receivables which have significant increase in credit risk - -
Impairment allowance (allowance for bad and doubtful debts)
Trade receivables - credit impaired (619.91) (226.72)
Trade receivables - credit impaired 619.91 226.72
TOTAL 43,135.33 37,450.16
Unsecured, Considered Good - -
Unsecured, Considered Good 42,795.13 37,203.57
43,755.24 37,676.88
Secured, Considered Good 340.20 246.59
Trade receivable are secured to the extent of deposit received from the customers.
Trade Receivables are non-interest bearing and are generally on terms of 30 to 180 days.
For amounts due and terms and conditions relating to related party receivables, Refer Note 41.
For information about Credit Risk and Market Risk related to Trade Receivables, Refer Note 42.
(Rs. in Lakhs) PARTICULARS
9 INVESTMENTS - CURRENT
st st 31 March 2019 31 March 2018
(Investment at Fair Value through Profit and Loss) (I) Investments in Mutual Funds (Quoted) Investment in Mutual Funds (Refer Note below) - 7,141.81
TOTAL - 7,141.81
Aggregate Value of Quoted Current Investments
st st 31 March 2019 31 March 2018
Carrying Amount - 7,141.81
(Rs. in Lakhs) PARTICULARS
Market Value - 7,141.81
Note :
Deposits are made for varying periods of between 60 days to 90 days and earns interest ranging between 6.90% to 7.75%.Note :
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
183 IND
(Rs. in Lakhs) PARTICULARS
13 LOANS
st st 31 March 2019 31 March 2018
Unsecured, Considered Good Loan to Employees (Refer Note below) 58.62 37.82
TOTAL 58.62 37.82
The loans to employees are interest free and are generally for a tenure of 6 to 12 months.
Note:
Since all the above loans given by the Group are unsecured and considered good, the bifurcation of loan in other catagories as required by Schedule III of Companies Act 2013 viz: a) secured, b) loans which have significant increase in credit risk and c) credit impared is not applicable.
14 OTHER FINANCIAL ASSETS (CURRENT)
st st 31 March 2019 31 March 2018
Unsecured, Considered Good
Export Benefit Receivable 2,419.83 1,725.01
Balance with Government Authorities (GST Refund) 1,356.59 3,559.76
Insurance Claim Receivable - 1,494.76
Interest Accrued on Deposits with Banks and Others 368.97 - Security Deposit 31.27 31.27
(Rs. in Lakhs) PARTICULARS
TOTAL 4,176.66 6,810.80
Prepaid Expenses 989.11 624.71
15 OTHER CURRENT ASSETS
(Rs. in Lakhs) PARTICULARS st st 31 March 2019 31 March 2018
Unsecured, Considered Good
Balance with Government Authorities (Refer Note below) 3,406.49 3,533.23
Advances to Suppliers 311.68 394.64
Advances to Employees 9.33 13.45
Export Benefit Receivable 63.96 79.48
Others 145.42 64.44
Unsecured, Considered Doubtful
Advances to Suppliers 20.90 20.90
Allowance for Doubtful Advances (20.90) (20.90)
TOTAL 4,925.99 4,709.95
Note: Balance with Government Authorities includes VAT / Cenvat / Service Tax credit receivable and GST.
12 OTHER BANK BALANCES
st st 31 March 2019 31 March 2018
(Rs. in Lakhs) PARTICULARS
TOTAL 136.25 566.72
Bank Deposits with original maturity of more than three months
Earmarked balances For Unclaimed Dividend 122.96 22.10
but less than twelve months (Refer Note below) 13.29 544.62
Note : Deposits amounting Rs. 13.29 Lakhs are given as security against bank guarantees (31st March 2018 - Rs. 544.62 Lakhs). These deposits are made for varying periods of 3 months to 12 months and earns interest ranging between 6.25% to 7.00%.
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
184
The Company has one class of equity shares having par value of Re. 1 per share. Each holder of Equity Shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
Terms / Rights attached to Equity shares
In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
As per records of the Company, including its register of shareholders/ members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.
Mr. Jayantilal Patel 1,80,24,390 7.09% 1,78,24,390 7.01%
Mr. Ramesh Patel 1,56,60,689 6.16% 1,54,02,392 6.06%
DBS Nominees (P) Ltd. 1,28,92,190 5.07% 1,36,23,540 5.36%
Mr. Natwarlal Patel 2,07,39,850 8.16% 2,05,39,850 8.08%
TOTAL 9,21,02,747 36.22% 9,19,75,800 36.17%
Mr. Ashish Soparkar 2,47,85,628 9.75% 2,45,85,628 9.67%
PARTICULARSAs at 31st March 2019 As at 31st March 2018
No. of shares No. of shares% holding % holding
Details of Shareholders holding more than 5% Shares in the Company
Proposed cash dividend for 31 March 2019: Rs. 0.40 per share (31 March 2018: Rs. 0.40 per share) 1,017.26 1,017.26
Proposed dividends on Equity shares:
Cash dividends on Equity shares declared and paid: Final dividend for 31 March 2018: Rs. 0.40 per share (31 March 2017: Rs. 0.40 per share) 1,017.26 1,017.26 Interim Dividend for 31 March 2019: Rs 0.60 per share ( 31 March 2018: Nil) 1,525.88 -
PARTICULARS(Rs. in Lakhs)
st31 March 2018st31 March 2019
Distribution made and proposed
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
AUTHORISED SHARE CAPITAL No. of shares Rs. in Lakhs
As at 1st April 2017 37,00,00,000 3,700.00
As at 31st March 2018 37,00,00,000 3,700.00 Increase/(Decrease) during the year - - As at 31st March 2019 37,00,00,000 3,700.00
16 SHARE CAPITAL
ISSUED, SUBSCRIBED AND FULLY PAID UP SHARE CAPITAL No. of shares Rs. in Lakhs Equity shares of Re. 1 each. 25,43,14,211 2,543.14
Increase/(Decrease) during the year - -
Equity shares of Re. 1 each.
Reconciliation of shares outstanding at the beginning and at the end of the reporting period
Increase/(Decrease) during the year - -
Increase/(Decrease) during the year - - As at 31st March 2019 25,43,14,211 2,543.14
As at 31st March 2018 25,43,14,211 2,543.14
As at 1st April 2017 25,43,14,211 2,543.14
PARTICULARS No. of shares Rs. in Lakhs
185 IND
Balance as at the beginning of the year 9,755.58 8,955.58
17 OTHER EQUITY
Balance as at the end of the year 15,650.48 15,650.48
(Rs. in Lakhs) PARTICULARS st st 31 March 2019 31 March 2018
Balance as at the beginning of the year 15,650.48 15,650.48 (1) Securities Premium
(2) Capital Reserve
Less : Acquisition of Stake from Non-controlling Interest (NCI) (Refer Note 45) (9,006.95) - Balance as at the end of the year (8,971.77) 35.18
(3) General Reserve
Balance as at the beginning of the year 35.18 35.18
Balance as at the end of the year 11,255.58 9,755.58
(4) Capital Redemption Reserve Balance as at the beginning of the year 184.33 184.33
Balance as at the beginning of the year - (21.66)
Balance as at the end of the year - - (6) Currency Translation Reserve
Balance as at the end of the year 184.33 184.33
Balance as at the beginning of the year (60.77) 715.02
Add : Transferred from Retained earning 1,500.00 800.00
Add : Addition during the year 34.14 (775.79)
Add : (Addition) / Deduction during the year - 21.66
(5) Hedge Reserve
Balance as at the end of the year (26.63) (60.77)
(7) Retained Earning
Add : Other Comprehensive Income for the Year (95.83) 15.17
83,977.14 60,970.07
Balance as at the end of the year 79,724.90 58,945.72
Dividend Paid 2,543.14 1,017.26 Transfer to General Reserve 1,500.00 800.00
Dividend Distribution Tax 209.10 207.09
Less : Appropriation
Add : Profit for the year 25,127.25 17,132.18
TOTAL 97,816.89 84,510.52
Balance as at the beginning of the year 58,945.72 43,783.37 Add : Receivable written off in Standalone and now accounted for Consolidation - 39.35
Securities premium
Capital Reserve
Where the Company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount of the premium received on those shares shall be transferred to “Securities Premium”. The Company may issue fully paid-up bonus shares to its members out of the securities premium and the Company can use this reserve for buy-back of shares.
The Capital Reserve pertains to deduction in Depreciation at the time of Incorporation of the Company and amount paid in excess of the value of investment at the time of conversion and restructuring of Stake holding of Non-controling interest.
General Reserve is created out of the profits earned by the Company by way of transfer from surplus in the statement of profit and loss. The Company can use this reserve for payment of dividend and issue of fully paid-up bonus shares.
Nature and purpose of Reserves :
General Reserve
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
186
In Indian Currency (Refer Notes below) 37,448.64 30,440.00
The above amounts includes:
Total Non-Current borrowing 45,061.50 21,831.23
In Foreign Currency (Refer Notes below) 13,981.05 -
18 BORROWINGS
TOTAL 51,429.69 30,440.00
(Rs. in Lakhs) PARTICULARS
Secured Term Loan Facilities from Banks and Financial Institutions:
Secured borrowing 45,061.50 21,831.23
Unsecured borrowing - -
Current maturity of long term borrowing clubbed under-
Current Financial liabilities (Refer Note 24) 6,368.19 8,608.77
st st 31 March 2019 31 March 2018
Refer Note No - 42 For Interest rate Risk and Liquidity Risk.
2 Seventeen quarterly instalments of Rs. 512.50 Lakhs each starting from 30.06.2016
3 Seven quarterly instalments of Rs. 187.50 Lakhs each starting from 30.09.2020
ii The Company has Rupee Term Loan facility of Rs. 10,675.00 Lakhs. The facility is secured by First charge on all the
Company's movable and immovable fixed assets and exclusive charge on specific movable and immovable fixed
assets. The loan carries floating interest rate linked to one year MCLR plus spread of 70 bps with monthly rests. Interest
rate was in the range of 8.20% to 8.85% during the year (31 March 2018: 9%). The Term Loan is repayable in 26
quarterly instalments starting from 31st December 2015 and ending on 31st March 2022, as per below mentioned
terms. The outstanding amount of loan as at March 31, 2019 is Rs. 3,875.00 (as at March 31, 2018: Rs. 5,925.00)
Lakhs.
Details of Security and Repayment Terms :
i The Company has Rupee Term Loan facility of Rs. 3,000.00 Lakhs.The facility is secured by First Pari Passu charge on
specific movable and immovable fixed assets of the Company. Loan is repayable in 20 Quarterly installments of Rs.
150.00 Lakhs each commencing from 30th April 2016 and interest rate is linked to one year MCLR with monthly rests.
Interest rate was in the range of 8.20% to 8.75% during the year (31 March 2018: 9.45%). The outstanding amount of
loan as at March 31, 2019 is Rs. 1,200.00 (as at March 31, 2018: Rs. 1,800.00) Lakhs.
1 Two quarterly instalments of Rs. 325.00 Lakhs each starting from 31.12.2015
Currency Translation Reserve
Capital Redemption Reserve
Hedge Reserve Hedge Reserve is created to the extent hedges are effective; the change in fair value of the hedging instrument is recognised
in the cash flow hedging reserve. Amounts recognised in the cash flow hedging reserve is reclassified to profit or loss when the hedged item affects profit or loss.
Capital Redemption Reserve was created for buy-back of shares.
Exchange differences arising on translation of the foreign operations are recognised in Other Comprehensive Income as described in accounting policy and accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit or loss when the net investment is disposed-off.
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
187 IND
The outstanding amount of loan as at March 31, 2019 is Rs. 7,666.67 (as at March 31, 2018: Rs. 8,700.00) Lakhs.
The Indian Rupee term loan facilities are secured by first pari passu mortgage charge of all immovable properties of
MFL, first pari passu hypothecation charge over all the moveable assets of MFL and second pari passu
hypothecation charge over all the current assets, intangibles, revenues of whatsoever nature and uncalled capital
of MFL, both present and future.
iii The Company has Rupee Term Loan facility of Rs. 9,200.00 Lakhs. The Facility is secured by (a) Exclusive Charge on
Windmill (b) First Pari Passu charge by way of Hypothecation on the movable fixed assets of the Company (c)
Assignment of Lease Hold Land used for Windmill (d) First Pari Passu charge by way of mortgage on immovable fixed
assets of the Company (excluding the assets charged specifically to other lenders). The term Loan is repayable in 12
half yearly instalments of Rs.766 Lakhs after a moratorium period of 12 months from the date of first disbursement. The
interest rate is linked to 12 months G-Sec, which will be reset every year. Interest rate was in the range of 7.60% to
8.90% during the year (31 March 2018: 7.6%).
1) Term loan amounting Rs. 11,000.00 Lakhs with outstanding balance for this facility is Rs. 10,450.00 Lakhs (31
March 2018: Rs. 100.00 Lakhs). The borrowing carries interest @ 1 year MCLR (Benchmark rate) plus NIL
spread (to be set every year) payable on monthly rest. The effective interest rate is 8.40% (31 March 2018:
8.25%). The term loan is repayable in 20 quarterly installments of Rs 550.00 Lakhs each and repayment
started from March 2019.
The outstanding amount of loan as at March 31, 2019 is Rs. NIL (as at March 31, 2018: Rs. 10,000.00) Lakhs. The
Company has prepaid the entire Term loan on 26th March, 2019.
2) Term loan amounting Rs. 15,000.00 Lakhs with outstanding balance for this facility is Rs. 7,500.00 Lakhs (31
March 2018: Nil). The borrowing carries interest @ 1 year MCLR (Benchmark rate) plus NIL spread (to be set
every year) payable on monthly rest. The effective interest rate is 8.75% (31 March 2018: NIL). The term loan is
repayable in 18 quarterly installments of Rs 833.33 Lakhs each starting from September 30, 2020.
iv The Company has Rupee Term loan facility of Rs. 12,500.00 Lakhs. The Facility is secured by (a) First Pari Passu
charge by way of Hypothecation on the movable fixed assets of the Company excluding exclusively charged assets (b)
First Pari passu charge on immovable fixed assets of the Company (excluding exclusively charged assets to other
lenders) (c) Second Pari Passu Charge by way of Hypothecation over entire current assets. The Term Loan is
repayable in 16 quarterly instalments amounting to Rs.625 Lakhs after a moratorium period of 13 Months from the date
of first disbursement. The interest rate is linked to one year MCLR with 15 bps spread. Interest rate was in the range of
8.20% to 8.70% during the year (31 March 2018: 8.2%).
v (I) The Subsidiary Company Meghmani Finechem Limited (MFL) has taken External Commercial Borrowing of Euro
180.00 lakhs for capital expansion purpose. Outstanding balance for this borrowing is Euro 180.00 lakhs equivaent
to Rs 13,981.05 lakhs (31 March 2018: NIL). The borrowing is secured by first pari passu mortgage charge on all
immovable properties of MFL, first pari passu hypothecation charge over all the moveable assets of MFL and
second pari passu hypothecation charge over all the current assets of MFL, both present and future. The borrowing
carries interest @ Euribor + 1.6% p.a. (31 March 2018: NIL) payable on quarterly rests. MFL has entered into
Interest Rate Swap (‘IRS’) agreement with the bank to fixed interest rate @ 1.85% p.a. (31 March 2018: NIL) and
hedging of the foreign exchange rate whereby Company will pay additional interest @ 4.95% p.a. (31 March 2018:
NIL). The effective interest rate after considering basic interest rate and interest for hedging is @ 6.8%. (31 March
2018: NIL). The borrowing is repayable in 15 quarterly installments of Euro 12 Lakhs each, starting from July 3,
2020.
ii) The Subsidiary Company Meghmani Finechem Limited (MFL) has availed following Indian Rupee Loan facilities
for capital expansion purpose:
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
188
(Rs. in Lakhs) PARTICULARS
currency swap valued at fair value through profit and loss) 781.31 -
19 OTHER FINANCIAL LIABILITIES (NON CURRENT)
st st 31 March 2019 31 March 2018
TOTAL 781.31 -
Mark to market derivative liabilities (on interest rate swap and cross
4) Term loan amounting Rs 22,000.00 Lakhs. Outstanding balance for this term loan is Nil (31 March 2018: Rs.
3,992.74 Lakhs). The effective interest rate is 9.62% (31 March 2018: 9.62%).
(iv) Bank loans availed by the Group are subject to certain covenants relating to interest service coverage ratio, current
ratio, debt service coverage ratio, total outside liabilities to total net worth, fixed assets coverage ratio, ratio of total
term liabilities to net worth and return on fixed assets. The Group has complied with the covenants as per the terms
of the loan agreements.
3) Term loan amounting Rs. 12,500.00 Lakhs with outstanding balance for this facility is Rs. 6,803.00 Lakhs (31
March 2018: Nil). The borrowing carries interest @ 12 month T-bill rate (benchmark as published by RBI - to be
reset every year) plus spread (fixed @ 0.94%) payable on monthly rest. The effective interest rate is 8.25% (31
March 2018: NIL). The term loan is repayable in 19 quarterly installments of Rs 657.89 Lakhs each starting
from June 28, 2020.
(iii) MFL is in the process of executing an Indenture of mortgage with Lenders of these term loans (Secured Parties) for
creating mortgages on Immovable Properties of the Company by creating a charge by way of registered mortgage.
According to the indenture, all the Secured Parties will share pari passu charge with first ranking and priority over
the Immovable Properties of the Company, both present and future.
Provision for Employee Benefits
Leave Encashment 84.56 62.29
(Rs. in Lakhs) PARTICULARS
20 PROVISIONS (NON CURRENT)
st st 31 March 2019 31 March 2018
Gratuity (Refer Note 38) 675.69 461.08
TOTAL 760.25 523.37
(a) Amounts recognised in Profit and Loss
21. Tax expense
Tax expense for the year 11,319.24 8,778.76
Adjustment to tax related to earlier periods (61.52) 113.54
(Rs. in Lakhs) PARTICULARS
For the year ended For the year ended March 31, 2019 March 31, 2018
Deferred Income Tax Liability / (Asset), net
Deferred tax relating to origination & reversal of temporary differences (1,814.53) 2,746.97
(Credit) / Utilisation of MAT 2,540.73 (1,304.35)
Current Income Tax 10,654.56 7,222.60
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
189 IND
Foreign Currency Translation of Foreign Operations
Net of Tax 22.21 2.19
(Rs. in Lakhs) PARTICULARS
Before Tax 34.14 3.36
Tax Amount (11.93) (1.17)
Net of Tax (127.72) 15.19
Tax Amount 68.61 (8.16)
For the year ended For the year ended March 31, 2019 March 31, 2018
Items that will not be reclassified to Profit or Loss: Remeasurement gain / (loss) on defined benefit plans
Items that will be reclassified to Profit or Loss:
Before Tax (196.33) 23.35
(b) Amounts recognised in Other Comprehensive Income
For the year ended For the year ended March 31, 2019 March 31, 2018
Profit Before Tax 40,855.96 32,571.47
Tax using the Company’s domestic tax rate 14,276.71 11,272.33 (Current Year 34.94% and Previous Year 34.61%)
Non-Deductible Tax Expenses
Capital work-in-progress loss due to fire 100.74 -
Investment Written Off - 0.28
Interest on Preference Share Capital 110.30 -
Others 353.38 345.32
Allowable Tax Expenditure
Additional R & D Expenses u/s - 35(2AB) (36.63) (33.10)
Donation disallowed 78.43 -
(Rs. in Lakhs) PARTICULARS
Total 11,319.24 8,778.76
Others (112.22) (95.23)
Impact on account of change in the Deferred Tax rate (134.08) (27.67)
Other adjustments (842.86) (167.14)
Others Adjustments
Currency Translation Reserve (11.93) (1.17)
Unrecognised MAT Credit Entitlement - (1,304.35)
Adjustment for Tax of Prior Periods (61.52) 113.54
Adjustment to Tax Related to Rectification of Deferred Tax of Previous Year - 576.41
Effective Tax Rate 27.71% 26.95%
Income exempt from Income Taxes (u/s 10A & 80IA) (2,401.08) (1,900.46)
(c) Reconciliation of Effective Tax Rate
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
190
(d) Movement in Deferred Tax balances for the year ended March 31, 2019
(e) Movement in Deferred Tax balances for the year ended March 31, 2018
Reserve - 11.93 (11.93) - - - Currency Translation
Net Tax Assets /
Tax Assets/ (4,303.37) (726.20) 56.68 (40.86) (5,013.75) 2,837.80 (7,851.55)
Others (125.96) 302.35 176.39 176.39 -
(Liabilities)
(Liabilities) 28.06 (5,041.81)
Set off (2,809.74) 2,809.74
Property, Plant and (8,968.10) 1,137.96 - - (7,830.14) - (7,830.14)Equipment
(Including Derivative)-Loans and Borrowings (48.83) 159.60 - - 110.77 110.77 -
Trade Receivables 78.47 145.45 - - 223.92 223.92 - DTA on Stock Reserve 52.81 (11.11) - - 41.70 41.70 - Employee Benefits 312.54 24.02 68.61 - 405.17 405.17 - Investment (65.74) 44.33 - (21.41) - (21.41)Tax Credit (MAT) 4,461.44 (2,540.73) - (40.86) 1,879.85 1,879.85 -
Investment (18.24) (47.50) - (65.74) - (65.74)Tax Credit (MAT) 4,668.97 (207.53) - - 4,461.44 4,461.44 -
Property, Plant and (8,130.06) (838.04) - - (8,968.10) - (8,968.10)
(Liabilities) 751.78 (5,055.14)
Currency Translation - 1.17 (1.17) - - - Reserve
Others - (125.96) (125.96) - (125.96)
Loans and Borrowings (53.87) 5.04 (48.83) - (48.83)
Inventories 607.95 (555.14) - - 52.81 52.81 -
Tax Assets/ (Liabilities) (2,851.42) (1,442.62) (9.33) - (4,303.37) 4,905.26 (9,208.62)Set off (4,153.48) 4,153.48
Deferred tax asset
Equipment
Net Tax Assets /
Trade Receivables (94.21) 172.68 - - 78.47 78.47 -
Employee benefits 168.04 152.66 (8.16) - 312.54 312.54 -
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
(Rs. in Lakhs)
(Rs. in Lakhs)
Other(Including
adjustmentof tax
pertainingto earlierperiods)
Other
Deferred TaxAsset as atMarch 31,
2019
Deferred TaxAsset as atMarch 31,
2018
Deferred TaxLiability as at
March 31,2019
Deferred TaxLiability as at
March 31,2019
Net
Net
Particular
Particular
NetBalanceApril 1, 2018
NetBalanceApril 1, 2017
Recognisedin Profitor Loss
Recognisedin Profitor Loss
Recognisedin OCI
Recognisedin OCI
191 IND
ii The Subsidiary Company Meghmani Finechem Limited (MFL) has availed Working Capital facility of Rs 13,350 Lakhs
(March 31, 2018: Rs. 7,000 Lakhs) as Sanctioned Limit from consortium comprising of ICICI Bank Limited, Standard
Chartered Bank and HDFC Bank Ltd. The present consortium is lead by ICICI Bank Limited. The entire facility is Secured
by first pari passu charge on all the current assets of MFL, both present and future. Interest rate for the year ranges between
9.30% to 9.65% (March 31, 2018: 9.50% to 10.15%).
(c) Interest rates on Working Capital demand loans vary within the range of 8.05% to 8.60% (31 March 2018: 7.85% to
8.90%).
iii MFL is in the process of filing requisite forms with Ministry of Corporate Affairs for creating of first pari passu hypothecation
charge over all the current assets and for additional facilities sanctioned during the year.
(b) Interest rates on Packing Credit loans vary within the range of Libor + 1.50% to Libor + 2.70% (31 March 2018: Libor
+2.00%).
I The Company has availed Cash Credit, Packing Credit and Working Capital demand loans of Rs 40,000 lakhs (31 March
2018: Rs 40,000 lakhs) as sanctioned limit from State Bank of India, HDFC Bank Limited, Standard Chartered Bank and
ICICI Bank Limited (Collectively known as Consortium Bankers). The present Consortium is lead by State Bank of India.
These loans are secured by first pari passu charge by way of hypothecation of the entire Stock of Raw Materials, Work in
Process, Finished Goods, Stores and Spares and Receivables and first pari passu charge on immovable Fixed Assets of
the Company as a collateral security. Interest rate on these loans are as follows:
(a) Interest rates on Cash Credit loans vary within the range of 9.20% to 10.50% (31 March 2018: 8.15% to 10.45%).
Details of Security and Repayment Terms :
(Rs. in Lakhs) PARTICULARS
23 TRADE PAYABLE
st st 31 March 2019 31 March 2018
Trade Payables 25,193.51 19,506.15
TOTAL 25,193.51 19,506.15
Terms and Conditions of the above Outstanding Dues :
Trade payables are non-interest bearing and are normally settled on 30-360 days terms. For amounts due to related parties and
terms and conditions with related parties, Refer Note 41. Refer Note 42 for Group’s Credit Risk Management processes.
(Refer Note below)
From Banks - In Indian Currency 10,395.13 6,186.54
st st 31 March 2019 31 March 2018
Secured Loans
Loans Repayable on Demand
From Banks - In Foreign Currency 9,798.81 1,955.25
TOTAL 20,193.94 8,141.79
22 BORROWINGS
Cash Credit, Packing Credit and Working Capital Demand Loan accounts
(Rs. in Lakhs) PARTICULARS
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
192
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
Financial liabilities carried at amortised cost
24 OTHER FINANCIAL LIABILITIES (CURRENT)
(Rs. in Lakhs) PARTICULARS st st 31 March 2019 31 March 2018
Current maturities of Non Current Borrowings (Refer Note 18) 6,368.19 8,608.77 Interest accrued but not due on borrowings 458.84 72.74 Employee Benefit Payable 4,905.00 3,103.89 Unclaimed Dividend 122.96 22.10 Payable for Retention Money 47.92 11.76 Payables for Capital Goods 6,562.42 1,219.98 Security Deposits Payable 656.81 485.21 Expenses Payable 2,627.59 1,303.77 Interest as per MSMEDA, 2006 421.36 290.55 Financial liabilities carried at fair value through profit and loss Derivative Contracts - 17.38 TOTAL 22,171.09 15,136.15
Advance from Customers 817.06 446.65
TOTAL 1,177.65 1,037.24
25 OTHER CURRENT LIABILITIES
(Rs. in Lakhs) PARTICULARS st st 31 March 2019 31 March 2018
Statutory Dues Payable 360.59 590.59
Leave Encashment 10.90 9.01
st st 31 March 2019 31 March 2018
(Rs. in Lakhs) PARTICULARS
TOTAL 596.23 9.01
Provision for Amount paid under Dispute (MEIS) 585.33 -
Provisions for Employee Benefits
26 PROVISIONS (CURRENT)
27 CURRENT TAX LIABILITIES (NET)
TOTAL 1,414.70 1,410.81
Current Tax Payable (Net) 1,414.70 1,410.81
(Rs. in Lakhs) PARTICULARS st st 31 March 2019 31 March 2018
193 IND
28 REVENUE FROM OPERATIONS
st st 31 March 2019 31 March 2018
ii - Traded Goods 11,218.41 8,337.19
Sale of Products
Total Sale of Products 2,05,234.99 1,81,454.13
Other Operating Revenue
i - Export benefits and other incentives 3,412.79 2,838.86
ii - Scrap Sales 148.07 24.02
TOTAL 2,08,795.85 1,84,317.01
(Rs. in Lakhs) PARTICULARS
i - Manufactured Goods 1,94,016.58 1,73,116.94
Total Other Operating Revenue 3,560.86 2,862.88
Set out below is the disaggregation of the Group’s revenue from contracts with customers:
Total revenue from contracts with customers 2,15,005.71 1,90,192.02
Goods transferred at a point in time 2,05,234.99 1,81,454.13
Geographical location of customer
(Rs. in Lakhs) PARTICULARS
Others (Merchant Trading) 7,997.75 6,304.39
Total revenue from contracts with customers 2,05,234.99 1,81,454.13
India 93,343.80 88,736.23
Total revenue from contracts with customers 2,05,234.99 1,81,454.13
Timing of revenue recognition
Agro Chemicals 77,066.25 64,192.07
28.1 Disaggregated revenue information
Basic Chemicals 71,006.80 61,448.40
Pigments 58,934.91 58,247.16
st st 31 March 2019 31 March 2018
Type of Goods
Less - Inter-segment Sales 9,770.72 8,737.89
Total revenue from contracts with customers 2,05,234.99 1,81,454.13
Outside India 1,11,891.19 92,717.90
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
194
Trade Receivables 43,135.33 37,450.16
Advance from customers 817.06 446.65
28.3 Contract Assets and Contract Liabilities
st st 31 March 2019 31 March 2018
(Rs. in Lakhs) PARTICULARS
The Group has recognised the following revenue-related contract asset and liabilities
28.2 Sale of Products includes excise duty collected from customers of Rs. Nil (31 March 2018: Rs. 3,984.61 Lakhs). Sale of
Pigment, Agro Chemicals, Basic Chemicals and Others net of excise duty is Rs. 2,05,234.99 Lakhs (31 March 2018:
Rs. 1,81,454.13 Lakhs). Revenue from operations for previous periods up to 30 June 2017 includes excise duty. From 1
July 2017 onwards the excise duty and most indirect taxes in India have been replaced with Goods and Service Tax
(GST). The group collects GST on behalf of the Government. Hence, GST is not included in Revenue from operations.
In view of the aforesaid change in indirect taxes, Revenue from operations for the year ended 31 March 2019 is not
comparable with 31 March 2018.
Contract liabilities includes short term advance received for sale of products. There is no significant movement during
the year.
Trade receivables are non-interest bearing and are generally on terms of 30 to 180 days. Trade receivable are secured
to the extend of deposit received from the customers. There is no significant movement during the year. In March 2019,
Rs.619.91 Lakhs (March 2018: Rs.226.72 Lakhs) was recognised as provision for expected credit losses on trade
receivables
Revenue as per contracted price 2,08,051.90 1,89,190.18
Sales return (739.29) (340.07)
(Rs. in Lakhs) PARTICULARS
28.4 Reconciling the amount of revenue recognised in the Statement of Profit and Loss with the contracted price
Commission (375.29) (378.00)
Revenue from contract with customer 2,05,234.99 1,81,454.13
Trade and Cash Discount (1,702.33) (7,017.98)
Adjustments
st st 31 March 2019 31 March 2018
28.5 Performance obligation
Information about the Group’s performance obligations are summarised below:
The performance obligation is satisfied upon dispatch of goods from the company's premises / delivery of goods to the
customer in accordance with the terms of contract with customer.
No single customer represents 10% or more of the Group’s total revenue during the year ended 31 March 2019 and 31
March 2018.
28.6 Information about major customers
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
195 IND
(Rs. in Lakhs) PARTICULARS
Fair Value Gain on Mutual Funds held at Fair Value Through Profit or Loss 585.83 128.89
29 OTHER INCOME
st st 31 March 2019 31 March 2018
Interest Income on :
- Bank Deposits 183.32 67.83
- Others 250.29 369.87
Dividend Income 3.75 1.54
Fair Value Gain on Derivative Instruments held at Fair Value Through Profit or Loss 17.38 85.62
Net Gain on Foreign Currency transactions and translation 1,812.23 1,912.38
Liabilities No Longer Required Written Back 320.88 99.65
Miscellaneous Income 146.70 366.89
TOTAL 3,320.38 3,032.67
(Rs. in Lakhs) PARTICULARS
30 COST OF MATERIALS CONSUMED
Pigments 34,921.41 32,204.63
Agro Chemicals 53,033.20 36,546.23
TOTAL 1,08,891.28 88,524.48
st st 31 March 2019 31 March 2018
Basic Chemical 20,936.67 19,773.62
(iii) Stock in Trade 632.36 507.51
TOTAL (B) 28,100.21 16,816.85
(A) Inventories at the beginning of the year
(Rs. in Lakhs) PARTICULARS
(i) Finished Goods 11,062.41 6,494.75
31 CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROCESS AND STOCK IN TRADE
(iv) Work-in-Process 1,115.51 1,205.50
TOTAL (A) 16,816.85 16,208.98
(ii) Finished Goods in Transit 14,914.45 8,574.23
(B) Inventories at the end of the year
(ii) Finished Goods in Transit 8,574.23 7,561.77
(iii) Stock in Trade 746.84 632.36
(iv) Work-in-Process 1,376.51 1,115.51
Total Changes in Inventories (A - B) (11,283.36) (607.87)
(i) Finished Goods 6,494.75 6,934.20
st st 31 March 2019 3 1 March 2018
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
Note : The above amount comprises of raw material consumption generated from the accounting system and related adjustments there to.
196
TOTAL 12,467.47 9,980.94
Directors Remuneration (Refer Note 41) 4,468.46 3,317.07
(Rs. in Lakhs) PARTICULARS
32 EMPLOYEE BENEFIT EXPENSE
Contribution to Provident and Other Funds (Refer Note 38) 648.28 389.90
st st 31 March 2019 31 March 2018
Salary, Wages and Bonus 6,795.25 5,772.74
Staff Welfare Expenses 555.48 501.23
(Rs. in Lakhs) PARTICULARS
33 FINANCE COST
Term Loans 2,448.50 2,187.49
Cash Credit and Working Capital Demand Loan 1,340.45 1,088.66
Dividend Distribution Tax on Non Convertible Redeemable Preference Shares 315.64 -
Interest expense on :
(Refer Note 45)
Loss on Derivative Instruments 781.31 -
Exchange gain on restatement of ECB (418.95) -
Other Borrowing Costs 599.63 356.07
TOTAL 5,599.21 3,987.14
st st 31 March 2019 31 March 2018
Others 532.63 354.92
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
197 IND
- Plant and Machinery 1,592.56 1,266.95
Excise Duty Expenses 10.35 370.90
st st 31 March 2019 31 March 2018
Consumption of Stores and Spares 2,411.22 2,052.41
Labour Contract Charges 2,802.25 2,847.47
Loss on Discarded Fixed Assets 378.38 133.71
(Rs. in Lakhs) PARTICULARS
Loss on Derivatives - 189.38
34 OTHER EXPENSES
- Buildings 273.73 192.27
Insurance 876.40 967.64
Research & Development Expenses (Refer Note - ii below) 209.65 191.29
Packing Material Consumption 3,353.07 3,742.01
Rates and Taxes 1,300.74 138.69
Renewal Purchase Obligation (RPO) 567.51 404.91
Rent (Refer Note - i below) 300.91 293.89
Pollution Control Expenses 2,165.92 2,085.46
Provision For Doubtful Debts and Advances 393.19 247.62
Freight Expenses 2,642.67 2,865.31
Power and Fuel 8,362.94 9,020.46
Repairs and maintenance:
Bad Debts 504.75 780.25
Fees to promoters on successful exit of IFC 1,500.00 -
Electricity duty on Power Generation 1,446.89 1,421.94
Selling and Promotion Expenses 676.41 196.36
TOTAL 38,585.57 36,204.21
Expenditure towards Corporate Social Responsibility (Refer Note - iii below) 246.05 322.32
Miscellaneous Expenses 4,927.96 4,880.55
Water charges 1,595.07 1,548.48
Payments to the Auditors (Refer Note - iv below) 46.95 43.94
Notes
i The Group has entered into lease rent agreement for nine years for office premises. The leasing agreement is cancellable,
and renewable on a periodic basis by mutual consent on mutually accepted terms including escalation of lease rent. Lease
payments recognised in the Statement of Profit and Loss for the year amounts to Rs 300.91 Lakhs (March 31, 2018: Rs
293.89 Lakhs).
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
198
Raw Material Consumption 23.29 17.61
Computer Maintenance - 0.05
Vehicle Expenses 4.91 8.06
st st 31 March 2019 31 March, 2018
Conveyance Expenses 1.54 2.23
Travelling Expenses 0.47 2.91
Stationery Expenses - 0.99
Electricity Expenses 10.46 12.62
TOTAL 209.65 191.29
Consumables & Spares and Others 2.04 2.52
Salary & Wages 155.55 128.30
Telephone,Mobile & Internet Expenses 0.10 0.61
Annual Maintenance Contract & Reparing 11.29 13.67
Miscellaneous Expenses - 1.72
(Rs. in Lakhs) Particulars
Details of Corporate Social Responsibility (CSR Expenditure)
iii Corporate Social Responsibility Expenditure - spent during the year is Rs. 246.05 Lakhs (31st March 2018 Rs. 322.32 Lakhs)
ii Expenses includes Research & Development related expenses as follows
(Rs. in Lakhs) Particulars st st 31 March 2019 31 March, 2018
Amount spent in cash during the year on :
i - Construction / Acquisition of an Assets - -
ii - On Purposes other than (i) above 246.05 322.32
st st 31 March 2019 31 March, 2018
TOTAL 46.95 43.94
(a) as Auditors 44.00 43.51
(c) for Reimbursement of Expenses 1.85 0.43
(b) for Other Services 1.10 -
(Rs. in Lakhs) Particulars
iv Payments to Auditors (Excluding Taxes)
st st 31 March 2019 31 March, 2018
TOTAL 1,586.78 112.52
(Rs. in Lakhs) Particulars
Loss due to Fire (Refer Note below) 1,586.78 112.52
35 EXCEPTIONAL ITEMS
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
199 IND
Property, Plant and Equipment (including Capital work in progress) 952.80
Other ancillary cost 110.00
Rs. in Lakhs PARTICULARS
Total 1,586.78
Inventory 523.98
The exceptional loss for year ended March 31, 2018 of Rs.112.52 Lakhs pertained to loss on account of fire at Dahej SEZ manufacturing facility of the Holding Company. Against the outstanding insurance claim receivable of Rs. 2,942.04 Lakhs as at March 31, 2018, the Holding Company had received Rs. 2,783.02 Lakhs and charged the differential amount of Rs.112.52 Lakhs to the Statement of Profit and Loss.
37 EARNINGS PER SHARE
The following reflects the income and share used in the basic and diluted EPS computation:
Basic and Diluted EPS amounts are calculated by dividing the profit for the year attributable to equity shareholders by the weighted average number of Equity shares outstanding during the year.
The exceptional loss for the year includes loss on account of fire on March 26, 2019 at a manufacturing facility of the Holding
Company in Dahej. Management is in the process of compiling and submitting requisite information to surveyor considering
which preliminary assessment / claim report is not received. Accordingly, the loss on fire including inventory, property plant
and equipment (including capital work in progress) and other ancillary expenses of Rs. 1,586.78 Lakhs as per table below, as
assessed by management, is charged to Statement of Profit and Loss for the year ended March 31, 2019 in line with
requirements of Ind AS 16 . The Company has All Risk Insurance Policy (including Loss of Profit Policy) and is fully covered
for insurance claim. (Rs. in Lakhs)
(i) Exchange differences in translating the Financial Statements of 34.14 3.36
(Rs. in Lakhs) Particulars
Statement of Other Comprehensive Income
A - Items that will not be reclassified to Profit or Loss
(i) Remeasurements of the Defined Benefit Plans (196.33) 23.35
(ii) Income tax relating to items that will not be reclassified to Profit or Loss 68.61 (8.16)
Total (B) 22.21 2.19
Total (A+B) (105.51) 17.38
st st 31 March 2019 31 March, 2018
Total (A) (127.72) 15.19
B - Items that will be reclassified to Profit or Loss
a foreign operation
(ii) Income Tax relating to items that will be reclassified to Profit or Loss (11.93) (1.17)
36 OTHER COMPREHENSIVE INCOME
Face value per Equity Share (Rs.) 1 1
(Rs. in Lakhs) Particulars st st 31 March 2019 31 March, 2018
Basic and Diluted Earnings Per Share (Rs.) 9.88 6.74
Weighted Average number of Equity Shares outstanding (Nos.) 25,43,14,211 25,43,14,211
Profit attributable to Equity holders of the Parent 25,127.25 17,132.18
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
200
Closing Balance of Defined Benefit Obligation 1,330.31 952.80
a. Current Service Cost 144.73 99.63
b. Actuarial Loss/(Gain) from changes in financial assumptions 233.81 (12.58)
Interest Cost 70.05 61.86
st st 31 March 2019 31 March, 2018
Service Cost
Benefits Paid (41.40) (39.83)
Opening Balance of Defined Benefit Obligation 952.80 868.22
b. Past Service Cost - 1.21
Table 1: Reconciliation of Defined Benefit Obligation (DBO)
c. Actuarial Loss/(Gain) from experience over the past period (0.16) (25.71)
a. Actuarial Loss/(Gain) from changes in demographic assumptions (29.52) -
Re-measurements
(Rs. in Lakhs)
Table 2: Reconciliation of Fair Value of Plan Assets st st 31 March 2019 31 March, 2018
Opening Balance of Fair Value of Plan Assets at start of the period 507.34 480.79
Contributions by Employer 144.11 47.63
Benefits Paid (41.40) (39.83)
Interest Income on Plan Assets 36.76 33.70
Re-measurements
Closing Balance of Fair Value of Plan Assets at end of the period 654.62 507.34
Actual Return on Plan Assets 44.57 18.75
a. Actuarial (Loss)/Gain from changes in Financial assumptions - 2.74
b. Return on Plan Assets excluding amount included in net interest on the net 7.81 (17.69) Defined Benefit Liability/(Asset)
(Rs. in Lakhs)
a. Current Service Cost 144.73 99.63
Table 3: Expenses recognised in the Profit and Loss Account
Net Interest on net Defined Benefit Liability/(Asset) 33.29 28.16
b. Past Service Cost - 1.21
Employer Expenses 178.02 129.00
st st 31 March 2019 31 March, 2018
Service Cost
(Rs. in Lakhs)
38 GRATUITY AND OTHER POST EMPLOYMENT BENEFIT PLANS
The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five
years of service is entitled to specific benefit. The level of benefits provided depends on the member’s length of
service and salary at retirement age. The following tables summarise the components of net benefit expense
recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet for
the respective plans:
(a) Retirement Benefits
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
201 IND
Table 4: Net Liability/ (Asset) recognised in the Balance Sheet st st 31 March 2019 31 March, 2018
Fair Value of Plan Assets 654.62 507.34
Liability/ (Asset) recognised in the Balance Sheet 675.69 445.46
Funded Status [Surplus/(Deficit)] (675.69) (445.46)
Experience Adjustment on Plan Liabilities: (Gain)/Loss (0.16) (25.71)
Experience Adjustment on Plan Assets: Gain/(Loss) 7.81 (17.69)
Present Value of DBO 1,330.31 952.80
(Rs. in Lakhs)
Table 5: Percentage Break - down of Total Plan Assets st st 31 March 2019 31 March, 2018
Of which, Unit Linked 11% 8%
Of which, Traditional/ Non-Unit Linked 89% 92%
Total 100% 100%
Investment Funds with Insurance Company 100% 100%
Note: None of the assets carry a quoted market price in an active market or represent the Entity’s own transferable
financial instruments or are property occupied by the Entity.
Table 6: Actuarial Assumptions
Salary Growth Rate 10% p.a. 6% p.a.
Withdrawal Rate 12% p.a. 8% p.a.
Expected Return on Plan Assets 7.3% - 7.7% p.a. 7.7% p.a.
