SENSEX NIFTY India | Notes to Account > Dyes & Pigments > Notes to Account from Bodal Chemicals - BSE: 524370, NSE: BODALCHEM

Bodal Chemicals

BSE: 524370|NSE: BODALCHEM|ISIN: INE338D01028|SECTOR: Dyes & Pigments
Mar 23, 16:00
-6 (-4.83%)
VOLUME 236,267
Mar 23, 15:49
-6.2 (-4.99%)
VOLUME 701,090
Mar 16
Notes to Accounts Year End : Mar '17

Company Background

Bodal Chemicals Limited (the ‘Company’) is a public limited Company incorporated under the Companies Act 1956. The Company is engaged in the business of manufacturing of Dyes, Dye Intermediates and Basic Chemicals.

1.1 Pursuant to the Scheme of Amalgamation u/s 391 to 394 of the Companies Act, 1956 and u/s 52 of the Companies Act, 2013 for amalgamation of Bodal Agrotech Ltd. (Transferor Company) with the Company, with effect from 1st April, 2016 (appointed date), as sanctioned by the Hon’ble High Court of Gujarat dated 11th November 2016, Authorised Share Capital of Bodal Agrotech Ltd. of RS.30 millions has been added in the Authoried Share Capital of the Company

1.2 Rights, preferences and restrictions attached to shares Equity shares

The Company has only one class of equity shares having a par value of RS.2/- per share. Each shareholder is eligible for one vote per share. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company, after distribution of all preferential amounts, in proportion of their shareholding The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

1.3 The Board of Directors at its meeting held on 3rd August, 2016 declared an interim dividend of H0.30 (Paise thirty only) per equity share of RS.2/- each. The total dividend appropriation for the year ended 31st March, 2017 amounted to RS.39.40 millions including corporate dividend tax of RS.6.67 millions.

1.4 The Board of Directors at its meeting held on 25th May, 2017 has recommended a final dividend of H0.50 (Paise fifty only) per equity share for the financial year ended March 31, 2017. The proposal is subject to the approval of shareholders at the Annual General Meeting and if approved would result in a cash outflow of RS.65.66 millions including corporate dividend tax of RS.11.11 millions.

2.1 Working Capital Loans from Banks are secured by Hyp. Of Inventories, Book Debts and bills drawn under letter of credit and confirmed contracts and collaterally secured by equitable mortgage of Immovable property and Hyp. Of P&M of the company and personal guarantees of the Chairman and Managing Director and Executive directors.

2.2 Unsecured Working Capital Loan from Bank is personally guaranteed by Chairman and Managing Director and Executive directors.

3.1 Trade Payables include RS.66.71 millions (PY RS.8.38 millions) to related parties (refer note 33)

4.1 There is no amount due and outstanding to be transferred to the Investor Education and Protection Fund as on 31st March 2017

4.2 Other Current Liabilities includes Deferred Premium, Interest payable, expenses payable etc.

4.3 Statutory liabilities represent amounts payable towards VAT, CST, Excise duty and TDS etc.

5.1 Provision for Employee Benefits include RS.1.18 millions (PY 15.31 millions) to related parties (refer note 33)

6.1 1 (One) Equity Share of Bhageria Industries Ltd. of RS.10/- each is sub-divided into 2 (Two) Equity Shares of RS.5/- each fully paid-up with effect from October 27, 2016.

7.1 Balance with Statutory Authorities includes balances with Excise, Service Tax, Sales Tax, Customs Dept. etc.

8.1 Trade Receivables include RS.22.73 millions (PY RS.9.13 millions) to related parties. (refer note 33)

9.1 Details of Specified Bank Notes (SBN) held and transacted during demonetisation period from 08-11-2016 to 30-12-2016

10.1 Advances to supplier of goods include RS.41.64 millions (PY RS.15.56 millions) to related parties. (refer note 33)

10.2 Balance with Statutory Authorities includes balances with Excise, Service Tax, Sales Tax, etc.

10.3 Others include Tour Advances, Gratuity Planned Assets (Net), and Income Receivables.

11 Derivative Instruments and Un-hedged Foreign Currency Exposure

The company enters into forward exchange contracts to hedge against its foreign currency exposures relating to the underlying transactions and firm commitments. The company does not enter into any derivative instruments for trading or speculative purposes.

12 Employees’ Benefits

a) Defined Benefit Plan Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Life Insurance Corporation of India and Star Union Dai-ichi Life insurance company in the form of qualifying insurance policy.

The following table sets out the funded status of the gratuity plan and the amounts recognised in the company’s financial statements based on actuarial valuations being carried out as at 31st March 2017.

b) Defined Contribution Plan

The company has recognized the following amount in statement of profit and loss which is included under contribution to funds.

