Dr.V.L.Dutt It is with deep regret that we record the untimely demise of our beloved Executive Chairman Dr.V.L.Dutt on 18th February, 2020. Velgapudi Lakshmana Dutt was a Indian Industrialist and philanthropist. He was the Chairman of KCP group RI FRPSDQLHV D GLYHUVL¿HG ,QGLDQ ,QGXVWULDO JURXS ZLWK interests in Sugar, Cement, Heavy Engineering, Power and Hospitality sectors. KCP was founded in 1941 by his father Late V. Ramakrishna by taking over a small Cooperative Sugar Plant in Vuyyuru, Andhra Pradesh. Under Dr.Dutt’s leadership, the sugar factory was modernized and enhanced to a capacity to 8000 tons per day and Challapalli Sugars Limited, a sick sugar plant at Lakshmipuram in Challapalli, Andhra Pradesh was amalgamated into KCP in 1987 and was successfully modernised to 2,500 tons per day. His farsighted and visionary approach of going global early led to forging a JV company - Fuller KCP Limited with Fuller International Inc, USA in the year 1984 to build large size Cement Plants, another JV company - Fives Cail KCP Limited with Fives Group of France in the year 1996 to build large Sugar & Power plants and later in 1999 setting up a subsidiary .&39LHWQDP/LPLWHGLQ9LHWQDPWRPDQXIDFWXUHUH¿QHGVXJDUDQGELRPDVVEDVHGSRZHU He was the driving focus for high quality and sustainable innovations within the KCP group. Every year on 27th December his birthday is observed as quality day within the group companies. Beyond business as a philanthropist he was actively involved in various health, educational and social organisations. Dr. Dutt was born in Thirunelveli, Madras State, British India on 27th December 1937 to Velagapudi Ramakrishna and Durgamba. His father was the then collector of Thirunelveli District in Madras Presidency. He was the youngest of the 3 children. He had his early education in Ramakrishna Mission School in Madras and then Loyola College, Madras. This was followed by business degree from the Business Institute of Management, London, England graduating in 1962. He was married to Dr. V.L. Indira Dutt, eldest daughter of the Raja of Muktyala, Sri Raja Vasireddi Ramagopal Krishna Maheshwar Prasad & Rajyalakshmamma on March 5th 1964 at Madras. He joined the family business The KCP Limited as a director in 1958. Later after the abolition of the managing agency system assumed charge as Managing Director in 1970, Chairman & Managing Director in 1977 and Executive Chairman in 2016. He was the Administrative Director of V Ramakrishna Sons Private Limited since 1962 which was the managing agency and promoter company for The KCP Group. Dr.Dutt served as Director on the Boards of Public Sector Companies like Air India Limited, Indian Airlines Limited and Boards of Private Sector Companies like EIMCO KCP Limited, Fuller KCP Limited, Oriental Hotels Limited, DCM Shriram Industries Limited and Salora International Limited. Dr.Dutt was the president of FICCI (in year 1991-1992), at a crucial juncture when the Indian Economy opened up and deregulated. Dr. Dutt lead various business delegations accompanying the Prime Minister of India Sri. P.V. Narasimha Rao and other union Ministers