Page 170 - FBL AR 2019-20

Fermenta Biotech Limited
Annual Report 2019-20

Notes to the Standalone financial statements for the year ended March 31, 2020

59 a) During the previous year ended March 31, 2019, the Company sold 45,186 equity shares of H10/- each in Zela Wellness Private
Limited (Zela). Consequently, the Company’s equity holding in Zela Wellness Private Limited (Zela) is reduced to 16.59 % as against
earlier 29.5% and accordingly, post November 29, 2018, the entity is not an associate of the Company.
b) The Company had given share application money of H597.00 Lakhs to Noble Explochem Ltd, whose total equity as at March 31,
2019, as per the available latest audited financial statements for the year ended March 31, 2019, is negative, where the independent
auditors of Noble had issued an adverse audit opinion on the aforesaid financial statements. Further, the operations of Noble were
suspended since December 2006. Noble was under insolvency proceedings from May 14, 2018. The Company had been accepted
as financial creditor by the NCLT. The NCLT has passed an Order approving the plan filed by one of the resolution applicants,
pursuant to which an amount of H617.62 Lakhs (including interest) has been received during the year.

60 a) In view of the amalgamation referred to in note 1.2, the Company had recognised a deferred tax asset on unutilised carried forward
losses and depreciation in respect of DIL Limited as it is probable that future taxable profits will be available against which the
unutilised carried forward losses can be utilised.

b) During the year ended March 31, 2020, the management has assessed the recoverability of MAT credit entitlement and recognised
MAT credit of H5,072.14 Lakhs (presented within deferred tax asset). Further, the effect of change in the Minimum alternative tax rate
from 18% to 15% plus applicable surcharge and health and education cess thereon as enacted in the Taxation Law (Amendment)
Ordinance, 2019 and also a change in the income tax rate from 30% to 25% plus applicable surcharge and health and education
cess thereon as enacted in the Union Budget 2019 for companies which have turnover less than 400 crores for the financial year
2017-18. Accordingly, the Company had measured the deferred taxes (other than MAT credit entitlement as referred above) as at
March 31, 2020 at the eligible tax rate of 25% plus applicable surcharge and health and education cess thereon.
c) The combined effects of the above [60(a) and 60(b)] have been included in the tax expense for the year ended 31st March, 2020:
reversal of current tax by H510.03 Lakhs and net credit for deferred tax of H1,611.08 Lakhs.

61 Capitalisation of borrowing costs
During the year ended March 31, 2020, the Company capitalised the following borrowing costs attributable to qualifying assets to the cost
of property, plant and equipment / capital work-in-progress (CWIP). Consequently, finance costs disclosed under note 37 are net of amounts
capitalised by the Company.
( H in Lakhs )
March 31, 2020 March 31, 2019
Finance costs (Including forex revaluation) 234.29 4.84
Total 234.29 4.84

62 The Company had given (unsecured) Inter-corporate deposits aggregating H2,130.00 Lakhs in various tranches to another entity over
the last twenty months until the end of the reporting period for the development of the new product i.e. cholesterol from Fish Oil.
During the year, the Company has also given trade advances of H102.00 Lakhs to the same entity. The amount outstanding as on March
31, 2020 is H2,430.88 Lakhs, including interest of H198.88 Lakhs.The Company has started the export sales of the new product and is
confident that it shall be able to recover the trade advances and Inter corporate deposit amount along with interest in next 12 months.

168