1. CORPORATE INFORMATION
United Phosphorus Limited (the Company) is a public Company domiciled
in India and incorporated under the provisions of the Companies Act,
1956. Its shares are listed on two stock exchanges in India. United
Phosphorus Limited is engaged in the business of agrochemicals,
industrial chemicals, chemical intermediates and specialty chemicals.
2. BASIS 0F PREPARATION
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The financial statements have been prepared to comply in
all material respects with the accounting standards notified by
Companies (Accounting Standards) Rules, 2006, as amended, and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared under the historical cost convention on
an accrual basis. The accounting policies have been consistently
applied and are consistent with those used in the previous year.
2.1 Am3lgamation of United Phosphorus Limited, Mauritius:
Pursuant to the Scheme of Amalgamation (the Scheme) under Sections
391 to 394 of the Companies Act, 1956, the Hon''ble High Court of
Gujarat has pronounced an order on January 13, 2012 sanctioning the
Scheme of amalgamation of United Phosphorus Limited, Mauritius (UPL
Mauritius), a wholly owned step down subsidiary of the Company with the
Company from the appointed date viz July 1, 2011. The Scheme became
effective on January 19, 2012 upon filing of the said order with the
Registrar of Companies, Gujarat. Consequently, all the assets and
liabilities of UPL Mauritius have been transferred to and vested in the
Company with effect from July 01, 2011. The Scheme has accordingly been
given effect to in these accounts.
The amalgamation has been accounted for under the pooling of interest
method referred to in Accounting Standard 14- Accounting for
Amalgamation, as prescribed by the Scheme. Accordingly, all the assets,
liabilities and other reserves of UPL Mauritius as on July 1, 2011 have
been aggregated at their respective book values (after converting the
book values using the applicable exchange rate at the close of business
of the day immediately preceding the appointment date).
The Company was indirectly holding the entire paid-up capital of UPL
Mauritius and hence no consideration has been issued for the aforesaid
amalgamation. Further, the share capital of UPL Mauritius has been
cancelled and the corresponding amount of Rs. 3 lacs has been credited
to the Capital Reserve.
b) Terms/ rights attached to equity shares:
The Company has one class of equity shares having par value of Rs. 2
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.
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
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.
a. Rs. Nit (Previous Year: Rs. 17,000 lacs) 12.20 % Non convertible
Debentures (NCDs) referred above are redeemable at par in three equal
installments from January 2014 and had a call option at the end of 3rd
year i.e. 27 January 2012. These debentures were secured by way of
pledge of 65,29,500 equity shares of Advanta India Limited.
b. Unsecured Redeemable Non-Convertible Debentures
i) NCDs amounting to Rs 25,000 lacs (Previous Year: Rs Nil) are
redeemable at par at the end of 15th year i.e July 2026 from the date
of allotment. The NCDs carry a call option at the end of 10th year from
the date of allotment.
ii) NCDs aggregating to Rs 30,000 lacs (Previous Year: Rs 30,000 lacs)
are redeemable at par at the end of 12th year (Rs. 7,500 lacs), llth
year (Rs. 7,500 lacs), 9th year (Rs. 7,500 lacs) and 8th year (Rs.
7,500 lacs) i.e. October 2022, October, 2021, October 2019 and October
2018 respectively from the date of allotment.
iii) NCDs aggregating to Rs. 30,000 lacs (Previous Year: Rs. 30,000
lacs) are redeemable at par at the end of 10th year (Rs. 15,000 lacs)
i.e. April 2020 and at the end of 7th year (Rs. 15,000 lacs) i.e. April
2017 from the date of allotment. The NCDs carry a call option at the
end of 6th year i.e. April 2016 and 5th year i.e. April 2015
respectively from the date of allotment.
iv) NCDs amounting to Rs 25,000 lacs (Previous Year: Rs 25,000 lacs)
are redeemable at par at the end of 5th year i.e January, 2015 from the
date of allotment.
v) NCDs amounting to Rs 13,500 lacs (Previous Year: Rs 13,500 lacs) are
redeemable at par at the end of 3.5 year (Rs. 10,500 lacs) i.e.