Discount Rate 6.9% - 7.0% p.a. 7.1% p.a.
st st 31 March 2019 31 March, 2018
Expected weighted average remaining working life 4 to 5 years 5 years
Mortality IALM 2012 - 14 Ult. IALM 2006 - 08 Ult.
b. Return on Plan assets, excluding amount included in net interest on the
net defined benefit liability/(asset) 7.81 (17.69)
a. Actuarial (Loss)/Gain from changes in demographic assumptions 29.52 -
st st 31 March 2019 31 March, 2018
Balance at start of period (Loss)/Gain (25.24) (48.58)
Table 7: Movement in Other Comprehensive Income
Re-measurements on DBO
a. Actuarial (Loss)/Gain from changes in financial assumptions (233.81) 12.58
b. Actuarial (Loss)/Gain from experience over the past period 0.16 25.71
Re-measurements on Plan Assets
a. Actuarial (Loss)/Gain from changes in financial assumptions - 2.74
Balance at end of period (Loss)/Gain (221.56) (25.24)
(Rs. in Lakhs)
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
202
Financial Year ended March 31, 2018 Increases 1% Decreases 1%
Discount Rate DBO decreases by Rs 48.91 Lakhs DBO increases by Rs 54.83 Lakhs
Salary Growth Rate DBO increases by Rs 55.05 Lakhs DBO decreases by Rs 49.98 Lakhs
Withdrawal Rate DBO increases by Rs 2.14 Lakhs DBO decreases by Rs 2.59 Lakhs
Mortality (increase in expected lifetime by 1 year) DBO decreases by Rs 0.22 Lakhs
Mortality (increase in expected lifetime by 3 years) DBO decreases by Rs 0.43 Lakhs
Note: The sensitivity is performed on the DBO at the respective valuation date by modifying one parameter whilst retaining other
parameters constant. There are no changes from the previous period to the methods and assumptions underlying the sensitivity
analysis.
Surplus / (Deficit) at start of period (445.46) (387.43)
Contributions 144.11 47.63
st st 31 March 2019 31 March, 2018
Table 9: Movement in Surplus / (Deficit)
Movement during the period
Current Service Cost (144.73) (99.63)
Past Service Cost - (1.21)
Net Interest on net DBO (33.29) (28.16)
Actuarial Gain/ (Loss) (196.32) 23.34
Surplus/ (Deficit) at end of period (675.69) (445.46)
(Rs. in Lakhs)
(b) Defined Contribution Plans
The Company makes Provident Fund contributions to defined contribution plans for qualifying employees. Under the
schemes, the Company is required to contribute a specified percentage of payroll costs to fund the benefits. The Company
has recognised provident fund contribution of Rs. 294.64 Lakhs (March 31, 2018 Rs. 275.72 Lakhs) as expense in Note 32
under the head ‘Contributions to Provident and Other Funds’.
Salary Growth Rate DBO increases by Rs 65.56 Lakhs DBO decreases by Rs 60.38 Lakhs
Table 8: Sensitivity Analysis
Financial Year ended March 31, 2019 Increases 1% Decreases 1%
Withdrawal Rate DBO decreases by Rs 10.72 Lakhs DBO increases by Rs 11.67 Lakhs
Discount Rate DBO decreases by Rs 61.50 Lakhs DBO increases by Rs 68.19 Lakhs
Mortality (increase in expected lifetime by 1 year) DBO increases by Rs 0.34 Lakhs
Mortality (increase in expected lifetime by 3 years) DBO increases by Rs 0.76 Lakhs
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
203 IND
39 CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS
A Claims against the Group not acknowledged as liabilities (Excluding interest and Penalty)
(Rs. in Lakhs) PARTICULARS
st st 31 March 2019 31 March 2018
Disputed Income-Tax Liability 87.83 150.37
Disputed Excise Duty Liability 1,938.69 1965.67
Disputed Service Tax Liability 359.90 434.21
contingent liabilities are determinable only on receipt of judgments
pending at various Forums / Authorities)
In respect of Letter of Credit 1,990.40 6,081.88
Disputed Value Added Tax Liability 87.04 87.04
- Corporate Guarantee Given - 2,500.00
Disputed Custom Duty 621.83 621.83
In respect of the above matters, future cash outflows in respect of
In respect of Guarantee
Disputed Labour Law Compliance Liabilities 42.11 63.88
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
(Rs. in Lakhs) PARTICULARS
Estimated amount of Contracts pending execution on Capital accounts and not 13,792.71 21,293.34 provided for (net of advances)
st st 31 March 2019 31 March 2018
B. CAPITAL COMMITMENTS
C. OTHER COMMITMENT
The subsidiary Company Meghmani Finechem Limited has imported capital goods for the various expansion projects under the EPCG Scheme at Nil rate of custom duty by undertaking obligation to export. Future outstanding export obligation under the scheme is Rs 4,520.79 Lakhs (31 March 2018: Rs Nil) which is equivalent to 6 times of duty saved of Rs. 753.46 Lakhs (31 March 2018: Rs. Nil). The export obligation has to be completed by 2024-25. Further during the year,Meghmani Finechem Limited has submitted documents for fulfilment of obligations of Rs. 1,322.62 Lakhs. However, pending export obligation discharge clearance certificate, the same have been considered outstanding as on 31 March 2019.
D. PROVIDENT FUND LIABILITY
There are numerous interpretative issues relating to the Supreme Court (SC) judgment on PF dated 28th February, 2019. As a matter of caution, the Group has decided to assess the impact on a prospective basis from the date of the SC order. The Impact on account of this is not material. The Group will update its provision, on receiving further clarity on the subject.
204
Financial Year ended on 31st March 2019:
(Rs. in Lakhs)
Deferred Tax (Expenses) (726.20)
Profit After Tax 29,536.72
Revenue
Particulars Pigments Agro Chemicals Basic Chemical Others * Elimination Total
External Sales 55,025.37 76,505.91 6,5705.97 7997.74 - 2,05,234.99
Other Operating Revenue 1.545.32 1,983.02 32.50 0.03 - 3,560.86
Results
Segment Results 6,923.61 16,809.98 26,621.55 71.15 345.19 50,771.48
Total Revenue 60,480.23 79,049.27 71,039.3 7,997.77 (9,770.72) 2,08,795.85
Finance Cost (5,599.21)
Inter-segment Sales 3,909.54 560.35 5,300.83 - (9,770.72) -
Investments Income 3.75
Profit before 42,442.74Exceptional Items
Un-allocable (Expenses)/Income (2,733.28)
Exceptional Items - (1,586.78) - (1,586.78)
Profit from Operation 48,038.20
Profit Before Tax 40,855.96
Income tax Expenses (10,593.04)
/ Income
A - Analysis By Business Segment
40. SEGMENT REPORTING
*Others includes Merchant Trading Activity.
Balance sheet Pigments Agro Chemicals Basic Chemical Others * Elimination Total
Assets
Total Assets 2,37,675.84
Un-allocable Assets 20,936.84
Segment Liabilities 24,603.62 35,777.95 55,134.68 1,585.04 (1,529.53) 1,15,571.76
Liabilities
Unallocable Liabilities 1,778.42
Total Liabilities 1,22,391.99
Deferred Tax Liabilities 5,041.81
Segment Assets 59,014.93 70,586.53 1,04,044.94 2,728.18 (19,635.59) 2,16,739.00
(Rs. in Lakhs)
Non-Cash Items (280.98) 1,922.22 157.50 20.03 - 1,818.76
Capital Addition 2,287.20 5,159.14 39,107.06 54.85 - 46,608.25
Other information Pigments Agro Chemicals Basic Chemical Others * Elimination Total
Depreciation (2,197.11) (2,228.27) (5,409.88) (207.13) 316.45 (9,725.94)
(Rs. in Lakhs)
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
205 IND
Financial Year ended on 31st March 2018:
(` in Lakhs)
External Sales 54,122.86 64,015.13 57,011.74 6,304.4 - 1,81,454.13 Other Operating Revenue 1,298.63 1,497.95 40.87 25.43 - 2,862.88
Inter-segment Sales 4,124.30 176.93 4,436.66 (8,737.89) -
Total Revenue 59,545.79 65,690.01 61,489.27 6,329.83 (8,737.89) 1,84,317.01
Results
Segment Results 7,554.56 8,492.97 20,383.30 426.98 233.56 37,091.37
/Income
Profit from Operation 36,669.59
Finance Cost (3987.14)
Investments Income 1.54
Profit before 32,683.99
Un-allocable (Expenses) (421.78)
Revenue Pigments Agro Chemicals Basic Chemical Others * Elimination Total
/Income
Profit After Tax 23,792.71
Income Tax Expenses (7,336.14)
Exceptional Items
Profit Before Tax 32,571.47
Deferred Tax (Expenses) (1,442.62)
Exceptional Items (112.52)
(Rs. in Lakhs)
Other information Pigments Agro Chemicals Basic Chemical Others * Elimination Total
Capital Addition 5,272.22 6,166.95 8,131.19 450.46 450.31 20,471.13
Depreciation (2,167.32) (2,093.00) (5,527.15) (6.24) 316.45 (9,477.26)
Non-Cash Items 355.08 (664.02) 291.18 (98.71) (49.68) (166.14)
(Rs. in Lakhs)
Segment Liabilities 26,394.29 24,986.12 15,004.72 1,761.52 (1,3,111.02) 55,035.63
Unallocable Liabilities 12,560.12
Un-allocable Assets 25,383.60
Deferred Tax Liabilities 5,055.14
Total Liabilities 72,650.89
Liabilities
Total Assets 1,81,841.30
Segment Assets 61,435.64 51,452.3 66,282.70 13,917.55 (36,630.49) 1,56,457.70
Balance sheet Pigments Agro Chemicals Basic Chemical Others * Elimination Total
Liabilities
Assets
(Rs. in Lakhs)
*Others includes Merchant Trading Activity
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
(i) Segment Revenue
B ANALYSIS BY GEOGRAPHICAL SEGMENT
Segment revenue is analysed based on the location of customers regardless of where the goods are produced. The following provides an analysis of the Group Sales by geographical Markets
206
Outside India 1,15,303.98 95,556.76
Within India 93,491.87 88,760.25
(Rs. in Lakhs) PARTICULARS
TOTAL 2,08,795.85 1,84,317.01
31st March 2019 31st March 2018 Revenue:
Segment Assets, Liability and Capital Expenditure are analysed based on location of those assets. Capital Expenditure includes the total cost incurred to purchase Property, Plant and Equipment.
(ii) Segment Assets
Note:
31st March 2019 31st March 2018
(Rs. in Lakhs) PARTICULARS
Within India 2,13,948.30 1,59,048.10
TOTAL 2,36,281.22 1,79,980.34
Outside India 22,332.92 20,932.24
(Rs. in Lakhs) PARTICULARS
TOTAL 1,15,935.48 66,184.94
Within India 95,729.43 62,144.96
31st March 2019 31st March 2018
Outside India 20,206.05 4,039.98
(iii) Segment Liability
(iv) Segment Capital Expenditure
Note - Segment Liabilities does not includes Deferred Tax and Income Tax Liabilities
TOTAL 46,608.25 20,471.13
31st March 2019 31st March 2018
(Rs. in Lakhs) PARTICULARS
Within India 46,608.25 20,471.13
Outside India - -
a) Agro Chemicals - The Group’s operation includes manufacture and marketing of technical, intermediates and formulation of Crop Protection Chemicals..
c) Basic Chemicals - Chemicals undergo processing in many stages before being converted into downstream Chemicals which are used by the Agriculture Sector, Industry and also directly by the Consumers. The Caustic – Chlorine and Caustic Potash to be manufactured fall under the category of Basic Chemicals.
Notes
(2) The Group is divided into three segments. These segments are the basis for management control and hence form the basis for reporting. The business of each segment comprises of :
b) Pigment Business - The Group’s operation includes manufacture and marketing of Phthalocynine Green 7, Copper Phthalocynine Blue (CPC), Alpha Blue and Beta Blue.
(1) Based on “management approach” defined under Ind AS 108 - Operating Segments, the Chief Operating Decision Maker evaluates the Company’s performance and allocates resources based on an analysis of various performance indicators by business segments. Accordingly information has been presented along these Segments.
(3) Segment Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the Segments and amounts allocated on a reasonable basis.
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
Note: Segment Assets does not include Deferred Tax, Investment, Current and Non current Tax Asset.
207 IND
41 RELATED PARTIES DISCLOSURES :-
Independent Directors: Mr. Balkrishna Thakkar
Ms. Urvashi Shah
Relatives of Key Managerial : Ms. Deval Soparkar
Mr. A L Radhakrishnan (w.e.f. 20.10.2017 to 10.02.2018)
Mr. Anand Patel
Mr. Darshan Patel (COO)
Mr. Maulik Patel (Chairman and Managing Director of MFL)
Mr. Bhaskar Rao (From 10.02.2018)
Navratan Specialty Chemicals LLP
Meghmani Exports Limitada S.A.De CV
Mr. Karana Patel (COO)
Mr. Kantibhai Patel (up to 10.02.2018)
Matangi Industries LLP
Mr. Ramesh Patel
Mr. G.S. Chahal (Chief Financial Officer w.e.f.10.02.2018)
Mr. Rajkumar Mehta (Chief Financial Officer w.e.f.22.05.2017 to
Mr. Sanjay Jain (Chief Financial Officer of MFL)
Ms. Taraben Patel
relatives havesignificant influence : Tapsheel Enterprise
Meghmani Dyes & Intermediates LLP
31.12.2017)
Mr. Natwarlal Patel
Mr. Chinubhai Shah (up to 14.05.2018)
Mr. C S Liew (From 10.02.2018)
Enterprises in which Key Meghmani Pigments
Meghmani Chemicals Limited
Meghmani LLP (Formerly Meghmani Unichem LLP)
Trent Chemicals
Mr. Ashish Soparkar
Mr. Kaushal Soparkar (Managing Director of MFL)
Mr. Ankit Patel (CEO)
Managerial Personnel [KMP] & their Ashish Chemicals
Meghmani Industries Limited
Vidhi Global Chemicals Limited
Panchratna Corporation
Key Managerial Personnel : Mr. Jayantilal Patel
Mr. Kamlesh Mehta (Company Secretary)
Mr. Chander Kumar Sabharwal
Mr. Manubhai Patel (From 10.02.2018)
Ms. Nirali Parikh
Mr. Jayaraman Vishwanathan (up to 08.11.2017)
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
208
No
te -
41
RE
LA
TE
D P
AR
TIE
S D
ISC
LO
UR
ES
:-
Tra
nsacti
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s w
ith
Rela
ted
Part
ies in
Ord
inary
Co
urs
e o
f B
usin
ess
En
terp
rise
s in
wh
ich
D
irec
tors
& K
ey
Man
ager
ial P
erso
nn
el
[KM
P]
hav
e si
gn
ific
ant
infl
uen
ce
Rel
ativ
es o
f K
ey
Man
ager
ial P
erso
nn
elP
arti
cula
rs
(Rs
. in
La
kh
s)
Key
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ager
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2,34
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589.
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e of
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7,3
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261.
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ity S
hare
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-
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rom
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cess
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- 1,
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-
-
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Div
iden
d
-
-
1,02
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of
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vice
s (*
) -
- -
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-
-
- 8
.00
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Giv
en
-
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10
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97
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- 4.
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* P
ert
ain
s to
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f se
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from
an I
ndependent
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or.
MF
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Meghm
ani F
inech
em
Lim
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OU
TS
TA
ND
ING
BA
LA
NC
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WIT
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EL
AT
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PA
RT
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En
terp
rise
s in
wh
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D
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& K
ey
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ial P
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[KM
P]
hav
e si
gn
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uen
ce
Rel
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f K
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Man
ager
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erso
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(Rs
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,878
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8.20
(2)
For
the y
ear
ended 3
1 M
arc
h 2
019, th
e G
roup h
as
not re
cord
ed a
ny
impairm
ent of re
ceiv
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les
rela
ting
to
am
ou
nts
ow
ed
by
rela
ted p
art
ies
(31 M
arc
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018:
Rs.
Nil)
. T
his
ass
ess
ment
is u
ndert
ake
n e
ach
fin
an
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l ye
ar
thro
ug
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xam
inin
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he
fin
anci
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osi
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f the re
late
d p
art
y and th
e m
ark
et i
n w
hic
h th
e re
late
d p
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tes.
.
(1)
The G
roup’s
tra
nsa
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with
rela
ted p
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are
at
arm
’s le
ngth
. M
anagem
ent
belie
ves
tha
t th
e G
rou
p’s
do
me
stic
an
d
inte
rnatio
nal tr
ansa
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ns
with
rela
ted p
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post
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ontin
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o b
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t a
rm’s
le
ng
th a
nd
th
at
the
tra
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prici
ng le
gis
latio
n w
ill n
ot h
ave
any
impact
on th
e fi
nanci
al s
tate
ments
part
icula
rly
on
the
am
ou
nt o
f th
e ta
x e
xpe
nse
for th
e
year a
nd th
e a
mount o
f the p
rovi
sion fo
r taxa
tion a
t the p
eriod e
nd.
Term
s a
nd
Co
nd
itio
ns o
f tra
nsacti
on
s w
ith
Rela
ted
Part
ies
st31
Mar
ch, 2
019
st31
Mar
ch, 2
018
st31
Mar
ch, 2
019
st31
Mar
ch, 2
018
st31
Mar
ch, 2
018
st31
Mar
ch, 2
018
st31
Mar
ch, 2
019
st31
Mar
ch, 2
019
st31
Mar
ch, 2
019
st31
Mar
ch, 2
018
st31
Mar
ch, 2
019
st31
Mar
ch, 2
018
st31
Mar
ch, 2
018
st31
Mar
ch, 2
018
st31
Mar
ch, 2
019
st31
Mar
ch, 2
019
st
No
tes t
o t
he C
on
so
lid
ate
d F
inan
cia
l S
tate
men
ts F
or
Th
e Y
ear
En
ded
31
Marc
h 2
019
209 IND
41. RELATED PARTIES DISCLOURES :- Disclosure in respect of material transaction with related party during the year:
Transaction
Party Name Relationship Nature of 2018-2019 2017-2018
Meghmani LLP-SEZ Enterprises in which Directors Sale of Goods - 68.32
Intermediate Ltd & KMP have significant influence
Ashish Chemical Enterprises in which Directors Sale of Goods 294.71 421.49
Meghmani Chemicals Limited Enterprises in which Directors Sale of Goods - 15.44
Intermediate LLP & KMP have significant influence
Meghmani LLP Enterprises in which Directors Sale of Goods 3,016.41 2,847.61
& KMP have significant influence
& KMP have significant influence
Ashish Chemical Enterprises in which Directors Purchase of Goods 15.93 -
LLP & KMP have significant influence
& KMP have significant influence
-SEZ & KMP have significant influence
& KMP have significant influence
Meghmani Dyes & Enterprises in which Directors Sale of Goods 119.71 96.45
Meghmani Industries Limited Enterprises in which Directors Sale of Goods - 393.46
& KMP have significant influence
Meghmani Dyes & Enterprises in which Directors Sale of Goods 942.67 619.96
Meghmani Pigment Enterprises in which Directors Sale of Goods 165.92 210.03
Tapsheel Enterprises Enterprises in which Directors Sale of Goods 3.89 51.32
Navratan Speciality Chemical Enterprises in which Directors Sale of Goods 25.98 8.44
& KMP have significant influence
& KMP have significant influence
Vidhi Global Chemicals Limited Enterprises in which Directors Purchase of Goods - 777.53
Vidhi Global Chemicals Limited Enterprises in which Directors Sale of Goods - 687.25
Total 7,354.08 5,792.14
Meghmani Industries Limited Enterprises in which Directors Purchase of Goods 40.77 53.63
& KMP have significant influence
Trent Chemical Industries Enterprises in which Directors Sale of Goods 1,957.77 -
Meghmani Pigment Enterprises in which Directors Purchase of Goods 1,577.76 1,460.19
& KMP have significant influence
Meghmani Industries Limited Enterprises in which Directors Sale of Goods 827.02 372.37
& KMP have significant influence
& KMP have significant influence
& KMP have significant influence
& KMP have significant influence
Matangi Industries Enterprises in which Directors Purchase of Goods 12.77 33.63
& KMP have significant influence
(Rs. in Lakhs)
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
210
Party Name Relationship Nature of 2018-2019 2017-2018
Transaction
(Rs. in Lakhs)
Meghmani Dyes & Enterprises in which Directors Purchase of Goods - 0.44
& KMP have significant influence
Total 266.17 261.13
Panchratna Corporation Enterprises in which Directors Availing of Services 266.17 261.13
Jayantilal Patel Key Managerial Personnel Managerial 455.38 317.89
Meghmani Industries Limited Enterprises in which Directors Reim. Of Expenses 2.25 -
Remuneration
Total 2.72 -
Remuneration
Intermediate Ltd & KMP have significant influence
Maulik J Patel Key Managerial Personnel Managerial 640.61 490.36
Navratan Speciality Chemical Enterprises in which Directors Purchase of Goods - 1.81
Remuneration
& KMP have significant influence
Navratan Speciality Chemical Enterprises in which Directors Rent Income 2.72 -
LLP & KMP have significant influence
Total 2,341.37 2,589.19
Meghmani LLP Enterprises in which Directors Purchase of Goods 692.60 255.67
LLP & KMP have significant influence
& KMP have significant influence
Ashish Soparkar Key Managerial Personnel Managerial 455.29 317.67
Meghmani Chemicals Limited Enterprises in which Directors Purchase of Goods 1.54 6.29
& KMP have significant influence
Total 2.25 -
Remuneration
Remuneration
Natwarlal Patel Key Managerial Personnel Managerial 455.17 317.67
Ramesh Patel Key Managerial Personnel Managerial 300.25 217.66
Anand Patel Key Managerial Personnel Managerial 222.37 167.28
Remuneration
Karana Patel Key Managerial Personnel Managerial 400.32 310.46
Ankit N Patel Key Managerial Personnel Managerial 640.32 490.36
Remuneration
Darshan I Patel Key Managerial Personnel Managerial 280.32 220.51
Remuneration
Remuneration
Kaushal A Soparkar Key Managerial Personnel Managerial 640.61 490.36
Remuneration
41. RELATED PARTIES DISCLOURES :- Disclosure in respect of material transaction with related party during the year:
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
211 IND
Party Name Relationship Nature of 2018-2019 2017-2018
Transaction
Kantibhai H Patel Independent Directors Sitting Fees - 1.75
Arvind K Patel Independent Directors Sitting Fees - 0.50
Total 4,583.62 3,426.21
Ms. Deval Soparkar Relatives of Key Managerial Salary 19.49 12.90
Balkrishna T Thakkar Independent Directors Sitting Fees 5.75 6.75
Personnel
Total 19.49 12.90
Jayaraman Vishwanathan Independent Directors Sitting Fees - 1.00
G.S Chahal Key Managerial Personnel Salary 36.22 9.42
Ms. Urvashi Shah Independent Directors Sitting Fees 0.75 0.75
R K Mehta Key Managerial Personnel Salary - 26.67
Chinubhai R Shah Independent Directors Sitting Fees - 6.75
Sanjay Jain Key Managerial Personnel Salary 34.82 27.82
Kamlesh Mehta Key Managerial Personnel Salary 21.94 22.08
Chander Kumar Sabharwal Independent Directors Sitting Fees 1.25 1.00
Manubhai K Patel Independent Directors Sitting Fees 5.25 1.00
Total 14.50 21.00
Darshan Patel Key Managerial Personnel Dividend 1.92 0.60
Loan Given Total 1,098.01 436.12
Maulik Patel Key Managerial Personnel Dividend 12.70 5.08
Anand Patel Key Managerial Personnel Dividend 82.03 32.52
Kaushal Soparkar Key Managerial Personnel Dividend 13.50 5.40
Jayanti Patel Key Managerial Personnel Dividend 186.80 74.24
Natwarlal Patel Key Managerial Personnel Dividend 260.40 102.85
Ramesh Patel Key Managerial Personnel Dividend 165.77 65.69
Karana Patel Key Managerial Personnel Dividend 18.65 7.73
Taraben Patel Relatives of Key Managerial Dividend 73.60 29.44
Personnel
Ms. Nirali Parikh Independent Directors Sitting Fees 1.50 1.50
Ankit Patel Key Managerial Personnel Dividend 30.21 12.08
Repayment of Loan Total 10.00 -
Sanjay Jain Key Managerial Personnel Repay Loan 3.00 -
Ashish Soparkar Key Managerial Personnel Dividend 248.33 98.85
Issue of Equity Shares Total 3.00 -
Jayanti M Patel Key Managerial Personnel Share Issue of MFL 375.00 -
Sanjay Jain Key Managerial Personnel Loan Given 10.00 -
Ashish N Soparkar Key Managerial Personnel Share Issue of MFL 375.00 -
Deval Soparkar Key Managerial Personnel Dividend 4.10 1.64
(Rs. in Lakhs)
41. RELATED PARTIES DISCLOURES :- Disclosure in respect of material transaction with related party during the year:
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
212
Party Name Relationship Nature of 2018-2019 2017-2018
Transaction
Jayantilal M Patel Key Managerial Personnel Success Fees 375.00
Ramesh M Patel Key Managerial Personnel Success Fees 225.00
Anand I Patel Key Managerial Personnel Success Fees 150.00
Total 18,695.21 12,546.69
Ramesh M Patel Key Managerial Personnel Share Issue of MFL 225.00 -
Ashish N Soparkar Key Managerial Personnel Success Fees 375.00
Availing of Services
Total 1,500.00 -
Anand I Patel Key Managerial Personnel Share Issue of MFL 150.00 -
Natwarlal M Patel Key Managerial Personnel Success Fees 375.00
Total - 8.00
Chander Kumar Sabharwal Independent Directors Availing of Services - 8.00
Natwarlal M Patel Key Managerial Personnel Share Issue of MFL 375.00 -
Total 1,500.00 -
Promoter Success Fees
(Rs. in Lakhs)
41. RELATED PARTIES DISCLOURES :- Disclosure in respect of material transaction with related party during the year:
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
213 IND
(Rs. in Lakhs)41. RELATED PARTIES DISCLOURES :-
Meghmani Chemicals Limited - 10.40
Meghmani Industries Ltd. 31.49 51.08
Navratan Speciality Chemical LLP 1.95 1.95
Ashish Chemicals Eou Unit - II 54.16 150.33
Meghmani LLP 266.32 68.93
Meghmani Industries Ltd. 129.14 210.94
Navratan Speciality Chemical LLP 17.07 5.14
Trent Chemical Industries 349.16 460.84
Particular 31st March 2019 3 1st March 2018
Matangi Industries 0.65 -
Payable
Meghmani Dyes & Intermediate Ltd. 0.23 0.44
Meghmani Pigments 475.02 503.91
Panchratna Corporation 7.60 -
Receivables
Meghmani Chemicals Limited 21.78 35.61
Meghmani Dyes & Intermediate LLP 189.27 153.52
Meghmani Industries Ltd - Sez Unit 104.77 -
Meghmani LLP 683.10 565.64
Meghmani Pigments 42.46 48.73
Tapasheel Enterprise - 5.34
Meghmani Exports Limitada S A De C V 108.84 -
Remunaration Payable
Natwarlal Patel 390.21 150.11
Ramesh Patel 235.20 92.71
Anand Patel 157.71 62.71
Ankit N Patel 576.87 401.36
Darshan I Patel 231.88 161.50
Maulik J Patel 576.82 401.36
Kaushal A Soparkar 576.82 401.36
Karana Patel 346.87 241.45
Vidhi Global Chemicals Limited - 5.61
Jayantilal Patel 390.21 152.71
Ashish Soparkar 390.21 152.71
Loan Receivable
G.S Chahal 1.90 2.81
K D Mehta 1.53 4.90
Deval Soparkar 0.35 0.81
Sanjay Jain 2.04 1.70
Sanjay Jain 7.00 -
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
214
42 - FINANCIAL INSTRUMENTS – FAIR VALUE HIERARCHY
The significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of Financial Asset, Financial Liability and Equity Instrument are disclosed in Note 2 to the Financial Statements.
A. CATEGORY-WISE CLASSIFICATION OF FINANCIAL INSTRUMENT
The carrying value of financial instruments by categories as of March 31, 2019 is as follows:
31st March 2019 Fair value Fair value Amortised Total
(Refer Note 12)
Non-Current Borrowings (Refer Note 18) - - 45,061.5 45,061.5
and loss comprehensive
Fair Value of Financial Derivatives 781.31 - - 781.31
Financial Assets
Non-Current Investments (Refer Note 4) - 57.41 - 57.41
Trade Receivables (Refer Note 10) - - 43,135.33 43,135.33
through profit through other Cost
Total Financial Assets - 57.41 61,881.66 61,939.07
Other Financial Asset (Refer Note 14) 4,176.66 4,176.66
Trade Payables (Refer Note 23) - - 25,193.51 25,193.51
(Refer Note 19)
Carrying amount
Current investments (Refer Note 9) - - - -
Current Borrowings (Refer Note 22) - - 20,193.94 20,193.94
Cash and Cash Equivalents (Refer Note 11) - - 13,329.63 13,329.63
Non-Current Other Financial Assets - - 1,045.17 1,045.17
Financial Liabilities
Other Financial Liabilities (Refer Note 24) - - 22,171.09 22,171.09
Bank Balances (Other than above) - - 136.25 136.25
Total Financial Liabilities 781.31 - 1,12,620.04 1,13,401.35
income
(Refer Note 5)
Loans (Refer Note 13) - - 58.62 58.62
(Rs. in Lakhs)
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
215 IND
The carrying value of financial instruments by categories as of March 31, 2018 is as follows:
31st March 2018 (Rs. in Lakhs) Fair value Fair value Amortised Total
through profit through other Cost
and loss comprehensive
income
Financial Assets
Non-Current Investments (Refer Note 4) - 57.41 - 57.41
Non-Current Other Financial Assets - - 1,078.06 1,078.06
Cash and Cash Equivalents (Refer Note 11) - - 425.50 425.50
Bank Balances (Other than above) - - 566.72 566.72
(Refer Note 12) -
Other Financial Asset (Refer Note 14) - - 6,810.80 6,810.80
Total Financial Assets 7,141.81 57.41 46,369.06 53,568.28
Carrying amount
(Refer Note 5)
Current investments (Refer Note 9) 7,141.81 - - 7,141.81
Trade Receivables (Refer Note 10) - - 37,450.16 37,450.16
Loans (Refer Note 13) - - 37.82 37.82
Fair Value of Financial Derivatives - - - -
Current Borrowings (refer note 22) - - 8,141.79 8,141.79
Trade Payables (refer note 23) - - 19,506.15 19,506.15
(refer note 19)
Total Financial Liabilities - - 64,615.32 64,615.32
Non-Current Borrowings (refer note 18) - - 21,831.23 21,831.23
Financial Liabilities
Other Financial Liabilities (refer note 24) - - 15,136.15 15,136.15
Fair value hierarchy:
(i) Level 1: quoted prices (unadjusted) in active markets for identical Assets or Liabilities. (ii) Level 2: inputs other than quoted prices included within Level 1 that are observable for the Assets or Liabilities, either directly (i.e., as prices) or indirectly (i.e., derived from prices). (iii) Level 3: inputs for the Assets or Liabilities that are not based on observable market data (unobservable inputs).
The fair value of the Financial Assets and Liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The Group uses the following hierarchy for determining and/or disclosing the fair value of Financial Instruments by valuation techniques:
B. Measurement of Fairvalues and Sensitivity analysis
The cost of unquoted investments included in Level 3 of fair value hierarchy approximate their fair value because there is a wide range of possible fair value measurements and the cost represents estimate of fair value within that range
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
(Rs. in Lakhs)
216
The Group's Board of Directors have overall responsibility for the establishment and oversight of the Group's Risk Management Framework. The Group manages market risk through treasury operations, which evaluates and exercises independent control over the entire process of market risk management. The finance team recommends Risk Management Objectives and Policies. The activities of this operations include management of Cash Resources, hedging of Foreign Currency Exposure, Credit Control and ensuring compliance with market risk limits and policies.
Financial Risk Management Framework
The Group has an effective risk management framework to monitor the risks controls in key business processes. In order to minimise any adverse effects on the bottom line, the Group takes various mitigation measures such as credit control, foreign exchange forward contracts to hedge foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.
The Group has exposure to the following risks arising from Financial Instruments
▪ Liquidity risk ; and
▪ Market risk
▪ Credit risk ;
The Group's principal Financial Liabilities, other than derivatives, comprises of long term and Short Term Borrowings, Trade and Other Payables, and Financial Liabilities. The main purpose of these Financial Liabilities is to finance the Group's operations. The Group's principal Financial Assets include Loans, Trade and Other Receivables, Cash and Cash Equivalents, Other Bank balances and other Financial Assets that derive directly from its operations.
The following table shows a reconciliation from the opening balance to the closing balances for level 1 fair values Reconciliation of level 1 fair values
Purchases 26,003.33 11,249.07
Opening balance on 1 April 2018 7,141.81 2,852.70
Sales (33,145.14) (7,141.16) Closing balance on 31 March 2019 - 7,141.81
Particulars 31 March 2019 31 March 2018
Net change in fair value (unrealised) - 181.20
Particulars 31 March 2019 31 March 2018Opening balance on 1 April 2018 57.41 58.43
Impairment in value of investments - -Purchases - -
Disposal during the year - 1.02Closing balance on 31 March 2019 57.41 57.41
The following table shows a reconciliation from the opening balance to the closing balances for level 3 fair values Reconciliation of level 3 fair values
Financial instrument measured at amortised cost
The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Group does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.
Financial assets / financial liabilities 31 March 2019 31 March 2018
rate swap and cross currency swap valued at fair value through profit and loss) (Refer Note 18)
(Refer Note 8)
Investment in mutual fund at FVTPL (quoted) - 7,141.81 Level 1
Mark to market derivative liabilities (on interest 781.31 - Level 2
Financial instrument measured at fair value Fair value as at Fair value hierarchy
Investment at FVTOCI (unquoted) (Refer Note 8) 57.41 57.41 Level 3
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
(Rs. in Lakhs)
(Rs. in Lakhs)
(Rs. in Lakhs)
217 IND
Other Regions 20,025.54 18,466.98Domestic 23,109.79 18,983.18Particulars 31st March 2019 31st March 2018
Total 43,135.33 37,450.16
Age of Receivables
Past due1–90 days 13,081.01 9,426.51 Neither due nor impaired 27,611.50 23,212.46
More than 180 days 950.96 2,150.41
Particulars 31st March 2019 31st March 2018
Total 43,135.33 37,450.16
Past due 91–180 days 1,491.86 2,660.78
Management believes that the unimpaired amounts that are past due by more than 180 days are still collectible in full, based on historical payment behavior and extensive analysis of customer Credit Risk, including underlying customers’ credit ratings if they are available.
Management estimates that the amount of provision of Rs. 619.91 Lakhs (March 31, 2018: Rs. 226.72 Lakhs) is appropriate.
i. Credit Risk
Credit Risk is the risk that counter party will not meet its obligation leading to a Financial Loss. The Group is exposed to Credit Risk arising from its operating activities primarily from trade receivables and from financing activities primarily relating to parking of surplus funds as Deposits with Banks. The Group considers probability of default upon initial recognition of assets and whether there has been a significant increase in credit risk on an ongoing basis throughtout the reporting period.
The carrying amount of following Financial Assets represents the maximum credit exposure:
Financial instruments and cash deposit
Credit risk from balances with banks and financial institutions is managed by the Group treasury department. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.
Trade Receivables
The Sales Department has established a Credit Policy under which each new customer is analysed individually for creditworthiness before the Group standard payment and delivery terms and conditions are offered. The Group review includes external ratings, if they are available, and in some cases bank references. Sale limits are established for each customer and reviewed periodically. Any sales exceeding those limits require approval from the Board of Directors.
Trade Receivables of the Group are typically unsecured ,except to the extent of the security deposits received from the customers or financial guarantees provided by the market organizers in the business. Credit risk is managed through credit approvals and periodic monitoring of the creditworthiness of customers to which Group grants credit terms in the normal course of business. The Group performs ongoing credit evaluations of its customers’ financial condition and monitors the creditworthiness of its customers to which it grants credit terms in the normal course of business. The allowance for impairment of Trade receivables is created to the extent and as and when required, based upon the expected collectability of accounts Receivables. The Group evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.
The Group measures the expected credit loss of trade receivables and loan from individual customers based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends.
The maximum exposure to credit risk for trade receivables by geographic region was as follows:
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
(Rs. in Lakhs)
(Rs. in Lakhs)
218
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk, and other price risk such as equity price risk. Financial instruments affected by market risk include loans and borrowings, deposits, FVTOCI and amortised cost investments and derivative financial instruments.
The currency profile of financial assets and financial liabilities as at March 31, 2019 and March 31, 2018 are as below:
ii. Market Risk
Foreign Currency Risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Group exposure to the risk of changes in foreign exchange rates relates primarily to the Group operating activities (when revenue or expense is denominated in a foreign currency).
The Group manages its foreign currency risk by hedging transactions that are expected to occur within a maximum 12-month period for hedges of actual sales and purchases and 12-month period for foreign currency loans. When a derivative is entered into for the purpose of being a hedge, the Group negotiates the terms of those derivatives to match the terms of the hedged exposure. For hedges of forecast transactions the derivatives cover the period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency.
Exposure to Currency Risk
Financial instruments – Fair Values and Risk Management (continued)
The Group exposure to foreign currency risk at the end of the reporting period expressed in Rs. are as follows
Term Loan
Long Term Borrowings 45061.50 - 13,981.05 31,080.45
Trade and Other Receivables 43,135.33 16,533.20 3717.06 22,885.07
Financial Assets
Total 61,939.07 16533.20 3,717.06 22,885.07
Short Term Borrowings 20,193.94 1,210.21 8,588.60 18,983.73
Other Non-Current Financial 781.31 - - 781.31
Liabilities
Particulars March 31, 2019 March 31, 2019 March 31, 2019 March 31, 2019
Financial Liabilities
Trade and Other Payables 25,193.51 5,646.50 17.98 19,529.03
Other Current Financial Liabilities 22,171.09 308.32 8.74 21,854.03
Less : Foreign Currency Hedged (13981.05) - (13981.05) -
Total USD Euro INR
Total 99,420.30 7,165.03 8,615.32 60,366.79
(Rs. in Lakhs)
(Rs. in Lakhs)
Selling Foreign Currency
Trade and Other Receivables 37,450.16 11,665.25 4,243.16 21,541.75
Less - Forward Contract For (14,227.60) (10,590.94) (3,636.66) -
Particulars March 31, 2018 March 31, 2018 March 31, 2018 March 31, 2018 Total USD Euro I NR
Financial Assets
Total 39,340.68 1,074.31 606.50 21,541.75
Short Term Borrowings 8,141.79 1,955.25 - 6,186.54
Other Current Financial 15,136.15 76.53 15.59 15,044.03
Liabilities
Trade and Other Payables- 19,506.15 2,299.94 27.63 17,178.58
Financial Liabilities
Total 42,784.09 4,331.72 43.22 38,409.15
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
219 IND
Sensitivity analysis
A reasonably possible strengthening (weakening) of the Indian Rupee against US dollars and Euro at March 31 would have affected the measurement of financial instruments denominated in US dollars and Euro and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.
(Rs. in Lakhs)
31st March 2019
USD 468.41 (468.41) 304.73 (304.73)
Profit or (Loss) Equity, net of tax
Effect in INR Strengthening Weakening Strengthening Weakening
5% movement
EUR (244.91) 244.91 (159.33) 159.33
Profit or (Loss) Equity, net of tax
Effect in INR Strengthening Weakening Strengthening Weakening
5% movement
'March 31, 2018
EUR 28.16 (28.16) 18.42 (18.42)
USD (162.87) 162.87 (106.50) 106.50
(Rs. in Lakhs)
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
220
Interest Rate Risk
Financial instruments – Fair Values and Risk Management (continued)
Group’s Interest Rate Risk arises from borrowings obligations. Borrowings issued exposes to fair value interest rate risk. The interest rate profile of the Group’s interest-bearing financial instruments as reported to the management of the Group is as follows.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s long-term debt obligations with floating interest rates. The Group’s manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings
Exposure to Interest Rate Risk
Non Current - Borrowings 45,061.50 21, 831.23
Current portion of Long Term Borrowings 6,368.19 8,608.77
Variable-rate instruments 31st March 2019 31st March 2018
Total 51,429.69 30440.00
Cash Flow sensitivity analysis for variable-rate instruments
A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased /(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.
Current portion of Long Term (86.09) 86.09 (56.29) 56.29
31st March 2019
Total (514.30) 514.30 (334.58) 334.58
Non Current - Borrowings (218.31) 218.31 (142.76) 142.76
Borrowings
Total (304.40) 304.40 (199.05) 199.05
100 bp increase 100 bp decrease 100 bp increase 100 bp decrease
Particulars Profit or (Loss) Equity, Net of Tax
Non Current - Borrowings (450.62) 450.62 (293.15) 293.15
Borrowing
Current portion of Long Term (63.68) 63.68 (41.43) 41.43
31st March 2018
The Group’s listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The investment in listed equity securities are not significant.
Equity Price Risk:
(Rs. in Lakhs)
The Group manages liquidity risk by maintaining adequate reserves, by continuously monitoring forecast and actual cash
flows and matching the maturity profiles of the financial assets and liabilities. The table below summarises the remaining
contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include
estimated interest payments and exclude the impact of netting agreements.
Exposure to Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage
to the Group’s reputation.
iii. Liquidity Risk
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
221 IND
Contractual Cash Flows
Carrying amount
Total 1 Year or Less
1-2 years 2-5 years More than 5 years
st31 March, 2019
Standard Chartered Bank 13,981.05 13,981.05 - 2,796.21 11,184.84 - Working Capital loans from banks 20,193.94 20,193.94 20,193.94 - - -
SBI Bank Limited 3,828.97 3,828.96 2,034.85 1,044.11 750.00 -
Fedral Bank Limited 6,803.00 6,803.00 - 1,250.00 5,553.00 -
Total 37,448.64 37,448.63 6,368.19 8,059.65 2,3020.79 -
Non-Derivative Financial Liabilities
AXIS Bank Limited 7,666.67 7,666.67 1,533.34 1,533.33 4,600.00 -
Foreign Currency Term Loans from banks
HDFC Bank Limited 17950.00 17950.00 2,200.00 3,632.21 12,117.79 -
HDFC Bank Limited 1,200.00 1,200.00 600.00 600.00 - -
Trade and Other Payables 25,193.51 25,193.51 25,193.51 - - -
Rupee Term Loans from Banks
(Rs. in Lakhs)
Contractual Cash Flows
Carrying amount
Total 1 Year or Less
1-2 years 2-5 years More than 5 years
st31 March, 2018
Non-Derivative Financial Liabilities
Rupee Term Loans from Banks
ICICI Bank Limited 13,992.74 13,992.74 5,242.74 2,500.00 6,250.00 -
HDFC Bank Limited 1,900.00 1,900.00 610.00 620.00 670.00 -
SBI Bank Limited 5,847.26 5,847.26 1,972.26 2,050.00 1,825.00 -
AXIS Bank Limited 8,700.00 8,700.00 725.00 1,450.00 6,525.00 -
Total 30,440.00 30,440.00 8,550.00 6,620.00 15,270.00 -
Trade and Other Payables 19,506.15 19,506.15 19,506.15 - - -
Working Capital loans from banks 8,141.79 8,141.79 8,141.79 - - -
(Rs. in Lakhs)
The gross inflows/(outflows) disclosed in the above table represent the contractual undiscounted cash flows relating to
derivative financial liabilities held for risk management purposes and which are not usually closed out before contractual
maturity. The disclosure shows net cash flow amounts for derivatives that are net cash-settled and gross cash inflow and
outflow amounts for derivatives that have simultaneous gross cash settlement
In order to avoid excessive concentrations of risk, the policies and procedures include specific guidelines to focus on the
maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.