to several countries including Laos and Vietnam. He was also the President of All India Organisation of Employers, ICC India, Indian Sugar Mills Association, Cement Manufacturers Association and Andhra Chamber of Commerce and was also the vice-chairman of ICC ‘s Commission of International Trade and Investment Policy, Paris. He was the Chairman of Dr. Nayudamma Memorial Science Foundation, Chennai, which donate funds to cater to the poor in Rural Areas, Cardiac Medical & Research Foundation, Chennai, which assists and help needy people who suffer from cardiac problem and require surgery and was the trustee for The Indian Education Trust, which manages the Sankara Vidyshramam School and Sri Sankara Senior Secondary School in Chennai and also the Chairman, Chennai Wellington Corporate Foundation. Dr.Dutt was also the President of World Telugu Federation (WTF) and Promoter of Siddhartha Academy of General & Technical Education. Dr.Dutt was conferred with the following awards/recognitions:
MAY HIS SOUL REST IN PEACE
The Board of Directors
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$118$/5(3257 THE K.C.P. LIMITED
KEY FINANCIAL HIGHLIGHTS - THE K.C.P. LIMITED (Rs. In Lakhs) Year Ended 31-3-20 31-3-19 31-3-18 31-3-17 31-3-16 31-3-15 31-3-14 31-3-13 31-3-12 31-3-11 31-3-10 31-3-09 SHARE CAPITAL 1289 1289 1289 1289 1289 1289 2089 2789 3289 3289 3289 1289 RESERVES & SURPLUS 45411 47744 45289 39768 36652 34592 34250 34458 33168 29542 27189 22780 NET WORTH 46700 49033 46578 41057 37941 35881 36339 37247 36457 32831 30478 24069 FIXED ASSETS (NET) 95769 98110 90710 72223 71838 69486 66453 60639 54374 50668 33448 13147 GROSS INCOME 97052 116360 110048 95476 86582 70893 75723 88971 72654 37626 42289 41788 GROSS PROFIT 10242 14092 19669 14835 14965 10680 8002 11348 15208 8224 11052 11369 DEPRECIATION 7141 5193 4903 4861 3912 3431 3409 3197 2935 1233 1056 914 INTEREST 5641 3419 3529 4725 4541 4886 4473 3812 3795 1394 949 671 PROFIT BEFORE TAX (2540) 5480 11237 5249 6512 2363 120 4339 8478 5597 9047 9784 PROFIT AFTER TAX (677) 3951 8127 3381 4286 1587 127 3046 6153 4135 6002 6591 OTHER COMPREHENSIVE INCOME (353) (206) (27) (266) TOTAL COMPREHENSIVE INCOME (1030) 3745 8100 3115 EARNINGS PER SHARE (Rs.)* (0.52) 3.06 6.30 2.62 3.32 1.17 (0.04) 2.16 4.56 2.99 45.88 51.13 BOOK VALUE PER SHARE (Rs.)* 36.23 38.04 36.13 31.85 29.43 27.84 27.57 27.34 26.73 23.92 220.93 186.72 DIVIDEND ON EQUITY (%) 15 100 100 200 100 75 10 100 150 100 100 100 DEBT EQUITY RATIO 1.09 1.14 1.03 1.01 1.04 0.89 0.86 0.54 0.51 0.71 0.33 0.27 KEY FINANCIAL HIGHLIGHTS - THE K.C.P. LIMITED GROUP (Rs. In Lakhs) Year Ended 31-3-20 31-3-19 31-3-18 31-3-17 31-3-16 31-3-15 31-3-14 31-3-13 31-3-12 31-3-11 31-3-10 31-3-09 SHARE CAPITAL 1289 1289 1289 1289 1289 1289 2089 2789 3289 3289 3289 1289 RESERVES & SURPLUS 82543 79766 72324 66251 59473 51896 48425 47574 46890 41684 33434 26791 NET WORTH 83832 81055 73613 67540 60762 53185 50514 50363 50179 44973 36723 28080 FIXED ASSETS (NET) 119567 122773 116408 98078 97512 76542 74502 67124 61561 57821 40750 22401 GROSS INCOME 142771 166926 152952 137118 141450 129229 118246 133590 115004 