February, 2013 and 3 years (Rs. 3,000 lacs) i.e. August, 2012 from the
date of allotment.
vi) NCDs mentioned above carry a coupon rate ranging from 8.75% to
c. Term Loans of Rs Nil (Previous Year: Rs 17,500 lacs) from banks
were carrying interest rate ranging from 8.5% to 10% and repayable in
June 2011, August 2011 and September 2011.
d. External Commercial Borrowing from Banks amounting to Rs - Nil
(Previous Year: Rs. 81,850 lacs) were carrying interest rate at Libor
plus 130 basis points. The loan was due for repayment in October 2011.
e External Commercial Borrowing from a Multilateral Financial
Institution amounting to Rs. 712 lacs (Previous Year: Rs 1,873 lacs) is
secured by pari-passu first charge by way of hypothecation of specific
movable assets, present and future, situated at Jhagadia Unit of the
Company and carries Interest rate at Libor plus 210 basis points. The
outstanding loan is due for payment in June 2012.
a. Outstanding loans carry an interest rate of Base Rate/Libor plus
margin ranging from 175 bps to 400 bps
b. Outstanding loan is secured by hypothecation of inventories, bills
receivables, book debts and all movables assets of the Company both
present and future, wherever situated.
c. Short term buyers credit are unsecured and the outstanding loan
carry an interest rate ranging from Libor plus 125 bps to 225 bps.
d. Unsecured short term demand loan carrying interest at the rate of
3. RETIREMENT BENEFITS
Gratuity benefit is payable to employees on retirement or resignation
or death. The amount of gratuity payable is based on the past service
and salary at the time of exit as per payment of Gratuity Act, 1972.
There is a vesting period of five years on the benefit.
A Scheme of Arrangement between the Company and SWAL Corporation Ltd.
and their respective Shareholders'' under Sections 391 to 394 read with
Section 78 and Sections 100 to 103 of the Companies Act, 1956 with the
Appointed Date of 1st April 2007, was sanctioned by the Hon''ble Bombay
High Court on 29th February 2008 and High Court of Judicature at
Gujarat on 16th April 2008 and became effective from 30th April 2008.
As per the said scheme, reduction of Capital under Sections 100 to 103
of the Companies Act, 1956 was sanctioned and accordingly the debit
balance aggregating to Rs. 56,212 lacs in respect of Product
Registrations and Product Acquisitions appearing as on 31st March 2007,
has been debited to the Securities Premium Account and the General
Reserve after adjusting for Deferred Tax arising on account of these
assets amounting to Rs. 2,525 lacs on that date.
As per the ICAI announcement, expense adjusted directly to reserve is
net of its tax effect. As per the Court order and legal advice
obtained, the Company has taken a consistent view that the tax benefit
available is not to be adjusted in respect of amortization of the
product registrations and product acquisitions adjusted to the
Reserves. The difference in provision for taxation for the year due to
this is Rs 1,252 lacs (Previous Year: Rs 1,709 lacs) though overall,
there is no impact on the aggregate of Reserves and Surplus of the
1) The Company is organized into three main business segments namely :
a) Agro Chemicals - comprising of Agrochemicals Technical''s and
b) Industrial Chemicals - comprising of Industrial Chemicals and
c) Others - primarily comprising of Traded Products.
2) Segment Revenue in the above segments includes sales of products net
3) Inter Segment Revenue is taken as comparable third party average
selling price for the year.
4) Segment Revenue in the geographical segments considered for
disclosure are as follows:
a) Revenue within India includes sales to customers located within
b) Revenue outside India includes sales to customers located outside
5) Segment Revenue, Results, Assets and Liabilities include the
respective amounts identifiable to each of the segments and amounts
allocated on a reasonable basis.