Selective hedging is used within the Group to manage risk concentrations at both the relationship and industry levels
Excessive risk concentration
Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same
geographical region, or have economic features that would cause their ability to meet contractual obligations to be
similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of
the Group’s performance to developments affecting a particular industry
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
222
43 (
A)
- In
form
ati
on
ab
ou
t S
ub
sid
iari
es
The G
rou
p’s
Subsi
dia
ries
at 31 M
arc
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019 a
re s
et
out
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have
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ly o
f equity
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at are
held
direct
ly b
y th
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roup,
and t
he p
roport
ion o
f ow
ners
hip
inte
rest
s held
eq
ua
ls t
he
vo
ting
rights
held
by
the g
roup. T
he c
ountr
y of in
corp
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tion o
r re
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tratio
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als
o t
heir p
rinci
pal p
lace
of
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ness.
st
No
tes t
o t
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on
so
lid
ate
d F
inan
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l S
tate
men
ts F
or
Th
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ear
En
ded
31
Marc
h 2
019
&
Che
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als
M
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inec
hem
Lim
ited
Indi
a 57
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57
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42
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42
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M
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(R
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US
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to M
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Trad
ing
of
Nam
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Ent
ity31
st M
arch
201
931
st M
arch
201
931
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arch
201
831
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201
8
Plac
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bus
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Cou
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of
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Prin
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non-
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43 (
B)
-KE
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F S
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NO
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TR
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ter-
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st
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31
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31
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(Rs.
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P
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(Rs
. in
La
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223 IND
Net
Ass
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(To
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iab
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Sh
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in P
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31
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201
9 1.
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M
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31
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8
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2
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8
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M
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Du
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31
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201
8 20
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2
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6.75
27
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B
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31
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31st
Mar
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019
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-
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(
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0
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(
4.05
)
31
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201
8 -0
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31
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53
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1
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31
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M
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31
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22.
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(38
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31
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201
8 0.
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5
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2.
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4
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(i)
Ind
ian
P
T M
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s In
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31
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201
9 12
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1
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3.82
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4
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31
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arch
201
8 63
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6
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9.84
32
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57
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7
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(ii)
F
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M
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.
31
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201
8 0.
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4
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3
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%
58.
49
-0.4
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(0.
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0.25
%
58.
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To
tal
31
st M
arch
201
9 10
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2
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31
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arch
201
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09
31
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arch
201
9 56
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6
4,83
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31
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43 (
C)
- A
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L IN
FO
RM
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IRE
D B
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ED
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Su
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Cash
Flo
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st
st
31
Marc
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019
31
Ma
rch
, 2
01
8
C
ash
flo
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from
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The Group monitors capital using a ratio of ‘adjusted net debt’ to ‘adjusted equity’. For this purpose, adjusted net debt is
defined as total liabilities, comprising interest-bearing loans and borrowings and obligations under finance leases, less
cash and cash equivalents. Adjusted equity comprises all components of equity.
Capital includes equity attributable to the equity holders to ensure that it maintains an efficient capital structure and healthy
capital ratios in order to support its business and maximise shareholder value. The Group manages its capital structure
and makes adjustments to it, in light of changes in economic conditions or its business requirements. To maintain or adjust
the capital structure, the Group Company may adjust the dividend payment to shareholders, return capital to shareholders
or issue new shares. No changes were made in the objectives, policies or processes during the year ended March 31,
2019 and March 31, 2018.
44. Capital Management
Adjusted Net Debt to Adjusted Equity Ratio 0.58 0.44
(Rs. in Lakhs) PARTICULARS
Total Interest bearing Liabilities 71,623.63 38,581.79
Adjusted Equity 1,00,360 87,054
Total Equity 1,00,360 87,054
Less : Cash and Cash Equivalent 13,329.63 425.50
31st March 2019 31st March 2018
Adjusted Net Debt 58,294.00 38,156.29
45. Changes in stake of Non-Controlling Interest (NCI) – Acquisition and Issue of shares and merger of subsidiaries –
Meghmani Finechem Limited (MFL) and Meghmani Agrochemicals Private Limited (MACPL)
The Board of Directors of subsidiary company Meghmani Finechem Limited in their meeting held on 19th May 2018
approved the Scheme of Arrangement in the nature of Amalgamation of Meghmani Agrochemical Private Limited
('MACPL') with the MFL ('the Scheme'). MFL applied to National Company Law Tribunal ("NCLT") for approval of the
Scheme of Arrangement. The Scheme was approved by NCLT on 11th February 2019. The amalgamation was effective
from the date of the Order (i.e effective date).
Pursuant to the Scheme of Amalgamation, MFL issued 210,919,871 8% Optionally Convertible / Redeemable
Preference Shares (OCRPS) of Rs. 10 each amounting to Rs 21,091.99 lakhs and 221,708,925 8% Non-Convertible
Redeemable Preference Shares (NCRPS) of Rs. 10 each amounting to Rs 22,170.89 lakhs to the Company against its the
investment in Equity and Preference Shares issued by MACPL.
The aforesaid NCRPS were issued in lieu of holding of IFC which was acquired by MACPL before the amalgamation.
During the current year, MFL and MACPL entered into Share Sale Agreement dated 26 April 2018, accordingly IFC sold its
equity stake in the Company to MACPL. The agreement also allowed the Promoters to exercise their rights of the
Promoters Warrants in accordance with the terms of the Share Subscription Agreement between the Company,
Promoters and IFC at Rs. 30 each. The promotors exercised the warrant option rights conferred. Post-merger and on
cancellation of investment and shares in MFL, the Group’s share in MFL is 57.16%.
Changes in stake of Non-Controlling Interest (NCI):
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
225 IND
The Group evaluates events and transactions that occur subsequent to the balance sheet date but prior to approval of
financial statement to determine the necessity for recognition and/or reporting of any of these events and transactions in
the financial statements. As of 24th May 2019 there were no material subsequent events to be recognized or reported that
are not already previously disclosed.
47. Previous year figures have been regrouped wherever necessary to make them comparable with those of the current year
46 Events occurred after the Balance Sheet date
per Sukrut Mehta G S Chahal J.M.Patel - Executive Chairman (DIN - 00027224)
Chartered Accountants (CIN NO-24110GJ1995PLC024052)
Date : 24th May 2019 Date : 24th May 2019
K. D. Mehta
AS PER OUR REPORT OF EVEN DATE For and on behalf of the Board of Directors of
FOR S R B C & CO LLP Meghmani Organics Limited
ICAI Firm Regn. No. 324982E / E300003
Partner Chief Financial Officer A.N.Soparkar - Managing Director (DIN - 00027480)
Membership No : 101974 N.M.Patel - Managing Director (DIN - 00027540)
Company Secretary
Place : Ahmedabad Place : Ahmedabad
***
stNotes to the Consolidated Financial Statements For The Year Ended 31 March 2019
226
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227 IND
NOTICE OF ANNUAL GENERAL MEETING
1. To receive, consider, and adopt:
ORDINARY BUSINESS:
“RESOLVED THAT in accordance with the provisions of Section 148 (3) of the Companies Act, 2013 read with Rule 14 of
the Companies (Audit and Auditors) Rules, 2014 and other applicable provisions, if any, of the Companies Act, 2013 M/s.
Kiran J Mehta & Co. Cost Accountants Ahmedabad (having Firm’s Registration No. 000025), be and is hereby appointed as
Cost Auditor of the Company for conducting the audit of the cost records of the Company for the Financial Year 2019-2020
at a remuneration of Rs. 2,50,000/- (Rupees Two Lakhs Fifty Thousand only) per annum (apart from reimbursement of
pocket expenses incurred for the purpose of Audit).”
SPECIAL BUSINESS:-
“RESOLVED THAT pursuant to the provisions of Section 196, 197 and 188 of the Companies Act, 2013 read with Schedule-
V and other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014 (including any statutory modification amendments or re-enactment thereto for the
time being in force) and subject to approval of the shareholders Mr. Jayantilal Patel (DIN : 00027224) be and is hereby re-
appointed as Executive Chairman of the Company, for a period of Five years from 01 April, 2019 to 31 March, 2024 on the
terms and conditions as to remuneration as set out herein below:-
4. To Consider and if thought fit to pass the following resolution with or without modification as Special Resolution: -
(ii) the Audited Consolidated Financial Statement of the Company for the financial year ended on 31st March, 2019
together with report of Auditors thereon.
NOTICE IS hereby given that Twenty Fifth Annual General Meeting of the Company will be held on Thursday, 25th July, 2019 at
10.00 a.m. at H T Parekh Convention Centre, Ahmedabad Management Association (AMA), ATIRA Campus, Dr. Vikram Sarabhai
Marg, Vastrapur, Ahmedabad -380 015 to transact the following businesses:-
(i) the Audited Standalone Financial Statement of the Company for the financial year ended 31st March, 2019 together
with report of the Board of Directors and Auditors thereon and
2. To confirm the payment of Interim Dividend paid on Equity Shares and to declare a Final Dividend on Equity Shares for the
financial year 2018-19.
SPECIAL BUSINESS:-
3. To Consider and if thought fit to pass the following resolution with or without modification as Ordinary Resolution:-
APPOINTMENT OF COST AUDITOR OF THE COMPANY FOR FY 2019-20
“RESOLVED FURTHER THAT the Board of Directors of the Company (including any Committee thereof), be and is hereby
authorized to do all acts and take all such steps as may be necessary, proper or expedient to give effect to this resolution.”
REAPPOINTMENT OF MR. JAYANTILAL PATEL AS EXECUTIVE CHAIRMAN OF THE COMPANY
MEGHMANI ORGANICS LIMITEDCIN L24110GJ1995PLC024052
Registered Office: Plot No. 184, (Phase II), G.I.D.C. Industrial Estate, Vatva, Ahmedabad - 382 445.
228
NOTICE OF ANNUAL GENERAL MEETING
Perquisites In addition to the salary and performance bonus, the following perquisites mentioned in
Category A, Category B and Category C shall be allowed to Mr. Jayantilal Patel - the Executive
Chairman and the total value of perquisites shall be restricted to an amount equal to the annual salary.
Performance Bonus Up to 10% of the Net Profits of the Company (as per the Act) or such other quantum of the Net
Profits of the Company as may be approved by the Board of Directors at its discretion for each
financial year.
Basic Salary Rs. 7,50,000 /- per month (with increments as the Board may decide from time to time)
Category A
Club Fee The Company shall pay and/or Reimburse Fees and expenses (excluding Admission and Life
Membership Fees) of maximum two clubs.
Mediclaim and The Company shall pay Mediclaim and Personal Accident Insurance Premium as per the
Personal Accident rules of the Company.
Insurance Premium
Leave Travel For Self and Family in accordance with the Policy of the Company. Family means the spouse,
Assistance the dependent children and dependent parents.
Category C
Car The Company shall provide a car with driver at the entire cost of the Company for personal
use and office work. The Company shall bill use of car for private purposes.
Entertainment and all Reimbursement of entertainment and all other expenses actually incurred in the course of
Other Expenses business of the Company
Communication The Company shall provide communication devices such as telephones, audio and video
Facility conference facilities etc., at the residence telephone at the entire cost of the Company.
Personal long distance calls be billed by the Company.
No Sitting Fees No sitting fee will be paid for attending meetings of the Board or Committee thereof
The remuneration referred to above is subject to provisions as prescribed under the Act, Rules and in Schedule V of the
Companies Act, 2013, as amended from time to time. This includes amendment to maximum remuneration issued by
Ministry of Corporate Affairs vide notification dated 12th September, 2018.
In case of inadequacy of Profit / Loss during the period of appointment, the remuneration payable to Mr. Jayantilal
Patel – Executive Chairman, shall be as per limit prescribed in Schedule V of the Companies Act, 2013 or any
modification(s) or re-enactment(s) thereto.”
In the event of cessation of office during any financial year, a rateable proportion of the aforesaid remuneration shall be
payable by the Company.
Mr. Jayantilal Patel shall, subject to the superintendence, control and direction of the Board of Directors, manage and
conduct the business and affairs of the Company relating to International Marketing and Policy matter of the Company.
He shall not be paid any sitting fee for attending meetings of the Board or Committee thereof.
Category B
Gratuity The Company shall pay gratuity at the rate not exceeding half a month's salary for each
completed year of service subject to maximum amount permissible under the Payment of
Gratuity Act, 1972 from time to time.
Provident Fund The Company shall make contribution to Provident Fund, Superannuation Fund or Annuity
fund (as per the rules of the Company) to the extent these either singly or put together are
not taxable under the Income Tax Act.
229 IND
5. To Consider and if thought fit to pass the following resolution with or without modification as Special Resolution: -
“RESOLVED FURTHER THAT pursuant to Section 197 (9) of the Companies Act, 2013 in case of receipt of remuneration, in
excess of the specified threshold, Mr. Jayantilal Patel - Executive Chairman, shall refund the amount within two years or
such lesser period as may be allowed by the Company, and until such sum is refunded, hold it in trust for the Company. The
approval of Banks, Financial Institutions, Non-Convertible Debenture holders or Secured Creditors will be required, in case
the Company has defaulted in payment of their dues, the Company is allowed to waive such refundable amount by passing a
Special Resolution within TWO YEARS from the date the sum becomes refundable.”
“RESOLVED FURTHER THAT the Board of Directors in their discretion be and is hereby authorized to increase, alter, and
vary the Salary, Perquisites and Performance Bonus in such manner as the Board in absolute discretion deem fit and
acceptable to Mr. Jayantilal Patel - Executive Chairman subject to the provisions of Section 197 and 198 read with
Schedule-V of the Companies Act, 2013 and any amendments /modifications, enactment from time to time.”
“RESOLVED FURTHER THAT in the event of any re-enactment or modification or re-codification of the Companies Act,
2013 this Special Resolution shall remain in force and the reference to various provisions of the Companies Act shall be
deemed to be substituted by the corresponding provisions of the new act or amendments thereto or the Rules and
Notifications issued thereunder."
"RESOLVED THAT pursuant to the provisions of Section 196, 197 and 188 of the Companies Act, 2013 read with Schedule V
and other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 (including any statutory modification amendments or re-enactment thereto for the time
being in force) and subject to approval of the members Mr. Ashish Soparkar (DIN : 00027480) be and is hereby re-
appointed as Managing Director of the Company, for a period of Five years from 01 April, 2019 to 31 March, 2024 on the
terms and conditions as to remuneration as set out herein below:-
"RESOLVED FURTHER THAT the Board of Directors and the Company Secretary of the Company be and are hereby
individually authorized to do all such acts, deeds, matters and things as in its absolute discretion, as may be considered
necessary, desirable or expedient and to settle any question, or doubt that may arise in relation thereto and the Board of
Directors shall have absolute powers to decide breakup of the remuneration, restructure remuneration within the maximum
permissible limit and in order to give effect to this resolution or as may be considered by it to be expedient in the best interest
of the Company.”
REAPPOINTMENT OF MR. ASHISH SOPARKAR AS MANAGING DIRECTOR OF THE COMPANY
NOTICE OF ANNUAL GENERAL MEETING
Performance Bonus Up to 10% of the Net Profits of the Company (as per the Act) or such other quantum of the Net
Profits of the Company as may be approved by the Board of Directors at its discretion for each
financial year
Basic Salary Rs. 7,50,000 /- per month (with increments as the Board may decide from time to time)
Perquisites In addition to the salary and performance bonus, the following perquisites mentioned in
Category A, Category B and Category C shall be allowed to Mr. Ashish Soparkar – Managing
Director and the total value of perquisites shall be restricted to an amount equal to the annual salary.
Category A
Mediclaim and The Company shall pay Mediclaim and Personal Accident Insurance Premium as per the
Personal Accident rules of the Company.
Insurance Premium
Club Fee The Company shall pay and/or Reimburse Fees and expenses (excluding Admission and Life
Membership Fees) of maximum two clubs.
Leave Travel For Self and Family in accordance with the Policy of the Company. Family means the spouse,
Assistance the dependent children and dependent parents.
230
NOTICE OF ANNUAL GENERAL MEETING
Category C
Communication The Company shall provide communication devices such as telephones, audio and video
Facility conference facilities etc., at the residence telephone at the entire cost of the Company.
Personal long distance calls be billed by the Company.
Entertainment and all Reimbursement of entertainment and all other expenses actually incurred in the course of
Other Expenses business of the Company
Car The Company shall provide a car with driver at the entire cost of the Company for personal
use and office work. The Company shall bill use of car for private purposes.
No Sitting Fees No sitting fee will be paid for attending meetings of the Board or Committee thereof
Category B
The remuneration referred to above is subject to provisions as prescribed under the Act, Rules and in Schedule V of the
Companies Act, 2013, as amended from time to time. This includes amendment to maximum remuneration issued by
Ministry of Corporate Affairs vide notification dated 12th September, 2018.
In case of inadequacy of Profit /Loss during the period of appointment, the remuneration payable to Mr. Ashish
Soparkar – Managing Director shall be as per limit prescribed in Schedule V of the Companies Act, 2013 or any
modification(s) or re-enactment(s) thereto.”
Mr. Ashish Soparkar – Managing Director shall, subject to the superintendence, control and direction of the Board of
Directors, manage and conduct the business and affairs of the Company relating to Finance and Corporate Affairs. He
shall not be paid any sitting fee for attending meetings of the Board or Committee thereof.
In the event of cessation of office during any financial year, a ratable proportion of the aforesaid remuneration shall be
payable by the Company.
“RESOLVED FURTHER THAT the Board of Directors in their discretion be and is hereby authorized to increase, alter,
and vary the Salary, Perquisites and Performance Bonus in such manner as the Board in absolute discretion deem fit and
acceptable to Mr. Ashish Soparkar – Managing Director subject to the provisions of Section 197 and 198 read with
Schedule V of the Companies Act, 2013 and any amendments /modifications, enactment from time to time.”
“RESOLVED FURTHER THAT pursuant to Section 197 (9) of the Companies Act, 2013 in case of receipt of
remuneration, in excess of the specified threshold, Mr. Ashish Soparkar – Managing Director, shall refund the amount
within two years or such lesser period as may be allowed by the Company, and until such sum is refunded, hold it in trust
for the Company. The approval of Banks, Financial Institutions, Non-Convertible Debenture holders or Secured
Creditors will be required, in case the Company has defaulted in payment of their dues, the Company is allowed to waive
such refundable amount by passing a Special Resolution within TWO YEARS from the date the sum becomes
refundable.”
“RESOLVED FURTHER THAT in the event of any re-enactment or modification or re-codification of the Companies Act,
2013 this Special Resolution shall remain in force and the reference to various provisions of the Companies Act shall be
deemed to be substituted by the corresponding provisions of the new act or amendments thereto or the Rules and
Notifications issued thereunder."
Provident Fund The Company shall make contribution to Provident Fund, Superannuation Fund or Annuity
fund (as per the rules of the Company) to the extent these either singly or put together are
not taxable under the Income Tax Act.
Gratuity The Company shall pay gratuity at the rate not exceeding half a month's salary for each
completed year of service subject to maximum amount permissible under the Payment of
Gratuity Act, 1972 from time to time.
231 IND
"RESOLVED FURTHER THAT the Board of Directors and the Company Secretary of the Company be and are hereby
individually authorized to do all such acts, deeds, matters and things as in its absolute discretion, as may be considered
necessary, desirable or expedient and to settle any question, or doubt that may arise in relation thereto and the Board of
Directors shall have absolute powers to decide breakup of the remuneration, restructure remuneration within the maximum
permissible limit and in order to give effect to this resolution or as may be considered by it to be expedient in the best interest
of the Company.
REAPPOINTMENT OF MR. NATWARLAL PATEL AS MANAGING DIRECTOR OF THE COMPANY
"RESOLVED THAT pursuant to the provisions of Section 196, 197 and 188 of the Companies Act, 2013 read with Schedule V
and other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 (including any statutory modification amendments or re-enactment thereto for the time
being in force) and subject to approval of the members Mr. Natwarlal Patel (DIN: 00027540) be and is hereby re-appointed
as Managing Director of the Company, for a period of Five years from 01 April, 2019 to 31 March, 2024 on the terms and
conditions as to remuneration as set out herein below:-
6. To Consider and if thought fit to pass the following resolution with or without modification as Special Resolution: -
Basic Salary Rs. 7,50,000 /- per month (with increments as the Board may decide from time to time)
Performance Bonus Up to 10% of the Net Profits of the Company (as per the Act) or such other quantum of the Net
Profits of the Company as may be approved by the Board of Directors at its discretion for each
financial year
Perquisites In addition to the salary and performance bonus, the following perquisites mentioned in
Category A, CategoryB and Category C shall be allowed to Mr. Natwarlal Patel – Managing
Director and the total value of perquisites shall be restricted to an amount equal to the annual salary.
Category A
Club Fee The Company shall pay and/or Reimburse Fees and expenses (excluding Admission and Life
Membership Fees) of maximum two clubs.
Mediclaim and The Company shall pay Mediclaim and Personal Accident Insurance Premium as per the
Personal Accident rules of the Company.
Insurance Premium
Leave Travel For Self and Family in accordance with the Policy of the Company. Family means the spouse,
Assistance the dependent children and dependent parents.
Category C
Car The Company shall provide a car with driver at the entire cost of the Company for personal
use and office work. The Company shall bill use of car for private purposes.
Communication The Company shall provide communication devices such as telephones, audio and video
Facility conference facilities etc., at the residence telephone at the entire cost of the Company.
Personal long distance calls be billed by the Company.
Entertainment and all Reimbursement of entertainment and all other expenses actually incurred in the course of
Other Expenses business of the Company
No Sitting Fees No sitting fee will be paid for attending meetings of the Board or Committee thereof
Category B
Provident Fund The Company shall make contribution to Provident Fund, Superannuation Fund or Annuity
fund (as per the rules of the Company) to the extent these either singly or put together are
not taxable under the Income Tax Act.
Gratuity The Company shall pay gratuity at the rate not exceeding half a month's salary for each
completed year of service subject to maximum amount permissible under the Payment of
Gratuity Act, 1972 from time to time.
NOTICE OF ANNUAL GENERAL MEETING
232
NOTICE OF ANNUAL GENERAL MEETING
In case of inadequacy of Profit /Loss during the period of appointment, the remuneration payable to Mr. Natwarlal
Patel – Managing Director shall be as per limit prescribed in Schedule V of the Companies Act, 2013 or any
modification(s) or re-enactment(s) thereto.”
Mr. Natwarlal Patel – Managing Director shall, subject to the superintendence, control and direction of the Board of
Directors, manage and conduct the business and affairs of the Company relating to technical matters of Agrochemical
Divisions as well as the International and Domestic Marketing of Agrochemical Products. He shall not be paid any
sitting fee for attending meetings of the Board or Committee thereof.
In the event of cessation of office during any financial year, a ratable proportion of the aforesaid remuneration shall be
payable by the Company.
The remuneration referred to above is subject to provisions as prescribed under the Act, Rules and in Schedule V of the
Companies Act, 2013, as amended from time to time. This includes amendment to maximum remuneration issued by
Ministry of Corporate Affairs vide notification dated 12th September, 2018.
“RESOLVED FURTHER THAT the Board of Directors in their discretion be and is hereby authorized to increase, alter,
and vary the salary, perquisites and Performance Bonus in such manner as the Board in absolute discretion deem fit and
acceptable to Mr. Natwarlal Patel – Managing Director subject to the provisions of Section 197 and 198 read with
Schedule V of the Companies Act, 2013 and any amendments /modifications, enactment from time to time.”
"RESOLVED THAT pursuant to the provisions of Section 196, 197 and 188 of the Companies Act, 2013 read with
Schedule V and other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification amendments or re-enactment
thereto for the time being in force) and subject to approval of the members Mr. Ramesh Patel (DIN : 00027637) be and is
hereby re-appointed as Executive Director of the Company, for a period of Five years from 01 April, 2019 to 31 March,
2024 on the terms and conditions as to remuneration as set out herein below:-
“RESOLVED FURTHER THAT pursuant to Section 197 (9) of the Companies Act, 2013 in case of receipt of remuneration, in
excess of the specified threshold, Mr. Natwarlal Patel – Managing Director, shall refund the amount within two years or
such lesser period as may be allowed by the Company, and until such sum is refunded, hold it in trust for the Company. The
approval of Banks, Financial Institutions, Non-Convertible Debenture holders or Secured Creditors will be required, in case
the Company has defaulted in payment of their dues, the Company is allowed to waive such refundable amount by passing a
Special Resolution within TWO YEARS from the date the sum becomes refundable.”
“RESOLVED FURTHER THAT in the event of any re-enactment or modification or re-codification of the Companies Act,
2013 this Special Resolution shall remain in force and the reference to various provisions of the Companies Act shall be
deemed to be substituted by the corresponding provisions of the new act or amendments thereto or the Rules and
Notifications issued thereunder."
"RESOLVED FURTHER THAT the Board of Directors and the Company Secretary of the Company be and are hereby
individually authorized to do all such acts, deeds, matters and things as in its absolute discretion, as may be considered
necessary, desirable or expedient and to settle any question, or doubt that may arise in relation thereto and the Board of
Directors shall have absolute powers to decide breakup of the remuneration, restructure remuneration within the
maximum permissible limit and in order to give effect to this resolution or as may be considered by it to be expedient in the
best interest of the Company.”
7. To Consider and if thought fit to pass the following resolution with or without modification as Special Resolution: -
REAPPOINTMENT OF MR. RAMESH PATEL AS EXECUTIVE DIRECTOR OF THE COMPANY
Basic Salary Rs. 7,50,000 /- per month (with increments as the Board may decide from time to time)
Performance Bonus Up to 10% of the Net Profits of the Company (as per the Act) or such other quantum of the Net
Profits of the Company as may be approved by the Board of Directors at its discretion for each
financial year.
Perquisites In addition to the salary and performance bonus, the following perquisites mentioned in
Category A, CategoryB and Category C shall be allowed to Mr. Ramesh Patel – Executive
Director and the total value of perquisites shall be restricted to an amount equal to the annual salary.
233 IND
NOTICE OF ANNUAL GENERAL MEETINGCategory A
Club Fee The Company shall pay and/or Reimburse Fees and expenses (excluding Admission and
Life Membership Fees) of maximum two clubs.
Mediclaim and The Company shall pay Mediclaim and Personal Accident Insurance Premium as per the
Personal Accident rules of the Company.
Insurance Premium
Leave Travel For Self and Family in accordance with the Policy of the Company. Family means the
Assistance spouse, the dependent children and dependent parents.
Category C
Entertainment and all Reimbursement of entertainment and all other expenses actually incurred in the course of
Other Expenses business of the Company
Communication The Company shall provide communication devices such as telephones, audio and video
Facility conference facilities etc., at the residence telephone at the entire cost of the Company.
Personal long distance calls be billed by the Company.
No Sitting Fees No sitting fee will be paid for attending meetings of the Board or Committee thereof
Car The Company shall provide a car with driver at the entire cost of the Company for personal
use and office work. The Company shall bill use of car for private purposes.
Category B
Gratuity The Company shall pay gratuity at the rate not exceeding half a month's salary for each
completed year of service subject to maximum amount permissible under the Payment of
Gratuity Act, 1972 from time to time.
Provident Fund The Company shall make contribution to Provident Fund, Superannuation Fund or Annuity
fund (as per the rules of the Company) to the extent these either singly or put together are
not taxable under the Income Tax Act.
In case of inadequacy of Profit /Loss during the period of appointment, the remuneration payable to Mr. Ramesh Patel
– Executive Director shall be as per limit prescribed in Schedule V of the Companies Act, 2013 or any modification(s)
or re-enactment(s) thereto.”
The remuneration referred to above is subject to provisions as prescribed under the Act, Rules and in Schedule V of the
Companies Act, 2013, as amended from time to time. This includes amendment to maximum remuneration issued by
Ministry of Corporate Affairs vide notification dated 12th September, 2018.
In the event of cessation of office during any financial year, a ratable proportion of the aforesaid remuneration shall be
payable by the Company.
Mr. Ramesh Patel – Executive Director shall, subject to the superintendence, control and direction of the Board of
Directors, manage and conduct the business and affairs of the Company relating to overseeing purchases made by the
Company, liasioning between the Company and Government authorities. He shall not be paid any sitting fee for
attending meetings of the Board or Committee thereof.
“RESOLVED FURTHER THAT pursuant to Section 197 (9) of the Companies Act, 2013 in case of receipt of remuneration, in excess of the specified threshold, Mr. Ramesh Patel – Executive Director, shall refund the amount within two years or such lesser period as may be allowed by the Company, and until such sum is refunded, hold it in trust for the Company. The approval of Banks, Financial Institutions, Non-Convertible Debenture holders or Secured Creditors will be required, in case the Company has defaulted in payment of their dues, the Company is allowed to waive such refundable amount by passing a Special Resolution within TWO YEARS from the date the sum becomes refundable.”
“RESOLVED FURTHER THAT the Board of Directors in their discretion be and is hereby authorized to increase, alter, and vary the salary, perquisites and Performance Bonus in such manner as the Board in absolute discretion deem fit and acceptable to Mr. Ramesh Patel – Executive Director subject to the provisions of Section 197 and 198 read with Schedule V of the Companies Act, 2013 and any amendments /modifications, enactment from time to time.”
234
Category C
Communication The Company shall provide communication devices such as telephones, audio and video
Facility conference facilities etc., at the residence telephone at the entire cost of the Company.
Personal long distance calls be billed by the Company.
Car The Company shall provide a car with driver at the entire cost of the Company for personal
use and office work. The Company shall bill use of car for private purposes.
NOTICE OF ANNUAL GENERAL MEETING
“RESOLVED FURTHER THAT in the event of any re-enactment or modification or re-codification of the Companies Act, 2013 this Special Resolution shall remain in force and the reference to various provisions of the Companies Act shall be deemed to be substituted by the corresponding provisions of the new act or amendments thereto or the Rules and Notifications issued thereunder."
"RESOLVED FURTHER THAT the Board of Directors and the Company Secretary of the Company be and are hereby individually authorized to do all such acts, deeds, matters and things as in its absolute discretion, as may be considered necessary, desirable or expedient and to settle any question, or doubt that may arise in relation thereto and the Board of Directors shall have absolute powers to decide breakup of the remuneration, restructure remuneration within the maximum permissible limit and in order to give effect to this resolution or as may be considered by it to be expedient in the best interest of the Company.”
REAPPOINTMENT OF MR. ANAND PATEL AS EXECUTIVE DIRECTOR OF THE COMPANY
"RESOLVED THAT pursuant to the provisions of Section 196, 197 and 188 of the Companies Act, 2013 read with Schedule V and other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification amendments or re-enactment thereto for the time being in force) and subject to approval of the members Mr. Anand Patel (DIN : 00027637)be and is hereby re-appointed as Executive Director of the Company, for a period of Five years from 01April, 2019 to 31 March, 2024 on the terms and conditions as to remuneration as set out herein below:-
8. To Consider and if thought fit to pass the following resolution with or without modification as Special Resolution: -
Performance Bonus Up to 10% of the Net Profits of the Company (as per the Act) or such other quantum of the Net
Profits of the Company as may be approved by the Board of Directors at its discretion for each
financial year.
Perquisites In addition to the salary and performance bonus, the following perquisites mentioned in
Category A, Category B and Category C shall be allowed to Mr. Anand Patel – Executive Director
and the total value of perquisites shall be restricted to an amount equal to the annual salary.
Basic Salary Rs. 7,50,000 /- per month (with increments as the Board may decide from time to time)
Category A
Leave Travel For Self and Family in accordance with the Policy of the Company. Family means the spouse,
Assistance the dependent children and dependent parents.
Club Fee The Company shall pay and/or Reimburse Fees and expenses (excluding Admission and Life
Membership Fees) of maximum two clubs.
Mediclaim and The Company shall pay Mediclaim and Personal Accident Insurance Premium as per the
Personal Accident rules of the Company.
Insurance Premium
Category B
Gratuity The Company shall pay gratuity at the rate not exceeding half a month's salary for each
completed year of service subject to maximum amount permissible under the Payment of
Gratuity Act, 1972 from time to time.
Provident Fund The Company shall make contribution to Provident Fund, Superannuation Fund or Annuity
fund (as per the rules of the Company) to the extent these either singly or put together are
not taxable under the Income Tax Act.
235 IND
NOTICE OF ANNUAL GENERAL MEETING
Entertainment and all Reimbursement of entertainment and all other expenses actually incurred in the course of
Other Expenses business of the Company
No Sitting Fees No sitting fee will be paid for attending meetings of the Board or Committee thereof
In case of inadequacy of Profit /Loss during the period of appointment, the remuneration payable to Mr. Anand Patel –
Executive Director shall be as per limit prescribed in Schedule V of the Companies Act, 2013 or any modification(s) or
re-enactment(s) thereto.”
In the event of cessation of office during any financial year, a ratable proportion of the aforesaid remuneration shall be
payable by the Company.
The remuneration referred to above is subject to provisions as prescribed under the Act, Rules and in Schedule V of the
Companies Act, 2013, as amended from time to time. This includes amendment to maximum remuneration issued by
Ministry of Corporate Affairs vide notification dated 12th September, 2018.
Mr. Anand Patel – Executive Director shall, subject to the superintendence, control and direction of the Board of
Directors, manage and conduct the business and affairs of Pigment Division situated at Vatva, Panoli and Dahej and is
also looking after the domestic and International Sales of Pigment division. He shall not be paid any sitting fee for
attending meetings of the Board or Committee thereof.
“RESOLVED FURTHER THAT the Board of Directors in their discretion be and is hereby authorized to increase, alter,
and vary the salary, perquisites and Performance Bonus in such manner as the Board in absolute discretion deem fit and
acceptable to Mr. Anand Patel – Executive Director subject to the provisions of Section 197 and 198 read with
Schedule V of the Companies Act, 2013 and any amendments /modifications, enactment from time to time.”
“RESOLVED FURTHER THAT pursuant to Section 197 (9) of the Companies Act, 2013 in case of receipt of
remuneration, in excess of the specified threshold, Mr. Anand Patel – Executive Director, shall refund the amount
within two years or such lesser period as may be allowed by the Company, and until such sum is refunded, hold it in trust
for the Company. The approval of Banks, Financial Institutions, Non-Convertible Debenture holders or Secured
Creditors will be required, in case the Company has defaulted in payment of their dues, the Company is allowed to waive
such refundable amount by passing a Special Resolution within TWO YEARS from the date the sum becomes
refundable.”
“RESOLVED FURTHER THAT in the event of any re-enactment or modification or re-codification of the Companies Act,
2013 this Special Resolution shall remain in force and the reference to various provisions of the Companies Act shall be
deemed to be substituted by the corresponding provisions of the new act or amendments thereto or the Rules and
Notifications issued thereunder."
"RESOLVED FURTHER THAT the Board of Directors and the Company Secretary of the Company be and are hereby
individually authorized to do all such acts, deeds, matters and things as in its absolute discretion, as may be considered
necessary, desirable or expedient and to settle any question, or doubt that may arise in relation thereto and the Board of
Directors shall have absolute powers to decide breakup of the remuneration, restructure remuneration within the
maximum permissible limit and in order to give effect to this resolution or as may be considered by it to be expedient in the
best interest of the Company.”
184, PHASE II, GIDC INDUSTRIAL ESTATE, K D MEHTA
VATVA, AHMEDABAD 382 445 COMPANY SECRETARYDate: 24.05.2019 FCS - 2051
Registered Office: By Order of the Board
236
4. Corporate Members intending to send their authorized representatives to attend the Meeting pursuant to Section 113 of
the Companies Act, 2013 are requested to send to the Company, a certified copy of the relevant Board Resolution
together with their respective specimen signatures authorizing their representative(s) to attend and vote on their behalf
at the Meeting.
1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY/ PROXIES
TO ATTEND AND VOTE INSTEAD OF HIMSELF/HERSELF SUCH A PROXY/ PROXIES NEED NOT BE A MEMBER
OF THE COMPANY.
12. Electronic copy of the Annual Report for 2018 - 19 is being sent to all the members whose email IDs are registered with
the Company/Depository Participants(s) for communication purposes unless any member has requested for a hard copy
of the same. For members who have not registered their email address, physical copies of the Annual Report for 2018-19
is being sent in the permitted mode.
2. The instrument of Proxy in order to be effective, should be deposited at the Registered Office of the Company, duly
completed and signed, not less than 48 hours before the commencement of the meeting.
5. The Register of Members and Share Transfer Books of the Company will remain closed from Friday 19th July, 2019 to
Thursday 25th July, 2019 (both days inclusive) for the purpose of Annual General Meeting.
7. The Explanatory Statement pursuant to Section 102 of the Companies Act, 2013, which sets out details relating to
Special Business at the meeting, is annexed hereto.
11. Details in respect of the Directors seeking appointment/re-appointment at the Annual General Meeting, forms integral
part of the notice. The Directors have furnished the requisite declarations for their appointment/re-appointment.
13. Electronic copy of the Notice of the 25th Annual General Meeting of the Company inter alia indicating the process and
manner of e-voting along with Attendance Slip and Proxy Form is being sent to all the members whose email IDs are
registered with the Company/Depository Participants(s) for communication purposes unless any member has requested
for a hard copy of the same. For members who have not registered their email address, physical copies of the Notice of
the 25th Annual General Meeting of the Company inter alia indicating the process and manner of e-voting along with
Attendance Slip and Proxy Form is being sent in the permitted mode.
10. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account
Number (PAN) by every participant in securities market. Members holding shares in electronic form are,
therefore, requested to submit the PAN to their Depository Participants with whom they are maintaining their
demat accounts. Members holding shares in physical form can submit their PAN details to the Registrar and
Share Transfer Agent.
3. As per Section 105 of the Companies Act, 2013 and Rules 7.17 thereof a person can act as proxy on behalf of members
not exceeding fifty (50) and holding in the aggregate not more than 10% percent of the total share capital of the Company.
6. If a dividend is declared at the Annual General Meeting, the payment of such dividend will be made to those Members of
the Company whose names stand on the Register of Members of the Company on July 18, 2019. The dividend in respect
of shares held in dematerialized form in the Depository System will be paid to the beneficial owners of shares as on July
18, 2019, as per the list provided by the Depositories for this purpose. The dividend will be payable on and from August
05, 2019.
8. Members holding shares in electronic form are hereby informed that bank particulars registered against their respective
depository accounts will be used by the Company for payment of dividend, if any. The Company or its Registrars cannot
act on any request received directly from Members holding shares in electronic form for any change of bank
particulars or bank mandates. Such changes are to be advised only to the Depository Participant of the Members.
Members holding shares in physical form and desirous of either registering bank particulars or changing bank particulars
already registered against their respective folios are requested to write to the Registrar and Share Transfer Agent.
9. To prevent fraudulent transactions, members are advised to exercise due diligence and notify the Company of any
change in address or demise of any member as soon as possible. Members are also advised not to leave their demat
account(s) dormant for long. Periodic statement of holdings should be obtained from the concerned Depository
Participant and holdings should be verified.
NOTES:
237 IND
17. Members are requested to provide their client ID and DP ID numbers at the meeting for easy identification.
21. Voting through electronic means
16. Members are requested to bring their Attendance Slip along with their copy of Annual Report to the Meeting.
20. Members are requested to note that dividends not encashed or claimed within seven years from the date of transfer to
the Company’s Unpaid Dividend Account, will be, transferred to the Investor Education and Protection Fund as per
Section 125 of the Companies Act, 2013.
In compliance with provisions of Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management
and Administration) Rules, 2014, the Company is pleased to provide members facility to exercise their right to vote at the
25th Annual General Meeting (AGM) by electronic means and the business may be transacted through e-Voting
Services provided by Central Depository Services (India) Limited (CDSL).
15. Even after registering for e-communication, members are entitled to receive such communication in physical form, upon
making a request for the same, by post free of cost. For any communication, the shareholders may also send requests to
the Company’s investor email ID: [email protected]
18. Members desirous of obtaining any information concerning the accounts and operations of the Company are
requested to address their questions in writing to the Company at least 7 (Seven) days before the date of the
Meeting so that the information required may be made available at the Meeting.
14. Members may also note that the Notice of the 25th Annual General Meeting and the Annual Report for 2018 - 19 will
also be available on the Company’s website www.meghmani.com for their download. The physical copies of the
relevant documents mentioned in accompanying notice will be available at the Company’s Registered Office in
Ahmedabad for inspection during normal business hours on all working days except Saturdays till the date of Annual
General Meeting.
19. Members wishing to claim dividends, which remain unclaimed, are requested to correspond with Link Intime India
Private Limited, the Registrar and Share Transfer Agent of the Company.
****
238
(v) Next enter the Image Verification as displayed and Click on Login.
c. Members holding shares in Physical Form should enter Folio Number registered with the Company.
(xi) Click on the EVSN of Meghmani Organics Limited.
a. For CDSL: 16 digits beneficiary ID,
(iv) Now Enter your User ID
(vii) If you are a first time user follow the steps given below:
(ii) The shareholders should log on to the e-voting website www.evotingindia.com.
(xiv) After selecting the resolution you have decided to vote on, click on “SUBMIT”. A confirmation box will be displayed. If you
wish to confirm your vote, click on “OK”, else to change your vote, click on “CANCEL” and accordingly modify your vote.
(iii) Click on Shareholders.
(xiii) Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.
(viii) After entering these details appropriately, click on “SUBMIT” tab.
The instructions for shareholders voting electronically are as under:
(i) The voting period begins on 22nd July, 2019 at 9.00 AM and ends on 24th July, 2019 at 5.00 PM. During this period
shareholders’ of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date
(record date) of 18th July, 2019 may cast their vote electronically. The e-voting module shall be disabled by CDSL for
voting thereafter.
b. For NSDL: 8 Character DP ID followed by 8 Digits Client ID,
(vi) If you are holding shares in demat form and had logged on to www.evotingindia.com and voted on an earlier voting of
any company, then your existing password is to be used.
(ix) Members holding shares in physical form will then directly reach the Company selection screen. However, members
holding shares in demat form will now reach ‘Password Creation’ menu wherein they are required to mandatorily enter
their login password in the new password field. Kindly note that this password is to be also used by the demat holders for
voting for resolutions of any other company on which they are eligible to vote, provided that company opts for e-voting
through CDSL platform. It is strongly recommended not to share your password with any other person and take utmost
care to keep your password confidential.
(x) For Members holding shares in physical form, the details can be used only for e-voting on the resolutions contained in
this Notice.
