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Company Information

Home » Market » Company Information

Lords Chloro Alkali Ltd.

Jan 21
97.90 +3.70 (+ 3.93 %)
 
VOLUME : 46386
Prev. Close 94.20
Open Price 98.90
TODAY'S LOW / HIGH
96.05
 
 
 
98.90
Bid PRICE (QTY.) 0.00 (0)
Offer PRICE (Qty.) 0.00 (0)
52 WK LOW / HIGH
28.00
 
 
 
98.90
Lords Chloro Alkali Ltd. is not traded in NSE
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Market Cap. ( ₹ ) 246.26 Cr. P/BV 2.94 Book Value ( ₹ ) 33.34
52 Week High/Low ( ₹ ) 99/28 FV/ML 10/1 P/E(X) 0.00
Bookclosure 30/09/2019 TTM EPS ( ₹ ) 1.60 Div Yield (%) 0.00
NOTES TO ACCOUNTS
You can view the entire text of Notes to accounts of the company for the latest year
Year End :2018-03 

1. Significant accounting judgments, estimates and assumptions

When preparing the financial statements, management undertakes a number of judgments, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses.

The actual results are likely to differ from the judgments, estimates and assumptions made by management, and will seldom equal the estimated results.

Information about significant judgments, estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses are discussed below:

(i) Evaluation of indicators for impairment of non-financial assets

The evaluation of applicability of indicators of impairment of non-financial assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets.

(ii) Recognition of deferred tax assets

The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the future taxable income against which the deferred tax assets can be utilized. The recognition of deferred tax assets and reversal thereof is also dependent upon management decision relating to timing of A ailment of tax holiday benefits available under the Income Tax Act, 1961 which in turn is based on estimates of future taxable profits.

Sources of estimation uncertainty:

(i) provisions

At each balance sheet date, basis the management judgment, changes in facts and legal aspects, the Company assesses the requirement of provisions against the outstanding warranties and guarantees. However, the actual future outcome may be different from management’s estimates.

(ii) Fair valuation of financial instruments

Management applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available). This involves developing estimates and assumptions consistent with how market participants would price the instrument.

33 Related party disclosures

The nature of relationship and summary of transactions with related parties are summarized below

a) Name of the related party and nature of their relationship

Name of the related party Nature of relationship

Name of key managerial personnel (KMp) Designation

Mr. Rakesh Ahuja Non-Executive Director

Mr. Madhav Dhir Executive Director

Mr. Yuvraj Ahuja Non-Executive Director

Mr. Ajay Virmani Managing Director

Mr. Ranbir Singh Makhni Independent Director

Mr. Pawan Kumar Nayyar Independent Director

Mr. Sandeep Chaudhary Independent Director

Mr. Chandra Shekhar Pathak Independent Director

Mrs. Poonam Rawat Independent Director

Mr. Shiv Dutt Sharma Independent Director

Mr. Deepak Mathur Director (Technical)

Mr. Rajiv Kumar Chief Financial Officer

Mr. Rohit Verma(29 May’17 to 31 August’17) Company Secretary

Mr. Dipendra Chaudhary(27 February ‘18 to present) Company Secretary

Mr. Alok Dhir Relative of key

managerial personnel

Entities in which KMP/Relatives of KMP can exercise significant influence Cirrus Chemicals Pvt. Ltd.

Dhir & Dhir Associates

A Gratuity

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 following tables summarize the components of net benefit expense recognized in the Statement of Profit and Loss and amounts recognized in the balance sheet for the respective plans.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defind benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied which was applied while calculating the defined benefit obligation liability recognized in the balance sheet.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to prior period.

2.Leases

in case of assets taken on lease

Operating Lease:

The Company has entered into various operating lease arrangements for factory building, guest house and office premises. The leases are renewable on a periodic basis cancellable at its option.

3. Fair value disclosures

(i) Fair values hierarchy

Financial assets and financial liabilities measured at fair value in the statement of financial position are classified into three Levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: Quoted prices (unadjusted) in active markets for financial instruments.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data rely as little as possible on entity specific estimates.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

The management assessed that cash and cash equivalents, trade receivables, other receivables, trade payables and other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. Other non-current financial assets and non-current borrowings bear a market interest rate and hence their carrying amounts are also considered a reasonable approximation of their fair values.

4. Financial risk management

ii) Risk Management

The Company’s activities expose it to market risk, liquidity risk and credit risk. The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.

A) Credit risk

Credit risk is the risk that a counterparty fails to discharge an obligation to the company. The company is exposed to this risk for various financial instruments, for example by granting loans and receivables to customers, placing deposits, etc. The company’s maximum exposure to credit risk is limited to the carrying amount of following types of financial assets.

- cash and cash equivalents,

- trade receivables,

- loans & receivables carried at amortized cost, and

- deposits with banks

a) Credit risk management

The Company assesses and manages credit risk based on internal credit rating system, continuously monitoring defaults of customers and other counterparties, identified either individually or by the company, and incorporates this information into its credit risk controls. Internal credit rating is performed for each class of financial instruments with different characteristics. The Company assigns the following credit ratings to each class of financial assets based on the assumptions, inputs and factors specific to the class of financial assets.

A: Low B: Medium C: High

Cash & cash equivalents and bank deposits

Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated banks and diversifying bank deposits and accounts in different banks.

Trade receivables

Company’s trade receivables are considered of high quality and accordingly no life time expected credit losses are recognized on such receivables.

Other financial assets measured at amortized cost

Other financial assets measured at amortized cost includes advances to employees. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously, while at the same time internal control system in place ensure the amounts are within defined limits.

B) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding by maintaining availability under committed facilities.

Management monitors rolling forecasts of the Company’s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates. In addition, the Company's liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

Maturities of financial liabilities

The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

C) Market risk

a) interest rate risk

The Company is not exposed to changes in market interest rates as all of the borrowings are at fixed rate of interest. Also the Company’s fixed deposits are carried at amortized cost and are fixed rate deposits. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

b) Price risk Exposure

The Company’s exposure to price risk arises from investments held and classified as FVTPL. To manage the price risk arising from investments in mutual funds and equity investment, the Company diversifies its portfolio of assets. Sensitivity

Below is the sensitivity of profit or loss and equity to changes in fair value of investments, assuming no change in other variables:

5. Capital management

The Company’ s capital management objectives are

- to ensure the Company’s ability to continue as a going concern

- to provide an adequate return to shareholders

Management assesses the Company’s capital requirements in order to maintain an efficient overall financing structure. This takes into account the subordination levels of the Company’s various classes of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.

*The details of amounts outstanding to micro enterprises and small enterprises under the Micro, Small and Medium Enterprises Development Act (MSMED), 2006 are as per available information with the Company.

6. Segment information

The Company's primary business segment is reflected based on principal business activities carried on by the Company i.e. Caustic soda and other chemicals, which as per Ind AS 108 on “Segment Reporting” as specified under Section 133 of Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended) is considered to be the only operating segment. The Company is primarily operating in India which is considered as a single geographical segment.

7. Details of Corporate Social Responsibility (CSR) expenditure is as follows:

i) Gross amount required to be spent by the Company during the year (i.e. 2% of Average Net profits u/s 198 of Companies Act, 2013 of last three years): Rs.8.60 Lakhs (March 31, 2017: Rs. Nil)

8.First time adoption of Ind AS

Financial statements for the year ended 31 March 2018 are the first financial statements that the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2017, the Company prepared its financial statements in accordance with the accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (‘previous GAAP’).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on or after 31 March 2018. In preparing these financial statements, the Company’s opening balance sheet was prepared as at 1 April 2016 which is the Company’s date of transition to Ind AS. This note explains the key adjustments made by the Company in restating its previous GAAP financial statements, including the Balance Sheet as at 1 April 2016 and the financial statements as at and for the year ended 31 March 2017 to Ind AS.

A. Optional exemption availed:

i. Deemed cost for property, plant and equipment:

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment are recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. Accordingly, the Company has elected to measure all of its property, plant and equipment at their previous GAAP carrying value.

B. Mandatory exceptions: i. Estimates:

An entity’s estimates in accordance with IndASs at the date of transition to IndAS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made certain estimates in accordance with Ind AS at the date of transition which were not required under previous GAAP.

C. Reconciliations between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

(i) Reconciliation of total equity as at 31 March 2017 and 1 April 2016

* The previous GAAP figures have been reclassified to confirm Ind AS presentation requirements for the purpose of this note.

Notes:

Note - 1: Fair valuation of investments

Under the previous GAAP, investments in equity instruments and mutual funds were classified as long-term investments or current investments based on the intended holding period and realis-ability. Long-term investments were carried at cost less provision for other than temporary decline in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments have been recognized in retained earnings as at the date of transition and subsequently in the profit or loss for the year.

Note - 2: Remeasurement of defined benefit obligation

Under Ind AS, remeasurements i.e. actuarial gains and losses on the net defined benefit liability are recognized in other comprehensive income instead of profit or loss. Under the previous GAAP, these measurements were forming part of the profit or loss for the year.

Note - 3: prior period adjustments

Under previous GAAP, expenses related to period other than current accounting period not captured earlier were shown as prior period expenses or income in the current period Statement of profit and loss. Under Ind AS, prior period adjustments are not allowed and expenses are to be adjusted in the year to which it pertains and balances are to be restated accordingly.

Note - 4: Excise duty

Under previous GAAP reporting framework, statutory taxes levied on sales were required to be netted off from the revenue. Under current reporting framework, excise duty are to be shown separately as expenses.

Note - 5: Deferred tax

Under previous GAAP, deferred tax was accounted using the income statement approach, on the timing differences between the taxable profit and accounting profits for the period. Under Ind AS, deferred tax is recognized following balance sheet approach on the temporary differences between the carrying amount of asset or liability in the balance sheet and its tax base. In addition, various transitional adjustments has also lead to recognition of deferred taxes on new temporary differences.

Note - 6: Deemed cost for property, plant and equipment:

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment are recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. Earlier the company was crediting an amount equal to increased depreciation on leasehold land which was revalued in earlier years to statement of profit and loss account but due to adoption of the exemption the revaluation reserve was transferred to retained earnings, due to which there was increase in depreciation.

B Commitments (net of advance):

Estimated amount of contracts remaining to be executed on capital account Rs. Nil, (Previous years: 31 March 2017: Rs. 1,299.55 lakhs and 1 April 2016 Rs. 276.63 lakhs).

9. Unclaimed amount in respect of debentures and excess share application money refundable Rs. 11.64 lakhs, (Previous years: 31 March 2017: 11.64 lakhs and 1 April 2016 11.64 lakhs) is required to be transferred to the “Investor education and protection fund” in terms of section 125 of the companies act, 2013. the company is taking steps to reconcile the above accounts and deposit the amount with the appropriate authorities.

10. Authorization of financial statements

These financial statements for the year ended 31 March 2018 (including comparatives) were approved by the Board of Directors on 16 May 2018.