'In years, our business picture will be very different'
Check out theManagement Discussions about Tata chemicals ltd on NSE, BSE on the new economic relationship with the European Union ('EU) and the extent also review closure of all agreed actions and compliance to the audit plan. Yet while every other plant in the UK has closed, Tata Chemicals Europe (TCE) still operates at Lostock, Cheshire - years since production. Notes on the accounts of Tata Chemicals Ltd. Company including the opening and closing balances in the Balance Sheet for liabilities .. (a) Related parties and their relationship (as defined under IndAS Related Party Disclosures) 17 Tata Chemicals Europe Holdings Limited, United Kingdom.
Accordingly, the Company has opted to consider the carrying value of its PPE and intangible assets as recognized in the Previous GAAP on date of transition as deemed cost after adjusting decommissioning liabilities. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. However, the Company has used Ind AS exemption and recognized arrangements having embedded leases based on facts and circumstances existing as at the date of Transition.
Reconciliations An explanation of how the transition from the Previous GAAP to Ind AS has affected the Company''s equity, Statement of Profit and Loss and other comprehensive income and Cash Flows is set out in the following tables and notes that accompany the tables.
B3 Explanation of material adjustments to Statement of cash flow for the year ended 31 March, There are no material adjustments to Statement of Cash Flows as reported under the Previous GAAP except for decrease in cash from financing activities and corresponding increase in cash from operating activities of '' Consequent to the classification of suppliers'' credit as a part of borrowings, the cash flows arising in this regard have been classified as a part of ''Cash flows used in financing activities''.
C Notes to reconciliations: This difference has resulted in a decrease in equity under Ind AS by Rs, Under Ind AS, a proposed dividend is recognized as a liability in the period in which it is declared by the Company usually when approved by share holders in a general meeting or paid.
In case of the Company, the declaration of dividend occurs after period end. Therefore, the liability of Rs, The proposed dividend for the year ended on 31 March, of Rs, As a result Rs, 8. Under the Previous GAAP, in the absence of any specific guidance, the Company did not identify leases contained in such arrangements.
Tata Chemicals Ltd. Notes to Accounts, Tata Chemicals Ltd. Company
These differences mentioned above in note 5 and note 6 have resulted in a decrease in equity under Ind AS by Rs, Tax adjustments includes deferred tax impact on account of difference between the Previous GAAP and Ind AS on the adjustments discussed above in notes 1 to 6.
The loan carries an interest rate based on State Bank of India base rate plus 1. Reversal of previous write-downs have been largely as a result of increased selling prices of certain products. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in the case of interim dividend.
In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company, after distribution of all preferential accounts, in proportion to their shareholding.
This reserve represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through other comprehensive income, net of amounts reclassified to retained earnings when those assets have been disposed off.
Details of term loans and other borrowings as at 31 March, are stated below: Current portion due for repayment within one year is Rs, Rs, crore USD 60 million and LIBOR plus spread of 1. This has been disclosed in note 17 within the heading current maturity of long term debt under other financial liabilities current. DBT has approved a loan of Rs, 0. The Company has received three installments of this loan aggregating to Rs, 0. Current portion has been disclosed in note The entire loan amount has been repaid during the current year.
The loan bears interest of one month T-bill 0. Loans under this scheme are secured by hypothecation of subsidy receivables.
Fixed interest rate of 8. The Company gives warranties on certain products that fail to perform satisfactorily during the warranty period. The timing of the outflows is expected to be within a period of one year from the date of Balance Sheet. No impairment loss has been recognized on the date of classification or as at reporting date. The Company expects that the fair value estimated based on the recent market prices of similar assets in similar locations less costs to sell is higher than the carrying amount.
The Company is liable to pay to the provident fund to the extent of the amount contributed and any shortfall in the fund assets based on government specified minimum rates of return relating to current services. The Company recognize such contribution and shortfall if any as an expense in the year incurred. On account of the above contribution plans, a sum of Rs, The scheme provides for lump sum payment to vested employees at retirement or death while in employment or on termination of employment.
Employees, upon completion of the vesting period, are entitled to a benefit equivalent to either half month, three fourth month and full month salary last drawn for each completed year of service depending upon the completed years of continuous service in case of retirement or death while in employment.