(xii) On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option “YES/NO” for voting.
Select the option YES or NO as desired. The option YES implies that you assent to the Resolution and option NO implies
that you dissent to the Resolution.
(xv) Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.
PAN Enter your 10 digit alpha-numeric *PAN issued by Income Tax Department (Applicable for
both Demat shareholders as well as Physical shareholders)
• Members who have not updated their PAN with the Company/Depository Participant are requested to
use the Sequence Number. The Sequence Number will be intimated to such member by way of a letter.
Date of Birth • If both the details are not recorded with the Depository or Company, please enter the
(DOB) member ID / Folio number in the Dividend Bank details field as mentioned in instruction (iv).
Dividend Bank Enter the Dividend Bank Details or Date of Birth (in dd/mm/yyyy format) as recorded in
Details OR your Demat account or in the Company records in order to login.
For Members holding shares in Demat Form and Physical Form
NOTES:
239 IND
E-MAIL :- [email protected]
E-VOTING AGENCY CENTRAL DEPOSITORY SERVICES [INDIA] LIMITED
SCRUTINIZER MR. MUKESH KHANDWALA – Chartered Accountants
****
E-MAIL - [email protected]
M/S CNK KHANDWALA & ASSOCIATES
E-MAIL:- [email protected]
Tel: +91 022 - 4918 6270, Fax: +91 22 4918 6060
• Non-Individual shareholders (i.e. other than Individuals, HUF, NRI etc.) and Custodian are required to log on to
www.evotingindia.com and register themselves as Corporate.
(xvii) If a demat account holder has forgotten the login password then Enter the User ID and the image verification code and
click on Forgot Password& enter the details as prompted by the system.
(xviii) Shareholders can also use Mobile app - “m - Voting” for e voting . m - Voting app is available on Apple , Android and
Windows based Mobile. Shareholders may log in to m - Voting using their e voting credentials to vote for the Company
resolution(s).
AHMEDABAD- 380 015
COMPANY MEGHMANI ORGANICS LIMITED
(xvi) You can also take a print of the votes cast by clicking on “Click here to print” option on the Voting page.
In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked Questions (“FAQs”) and
e-voting manual available at www.evotingindia.com, under help section or write an email to
(xix) Note for Non – Individual Shareholders and Custodians
• A scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued in favour of the
Custodian, if any, should be uploaded in PDF format in the system for the scrutinizer to verify the same.
• A scanned copy of the Registration Form bearing the stamp and sign of the entity should be emailed to
• After receiving the login details, user would be able to link the account(s) for which they wish to vote on.
• The list of accounts linked in the login should be mailed to [email protected] and on approval of the
accounts they would be able to cast their vote.
CONTACT DETAILS :-
“MEGHMANI HOUSE”, B/H SAFAL PROFITAIRE,
CORPORATE ROAD, PRAHALADNAGAR,
E-MAIL:- [email protected]
REGISTRAR AND LINK INTIME INDIA PRIVATE LIMITED
TRANSFER AGENT C 101, 247 PARK, L.B.S.MARG,
VIKHROLI (WEST),
MUMBAI - 400083.
240
ITEM NO. - 4 to 8 :
EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE
COMPANIES ACT, 2013
The Board of Directors recommend passing of the Ordinary Resolution at item Number 9 of the Notice. None of the Directors,
Key Managerial Personnel and/or their relatives is concerned or interested in the Resolution.
(1) Term of Re-appointment
Based on the recommendation of the Audit Committee, the Board of Directors has approved the appointment of M/s Kiran J
Mehta & Co., Cost Accountants (Firm’s Registration No. 000025) as a Cost Auditor for Cost Audit of certain Pigment and
Agrochemicals Products manufactured by the Company for the year 1st April, 2019 to 31st March, 2020 on a remuneration of
Rs. 2,50,000/- (Rupees Two lakhs Fifty Thousand only) (apart from reimbursement of out-of pocket expenses incurred for the
purpose of Audit) subject to approval of remuneration by the Members.
In accordance with the provisions of Section 148(2) and 148(3) of the Companies Act, 2013 read with The Companies (Cost
Records and Audit) Rules, 2014, the Company is required to appoint a Cost Auditor for audit of Cost Records of Certain Pigment
and Agrochemicals Products manufactured by the Company.
ITEM NO. 3 - APPOINTMENT OF COST AUDITOR:
The present term of appointment of the following directors has expired on 31 March, 2019. The Managerial remuneration
Committee at its meeting held on 01st April, 2019 has resolved to re-appoint them from 01st April, 2019 for a period of five years
as mentioned against their name in the table and approved terms of remuneration. The Board at its meeting held on 24 May,
2019 has confirmed their re-appointment and approved terms of remuneration payable to them.
Name Designation Re-appointment Period Director Identification No.
Mr. Ashish Soparkar Managing Director 31.03.2024 00027480
Mr. Natwarlal Patel Managing Director 31.03.2024 00027540
Mr. Ramesh Patel Executive Director 31.03.2024 00027637
Mr. Jayantilal Patel Executive Chairman 31.03.2024 00027224
Mr. Anand Patel Executive Director 31.03.2024 00027836
(2) Basic Salary :-
Mr. Jayantilal Patel 750,000
Mr. Ashish Soparkar 750,000
Name Basic Salary per month Rs.
Mr. Natwarlal Patel 750,000
Mr. Ramesh Patel 750,000
Mr. Anand Patel 750,000
In addition to Salary Mr. Jayantilal Patel, Mr. Ashish Soparkar, Mr. Natwarlal Patel, Mr. Ramesh patel and Mr. Anand
Patel shall be eligible for the following perquisites which shall not be included in the computation of the Ceiling on
remuneration specified in Section II and Section III of Schedule V of the Companies Act, 2013 :
(b) The Company shall pay gratuity at the rate not exceeding half a month's salary for each completed year of
service subject to maximum amount permissible under the Payment of Gratuity Act, 1972 from time to time.
Family means the spouse, the dependent children and dependent parents.
(c) Leave Travel Assistance: - For Self and his family once in a year as per the rules of the Company.
(3) PERQUISITES :
(a) The Company shall make contribution to Provident Fund, Superannuation Fund or Annuity fund (as per the
rules of the Company) to the extent these either singly or put together are not taxable under the Income Tax Act.
241 IND
Reimbursement of entertainment expenses actually and properly incurred in the course of business of the Company.
(6) Bonus:
(b) They will not be paid any sitting fee for attending meetings of the Board or Committee thereof.
(d) Mediclaim and Personal Accident Insurance Policy as per the rules of the Company.
(5) Reimbursement:
(7) Other Terms:
(4) The Board of Directors or Committee thereof may, in their discretion, revise/modify any of the terms from time to
time, within the limits stipulated.
(d) in case of inadequacy of Profit /Loss during the period of appointment, the remuneration payable to Mr.
Jayantilal Patel, Mr. Ashish Soparkar, Mr. Natwarlal Patel, Mr. Ramesh Patel and Mr. Anand Patel shall be as
per limit prescribed in Schedule V of the Companies Act 2013.
Performance based Bonus calculated on the basis of Net Profit under the act at the end of each financial year and
approved by the Board.
(f) The Company shall provide a car with driver at the entire cost of the Company for personal use and office
work. The Company shall bill use of car for private purposes.
(g) One month’s privilege leaves fro every eleven-month’s service.
(i) Such other perquisites and allowances in accordance with the rules of the Company or as may be agreed to
by the Board of Directors and Mr. Jayantilal Patel, Mr. Ashish Soparkar, Mr. Natwarlal Patel, Mr. Ramesh Patel
and Mr. Anand Patel .
(h) The Company shall provide communication devices such as telephones, audio and video conference facilities
etc., at the residence at the entire cost of the Company. Personal long distance calls be billed by the
Company.
(e) Club Fee: - Fees of Club subject to a maximum of two clubs. This will not include admission and Life
Membership Fees.
(a) Mr. Jayantilal Patel, Mr. Ashish Soparkar, Mr. Natwarlal Patel, Mr. Ramesh Patel and Mr. Anand Patel shall,
subject to the superintendence, control and direction of the Board of Directors, manage and conduct the
business and affairs of the Company.
(c) The Board of Directors shall increase, alter, and vary the salary, perquisites and Performance based Bonus in
such manner as the Board in absolute discretion deem fit subject to the provisions of Section 197 read with
Schedule V of the Companies Act, 2013.
****
The value of the above perquisites shall be evaluated as per Income-tax Rules, 1962, wherever applicable,
and at cost in the absence of any such Rule, and shall be subject to an overall annual ceiling of an amount
equal to the Salary for the relevant period.
242
STATEMENT AS PER LISTING AGREEMENT WITH REGARD TO THE DIRECTORS PROPOSED FOR APPOINTMENT – REAPPOINTMENT:-
1. Mr. Jayantilal Patel :- DIN 00027224
Name Mr. Jayantilal Meghjibhai Patel
3) PT. Meghmani Organics Indonesia
Brief Profile Mr. Jayantilal Patel currently oversees the international marketing of the Company and is responsible for all major policy decisions. Mr. Jayantilal Patel is also looking after International marketing.
Age 67 years
2) Meghmani Organics USA Inc
Mr. Jayantla Patel has more than 37 years’ experience in the Chemicals Industries.
Interest in Other Entities 1) Meghmani Chemicals Limited
6) Alkali Manufacturer’s Association of India
Qualification B. E. (Chemical)
4) Ashish Chemicals
Designation Executive Chairman
5) Meghmani Pigments
7) Arjan Owners LLP
2. Mr. Ashish Soparkar :- DIN 00027480
6) Arjan Owners LLP
4) Ashish Chemicals
Mr. Ashish Soparkar has more than 37 years’ experience in the Chemical Industries.
Designation Managing Director
Brief Profile Mr. Ashish Soparkar currently oversees the corporate affairs and finance related matters and selected account of International Customers.
Name Mr. Ashish Natwarlal Soparkar
Interest in Other Entities 1) Meghmani Chemicals Limited
2) Meghmani Organics USA Inc
3) Meghmani Exports Limitada Sa De CV Mexico
Age 66 years
Qualification B. E. (Chemical)
5) Meghmani Pigments
243 IND
STATEMENT AS PER LISTING AGREEMENT WITH REGARD TO THE DIRECTORS PROPOSED FOR APPOINTMENT – REAPPOINTMENT:-
3. Mr. Natwarlal Patel :- DIN 00027540
Name Mr. Natwarlal Meghjibhai Patel
Brief Profile Mr. Natwarlal Patel currently oversees the technical matters of the Agrochemicals divisions, as well as the International and Domestic marketing of the Agrochemical products.
Age 66 years
Designation Managing Director
Qualification Master of Science (MSc)
Interest in Other Entities 1) Meghmani Industries Limited
2) Meghmani Chemicals Limited
5) Meghmani Overseas FZE – Sharjah
7) Corp Care Federation of India
3) John Energy Limited
8) Uniworth Enterprises LLP
Mr. Natwarlal Patel has more than 35 years of experience in the Chemical Industries.
6) Tapsheel Enterprises
4) GSEC Limited
4. Mr. Ramesh Patel :- DIN 00027637
3) Uniworth Enterprises LLP
Interest in Other Entities 1) Meghmani Industries Limited
2) Meghmani Dyes and Intermediates LLP
Name Mr. Ramesh Meghjibhai Patel
Brief Profile Mr. Ramesh Patel is currently in charge of overseeing purchases made by the Company (including domestic purchases and global imports) and is responsible for all liaisons between the Company and government authorities.
Age 63 years
Designation Executive Director
Qualification Bachelors of Arts (BA)
Mr. Ramesh Patel has 32 years of experience in the Chemicals Industries.
244
STATEMENT AS PER LISTING AGREEMENT WITH REGARD TO THE DIRECTORS PROPOSED FOR APPOINTMENT – REAPPOINTMENT:-
5. Mr. Anand Patel :- DIN 00027836
Designation Executive Director
Name Mr. Anand Patel
Age 57 years
Qualification BSc
Mr. Anand Patel has 28 years of experience in the Pigments Industry.
Brief Profile Mr. Anand Patel currently incharge of overall management of Pigments divisions situated at Vatva, Panoli and Dahej. Mr. Anand Patel is also looking after the Domestic and International marketing of Pigments.
Interest in Other Entities 1) Uniworth Enterprises LLP
2) Meghmani Dyes and Intermediates LLP
3) Novel Spent Acid Management
4) Matangi Specialities LLP
5) Matangi Industries LLP
245 IND
(1) Nature of Industry:
He has more than 37 years experience in the dyes and pigments industry and more than 20 years of experience in the agrochemicals industry.
3) Mr. Natwarlal Patel, is the Managing Director of our Company since incorporation of our Company in 1995. He was one of the co-founders and Partners of M/s Gujarat Industries, which was subsequently converted into our Company in 1995. He holds a Master of Science degree from Sardar Patel University, Gujarat.
He has more than 37 years of experience in the Chemicals industry.
I. General Information:
(3) In case of new companies, expected date of commencement of activities as per project approved by financial institutions appearing in the prospectus:
The Company has no foreign investment or collaboration.
Manufacture of Pigment and its intermediates, Agrochemicals its Intermediates, Formulation in Bulk and Small.
(2) Date or expected date of commencement of commercial production:
Not applicable as the Company is existing company and in operation since 4th January, 1995
Not Applicable
(4) Financial performance based on given indicators:
(5) Foreign Investment or Collaboration if any:
II. Information about the appointee:
(1) Back Ground details
1) Mr. Jayantilal Patel, is the Executive Chairman of the Company. He was one of the co-founders and partners of M/s. Gujarat Industries, which was subsequently converted into our Company in 1995. He holds a Bachelor of Chemical Engineering degree from Maharaja Sayajirao University, Baroda.
2) Mr. Ashish Soparkar, is the Managing Director of our Company since incorporation of our Company in 1995. He was one of the co-founders and partners of M/s Gujarat Industries, which was subsequently converted into our Company in 1995. He holds a Bachelors of Chemical Engineering degree from Maharaja Sayajirao University of Baroda He has more than 37 years of experience in the Chemical industry.
4) Mr. Ramesh Patel, is the Executive Director of our Company since incorporation of our Company in 1995. He was one of the co-founders and partners of the M/s Gujarat Industries, which was subsequently converted into our Company in 1995. He holds a Bachelor of Arts degree from Saurashtra University. He has more than 31 years of experience in the Chemicals industry.
‘Annexure – A’STATEMENT AS REQUIRED SCHEDULE V OF THE COMPANIES ACT, 2013
WITH REFERENCE TO THE RESOLUTION AT ITEM NO. 4 TO 8 OF THE NOTICEFOR THE ANNUAL GENERAL MEETING OF MEGHMANI ORGANICS LIMITED
S. N. Particulars 2017 - 2018 2016 - 2017 2015 - 2016
1 Turnover 120978.18 102301.00 94029.63
2 Profit/(Loss) before tax 12144.82 6547.08 4966.93
3 Net Profit/(Loss) after tax 7693.16 4151.06 3627.53
5 Reserves & Surplus 67226.69 60747.86 56616.45
4 Paid-up share capital 2543.14 2543.14 2543.14
246
STATEMENT AS REQUIRED SCHEDULE V OF THE COMPANIES ACT, 2013WITH REFERENCE TO THE RESOLUTION AT ITEM NO. 4 TO 8 OF THE NOTICEFOR THE ANNUAL GENERAL MEETING OF MEGHMANI ORGANICS LIMITED
(2) Past Remuneration
Not applicable
(4) Job profile
(6) Comparative remuneration profile with respect to industry, size of the Company, profile of the position and person (in case of expatriates the relevant details would be with reference to the country of his origin):
5) Mr. Anand Patel, is the Managing Director of our Company since incorporation of our Company in 1995. He was one of the co- founders and partners of M/s Gujarat Industries, which was subsequently converted into our Company in 1995. He holds a Bachelor of Science degree from the Gujarat University. He has more than 28 years of experience in the pigments.
(5) Remuneration proposed
The remuneration profile with respect to industry, size of the Company is conservative.
As stated in the Resolution at Item No. 4 to 8 of the Notice.
(3) Recognition or awards
Mr. Jayantilal Patel currently oversees the international marketing of the Company and is responsible for all the major
policy decisions. Mr. Jayantilal Patel is also looking after International Marketing of Pigment.
Mr. Ashish Soparkar currently oversees the corporate affairs and finance related matters and selected accounts of
International Customers.
Mr. Ramesh Patel is currently in charge of overseeing purchases made by the Company and is responsible for all
liaisons between the Company and government authorities.
Mr. Natwarlal Patel currently oversees the technical matters of the agrochemical divisions, as well as the international
and domestic marketing of the agrochemical products.
Mr. Anand Patel is currently in charge of overall Management of Pigment Divisions situated at Vatva, Panoli and Dahej.
Mr. Anand Patel is also looking after the Domestic and International marketing of Pigment.
Name of Appointee 2017-2018 2016-2017 2015-2016
Mr. Jayantilal Patel 167.79 92.28 67.31
Mr. Natwarlal Patel 167.67 92.28 67.27
Mr. Ramesh Patel 127.66 82.28 67.31
Mr. Ashish Soparkar 167.67 92.28 67.27
Mr. Anand Patel 107.28 77.28 67.27
Total 738.07 436.4 336.43
(Rs. in Lakhs)
247 IND
Name of Appointee Pecuniary relationship
Mr. Natwarlal Patel Apart from the remuneration and dividend payable Mr. Natwarlal Patel has no pecuniary
relationship with the Company. Mr. Ankit Patel - (CEO) son of Mr. Natwarlal Patel is not
drawing any remuneration from the Company. Mr. Natwarlal Patel is related as brother to Mr.
Jayanti Patel and Mr. Ramesh Patel.
Mr. Ramesh Patel Apart from the remuneration and dividend payable Mr. Ramesh Patel has no pecuniary
relationship with the Company. Mr. Karana Patel – COO son of Mr. Ramesh Patel is not
drawing any remuneration from the Company.
Mr. Anand Patel Apart from the remuneration and dividend payable Mr. Anand Patel has no pecuniary
relationship with the Company. Mr. Darshan Patel – COO son Mr. Anand Patel is not drawing
any remuneration from the Company. Mr. Ramesh Patel is related as brother to Mr. Jayanti
Patel and Mr. Natwarlal Patel.
Mr. Jayantilal Patel Apart from the remuneration and dividend payable Mr. Jayantilal Patel has no pecuniary
relationship with the Company. Mr. Jayantilal Patel is related as brother to Mr. Natwarlal Patel
and Mr. Ramesh Patel.
Mr. Ashish Soparkar Apart from the remuneration and dividend payable, Mr. Ashish Soparkar has no pecuniary
relationship with the Company.
STATEMENT AS REQUIRED SCHEDULE V OF THE COMPANIES ACT, 2013WITH REFERENCE TO THE RESOLUTION AT ITEM NO. 4 TO 8 OF THE NOTICEFOR THE ANNUAL GENERAL MEETING OF MEGHMANI ORGANICS LIMITED
III. Other information
(7) Pecuniary relationship directly or indirectly with the company, or relationship with the managerial personnel, if any:
(1) Reasons of loss or inadequacy of profits:
Not Applicable as the Company is making adequate profit.
Not Applicable as the Company is a profit making company.
(3) Expected increase in productivity and profits in measurable terms
(2) Steps taken or proposed to be taken for improvement:
The management expects around 10% to 15% increase in productivity and profits. However, the Company expects that the productivity and profitability would be comparable with the industry average.
Registered Office: By Order of the Board
VATVA, AHMEDABAD 382 445 FCS - 2051
GIDC INDUSTRIAL ESTATE, COMPANY SECRETARY
184, PHASE II, K D MEHTA
Date: 24.05.2019
248
Form No. MGT-11Proxy form
[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules, 2014]
I/We , being the member(s) holding ____________________________shares of Meghmani Organics Limited hereby appoint :-
E-mail Id: E-mail Id: E-mail Id:
Address: Address: Address:
Name : Name : Name :
Signature, .............................................or Signature, .............................................or Signature, .............................................or
failing him / her failing him / her failing him / her
as my/ our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 25th Annual General Meeting of the company, to be held on
Thursday 25th July, 2019 at 10.00 a.m. at H T Parekh Convention Centre, Ahmedabad Management Association (AMA), ATIRA Campus, Dr.
Vikram Sarabhai Marg, Vastrapur, Ahmedabad -380 015 and at any adjournment thereof in respect of such resolutions as are indicated below:
Sr. Description No. of I / We Assent I / We Dissent No. Shares the Resolution the Resolution. held FOR) (AGAINST)
7 Reappointment of Mr. Ramesh Patel as Executive Director of the Company
8 Reappointment of Mr. Anand Patel as Executive Director of the Company
1 Adoption of Standalone and Consolidated Financial statement for the
year ended on 31st March, 2019.
3 Appointment of Cost Auditors of the Company for FY 2019-20.
ORDINARY BUSINESS
5 Reappointment of Mr. Ashish Soparkar as Managing Director of the Company
4 Reappointment of Mr. Jayantilal Patel as Executive Chairman of the Company.
2 Confirm the payment of Interim Dividends and declaration of Dividend
SPECIAL BUSINESS
for FY 2018-19.
6 Reappointment of Mr. Natwarlal Patel as Managing Director of the Company
Signed this __________ day of July, 2019
Signature of Shareholder:- _________________________ Signature of Proxy holder: - _________________________
Notes: This form of Proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before commencement of the Meeting.
Affix Rs. 1 Revenue Stamps
Name of the company Meghmani Organics Limited - CIN L24110GJ1995PLC024052
Registered Office Plot No. 184, Phase II, GIDV Vatva, Ahmedabad – 382 445
Name of the Member(s)
Folio No /Client ID
Registered Address
DP ID
E-mail Id
249 IND
MEGHMANI ORGANICS LIMITEDCIN L24110GJ1995PLC024052
Registered Office: Plot No. 184, (Phase II), G.I.D.C. Industrial Estate, Vatva, Ahmedabad - 382 445.
ATTENDANCE SLIP
To be handed over at the entrance of the Meeting Hall
I hereby record my presence at Twenty Fifth Annual General Meeting of Meghmani Organics Limited on Thursday, 25th July,
2019 at 10.00 a.m. at H T Parekh Convention Centre, Ahmedabad Management Association (AMA), ATIRA Campus, Dr.
Vikram Sarabhai Marg, Vastrapur, Ahmedabad -380 015.
Full Name of Shareholder (In block letters) Signature
Full Name of Proxy (In block letters) Signature
Registered Address
Name of the Member(s)
DP ID Client ID No. of Shares Held
250
ROUTE MAP TO 25TH ANNUAL GENERAL MEETING VENUE
MEGHMANI ORGANICS LIMITEDCIN L24110GJ1995PLC024052
Time : 10.00 a.m.
Venue : H T Parekh Convention Centre,
Ahmedabad Management Association (AMA),
Vastrapur, Ahmedabad -380 015.
ATIRA Campus, Dr. Vikram Sarabhai Marg,
th25 Annual General MeetingthDate : 25 July, 2019, Thursday
251 IND
NOTES
252
Corporate Office : 'Meghmani House'B/h Safal Profitaire, Corporate Road, Prahaladnagar, Ahmedabad - 380015. Gujarat (INDIA)
Tel : +91 79 2970 9600/ 7176 1000, Fax : +91 79 2970 9605E-mail : [email protected] website : www.meghmani.com
CIN No. : L24110GJ1995PLC024052 S
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MEGHMANI ORGANICS LIMITED
Your essentials. Our expertise.
Annexure- 19
Page No: 236
To treat its stakeholders as partners in growth and to focus on providing Quality Products and Services
To be a responsible chemical conglomerate with diversified portfolio with Sustainability and Profitable Growth
To provide due consideration to Health, Safety & Environment (HSE) and Corporate Social Responsibility (CSR)
To remain committed for providing opportunities to its personnel for converting their Potential into Performance
Empowered work empowerment
Speed of decision making
Ethical way of functioning
Business Integrity
Hououring Commitments
Focusing on Results
Innovation & Efficiency
We will lead through :
We Value : TRUST
ETHICS
ADAPTABILITY
INTEGRITY
DIVERSITY
Accelerating Growthwith closely integrated businesses
Revenue increased
from Rs. 174 Cr in 2010 to Rs. 710 Cr in 2019
EBITDA increasedfrom Rs. 5 Cr in 2010 to Rs. 322 Cr in 2019
OUR PAST ACHIEVEMENTS DON’T SERVE AS BENCHMARKS BUT AS REMINDERS TO KEEP PUSHING OURSELVES. WE CONSTANTLY BEAT OUR OWN RECORDS.
The state of art manufacturing facility enables in fulfilling the growing customized requirements of our varied and valued Customers within promised time-frame.
• Manufacturing Capacities after Expansion are Caustic Soda 280,000 TPA, Caustic Potash 21,000 TPA, Chloromethane’s 50,000 TPA and Hydrogen peroxide 60,000 MT and increase in Coal Based - Captive Powder Plant capacity to 96 MW
• Manufacturing location is accessible to Global Markets through West Coast Sea Ports like Hazira, Nhava Sheva, Mundra, Dahej and Ankleshwar (ICD)
• The manufacturing facility is strengthened by highly experienced, skilled and dedicated team of 500+ professionals, which always helped in understanding requirements of clients properly and offering them solutions, without compromising the quality of products.
• MFL has completed one decade and during the journey has strengthened its roots in the Nation and Globally by delivering the most essential Products and Services, hence thereby fulfilling the demands with perfection.
Inspiring our
10 YEAR of
Growth
CONTENTS
CORPORATE INFORMATION .......................................................................................001
NOTICE OF ANNUAL GENERAL MEETING .................................................................087
DIRECTORS' REPORT..................................................................................................003
INDEPENDENT AUDITORS’ REPORT ..........................................................................025
BALANCE SHEET..........................................................................................................032
SECRETARIAL AUDIT REPORT....................................................................................021
STATEMENT OF PROFIT AND LOSS ..........................................................................033
CASH FLOW STATEMENT ............................................................................................034
NOTES ON FINANCIAL STATEMENT ..........................................................................038
MEGHMANI FINECHEM LIMITED
CORPORATE INFORMATION
Ms. Nirali Parikh - Independent Director
Mr. Manubhai Patel - Independent Director
AUDIT COMMITTEE Mr. Manubhai Patel - Chairman
Mr. Balkrishna Thakkar - Member
Mr. Kaushal Soparkar - Member
BOARD OF DIRECTORS Mr. Maulik Patel - Chairman & Managing Director
Mr. Karana Patel - Executive Director
Mr. Ankit Patel - Executive Director
Mr. Darshan Patel - Executive Director
Mr. Balkrishna Thakkar - Independent Director
Mr. Kaushal Soparkar - Managing Director
COMPANY SECRETARY Mr. K. D. Mehta
NOMINATION & Mr. Balkrishna Thakkar - Chairman
REMUNERATION COMMITTEE Mr. Manubhai Patel - Member
Mr. Maulik Patel - Member
Nr. Auda Garden, Prahlad Nagar,
REGISTERED OFFICE & PLANT LOCATION Plot No.: CH1 / CH2,
CORPORATE OFFICE “Meghmani House”,
Ahmedabad - 380 015,
Gujarat, India.
GIDC Industrial Estate, Dahej,
Behind Safal Profitaire, Corporate Road,
Tal.: Vagara, Dist.: Bharuch 392 130,
CHIEF FINANCIAL OFFICER Mr. Sanjay Jain
Gujarat, India.
01
MEGHMANI FINECHEM LIMITED
01
CORPORATE INFORMATION
Ambawadi, Ahmedabad – 380 015.
Ahmedabad - 380 009.
11, Zodiac Square, Opp. Gurudwara,
2nd Floor, Shivalik Ishan,
SG Highway, Ahmedabad - 380 054 .
Nr. Mithakahali Six Road, Navrangpura,
Near Mithakhali Six Road,
INTERNAL AUDITOR C N K Khandwala & Associates
PRINCIPAL BANKERS ICICI Bank Limited
JMC House, Opp. Parimal Garden,
Ambawadi, Ahmedabad - 380 009.
Federal Bank Limited
HDFC Bank Limited
Ground Floor, Astral Towers,
Standard Chartered Bank
Abhijeet - II, Ground Floor,
Ahmedabad - 380006.
STATUTORY AUDITOR S R B C & CO LLP
Assurance Services
Nr. C.N. Vidhyalaya,
Chartered Accountants,
2nd Floor, “HRISHIKESH”,
Vasantbaug Society, Opp. Water Tank,
Gulbai Tekra, Ahmedabad - 380006.
02
MEGHMANI FINECHEM LIMITED
02
DIRECTORS' REPORT
The Members,
FINANCIAL RESULTS
Meghmani Finechem Limited
To,
Your Directors have pleasure in presenting Twelth Annual Report and Audited Financials Statement of Accounts of the Company stfor the Financial Year ended on 31 March, 2019.
(Rs. in Lakhs )
1. STATE OF COMPANY’S AFFAIRS
The Company is in the business of manufacturing of Caustic-Chlorine and Caustic Potash. This was one more excellent
year of the performance where the Company registered remarkable growth in sales and achieved the profitability to set the
new land mark. The operating results of the Company are given hereunder: -
1) REVENUE FROM OPERATIONS:-
The Revenue from Operations of the Company increased by Rs. 11,287.55 Lakhs i.e. from Rs. 59,751.75 Lakhs in FY
2018 to Rs. 71,039.30 Lakhs in FY 2019, mainly due to increase in sales quantity of Caustic Potash and higher ECU
(Electro Chemical Unit) realization both for Caustic Lye and Caustic Potash.
2) OTHER INCOME :-
3) EARNING BEFORE INTEREST, TAX DEPRECIATION & AMORTIZATION (EBITDA):-
Other Income increased by Rs. 594.21 Lakhs i.e. from Rs. 412.63 Lakhs in FY 2018 to Rs. 1,006.84 Lakhs in FY 2019.
The increase in other income mainly comprises of profit on sale of investment arising from redemption of Mutual Fund. The
Company has redeemed its investments in Mutual Fund in FY 2018-19.
EBITDA has increased by Rs. 6233.86 Lakhs i.e. from Rs. 25,940.99 Lakhs in FY 2018 to Rs. 32,174.85 Lakhs FY 2019.
4) PROFIT BEFORE TAX (PBT): -
(3) Higher Capacity utilization of Caustic Potash and
(1) Increase in Revenue from Operations
(4) Increase in Other Income.
(2) Higher ECU Realization
Profit before Tax (PBT) has increased by Rs. 4,712.26 Lakhs i.e. from Rs. 19,516.87 Lakhs in FY 2018 to Rs. 24,229.13
Lakhs in FY 2019. The reasons for increase in Profit are:-
Other Income 1,006.84 412.63
Profit Before Finance Cost & Depreciation 32,174.85 25,940.99
Revenue from Operations (Net of Excise Duty) 71,039.30 59,751.75
PARTICULARS YEAR ENDED ON YEAR ENDED ONst st 31 MARCH, 2019 31 MARCH, 2018
Total Revenue 72,046.14 60,164.38
Finance Cost 2,535.84 896.97
Depreciation 5,409.88 5,527.15
Profit Before Tax 24,229.13 19,516.87
Payment & Provision of Current Tax 7,773.83 5,651.87
Deferred Tax Expenses/(Income) (1,837.66) (439.84)
Profit After Tax 18,280.69 15,547.45
Short/ (Excess) Provision of Tax of earlier years 12.27 (1,242.61)
MEGHMANI FINECHEM LIMITED
03
The Company in view of on-going expansion plan has decided not to recommend final dividend to Equity Shareholders for
FY 2018-19.
2. SCHEME OF AMALGAMATION APPROVED BY NATIONAL COMPANY LAW TRIBUNAL (NCLT) AHMEDABAD
BENCH
(5) Paid the difference of amount of fees on the enhanced Authorized Capital
(2) Amended Capital Clause of the Memorandum of Association
(2) Payment of Success fees to Promoters ( Rs. 1,500.00 Lakhs)
Pursuant to the order of National Company Law Board, Ahmedabad Bench, the Company has paid Dividend of
Rs. 1,535.56 Lakhs on 22,17,08,925, 8 % Non-Convertible Redeemable Preference Shares (NCRPS) of Rs. 10/- each
aggregating Rs. 22,170.89 Lakhs.
(6) Made the consequential reduction of Equity Share Capital
3. DIVIDEND
(3) Mark to Market provision for ECB Loan (Rs. 362.36 Lakhs)
(1) Increased its Authorized Share Capital
(3) Amended Object Clause of the Memorandum of Association
The Profitability of the Company would have been better but for the certain following exceptional items :-
The National Company Law Tribunal (NCLT), Ahmedabad Bench on 11th February, 2019 approved the Composite Scheme
of Arrangement in the nature of Amalgamation of Meghmani Agrochemicals Private Limited (MAPL) with Meghmani
Finechem Limited (MFL or the Company) and restructure of Share Capital of the Company.
4. INCREASE IN AUTHORIZED SHARE CAPITAL
(7) Issued NCRPS and Optionally Convertible Redeemable Preference Shares (OCRPS)
To give effect to the NCLT order the Company has: -
(4) Consolidated the Authorized Share Capital of the Company
(1) Payment of dividend including tax to Non Convertible Redeemable Prefernce Shares (NCRPS) holders (Rs. 1,851.20
Lakhs)
DIRECTORS' REPORT
As on 31.03.2019 9,500 45,263 54,763
Capital – Preference Shares
Particulars Date Equity Preference Total
Reclassification of - 8,000 2,000 10,000
Increase in Authorized 11.02.2019 1,500 3,000 4,500
Capital due to NCLT Order
Total - 9,500 5,000 14,500
Increase in Authorized 05.03.2019 - 40,263 40,263
Rs. In Lakhs Rs. In Lakhs Rs. In Lakhs
Authorized Share Capital 31.03.2018 7,500 2,500 10,000
Authorized Capital
MEGHMANI FINECHEM LIMITED
04
DIRECTORS' REPORT
5. SHARE CAPITAL
During the year under review, the following changes in the Share Capital has taken place:-
The information pertaining to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo as
required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules,
2014 is attached to this report as “Annexure- A”.
As per the NCLT order the Company issued 221,708,925, 8% Non-Convertible Redeemable Preference Shares (NCRPS)
of Rs. 10/- each and 210,747,191 8% Optionally Convertible Redeemable Preference Shares (OCRPS) of Rs. 10/- each to
Meghmani Organics Limited.
The Company has neither issued Equity Shares with differential rights as to dividend, voting or otherwise, nor issued /
granted Employee Stock Options or Sweat Equity Shares to the Employees or Directors of the Company under any
Scheme.
During the year, the Company has redeemed 221,708,925, 8% Non-Convertible Redeemable Preference Shares
(NCRPS) of Rs. 10/- each at its face value.
7. FINANCIAL CLOSURE
To meet the finance requirement of the capital projects the Company has tie-up the financial closure of Rs. 52,900 Lakhs
from (1) Federal Bank Limited (Rs.12,500 Lakhs) (2) Standard Chartered Bank (Rs. 14,400 Lakhs) (3) HDFC Bank
Limited (Rs. 26,000 Lakhs).
6. ISSUE OF PREFERENCE SHARES AND REDEMPTION OF NCRPS
8. CREDIT RATING
The Company has been reaffirmed Long Term Rating CRISIL A+ / Stable (Reaffirmed) for its various bank facility of
Rs. 22,000 Lakhs by CRISIL Limited (Rating Agency) vide its letter dated September 24, 2018.
9. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
12. MEETINGS OF BOARD
13. AUDIT COMMITTEE MEETING
The details forming part of the extract of the Annual Return in form MGT 9 is attached to this report herewith as “Annexure B”.
During the year, Nine Board meetings were convened and held respectively on 09/4/2018, 26/04/2018, 19/05/2018,
01/08/2018, 22/10/2018, 31/01/2019, 27/02/2019, 05/03/2019 and 08/03/2019 in respect of which proper notices were
given and the proceedings were properly recorded and signed.
The Company does not have any Subsidiary, Joint Venture or Associate Company.
10. DETAILS OF SUBSIDIARY, JOINT VENTURE OR ASSOCIATE COMPANIES
The Audit Committee comprises of three members. During the year four Audit Committee meetings were convened and
held on 19/05/2018, 01/08/2018, 22/10/2018 and 31/01/2019.
11. ANNUAL RETURN
Particulars Rs. In Lakhs
Effect of NCLT order Reduction in Shares of MFL 3,457
Share Capital as on 31.03.2019 4,119
Issue of Share Warrant Shares 500
Issued & Subscribed Share Capital 7,076
Total 7,576
MEGHMANI FINECHEM LIMITED
05
DIRECTORS' REPORT
14. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
16. INSURANCE :
The Company’s Plant, Property, Equipment and Stocks are adequately insured under the Industrial All Risk (IAR) Policy.
The Company has insurance coverage for Product Liability, Public Liability and also has Directors’ and Officers' Liability
(D & O) Policy.
17. RELATED PARTY TRANSACTIONS (RPT) :
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are
given in the notes to the Financial Statements.
All related party transactions entered during the financial year was on an Arm’s Length Basis and were in the ordinary
course of business. The Company has not entered in to materially significant transactions with related parties, Promoters,
Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of
the Company at large.
During the year, all related party transactions were placed before the Audit Committee and also the Board for approval. The
Company had obtained members’ approval at its Annual General Meeting held on 16th July, 2018 for entering into the
transactions with Related Parties for the period of 3 (Three) years i.e. from 01st October, 2018 till decided otherwise.
18. DIRECTORS :
Your Directors have pleasure to announce that Chloromethane Plant is expected to be commenced by July, 2019,
Hydrogen Peroxide and Caustic Soda Expansion Plant by October, 2019.
15. PROJECT : UPDATES ON EXPANSION PLAN
The Company expects to get effective contribution in topline from above expansion for a period of 6 (Six) Months i.e. from
October, 2019 to March, 2020.
In accordance with Section 149 (7) of the Companies Act, 2013, all Independent Director has given written declarations to
the Company confirming that they meet the criteria of independence as laid down under Section 149(6) of the Companies
Act, 2013.
19. KEY MANAGERIAL PERSONNEL (KMP) :
1. Mr. Kaushal Soparkar – CEO
In accordance with Section 149 (10) of the Companies Act, 2013, Mr. Darshan Patel and Mr. Maulik Patel, Director of the
Company are retiring by rotation at this Annual General Meeting and being eligible have offered themselves for re-
appointment.
Independent Directors :
3. Mr. Sanjay Jain – CFO
The Company has in its place adequate Internal Financial Controls with reference to Financial Statements. During the year,
such controls were tested and no reportable material weakness in the design or operation of Internal Finance Control
System was observed. As per the relevant provisions of the Companies Act, 2013, the Statutory Auditors have expressed
their views on the adequacy of Internal Financial Control in their Audit Report.
20. INTERNAL FINANCE CONTROL SYSTEM AND THEIR ADEQUACY :
Directors coming up for retirement by rotation :
Pursuant to Section 2 (51) and Section 203 of the Companies Act, 2013 read with Rules framed there under the following
persons have been designated as Key Managerial Personnel (KMP) of the Company.
2. Mr. Kamlesh Mehta – Company Secretary
MEGHMANI FINECHEM LIMITED
06
DIRECTORS' REPORT
24. Remuneration Policy :
Pursuant to the provisions of the Companies Act, 2013, the Board has carried out the annual performance evaluation of its
own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination and
Remuneration Committees.
The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation
of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the
performance of the Secretarial Department. The Directors expressed their satisfaction with the evaluation process.
The Company has formed a Corporate Social Responsibility (CSR), Committee and has identified projects in the areas of
Kanya Kelwani Nidhi, Livelihood, Health, Agaria Kalyan Yojana and Vanvasi Kalyan Yojana. These projects are in
accordance with Schedule VII of the Companies Act, 2013.
The unspent CSR amount of Rs. 345.62 Lakhs till 31.03.2019 will be spent in the Financial Year 2019-20 and report thereof
will be placed in the next Annual Report.
The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and
appointment of Directors, Senior Management and their remuneration.
● The remuneration is divided into two components viz. fixed component comprising salaries, perquisites and retirement
benefits and a variable component comprising performance bonus;
23. BOARD EVALUATION :
The CSR amount for the Financial Year 2018-19 works out to Rs. 239.07 Lakhs. During the year the Company has spent an
amount of Rs. 0.16 Lakhs towards the CSR activities.
All the Executive Directors (i.e. Executive Chairman/MD/Whole-time Director) has been paid remuneration as may be
mutually agreed between the Company and the appointee Executive Directors within the overall limits prescribed under the
Companies Act, 2013.
21. FIXED DEPOSITS :
● The remuneration including annual increment and performance bonus is decided based on the criticality of the roles
and responsibilities, the Company’s performance vis-à-vis the annual budget achievement, individual’s performance
vis-à-vis Key Result Areas (KRAs) / Key performance Indicators (KPIs), industry benchmark and current compensation
trends in the market.
A Non-Executive Director shall be entitled to receive sitting fees for each meeting of the Board or Committee of the Board
attended by him, of such sum as may be approved by the Board of Directors within the overall limits prescribed under the
Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
In determining the remuneration of the Senior Management Employees (i.e. KMPs and Executive Committee Members)
the Nomination and Remuneration Committee shall ensure / consider the following :
A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering
various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, Board
culture, execution and performance of specific duties, obligations and governance.
22. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE :
The Company has not accepted the Fixed Deposits during the year under report.
A separate exercise was carried out to evaluate the performance of individual of the Board, who were evaluated on
parameters such as level of engagement and contribution, independence of judgment safeguarding the interest of the
Company and its minority shareholders etc.
MEGHMANI FINECHEM LIMITED
07
DIRECTORS' REPORT
Your Directors had, on the recommendation of the Audit Committee, appointed M/s. Koushalya V Melwani Cost
Accountants (Registration number 100497) for the financial year 2018-19 on a remuneration of Rs.1,30,000/- per
annum. As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be
placed before the Members in a General Meeting.
27. DIRECTORS' RESPONSIBILITY STATEMENT :
25. VIGIL MECHANISM / WHISTLE BLOWER POLICY :
The Company has a WHISTLE BLOWER POLICY to deal with instance of unethical behaviour, actual or suspected fraud or
violation of Company’s code of conduct, if any. The detail of the WHISTLE BLOWER POLICY is posted on the website of
the Company.
26. AUDITORS:
A) STATUTORY AUDITORS :
M/s. SRBC & Co LLP, Chartered Accountants, Ahmedabad (Firm Regn. No. 324982E / E 300003) was appointed as
Statutory Auditors at the Annual General Meeting held on 27th July, 2017 to hold office from the conclusion of 10th
Annual General Meeting (AGM) till the conclusion of 15th AGM i.e. for a period of five years (subject to ratification of the
appointment by the Members at every AGM held after this AGM).
B) SECRETARIAL AUDITOR :
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Shah & Associates, a firm of
Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for
the financial year 2018-19 is appended to this report.
C) COST AUDITOR :
Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment
Rules, 2014, the Cost Audit records maintained by the Company is required to be audited by a Qualified Cost
Accountant.