72100 69471 60401 GROSS PROFIT 19487 23827 25558 22855 24140 17990 14766 18316 23625 15288 17298 15428 DEPRECIATION 9609 7562 7051 6259 4829 4821 4713 4442 4104 2233 2167 2015 INTEREST 5940 3909 4234 4993 5234 5146 4631 3971 4154 1565 1336 1279 PROFIT BEFORE TAX 3938 12356 14273 11603 14077 8023 5422 9903 15367 11490 13795 12134 PROFIT AFTER TAX 2713 8223 8951 7655 9335 5037 3449 6524 10605 7874 9076 8118 OTHER COMPREHENSIVE INCOME 1366 517 (291) (869) TOTAL COMPREHENSIVE INCOME 4079 8739 8660 6786 EARNINGS PER SHARE (Rs.)* 2.1 6.38 6.94 5.94 7.24 3.84 2.54 4.89 8.01 5.89 69.70 62.98 BOOK VALUE PER SHARE (Rs.)* 65.04 62.88 57.11 52.40 47.14 41.26 38.57 37.91 37.38 33.33 269.38 217.84 DIVIDEND ON EQUITY (%) 15 100 100 200 100 75 10 100 150 100 100 100 DEBT EQUITY RATIO 0.65 0.73 0.76 0.76 0.78 0.60 0.60 0.39 0.38 0.53 0.42 0.07 * During the year 2010-11 the Equity Shares of Rs.10/- each were sub-divided into 10 Equity Shares of Re.1/- each. EPS and Book Value per Share are reworked accordingly. ** Figures for FY 2015-16 and 2016-17 have been restated in accordance with implementation of Indian Accounting Standards w.e.f. 01.04.2017.
2 CORPORATE INFORMATION
BOARD OF DIRECTORS NOMINATION AND REMUENRATION COMMITTEE Sri. V. H. Ramakrishnan Sri. Vijay Sankar EXECUTIVE DIRECTORS Dr. V.L. Indira Dutt (From 29/02/2020) Sri. M. Narasimhappa DR. V.L. INDIRA DUTT Sri. P.S. Kumar Dr. V.L. Dutt (upto 18/02/2020) Chairperson & Managing Director RISK MANAGEMENT COMMITTEE Smt. V. KAVITHA DUTT Joint Managing Director Smt. V. Kavitha Dutt Sri. G.N. Murty
INDEPENDENT DIRECTORS Dr. V.L. Indira Dutt Sri. V.M. Rao Sri. P.S. KUMAR Sri. P.S. Kumar Sri. B.V.P.S. Chowdary SRI. V.H. RAMAKRISHNAN Sri. Vijay Sankar Sri. K. Ramakrishna Sri. VIJAY SANKAR CORPORATE SOCIAL RESPONSIBILITY COMMITTEE Sri. M. NARASIMHAPPA Dr. V.L. Indira Dutt Sri. P.S. Kumar Smt. JANAKI PILLAI Smt. V. Kavitha Dutt Sri. Vijay Sankar ADDITIONAL DIRECTORS (w.e.f. 18.06.2020) INNOVATION AND BEST PRACTICES COMMITTEE Sri. V. CHANDRAKUMAR PRASAD Sri. M. Narasimhappa Sri. V. H. Ramakrishnan Dr. SUBBARAO VALLABHANENI Sri. RAVI CHITTURI Sri. P.S. Kumar Smt. V. Kavitha Dutt Sri. Vijay Sankar, CHIEF FINANCIAL OFFICER FINANCE COMMITTEE Sri. G.N. MURTY Dr. V.L. Dutt (upto 18/02/2020) Sri. P.S. Kumar COMPANY SECRETARY Dr. V.L. Indira Dutt Sri. Vijay Sankar Sri. Y. VIJAYAKUMAR Smt. V. Kavitha Dutt AUDITORS INVESTMENT COMMITTEE M/s. K.S. RAO & CO., Chartered Accounts, Dr. V.L. Indira Dutt Sri. Vijay Sankar Flat No. 601A, Golden Green Apartments, Sri. P.S. Kumar Sri. M. Narasimhappa Irrummangil Colony, Hyderabad 500 082 BANKERS INTERNAL AUDITORS BANK OF BARODA STATE BANK OF INDIA M/s. SRIRAMAMURTY & CO., Visakhapatnam CANARA BANK IDFC FIRST BANK LTD M/s. BHASKARA RAO & CO. Hyderabad BANK OF INDIA HDFC BANK LTD REGISTERED AND CORPORATE OFFICE INDIAN OVERSEAS BANK “Ramakrishna Buildings”, 2, Dr. P.V. Cherian Crescent, Egmore, Chennai 600 008 Ph: 044-66772600 Fax: 66772620 PLANT LOCATION Email: [email protected] Website: www.kcp.co.in CEMENT PLANTS Macherla 522426 REGISTRAR & SHARE TRANSFER AGENTS Guntur District, Andhra Pradesh M/s. INTEGRATED REGISTRY