NOTES TO ACCOUNTS A BACK GROUND The Company is engaged in manufacturing and mixing of fertilisers and has a network of distributors in the southern states and has developed a brand value recognised in the market place. The company has planned to develop a Container Terminal at Ennore. B Significant Accounting Policies The financial statements are brpared on accrual basis of accounting and in accordance with the applicable Accounting Standards. i Revenue Recognition Revenue is recognized on accrual basis and is inclusive of excise duty wherever applicable. ii Foreign Currency Transactions Foreign Currency transactions are recorded at the rates brvailing on the date of the transactions. Exchange differences arising on settlement are recognized in the statement of Profit & Loss. Outstanding foreign balances are restated at exchange rates brvailing on the Balance Sheet date. iii Employee Benefits Short term employee benefits are estimated and provided for. Further Company’s contribution to Provident Fund, Employees State Insurance and other funds are determined under the relevant schemes and/or statute are charged to revenue. Gratuity is provided for in the accounts based on an Actuarial Valuation. iv Fixed Assets Fixed Assets are valued at cost. Most of the fixed assets were revalued in the past earlier years to reflect the true value of such assets and the incremental apbrciation on account of such revaluation was credited to Fixed Assets Revaluation Reserve in earlier years. v Debrciation Debrciation is provided on Written Down value method on all assets at the appropriate rates in accordance with Schedule XIV to the Companies Act, 1956. The incremental differential debrciation on account of revaluation of certain debrciable assets is charged against Fixed Assets Revaluation Reserve account. vi Borrowing Cost Interest cost on qualifying asset being an asset necessarily takes a substantial period of time to get ready for its intended use or sale, is capitalized at the weighted average rate of the funds borrowed and utilized for acquisition of such assets. vii Impairment of Assets The carrying cost of assets are reviewed at each Balance Sheet date and if there is any indication of impairment based on internal/external factors, the same is recognized and provided for. viii Investments Investments meant to be held for long term are carried at cost. ix Inventories Fertilizer mixtures are valued at lower of cost and net realizable value following first in first out method. Raw materials, Stores and Spare parts are valued at weighted-average cost and are inclusive of excise duty and other taxes wherever applicable 2.1 Additional Disclosure (i) Land and buildings at Fertilizer Division were revalued in the years 1989, 1992 and again on 1st April 1995. (ii) Part of the “Kothari Building” belonging to the Company was revalued at the fair market value on 31st March 2002 by an approved valuer (iii) “Kothari Building” belonging to the Company was revalued at the fair market value on 31st March 2012 by an approved valuer (iv) The apbrciation in the value of the above fixed assets has been credited to Fixed Asset Revaluation Reserve. 2.2 The company has entered into a lease agreement with M/s.Gemini Iron and Steel Pvt. Ltd. for sale of four floors consisting of Ground, First, Fourth and 5th Floor along with undivided share of 6.33 grounds of land out of 9.5 grounds in Kothari Buildings, Chennai, for a total consideration of Rs.45 crores and has received an advance of Rs.9.01 crores. The resolution pertaining to the sale of floors is subject to the approval of the shareholders at the ensuing Annual General Meeting. 2.3 The company has entered into a lease arrangement with M/s.Gemini Fertilizers for operating the fertilizer factory of the company situated at Ennore near Chennai for a period of 10 years for production of Single Super Phosphate. This arrangement of lease is subject to the approval of the shareholders at the ensuing Annual General Meeting. 3 In accordance with Accounting Standard 22 - “Taxes on Income”, as per prudence Deferred tax Asset of Rs.14,69,05,157/ - is not recognised as a matter of prudence. 4 As per the records and information available with the company there are no amounts outstanding as on 30th June, 2013 payable to : (i) Small Scale Industries (ii) Micro, Small and Medium Enterprises 5 Balance Sheet and Statement of Profit & Loss Account have not been signed by the Chief Financial Officer. (since resigned on 30.06.2015) 6 With respect to the pending litigations, the company has not provided for additional financial commitment over and above the amount due and appearing in the books of accounts to the various litigants. 7 Winding up Petitions: (i) Winding up petition filed by Kotak Mahindra Bank Limited against the company for the guarantee executed to its associate company namely, DC Kothari Textiles Ltd is pending before the Hon’ble High Court of Judicature at Madras. (ii) Certain employees have also filed winding up petitions before the Hon’ble High Court of Judicature at Madras for recovery of their dues payable to them on retirement/resignation. (iii) A creditor of the company has also filed winding up petition before the High Court of Judicature at Madras for recovery of its dues against the supply of raw materials. The company has already contested the above petitions before the Hon’ble High Court of Judicature at Madras. 8 The company had referred to the appropriate authorities certain contracts entered into by the erstwhile Executive Director. 9 The figures in brackets relate to Previous year and regrouped / reclassified to confirm to the requirements of the current year. |