Accordingly, a Resolution seeking Member’s approval for the remuneration payable to M/s Koushalya V Melwani, Cost
Accountants is included at Item No. 5 of the notice convening the Annual General Meeting.
st a) In the preparation of the Annual Accounts for the year ended on 31 March, 2019, the applicable accounting standards
had been followed along with proper explanation relating to material departures;
b) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates stthat are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at 31 March,
st2019 and of the profit of the Company for the period ended on 31 March, 2019.
c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance
with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
d) The Directors had prepared the annual accounts on a going concern basis;
f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such
systems were adequate and operating effectively.
To the best of their knowledge and belief and according to the information and explanation obtained the Board hereby
submits its responsibility Statement in accordance with the provisions of Section 134(5) of the Companies Act, 2013 :
e) The Directors had laid down Internal Financial Controls and that such Internal Financial Controls are adequate and
were operating effectively.
MEGHMANI FINECHEM LIMITED
08
DIRECTORS' REPORT
28. ACKNOWLEDGMENT :
Your Directors thank the various Central and State Government Departments, Organizations and Agencies for the
continued help and co-operation extended by them.
The Directors also gratefully acknowledge all stakeholders of the Company viz. Customers, Members, Dealers, Vendors,
Banks and Other Business Partners for the excellent support received from them during the year.
The Directors place on record unstinted commitment and continued contribution of the Employee to the Company.
For and on behalf of the Board
Maulik PatelthDate: 9 May, 2019 Chairman & Managing Director
Place: Ahmedabad (DIN–02006947)
MEGHMANI FINECHEM LIMITED
09
CONSERVATION OF ENERGY :
A Energy Conservation measure taken
= Ash recirculation in Boiler Furnace
= Sonic Soot Blower for Boiler No 3
= LED Light Installation
= Auxiliary steam for Turbine Generator through Bleed
B Additional Investment implemented for reduction in consumption of energy.
= Rs. 275 Lakhs.
C Impact of measures at (a) & (b) above for reduction of energy consumption and consequent impact on the cost of production.
D Total energy consumption and energy consumption per unit of production.
= Reduction of 20 Kwh per ton of production
ANNEXURE-A
As per From A
MEGHMANI FINECHEM LIMITED
10
FORM A
2 Coal
Production in MT 161473 161674
Unit KWH 11200 19861
Unit per Liter of Diesel KWH/Ltr 2.06 2.67
Total Amount Rs. 364.57 Lakhs 61.66 Lakhs
Unit KWH 445936727 443783295
Steam Generated MT 2084331 2059621
B. Consumption per unit of Producation
Through Diesel Generator
Coal Cost/Unit Rs. 3.72/unit 2.98/unit
Rate/Unit Rs. 15.33 10.02
Consumption Per MT 2776 2745
Electricity ( Rs./ MT) 15490 14137
Unit KWH 2377656 6108720
Steam Purchase - -
3 Others/internal generations - -
(b) Own Generation
Coal Cost of steam per unit (kg) Rs. 0.80/unit 0.80/unit
1 Electricity Consumption
(c) Through Coal
Consumption of Coal MT 377925 339113
(a) Purchased
Cost/Unit Rs. 29.44/unit 22.67/unit
Unit per kg of coal KWH/ Kg of Coal 1.18 1.31
Particulars 2018-2019 2017-2018
A. Power Consumption
Form for disclosure of particulars with respect to conservation of Energyst st
1 April, 2018 to 31 March, 2019
MEGHMANI FINECHEM LIMITED
11
FORM B
Technology Absorption:Form for disclosure of particulars with respect to technology absorption
A. Research & Development
4 Expenditure on R & D N.A
3 Future Plan of Action N.A
1 Specific areas in which R & D is carried out by the Company. N.A
2 Benefits derived as a result of the above R & D N.A
B. Technology Absorption, Adoption and Innovation:
A Efforts, in brief, made towards technology absorption, -
adoption and innovation.
stForeign Exchange Earnings and Outgo : as on 31 March 2019.
B Benefits derived as a result of the above efforts e.g. -
Product Improvement, Cost Reduction, Product
Development, Import Substitution etc.
The particulars with regards to :
Foreign Exchange Earnings Rs. 3,567.06 Lakhs
Foreign Exchange Outgo Rs.11,208.77 Lakhs
Place: Ahmedabad (DIN–02006947)
For and on behalf of the Board
Maulik PatelthDate: 9 May, 2019 Chairman & Managing Director
MEGHMANI FINECHEM LIMITED
12
(As on the financial year ended 31.03.2019)
Companies (Management and Administration) Rules, 2014]
EXTRACT OF ANNUAL RETURN
[Pursuant to Section 92(3) of the Companies Act, 2013, and Rule 12(1) of the
ANNEXURE- B
I. Registration and other details
CIN U24100GJ2007PLC051717
FORM NO. MGT - 9
Registration Date 11th September, 2007
Name of the Company Meghmani Finechem Limited
Category/Sub-category of the Company Company having Share Capital
Address of the Registered Office and contact details CH/1, CH/2, GIDC Industrial Estate, Dahej, Tal. Vagra, Bharuch Gujarat. Ph : 91 - 79 - 25831210
Name, address and contact details of the Registrar Not Applicable and Transfer Agent, if any
Whether Listed Company No
Caustic Soda 20119 90.00
II. Principal Business Activities of the Company
All the Business Activities contributing 10% or more of the total turnover of the Company shall be stated.
Name & Description of main NIC Code of the Product/ Service % of total turnover of Products/Services the Company
Caustic Potash 20119 10.00
Others - 0.00
III. Particulars of Holding, Subsidiary & Associate Companies
Sr. Name & Address of CIN/GIN Holding/ % of shares Applicable No the Company Subsidiary/ held Section Associate
1 Meghmani Organics Limited L24110GJ1995PLC024052 Holding 57.16 2(6)
MEGHMANI FINECHEM LIMITED
13
(a
) IN
DIV
IDU
AL
- -
- -
- -
- -
-
DIR
EC
TOR
S R
ELA
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ES
8,
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- 8,
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6 20
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8.
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FO
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OF
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9,17
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1
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(d
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- -
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(c
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ST
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NS
-
- -
- -
- -
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SU
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OTA
L :
(A
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- -
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Cat
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Cat
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f S
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No
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at
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ATE
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year
MEGHMANI FINECHEM LIMITED
14
1
INS
TIT
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S
- -
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- -
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year
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MEGHMANI FINECHEM LIMITED
15
GR
AN
D T
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L (A
)+(B
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-
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year
MEGHMANI FINECHEM LIMITED
16
Jayantibhai Patel 632,414 0.89% - 1,882,414 4.57% - 3.68%
(i) Shareholdings of Promoters
Name year 01.04.2018 year 31.03.2019 during the Shareholders Shareholding at the beginning of the Shareholding at the end of the % change
year No. of % of total % of total No. of % of total % of total shares shares of the pledged/ shares shares of pledged/ Company encumbered the encumbered to total shares Company to total shares
Natwarlal Patel 977,305 1.38% - 2,227,305 5.41% - 4.03%
Rameshbhai Patel 632,414 0.89% - 1,382,414 3.36% - 2.47%
Anandbhai Patel 980,178 1.39% - 1,480,178 3.59% - 2.20%
Ashish Soparkar 948,563 1.34% - 2,198,563 5.34% - 4.00%
(iii) Shareholding Pattern of Top Ten Shareholders (Other than Directors, Promoters and Holders of GDR and ADRs)
For Each of the Top 10 Shareholding at the beginning Shareholding at the end of
Kalpanaben Patel 442,609 0.62% 442,609 1.07%
of the Company of the Company
Taraben Patel 316,150 0.45% 316,150 0.77%
Deval Soparkar 158,190 0.22% 158,190 0.38%
Nayana Soparkar 316,150 0.45% 316,150 0.77%
No. of Shares % of total shares No. of Shares % of total shares
Limited
International Finance Corporation 17,666,050 24.97% - -
Shareholders of the year 01.04.2018 the year 31.03.2019
Meghmani Organic Limited 23,545,985 33.28% 235,45,985 57.16%
Meghmani Agrochemicals Private 16,900,835 23.88% - -
Kruti Patel 316,150 0.45% 316,150 0.77%
Bhartiben Patel 229,927 0.32% 229,927 0.56%
Vaishakhi Patel 316,149 0.45% 316,149 0.77%
Disha Patel 344,890 0.49% 344,890 0.84%
of the Company the Company
Shareholding at the beginning of the year 01.04.2018 Cumulative Shareholding during the year
No. of shares % of total shares No. of shares % of total shares of
At the beginning of the year
(ii) Change in Promoter’s Shareholding
Date wise Increase/ Decrease inPromoters Shareholding during the Refer (i) Shareholding of Promotersyear with reasons for change
At the end of the year
MEGHMANI FINECHEM LIMITED
17
Gross Salary Maulik Kaushal Ankit Karana Darshan Total Amount
A. Remuneration to Managing Directors, Whole-time Directors and/or Manager
Patel Soparkar Patel Patel Patel ( Rs. In Lakhs)
Sweat Equity - - - - - -
Commission (as % of Profit) - - - - - -
VI. Remuneration of Directors and Key Managerial Personnel
Salary as per provisions of Section 17(1) 36.00 36.00 36.00 36.00 36.00 180.00of the Income Tax Act, 1961
Profit in lieu of salary under Section 17(3) - - - - - -of the Income Tax Act, 1961
Stock Options - - - - - -
Others (Performance Bonus) 600.00 600.00 600.00 360.00 240.00 2400.00
Total (A) 640.61 640.61 640.32 400.32 280.32 2602.18
Value of perquisites under Section 17(2) 4.61 4.61 4.32 4.32 4.32 22.18of the Income Tax Act, 1961
Others, Please Specify - - -
Total (B) 2.25 2.75 1.50 6.50
Remuneration Mr. B T Thakkar Mr. M. K. Patel Ms Nirali Parikh
Particulars of Name of Directors
Remuneration to other Non –Executive Independent Directors
Commission - - -
Fees for attending Board/ 2.25 2.75 1.50 6.50Committee Meetings
Total Amount(Rs. In Lakhs)
Sweat Equity - - -
Particulars of Remuneration Key Managerial Personnel (KMP)
Stock Options - - -
Commission ( as % of Profit) - - -
(CS) (CFO)
Mr. K. D. Mehta Mr. Sanjay Jain Total Amount
Total (C) - 34.82 34.82
B. Remuneration to Key Managerial Personnel other than MDs/EDs
Salary as per provisions of Section 17(1) of the Income Tax Act, 1961 - 34.82 34.82
Gross Salary
Others - - -
Value of perquisites under Section 17(2) of the Income Tax Act, 1961 - 0.00 0.00
Company Secretary Chief Financial Officer (Rs. In Lakhs)
Profit in lieu of salary under Section 17(3) of the Income Tax Act, 1961 - - -
MEGHMANI FINECHEM LIMITED
19
(iv) Shareholding of Directors and Key Managerial Personnel
Mr. Balkrishna Thakkar - - - -
Mr. Maulik Patel 1,897,012 2.68% 1,897,012 4.61%
Mr. Chinubhai Shah - - - -
of the Company of the Company
Mr. Ankit Patel 1,609,503 2.27% 1,609,503 3.91%
For each of Directors and KMP Shareholding at the beginning of Cumulative Shareholding the year 01.04.2018 at the end of the year 31.03.2019
No. of Shares % of total shares No. of Shares % of total shares
Mr. Kaushal Soparkar 1,580,747 2.23% 1,580,747 3.84%
Mr. Karana Patel 505,954 0.72% 505,954 1.23%
Mr. Darshan Patel 94,960 0.13% 94,960 0.23%
Mr. Kamlesh Mehta - - - -
Ms. Nirali Parikh - - - -
Mr. Sanjay Jain - - - -
Dr. Arvind Patel - - - -
V. Indebtedness
Indebtedness of the Company Including interest outstanding/accrued but not due for payment
Secured Loans excluding Unsecured Deposits Total deposits Loans Indebtedness
Indebtedness at the beginning of the financial year
i) Principal Amount 4,128.03 - - 4,128.03
Total (i+ii+iii) 39,080.58 - - 39,080.58
iii) Interest accrued but not due 346.53 - - 346.53
ii) Interest due but not paid - - - -
Total (i+ii+iii) 4,128.72 - - 4,128.72
Addition 39,184.05 - - 39,184.05
ii) Interest due but not paid - - - -
i) Principal Amount 38,734.05 - - 38,734.05
Change in Indebtedness during the financial year
Reduction 4,578.72 - - 4,578.72
Indebtedness at the end of the financial year
Net Change 34,605.33 - - 34,605.33
iii) Interest accrued but not due 0.69 - - 0.69
(Rs. in Lakhs)
MEGHMANI FINECHEM LIMITED
18
A. Company
B. Directors
C. Other Officers in Defaults
VII. Penalties/ Punishment/ Compounding of Offences
Type Section of the Brief Details of Authority Appeal Companies Act Description Penalty/Punishment/ (RD/NCLT/Court) made, Compounding fees imposed if any
Penalty
Punishment None
Compounding
Punishment None
Compounding
Penalty
Penalty
Punishment None
Compounding
* * * *
MEGHMANI FINECHEM LIMITED
20
The Members,
a. Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to
express an opinion on these secretarial records based on our audit.
We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good
corporate practices by Meghmani Finechem Limited (hereinafter called the Company). Secretarial Audit was conducted in a
manner that provided us a reasonable basis for evaluating the corporate conducts/ statutory compliances and expressing our
opinion thereon.
4. Foreign Exchange Management Act, 1999 and the Rules and Regulations made there under to the extent of Foreign
Direct Investment, Overseas Direct Investment and External Commercial Borrowings;
3. The Depositories Act, 1996 and the Regulations and bye-laws framed there under (Not Applicable to the Company
during the Audit Period)
Ta - Vagra, Dist - Bharuch- 392 130.
1. The Companies Act, 2013 (the Act) and the Rules made there under;
b. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the
correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct
facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a
reasonable basis for our opinion.
GIDC Industrial Estate, Dahej,
2. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the Rules made there under;
We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for stthe financial year ended on 31 March, 2019 according to the provisions of :
Meghmani Finechem Limited,
Plot No.CH/1/CH2,
d. The compliance of the provisions of the Corporate and other applicable laws, rules, regulation, standards is the
responsibility of the management. Our examination was limited to the verification of procedures on test basis.
e. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or
effectiveness with which the management has conducted the affairs of the Company.
Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained
by the Company and also the information provided by the Company, its officers, agents and authorized representatives during
the conduct of Secretarial Audit, we hereby report that in our opinion, the Company has, during the audit period covering the stfinancial year ended on 31 March, 2019 (“Audit Period”), complied with the statutory provisions listed hereunder and also
that the Company has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to
the reporting made hereinafter :
To,
We report that -
c. We have not verified the correctness and appropriateness of the financial statement of the Company.
FORM NO.: MR - 3
SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED ON 31.03.2019(As on the financial year ended 31.03.2019)
[Pursuant to section 204(1) of the Companies Act, 2013 and
Rule No.9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014]
MEGHMANI FINECHEM LIMITED
21
SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED ON 31.03.2019
b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, as amended from
time to time; 2009 (Not Applicable to the Company during the Audit Period) ;
iii. Secretarial Standards (SS-1 & SS-2) issued by the Institute of Company Secretaries of India.
Adequate notice is given to all Directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at
least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda
items before the meeting and for meaningful participation at the meeting.
c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirement) Regulations, 2009
(Not Applicable to the Company during the Audit Period) ;
During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines,
Standards, etc. mentioned above.
5. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992
(‘SEBI Act’):
g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (Not Applicable to
the Company during the Audit Period) ; and
i. The Listing Agreements entered into by the Company with Stock Exchanges (Not Applicable to the Company
during the Audit Period) ;
f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations,
1993 regarding the Companies Act and dealing with client 2009 (Not Applicable to the Company during the
Audit Period) ;
d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase
Scheme) Guidelines, 1999 (Not Applicable to the Company during the Audit Period) ;
The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors
and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under
review were carried out in compliance with the provisions of the Act.
h) The Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998 (Not Applicable to the
Company during the Audit Period) ;
6. Other laws specifically applicable to the Company (As per Annexure-1)
a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations,
2011, as amended from time to time; (Not Applicable to the Company during the Audit Period) ;
e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008
(Not Applicable to the Company during the Audit Period) ;
ii. Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015 (with
effect from December, 2015) (Not Applicable to the Company during the Audit Period) ;
We have also examined compliance with the applicable clauses of the followings :
We further report that
We further report that there are adequate systems and processes in the Company commensurate with the size and operations
of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
Board decisions are carried out with unanimous consent and therefore, no dissenting views were required to be captured and
recorded as part of the minutes.
MEGHMANI FINECHEM LIMITED
22
3. Major decisions taken by the members in pursuance to Section 180 of the Companies Act, 2013.
We further report that during the audit period, there were no instances of:
1. Public / Rights / Preferential issue of Shares / Debentures / Sweat Equity, other than Scheme of Arrangement.
2. Redemption/Buy Back of Securities.
4. Merger / Amalgamation / Reconstruction, other than Scheme of Arrangement.
5. Foreign Technical Collaborations.
thDate: 9 May, 2019 Partner
For SHAH & ASSOCIATES
Company Secretaries
Kaushik Shah
Place: Ahmedabad FCS No 2420 CP No-1414
MEGHMANI FINECHEM LIMITED
23
ANNEXURE-A
(1) ENVIRONMENT PROTECTION ACT, 1986 & OTHER ENVIRONMENTAL LAWS
(2) THE GOODS AND SERVICES ACT, 2016
(3) INCOME TAX ACT, 1961
(4) PROFESSIONAL TAX
(10) THE PAYMENT OF BONUS ACT
(8) THE INDUSTRIAL DISPUTE ACT, 1947
(7) THE APPRENTICE ACT, 1961
(11) THE PAYMENT OF GRATUITY ACT
(14) THE EMPLOYMENT EXCHANGE ACT 1952
(15) THE EMPLOYEES PROVIDENT FUND & MISC. PROVISIONS ACT
(13) THE TRADE UNION ACT, 1926
(9) THE PAYMENT WAGES ACT, 1965
(17) THE FOREIGN TRADE (DEVELOPMENT AND REGULATION) ACT, 1992
(18) CUSTOMS ACT, 1962
(12) THE MINIMUM WAGES ACT, 1946
(5) NEGOTIABLE INSTRUMENT ACT
(6) THE FACTORIES ACT, 1948
(16) INDIAN STAMP ACT
For SHAH & ASSOCIATES
Company Secretaries
Kaushik ShahthDate: 9 May, 2019 Partner
Place: Ahmedabad FCS No 2420 CP No-1414
MEGHMANI FINECHEM LIMITED
24
INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF MEGHMANI FINECHEM LIMITED
Our opinion on the Ind AS Financial Statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial
statements give the information required by the Companies Act, 2013, as amended (“the Act”) in the manner so required and
give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the
Company as at March 31, 2019, its profit including other comprehensive income, its cash flows and the changes in equity for the
year ended on that date.
Basis for Opinion
Other Information
The Company’s Board of Directors is responsible for the other information. The other information comprises the information
included in the Director’s Report but does not include the Ind AS Financial Statements and our auditor’s report thereon.
In connection with our audit of the Ind AS Financial Statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the Financial Statements or our knowledge obtained in
the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
We have audited the accompanying Ind AS Financial Statements of Meghmani Finechem Limited (“the Company”), which
comprise the Balance sheet as at March 31 2019, the Statement of Profit and Loss, including the Statement of Other
Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to
the Financial Statements, including a summary of significant accounting policies and other explanatory information.
Responsibilities of Management for the Ind AS Financial Statements
The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the
preparation of these Ind AS Financial Statements that give a true and fair view of the financial position, financial performance
including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting
principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act
read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes
maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the
Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of
adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the
accounting records, relevant to the preparation and presentation of the Ind AS Financial Statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Report on the Audit of the Ind AS Financial Statements
We conducted our audit of the Ind AS Financial Statements in accordance with the Standards on Auditing (SAs), as specified
under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ‘Auditor’s
Responsibilities for the Audit of the Ind AS Financial Statements’ section of our report. We are independent of the Company in
accordance with the ‘Code of Ethics’ issued by the Institute of Chartered Accountants of India together with the ethical
requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder,
and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS
Financial Statements.
MEGHMANI FINECHEM LIMITED
25
INDEPENDENT AUDITORS’ REPORT
Our objectives are to obtain reasonable assurance about whether the Ind AS Financial Statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
Ind AS Financial Statements .
● Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in
the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the
Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.
In preparing the Ind AS Financial Statements, management is responsible for assessing the Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Ind AS Financial Statements
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout
the audit. We also:
● Identify and assess the risks of material misstatement of the Ind AS Financial Statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
● Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
● Evaluate the overall presentation, structure and content of the Ind AS Financial Statements, including the disclosures, and
whether the Ind AS Financial Statements represent the underlying transactions and events in a manner that achieves fair
presentation.
● Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on
the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Company to cease to continue as a going concern.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, related safeguards.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
26
1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the Central Government of India in
terms of sub-section (11) of section 143 of the Act, we give in the “Annexure 1” a statement on the matters specified in
paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that :
Report on Other Legal and Regulatory Requirements
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material
foreseeable losses;
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our
examination of those books;
(g) In our opinion, the managerial remuneration for the year ended March 31, 2019 has been paid / provided by the
Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
(h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies
(Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the
explanations given to us:
(e) On the basis of the written representations received from the directors as on March 31, 2019 taken on record by the
Board of Directors, none of the directors is disqualified as on March 31, 2019 from being appointed as a director in terms
of Section 164 (2) of the Act;
(d) In our opinion, the aforesaid Ind AS Financial Statements comply with the Accounting Standards specified under
Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were
necessary for the purposes of our audit;
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the
Company.
i. The Company has disclosed the impact of pending litigations on its financial position in its Ind AS Financial
Statements – Refer Note 38 to the Ind AS Financial Statements ;
(c) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the
Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of
account;
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company with reference to
these Ind AS Financial Statements and the operating effectiveness of such controls, refer to our separate Report in
“Annexure 2” to this report;
INDEPENDENT AUDITORS’ REPORT
ICAI Firm Registration Number: 324982E / E300003
per Sukrut Mehta,
Membership Number: 101974
Place : Ahmedabad
CHARTERED ACCOUNTANTS
For S R B C & CO LLP
Partner
thDATE : 9 MAY, 2019
MEGHMANI FINECHEM LIMITED
27
v. The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies
(Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not
applicable and hence not commented upon.
vii. (a) According to the information and explanations given to us and on the basis of our examination of the records of the
Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including
provident fund, income-tax, duty of custom, goods and service tax, professional tax, cess and other material statutory
dues are generally regularly deposited with the appropriate authorities though there has been a slight delay in a few
cases. The provisions relating to employees’ state insurance are not applicable to the Company.
(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were
identified on such verification.
(c ) According to the information and explanations given by the management, the title deeds of immovable properties
included in property, plant and equipment are held in the name of the Company.
(c ) The dues of income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax and cess on account of
any dispute, are as follows:
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund,
employees’ state insurance, income-tax, service tax, sales tax, duty of custom, duty of excise, value added tax, goods
and service tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six
months from the date they became payable.
ii. The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification
is reasonable. No material discrepancies were noticed on such physical verification.
i. (a) The Company has maintained proper records showing full, including quantitative details and situation of fixed assets.
iii. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured
to Companies, Firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of
the Companies Act, 2013. Accordingly, the provisions of clause 3(iii) (a),(b) and (c) of the Order are not applicable to the
Company and hence not commented upon.
iv. In our opinion and according to the information and explanations given to us, provisions of section 186 of the Act in respect
of investments made have been complied with by the Company. Further, in our opinion and according to the information
and explanations given to us, since there are no loans, guarantees, and securities given in respect of which provisions of
section 185 and 186 of the Act are applicable and hence not commented upon.
vi. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central
Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to the
manufacture of basic chemicals, and are of the opinion that prima facie, the specified accounts and records have been
made and maintained. We have not, however, made a detailed examination of the same.
ANNEXURE 1 REFERRED TO IN PARAGRAPH 1 OF REPORT ON OTHER LEGALAND REGULATORY REQUIREMENTS OF OUR REPORT OF EVEN DATE OF
stMEGHMANI FINECHEM LIMITED FOR THE YEAR ENDED 31 MARCH, 2019.
Income Tax Act, 1961 Income Tax 40.86 2010-11 Commissioner of Income tax
(Rs. in Lakhs)* amount relates dispute is pending
The Finance Act Service Tax 83.92 2011-12 to 2014-15 CESTAT,
Custom Act, 1962 Custom Duty 621.83 2012-13 CESTAT
(Service Tax), 1994 Departmental Authorities
Name of Statute Nature of Dues Amount involved Period to which the Forum where the
* Net of amount paid under protest amounting to Rs. 8.10 Lakhs
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
28
xiv. According to the information and explanations given to us and on an overall examination of the balance sheet, the
Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures
during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the Company and,
not commented upon.
xv. According to the information and explanations given by the management, the Company has not entered into any non-cash
transactions with directors or persons connected with him as referred to in section 192 of the Act.
xiii. According to the information and explanations given by the management, transactions with the related parties are in
compliance with Section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the
notes to the Ind AS Financial Statements, as required by the applicable accounting standards.
xvi. According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act,
1934 are not applicable to the Company.
xi. According to the information and explanations given by the management, the managerial remuneration has been paid /
provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the
Companies Act, 2013.
xii. In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the order are not applicable
to the Company and hence not commented upon.
viii. In our opinion and according to the information and explanations given by the management, the Company has not
defaulted in repayment of loans or borrowings to financial institutions and banks. The Company did not have any due
payable to debenture holders and government during the year.
ix. According to the information and explanations given by the management, the Company has utilized the monie s raised by
way of term loans for the purposes for which they were raised, though idle funds which were not required for immediate
utilization have been gainfully invested in fixed deposits with banks. The maximum amount of idle funds invested during the
year was Rs. 14,350 Lakhs, of which Rs 12,000 Lakhs was outstanding at the end of the year. The Company has not raised
money by way of initial public offer, further public offer and debt instrument.
x. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements
and according to the information and explanations given by the management, we report that no fraud by the Company or no
fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
ANNEXURE 1 REFERRED TO IN PARAGRAPH 1 OF REPORT ON OTHER LEGALAND REGULATORY REQUIREMENTS OF OUR REPORT OF EVEN DATE OFMEGHMANI FINECHEM LIMITED FOR THE YEAR ENDED MARCH 31, 2019.
Place : Ahmedabad
For S R B C & CO LLP
CHARTERED ACCOUNTANTS
Membership Number: 101974
ICAI Firm Registration Number: 324982E / E300003
per Sukrut Mehta,
Partner
thDATE : 9 MAY, 2019
MEGHMANI FINECHEM LIMITED
2 9
29
ANNEXURE 2 TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATEON THE IND AS FINANCIAL STATEMENTS OF MEGHMANI FINECHEM LIMITED
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013
(“the Act”)
Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting with reference to
the financial statement based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal
Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing as specified under section
143(10) of the Act, to the extent applicable to an audit of internal financial controls and, both issued by the Institute of Chartered
Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether adequate internal financial controls system over financial
reporting with reference to the financial statement was established and maintained and if such controls operated effectively in all
material respects.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the
internal financial controls system over financial reporting.
A company's internal financial control over financial reporting with reference to the financial statement is a process designed to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles. A company's internal financial control over
financial reporting with reference to the financial statement includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of
the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that
could have a material effect on the financial statements.
Management’s Responsibility for Internal Financial Controls
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system
over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness
exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The
procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the
Ind AS Financial Statements, whether due to fraud or error.
The Company’s Management is responsible for establishing and maintaining internal financial controls based on the internal
control over financial reporting criteria established by the Company considering the essential components of internal control
stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered
Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial
controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the
Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and
completeness of the accounting records, and the timely preparation of reliable financial information, as required under the
Companies Act, 2013.
We have audited the internal financial controls over financial reporting with reference to the Financial Statement of Meghmani
Finechem Limited (“the Company”) as of March 31, 2019 in conjunction with our audit of the Ind AS Financial Statements of the
Company for the year ended on that date.
Auditor’s Responsibility
Meaning of Internal Financial Controls Over Financial Reporting with reference to the financial statement
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
30
Because of the inherent limitations of internal financial controls over financial reporting with reference to the financial statement,
including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud
may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting with
reference to the financial statement to future periods are subject to the risk that the internal financial control over financial
reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting
with reference to the financial statement and such internal financial controls over financial reporting were operating effectively as
at March 31, 2019, based on the internal control over financial reporting criteria established by the Company considering the
essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial
Reporting issued by the Institute of Chartered Accountants of India.
Inherent Limitations of Internal Financial Controls Over Financial Reporting with reference to the financial statement
ANNEXURE 2 TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATEON THE IND AS FINANCIAL STATEMENTS OF MEGHMANI FINECHEM LIMITED
CHARTERED ACCOUNTANTS
per Sukrut Mehta,
Membership Number: 101974
Partner
Place : Ahmedabad thDATE : 9 MAY, 2019
For S R B C & CO LLP
ICAI Firm Registration Number: 324982E / E300003
MEGHMANI FINECHEM LIMITED
31
stBALANCE SHEET AS AT 31 MARCH 2019(Rs. in Lakhs )
st stPARTICULARS Note 31 March 2019 31 March 2018I. ASSETS (1) Non-Current Assets (a) Property, Plant and Equipment 3.1 29,471.65 34,721.39
( c) Other Intangible Assets 3.3 - 0.04 (b) Capital Work in Progress 3.2 46,824.83 7,880.26
(d) Financial Assets (i) Others Financial Assets 4 485.47 470.61 (e) Non Current Tax Assets (Net) 33 28.06 751.78 (f) Income Tax Assets (Net) 5 348.40 49.77 (g) Other Non-Current Assets 6 1,831.07 4,540.55 Total Non-Current Assets 78,989.48 48,414.40 (2) Current Assets (a) Inventories 7 4,065.41 2,960.05
(b) Instruements entirely Equity in nature 15 21,091.99 -
Summary of Significant Accounting Policies 2
(c) Other Current Assets 14 565.80 226.86
(c) Other Equity 16 24,065.81 44,656.82
Non Current Liabilities
TOTAL ASSETS 1,04,421.38 67,084.25
(i) Borrowings 20 236.62 3,335.31
(d) Current Tax Liabilities(Net) 25 9.62 346.71
Current Liabilities
(ii) Trade Receivables 9 7,736.30 7,686.27
Total Current Assets 25,431.90 18,669.85
(b) Financial Assets
Equity (a) Equity Share Capital 15 4119.31 7,076.00
Liabilities
II. EQUITY AND LIABILITIES
(b) Provisions 19 111.57 26.11
(iii) Cash and Cash Equivalents 10 12,921.38 7.31
Total Non Current Liabilities 37,426.93 116.11
(i) Borrowings 17 36,534.05 90.00
(vi) Other Financial Assets 13 107.37 124.94
(ii) Other Financial Liabilities 18 781.31 -
(v) Loans 12 35.64 21.62
(a) Financial Liabilities
Total outstanding dues of Micro and Small Enterprise 85.86 38.34 Total outstanding dues of Creditors other than Micro and Small Enterprise 3,548.25 3,277.15 (iii) Other Financial Liabilities 22 13,603.18 7,833.71
(iv) Bank Balances other than (iii) above 11 - 500.99
(ii) Trade Payables 21
(i) Investments 8 - 7,141.81
(b) Other Current Liabilities 23 228.80 400.15 (c) Provisions 24 5.01 3.95
Total Current Liabilities 17,717.34 15,235.32
Total Equity 49,277.11 51,732.82
(a) Financial Liabilities
Total Liabilities 55,144.27 15,351.43 TOTAL EQUITY AND LIABILITIES 1,04,421.38 67,084.25
The accompanying Notes are an integral part of these Financial Statements
th DATE : 9 MAY, 2019
AS PER OUR REPORT OF EVEN DATE OF DIRECTORS OF FOR S R B C & CO LLP MEGHMANI FINECHEM LIMITED CHARTERED ACCOUNTANTS (CIN U24100GJ2007PLC051717)
ICAI Firm Regn. No. 324982E / E300003 SANJAY JAIN MAULIK PATELper SUKRUT MEHTA CHIEF FINANCIAL OFFICER CHAIRMAN & MANAGING DIRECTOR PARTNER (DIN NO 02006947)
PLACE : AHMEDABAD COMPANY SECRETARY MANAGING DIRECTOR
FOR AND ON BEHALF OF THE BOARD
thDATE : 9 MAY, 2019 (DIN No. 01998162)
PLACE : AHMEDABAD
M. NO.: 101974 K.D. MEHTA KAUSHAL SOPARKAR
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
32
K.D. MEHTA KAUSHAL SOPARKAR COMPANY SECRETARY MANAGING DIRECTOR
PLACE : AHMEDABAD PLACE : AHMEDABADth thDATE : 9 MAY, 2019 DATE : 9 MAY, 2019
(DIN No. 01998162)
FOR S R B C & CO LLP MEGHMANI FINECHEM LIMITED CHARTERED ACCOUNTANTS (CIN U24100GJ2007PLC051717) ICAI Firm Regn. No. 324982E / E300003
per SUKRUT MEHTA SANJAY JAIN CHAIRMAN & MANAGING DIRECTOR
AS PER OUR REPORT OF EVEN DATE FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF
PARTNER CHIEF FINANCIAL OFFICER (DIN NO 02006947)
MAULIK PATEL
M. NO.: 101974
st STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH 2019(Rs. in Lakhs )
st stPARTICULARS Note 31 March 2019 31 March 2018 Revenue
Revenue from Operations 26 71,039.30 61,489.26
Cost of Materials Consumed 28 25,667.26 23,541.19
Employee Benefits Expenses 30 4,717.81 3,606.31
Finance Costs 31 2,535.84 896.97
Expenses
Other Expenses 32 9,618.04 6,775.36
Tax expense: 33
Total Expenses (B) 47,817.01 42,385.02
Depreciation and Amortization Expenses 3 5,409.88 5,527.15
Other Income 27 1,006.84 412.63
Changes in Inventories of Finished Goods 29 (131.82) 300.53
Profit Before Tax (C) = (A-B) 24,229.13 19,516.87
Current Tax 5,233.10 4,140.00
Adjustment of Tax relating to Earlier Periods 12.27 (1,242.61)
Deferred Tax (1,837.66) (439.84)
Excise Duty on Sales - 1,737.51
Utilisation of MAT Credit 2,540.73 1,511.87
Total Tax Expense (D) 5,948.44 3,969.42
Total Income (A) 72,046.14 61,901.89
Diluted 20.37 21.97
Remeasurement gain/(loss) on Defined Benefit Plans (57.87) 7.95
Summary of Significant Accounting Policies 2
Income Tax Effect on above 20.22 (2.78)
Earnings Per Equity Share (Face Value Per Share - Rs. 10 Each) (In Rs.)
Profit for the Year (E) = (C-D) 18,280.69 15,547.45
Total Other Comprehensive Income / (Loss) for the Year, net of Tax (F) (37.65) 5.17
Items that will not be reclassified to Profit or Loss
Total Comprehensive Income for the Year (G) = (E+F) 18,243.04 15,552.62
The accompanying Notes are an integral part of these Financial Statements
Other Comprehensive Income
Basic 34 25.09 21.97
MEGHMANI FINECHEM LIMITED
33
stCASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2019
Increase in Other Current Financial Liabilities 1,964.55 2,024.50
Depreciation and Amortisation Expenses 5,409.88 5,527.15
Net Cash from Operating Activities 26,134.86 22,489.37
Proceed from Sale of Property, Plant & Equipment 2.50 98.76
Adjustment for:
(Increase)/Decrease in Other Non Current Financial Assets (10.47) 3.33
(Increase)/Decrease in Other Current Assets (338.94) 573.31
Interest Income (139.94) (29.01)
A. Cash Flow from Operating Activities
Unrealised Foreign Exchange Loss/( Gain) (504.41) 29.96
Increase/(Decrease) in Long Term Provision 27.59 (2.68)
(Decrease) in Other Current Liabilities (171.34) (16.50)
Adjustment for :
(Increase) in Inventories (1,105.36) (144.88)
Profit on Sale of Property, Plant & Equipment (0.16) -
Profit on Sale of Mutual Fund (585.83) (369.86)
Operating Profit before Working Capital changes 31,210.62 25,619.26
Increase in Trade Payables 404.08 1,444.35
Profit Before Taxation 24,229.13 19,516.87
(Increase)/Decrease in Other Current Financial Assets 98.21 (64.25)
st stPARTICULARS 31 March 2019 31 March 2018
(Increase)/Decrease in Other Non Current Assets - 115.91
(Increase) in Short Term Loans and Advances (14.02) (15.15)
Dividend Income (3.47) (1.54)
Increase in Short Term Provisions 1.06 2.58
Sundry Balance Written back (149.36) 6.67
(Increase) in Trade Receivables (50.03) (3,247.52)
Interest and Finance Charges 2,173.48 896.97
Mark to Market Loss on Derivative 781.31 42.05
Working Capital Changes 805.33 673.00
Cash Generated from Operation 32,015.95 26,292.26
Direct Taxes Paid (Net of Refund) (5,881.09) (3,802.91)
B. Cash Flow from Investment Activities
Purchase of Property, Plant & Equipment (30,263.96) (12,346.74)
Proceeds from Sale of Mutual Funds 33,730.72 7,329.92
Investment in Mutual Fund (26,003.08) (11,249.07)
Dividend Received 3.47 1.54
Fixed Deposits redeemed 84,400.00 2,400.00
Net Cash (Used in) Investing Activities (21,730.00) (16,658.80)
Interest Received 376.65 20.98
Fixed Deposits made (83,976.30) (2,914.18)
(Rs. in Lakhs )
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
34
CHARTERED ACCOUNTANTS (CIN U24100GJ2007PLC051717)
K.D. MEHTA KAUSHAL SOPARKAR
PARTNER CHIEF FINANCIAL OFFICER (DIN NO 02006947)
ICAI Firm Regn. No. 324982E / E300003
FOR S R B C & CO LLP MEGHMANI FINECHEM LIMITED
M. NO.: 101974
COMPANY SECRETARY MANAGING DIRECTOR
th thDATE : 9 MAY, 2019 DATE : 9 MAY, 2019PLACE : AHMEDABAD PLACE : AHMEDABAD
AS PER OUR REPORT OF EVEN DATE FOR AND ON BEHALF OF THE BOARD
MAULIK PATEL
OF DIRECTORS OF
per SUKRUT MEHTA SANJAY JAIN CHAIRMAN & MANAGING DIRECTOR
(DIN No. 01998162)
stCASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2019
C. Cash Flow from Financing Activities
st stPARTICULARS 31 March 2019 31 March 2018
Interest and Finance Charges Paid (904.99) (901.50)
Repayment of Long-Term Borrowing (4,578.03) (6,764.57)
Proceeds from Long-Term Borrowing 39,613.00 -
Repayment of Short-Term Borrowing (Net) (3,098.68) 1,834.27
Dividend paid on Preference Shares (1,535.56) -
Tax on Dividend paid on Preference Shares (315.64) -
Proceeds from issue of Share Capital 1,500.00 -
Notes to the Cash Flow Statement for the Year ended on 31st March 2019
Cash & Cash Equivalent at the end of the year (refer note 10) 12,921.38 7.31
Net Increase (Decrease) in Cash and Cash Equivalents (A+B+C) 12,914.07 (1.24)
The accompanying Notes are an integral part of these Financial Statements.
Cash and Cash Equivalent at the beginning of the year 7.31 8.56
Redemption of Preference Shares (22,170.89) -
Deposits with Schedule Banks 12,000.00 -
The Cash Flow Statement has been prepared as per Indirect Method in accordance with the Indian Accounting Standard - 7 on “Statement of Cash Flow" issued by the Institute of Chartered Accountants of India.
Net Cash (Used in) generated from Financing Activities 8,509.21 (5,831.80)
Cash on Hand 0.92 1.55
Cash and Cash Equivalent at the end of the year 12,921.38 7.31
Balance with Schedule Banks in Current Accounts 920.46 5.76
Cash and Cash Equivalent comprises as under
(Rs. in Lakhs )
MEGHMANI FINECHEM LIMITED
35
st
STA
TE
ME
NT
OF
CH
AN
GE
S IN
EQ
UIT
Y (
SO
CIE
) F
OR
TH
E Y
EA
R E
ND
ED
31
MA
RC
H 2
019
(Rs
. in
La
kh
s)
Bala
nce a
s a
t 1st
Ap
ril 2017
7,0
7,5
9,9
99
7
,07
6.0
0
(a)
Eq
uit
y S
hare
Cap
ital
Bala
nce
as a
t 31st
Marc
h 2
018
7
,07
,59
,99
9
7,0
76
.00
(R
efe
r N
ote
15
)
Part
icu
lars
N
o.
of
Sh
are
s
Am
ou
nt
Equity
sh
are
of R
s.10 e
ach
Iss
ued, S
ubsc
ribed a
nd f
ully
Paid
up
Share
s ca
nce
lled p
urs
uant to
Sch
em
e o
f A
malg
am
atio
n (
refe
r note
42)
(3
,45
,66
,88
5)
(3
,45
6.6
9)
Bala
nce
as a
t 31st
Marc
h 2
019
4,1
1,9
3,1
14
4
,11
9.3
1
Issu
e o
f E
quity
Share
Capita
l (re
fer
note
42)
50
,00
,00
0
50
0.0
0
(Rs
. in
La
kh
s)
Share
s is
sued p
urs
uant to
Sch
em
e o
f A
malg
am
atio
n (
refe
r note
42)
21
,09
,19
,87
1
21
,09
1.9
9
(R
efe
r N
ote
15
)
8%
Optio
nally
Conve
rtib
le R
edeem
able
Pre
fere
nce
Share
of
Rs.
