Century Textiles & Industries Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Dec 2018
Auditor and Management Disclosures and Notes for the quarterly results dated 31 Dec 2018
1. The above standalone financial results have been reviewed and recommended for adoption by the Audit Committee to the Board of Directors. The same has been approved by the Board at its meeting held on January 28, 2019. The standalone financial results for the quarter ended December 31, 2018 have been subjected to limited review by the Company's statutory auditors.
2. The Company had filed appeal against the order of Competition Commission of India ("CCI") dated August 31,2016. Upon the National Company Law Appellate Tribunal (NCLAT) disallowing its appeal against the CCI order dated August 31,2016, the Hon'ble Supreme Court has, by its order dated October 5,2018 admitted its appeal against the NCLAT order. The Company believes that it has a good case and accordingly no provision has been made in the accounts.
3. Post the applicability of Goods and Services Tax (GST) with effect from July 1, 2017, revenue from operations is disclosed net of GST and prior to that excise duty on sales were grossed up with sales and disclosed separately as an expense. Accordingly, the revenue from operations and other expenditures for the nine months ended December 31, 2018 are not comparable with the nine months ended December 31,2017 presented in the results.
4. Other operating income includes gain on sale of Transferable Development Rights (TOR) amounting to Rs. 83.46 crores for the quarter ended September 30, 2018, Rs. 160.16 crores for the nine months ended December 31, 2018 and Rs. 79.63 crores for the year ended March 31, 2018.
5. On May 20, 2018, the Board of Directors of the Company has approved the Scheme of Arrangement ('Scheme') between the Company and UltraTech Cement Limited ('UltraTech') to demerge its Cement business (comprises of all assets and liabilities including borrowings of Rs. 3000 crores) in to UltraTech and in consideration UltraTech will issue equity shares of UltraTech to the eligible shareholders of the Company. During the quarter, shareholders of the Company has approved the transaction, accordingly the operations of Cement division has been classified as discontinued operations.
6. The Company has adopted Ind AS 115 'Revenue from Contracts with Customers' with effect from April 1, 2018, using the modified retrospective method. The application of Ind AS 115 did not have any significant impact on retained earnings as at April 1, 2018. Also the application of Ind AS 115 did not have any significant impact on the recognition and measurement of revenue and related items in the financial results for the quarter and nine months ended December 31, 2018.
7. During the previous year, the Company has granted the right to manage and operate the Company's Viscose Filament Yam ('VFY') business, which is part of Textile segment, to Grasim Industries Limited ('GIL'), for a duration of 15 years effective from February 1, 2018. As a part of consideration, GIL had paid an upfront royalty of Rs. 600.00 crores. The Company is recognizing royalty over the period of 15 years on pro-rata basis. Accordingly, the figures of the Quarter and nine months ended December 31, 2018 are strictly not comparable with the Quarter and nine month ended December 31, 2017.
8. The company is organised into business divisions based on its products and services and has five reportable segments, as follows: (a) "Textiles" include Yarn, Fabric. Viscose Filament Yarn and Tyre Yarn (Refer Note 7) (b) "Cement" includes Cement and Clinker (Refer Note 5) (c) "Pulp and Paper" include Pulp. Writing & Printing paper, Tissue paper and Multilayer packaging board. (d) "Real Estate" includes Leased Properties and Investment properties of the Company. (e) "Others" include Salt works and Chemicals.