In case of termination, the benefit is equivalent to fifteen days salary last drawn for each completed year of service in line with the Payment of Gratuity Act, Vesting occurs upon completion of five years of continuous service. The Company also provides post retirement medical benefits to eligible employees under which employees at Mithapur who have retired from service of the Company are entitled for free medical facility at the Company hospital during their lifetime.
How Tata Chemicals Europe survived its energy costs doubling
Other employees are entitled to domiciliary treatment exceeding the entitled limits for the treatments covered under the Health Insurance Scheme up to slabs defined in the scheme.
The floater medic aim policy also covers retired employees based on eligibility, for such benefit. Family benefit scheme is applicable to all permanent employees in management, officers and workmen who have completed one year of continuous service. In case of untimely death of the employee, nominated beneficiary is entitled to an amount equal to the last drawn salary Basic Salary, DA and FDA till the normal retirement date of the deceased employee.
The most recent actuarial valuations of plan assets and the present values of the defined benefit obligations were carried out at 31 March, The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method. The following tables set out the funded status and amounts recognized in the Company''s financial statements as at 31 March, for the Defined Benefit Plans.
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below: If future investment returns on assets are lower than assumed in valuation, the scheme''s assets will be lower, and the funding level higher, than expected: Changes in bond yields: A decrease in yields will increase plan liabilities, although this will be partially offset by an increase in the value of the plans'' bond holdings: If improvements in life expectancy are greater than assumed, the cost of benefits will increase because pensions are paid for longer period than expected.
This will mean the funding level will be higher than expected: I f inflation is greeted than assumed, the cost of benefits will increase as pension increases and deferred revaluations are linked to inflation: The Investments measured at fair value and falling under fair value hierarchy Level 3 are valued on the basis of valuation reports provided by external valuers with the exception of certain investments, where cost has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair values within that range.
The carrying value of those investments are individually immaterial. Hence, urea and customized fertilizer business is classified as discontinued operation in the financial statements for the year ended 31 March, The consolidated revenue from the continuing operations decreased from Rs, 15, Profit before tax from continuing operations has increased from Rs, 1, Profit after tax from the continuing operations has increased from Rs, Profit for the year continuing operations and discontinued operation has increased from Rs, 1, Profit for the year attributable to equity shareholders of the Company has increased from Rs, The revenue from the continuing operations decreased from Rs, 8, Profit before tax from continuing operations has increased from Rs, Profit for the year continuing operations and discontinued operation has increased from Rs, Performance review of these businesses is as under: During the year, the Inorganic Chemicals business posted a revenue on standalone basis of Rs, 3, The Indian Chemical Operations registered another year of healthy financial performance with profit before tax higher than the previous year, in a mixed business environment.
An increased focus on cost, driven through several operational efficiency programs, enabled this performance in an environment characterised by pricing pressures.
The production volumes of all major products; soda ash, sodium bicarbonate and salt exceeded previous year levels. However, increased imports and domestic capacity addition led to soda ash prices coming under pressure during the year.
How Tata Chemicals Europe survived its energy costs doubling
Operational costs, both fixed and variable cost, were kept under strict control. Higher manufacturing volumes and lower costs helped overcome pricing pressure in the market and led to an overall improvement in the profitability levels.
The manufacturing volumes at Mithapur also went up marginally from 8. The soda ash production volume at Mithapur was supplemented by sourcing from TCL group companies and others leading to a total sales volume of 7.
Prices remained under pressure due to higher import and domestic volumes. Sodium Bicarbonate The Company believes in the long-term volume and value growth potential of the domestic sodium bicarbonate market. Sodium bicarbonate production at Mithapur rose from 97, tonnes to 1,01, tonnes for the year. Although sodium bicarbonate prices were under pressure during the year, the Company continues to focus on value-driven growth by expanding its portfolio of value added offerings for high-end applications in the domestic market.
Cement The business environment for cement continued to remain challenging during the year with subdued demand growth and pricing pressures resulting in downward pressure on both the sales volume and realizations throughout the year.