10/-
Iss
ued ,
Subsc
ribed a
nd F
ully
Paid
up
(b)
Instr
um
en
t E
nti
rely
Eq
uit
y in
Natu
re
Part
icu
lars
N
o.
of
Sh
are
s
Am
ou
nt
Bala
nce
as a
t 1st
Ap
ril 2017
-
-
Bala
nce
as a
t 31st
Marc
h 2
018
-
-
Bala
nce
as a
t 31st
Marc
h 2
019
21
,09
,19
,87
1
21
,09
1.9
9
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
36
(Rs
. in
La
kh
s)
st
STA
TE
ME
NT
OF
CH
AN
GE
S IN
EQ
UIT
Y (
SO
CIE
) F
OR
TH
E Y
EA
R E
ND
ED
31
MA
RC
H 2
019
Pro
fit for
the Y
ear
-
-
-
15
,54
7.4
5
15
,54
7.4
5
Pre
miu
m u
tilis
ed p
urs
uant to
Sch
em
e o
f A
malg
am
atio
n
-
(1
5,1
42.0
0)
-
-
(
15
,14
2.0
0)
(refe
r n
ote
42)
Oth
er
Com
pre
hensi
ve Inco
me for
the Y
ear
(net
of
taxe
s)
-
-
-
5
.17
5
.17
Pro
fit for
the Y
ear
-
-
-
18
,28
0.6
9
18
,28
0.6
9
Oth
er
Com
pre
hensi
ve Inco
me for
the Y
ear
(net
of Ta
xes)
-
-
-
(37
.65
) (
37
.65
)
To
tal C
om
pre
hen
siv
e In
co
me f
or
the Y
ear
-
-
-
15
,55
2.6
2
15
,55
2.6
2
Non C
ash
Capita
l contr
ibutio
n fro
m H
old
ing C
om
pany
2
.03
-
-
-
2
.03
during t
he Y
ear
fro
m H
old
ing
Co
mp
an
y
The a
ccom
panyi
ng N
ote
s are
an in
tegra
l part
of
these
Fin
anci
al S
tate
ments
Bala
nc
e a
t 1st
Ap
ril 2017
51.5
9
14,1
42.0
0
-
14
,90
2.4
8
29
,09
6.0
7
Bala
nc
e a
t 31st
Marc
h 2
018
59.7
2
14,1
42.0
0
-
30
,45
5.1
0
44
,65
6.8
2
Bala
nc
e a
s a
t 31st
Marc
h 2
019
61.7
5
-
(2
4,6
94
.08
)
48
,69
8.1
4
24
,06
5.8
1
Sum
ma
ry o
f S
ignifi
cant A
ccountin
g P
olic
ies
Non C
ash
Capita
l contr
ibutio
n fro
m H
old
ing C
om
pany
8.1
3
-
-
-
8.1
3
during t
he Y
ear
Part
icu
lars
N
on
Cash
S
ecu
riti
es
Ca
pti
al
R
eta
ine
d
To
tal
Oth
er
Cap
ital
Co
ntr
ibu
tio
n
Pre
miu
m
Re
se
rve
E
arn
ing
s
Eq
uit
y
Capita
l Rese
rve g
enera
ted p
urs
uant to
Sch
em
e o
f
-
-
(24
,69
4.0
8)
-
(2
4,6
94
.08
)
(C)
Oth
er
Eq
uit
y
R
eserv
es &
Su
rplu
s (
Re
fer
No
te 1
6)
Pre
miu
m r
ece
ived o
n is
sue o
f E
quity
Share
Capita
l -
1,0
00.0
0
-
-
1
,00
0.0
0
Am
alg
am
atio
n (
refe
r note
42)
To
tal C
om
pre
hen
siv
e In
co
me f
or
the Y
ear
-
-
-
18
,24
3.0
4
18
,24
3.0
4
AS
PE
R O
UR
RE
PO
RT
OF
EV
EN
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FO
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ND
ON
BE
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LF
OF
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OF
F
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& C
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CH
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CH
AR
TE
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D A
CC
OU
NTA
NT
S
(C
IN U
24100G
J2007P
LC
051717)
ICA
I F
irm
Reg
n. N
o. 324982E
/ E
300003
MA
UL
IK P
AT
EL
p
er
SU
KR
UT
ME
HTA
S
AN
JA
Y J
AIN
C
HA
IRM
AN
& M
AN
AG
ING
D
IRE
CT
OR
M. N
O.:
101974
K
.D. M
EH
TA
K
AU
SH
AL
SO
PA
RK
AR
PA
RT
NE
R
CH
IEF
FIN
AN
CIA
L O
FF
ICE
R
(DIN
NO
02006947)
PL
AC
E :
AH
ME
DA
BA
D
P
LA
CE
: A
HM
ED
AB
AD
(DIN
No
. 01998162)
C
OM
PA
NY
SE
CR
ETA
RY
M
AN
AG
ING
D
IRE
CT
OR
thth
DA
TE
:
09
MA
Y, 2019
D
AT
E :
09
MA
Y, 2019
MEGHMANI FINECHEM LIMITED
37
STNOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 MARCH 2019
The Financial Statements were authorized for issue in accordance with a resolution passed in Board Meeting held on th9 May 2019.
● Derivative financial instruments
● Certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial
instruments)
The Financial Statements have been prepared on accrual basis and under historical cost basis, except for the
following assets and liabilities which have been measured at fair value:
Meghmani Finechem Limited (the Company) is a Public Company limited by shares domiciled in India, incorporated under
the provisions of Companies Act, 1956. The registered office at Plot No.CH1, CH2, GIDC Industrial Estate, Dahej, Tal.
Vagara, Dist. Bharuch 392 130 Gujarat, India. The Company is engaged in manufacturing and selling of Basic Chemical
Products.
1 Corporate Information
2 Significant Accounting Policies
2.1 Basis for Preparation of Accounts
The Financial Statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified
under the Companies (Indian Accounting Standards) Rules, 2015 as amended thereafter.
In addition, the Financial Statements are presented in INR which is also the Company's functional currency and all
values are rounded to the nearest Lakh (INR 00,000), except when otherwise indicated.
2.2 Significant Accounting Estimates, Assumptions and Judgements
Estimates and Assumptions
The preparation of the Company’s Financial Statements requires management to make estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures,
and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in
outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
There are many transactions and calculations undertaken during the ordinary course of business for which the
ultimate tax determination is uncertain. Where the final tax outcome of these matters is different from the amounts
initially recorded, such differences will impact the current and deferred tax provisions in the period in which the tax
determination is made. The assessment of probability involves estimation of a number of factors including future
taxable income.
A liability in respect of defined benefit plans is recognised in the balance sheet, and is measured as the present value
of the defined benefit obligation at the reporting date less the fair value of the plan’s assets. The present value of the
defined benefit obligation is based on expected future payments which arise from the fund at the reporting date,
calculated annually by independent Actuaries. Consideration is given to expected future salary levels, experience of
employee departures and periods of service. Refer note 35 for details of the key assumptions used in determining
the accounting for these plans.
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date,
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
next financial year, are described below. The Company based its assumptions and estimates on parameters
available when the financial statements were prepared. Existing circumstances and assumptions about future
developments, however, may change due to market changes or circumstances arising that are beyond the control of
the Company. Such changes are reflected in the assumptions when they occur.
Taxes
Defined Benefit Plans (Gratuity Benefits)
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
38
Property, Plant and Equipment as disclosed in note 3 are depreciated over their useful economic lives. Management
reviews the useful economic lives at least once a year and any changes could affect the depreciation rates
prospectively and hence the asset carrying values.
Intangible Assets
Intangible development costs are capitalised as and when technical and commercial feasibility of the asset is
demonstrated and approved by authorities, future economic benefits are probable. The costs which can be
capitalised are directly attributable to development of the asset. Research costs are expensed as incurred.
Intangible assets are tested for impairment whenever events or changes in circumstances indicate that their carrying
amounts may not be recoverable. Refer note 2.3 (e) for the estimated useful life of Intangible assets. The carrying
value of Intangible assets has been disclosed in note 3.4.
Impairment of Non- Financial Assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any
indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s
recoverable amount. An asset’s recoverable amount is the higher of an asset’s fair value less costs of disposal and its
value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or group of assets. Where the carrying amount of an asset exceeds its
recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessment of the time value of money and the risk specific to the asset. In determining fair
value less cost of disposal, recent market transactions are taken into account. If no such transactions can be
identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples,
quoted share price for publicly traded subsidiaries or other available fair value indicators.
2.3 Summary of Significant accounting policies
a. Current Vs. Non-Current classification:
The Company presents assets and liabilities in the statement of Assets and Liabilities based on Current/ Non-
Current classification.
Useful economic lives of Property, Plant and Equipment
● Held primarily for the purpose of trading
A liability is treated as Current when it is:
● Expected to be realised or intended to be sold or consumed in normal operating cycle
● Expected to be settled in normal operating cycle
● Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period
An asset is treated as Current when it is:
● Held primarily for the purpose of trading
● Expected to be realised within twelve months after the reporting period, or
STNOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 MARCH 2019
MEGHMANI FINECHEM LIMITED
39
b. Revenue Recognition
Volume Rebates : The Company provides retrospective volume rebates to certain customers once the
quantity of product purchases during the period exceeds a threshold specified in the contract.
The operating cycle is the time between the acquisition of assets for processing and their realization in cash and
cash equivalents. The Company has identified twelve months as its operating cycle.
1) Sale of Goods
Revenue from sale of goods is recognised at the point in time when control of the goods is transferred to the
Customer, generally on dispatch/ delivery of the goods or terms as agreed with the Customer. The normal
credit term is 30 to 90 days from the date of dispatch. The Company considers whether there are other
promises in the contract that are separate performance obligations to which a portion of the transaction price
needs to be allocated. In determining the transaction price for the sale of goods, the Company considers the
effects of variable consideration, the existence of significant financing components, non-cash consideration,
and consideration payable to the Customer (if any).
ii) Contract Assets
A receivable represents the Company’s right to an amount of consideration that is unconditional (i.e.,
only the passage of time is required before payment of the consideration is due). Refer to accounting
policies of financial assets in (Financial Instruments – initial recognition and subsequent
measurement.)
● Due to be settled within twelve months after the reporting period, or
All other assets and liabilities are classified as Non-Current Assets and Liabilities. Deferred Tax Assets and
Liabilities are classified as non-current assets and liabilities.
● There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period
Revenue from contracts with Customers is recognised when control of the goods are transferred to the Customer
at an amount that reflects the consideration to which the company expects to be entitled in exchange for those
goods. Revenue is measured at the fair value of the consideration received or receivable, taking into account
contractually defined terms of payment and excluding taxes or duties collected on behalf of the government. The
Company has generally concluded that it is the principal in its revenue arrangements.
i) Variable consideration
If the consideration in a contract includes a variable amount, the Company estimates the amount of
consideration to which it will be entitled in exchange for transferring the goods to the Customer. The
variable consideration is estimated at the time of completion of performance obligation and constrained
until it is highly probable that a significant revenue reversal in the amount of cumulative revenue
recognised will not occur when the associated uncertainty with the variable consideration is subsequently
resolved. Some contracts for the sale of goods provide customers with cash discount in accordance with
the Company policy. The cash discount component gives rise to variable consideration.
A contract asset is the right to consideration in exchange for goods transferred to the Customer. If the
Company performs its obligation by transferring goods to a Customer before the customer pays
consideration or before payment is due, a contract asset is recognised for the earned consideration that is
conditional.
a) Trade Receivables
STNOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 MARCH 2019
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
40
The Company’s Financial Statements are presented in INR, which is also the Company’s functional currency.
Transactions in foreign currencies are initially recorded by the Company at the functional currency spot rates at
the date the transaction first qualifies for recognition. However, for practical reasons, the Company uses an
average rate if the average approximates the actual rate at the date of the transaction.
4) Dividend
A contract liability is the obligation to transfer goods or services to a Customer for which the Company has
received consideration (or an amount of consideration is due) from the Customer. If a Customer pays
consideration before the Company transfers goods to the Customer, a contract liability is recognised
when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised
as revenue when the Company performs under the contract.
For all financial instruments measured at amortized cost, interest income is recorded using the effective
interest rate (EIR). The EIR is the rate that exactly discounts the estimated future cash receipts over the
expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of
the financial asset. When calculating the effective interest rate, the Company estimates the expected cash
flows by considering all the contractual terms of the financial instrument (for example, prepayment,
extension, call and similar options) but does not consider the expected credit losses. Interest income is
included in other income in the Statement of Profit or Loss.
iii) Contract Liabilities
2) Interest Income
3) Export Incentives
Export incentives under various schemes notified by Government are accounted for in the year of exports
based on eligibility and when there is no uncertainty in receiving the same and is included in revenue in the
Statement of Profit and Loss due to its operating nature.
5) Insurance Claims
Dividend income is recognised when the right to receive the same is established, which is generally when
shareholders approve the dividend.
Claims receivable on account of insurance are accounted for to the extent the Company is virtually certain of
their ultimate collection
c Foreign Currencies
Transactions and Balances
Exchange differences arising on settlement or translation of monetary items are recognized in profit or loss.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot
rates of exchange at the reporting date.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in foreign
currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss
arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the
gain or loss on the change in fair value of the item (i.e. translation differences on items whose fair value gain or
loss is recognised in OCI or Statement of Profit or Loss are also recognised in OCI or profit or loss, respectively).
STNOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 MARCH 2019
MEGHMANI FINECHEM LIMITED
41
d. Fair Value Measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability takes place either:
● In the principal market for the asset or liability, or
● In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or
a liability is measured using the assumptions that market participants would use when pricing the asset or
liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participants that
would use the asset in its highest and best use.
The Company measures certain financial instruments at fair value at each Balance Sheet date.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the Financial Statements are categorised
within the fair value hierarchy, described as under, based on the lowest level input that is significant to the fair
value measurement as a whole:
● Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
● Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable.
● Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.
For assets and liabilities that are recognised in the Financial Statements on a recurring basis, the Company
determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation
(based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each
reporting period.
The Company's management determines the policies and procedures for both recurring fair value
measurement, such as unquoted financial assets measured at fair value, and for non-recurring measurement,
such as assets held for distribution in discontinued operations. The management comprises of the Managing
Director, Chief Executive Officer (CEO) and Chief Finance Officer (CFO).
External valuers are involved for valuation of significant assets. Involvement of external valuers is decided upon
annually by the Board of Directors after discussion with and approval by the management. Selection criteria
include market knowledge, reputation, independence and whether professional standards are maintained.
Valuers are normally rotated every three years. The management decides, after discussions with the Company's
external valuers, which valuation techniques and inputs to use for each case.
At each reporting date, the management analyses the movements in the values of assets and liabilities which are
required to be re-measured or re-assessed as per the Company’s accounting policies. For this analysis, the
management verifies the major inputs applied in the latest valuation by agreeing the information in the valuation
computation to contracts and other relevant documents.
STNOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 MARCH 2019
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
42
● Quantitative disclosures of fair value measurement hierarchy.
The management, in conjunction with the Company's external valuers, also compares the change in the fair
value of each asset and liability with relevant external sources to determine whether the change is reasonable.
Power Generating Units 20 Years
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the
basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as
explained above.
Property, Plant and Equipment (PPE) and Capital Work in Progress is stated at cost, net of accumulated
depreciation and accumulated impairment losses, if any. When significant parts of Plant and Equipment are
required to be replaced at intervals, the Company depreciates them separately based on their specific useful
lives. All other repair and maintenance costs are recognized in profit or loss as incurred.
An item of Property, Plant and Equipment and any significant part initially recognized is derecognized upon
disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on
de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying
amount of the asset) is included in the income statement when the asset is derecognized.
● Disclosures for valuation methods, significant estimates and assumptions.
Asset Estimated Useful life
Leasehold Land 99 Years
Other Equipments 5 Years
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as prescribed
under Part C of Schedule II of the Companies Act 2013 except for Plant and Machinery pertaining to Power
Generating Units which are based on independent technical evaluation, life has been estimated as 20 years (on
single shift basis) which is different from that prescribed in schedule II of the Act. Depreciation is not provided on
Freehold Land. Leasehold Land is amortized over the available balance lease period. The management believes
that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets
are likely to be used.
This note summarises accounting policy for fair value. Other fair value related disclosures are given in the
relevant notes. Refer note 41.
Capital Work-in-Progress comprises cost of fixed assets that are not yet installed and ready for their intended use
at the balance sheet date.
Furniture and Fixtures 10 Years
● Investment in Equity Shares.
● Financial Instruments (including those carried at amortised cost).
Vehicles 8 Years
e. Property, Plant and Equipment
Items of stores and spares that meet the definition of Property, Plant and Equipment are capitalised at cost and
depreciated over their useful life. Otherwise, such items are classified as inventories.
The residual values are not more than 5% of the original cost of the item of Property, Plant and Equipment. The
residual values, useful lives and methods of depreciation of Property, Plant and Equipmen are reviewed at each
financial year end and adjusted prospectively, if appropriate.
Building 30 Years
Plant & Machinery 15 Years
Computers 3 Years
STNOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 MARCH 2019
MEGHMANI FINECHEM LIMITED
43
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets are amortised over a period of 5 years.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no
such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated
by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If
any indication exists, or when annual impairment testing for an asset is required, the Company estimates the
asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s
(CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual
asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or
groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is
considered impaired and is written down to its recoverable amount.
f. Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition,
intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses, if
any. Cost include acquisition and other incidental cost related to acquiring the intangible asset. Research costs
are expensed as incurred. Intangible development costs are capitalised as and when technical and commercial
feasibility of the asset is demonstrated and approved by authorities, future economic benefits are probable.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment
whenever there is an indication that the intangible asset may be impaired. The amortisation period and the
amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each
reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic
benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and
are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is
recognised in the Statement of Profit and Loss.
Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the
net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and
Loss when the asset is derecognised.
g. Impairment of Non- Financial Assets
The Company bases its impairment calculation on detailed budgets and forecast calculations, which are
prepared separately for each of the Company’s CGUs to which the individual assets are allocated. These
budgets and forecast calculations generally cover a period of five years. For longer periods, a long-term growth
rate is calculated and applied to project future cash flows after the fifth year.
Impairment losses of continuing operations, including impairment on inventories, are recognised in the
Statement of Profit and Loss, except for properties previously revalued with the revaluation surplus taken to
Other Comprehensive Income (OCI). For such properties, the impairment is recognised in OCI up to the amount
of any previous revaluation surplus.
h. Financial Instrument
A financial instrument is any contract that gives rise to a financial asset of one Entity and a financial liability or
Equity Instrument of another Entity.
STNOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 MARCH 2019
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
44
STNOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 MARCH 2019
Initial Recognition and Measurement
(A) Financial Asset
Debt Instruments at Amortised Cost
A 'debt instrument' is measured at its amortised cost if both the following conditions are met:
a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash
flows, and
At initial recognition, the Company measures a financial asset or financial liability at its fair value plus or
minus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction
costs that are directly attributable to the acquisition or issue of the financial asset or financial liability.
b) Contractual terms of the asset give rise on specified dates to cash flows that are Solely Payments of
Principal and Interest (SPPI) on the principal amount outstanding
A 'debt instrument' is classified at FVTOCI if both of the following criteria are met:
a) The objective of the business model is achieved both by collecting contractual cash flows and selling the
financial assets, and
b) The asset's contractual cash flows represent SPPI
Debt Instrument at (FVTPL)Fair Value Through Profit and Loss
Debt Instrument at Fair Value Through Other Comprehensive Income ( FVTOCI)
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date
at fair value. Fair value movements are recognized in the Other Comprehensive Income (OCI). However, the
Company recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in
the Statement of Profit and Loss. On derecognition of the asset, cumulative gain or loss previously
recognised in OCI is reclassified from the equity to profit and loss. Interest earned whilst holding FVTOCI debt
instrument is reported as interest income using the EIR method.
After initial measurement, such financial assets are subsequently measured at amortised cost using the
Effective Interest Rate (EIR) method. Amortised cost is calculated by taking into account any discount or
premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included
in other income in the Statement of Profit or Loss. The losses arising from impairment are recognised in the
Statement of Profit or Loss.
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for
categorization as at amortized cost or as FVTOCI, is classified as FVTPL.
All Equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held
for trading are classified as at FVTOCI. For all other Equity instruments, the Company may make an
irrevocable election to present in Other Comprehensive Income subsequent changes in the fair value. The
Company makes such election on an instrument-by instrument basis. The classification is made on initial
recognition and is irrevocable.
Debt instruments included within the FVTPL category are measured at fair value with all changes recognized
in the Statement of Profit and Loss.
Equity Investments
In addition, the company may elect to designate a debt instrument, which otherwise meets amortized cost or
FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a
measurement or recognition inconsistency (referred to as 'accounting mismatch'). The Company has
designated certain debt instrument as at FVTPL.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the
instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to
Statement of Profit and Loss, even on sale of investment. However, the Company may transfer the
cumulative gain or loss within equity.
MEGHMANI FINECHEM LIMITED
45
Equity instruments included within the FVTPL category are measured at fair value with all changes
recognized in the Statement of Profit and Loss.
a) Financial assets that are debt instruments, and are measured at amortised cost e.g., Loans, Debt
Securities, Deposits, Trade Receivables and Bank Balance
The application of simplified approach does not require the Company to track changes in credit risk. Rather, it
recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial
recognition.
The rights to receive cash flows from the asset have expired, or
In accordance with Ind AS 109, the Company applies Expected Credit Loss (ECL) model for measurement
and recognition of impairment loss on the following financial assets and credit risk exposure:
A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial
assets) is primarily derecognised (i.e. removed from the Company's Balance Sheet) when:
The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to
pay the received cash flows in full without material delay to a third party under a 'pass-through' arrangement;
and either the Company has transferred substantially all the risks and rewards of the asset, or (b) the
Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has
transferred control of the asset.
The Company follows 'simplified approach' for recognition of impairment loss allowance on:
b) Trade Receivables or any contractual right to receive cash or another financial asset that result from
transactions that are within the scope of Ind AS 18 (referred to as 'contractual revenue receivables' in these
Financial Statements)
When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-
through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership.
When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor
transferred control of the asset, the company continues to recognise the transferred asset to the extent of the
Company's continuing involvement. In that case, the Company also recognises an associated liability. The
transferred asset and the associated liability are measured on a basis that reflects the rights and obligations
that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower
of the original carrying amount of the asset and the maximum amount of consideration that the Company
could be required to repay.
Impairment of Financial Assets
De-recognition
Trade Receivables :
ECL is the difference between all contractual cash flows that are due to the Company in accordance with the
contract and all the cash flows that the entity expects to receive (i.e. all cash shortfalls), discounted at the
original EIR. When estimating the cash flows, an Entity is required to consider:
For recognition of impairment loss on other financial assets and risk exposure, the Company determines that
whether there has been a significant increase in the credit risk since initial recognition. Lifetime ECL are the
expected credit losses resulting from all possible default events over the expected life of a financial
instrument.
STNOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 MARCH 2019
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
46
All contractual terms of the financial instrument (including prepayment, extension, call and similar options)
over the expected life of the financial instrument. However, in rare cases when the expected life of the
financial instrument cannot be estimated reliably, then the Entity is required to use the remaining contractual
term of the financial instrument.
Financial assets measured as at amortised cost, contractual revenue receivables and lease receivables:
ECL is presented as an allowance, i.e. as an integral part of the measurement of those assets in the Balance
Sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria, the Company
does not reduce impairment allowance from the gross carrying amount.
The Company’s financial liabilities include Trade and Other Payables, Loans and Borrowings.
Financial Liabilities at (FVTPL) Fair Value Through Profit and Loss
Loan and Borrowings
(B) Financial Liabilities
Subsequent measurement of Financial Liabilities
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost
using the Effective Interest Rate (EIR) method. Gains and losses are recognised in profit or loss when the
liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by
taking into account any discount or premium on acquisition and fees or costs that are an integral part of the
EIR. The EIR amortisation is included as finance costs in the Statement of Profit and Loss.
All financial liabilities are recognised initially at fair value and, in the case of Loans and Borrowings and
Payables, net of directly attributable transaction costs.
Trade and Other Payables
Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual
terms.
Initial Recognition and Measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss,
Loans and Borrowings, Payables, as appropriate.
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are
classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This
category also includes derivative financial instruments entered into by the Company that are not designated
as hedging instruments in hedge relationships as defined by Ind AS 109.
Gains or losses on liabilities held for trading are recognised in the Statement of Profit or Loss.
These amounts represent liability for good and services provided to the Company prior to the end of financial
year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade
and Other Payables are presented as current liabilities unless payment is not due within 12 months after the
reporting period. They are recognised initially at fair value and subsequently measured at amortised cost
using the effective interest method.
STNOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 MARCH 2019
MEGHMANI FINECHEM LIMITED
47
Derivatives and Hedging Activities
The Company uses derivative financial instruments, such as Forward Currency Contracts and Currency
Swaps to hedge its foreign currency risks and interest rate risks respectively. Such derivative financial
instruments are initially recognised at fair value on the date on which a derivative contract is entered into and
are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is
positive and as financial liabilities when the fair value is negative.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the derecognition of the original liability and the recognition of a new liability. The
difference in the respective carrying amounts is recognised in the Statement of Profit or Loss.
Traded Goods are valued at lower of cost and net realizable value. Cost includes cost of purchase and other
costs incurred in bringing the inventories to their present location and condition. Cost is determined on a
weighted average basis.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of
completion and the estimated costs necessary to make the sale.
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a
legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or
realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent
on future events and must be enforceable in the normal course of business and in the event of default,
insolvency or bankruptcy of the group or the counterparty.
Stores and Spares, Packing Materials and Raw Materials are valued at lower of cost or net realisable value and
for this purpose, cost is determined on moving weighted average basis. However, the aforesaid items are not
valued below cost if the finished products in which they are to be incorporated are expected to be sold at or above
cost.
De-recognition
Semi-Finished Products, Finished Products and By-Products are valued at lower of cost or net realisable value
and for this purpose, cost is determined on standard cost basis which approximates the actual cost. Cost of
Finished Goods includes excise duty, as applicable. Variances, exclusive of abnormally low volume and
operating performance, are adjusted to inventory.
j Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily
takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the
asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of
interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also
includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
Provident Fund is a defined contribution scheme established under a State Plan. The contributions to the
scheme are charged to the Statement of Profit and Loss in the year when employee rendered related services.
Off-setting Financial Instrument
i Inventories
k. Retirement and Other Employee Benefits
STNOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 MARCH 2019
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
48
The Company has a Defined Benefit Gratuity Plan. Every employee who has completed five years or more of
service gets a gratuity on post-employment at 15 days salary (last drawn salary) for each completed year of
service as per the rules of the Company. The aforesaid liability is provided for on the basis of an actuarial
valuation on projected unit credit method made at the end of the financial year. The scheme is funded with an
insurance Company in the form of a qualifying insurance policy.
Tax Expense Comprises of Current Income Tax and Deferred Tax
Deferred Tax Liabilities are recognised for all taxable temporary differences, except:
Liabilities for Wages, Salaries, including non-monetary benefits that are expected to be settled wholly within 12
months after the end of the period in which the employees render the related services are recognised in respect
of employees' services up to the end of the reporting period and are measured at the amounts expected to be
paid when the liabilities are to be settled. The liabilities are presented as current employee benefit obligations in
the Balance Sheet.
● Service costs comprising of current service costs, past-service costs, gains and losses on curtailments and
non-routine settlements; and
Current Income Taxes
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The company
recognises the following changes in the net defined benefit obligation as an expense in the Statement of Profit
and Loss:
● Net interest expense or income
l. Accounting For Taxes On Income
Current Income Tax Assets and Liabilities are measured at the amount expected to be recovered from or paid to
the taxation authorities in accordance with the Income-Tax Act, 1961. The tax rates and tax laws used to compute
the amount are those that are enacted or substantively enacted, at the reporting date.
Deferred Taxes
The Company has other long-term employee benefits in the nature of leave encashment. The liability in respect
of leave encashment is provided for on the basis of an actuarial valuation on projected unit credit method made at
the end of the financial year. The aforesaid leave encashment is funded with an insurance Company in the form
of a qualifying insurance policy.
Re-measurements, comprising of actuarial gains and losses, the effect of asset ceiling, excluding amounts
included in the net interest on the net defined benefit liability and the return on plan assets (excluding amounts
included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a
corresponding debit or credit to retained earnings through OCI in the period in which they occur. Re-
measurements are not reclassified to profit or loss in subsequent periods.
Current Income Tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in
Other Comprehensive Income or in Equity). Current tax items are recognised in correlation to the underlying
transaction either in OCI or directly in Equity. Management periodically evaluates positions taken in the tax
returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes
provisions where appropriate.
Deferred Tax is provided using the liability method on temporary differences between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes at the reporting date.
STNOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 MARCH 2019
MEGHMANI FINECHEM LIMITED
49
Minimum Alternate Tax (MAT)
m. Provisions
Deferred Tax Assets and Liabilities are measured at the tax rates that are expected to apply in the year when the
asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
Deferred Tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in Other
Comprehensive Income or in Equity). Deferred Tax items are recognised in correlation to the underlying
transaction either in OCI or directly in Equity.
A Contingent Liability is a possible obligation that arises from past events whose existence will be confirmed by
the occurrence or non—occurrence of one or more uncertain future events not wholly within the control of the
Company or a present obligation that is not recognized because it is not probable that an outflow of resources will
In respect of taxable temporary differences associated with investments in Subsidiaries, Associates and
interests in Joint Ventures, when the timing of the reversal of the temporary differences can be controlled and it is
probable that the temporary differences will not reverse in the foreseeable future
Deferred Tax Assets are recognised for all deductible temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred Tax Assets are recognised to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences, and the carry forward of
unused tax credits and unused tax losses can be utilised, except:
When the Deferred Tax Asset relating to the deductible temporary difference arises from the initial recognition of
an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss.
The carrying amount of Deferred Tax Assets is reviewed at each reporting date and reduced to the extent that it is
no longer probable that sufficient taxable profit will be available to allow all or part of the Deferred Tax Asset to be
utilised. Unrecognised Deferred Tax Assets are re-assessed at each reporting date and are recognised to the
extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred Tax Assets and Deferred Tax Liabilities are offset, if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred tax relates to the same taxable entity and the same
taxable authority.
Minimum Alternate Tax (MAT) is in the nature of unused tax credit which can be carried forward and utilised when
the Company will pay normal income tax during the specified period. Deferred Tax Assets on such tax credit is
recognised to the extent that it is probable that the unused tax credit can be utilised in the specified future period.
n. Contingent Liabilities
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects
some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is
recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a
provision is presented in the Statement of Profit and Loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as a finance cost.
Provisions are not recognised for future operating losses
STNOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 MARCH 2019
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
50
A Contingent Assets is not recognised unless it becomes virtually certain that an inflow of economic benefits will
arise. When an inflow of economic benefits is probable, contingent assets are disclosed in the Financial
Statements.
be required to settle the obligation. A Contingent Liability also arises in extremely rare cases where there is a
liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a
contingent liability but discloses its existence in the financial statements.
Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.
o. Leases
The determination of whether an arrangement is (or contains) a lease is based on the substance of the
arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the
arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the
asset or assets, even if that right is not explicitly specified in an arrangement.
Company as a Lessee
A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers
substantially all the risks and rewards incidental to ownership to the Company is classified as a finance lease.
Finance leases are capitalised at the commencement of the lease at the inception date fair value of the leased
property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned
between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the
remaining balance of the liability. Finance charges are recognised in finance costs in the Statement of Profit and
Loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance
with the Company’s general policy on the borrowing costs. Contingent rentals are recognised as expenses in the
periods in which they are incurred.
A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the
Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the
estimated useful life of the asset and the lease term.
Operating lease payments are recognised as an expense in the Statement of Profit and Loss on a straight-line
basis over the lease term.
p. Earning Per Share
Basic Earnings Per Share are calculated by dividing the net profit or loss for the period attributable to Equity
Shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating Diluted Earnings Per Share, the net profit or loss for the period attributable to
Equity Shareholders and the weighted average number of shares outstanding during the period are adjusted for
the effects of all dilutive potential Equity Shares.
For the purpose of the Statement of Cash Flows, Cash and Cash Equivalents consist of Cash and Short-Term
Deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the
Company’s cash management.
Basic Earnings Per Share
Diluted Earnings Per Share
Cash and Cash Equivalent in the Financial Statements comprise Cash at Banks and on Hand and Short-Term
Deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in
value.
q. Cash And Cash Equivalents
STNOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 MARCH 2019
MEGHMANI FINECHEM LIMITED
51
t. Dividend to Equity and Preference Shareholders of the Company
Segment Policies:
Based on "Management Approach" as defined in Ind AS 108 -Operating Segments, the Chief Operating Decision
Maker (CODM) evaluates the Company's performance and allocates the resources based on an analysis of
various performance indicators by business segments. Inter segment sales and transfers are reflected at market
prices.
Unallocable items includes general Corporate income and expense items which are not allocated to any
business segment.
Amalgamation is accounted for under the Purchase Method. The Acquiree’s identifiable assets, liabilities and
contingent liabilities that meet the conditions for recognition, are recognised at their fair value at the acquisition
date, except certain assets and liabilities required to be measured as per the applicable standards.
Excess of fair value of purchase consideration over the acquisition date fair value of identifiable assets acquired,
liabilities assumed and own equity cancelled is recognised as debit balance of Capital Reserve as per the
Scheme of Amalgamation approved by National Company Law Tribunal (‘NCLT’).
The Company recognises a liability for dividends to Equity Holders of the Company when the dividend is
authorised and the dividend is no longer at the discretion of the Company. As per the Corporate laws in India, a
dividend is authorised when it is approved by the Shareholders. A corresponding amount is recognised directly in
Equity.
The Company recognises a liability for dividends to Preference Holders of the Company when the dividend is
authorised by the Board of Directors. Dividend to Optionally Convertible / Redeemable Shareholders is
recognised directly in Equity and dividend to Redeemable Preference Shareholders is recognised as finance
cost (along with dividend tax there on)
Ind AS 115 was issued on 28 March 2018 and supersedes Ind AS 11 Construction Contracts and Ind AS 18
Revenue and it applies, with limited exceptions, to all revenue arising from contracts with its Customers. Ind AS
115 establishes a five-step model to account for revenue arising from contracts with Customers and requires that
revenue be recognised at an amount that reflects the consideration to which an Entity expects to be entitled in
exchange for transferring goods or services to a customer.
r. Segment Reporting
Ind AS 115 Revenue from Contracts with Customers
The Company adopted Ind AS 115 using the modified retrospective method of adoption with the date of initial
application of 1 April 2018. Under this method, the standard can be applied either to all contracts at the date of initial
application or only to contracts that are not completed at this date. The Company elected to apply the standard to all
contracts as at 1 April 2018. The cumulative effect of initially applying Ind AS 115 is not material. Therefore, the
comparative information was not restated and continues to be reported under Ind AS 11 and Ind AS 18.
The Company prepares its segment information in conformity with the accounting policies adopted for preparing
and presenting the Financial Statements of the Company as a whole. Common allocable costs are allocated to
each segment on an appropriate basis.
s. Business Combination
u. New and Amended Standard
Ind AS 115 requires Entities to exercise judgement, taking into consideration all of the relevant facts and
circumstances when applying each step of the model to contracts with their Customers. The standard also specifies
the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract. In
addition, the standard requires extensive disclosures.
STNOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 MARCH 2019
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
52
STNOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 MARCH 2019
v. Standards Issued but not yet Effective
Ind AS 116 Leases
On March 30, 2019, Ministry of Corporate Affairs has notified Ind AS 116, Leases. Ind AS 116 is effective for
annual periods beginning on or after April 1, 2019. Ind AS 116 will replace the existing leases Standard, Ind AS 17
Leases, and related Interpretations. Ind AS 116 sets out the principles for the recognition, measurement,
presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance
sheet model similar to the accounting for finance leases under Ind AS 17. The standard includes two recognition
exemptions for lessees – leases of ‘low-value’ assets (e.g. personal computers) and short-term leases (i.e.
leases with a lease term of 12 months or less). At the commencement date of a lease, a lessee will recognise a
liability to make lease payments (i.e. the lease liability) and an asset representing the right to use the underlying
asset during the lease term (i.e. the right-of-use asset). Lessees will be required to separately recognise the
interest expense on the lease liability and the depreciation expense on the right-of-use asset. Lessees will be
also required to remeasure the lease liability upon the occurrence of certain events (e.g. a change in the lease
term, a change in future lease payments resulting from a change in an index or rate used to determine those
payments). The lessee will generally recognise the amount of the remeasurement of the lease liability as an
adjustment to the right-of-use asset. The effect of this amendment on the financial statements of the Company is
being evaluated.
MEGHMANI FINECHEM LIMITED
53
(Rs
. in
La
kh
s)
ST
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
FO
R T
HE
YE
AR
EN
DE
D 3
1 M
AR
CH
2019
st
3
Pro
pe
rty,
Pla
nt
an
d E
qu
ipm
en
t as a
t 31
Marc
h 2
019
1s
t Ap
ril,
Ad
dit
ion
D
edu
ctio
n /
31st
Mar
ch,
1st A
pri
l,
Fo
r th
e Y
ear
Ded
uct
ion
/ 3
1st
Mar
ch
31st
Mar
ch,
31st
Mar
ch,
3.1
TAN
GIB
LE
AS
SE
T
Leas
ehol
d La
nd
1,1
89.2
1
-
-
1,1
89.2
1
39.
21
13.
07
-
5
2.28
1
,136
.93
1
,150
.00
Pla
nt &
Mac
hine
ries
26,
672.
08
3.5
8
-
2
6,67
5.66
1
1,72
8.08
4
,278
.23
-
16,
006.
31
10,
669.
35
14,
944.
00
Cap
tive
Pow
er P
lant
&
11,
321.
03
74.
02
-
1
1,39
5.05
1
,769
.94
5
88.3
5
-
2
,358
.29
9
,036
.76
9
,551
.09
Equ
ipm
ents
Fur
nitu
res
& F
ixtu
res
267
.66
2
.92
-
270
.58
5
4.28
2
7.81
-
82.
09
188
.49
2
13.3
8
Veh
icle
s 1
18.3
9
62.
38
7.3
0
173
.47
2
0.96
2
1.01
5
.15
3
6.82
1
36.6
5
97.
43
Bui
ldin
g 1
0,12
6.51
7
.68
-
10,
134.
19
1,3
78.1
3
474
.06
-
1,8
52.1
9
8,2
82.0
0
8,7
48.3
8
Com
pute
rs
18.
23
6.7
1
-
2
4.94
1
1.56
3
.79
-
15.
35
9.5
9
6.6
7
TO
TAL
(A)
49,
734.
86
162
.50
7
.84
4
9,88
9.52
1
5,01
3.47
5
,409
.88
5
.48
2
0,41
7.87
2
9,47
1.65
3
4,72
1.39
Offi
ce E
quip
men
t 2
1.75
5
.21
0
.54
2
6.42
1
1.31
3
.56
0
.33
1
4.54
1
1.88
1
0.44
GID
C U
sage
Rig
hts
21.
40
-
0
.17
2
1.23
2
1.36
-
0.1
3
21.
23
-
0.0
4
3.2
INTA
NG
IBL
E A
SS
ET
TO
TAL
(B)
21.
40
-
0
.17
2
1.23
2
1.36
-
0.1
3
21.
23
-
0.0
4
20
18
A
dju
stm
ent
2019
2
018
A
dju
stm
ent
2019
20
19
2018
Des
crip
tio
n
Gro
ss B
lock
Dep
reci
atio
n /
Am
ort
isat
ion
N
et B
lock
TO
TAL
(A+B
) 4
9,75
6.26
1
62.5
0
8.0
1
49,
910.
75
15,
034.
83
5,4
09.8
8
5.6
1
20,
439.
10
29,
471.
65
34,
721.
43
During th
e C
urr
ent Y
ear exc
hange g
ain
of R
s. N
il (3
1 M
arc
h 2
018: e
xchange g
ain
of R
s. 2
2.2
1 L
akh
s) a
risi
ng o
n re
po
rtin
g o
f lo
ng
term
fore
ign
cu
rre
ncy
moneta
ry ite
m r
ela
ted t
o P
ropert
y, P
lant
and E
quip
ment
has
been a
dded/d
educt
ed t
o c
ost
of
Pro
pert
y, P
lan
t a
nd
Eq
uip
me
nt
an
d t
he
un
am
ort
ise
d
stbala
nce
carr
ied a
s part
of T
angib
le A
sset a
s at t
he y
ear end a
ggre
gate
to R
s. 2
77.4
8 L
akh
s (3
1 M
arc
h 2
018: R
s. 5
76
.65
La
khs
), in
vie
w o
f op
tion
giv
en
in p
ara
D13A
A o
f Ind A
S 1
01 o
n fi
rst t
ime a
doptio
n o
f Ind A
S.
No
tes:
(Rs.
in L
akh
s)
3.2
C
ap
ita
l W
ork
In
Pro
gre
ss
Part
icu
lars
A
mo
un
t
As
at 31st
Marc
h 2
018
7,8
80.2
6
Capita
lisa
tion
77.1
3
Cost
Additi
on
39,0
21.7
0
As a
t 31st
Marc
h 2
019
46,8
24.8
3
stC
apita
l W
ork
in P
rogre
ss a
s at
31
Marc
h 2
019
co
mp
rise
s e
xpe
nd
iture
fo
r H
ydro
ge
n
Pero
xide, C
hlo
rom
eth
ane a
nd C
aust
ic S
oda P
lants
(in
clu
din
g C
ap
tive
Po
we
r P
lan
ts) in
the
cours
e o
f co
nst
ruct
ion. To
tal a
mount
of
Capita
l Wo
rk-in
-Pro
gre
ss is
Rs.
46
,82
4.8
3 L
akh
s
(31st
Marc
h 2
018:
Rs.
7,8
80.2
6 L
akh
s).
The a
mo
un
t o
f b
orr
ow
ing
co
sts
ad
de
d t
o c
ost
of
st
Capita
l W
ork
-in-P
rogre
ss d
uring t
he y
ear
ended 3
1M
arc
h 2
01
9 w
as
Rs.
711
.83
La
khs
st(3
1 M
arc
h 2
018 :
Nil)
. The rate
use
d to
dete
rmin
e th
e a
mo
un
t of b
orr
ow
ing
co
sts
elig
ible
for
capita
lisatio
n r
anges
betw
een 6
.75%
to 8
.75%
, w
hic
h is
the
effe
ctiv
e in
tere
st r
ate
of
the
speci
fic b
orr
ow
ings
take
n fo
r above
mentio
ned P
roje
cts.
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
54
(Rs
. in
La
kh
s)
ST
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
FO
R T
HE
YE
AR
EN
DE
D 3
1 M
AR
CH
2019
st
3
Pro
pe
rty,
Pla
nt
an
d E
qu
ipm
en
t as a
t 31
Marc
h 2
018
Com
pute
rs
15.
81
2.4
2
-
1
8.23
7
.42
4
.15
-
11.
56
6.6
7
8.3
9
Veh
icle
s 4
9.70
7
6.23
7
.54
1
18.3
9
16.
03
8.6
0
3.6
7
20.
96
97.
43
33.
67
Offi
ce E
quip
men
t 1
9.27
2
.48
-
21.
75
7.4
3
3.8
8
-
1
1.31
1
0.44
1
1.84
Leas
e ho
ld L
and
1,1
89.2
1
-
-
1,1
89.2
1
26.
14
13.
07
-
3
9.21
1
,150
.00
1
,163
.07
stst
stst
stst
1
Ap
ril,
Ad
dit
ion
D
edu
ctio
n /
31 M
arch
, 1
Ap
ril,
F
or
the
Yea
r D
edu
ctio
n /
31
Mar
ch
31 M
arch
, 31
Mar
ch,
Cap
tive
Pow
er P
lant
&
11,
319.
03
2.0
0
-
1
1,32
1.03
1
,184
.32
5
85.6
2
-
1
,769
.94
9
,551
.09
1
0,13
4.71
GID
C U
sage
Rig
hts
21.
40
-
-
21.
40
21.
36
-
-
21.
36
0.0
4
0.0
4
Equ
ipm
ents
Des
crip
tio
n
Gro
ss B
lock
Dep
reci
atio
n /
Am
ort
isat
ion
N
et B
lock
Pla
nt &
Mac
hine
ries.
