i. SUBSIDY UNDER NEW PRICING SCHEME (NPS) FOR UREA
Escalation/De-escalation in input prices is subject to annual
revision based on the actual prices. Accordingly, a sum of Rs.85.89 Cr.
(Previous year Rs. 50.99 Cr.) has been reckoned as receivable from FICC
for the year 2011-12 towards annual escalation of input prices.
ii. EXCHANGE RATE FLUCTUATION
Exchange rate fluctuation included in other expenses is Rs. 4.06 Cr
(Previous year Rs. 7,362).
iii. CENTRAL EXCISE 25/70 NOTIFICATION
With due permission of COD, the Company has preferred an appeal with
CESTAT on 18.07.2011 against (I) demand for delayed payment interest
of Rs. 5.42 Cr. for refund of the excess Excise Duty of Rs. 3.10 Cr.
collected by the Department and (ii) to quash the order of Commissioner
(Appeals).The hearings are yet to take place.
No provision is considered necessary in the Books by the Company as the
matter is subjudice. However the same is shown under Contingent
iv. Advances include a sum of Rs. 63.09 Lacs deposited with ESI
authorities being employer contribution to ESI as per the direction of
Hon. Madras High Court. The Company has already filed Writ Appeal No.
1228/2010 against the orders passed in WP No. 14642/2006. The Hon.
Court on 29.06.2010 granted interim stay until further orders and
notice. Pending disposal of the case the amount is shown under advances
as of 31.3.2012.
v GOI has approved the 2007 pay revision vide letter No:
84/1/2009-HR-I dated April 18,2011. In terms of the order the perks and
allowances on the revised scales are effective 18.04.2011. Accordingly,
perks and allowances for the period from 18.04.2011 to 31.03.2012
amounting to Rs. 3.41 Cr. has been provided in the books of accounts to
enable implementation of revised perks and allowances per GOI order.
vi. OTHER DISCLOSURES
i. Information required under AS-15 (Revised) on Employee Benefit
Expenses is provided in Annexure -1 to this note.
ii. The amount of borrowing costs capitalised for the year is ''NIL''
(Previous year ''NIL'')per AS-16 (Borrowing Costs).
iii. Fertilizer manufacture is the only main business segment and
trading operations are less than 10% of the total revenue. Further, the
Company is engaged in providing and selling its products in single
economic environment in India i.e., there is a single geographical
segment. Hence, there is no requirement of segment reporting for the
Company as per AS -17 (Segment Reporting).
iv. During the year, there were no transactions with related parties as
defined in AS -18 (Related Party Disclosures). The data relating to
key managerial personnel is furnished under note 25.
v. The Company has not entered into joint venture activities as defined
in AS-27. Hence AS-27 on Financial Reporting of Interest in Joint
Ventures is not applicable to the Company at present.
vi. The movement of Provisions as required under AS- 29 Provisions,
Contingent Liabilities and Contingent Assets is given below:
Mar 31,2012 Mar 31,2011
(Rs. Cr) (Rs. Cr)
a. Leave Encashment
Provision at the beginning of the year 6.25 5.66
Provision made during the year 4.98 2.48
Utilisation/withdrawal during the year 1.83 1.89
Provision at the end of the year 9.40 6.25
b Retired Medical Benefits
Provision at the beginning of the year 1.43 1.34
Provision made during the year 0.05 0.23
Utilisation/withdrawal during the year 0.15 0.14
Provision at the end of the year 1.33 1.43
c. Service Awards
Provision at the beginning of the year 0.93 0.58
Provision made during the year 0.33 0.35
during the year - -
Provision at the end of the year 1.26 0.93
Provision at the beginning of the year 12.19 3.72
Provision made during the year 7.40 10.47
Utilisation / withdrawal during the year 4.00 2.00
Provision at the end of the year 15.59 12.19
e. Bad and Doubtful Debts
Provision at the beginning of the year 5.17 4.33
Provision made during the year 0.15 0.98
Utilisation/withdrawal during the year 0.54 0.14
Provision at the end of the year 4.78 5.17
f. Claims Recoverable
Provision at the beginning of the year 0.82 -
Provision made during the year 0.19 0.82
Utilisation/withdrawal during the year
Provision at the end of the year 1.01 0.82
vii. a) Considering the carry forward losses and allowances available
for set off, there is no Income Tax liability for the year 2011-12.
Hence no provision is made for Income Tax during the year.
b) Deferred tax asset (Net) as at 31.03.2012 has not been recognized
since there are no taxable profits in view of the set-off of the carry
forward loss and depreciation benefits available to the Company
under the Income-Tax Act.
viii. Eight hearings of BIFR have taken place since 02.04.2009 on
which date, the Company was declared sick under SIC (SP) Act, 1985. The
Operating Agency (SBI, Commercial Branch, Chennai) has submitted a
Draft Rehabilitation Scheme (DRS) to BIFR. In the BIFR hearing held on
07.5.2012, the Board wanted certain clarifications/modifications in the
DRS and directed the operating agency to resubmit the fully tied up
DRS. Next hearing is posted on 27.08.2012.
ix. Based on the preliminary report of the outside professional firm
of Chartered Accountants, the Company identified the disposal documents
for most of the items reported short under Air Conditioners & Water
Coolers and Lab Equipment. In respect of Furniture & Fittings, Office
Equipment and Automotive & Service Equipment, the reconciliation is in
progress. However, as most of the items reported short are fully
depreciated, there is no material financial impact on Accounts.