5. CONTINGENT LIABILITIES
(Rs. in Lacs)
Particulars As at As at
31 March 2012 31 March 2011
(a) Disputed Income-Tax
interest) 151 69
(b) Disputed Excise Duty /
Service Tax liability
(excluding interest) 10,373 7,123
(c) Disputed Sales Tax
liability 2,417 1,157
(d) Disputed Custom
Duty liability 2,331 2,331
(e) Disputed Fiscal Penalty
for cancellation of licences 3,348 3,348
(f) Disputed penalty levied
by Competition Commission of 25,244 -
for Cartelization of prices
(g) Disputed penalty on Water
Tax 161 161
(h) Bills discounted under
Letter of Credit and remaining
unpaid 816 361
at the date of the balance sheet
(i) Guarantees given by Company''s
bankers on behalf of
the Company to
third parties 4,129 11,253
(j) Corporate guarantees
given on behalf of
(i) United Phosphorus
Limited, U.K. 17,936 15,760
(ii) United Phosphorus
Limited, Hong Kong 4,324 3,791
(iii) United Phosphorus
Inc. USA 6,219 5,452
(iv) United Phosphorus
Inc. USA/Cerexagri Inc (PA) 1,272 1,115
(v) Evofarms SA - Columbia 1,272 1,115
(vi) United Phosphorus
Limited, Columbia 763 669
(vii) United Phosphorus
Limited, Australia 1,781 1,561
(viii) Bio-Win Corporation
Limited, Mauritius 132,676 7,581
(ix) Cerexagri Italia,
SRL, Italy 8,149 7,605
(x) Ceraxagri SAS.,
France 13,582 12,676
(xi) Ceraxagri B.V.,
Netherlands 14,261 13,309
(xii) Icona S.A.
Argentina - 4,460
(xiii) Uniphos Columbia
Plant Limited, Columbia - 6,689
against the Company not
acknowledged as debts 532 424
(c) Arrangement with Advanta India Limited
The Company has entered into a Licence Agreement effective from 2nd
April 2012 with Advanta India Limited (AIL) to obtain technical
know-how for commercial exploitation, development, use and sale of the
Licenced Products and use of brands. In consideration thereof, the
Company will pay a royalty at the rate of 7 % of net sales revenue of
the Licensed Products subject to a minimum royalty of Rs 700 lacs p.a.
Further, AIL shall carry out research and development activity, as
agreed, in connection with the Licensed Products and the Company will
pay an amount as may be agreed between both the parties at the
commencement of each year.
6.DETAILS OF DUES TO MICRO AND SMALL ENTERPRISES AS DEFINED UNDER THE
MSMED ACT, 2006
The identification of Micro, Small and Medium enterprises is based on
the management''s knowledge of their status. The Company has not
received any intimation from suppliers regarding their status under
The Micro, Small and Medium Enterprises Development Act, 2006.
7. OPERATING LEASES
Lease rent debited to profit and loss account is Rs. 2,457 lacs
(Previous Year: Rs. 1,487 lacs)
There is no contingent rent recognised in the statement of profit and
General description of the leasing arrangement:
The Company has entered into operating lease arrangements for its
vehicles, machinery, office premises, storage locations and residential
8. PREVIOUS YEAR FIGURES
Till the year ended 31st March 2011, the Company was using pre-revised
Schedule VI to the Companies Act 1956, for the preparation and
presentation of its financial statements. During the year ended 31st
March 2012, the revised Schedule VI notified under the Companies Act
1956, has become applicable to the Company. The Company has
re-classified previous year figures to conform to this year''s
classification. The adoption of revised Schedule VI does not impact
recognition and measurement principles followed for preparation of
financial statements. However, it significantly impacts presentation
and disclosures made in the financial statements, particularly
presentation of the balance sheet.
Further, in view of amalgamation of United Phosphorus Limited,
Mauritius with the Company (refer note 2.2), the current year figures
are not comparable with those of the previous year.