2
6,76
6.76
4
43.6
6
538
.34
2
6,67
2.08
7
,756
.43
4
,408
.44
4
36.7
9
11,
728.
08
14,
944.
00
19,
010.
33
3.1
TAN
GIB
LE
AS
SE
T
Bui
ldin
g 1
0,10
1.72
2
4.79
-
10,
126.
51
904
.82
4
73.3
1
-
1
,378
.13
8
,748
.38
9
,196
.90
Fur
nitu
res
& F
ixtu
res
258
.88
8
.78
-
267
.66
2
4.19
3
0.09
-
54.
28
213
.38
2
34.6
9
TO
TAL
(A)
49,
720.
38
560
.36
5
45.8
8
49,
734.
86
9,9
26.7
8
5,5
27.1
5
440
.46
1
5,01
3.47
3
4,72
1.39
3
9,79
3.60
TO
TAL
(B)
21.
40
-
-
21.
40
21.
36
-
-
21.
36
0.0
4
0.0
4
TO
TAL
(A+B
) 4
9,74
1.78
5
60.3
6
545
.88
4
9,75
6.26
9
,948
.14
5
,527
.15
4
40.4
6
15,
034.
83
34,
721.
43
39,
793.
64
20
17
A
dju
stm
ent
2018
2
017
A
dju
stm
ent
2018
20
18
2017
3.2
INTA
NG
IBL
E A
SS
ET
No
tes:
stst
During the 3
1 M
arc
h 2
018 e
xchange g
ain
of R
s. 2
2.2
1 L
akh
s (3
1 M
arc
h 2
017: R
s. 4
80.5
7 L
akh
s) a
risi
ng o
n r
ep
ort
ing
of lo
ng
te
rm fo
reig
n c
urr
en
cy
moneta
ry it
em
rela
ted to P
ropert
y, P
lant a
nd E
quip
ments
has
been a
dded/d
educt
ed to c
ost
of P
ropert
y, P
lan
t a
nd
Eq
uip
me
nt a
nd
th
e u
na
mo
rtis
ed
st
bala
nce
carr
ied a
s part
of t
angib
le a
sset a
s at t
he y
ear end a
ggre
gate
to R
s. 5
76.6
5 L
akh
s (31
Marc
h 2
017: R
s. 2
43
.51
La
khs)
, in
vie
w o
f op
tion
giv
en
in p
ara
D13A
A o
f Ind A
S 1
01 o
n fi
rst t
ime a
doptio
n o
f Ind A
S.
(Rs.
in L
akh
s)
3.2
C
ap
ita
l W
ork
In
Pro
gre
ss
Additi
on
7,6
15.7
1
Capita
lisa
tion
44.8
7
Part
icu
lars
A
mo
un
t
As
at 31st
Marc
h 2
017
309.4
2
Co
st
As a
t 31s
t M
arc
h 2
018
7,8
80.2
6
stC
apita
l Work
-in-P
rogre
ss fo
r tangib
le a
ssets
as
at 3
1 M
arc
h 2
018 c
om
prise
s exp
enditu
re fo
r the P
lant a
nd B
uild
ing
in th
e c
ou
rse
of c
on
stru
ctio
n.
MEGHMANI FINECHEM LIMITED
55
stNOTES TO THE FINANCIAL STATEMENT FOR THE PERIOD ENDED 31 MARCH 2019
Margin money deposits amounting Rs. 325.94 Lakhs (31 March 2018: Rs. 321.55 Lakhs ) are given as Security Deposit
against Bank Guarantee with bank. These deposits are made for varying periods of between 1 year to 10 years and earn
interest ranging between 6.70% to 6.85%.
5 Income Tax Assets (Net) (Rs. in Lakhs)
4. Other Financial Assets (Non-Current)
st st PARTICULARS 31 March, 2019 31 March, 2018
Advance payment of Income Tax (Net of Provision) 348.40 49.77
Total 348.40 49.77
Security Deposits 159.53 149.06
Total 485.47 470.61
st st PARTICULARS 31 March, 2019 31 March, 2018
Bank Deposits with original maturity of more than 12 months (including interest accrued) (Refer Note below) 325.94 321.55
6 Other Non-Current Assets (Rs. in Lakhs)st st PARTICULARS 31 March, 2019 31 March, 2018
Unsecured, Considered Good
Capital Advances 1,769.87 4,479.35
Balance with Government Authorities (Amount paid Under Protest) 61.20 61.20
Total 1,831.07 4,540.55
7 Inventories (valued at lower of cost or net realisable value ) (Rs. in Lakhs)st st PARTICULARS 31 March, 2019 31 March, 2018
Finished Goods 307.24 232.18
Finished Goods In Transit 56.76 -
Others (Packing Materials) 37.79 17.24
Consumable Stores and Spares 1,478.14 1,322.85
Raw Materials 2,185.48 1,387.78
Total 4,065.41 2,960.05
8 Investments (Rs. in Lakhs)
Investment at Fair Value Through Profit and Loss (FVTPL)
Total - 7,141.81
Aggregate amount of Quoted Investments and Market Value thereof - 7,141.81
st st PARTICULARS 31 March, 2019 31 March, 2018
Investment in Units of Mutual Funds (quoted) (Refer Note below) - 7,141.81
Note: Details of Investments
(Rs. in Lakhs)
Edelweiss Arbitrage Fund - 3,994.85
st st PARTICULARS 31 March, 2019 31 March, 2018
Kotak Equity Arbitrage Fund - 3,146.96
Total - 7,141.81
(Rs. in Lakhs)
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
56
9 Trade Receivables
Trade Receivables
Unsecured, Considered Good - -
Total 7,736.30 7,686.27
Unsecured, Considered Good 7,542.28 7,513.54
Total 7,736.30 7,686.27
st st PARTICULARS 31 March, 2019 31 March, 2018
Secured, Considered Good 194.02 172.73
Trade Receivables - Credit impaired - -
Impairment Allowance (allowance for Bad and Doubtful debts)
Trade Receivables which have significant increase in credit risk - -
Trade Receivables which have significant increase in credit risk - -
Trade Receivables - Credit impaired - -
For information about Credit Risk and Market Risk related to Trade Receivables, please Refer Note 41.
Trade Receivables are non interest bearing and generally have credit period of 30-90 days.
Trade Receivable are secured to the extend of deposit received from the Customers.
For amount due and terms and conditions relating to related party, please Refer Note 36
11 Other Bank Balances (Rs. in Lakhs)
12 months (Refer Note below)
Total - 500.99
st stPARTICULARS 31 March, 2019 31 March, 2018
Deposits are made for 6 months and earn interest of 7.30%.
- Deposits with original maturity of more than 3 months but less than - 500.99
Balance with Banks
10 Cash and Cash Equivalents (Rs. in Lakhs)st stPARTICULARS 31 March, 2019 31 March, 2018
- Deposits with original maturity of less than three months (Refer Note below) 12,000.00 -
Total 12,921.38 7.31
- On Current Accounts 920.46 5.76
Cash on Hand 0.92 1.55
Balance with Banks
Deposits are made for varying periods of between 60 days to 90 days and earn interest ranging between 6.90% to 7.75%.
stNOTES TO THE FINANCIAL STATEMENT FOR THE PERIOD ENDED 31 MARCH 2019
(Rs. in Lakhs)
MEGHMANI FINECHEM LIMITED
57
12 Loans (Rs. in Lakhs)
Loans to Employees are interest free and generally given for tenure of 6 to 12 months
Since all the above loans given by the Company are unsecured and considered good, the bifurcation of loan in other
catagories as required by Schedule III of Companies Act 2013 viz: a) Secured, b) Loans which have significant
increase in credit risk and c) Credit Impared is not applicable.
st stPARTICULARS 31 March, 2019 31 March, 2018
Total 35.64 21.62
Unsecured, Considered Good
Loans to Employees (Refer Note below) 35.64 21.62
13 Other Financial Assets (Current) (Rs. in Lakhs)
st stPARTICULARS 31 March, 2019 31 March, 2018
Security Deposits 26.32 26.32
Export Benefits Receivables 0.41 2.23
Insurance Claim Receivable - 96.39
Unsecured, Considered Good
Interest Accrued on Deposits with original maturity of less than three 80.64 -
months
Total 107.37 124.94
14 Other Current Assets (Rs. in Lakhs)
Unsecured, Considered Good
Prepaid Expenses 50.05 39.05
Balances with Government Authorities (refer note below) 398.32 71.35
Advance to Employees 6.06 1.81
Advances to Suppliers 47.41 35.17
Export Benefits Receivables 63.96 79.48
Total 565.80 226.86
st stPARTICULARS 31 March, 2019 31 March, 2018
stNOTES TO THE FINANCIAL STATEMENT FOR THE PERIOD ENDED 31 MARCH 2019
Balance with Government Authorities include VAT / Cenvat /Service Tax Credit Receivable.
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
58
15. Share Capitalst stPARTICULARS 31 March, 2019 31 March, 2018
Total Equity Share Capital [95,000,000 Equity Shares 9,500.00 7,500.00
Increase in Authorised Share Capital Pursuant to Scheme of Amalgamation 3,000.00 -
Increase in Authorised Share Capital during the Year 40,262.88 -
AUTHORISED SHARE CAPITAL
Preference Shares of Rs. 100 eachst2,500,000 Preference Shares (31 March 2018: 2,500,000) each Share of Rs.100/- 2,500.00 2,500.00
Increase in Authorised Share Capital during the Year* [5,000,000 Equity 500.00 -
Preference Shares of Rs. 10 each
Equity Share of Rs.10 each st75,000,000 Equity Shares (31 March 2018: 75,000,000) each Share of Rs.10/- 7,500.00 7,500.00
stShares (31 March 2018: Nil) each Share of Rs. 10/-]
Increase in Authorised Share Capital Pursuant to Scheme of Amalgamation 1,500.00 -st(Refer Note 42) [15,000,000 Equity Shares (31 March 2018: Nil)
each Share of Rs. 10/-]
(31st March 2018: 75,000,000) each Share of Rs. 10/-]
Reduction in Authorized Share Capital* [500,000 Preference Share (500.00) -st(31 March 2018: Nil) each Share of Rs. 100/-]
Total Preference Share Capital [2,000,000 Preference Shares 2,000.00 2,500.00st(31 March 2018: 2,500,000) each Share of Rs. 100 /-]
st(Refer Note 42 ) [30,000,000 Preference Shares (31 March 2018: Nil)
each Share of Rs. 10/-]
st[402,628,796 Preference Shares (31 March 2018: Nil) each Share of Rs. 10/-]
Preference Share Capital [432,628,796 Preference Shares 43,262.88 -st(31 March 2018: Nil) each Share of Rs. 10 /-]
Total Authorised Capital 54,762.88 10,000.00
st NOTES TO THE FINANCIAL STATEMENT FOR THE PERIOD ENDED 31 MARCH 2019
*Authorised Share Capital has been transferred from Preference Shares of Rs. 100 each to Equity Share of Rs. 10 each as thapproved by the shareholders in Extraordinary General Meeting (EGM) dated 9 April 2018. The Company has filed Form
MGT-14 for change in Authorised Share Capital with Ministry of Corporate Affairs dated 21st April 2018.
each Share of Rs. 10 /- Fully Paid Up
st(31 March 2018: NIL) each Share of Rs. 10 /- Fully Paid Up
Total 4,119.31 7,076.00
210,919,871 8% Optionally Convertible Redeemable Preference Share 21,091.99 -
Total 21,091.99 -
ISSUED, SUBSCRIBED & PAID UP
Instrument entirely Equity in Nature (Preference Share Capital)
Equity Share Capital st41,193,114 Equity Shares (31 March 2018: 70,759,999) 4,119.31 7,076.00
(Rs. in Lakhs)
(Rs. in Lakhs)
MEGHMANI FINECHEM LIMITED
59
stNOTES TO THE FINANCIAL STATEMENT FOR THE PERIOD ENDED 31 MARCH 2019
Reconciliation of No. of Shares
Issue of Equity Share Capital 50,00,000 -
Closing at the end of the Year 4,11,93,114 7,07,59,999
Shares issued pursuant to Scheme of Amalgamation (Refer Note 42) 21,09,19,871 -
Instrument entirely Equity in Nature (Preference Share Capital)
At the beginning of the Year - -
Equity Share Capital
st stPARTICULAR 31 March 2019 31 March 2018
Closing at the end of the Year 21,09,19,871 -
At the beginning of the Year 7,07,59,999 7,07,59,999
Shares cancelled pursuant to Scheme of Amalgamation (Refer Note 42) (3,45,66,885) -
Equity Share :
The Company has one class of Equity Shares par value of Rs.10 per share. Each equity shareholder is entitled to one
vote per share. All Equity Shareholders have equal dividend rights. In the event of liquidation of the Company, the
holders of Equity Shares will be entitled to recieve the remaining assets of the Company, after distribution of all
preferential amounts. The distribution will be in proportion to the number of Equity shares held by the shareholders.
Optionally Convertible Redeemable Preference Share ('OCRPS')
Considering all the rights of conversion / redemption and dividend declaration are in the hands of Company, same is
classified as Equity in nature and disclosed as 'Instrument entirely Equity in nature'. The Preference Shares rank ahead
of the Equity Shares in the event of a liquidation.
Each Optionally Convertible Redeemable Preference Share has par value of Rs.10 per share and is convertible at the
option of the Company. Incase, redemption does not happen within 20 years, it will be compulsorily converted into 10
Equity Shares for every 125 OCRPS. The Preference Shares carry a dividend of 8% per annum, payable subject to
approval of Board of Directors of the Company. The dividend rights are non-cumulative.
Shares held by the Holding Company
st210,919,871 (31 March 2018: Nil) Optionally Convertible 21,091.99 -
st23,545,985 (31 March 2018: 23,545,985) Equity Shares 2,354.60 2,354.60
Redeemable Preference Share
st stName of the Shareholder 31 March 2019 31 March 2018
Meghmani Organics Limited
(Rs. in Lakhs)
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
60
Details of Shareholding (more than 5% Equity Shares)
PARTICULAR 31 March 2019 31 March 2018
Number of Shares held by
(a) Meghmani Organics Limited (Holding Company) ('MOL') 2,35,45,985 2,35,45,985
% of Share held 57.16% 33.28%
(b) Meghmani Agrochemical Pvt Limited (WOS of MOL) - 1,69,00,835
% of Share held - 23.88%
(c) International Finance Corporation - 1,76,66,050
% of Share held - 24.97%
(e) Ashish Soparkar 21,98,563 9,48,563
% of Share held 5.41% 1.38%
(a) Meghmani Organics Limited (Holding Company) ('MOL') 21,09,19,871 -
(d) Natwarlal Patel 22,27,305 9,77,305
% of Share held 100% -
Optionally Convertible Redeemable Preference Share
% of Share held 5.34% 1.34%
stNOTES TO THE FINANCIAL STATEMENT FOR THE PERIOD ENDED 31 MARCH 2019
No dividend has been proposed / declared on Equity and OCRPS during the year.
As per records of the Company, including its register of shareholder / members and other declarations received from
shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of
shares.
16 Other Equity (Rs. in Lakhs)
Balance as at the end of the Year 61.75 59.72
Balance as at the end of the Year (24,694.08) -
Balance as at the beginning of the Year 30,455.10 14,902.48
Balance as at the end of the Year 48,698.14 30,455.10
Balance as at the end of the Year - 14,142.00
Security Premium
Balance as at the beginning of the Year 14,142.00 14,142.00
Premium received on issue of Equity Share Capital (Refer Note 42) 1,000.00 -
Premium utilised pursuant to Scheme of Amalgamation (Refer Note 42) (15,142.00) -
Reserves on Account of Non Cash Contribution From Shareholder
Balance as at the beginning of the Year 59.72 51.59
Capital Reserve
Balance as at the beginning of the Year - -
Addition for the Year 2.03 8.13
Capital Reserve generated pursuant to Scheme of Amalgamation (24,694.08) -
(Refer Note 42)
Retained Earnings
Profit for the Year 18,280.69 15,547.45
Other Comprehensive Income for the Year (37.65) 5.17
Total 24,065.81 44,656.82
st stPARTICULARS 31 March, 2019 31 March, 2018
MEGHMANI FINECHEM LIMITED
61
Capital Reserve
Securities Premium is used to record the premium on issue of shares. The Reserve can be utilised only for limited purposes
such as issuance of bonus shares, buy back of shares in accordance with the provisions of the Companies Act, 2013.
Reserves On Account Of Non Cash Contribution From Shareholder
Adjustment on account of Non Cash Capital Contribution from the Holding Company is on account of the notional
charges for Corporate Guarantee provided by the Holding Company.
Nature and purpose of Reserves:
Securities Premium
The debit balance in Capital Reserve represents difference between amount of consideration over the value of Net
Assets acquired as defined in Clause 13.5 of the Scheme of Amalgamation (Refer Note 42)
17 Borrowings (Rs. in Lakhs)
Redeemable Preference Shares (Refer Note 42) 22,170.89 -
Less: Shares redeemed during the year (Refer Note 42) (22,170.89) -
Term Loan Facilities from Banks (Refer Note below):
Secured Borrowing 36,534.05 90.00
Indian Rupee loan (Secured) (Refer Note below) 22,553.00 90.00
The above amounts includes:
[Refer Note 22 for Current Maturities of Term Loan from Banks and Financial stInstitutions Rs. 2200.00 Lakhs (31 March, 2018 Rs. 4002.74 Lakhs]
Unsecured Borrowing - -
Total Non-Current Borrowing 36,534.05 90.00
Foreign Currency Loan (Secured) (Refer Note below) 13,981.05 -
st stPARTICULARS 31 March, 2019 31 March, 2018
stNOTES TO THE FINANCIAL STATEMENT FOR THE PERIOD ENDED 31 MARCH 2019
Refer Note - 41 For Interest Rate Risk and Liquidity Risk.
(i) The Company has taken External Commercial Borrowing of Euro 180.00 Lakhs from Standard Chartered Bank for
Capital Expansion purpose. Outstanding balance for this borrowing is Euro 180.00 Lakhs equivalent to Rs.
13,981.05 Lakhs (31st March 2018 : NIL). The borrowing is Secured by first pari passu mortgage charge on all
immovable properties of the Company, first pari passu hypothecation charge over all the moveable assets of the
Company.
The borrowing is repayable in 15 quarterly installments of Euro 12 Lakhs each, starting from 3rd July 2020.
The borrowing carries interest @ 1 year MCLR (Benchmark rate) plus NIL spread (to be set every year) payable ston monthly rest. The effective interest rate is 8.40% (31 March 2018: 8.25%).
Details of Security and Repayment Terms :
The borrowing carries interest @ Euribor + 1.6% p.a. payable on quarterly rests. The Company has entered into
Interest Rate Swap (‘IRS’) agreement with the bank to fixed interest rate @ 1.85% p.a. and hedging of the foreign
exchange rate whereby the Company will pay additional interest @ 4.95% p.a. The effective interest rate after
considering basic interest rate and interest for hedging is @ 6.8%.
(1) Term Loan amounting Rs. 11,000.00 Lakhs from HDFC Bank Limited for capital expenditure towards setting up stof Chloromethane Plant. Outstanding balance for this facility is Rs. 10,450.00 Lakhs (31 March 2018:
Rs. 100.00 Lakhs).
(ii) The Company has availed following Rupee Loan facilities:
The Term Loan is repayable in 20 quarterly installments of Rs 550.00 Lakhs each and repayment started from
9th March 2019.
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
62
th The Term Loan is repayable in 18 quarterly installments of Rs. 833.33 Lakhs each starting from 30 September 2020.
th The Term Loan is repayable in 19 quarterly installments of Rs. 657.89 Lakhs each starting from 28 June, 2020.
(2) Term loan amounting Rs.15,000.00 Lakhs from HDFC Bank Limited for capital expenditure towards setting up of Caustic Soda Plant and 36 MW Power Plant.
st Outstanding balance for this facility is Rs.7,500.00 Lakhs (31 March 2018: Nil).
The borrowing carries interest @ 1 year MCLR (Benchmark rate) plus NIL spread (to be set every year) payable ston monthly rest.The effective interest rate is 8.75% (31 March 2018: NIL).
(3) Term Loan amounting Rs. 12,500.00 Lakhs from Federal Bank Limited for capital expenditure towards setting stup of Hydrogen Peroxide Plant. Outstanding balance for this facility is Rs. 6,803.00 Lakhs (31 March 2018: Nil).
The borrowing carries interest @ 12 month T-bill rate (benchmark as published by RBI - to be reset every year) plus stspread (fixed @ 0.94%) payable on monthly rest. The effective interest rate is 8.25% (31 March 2018: NIL).
(4) The Rupee Term Loan facilities are Secured by first pari passu mortgage charge of all immovable properties of the Company, first pari passu hypothecation charge over all the moveable assets of the Company and Intangibles including Goodwill, Revenues of whatsoever nature and uncalled Capital of the Company, both present and future.
(iii) ICICI Bank Limited has refinanced Term Loan of Rs. 22,000.00 Lakhs. The entire facility of Rs. 22,000.00 Lakhs has thbeen secured by, Deed of Hypothecation dated 30 January, 2012, on the whole of movable properties of the
Company, including its movable Plant & Machinery, Machinery Spares, Tools, Accessories and other movables both present and future where ever situate including Raw Material, Stock in Process, Finished Goods, Book Debts, Bills situated any where.
(iv) The Company is in the process of executing an Indenture of Mortgage with Lenders of these term loans (Secured Parties) for creating mortgages on Immovable Properties of the Company by creating a charge by way of registered mortgage. According to the indenture, all the Secured Parties will share pari passu charge with first ranking and priority over the Immovable Properties of the Company, both present and future.
The Indenture of Mortgage on immovable properties of the Company situated at Plot No. CH 1 and CH 2 has been th created on 18 October, 2012 to secure term loan of Rs. 22,000.00 Lakhs of ICICI Bank.
(v) Bank loans availed by the Company are subject to certain covenants relating to interest service coverage ratio, current ratio, debt service coverage ratio, total outside liabilities to total net worth, fixed assets coverage ratio, ratio of total term liabilities to net worth and return on fixed assets. The Company has complied with the covenants as per the terms of the loan agreements.
The rate of interest of term loan from ICICI Bank Limited is 1 Year MCLR +1.42% (i.e. 8.20%+1.42%) p.a The st effective interest rate is 9.62% (31 March 2018: 9.62%).
The repayment of this loan has started from March 2012. During the year, entire outstanding loan has been repaid on th15 June 2018. Outstanding balance for this term loan is Nil.
stNOTES TO THE FINANCIAL STATEMENT FOR THE PERIOD ENDED 31 MARCH 2019
18 Others Financial Liabilities (Rs. in Lakhs)
(on Interest Rate Swap and Cross Currency Swap valued at Fair Value
Mark to market Derivative Liabilities 781.31 -
Through Profit and Loss)
Total 781.31 -
st stPARTICULARS 31 March, 2019 31 March, 2018
19 Provisions (Rs. in Lakhs)
Gratuity (Refer Note 35) 67.64 9.54
Compensated Absences 43.93 16.57
Provision for Employee Benefits
Total 111.57 26.11
st stPARTICULARS 31 March, 2019 31 March, 2018
MEGHMANI FINECHEM LIMITED
63
stNOTES TO THE FINANCIAL STATEMENT FOR THE PERIOD ENDED 31 MARCH 2019
20 Borrowings (Rs. in Lakhs)
Cash Credit / Overdraft Facility from Banks (Refer Note below) 236.62 3,335.31
Total 236.62 3,335.31
Rupee Loans repayable on Demand
Secured Loans
st stPARTICULARS 31 March, 2019 31 March, 2018
Note :
stInterest rate for the year ranges between 9.5% to 9.65% (31 March 2018: 9.7%).
stThe Company has availed Working Capital Facility of Rs.13,350.00 Lakhs (31 March 2018:Rs. 7000 Lakhs) as sanctioned limit from consortium comprising of ICICI Bank Limited Rs. 7,100.00 Lakhs, Standard Chartered Bank Rs. 3,000.00 Lakhs and HDFC Bank Ltd. Rs. 3,250.00 Lakhs.
The entire facility is Secured by first pari passu charge on all the Current Assets of the Company, both present and future.
Rate of interest stipulated by Standard Chartered Bank is MCLR + applicable margin. Interest rate for the year ranges stbetween 9.35% to 9.45% (31 March 2018: 10% to 10.15%).
stInterest rate for the ranges between @ 9.3% to 9.45% (31 March 2018: 9.5% to 9.7%).
Rate of interest stipulated by ICICI Bank Limited is sum of I-base and "Spread" per annum, subject to minimum rate of 6 Month MCLR +0.9% p.a. plus applicable interest taxes or other statutory levy, if any, on the principal amount remains outstanding each day.
Rate of interest stipulated by HDFC Bank Limited is as per prevailing 1 year MCLR +spread (to be decided).
Bank loans availed by the Company are subject to certain covenants relating to Interest Service Coverage Ratio, Current Ratio, Debt Service Coverage Ratio, Total Outside Liabilities to Total Net Worth, Fixed Assets Coverage Ratio, Ratio of Total Term Liabilities to Net Worth and Return on Fixed Assets. The Company has complied with the covenants as per the terms of the loan agreements.
The Company is in the process of filing requisite forms with Ministry of Corporate Affairs for creating of first pari passu hypothecation charge over all the Current Assets for additional facilities sanctioned during the year.
21 Trade Payables (Rs. in Lakhs)
Total outstanding dues of Creditors other than Micro Enterprise and Small 3,548.25 3,277.15
Enterprise
Total outstanding dues of Micro Enterprise and Small Enterprise 85.86 38.34
(Refer Note 39)
Total 3,634.11 3,315.49
st stPARTICULARS 31 March, 2019 31 March, 2018
Terms and Conditions of the above Outstanding Dues :
Trade Payables are non-interest bearing and are normally settled on 90-360 days terms. For amounts due to related
parties and terms and conditions with Related Parties, Refer Note 36 and 41 for Company’s Credit Risk management
processes.
22 Other Financial Liabilities (Rs. in Lakhs)
Interest as per MSMEDA, 2006 ( Refer Note 39 ) 12.84 9.67
Financial Liabilities carried at Amortised Cost
st stPARTICULARS 31 March, 2019 31 March, 2018
Employee Benefits Payable 2,562.79 1,797.56
Security Deposits Payable 375.00 355.00
Capital Creditors 5,626.09 364.28
Expenses Payable 2,479.93 1,303.77
Total 13,603.18 7,833.71
Interest Accrued but not due on Borrowing 346.53 0.69
Current Maturities of Long-Term Debt ( Refer Note 17 ) 2,200.00 4,002.74
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
64
23 Other Current Liabilities (Rs. in Lakhs)
24 Provisions (Rs. in Lakhs)
25 Current Tax Liabilities (Net) (Rs. in Lakhs)
Total 228.80 400.15
Statutory Dues Payables 104.46 332.49
Advances from Customers 124.34 67.66
Compensated Absences 5.01 3.95
Provision for Employee Benefits
Total 5.01 3.95
Current Tax Payable (net) 9.62 346.71
Total 9.62 346.71
st stPARTICULARS 31 March, 2019 31 March, 2018
st stPARTICULARS 31 March, 2019 31 March, 2018
st stPARTICULARS 31 March, 2019 31 March, 2018
stNOTES TO THE FINANCIAL STATEMENT FOR THE PERIOD ENDED 31 MARCH 2019
26.1 Disaggregated Revenue Information
Set out below is the disaggregation of the Company’s revenue from Contracts with Customers: (Rs. in Lakhs)
Basic Chemicals 71,006.80 61,448.40
st stPARTICULARS 31 March, 2019 31 March, 2018
Type of Goods or Service
Total Revenue from contracts with Customers 71,006.80 61,448.40
Geographical location of Customer
India 69,988.26 60,154.03
Outside india 1,018.54 1,294.37
Total Revenue from contracts with Customers 71,006.80 61,448.40
Timing of Revenue Recognition
Goods transferred at a point in time 71,006.80 61,448.40
Total Revenue from contracts with Customers 71,006.80 61,448.40
26 Revenue from Operations (Rs. in Lakhs)st stPARTICULARS 31 March, 2019 31 March, 2018
Sales of Products 71,006.80 61,448.40
Other Operating Revenue
Export Benefits and Other Incentives 31.40 39.76
Scrap Sales 1.10 1.10
Total Other Operating Revenue 32.50 40.86
Total 71,039.30 61,489.26
stSale of products includes excise duty collected from Customers of Rs. Nil (31 March 2018: Rs.1,737.51 Lakhs). Sale
of Basic Chemical net of excise duty is Rs. 71,006.80 Lakhs (31st March 2018: Rs. 59,710.89 Lakhs). Revenue from thOperations for previous periods up to 30 June 2017 includes excise duty. From 1st July 2017 onwards the excise duty
and most indirect taxes in India have been replaced by Goods and Service Tax (GST). The Company collects GST on
behalf of the Government. Hence, GST is not included in Revenue from Operations. In view of the aforesaid change in st stindirect taxes, Revenue from Operations year ended 31 March 2019 is not comparable to 31 March 2018.
MEGHMANI FINECHEM LIMITED
65
stNOTES TO THE FINANCIAL STATEMENT FOR THE PERIOD ENDED 31 MARCH 2019
The Company has recognised the following Revenue-related Contract Asset and Liabilities (Rs. in Lakhs)
26.2 Contract Assets and Contract Liabilities
Advance from Customers 124.34 67.66
st stPARTICULARS 31 March, 2019 31 March, 2018
Trade Receivables 7,736.30 7,686.27
Trade Receivable are secured to the extend of deposit received from the Customers.
Trade Receivables are non interest bearing and generally have credit period of 30-90 days.
There is no significant movement during the year. Contract Liabilities includes Short Term Advance received from
Customers towards Sale of Products.
There is no significant movement during the year.
with the Contracted price (Rs. in Lakhs)
26.3 Reconciling the amount of Revenue recognised in the Statement of Profit and Loss
Adjustments
Cash Discount (237.62) (6,735.41)
Revenue as per contracted price 72,801.71 68,581.35
st stPARTICULARS 31 March, 2019 31 March, 2018
Sale Returns (75.92) -
Trade Discount & Quantity Rebate (1,105.90) (19.54)
Sales Commission (375.46) (378.00)
Revenue from contract with Customers 71,006.80 61,448.40
The performance obligation is satisfied upon dispatch of Goods from the Company's premises / delivery of Goods to the
Customer in accordance with the terms of contract with Customer and payment is generally due within 30 to 90 days
from date of dispatch of Goods.
26.4 Perfomance Obligation
stNo single Customer represents 10% or more of the Company’s total Revenue during the year ended 31 March 2019 stand 31 March 2018
26.5 Information about Major Customers
27 Other Income (Rs. in Lakhs)
Dividend Income 3.47 1.54
Net gain on Foreign Currency Transactions (net) 127.81 12.22
- Bank Deposit 138.08 27.63
st stPARTICULARS 31 March, 2019 31 March, 2018
- Other 1.87 1.38
Net gain on Sale of Mutual Funds 585.83 369.86
Profit On Sale of Property, Plant and Equipment 0.42 -
Sundry Balance Written back 149.36 -
Interest Income on
Total 1,006.84 412.63
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66
28 Cost of Materials Consumed (Rs. in Lakhs)
Total 25,667.26 23,541.19
st stPARTICULARS 31 March, 2019 31 March, 2018
Basic Chemicals 25,667.26 23,541.19
29 Change In Inventories Of Finished Goods (Rs. in Lakhs)
30 Employee Benefit Expenses (Rs. in Lakhs)
st stPARTICULARS 31 March, 2019 31 March, 2018
Inventories at the beginning of the Year 232.18 532.71
Changes in Inventories (A-B) (131.82) 300.53
Total (A) 232.18 532.71
Inventories at the end of the Year 364.00 232.18
Total (B) 364.00 232.18
Total 4,717.81 3,606.31
Staff Welfare Expenses 149.03 124.30
st stPARTICULARS 31 March, 2019 31 March, 2018
Contribution to Provident and Other Funds (Refer Note 35) 121.80 99.93
Salaries and Wages 1,866.98 1,403.08
Director Remuneration (Refer Note 36) 2,580.00 1,979.00
31 Finance Costs (Rs. in Lakhs)
- Others 118.18 64.37
Dividend on Non Convertible Redeemable Preference Shares 1,851.20 -
Other Borrowing Costs (includes Bank Charges, etc.) 70.92 122.49
- MSMED Payable (Refer Note 39) 3.17 0.39
- Cash Credit and Working Capital Demand Loan 48.26 23.50
- Term Loan 81.75 686.22
Exchange gain on restatement of External Commercial Borrowing (ECB) (418.95) -
Interest Expense on :
Total 2,535.84 896.97
(including Dividend Distribution Tax) (Refer Note 42)
Loss on Derivative Instruments 781.31 -
st stPARTICULARS 31 March, 2019 31 March, 2018
stNOTES TO THE FINANCIAL STATEMENT FOR THE PERIOD ENDED 31 MARCH 2019
MEGHMANI FINECHEM LIMITED
67
32 Other Expenses (Rs. in Lakhs)
Consumption of Stores and Spares 1,032.78 698.37
Consumption of Packing Materials 327.68 317.42
Repairs and Maintenance:
- Buildings 73.40 31.21
- Plant and Machinery 431.80 257.12
st stPARTICULARS 31 March, 2019 31 March, 2018
Electricity Duty on Power Generation 1,446.89 1,421.94
Insurance 164.78 121.86
Total 9,618.04 6,775.36
Rent (Refer Note i below) 88.07 85.91
Selling and Promotion Expenses 676.41 196.36
Expenditure towards Corporate Social Responsibility ( Refer Note ii below) 0.17 296.10
Miscellaneous Expenses 618.62 535.61
Loss on Sale of Property, Plant and Equipment 0.26 6.67
Power and Fuel 367.86 621.07
Rates and Taxes 689.80 48.88
Success Fees to Promoters (Refer Note 42) 1,500.00 -
Water Charges 930.85 1,045.67
Payments to the Auditors (Refer Note - iii below) 16.39 14.00
Contract Labour Charges 684.77 672.26
Renewal Purchase Obligation 567.51 404.91
Amount required to be spent as per Section 135 of the Act 239.07 137.69
Amount Spend during the year in Cash
I. Construction / Acquisition of an Assets - -
ii. On purpose other than (i) above 0.17 296.10
(a) Statutory Audit Fees 15.50 14.00
(b) Other Services 0.50 -
Total 16.39 14.00
(c) Reimbursement of Expenses 0.39 -
st stPARTICULARS 31 March, 2019 31 March, 2018
st stPARTICULARS 31 March, 2019 31 March, 2018
i) The Company has entered into Lease Rent agreement for Office Premises. The Leasing agreement is cancellable,
and renewable on a periodic basis by mutual consent on mutually accepted terms including escalation of lease rent. stLease payment recognised in the Statement of Profit and Loss for the year amounts to Rs. 88.07 Lakhs (31 March
2018 Rs. 85.91 Lakhs)stii) Corporate Social Responsibility Expenditure - spent during the year is Rs. 0.17 Lakhs (31 March 2018 - Rs. 296.10
Lakhs)
Notes :
iii Payment to Auditors (Excluding Tax)
stNOTES TO THE FINANCIAL STATEMENT FOR THE PERIOD ENDED 31 MARCH 2019
(Rs. in Lakhs )
(Rs. in Lakhs )
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
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33 Tax expense
(a) Amounts recognised in Profit and Loss (Rs. in Lakhs)
PARTICULARS For the year 2019 For the year 2018
Adjustment of Tax relating to Earlier Periods 12.27 (1,242.61)
Deferred Income Tax Liability / (Asset), Net
Origination and Reversal of temporary differences (1,837.66) (439.84)
Tax Expense for the Year 5,948.44 3,969.42
Current Income Tax 5,233.10 4,140.00
Utilisation of MAT Credit 2,540.73 1,511.87
stNOTES TO THE FINANCIAL STATEMENT FOR THE PERIOD ENDED 31 MARCH 2019
(b) Amounts recognised in Other Comprehensive Income (Rs. in Lakhs)
Tax pense) Tax Tax pense) Tax
benefit /benefit
Remeasurement of the Defered Benefit Plan (57.87) 20.22 (37.65) 7.95 (2.78) 5.17
st stParticulars 31 March 2019 31 March 2018
Before Tax (ex- Net of Before Tax (ex- Net of
Items that will not be reclassified to Profit or Loss
Items that will be reclassified to Profit or Loss - - - - - -
Total (57.87) 20.22 (37.65) 7.95 (2.78) 5.17
(c) Reconciliation of Effective Tax Rate (Rs. in Lakhs)
Others
Others 1.62 105.98
(Current Year 34.944% and 31st March, 2018 34.608%) 8,466.63 6,754.40
Dividend on Preference Share 646.88 -
Other Adjustments (851.79) (167.13)
Adjustment for Tax of Prior Periods 12.27 (1,242.61)
Non-deductible Tax Expenses
Impact on Account of Change in Def Tax Rate - (13.88)
Profit deductible u/s 80 IA (2,205.92) (1,437.68)
Total 5,948.44 3,969.42
Tax using the Company’s domestic tax rate
PARTICULARS For the year 2019 For the year 2018
Upfront Fees already claimed 13.04 21.68
Profit Before Tax 24,229.13 19,516.88
Tax Charged at different tax rate (134.09) -
Donation Deductible u/s 80 G (0.21) (51.34)
MEGHMANI FINECHEM LIMITED
69
stNOTES TO THE FINANCIAL STATEMENT FOR THE PERIOD ENDED 31 MARCH 2019
st (d) Movement in Deferred Tax balances for the year ended 31 March 2019 (Rs. in Lakhs)
Employee Benefits 42.76 15.85 20.22 - 78.83 78.83 -
Property, Plant and Equipment (3,559.53) 1,325.91 - - (2,233.61) - (2,233.61)
Tax Credit (MAT) 4,461.44 - - (2,581.60) 1,879.84 1,879.84 -
Tax Assets/ (Liabilities) 751.78 1,837.65 20.22 (2,581.60) 28.06 2,261.67 (2,233.61)
st 1 April, Profit OCI red Tax red tax
Gain on derivative - Mark to market - 126.62 - - 126.62 126.62 -
balance nised in nised in Net Defer- Defer-
Loans and Borrowings (21.89) 21.89 - - - - -
stParticulars Net Recog- Recog- Other 31 March 2019
2018 or Loss Asset Liability
Set off Tax 2,261.67
Investment (45.04) 45.04 - - - - -
Others (125.96) 302.34 - - 176.38 176.38 -
Net Tax Assets / (Liabilities) 28.06
st Movement in Deferred Tax balances for the year ended 31 March 2018 (Rs. in Lakhs)
stParticulars Net Recog- Recog- Other 31 March 2018
balance nised in nised in Net Defer- Defer-st 1 April, Profit OCI red Tax red tax
2017 or Loss Asset Liability
Property, Plant and Equipment (4,116.98) 557.46 - - (3,559.53) - (3,559.53)
Employee Benefits 31.36 14.18 (2.78) - 42.76 42.76 -
Loans and Borrowings (31.08) 9.19 - - (21.89) - (21.89)
Gain on derivative - Mark to market (29.63) 29.63 - - - - -
Investment (0.38) (44.66) - - (45.04) - (45.04)
Others - (125.96) - - (125.96) - (125.96)
Tax Credit (MAT) 4,668.96 - - (207.52) 4,461.44 4,461.44 -
Net Tax Assets/ (Liabilities) 751.78
Set off tax 4,504.20
Tax Assets/ (Liabilities) 522.24 439.84 (2.78) (207.52) 751.78 4,504.20 (3,752.42)
Basic EPS are calculated by dividing the profit for the year attributable to Equity Shareholders by the weighted average
number of Equity Shares outstanding during the year.
Diluted EPS are calculated by dividing the profit for the year attributable to Equity Shareholders by the weighted average
number of Equity Shares outstanding during the year after adjusting effects of OCRPS which are Dilutive Potential
Equity Shares.
34 DISCLOSURE OF EARNING PER SHARE
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
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The following reflects the Income and Share used in the Basic and Diluted EPS computation:
PARTICULARS For the year 2019 For the year 2018
Total number of Equity Shares at the end of the Year (Nos) 41,193,114 70,759,999
Weighted Average number of Equity Shares outstanding (Nos)
- For basic EPS calculation 72,860,531 70,759,999
Nominal value per Equity Share (Rs.) 10.00 10.00
Basic Earnings Per Share (Rs.) 25.09 21.97
Diluted Earnings Per Share (Rs.) 20.37 21.97
Weighted average number of Equity Shares
Weighted average number of Equity Shares for basic EPS 72,860,531 70,759,999
- For diluted EPS calculation 89,734,121 70,759,999
Effect of dilution:
Weighted average number of Equity Shares adjusted for the effect of dilution 89,734,121 70,759,999
Profit attributable to Shareholders (Figure in Rs. in Lakhs ) 18,280.69 15,547.46
Optionally Convertible Redeemable Preference Shares (OCRPS) 16,873,590 -
stNOTES TO THE FINANCIAL STATEMENT FOR THE PERIOD ENDED 31 MARCH 2019
(a) Retirement Benefits
35 GRATUITY AND OTHER EMPLOYMENT BENEFIT PLANS
Table 1: Reconciliation of Defined Benefit Obligation (DBO)
The Gratuity Plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five
years of service is entitled to specific benefit. The level of benefits provided depends on the member’s length of service
and salary at retirement age. The following tables summarise the components of net benefit expense recognised in the
Statement of Profit and Loss and the funded status and amounts recognised in the Balance Sheet for the respective
plans :
(Rs. in Lakhs)
Benefits Paid (10.11) (9.71)
b. Actuarial Loss/(Gain) from experience over the past period (4.05) (4.29)
c. Actuarial (Loss)/Gain from change in demographic assumptions 6.58 -
Service Cost
PARTICULARS For the year 2019 For the year 2018
Opening balance of Defined Benefit Obligation 122.93 108.62
a. Current Service Cost 40.43 25.22
Interest Cost 9.47 7.93
Re-measurements
a. Actuarial Loss/(Gain) from changes in financial assumptions 54.25 (4.84)
Closing balance of the Defined Benefit Obligation 219.50 122.93
MEGHMANI FINECHEM LIMITED
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st NOTES TO THE FINANCIAL STATEMENT FOR THE PERIOD ENDED 31 MARCH 2019
Table 2 : Reconciliation of Fair Value of Plan Assets (Rs. in Lakhs)
Opening balance of Fair Value of Plan Assets 113.59 86.84
Interest Income on Plan Assets 7.51 6.34
PARTICULARS For the year 2019 For the year 2018
Re-measurements
b. Return on plan assets excluding amount included in net interest on (1.08) (1.62)
a. Actuarial (Loss)/Gain from changes in financial assumptions - 0.43
the net Defined Benefit Liability/(Asset)
Closing balance of Fair Value of Plan Assets 151.86 113.59
Actual Return on Plan Assets 6.43 5.16
Contributions by Employer 41.95 31.31
Benefits Paid (10.11) (9.71)
Table 3 : Expenses Recognised in the Profit and Loss Account (Rs. in Lakhs)
PARTICULARS For the year 2019 For the year 2018
b. Past Service Cost - -
Service Cost
a. Current Service Cost 40.43 25.22
Employer Expenses 42.39 26.81
c. Loss/(Gain) from Settlement - -
Net Interest on net Defined Benefit Liability/ (Asset) 1.96 1.59
Table 4 : Net Liability/ (Asset) recognised in the Balance Sheet (Rs. in Lakhs)
Liability/ (Asset) recognised in the Balance Sheet 67.64 9.34
PARTICULARS For the year 2019 For the year 2018
Fair Value of Plan Assets 151.86 113.59
Funded Status [Surplus/(Deficit)] (67.64) (9.34)
Experience Adjustment on Plan Liabilities: (Gain)/Loss (4.05) (4.29)
Experience Adjustment on Plan Assets: Gain/(Loss) (1.08) (1.62)
Present Value of DBO 219.50 122.93
Of Which, Short term Liability - -
Table 5 : Percentage Break-down of Total Plan Assets
Of which, Traditional/ Non-Unit Linked 100% 100%
PARTICULARS For the year 2019 For the year 2018
Investment Funds with Insurance Company 100% 100%
Total 100% 100%
Note :
None of the assets carry a quoted market price in an active market or represent the Entity’s own transferable financial
instruments or are property occupied by the Entity.