x. Included in Short term Trade Payables under ''Note 9a'' are:
a. Dues to CPCL - Rs. 0.02 Cr (Previous Year Rs. 82.27 Cr) for which
mortgage and First charge on Guindy land is given for Rs. 100 Cr till
the date of sanction of a rehabilitation scheme for the Company.
b. Dues to IOC - Rs. 49.60 Cr (Previous Year Rs. 49.92 Cr) for which
First charge on Plant and Machinery is given for Rs. 50 Cr
xi. The Company settled the dues to LICHFL through One Time Settlement
and the benefit of Rs. 1.31 Cr (Previous year Rs. 124.69 Cr with
Financial Institutions) has been accounted under extra ordinary items.
xii. The Annual maintenance of Plants was taken up from March 05,
2012. Per normally accepted Accounting Principles, all spares drawn
from stores up to March 31,2012 together with connected labour costs
were charged in 2011-12 Accounts, though the Plants have not restarted
as of year end.
1. CONTINGENT LIABILITIES, CAPITAL COMMITMENTS AND L/Cs OUTSTANDING:
(RS. ) (RS. )
(a) Contingent Liabilities in 183,58,01,504 156,72,77,307
respect of claims against the
Company not acknowledged as
debts in respect of Income Tax,
Excise Duty, Sales Tax and
others (Includes Customs Duty
on Imported Urea Rs. 65.86 Cr,
Penal Interest on GOI Loans
Rs. 104.20 Cr, and interest
on delayed payment of Excise
Duty Rs. 5.42 Cr).
(b) L/Cs outstanding
(not provided for) 18,12,30,479 21,72,90,258
(C) Estimated amount of
contracts remaining to be
executed on Capital Account
and not provided for (after
adjusting advance made therefor) 19,28,08,775 96,222
(d) ESI Liability (interest) not
provided for, based on Court''s
interim injunction. 38,41,925 42,53,871
2. GENERAL INFORMATION:
a. The Company has filed an appeal before the Commissioner of Customs
(Appeals) over the denial of concessional rate of duty for imported
Urea for use as manure by the Commissioner of Customs who demanded Rs.
65.86 Cr as differential duty including equal penalty. The appeal is
Based on COD clearance, the Company has filed a restoration application
before CESTAT, which vide order No: 66/12 dated 31.01.2012 waived
pre-deposit of the duty and penalty during the pendency of the appeal.
CESTAT also directed the Company to deposit an amount of Rs. 5 lacs which
the Company has complied with. Further hearings are to take place.
b. During the year, the Company has moved 4,86,750 MT of Urea from
current year production and 10,615 MTfrom the opening stock totaling to
4,97,365 MT. The Company is eligible for full subsidy upto 100%
capacity i.e. 4,86,750 MT and for the balance quantity at the rates
notified for the earlier years during which the stock got accumulated.
Further, the balance quantity of unmoved opening stock of 4,142 MT is
also eligible for subsidy as above. The valuation is done accordingly
pending notification from FICC.
c. Confirmation of balances has not been received in respect of Loans
from GOI, Trade Receivables/Payables and Loans and Advances.
d. Figures for the previous year have been regrouped wherever
necessary to conform to Current Year''s classification.
Information to Investors
Dematerilisation of Madras Fertilizers Limited (MFL) Shares
As you may be aware that the shares of MFL are under compulsory
dematerialisation (demat) segment of trading as per SEBI directives.
This means, MFL shares can be purchased/sold at the Stock Exchanges
only in demat form. Shareholders are therefore advised to avail the
Dematerialisation is the process of converting physical share
certificates into electronic form i.e. crediting of equivalent number
of shares to your depository account electronically.
For dematerialisation of shares you have to open a depository account
with a Depository Participant (DP) having connectivity with National
Securities Depository Ltd (NSDL)/Central Depository Services (I) Ltd
(CSDL). You are free to open an account with any of the DPs for demat.
Benefits of Dematerialisation
- No risk of loss/misplacement/theft/damage of share certificates
- No risk of bad deliveries
- No stamp duty on transfer of shares
- Faster transfer of shares
Steps involved for Dematerialisation of shares
1. Open a demat account with any of the Depository Participants (DPs)
2. Submit demat request form (DRF) (duly signed by all the holders)
along with the share certificates to the DP.
3. Obtain acknowledgement from the DP for having delivered the share
4. Receive a confirmation statement of holding from your DP.
5. PLEASE DO NOT SEND THE SHARE CERTIFICATES/DOCUMENTS FOR DEMAT TO
THE COMPANY OR SHARE TRANSFER AGENT OF THE COMPANY.
Some of the DP names are furnished under for your reference.
You may contact nearest DP in this regard.
- Appollo Sindhoori Capital Investments Ltd
- Cholamandalam Securities Ltd
- Fortis Securities Ltd
- Geojit Financial Services Ltd
- HDFC Bank Ltd
- ICICI Bank Ltd
- IDBI Bank Ltd
- India Infoline Securities P Ltd
- Indian Bank
- Induslnd Bank Ltd
- Integrated Enterprises India Ltd
- Kotak Securities Ltd
- State Bank of India
- Stock Holding Corporation of India Ltd
- Union Bank of India
- UTI Bank of India
- UTI Securities Ltd
In order to obtain the complete list of DP locations and other related
information you may log on www.nsdl.co.in/ www.cdslindia.com
In case you need any additional information on this matter, please feel
free to contact:
Madras Fertilizers Limited
Phone: 044-25941001 /25941201 Extn 3456
Fax : 044-25943613