MANAGEMENT SERVICES PVT. LTD Muktyala 521457 II Floor, “Kences Towers”, No.1, Ramakrishna Street, North Usman Road T. Nagar, Chennai 600 017 Ph: 044-28140801/803 Fax: 044-28142479 Krishna District, Andhra Pradesh [email protected], www.integratedindia.in HYDEL POWER PLANT COST AUDITORS B. No.AE-1, NSP Colony, Nekarikallu 522 615 Guntur District, AP M/s. NARASIMHAMURTHY & CO., Cost Accountants, Hyderabad M/s. S. MAHADEVAN & CO., Cost Accountants, Chennai WASTE HEAT RECOVERY PLANT Macherla, Guntur District, AP. SECRETARIAL AUDITOR THERMAL POWER PLANT Smt. SOBANA PRANESH, Company Secretary in Practice, Chennai Muktyala, Krishna District, Andhra Pradesh BOARD COMMITTEES & CONSTITUTION HEAVY ENGINEERING AUDIT COMMITTEE Tiruvottiyur – 600 019 Sri. P.S. Kumar Sri. V. H. Ramakrishnan Chennai, Tamilnadu Arakonam- 631 004 Sri. Vijay Sankar, Smt. V. Kavitha Dutt Mosur Road, Ekhunagar, Tamilnadu Sri. M. Narasimhappa SOLAR POWER PLANT STAKEHOLDERS RELATIONSHIP COMMITTEE Muktyala, Krishna District, Andhra Pradesh Sri. P.S. Kumar Sri. M. Narasimhappa WIND MILLS Dr. V.L. Indira Dutt Sri. V. H. Ramakrishnan Uthumalai Village, Tirunelveli District, Tamilnadu Sri. Vijay Sankar, HOTEL Mercure Hyderabad KCP 6-3-551, Somajiguda, Hyderabad 500 082, Telangana
3 ANNUAL REPORT 2019-20 7+(.&3/,0,7('
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romotion of art and culture KCP has been regularly extending support to local, social and charitable organizations in promoting their activities on different occasions, on the eve of Maha Shivaratri festival, we have arranged free RO drinking water dispensing counters and distributed drinking water bottles to the pilgrims and other visitors round the clock for 3 days and has constructed four dress changing rooms for the use of ladies near Krishna river. Our company is always in forefront in reaching the affected communities in such times of need to provide necessary relief and rehabilitation in case of nature GLVDVWHUVOLNHF\FORQHVÀRRGV to the villagers of Muktyala and other villages with supply of drinking water (RO) and domestic usage water through tankers and provided food packets. 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&RQVLGHUHGLQ&RQVROLGDWLRQ 5V/DNKV LL 1RW&RQVLGHUHGLQ&RQVROLGDWLRQ 'LYLGHQGSDLGGXULQJWKH\HDU 5HODWHVWRLQWHUHVWLQWKHMRLQWYHQWXUH 5HODWHVWR%DODQFHLQWHUHVWLQWKH-RLQW9HQWXUH )25$1'21%(+$/)2)7+(%2$5' $VSHURXUUHSRUWDQQH[HG IRU.65$2 &2 &KDUWHUHG$FFRXQWDQWV )LUP5HJQ1R 6 'U9/,1',5$'877 .$9,7+$'8779(/$*$38', 3*29$5'+$1$5(''< &KDLUSHUVRQ 0DQDJLQJ'LUHFWRU -RLQW0DQDJLQJ'LUHFWRU 3DUWQHU ,&$,0HP1R 36.80$5 *10857< <9,-$<$.80$5 'LUHFWRU &KLHI)LQDQFLDO2ႈFHU &RPSDQ\6HFUHWDU\ 3ODFH &KHQQDL 'DWH WK-XQH ANNEXURE - 6 Particulars of contracts / arrangements entered into by the company with related parties eferred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto. FORM AOC - 2 (Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014) Details of contracts or arrangements or transactions at Arm’s length basis. Value of the SL. Nature of the Name of the Relate Party Nature of relationship transaction No. transaction (Rs. in lakhs) 1 Fives Cail KCP Limited Joint Venture Purchases 16.61 2 Leasing of property & Fives Cail KCP Limited Joint Venture 123.07 Services 3 Chairperson & Managing Director (CMD), Wife of Dr.V.L. Indira Dutt Dr.V.L.Dutt and Mother Lease rentals 123.27 of Kavitha D Velagapudi, JMD of the Company. 