Styrenix Performance Materials Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Mar 2020
Auditor and Management Disclosures and Notes for the annual results dated 31 Mar 2020
1. The above statements were reviewed by the Audit Committee and approved by the Board of Directors of the Company at their respective meetings held on June 25, 2020.The audit report does not contain any qualification by the statutory auditors
2. The Company has adopted modified retrospective approach as per para C8 (c) (ii) of Ind AS 116 - Leases, effective from April 1, 2019. Accordingly, comparatives of the year ended March 31. 2019 (including quarter ended March 31, 2019) have not been retrospectively adjusted. On the initial date of application, the Company has recognised right of use of assets (an amount equal to the lease liability, adjusted by prepaid lease rent) as at April 1, 2019 In the financial results for the current quarter/year, operating lease expenses has changed from rent (included in Other expenses) to depreciation cost for the right of use assets and finance cost for interest accrued on lease liability
On adoption of the new accounting standard, rent expenses (included in Other expenses) has reduced by INR 298.69 Lakhs, finance cost has increased by INR 154.65 Lakhs and depreciation and amortisation expenses has increased by INR 232.72 Lakhs for the quarter. Consequently. profit before tax has decreased by INR 88 68 Lakhs for the quarter ended on March 31, 2020.
3. During the quarter ended September 30, 2019, the Company has elected to exercise the option permitted under section 115BAA of the Income-tax Act. 1961 as introduced by the Taxation Laws (Amendment) Act. 2019. Accordingly, the Company has recognized Provision for Current Tax and remeasured its Deferred Tax basis the rate prescribed in the sad section. The full impact of this change has been recognized in the financial results for the quarter ended September 30, 2019 However while reviewing full year financial results, the Company has again evaluated the option and decided not to exercise the option permitted under section 115 BAA of the Income tax Act, 1961 since old tax regime is more beneficial for the Company Impact of this change amounting to INR 542.66 Lakhs has been reversed in current quarter
4. In respect of one of the leasehold lands, the Company has received provisional order from relevant authority, demanding to pay INR 1,940.11 Lakhs towards fees and non-utilization of land charges Accordingly the Company has created the provision for the said amount during the quarter ended December 31, 2019. In view of the said provisional order, the Company has reviewed its other similar leases for potential liability and accordingly, based on the assessment and best estimates of the management, a provision of INR 1,855.34 Lakhs has been made during the quarter ended December 31, 2019 in respect of transfer fees for those leases The Management is in the process of evaluating various remedial measures that can be taken.
5. Consequent to the nationwide lockdown announced by the Government of India, the Company's plants and offices were shut down from March 23, 2020 onwards. Since the gradual easing of the lockdown from Ma/2020 onwards, and in line with the various directives of the Government, the Company's plants have commenced operations in a phased manner, in line with the market demand The COVID-19 crisis has caused significant disturbance and slowdown of economic activity. The Company's Management has done an assessment of the situation, including the liquidity position and the recoverability and carrying value of all its assets and liabilities as at March 31, 2020 and concluded that there are no material adjustments required in the financial statements as of March 31, 2020 However, the impact assessment of COVID-19 is a continuing process given the uncertainty associated with its nature and duration. The impact of COVID-19 on the Company's financial statements may differ from that estimated as at tie date of approval of these financial statements The Company will continue to monitor any material changes as the situation evolves
6 The figures for the quarter ended March 31.2020 are the balancing figures between audited figures in respect of the full financial year and the published year to date figures up to the third quarter of the respective financial year.