214 / 236
Atul Ltd | Annual Report 2016-17
The Central Government has, vide notification dated November 28, 2016, notified The Sick Industrial Companies (Special
Provisions) Repeal Act, 2003 effective December 01, 2016. As a result, BIFR and Appellate Authority for Industrial and Financial
Reconstruction (AAIFR) have been abolished and the SICA is repealed by enactment of The Sick Industrial Companies (Special
Provisions) Repeal Act, 2003.
Consequent to the above, the application of SICA which granted BIFR such substantive rights has ceased to be in force
effective December 01, 2016. However, any scheme of revival, which has already been sanctioned by the BIFR in the past and
is under implementation, shall continue to be in force. Since there is no monitoring agency having substantive powers akin to
BIFR preventing Atul Ltd from exercising its unilateral defacto control. Atul Ltd has potential voting rights of 16.11% which will
make its aggregate voting rights to 52.85% (36.74% as at March 31, 2017) in Amal Ltd towards the share application money
which is pending allotment from Amal Ltd. Amal Ltd has applied for in-principle approval from Ahmedabad Stock Exchange
Ltd, Bombay Stock Exchange Ltd and SEBI which is pending as at March 31, 2017. Amal Ltd has been classified as a subsidiary
company as per Ind AS 110 effective December 01, 2016. Ind AS 103 Business Combinations is applicable for accounting
of the event of gaining control. The controlling parties before and after the business combination are different hence, the
business combination is to be performed as per the acquisition method that is the identifiable assets and liabilities acquired
are measured at fair value as on acquisition date.
There is neither any change in the shareholding nor any payment of purchase consideration (including contingent consideration
or indemnification assets) for acquiring control over Amal Ltd. Also there were no costs incurred which were directly
attributable to this business combination. The aggregate effective shareholding of the Group in Amal Ltd continues to be
36.74%. However, the fair value of the previously held equity interests of the Group and fair value of non controlling interests
in Amal Ltd in aggregate exceed the fair value of identifiable assets and liabilities assumed. This has resulted in Goodwill on
the acquisition date that is not deductible for tax purposes.
The assets and liabilities recognised as a result of the acquisition are as follows:
(
`
cr)
Particulars
Fair value
Property, plant and equipment
Land - freehold
10.50
Land - leasehold
10.13
Buildings
0.32
Plant and machinery
6.97
Office equipment and furniture
0.01
Investments
0.02
Other financial assets
0.39
Other non-current assets
0.13
Inventories
1.03
Trade receivables
1.33
Cash and cash equivalents
0.75
Other current assets
0.32
Fair value of assets acquired
31.90
Provisions
0.01
Trade payables
1.26
Other financial liabilities
0.60
Other current liabilities
0.59
Fair value of liabilities assumed
2.46
Contingent liabilities
0.41
Net identifiable assets acquired
29.03
Calculation of Goodwill
Consideration transferred
–
Non-controlling interests in Amal Ltd
12.46
Acquisition date fair value of previously held equity interest (including share application money)
30.98
Less: Net identifiable assets acquired
(29.03)
Settlement of pre-existing relationship
9.34
Goodwill
23.75
Notes
to the Consolidated Financial Statements