4 Smt.Uma.S.Vallabhaneni Sister of CMD Lease rentals 119.64 5 Smt.V.Rama Kumari Sister of CMD Lease rentals 89.96 6 Bala Tripurasundari CMD is Trustee Lease rentals 114.99 Ammavaru Trust 7 Sri.V. Chandra Kumar Brother of CMD Lease rentals 49.59 8 Joint Managing Director Smt. Kavitha Dutt Velagapudi Lease rentals 5.06 (JMD) 9 V. Ramakrishna Charitable Trustees Lease rentals 0.17 Trust (a) Name of the related party Nature of Relationship: As proved in the table above (b) Nature, duration of the contract and particulars of the contract or arrangement. 1. The transactions at Serial number 1 is Contract of Sales and Services which include contracts with our Joint Venture Company M/s. Fives Cail KCP Limited at arm length prices. 7KH WUDQVDFWLRQV DW VHULDO QXPEHUV UHODWHV WR OHDVLQJ RI RI¿FH VSDFH RZQHG E\ WKH FRPSDQ\ DW “Ramakrishna Buildings” 2, Dr. P.V. Cherian crescent, Egmore, Chennai-600 006 to M/s. Fives Cail KCP Limited, (10,500 sft), at the rate prevailing in that area. 3. The trasnsactions at serial numbers 3 to 8 relates to Lease Agreements with certain Land owners including this parties mentioned in the table who are related parties for lease of lands at Muktyala for mining limestome. 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The Chart/matrix setting out the skills/expertise/competencies of Directors of the company Sl.No Areas Skills 1. Strategy & Policy Ability to identify and critically assess strategic opportunities and threats to development the organisation. Develop strategies in context to our policies and business objectives. 2. Ethics and Understand role as director and continue to self-educate on legal responsibility, Integrity DELOLW\WRPDLQWDLQERDUGFRQ¿GHQWLDOLW\GHFODUHDQ\FRQÀLFWV 3. Leadership Make decisions and take necessary actions in the best interest of the organisation, and represent the organisation favourably. Analyse issues and contribute at board level to solutions. 4. Contribution Ability to constructively contribute to board discussions and communicate effectively with management and other directors. 5. Previous Board Has director experience (past or present) on other listed/public company or experience private company Boards. 6. ,QGXVWU\VSHFL¿F Experience and knowledge with respect to the industry in which the Company skills operates. 7. Executive Experience in evaluating performance of senior management, and oversee management strategic human capital planning. Experience in industrial relations and organisational change management programmes. 