Cement production volumes were at 5,15, tonnes for the year against 5,27, tonnes during the previous year. Cement sales during the year were at 5,17, tonnes against 5,34, tonnes during the previous year. However, the Company''s continued focus on driving profitability in this business by strict cost control and operating in low freight zones would assist in driving superior performance going forward.
Salt Iodized salt production in Mithapur was 9,19, tonnes, up by 7.
Overall, branded salt sales grew by 2. Tata Salt grew by 4. It continues to be the largest distributed brand with a reach of Tata Salt Lite grew by I-Shakti salt continued to address the iodization movement, complimenting Tata Salt with a sale of 1,20, tonnes in FY Sales volumes were higher by 6. Revenue increased during the year due to higher sales volumes partially offset by adverse sales mix and pricing. Favorable sales and production volumes and favorable plant costs were offset by adverse sales price and mix.
The group companies maintained their share of UK markets in all key products during the year. Production of soda ash and sodium bicarbonate increased by 2. Sales volume of soda ash were down by 2. Export sales volume were below levels but margins improved due to the weakness of Sterling against Euro and US Dollar.
Electricity sales were higher as a result of the full year contribution from the new steam turbine commissioned in the third quarter of The businesses also benefited from the successful delivery of the final phase of a fixed cost reduction programme which was launched in The defined benefit pension scheme of Tata Chemicals Europe Limited was closed to future accrual in May, The profit on ordinary activities before taxation was GBP While there was no current tax charge for the year Nil but movements in deferred tax resulted in a charge of GBP 2.
The profit after tax was GBP 9. The major contributing factors for the lower EBITDA performance were mainly lower sales volume, selling prices, product quality challenges and poor plant efficiencies. The primary activities of the company constitute of trading and holding investments in overseas subsidiaries.
During the year under review, TCIPL expanded its business portfolio by engaging in procurement of coal from Indonesia. Sales revenue of discontinued operation urea and customized fertilizer business for the year was Rs, 1, The unfavorable cost structure at Haldia, when compared to imported alternatives as well as the delay in finalizing phosphatic acid prices during first half of the year, impacted the performance of Haldia plant.
The PBT grew sharply to Rs, Urea The Urea manufacturing plant at Babrala produced 12,13, tonnes in FY against 12,30, tonnes, lower by 16, tonnes compared to the previous year. Lower production is attributed to 20 days annual turnaround. The specific energy consumption level of the plant was 5.
- Information Links
- Tata Chemicals Ltd. Quick Links
- Main Navigation
This was primarily due to non-finalization of phosphate acid prices in the first half and partial shut down for re-routing of the Ammonia pipeline. The Ammonia Pipeline shifting project has been successfully completed. Considering the price volatility and exchange rate fluctuations, the Company has reduced its exposures to DAP imports. MOP sales were at 83, tonnes against the previous year''s sale of 1,10, tonnes.
The performance of traded business was in line with the strategy to scale down the business. Customised Fertilisers The customised fertiliser manufacturing plant at Babrala manufactures three grades of fertilisers applicable to Paddy, Potato and Sugarcane. The sales of customised fertilisers during the year were 16, tonnes against 23, tonnes in the previous year.
Customised fertiliser being a new concept, needs to be promoted in a phased manner and will gradually gain acceptance.
Exceptional items of Rs, Rallis earned a net profit of Rs, In response to market changes and to meet farmers'' expectations for advanced chemistries and new technologies, the unit introduced three new products during the year; Epic, an improved and advanced Water Dispersible Granules WDG formulation of Hexaconazole, launched in paddy; Summit, an advanced new generation insecticide, effective against thrips and almost all caterpillar pests; and Neonix, the first ever seed treatment product in India to control both soil insects and soil borne diseases in groundnut and wheat crops.
Rallis'' International Business division achieved a revenue growth of Ten new registrations were obtained during the year and the company commercialized three products in different geographies. A new product Geo Green P plus was introduced during the year, which has been well accepted by the market. Sales were impacted in Southern India due to severe drought conditions.
Pulses Tata Sampann pulses business faced a downward trend in the commodity cycle due to the Government interventions in regulating stock movement and pricing restrictions. Spices After the successful launch in northern markets, Tata Sampann spices has expanded its footprint across 16 states throughout the country in FY