13 Information on related party transactions as required by Accounting Standard (AS-18) on Related Party Disclosures for the year ended 31st March, 2017.

a) Names of related parties and nature of relationship I. Key Management Personnel (KMP)

1. Shri Suresh J. Patel Chairman& Managing Director

2. Shri Bhavin S. Patel Executive Director

3. Shri Ankit S. Patel Executive Director

4. Shri Mayur B. Padhya Chief Financial Officer

5. Shri Ashutosh B. Bhatt Company Secretary

II. Enterprise under significant influence of key management personnel (Enterprise)

(i) Shanti Inorgo Chem (Guj.) Pvt. Ltd.

(ii) Rudraksh Caterers Pvt. Ltd.

III. Associate Concern (AC)

(i) Trion Chemicals Pvt. Ltd. (W.e.f 16th March,2017)

IV. Subsidiary Company (SC)

(i) SPS Processors Pvt. Ltd. (W.e.f 21st March,2017)

V. Wholly-owned Subsidiary Company (WOS)

(i) Bodal Agrotech Ltd. (Up to 31st March, 2016)


(i) Bodal Agrotech Ltd is amalgamated with Bodal Chemicals Ltd w.e.f 1st, April, 2016 and in previous year loan was given for acquisition of assets and other business purposes and has been utilized for the same.

(ii) No amounts pertaining to related parties have been provided for as doubtful debts. Also no amounts have been written off or written back during the year.

14 Segment Reporting:

The Company’s primary segment is identified as business segment based on nature of products, risks, returns and the internal business reporting system and secondary segment is identified based on the geographical location of the customers as per Accounting Standard 17. The Company is principally engaged in a single business segment viz., “Dyes, Dyes Intermediates and Basic Chemicals”.

The geographical segment has been considered for disclosure as secondary segment.

Two secondary segments have been identified based on the geographical locations of customers i.e. domestic and export. Information about geographical segments are as below.

a) Revenue from external operations comprises of income from sale of products, and other operating revenues.

b) Carrying amount of segment assets comprises of non-current assets and current assets identified to the respective segments. However Segments assets in India also includes certain common assets used to generate revenue in both segments but not feasible of allocation.

c) Capital expenditure during the year represents net additions to Tangible and Intangible assets and movement in Capital work in progress.

15 Disclosure under the Micro, Small and Medium Enterprises Development Act, 2006 are provided as under for the year 2016-17, to the extent the Company has received intimation from the “Suppliers” regarding their status under the Act.

16 Corporate Social Responsibility Expenses

A. Gross amount required to be spent by the Company during the year 2016-17 - RS.21.47 millions (Previous year - RS.10.64 millions)

B. Amount spent during the year on :

17 Exceptional items

During the Year, the Company has sold out Unit-5 located at Ankleswar- GIDC, Bharuch, Gujarat. The company has gained RS.48.54 millions out of sale of whole unit and the same is disclosed under “Exceptional items” in the statement of Profit and loss.

Further, the revenue of Unit- V of the Company during the last financial year was nominal and the company has also not calculated capacity of Unit V in total production of capacity disclosed by the company

18 Amalgamation of Wholly Owned Subsidiary with the Company

Pursuant to the Scheme of Amalgamation u/s 391 to 394 of the Companies Act, 1956 for amalgamation of the erstwhile wholly owned subsidiary Bodal Agrotech Ltd. (Transferor Company) whose business of manufacturing as well as trading of the chemicals products merged with the Company, with effect from 1s, April, 2016 (appointed date), as sanctioned by the Hon’ble High Court of Gujarat. The effect of the merger has been given in the accounts as per the scheme sanctioned.

The amalgamation has been accounted for under the “Pooling of Interests method” as prescribed by Accounting Standard 14 (AS-14) notified by the Government of India. Accordingly, the assets, liabilities and reserves of the erstwhile Bodal Agrotech Ltd. as on the appointed date have been merged with the Company at their book values. The net impact of the merger on assets, liabilities and reserves as on the appointed date is as below:

* On amalgamation RS.17 millions carrying value of investment in equity of the transferor company eliminated in books of Transferee Company against Equity Share Capital of the Transferor Company

The scheme was given effect to in the financial statement from 1st April, 2016 and accordingly all the assets, liabilities, reserves and surplus of Transferor Company were recorded in the books of the transferee Company at their carrying amounts.

The figures for the previous year do not include figures for the erstwhile Bodal Agrotech Ltd. and accordingly the current year’s figures are not comparable to those of the previous year.

19 During the year, the Company has acquired 70% of the equity shares in SPS Processors Pvt. Ltd. As a result of this acquisition, SPS Processors Pvt Ltd. has become a subsidiary of the Company with effect from 21st March, 2017.

20 During the year, the Company has acquired 41.51% of the equity shares and 100% of the preference shares in Trion Chemicals Pvt. Ltd. As a result of this acquisition, Trion Chemicals Pvt. Ltd. has become an Associate concern of the Company with effect from 16th March, 2017.

21 Previous year’s figures have been rearranged and reclassified wherever necessary to correspond with the current year.

Source : Dion Global Solutions Limited
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