8. Board training Has completed formal training in director role and duties including training in governance and risk. 9. Risk compliance Identify key risks to the organisation related to each key area of operations. Name of Director Strat- Ethics Lead- Contri- Pre- In- Exec- Board Risk egy & and In- ership bution vious dustry utive Train- compli- Policy tegrity Board VSHFL¿F mange- ing ance devel- experi- skills ment opment ence Dr.V.L.Indira Dutt 99999998 9 Smt.V.Kavitha Dutt 99999998 9 Sri.P.S.Kumar 99999998 9 Sri.V.H.Ramakrishnan 99999998 9 Sri.Vijay Sankar 99999998 9 Sri.M.Narasimhappa 99999998 9 Sri.Janaki Pillai 9999889 8 9 e) The Board hereby confirms that all the Independent relatives, except for those disclosed in Annexure to Directors of the company fulfil the conditions the Board report. specified in Regulations and are independent of The web link for Related party transaction policy and the management. the policy on material subsidiaries is www.kcp.co.in I 0DWHULDOO\VLJQL¿FDQWUHODWHGSDUW\WUDQVDFWLRQV II. 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LIMITED III. SHAREHOLDERS’ INFORMATION 7KH %RPED\ 6WRFN ([FKDQJH 1. Date, Time and Venue of the Annual General Limited, Mumbai (permitted to 590066 Meeting WUDGH Name of the Depositories (for demat only) Date and Time Friday 4th September, 2020 at 10.15 a.m National Securities Depository Ltd ,1(& Venue “Ramakrishna Buildings”, &HQWUDO 'HSRVLWRU\ 6HUYLFHV ,1(& No.2, Dr. P.V. Cherian Crescent, ,QGLD /WG 5HJLVWHUHG2I¿FH (JPRUH The Company has paid the listing fees for the year Chennai 600 008. WR WKH 1DWLRQDO 6WRFN ([FKDQJH RI ,QGLD /LPLWHG 16( 2. Financial Calendar :Key Financial Reporting 'DWHVIRUWKH¿QDQFLDO\HDU 6. Share Price Data: First Quarter ending :LWKLQ)RUW\¿YH'D\VIURP NATIONAL STOCK EXCHANGE (NSE) 30th June, 2020 the end ofthe Quarter Second Quarter :LWKLQ)RUW\¿YH'D\VIURP Month High Low ending 30th the end of the Quarter April 2019 108.00 86.60 September, 2020 May 2019 96.50 82.70 Third Quarter ending :LWKLQ)RUW\¿YH'D\VIURP June 2019 92.80 81.90 31st December, 2020 the end of the Quarter July 2019 85.00 69.10 Fourth Quarter - Within Sixty Days from the August 2019 79.90 67.15 ending 31st March, end of the Financial year September 2019 78.75 68.05 2021 October 2019 69.80 62.20 1RYHPEHU 69.80 57.80 3. Book Closure: 29th August, 2020 to 4th December 2019 63.00 56.95 6HSWHPEHU %RWK 'D\V LQFOXVLYH RQ HTXLW\ January 2020 73.30 60.20 VKDUHV February 2020 67.95 58.60 4. Dividend: March 2020 62.10 35.00 The Board of Directors at their Meeting held on 18th 7. 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These amendments clarify expects to receive in exchange for those goods or WKDWZKHQDQHWGH¿QHGEHQH¿WSODQLVUHPHDVXUHG services excluding the amount collected on behalf of as a result of curtailment (or plant amendment or the third parties. settlement), updated actuarial assumptions should be used to determine current service cost net interest for (QJLQHHULQJ MRE ZRUN FDQ EH HLWKHU µPDWHULDO FXP the reminder of the reporting period and to recognize service’ contracts or service contracts. LQSUR¿WRUORVVDVSDUWRISDVWVHUYLFHFRVWJDLQRU loss on settlement, any reduction in surplus even if 3HUIRUPDQFH REOLJDWLRQ LQ FDVH RI µPDWHULDO FXP that surplus was not previously recognized because VHUYLFHV¶LVVDWLV¿HGDWDSRLQWLQWLPHFRQVHTXHQWO\ of the impact of asset ceiling. revenue is recognized when customer obtains control RYHU SURPLVHG JRRGV DQG WKH