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
72
Discount Rate DBO decreases by Rs.11.86 Lakhs DBO increases by Rs. 14.08 Lakhs
Salary Growth Rate DBO increases by Rs.14.18 Lakhs DBO decreases by Rs.12.15 Lakhs
Withdrawal Rate DBO increases by Rs.1.20 Lakhs DBO decreases by Rs. 1.45 Lakhs
Mortality (increase in expected lifetime by 3 years) DBO decreases by Rs. 0.17 Lakhs
Mortality (increase in expected lifetime by 1 year) DBO decreases by Rs. 0.09 Lakhs
Discount Rate DBO decreases by Rs.14.12 Lakhs DBO increases by Rs.15.94 Lakhs
Withdrawal Rate DBO decreases by Rs. 3.18 Lakhs DBO increases by Rs. 3.46 Lakhs
Salary Growth Rate DBO increases by Rs. 15.33 Lakhs DBO decrease by Rs. 13.87 Lakhs
Mortality (increase in expected lifetime by 1 year) DBO increases by Rs. 0.04 Lakhs
Mortality (increase in expected lifetime by 3 years) DBO increase by Rs. 0.16 Lakhs
Financial year ended March 31, 2019 Increases 1% Decreases 1%
Financial year ended March 31, 2018 Increases 1% Decreases 1%
stNOTES TO THE FINANCIAL STATEMENT FOR THE PERIOD ENDED 31 MARCH 2019
Table 6 : Actuarial Assumptions
PARTICULARS For the year 2019 For the year 2018
Salary Growth Rate 10% p.a. 6% p.a.
Withdrawal Rate 12% p.a. 2% p.a.
Mortality IALM 2012-14 Ult. IALM 2006-08 Ult.
Discount Rate 7% p.a. 7.7% p.a.
Expected Return on Plan Assets 7.7% p.a. 7.3% p.a.
Expected weighted average remaining working life 5 years 12 years
Table 7: Movement in Other Comprehensive Income (Rs. in Lakhs)
Opening Balance (Loss)/Gain (17.76) (25.70)
Re-measurements on DBO
a. Actuarial (Loss)/Gain from changes in financial assumptions (54.25) 4.84
PARTICULARS For the year 2019 For the year 2018
b. Actuarial (Loss)/Gain from experience over the past period 4.05 4.29
c. Actuarial (Loss)/Gain from change in demographic assumptions (6.58) -
Re-measurements on Plan Assets
b. Return on Plan assets, excluding amount included in net interest
on the net Defined Benefit Liability/(Asset) (1.08) (1.62)
Closing Balance (Loss)/Gain (75.62) (17.76)
a. Actuarial (Loss)/Gain from changes in financial assumptions - 0.43
Table 8 : Sensitivity Analysis
Note :
The sensitivity is performed on the DBO at the respective valuation date by modifying one parameter whilst retaining
other parameters constant. There are no changes from the previous period to the methods and assumptions
underlying the sensitivity analyses.
MEGHMANI FINECHEM LIMITED
73
stNOTES TO THE FINANCIAL STATEMENT FOR THE PERIOD ENDED 31 MARCH 2019
Table 9 : Movement in Surplus / (Deficit) (Rs. in Lakhs)
Contributions 41.95 31.31
Surplus/ (Deficit) at end of period (67.64) (9.34)
PARTICULARS For the year 2019 For the year 2018
Surplus / (Deficit) at start of period (9.34) (21.78)
Current Service Cost (40.43) (25.22)
Past Service Cost - -
Net Interest on net DBO (1.96) (1.59)
Actuarial Gain/ (Loss) (57.86) 7.94
(b) Defined Contribution Plans
The Company makes Provident Fund contributions to Defined Contribution Plans for qualifying employees. Under the
schemes, the Company is required to contribute a specified percentage of payroll costs to fund the benefits. The stCompany has recognised Provident Fund contribution of Rs. 79.62 Lakhs (31 March 2018: Rs. 73.13 Lakhs) as
expense in Note 30 under the head ‘Contributions to Provident and Other Funds’.
36 RELATED PARTIES DISCLOSURES :
• Key Managerial Personnel M r. Maulik Patel
Mr. Natwarlal Patel
Mr. Sanjay Jain (Chief Financial Officer)
Mr. Ashish Soparkar
Navratan Speciality Chemicals LLP
Mr. Ankit Patel
Mr. Ramesh Patel
• Holding Company Meghmani Organics Limited
Mr. Anand Patel
Mr. Kaushal Soparkar
Personnel [KMP] & their relatives have Meghmani Industries Limited (MIL)
Meghmani LLP (formerly Meghmani Unichem LLP) (MLLP)
Trent Chemical Industries
th Mr. Manubhai Patel (From 17 May, 2018)
• Enterprises in which Key Managerial Meghmani Dyes & Intermediates LLP ( MDI)
Tapsheel Enterprise (Tapsheel)
significant influence : Meghmani Pigments (MP)
Mr. Darshan Patel
Panchratna Corporation (PC)
Mr. Kamlesh Mehta (Company Secretary)
• Relatives of Key Managerial Personnel M r. Jayanti Patel
Mr. Karana Patel
th • Non Executive Directors Mr. Chinubhai Shah (Upto 14 May, 2018)
Mr. Balkrishna Thakkar
Ms. Nirali Parikh
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
74
stNOTES TO THE FINANCIAL STATEMENT FOR THE PERIOD ENDED 31 MARCH 2019
36 Transaction with Related Parties: (Rs. in Lakhs)
(Rent) PC
Kaushal Soparkar - - - - - 640.61 490.36 640.61 490.36
Karana Patel- Remuneration - - - - 400.32 310.46 400.32 310.46
Sanjay Jain - Remuneration - - - - 34.82 27.84 34.82 27.84
Navratan Speciality
Maulik Patel - Remuneration - - - - 640.61 490.36 640.61 490.36
Purchase of Goods 0.31 - - - - - 0.31 -
Ankit Patel- Remuneration - - - - - 640.32 490.36 640.32 490.36
Sale of Goods to MP - - 165.92 210.03 - - 165.92 210.03
Sale of Goods to Tapasheel - - - 45.93 - - - 45.93
Sale of Goods to - - 1,957.77 1,811.14 - - 1,957.77 1,811.14
Sale of Goods to MIL - - 718.18 636.32 - - 718.18 636.32
Trent Chemicals
Availing of Services - - 93.79 100.73 - - 93.79 100.73
Sale of Goods to MDI - - 942.67 627.27 - - 942.67 627.27
Sale of Goods 6,187.87 5,287.17 - - - - 6,187.87 5,287.17
Sale of Goods to MLLP - - 3,011.90 2,915.69 - - 3,011.90 2,915.69
Sale of Goods to - - 0.11 - - - 0.11 -
Purchase of MEIS Licence 482.76 155.04 - - - - 482.76 155.04
Sitting fees - - - - 6.50 8.00 6.50 8.00
Remuneration
Darshan Patel-Remuneration - - - - 280.32 220.51 280.32 220.51
Issue of OCRPS 21,091.99 - - - - - 21,091.99 -
Sanjay Jain - - - - - 3.00 - 3.00 -
Issue of Equity Shares
Jayanti Patel - - - - 375.00 - 375.00 -
Ashish Soparkar - - - - 375.00 - 375.00 -
Natwarlal Patel - - - - 375.00 - 375.00 -
Ramesh Patel - - - - 225.00 - 225.00 -
Success Fees to Promoters - -
Natwarlal Patel - - - - 375.00 - 375.00 -
Anand Patel - - - - 150.00 - 150.00 -
Issue of NCRPS 22,170.89 - - - - - 22,170.89 -
Total 73,640.28 5,442.21 6,890.33 6,347.12 5,656.49 2,037.88 86,187.10 13,827.21
Anand Patel - - - - 150.00 - 150.00 -
Ashish Soparkar - - - - 375.00 - 375.00 -
Jayanti Patel - - - - 375.00 - 375.00 -
Redemption of NCRPS 22,170.89 - - - - - 22,170.89 -
Ramesh Patel - - - - 225.00 - 225.00 -
Dividend Paid on NCRPS 1,535.56 - - - - - 1,535.56 -
Sanjay Jain - Loan Given - - - - 10.00 - 10.00 -
Repayment of Loan
Particulars Holding Company Enterprises in which Key Managerial Personnel (KMP)and its Relatives
have significant influence
Key Managerial Personnel and its Relatives
(KMP)
Total
st31 March,2019
st31 March,2018
st31 March,2019
st31 March,2018
st31 March,2019
st31 March,2018
st31 March,2019
st31 March,2018
MEGHMANI FINECHEM LIMITED
75
stNOTES TO THE FINANCIAL STATEMENT FOR THE PERIOD ENDED 31 MARCH 2019
Outstanding Balance with Related Parties:
(ii) The Company’s transactions with Related Parties are at arm’s length. Management believes that the Company’s domestic sttransactions with related parties post 31 March 2018 continue to be at arm’s length and that the transfer pricing legislation
will not have any impact on the Financial Statements particularly on the amount of the tax expense for the year and the
amount of the provision for taxation at the period end.
The Company's Chief Operating Decision Maker (CODM) examines the Company's performance from business and
geographic perspective. In accordance with Ind AS-108 - Operating Segments, evaluation by the CODM and based on the
nature of activities performed by the Company, which primarily relate to manufacturing of Basic Chemicals, the Company
does not operate in more than one business segment.
( i) Transaction entered into with Related Party are made on terms equivalent to those that prevail in arm’s length transactions.
Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash.
37 Segment Reporting
(Rs. in Lakhs)
Receivables from MP - - 42.46 48.73 - - 42.46 48.73
Remuneration Payable to - - - - 2.04 1.69 2.04 1.69
Karna Patel
Darshan Patel
Remuneration Payable to - - - - 346.87 241.45 346.87 241.45
Trent Chemical
Receivables from MLLP - - 680.06 565.41 - - 680.06 565.41
Remuneration Payable to - - - - 576.82 401.36 576.82 401.36
Payable to Panchratna - - 2.19 - - - 2.19 -
Remuneration Payable to - - - - 576.82 401.36 576.82 401.36
Kaushal Soparkar
Receivables from MDI - - 189.27 142.23 - - 189.27 142.23
Receivables from - - 349.16 460.84 - - 349.16 460.84
Receivables from Tapasheel - - - 2.43 - - - 2.43
Receivables from MOL - 850.04 - - - - - 850.04
Receivables from MIL - - 127.13 101.21 - - 127.13 101.21
Maulik Patel
Remuneration Payable to - - - - 576.87 401.36 576.87 401.36
Ankit Patel
Remuneration Payable to - - - - 231.87 161.50 231.87 161.50
Sanjay Jain -Loan Receivable - - - - 7.00 - 7.00 -
Sanjay Jain
Particulars Holding Company Enterprises in which Key Managerial Personnel (KMP)and its Relatives
have significant influence
Key Managerial Personnel and its Relatives
(KMP)
Total
st31 March,2019
st31 March,2018
st31 March,2019
st31 March,2018
st31 March,2019
st31 March,2018
st31 March,2019
st31 March,2018
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
76
38 Contingent Liabilities & Commitments
A. Claim against the Company not acknowledged as Debts (excluding Interest and Penalty)
st stPARTICULARS 31 March, 2019 31 March, 2018
Disputed Service Tax Liability 143.05 143.05
Disputed Income Tax Liability - 40.86
contingent liabilities are determinable only on receipt of judgements
pending at various Forums / Authorities)
(In respect of the above matters, future cash outflows in respect of
In respect of Letter of Credit 850.52 5,773.09
Disputed Custom Duty Liability 621.83 621.83
(Rs. in Lakhs )
stNOTES TO THE FINANCIAL STATEMENT FOR THE PERIOD ENDED 31 MARCH 2019
B. Capital CommitmentstThe Estimated amount of Contract to be executed on Capital Account of Rs. 12,191.72 Lakhs ( 31 March 2018
Rs. 20,398.42 Lakhs) has not provided for (Net of Advances).
C. Other Commitment
The Company has imported Capital Good for the various expansion projects under the EPCG Scheme at nil rate of
custom duty by undertaking obligation to export. Future outstanding export obligation under the scheme is Rs. 4,520.79 st stLakhs (31 March 2018: Rs. Nil) which is equivalent to 6 times of duty saved of Rs. 753.46 Lakhs (31 March 2018: Rs.
Nil). The export obligation has to be completed by 2024-25. Further during the year, the Company has submitted
documents for fulfilment of obligations of Rs.1,322.62 Lakhs. However, pending export obligation discharge clearance st certificate, the same have been considered outstanding as on 31 March 2019.
D. Providend Fund LiabilitythThere are numerous interpretative issues relating to the Supreme Court (SC) judgement on Providend Fund dated 28
February, 2019. As a matter of caution, the Company decided to assess the Impact on a prospective basis from the date
of SC Order. The impact on the account is not material. The Company will update its provision, on receiving further clarity
on the subject.
stAccordingly, the disclosure in respect of the amounts payable to such Enterprises as at 31 March, 2019 has been made
in the Financial Statements based on information received and available with the Company. Further in view of the
Management, the impact of interest, if any,that may be payable in accordance with the provisions of the Act is not
expected to be material. The Company has not received any claim for interest from any Supplier as at the Balance-Sheet
date.
thThe Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated 26 August, 2008 which
recommends that the Micro and Small Enterprises should mention in their correspondence with its Customers the
Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance with the ‘Micro, Small
and Medium Enterprises Development Act, 2006’ (‘the MSMED Act').
39 DISCLOSURES AS PER MSMED ACT, 2006
MEGHMANI FINECHEM LIMITED
77
st stPARTICULARS 31 March, 2019 31 March, 2018
Adjusted Net Debt 26,049.29 7,420.74
Adjusted Equity 49,242.15 51,732.82
Total Equity 49,242.15 51,732.82
Less : Cash and Cash Equivalent 12,921.38 7.31
Adjusted Net Debt to Adjusted Equity ratio 0.53 0.14
Total Interest bearing Liabilities 38,970.67 7,428.05
(Rs. in Lakhs )
The Company monitors capital using a ratio of ‘Adjusted Net Debt’ to ‘Adjusted Equity’. For this purpose, adjusted net Debt
is defined as Total Liabilities, comprising Interest-Bearing Loans and Borrowings, less Cash and Cash Equivalents.
Adjusted Equity comprises all components of Equity.
40. Capital Management
Capital includes Equity and OCRPS attributable to the Equity and OCRPS holders to ensure that it maintains an efficient
capital structure and healthy capital ratios in order to support its business and maximise shareholder value. The Company
manages its Capital Structure and makes adjustments to it, in light of changes in economic conditions or its business
requirements. To maintain or adjust the Capital Structure, the Company may adjust the dividend payment to Shareholders,
return capital to Shareholders or issue new Shares. No changes were made in the objectives, policies or processes during st stthe year ended 31 March 2019 and 31 March 2018.
12.84 9.67
Principal
remaining unpaid to any Supplier as at the end of each accounting year;
Capital Payables 319.94 -
The principal amount and the interest due thereon (to be shown separately)
Interest 12.84 9.67
- 0.01
6.58 2.86
st stPARTICULARS 31 March, 2019 31 March, 2018
Trade Payables 85.86 38.34
- -
(Rs. in Lakhs )
On the basis of information and records available with the Company, the above disclosures are made in respect of amount
due to the Micro, Small and Medium Enterprises, which have been registered with the relevant competent Authorities. This
has been relied upon by the Auditors.
The Significant Accounting Policies, including the criteria for recognition, the basis of measurement and the basis on
which income and expenses are recognised, in respect of each class of Financial Asset, Financial Liability and Equity
Instrument are disclosed in Note 2 to the Financial Statements.
41 Financial Instruments – Fair Values and Risk Management
The amount of interest paid by the Buyer in terms of Section 18 of MSMED Act,
along with the amounts of the payment made to the Supplier beyond the
appointed day during each accounting year
The amount of interest due and payable for the period of delay in making
(which have been paid but beyond the appointed day during the year) but
without adding the interest specified under this MSMED Act;
The amount of interest accrued and remaining unpaid at the end of each
accounting year; andThe amount of further interest remaining due and payable even in the
succeeding years, until such date when the interest dues as above are
actually paid to the Small Enterprise, for the purpose of disallowance as a
deductible expenditure under Section 23 of MSMED Act.
stNOTES TO THE FINANCIAL STATEMENT FOR THE PERIOD ENDED 31 MARCH 2019
The details as required by MSMED Act are given below:
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
78
(Rs. in Lakhs )
Financial Assets
Total Financial Assets 7,141.81 - 8,811.74 15,953.55
Trade Receivables (Refer Note 9) - - 7,686.27 7,686.27
Other Current-Financials Liabilities (Refer Note 22) - - 7,833.71 7,833.71
Loans (Refer Note 12) - - 21.62 21.62
and Loss rehensive Profit Other Comp
Other Current Financial Assets (Refer Note 13) - - 124.94 124.94
Current Borrowings (Refer Note 20) - - 3,335.31 3,335.31
Trade Payable (Refer Note 21) - - 3,315.49 3,315.49
Current Investments (Refer Note 8) 7,141.81 - - 7,141.81
Fair Value Fair Value Amortised Total
Through Through Cost
Other Bank Balance (Refer Note 11) - - 500.99 500.99
Total Financial Liabilities - - 14,574.51 14,574.51
Other Non-Current Financial Asset (Refer Note 4) - - 470.61 470.61
Income
Financial Liabilities
st 31 March 2018 Carrying Amount
Cash and Cash Equivalents (Refer Note 10) - - 7.31 7.31
Non-Current Borrowings (Refer Note 17) - - 90.00 90.00
(Rs. in Lakhs )
Other Non-Current Financial Asset (Refer Note 4) - - 485.47 485.47
st31 March 2019 Carrying Amount
Fair Value Fair Value Amortised Total
Through Through Cost Profit Other Comp- and Loss rehensive Income
Financial Assets
Trade Receivables (Refer Note 9) - - 7,736.30 7,736.30
Cash and Cash Equivalents (Refer Note 10) - - 12,921.38 12,921.38
Loans (Refer Note 12) - - 35.64 35.64
Other Current Financial Assets (Refer Note 13) - - 107.37 107.37
Other Non-Current Financial Liablities (Refer Note 18) 781.31 - - 781.31
Other Current-Financials Liabilities (Refer Note 22) - - 13,603.18 13,603.18
Non-Current Borrowings (Refer Note 17) - - 36,534.05 36,534.05
Financial Liabilities
Total Financial Assets - - 21,286.16 21,286.16
Current Borrowings (Refer Note 20) - - 236.62 236.62
Total Financial Liabilities 781.31 - 54,007.96 54,789.27
Trade Payable (Refer Note 21) - - 3,634.11 3,634.11
A. Category-wise classification of Financial Instrument st st The carrying value of Financial Instruments by categories as of 31 March, 2019 and 31 March, 2018 is as follows:
MEGHMANI FINECHEM LIMITED
79
B. Measurement of Fair Value and Sensitivity analysis
Fair Value Hierarchy :
The fair value of the Financial Assets and Liabilities is included at the amount at which the instrument could be exchanged
in a current transaction between willing parties, other than in a forced or liquidation sale. The Company uses the following
hierarchy for determining and/or disclosing the fair value of financial instruments by valuation techniques:
(i) Level 1: quoted prices (unadjusted) in active markets for identical Assets or Liabilities.
(iii) Level 3: inputs for the Asset or Liability that are not based on observable market data (unobservable inputs).
Financial Instrument measured at Fair Value
(ii) Level 2: inputs other than quoted prices included within Level 1 that are observable for the Asset or Liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices).
Financial Instrument measured at Amortised Cost
The carrying amount of Financial Assets and Financial Liabilities measured at amortised cost in the Financial Statements
are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would
be significantly different from the values that would eventually be received or settled.
Reconciliation of level 1 Fair Values
The following table shows a reconciliation from the opening balance to the closing balances for level 1 Fair Values
st There have been no transfers between level 1, level 2 and level 3 during the year ended 31 March 2019.
Financial Risk Management Framework
The Company’s Board of Directors have overall responsibility for the establishment and oversight of the Company’s risk
management framework. The Company manages market risk through treasury operations, which evaluates and
exercises independent control over the entire process of market risk management. The finance team recommends risk
management objectives and policies. The activities of this operations include management of cash resources, hedging of
foreign currency exposure, credit control and ensuring compliance with market risk limits and policies.
(Rs. in Lakhs )
the Fund
Financial Assets / Financial Liabilities Fair value as at Fair value Significantst st 31 March 31 March hierarchy observable
2019 2018 inputs
Investment in Mutual Fund at FVTPL (Quoted) - 7,141.81 Level 1 NAV
(Refer Note 8) statement
provided by
Mark to market Derivative Liabilities 781.31 - Level 2 Fair value as
(on Interest Rate Swap and Cross Currency Swap ascertained
by Bank
valued at FVTPL) (Refer Note 18) and provided
Manager
stClosing balance on 31 March 2019 - 7,141.81
stOpening balance on 1 April 2018 7,141.81 2,852.70
st stPARTICULARS 31 March, 2019 31 March, 2018
Net change in Fair Value (unrealised) - 181.20
Purchases 26,003.33 11,249.07
Sales (33,145.14) (7,141.16)
(Rs. in Lakhs )
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
80
The carrying amount of following Financial Assets represents the maximum credit exposure.
The Company has an effective risk management framework to monitor the risks controls in key business processes. In
order to minimise any adverse effects on the bottom line, the Company takes various mitigation measures such as credit
control, foreign exchange forward contracts to hedge foreign currency risk exposures. Derivatives are used exclusively
for hedging purposes and not as trading or speculative instruments.
▪ Market Risk
i. Credit Risk
▪ Credit Risk ;
Credit Risk is the risk that counter party will not meet its obligation leading to a financial loss. The Company is exposed to
Credit Risk arising from its operating activities primarily from Trade Receivables and from financing activities primarily
relating to parking of surplus funds as Deposits with Banks. The Company considers probability of default upon initial
recognition of Assets and whether there has been a significant increase in credit risk on an ongoing basis throughout
the reporting period.
The Company’s principal Financial Liabilities, other than Derivatives, comprises of Long Term and Short Term Borrowings,
Trade and Other Payables, and Financial Liabilities. 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, Cash and
Cash Equivalents, Other Bank Balances and Other Financial Assets that derive directly from its Operations.
The Company has exposure to the following risks arising from Financial Instruments :-
▪ Liquidity Risk ; and
Trade Receivables
Trade Receivables of the Company are typically unsecured ,except to the extent of the Security Deposits received from
the Customers or Financial Guarantees provided by the market organizers in the business.Credit Risk is managed
through credit approvals and periodic monitoring of the creditworthiness of Customers to which Company grants credit
terms in the normal course of business. The Company performs ongoing credit evaluations of its Customers’ financial
condition and monitors the creditworthiness of its Customers to which it grants credit terms in the normal course of
business. The allowance for impairment of Trade Receivables is created to the extent and as and when required, based
upon the expected collectability of Accounts Receivables. The Company evaluates the concentration of risk with respect
to Trade Receivables as low, as its Customers are located in several jurisdictions and industries and operate in largely
independent markets.
Credit Risk from Balances with Banks and Financial Institutions is managed by the Company’s treasury department.
Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each
counterparty. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through
counterparty’s potential failure to make payments.
Financial Instruments and Cash Deposit :
The Sales Department has established a Credit Policy under which each new Customer is analysed individually for
creditworthiness before the Company’s standard payment and delivery terms and conditions are offered. The
Company’s review includes external ratings, if they are available, and in some cases bank references. Sale limits are
established for each Customer and reviewed periodically. Any sales exceeding those limits require approval from the
Board of Directors.
The Company measures the expected credit loss of Trade Receivables and Loan from individual customers based on
historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on
actual credit loss experience and past trends.
MEGHMANI FINECHEM LIMITED
81
Domestic 7,612.57 7,686.27
st stPARTICULARS 31 March, 2019 31 March, 2018
Other Regions 123.73 -
Total 7,736.30 7,686.27
(Rs. in Lakhs )
Past due 91–180 days 10.77 84.97
More than 180 days 40.89 52.09
Total 7,736.30 7,686.27
Neither due nor Impaired 5,204.66 4,444.01
Past due 1–90 days 2,479.98 3,105.20
st stPARTICULARS 31 March, 2019 31 March, 2018
(Rs. in Lakhs ) Age of Receivables
USD Euro CNY
Trade and Other Receivables 7,736.30 123.73 - - 7,612.57
st31 March, 2019 Total INR INR INR INR Equivalent to Equivalent to Equivalent to
Financial Assets
Total 7,736.30 123.73 - - 7,612.57
Financial Liabilities
Non Current Borrowings 36,534.05 - 13,981.05 - 22,553.00
Trade Payables 3,634.11 1,670.41 - - 1,963.70
Other Current Financial Liabilities 13,603.18 308.32 8.74 639.16 12,646.96
Less : Foreign Currency Hedged 13,981.05 - 13,981.05 - -
Total 39,790.29 1,978.73 8.74 639.16 37,163.65
(Rs. in Lakhs )
The maximum exposure to Credit Risk for Trade Receivables by geographic region was as follows:
Market Risk is the risk that the fair value of future Cash Flows of a Financial Instrument will fluctuate because of changes in
market prices. Market risk comprises three types of risk: Currency Risk, Interest Rate Risk, and Other Price Risk such as
Equity Price Risk. Financial Instruments affected by market risk include Loans and Borrowings, Deposits, FVTOCI and
Amortised Cost Investments and Derivative Financial Instruments.
Management believes that the unimpaired amounts that are past due by more than 180 days are still collectible in full,
based on historical payment behavior and extensive analysis of Customer Credit Risk, including underlying Customers’
Credit Ratings if they are available.
ii. Market Risk
Foreign Currency Risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in
foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the
Company’s operating activities (when revenue or expense is denominated in a Foreign Currency).
Exposure to Currency Risk st st The Currency profile of Financial Assets and Financial Liabilities as at 31 March, 2019 and 31 March , 2018 are as below:
The Company manages its foreign currency risk by hedging transactions that are expected to occur within a maximum 12-
month period for hedges of actual sales and purchases and 12-month period for foreign currency loans. When a derivative
is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match the terms
of the hedged exposure. For hedges of forecast transactions the derivatives cover the period of exposure from the point
the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable that is
denominated in the Foreign Currency.
The Company's exposure to Foreign Currency Risk at the end of the reporting period expressed in INR, are as follows :
Foreign Currency Risk
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
82
Interest Rate Risk is the risk that the fair value or future Cash Flows of a Financial Instrument will fluctuate because of
changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily
to the Company’s Long-Term Debt obligations with floating interest rates. The Company manages its Interest Rate Risk by
having balanced portfolio of fixed and variable rate Loans and Borrowings.
Interest Rate Risk
Exposure to Interest Rate Risk
The Company’s Interest Rate Risk arises from Borrowings obligations. Borrowings is exposed to fair value interest rate
risk. The interest rate profile of the Company’s interest-bearing Financial Instruments as reported to the management of
the Company is as follows.
Cash Flow Sensitivity Analysis for Variable-Rate Instruments
A reasonably possible change of 100 basis points in Interest Rates at the reporting date would have increased /(decreased)
Equity and Profit or Loss by the amounts shown below. This analysis assumes that all other variables, in particular Foreign
Currency Exchange Rates, remain constant.
Non Current - Borrowings 36,534.05 90.00
Current portion of Long Term Borrowings 2,200.00 4,002.74
Total 38,734.05 4,092.74
st stVariable-Rate Instruments 31 March, 2019 31 March, 2018
Sensitivity Analysis
A reasonably possible strengthening / (weakening) of the Indian Rupee against US Dollars at March 31 would have
affected the measurement of financial instruments denominated in US Dollars and affected Equity and Profit or Loss by the
amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and
ignores any impact of forecast sales and purchases.
CNY (31.96) 31.96 (20.79) 20.79 EUR (0.44) 0.44 (0.28) 0.28
5% movement USD (92.75) 92.75 (60.34) 60.34
Strengthening Strengthening
st31 March, 2019Weakening Weakening
Profit or (Loss) Equity, Net of Tax
EUR (0.78) 0.78 (0.51) 0.51
5% movement
CNY - - - -
USD (60.64) 60.64 (39.65) 39.65
Strengthening Strengthening
st31 March, 2018Weakening Weakening
Profit or (Loss) Equity, Net of Tax
(Rs. in Lakhs )
(Rs. in Lakhs )
(Rs. in Lakhs )
st31 March, 2018 Total INR INR INR INR
USD Euro CNY
Total 11,149.20 1,212.83 15.59 - 9,920.78
Equivalent to Equivalent to Equivalent to
Trade and Other Payables 3,315.49 1,136.30 - - 2,179.19
Other Current Financial Liabilities 7,833.71 76.53 15.59 - 7,741.59
Financial Liabilities
(Rs. in Lakhs )
MEGHMANI FINECHEM LIMITED
83
Exposure to Liquidity Risk
The Company’s listed and non-listed Equity Securities are susceptible to market price risk arising from uncertainties about future values of the Investment Securities. The investment in listed and unlisted Equity Securities are not significant.
Equity Price Risk:
iii. Liquidity Risk
Liquidity Risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.
Non-Derivative Financial Liabilities
The Company manages liquidity risk by maintaining adequate reserves, by continuously monitoring forecast and Actual Cash flows and matching the maturity profiles of the Financial Assets and Liabilities. The table below summarises the remaining contractual maturities of Financial Liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements.
Current portion of Long Term Borrowings (40.03) 40.03 (26.17) 26.17
Non Current - Borrowings (365.34) 365.34 (237.68) 237.68
st31 March 2019
Non Current - Borrowings (0.90) 0.90 (0.59) 0.59
Total (387.34) 387.34 (251.99) 251.99
Total (40.93) 40.93 (26.76) 26.76
Current portion of Long Term Borrowings (22.00) 22.00 (14.31) 14.31
st31 March 2018
100 bp increase 100 bp increaseParticulars
100 bp decrease 100 bp decrease
Profit or Loss Equity, Net of Tax
Contractual Cash Flows
Total 1 Year or Less
1-2 Years 2-5 Years More than 5 Years
Other Payables 11,403.18 11,403.18 11,403.18 - - -
Trade Payables 3,634.11 3,634.11 3,634.11 - - -
Indian Rupee Loan 24,753.00 24,753.00 2,200.00 4,882.21 17,670.79 -
Total 54,007.96 54,007.96 17,473.91 7,678.42 28,855.63 -
Working Capital Loans from Banks 236.62 236.62 236.62 - - -
Foreign Currency Loan 13,981.05 13,981.05 - 2,796.21 11,184.84 -
st31 March, 2019Carrying
amount
Derivative Financial Liabilities
Contractual Cash Flows
Total 1 Year or Less
1-2 Years 2-5 Years More than 5 Years
Total 781.31 781.31 - 156.26 625.05 -
(on Interest Rate Swap and Cross
Mark to Market Derivative Liabilities 781.31 781.31 - 156.26 625.05 -
Currency Swap valued at FVTPL)
st31 March, 2019Carrying
amount
(Rs. in Lakhs )
(Rs. in Lakhs )
(Rs. in Lakhs )
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
84
Non-Derivative Financial Liabilities
Working Capital Loans from Banks 3,335.31 3,335.31 3,335.31 - - -
Rupee Term Loans from Banks 4,092.74 4,092.74 4,002.74 20.00 70.00 -
Trade Payables 3,315.49 3,315.49 3,315.49 - - -
Other Payables 3,830.97 3,830.97 3,830.97 - - -
Total 14,574.51 14,574.51 14,484.51 20.00 70.00 -
Contractual Cash Flows
Total 1 Year or Less
1-2 Years 2-5 Years More than 5 Years
st31 March, 2018Carrying
amount
Derivative Financial Liabilities
Total - - - - - -
Mark to Market Derivative Liabilities - - - - - -
Currency Swap valued at FVTPL)
(on Interest Rate Swap and Cross
Contractual Cash Flows
Total 1 Year or Less
1-2 Years 2-5 Years More than 5 Years
st31 March, 2018Carrying
amount
(Rs. in Lakhs )
(Rs. in Lakhs )
th The Board of Directors in meeting held on 19 May 2018 approved the Scheme of Arrangement in the nature of
Amalgamation of Meghmani Agrochemical Private Limited ('MACPL') with the Company ('the Scheme'). The Company
applied to National Company Law Tribunal ("NCLT") for approval of the Scheme of Arrangement. The Scheme was
approved by NCLT on 11th Febuary 2019. The amalgamation was effective from the date of the Order (i.e effective date).
Excessive Risk Concentration
Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same
geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly
affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the
Company’s performance to developments affecting a particular Industry .
The Gross inflows/(outflows) disclosed in the above table represent the contractual undiscounted Cash Flows relating to
Derivative Financial Liabilities held for Risk Management purposes and which are not usually closed out before
contractual maturity. The disclosure shows net Cash Flow amounts for derivatives that are net cash-settled and gross cash
inflow and outflow amounts for derivatives that have simultaneous gross cash settlement
In order to avoid excessive concentrations of risk, the policies and procedures include specific guidelines to focus on the
maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.
Selective hedging is used within the Company to manage risk concentrations at both the relationship and industry levels .
42 Amalgamation with Meghmani Agrochemical Private Limited and Shareholding changes
Pursuant to the Scheme of Amalgamation, the Company has issued 210,919,871 8% Optionally Convertible /
Redeemable Preference Shares (OCRPS) of Rs. 10 each amounting to Rs. 21,091.99 Lakhs and 221,708,925 8% Non
Convertiable Redeemable Preference Shares (NCRPS) of Rs. 10 each amounting to Rs. 22,170.89 Lakhs to Meghmani
Organics Limited (MOL) against the investment in Equity and Preference Shares issued by MACPL.
MEGHMANI FINECHEM LIMITED
85
th The Company has redeemed the NCRPS on 8 March 2019 along with dividend. As a result the Company has paid
Rs 22170.89 Lakhs towards redemption of NCRPS and Rs. 1,851.20 Lakhs (including Dividend Distribution Tax of Rs
315.64 Lakhs) as Dividend to MOL. As approved by the Board of Directors of the Company, dividend on NCRPS was paid thwith effect from 26 April 2018 (i.e. the date of Preference Shares issued by MACPL to MOL) to 5th March 2019 (i.e. date
of redemption).
Pursuant to the Scheme, accounting treatment for Assets and Liabilities acquired is as under:
( i) 34566855 Equity Shares of the Company as held by MACPL has been cancelled by operation of law as per the terms
of the Scheme.
(ii) Liability of Rs 29.88 Lakhs in the books of MACPL has been accounted at fair value.
(iv) Authorised Share Capital amounting to Rs. 4,500.00 Lakhs (Rs.1,500 Lakhs Equity Share Capital of Rs. 10 each
and Rs. 3,000 Lakhs Preference Share Capital of Rs. 10 each) has been increased.
(iii) The excess of Purchase Consideration paid over liabilities acquired and cancellation of Equity Shares of the
Company amounting to Rs 39,836.08 Lakhs has been adjusted against balance of Securities Premium amounting to
Rs. 15,142.00 Lakhs and remaining balance has been debited to Capital Reserve amounting to Rs. 24,694.08
Lakhs.
Pursuant to Scheme, the OCRPS issued is redeemable/ convertible at any time within a period of 20 years at the option of
the Company. Considering the terms of issue, all the significant right of conversion / redemption and declaration of
dividend is retained by the Company. Also management is not expecting to redeem the OCRPS as on the date of issue or
forseable period. Accordingly, OCRPS is accounted as Equity and shown below Equity Share Capital.
(v) Breakup of purchase consideration
The aforesaid NCRPS were issued in lieu of holding of IFC which was acquired by MACPL before the amalgamation.
During the current year, the Company and Meghmani Agrochemicals Limited ('MACPL') entered into Share Sale
Agreement dated 26 April 2018, accordingly IFC sold its equity stake in the Company to MACPL. The agreement also
allowed the Promoters to exercise their rights of the Promoters Warrants in accordance with the terms of the Share
Subscription Agreement between the Company, Promoters and IFC at Rs 30 each. The promotors exercised the warrant
option rights conferred.
21,09,19,871 8% OCRPS @ Rs 10 per share 21,091.99
Particulars Amount
Total Purchase consideration 43,262.88
22,17,08,925 8% NCRPS @ Rs 10 per share 22,170.89
The Company evaluates events and transactions that occur subsequent to the balance sheet date but prior to approval of
Financial Statement to determine the necessity for recognition and/or reporting of any of these events and transactions in
the Financial Statements. As of 9 May 2019 there were no material subsequent events to be recognized or reported that
are not already previously disclosed.
43 Events occurred after the Balance Sheet date
44 Previous Years figures have been regrouped wherever necessary to make them comparable with those of the current year
(Rs. in Lakhs )
M. NO.: 101974 K.D. MEHTA KAUSHAL SOPARKAR
AS PER OUR REPORT OF EVEN DATE OF DIRECTORS OF FOR AND ON BEHALF OF THE BOARD
FOR S R B C & CO LLP MEGHMANI FINECHEM LIMITED
PARTNER (DIN NO 02006947)
CHARTERED ACCOUNTANTS (CIN U24100GJ2007PLC051717)
ICAI Firm Regn. No. 324982E / E300003 SANJAY JAIN MAULIK PATEL
PLACE : AHMEDABAD COMPANY SECRETARY MANAGING DIRECTOR
per SUKRUT MEHTA CHIEF FINANCIAL OFFICER CHAIRMAN & MANAGING DIRECTOR
thDATE : 9 MAY, 2019 (DIN No. 01998162)
PLACE : AHMEDABADth DATE : 9 MAY, 2019
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
86
ORDINARY BUSINESS :
3) To appoint a Director in place of Mr. Darshan Patel (DIN 02047676) who retires by rotation and being eligible offers himself
for re-appointment.
st1) To consider and adopt the Audited Financial Statement including Balance sheet as at 31 March, 2019 Statement of Profit stand Loss and Cash Flow Statement for the financial year ended on 31 March, 2019, together with reports of Board of
Directors and the Auditor’s thereon.
SPECIAL BUSINESS :
APPOINTMENT OF COST AUDITORS FOR FY 2019 - 20
RESOLVED FURTHER THAT the Board of Directors of the Company (including Audit Committee), be and is hereby
authorized to ratify the payment remuneration and to do all acts and take all such steps as may be necessary, proper or
expedient to give effect to this resolution.
thNotice is hereby given that 12th Annual General Meeting of the Members of the Company will be held on Wednesday, 8 July,
2019 at 10.30 A.M. at the Registered Office of the Company, to transact the following business :
RESOLVED THAT pursuant to the provisions of Section 148 and other applicable provisions, if any, of the Companies Act,
2013 read with the Companies (Audit and Auditors) Rules, 2014, (including any statutory modifications or amendments or
re-enactments thereof for the time being in force), M/s K V Melwani & Associates, Cost Accountants (Registration No.
100497), be and is hereby appointed as Cost Auditors of the Company to conduct the audit of the cost records of the
Company for the financial year ending on 31 March, 2020, at a remuneration of Rs. 1,30,000/- (Rupees One Lakh Thirty
Thousand only) per financial year, plus applicable service tax and out of pocket expenses that may be incurred during the
course of Cost audit.
2) To appoint a Director in place of Mr. Maulik Patel (DIN 02006947) who retires by rotation and being eligible offers himself for
re-appointment.
4) To Consider and if thought fit to pass the following resolution with or without modification as Ordinary Resolution :
NOTICE OF ANNUAL GENERAL MEETING
By Order of the Board
Registered Office : for MEGHMANI FINECHEM LIMITED
GIDC Dahej, Taluka : Vagra
Place : Bharuch Maulik Patelth Date : 09 May,2019 (Chairman & Managing Director)
(DIN 02006947)
Plot No.: CH 1 & CH 2
A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND
VOTE INSTEAD OF HIMSELF AND A PROXY NEED NOT BE A MEMBER OF THE COMPANY.
1) The proxy in order to be effective must be deposited at the registered office of the Company not less than 48 hours before
the commencement of the meeting
2) If the appointer is a corporation, the proxy must be executed under seal or the hand of its duly authorized officer or attorney.
3) The Explanatory statement as required under Section 102 of the Companies Act, 2013 in respect of Item No. 5 to 12 is
annexed and form part of this Notice.
Notes :
MEGHMANI FINECHEM LIMITED
87
EXPLANATORY STATEMENT PURSUANT TO SECTION 102OF THE COMPANIES ACT, 2013
ITEM NO. 4 - APPOINTMENT OF COST AUDITOR
The Board of Directors of the Company, on the recommendation of the Audit Committee, has approved the appointment of M/s K
V Melwani & Associates, Cost Accountants (Registration No. 100497), as the Cost Auditors to conduct the audit of the cost
records of the Company for the financial year ending 31st March, 2020.
Accordingly, consent of the Members is sought by way of an Ordinary Resolution as set out at Item No. 4 for approval of the
remuneration amounting to Rs. 1,30,000/- per annum plus applicable service tax and out of pocket expenses payable to the
Cost Auditors for the financial year ending on 31st March, 2020. The Board accordingly recommends the resolution at Item No. 4
of this Notice for the approval of the Members.
None of the Directors or Key Managerial Personnel or their relatives are in any way concerned or interested, financially or
otherwise, in the resolution at Item No. 4 of this Notice.
In accordance with the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors)
Rules, 2014, the remuneration payable to the Cost Auditors has to be ratified and approved by the Members of the Company.
By Order of the Board
Plot No.: CH 1 & CH 2
Registered Office : for MEGHMANI FINECHEM LIMITED
GIDC Dahej, Taluka : Vagra
Place : Bharuch Maulik PatelthDate : 9 May, 2019 (Chairman & Managing Director)
(DIN 02006947)
MEGHMANI FINECHEM LIMITEDMEGHMANI FINECHEM LIMITED
88
Notes
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