HQWLW\ KDV VDWLV¿HG Effective date of application of these amendments SHUIRUPDQFHREOLJDWLRQ,QFDVHRIµVHUYLFHFRQWUDFWV¶ is April 1, 2019 and the effect of adoption would be revenue is recognized based on performances LQVLJQL¿FDQWLQWKHVWDQGDORQH¿QDQFLDOVWDWHPHQWV FRPSOHWHGWRGDWHE\XVLQJHLWKHUµ,QSXWPHWKRG¶RU µRXWSXWPHWKRG¶DVSUHVFULEHGIRUPHDVXULQJSURJUHVV c) IND AS 12- INCOME TAX of performance obligation under IND AS 115. Uncertainty over Income tax Treatments: - The company accounts for Discount such as Quantity In the current year, the company has adopted discounts, performance discounts and selling amendments of IND AS 12. These amendments commission to dealers as a reduction from revenue (appendix c) sets out how to determine the based on target achievement by customer towards STANDALONE accounting tax provision when there is uncertainty earning the discount/commission. over income tax treatments. According to appendix c, companies need to determine the probability of the Trade receivables and contract balances: - relevant tax authorities accepting each tax treatment 7KH FRPSDQ\ FODVVL¿HV WKH ULJKW WR FRQVLGHUDWLRQ that companies have used or plan to use in their in exchange for transferring control over goods or LQFRPHWD[¿OLQJWRFRPSXWHPRVWOLNHO\DPRXQWRUWKH services either as a trade receivable or as contract expected value of the tax treatment when determining asset. Trade Receivable is a right to consideration WD[DEOHSUR¿W WD[ORVV WD[EDVHVXQXVHGWD[ORVVHV that is unconditional and contract assets is a right to unused tax credits and tax rates. consideration that is conditional on something other Effective date of application of these amendments than passage of time. is April 1, 2019 and the effect of adoption would be Other income: - LQVLJQL¿FDQWLQWKHVWDQGDORQH¿QDQFLDOVWDWHPHQWV a) Dividend income:- Dividend is recognized in Dividend distribution tax: - VWDWHPHQW RI SUR¿W RU ORVV RQO\ ZKHQ WKH ULJKW WR Amendment requires entities to recognize the income receive payment is established, it is probable that WD[FRQVHTXHQFHVRIGLYLGHQGVLQSUR¿WRUORVV2WKHU HFRQRPLF EHQH¿WV DVVRFLDWHG ZLWK WKH GLYLGHQG ZLOO FRPSUHKHQVLYH LQFRPH 2&, RU HTXLW\ DFFRUGLQJ ÀRZWRWKHFRPSDQ\DQGWKHDPRXQWRIGLYLGHQGFDQ to where the entity originally recognized those past be reliably measured. transactions or events. b) Interest income:- Interest income is recognized Effective date of application of these amendments DVLWDFFUXHVLQWKHVWDWHPHQWRISUR¿WRUORVVXVLQJ is April 1, 2019 and the effect of adoption would be effective interest rate. LQVLJQL¿FDQWLQWKHVWDQGDORQH¿QDQFLDOVWDWHPHQWV II. BORROWING COST 1.5 SIGNIFICANT ACCOUNTING POLICIES Borrowing costs that are directly attributable to the I. REVENUE RECOGNITION acquisition, construction or production of qualifying assets are capitalised as part of the cost of that asset. The company derives revenues primarily from sale 4XDOLI\LQJDVVHWLVDQDVVHWWKDWQHFHVVDULO\WDNHVD RIJRRGVFRPSULVLQJ&HPHQW(QJLQHHULQJ-REZRUN substantial period of time to get ready for its intended Power, Hospitality in the brand name of Mercure. use. 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