Deepak Fertilisers received an order regarding the non-disclosure of immovable property, investments, and contingent liabilities in accounts. While the company has been asked to pay a compounding fee, no corrective action is required. The company maintains its accounting treatment is correct and the issue is technical.
Order Regarding Non-Disclosures
Deepak Fertilisers has received an order pertaining to alleged non-disclosures related to immovable property, investments, and contingent liabilities in its books of accounts. The order originated from the Regional Director, Western Region, Mumbai, and addresses the company’s application for compounding under Section 441 of the Companies Act, 2013.
Issue and Company Stand
The authority contends that the company did not appropriately present its investment in equity shares of a subsidiary. Specifically, the investment was shown in the immovable property schedule instead of the investments schedule.
Deepak Fertilisers asserts that it disclosed the investment amount in the schedule of immovable property. They further state that the disclosure included necessary facts reflecting the economic rights of the immovable property, adhering to accounting standards. The company applied the concept of ‘substance over form’ in its accounting treatment.
Contingent Liabilities
The authority also noted that the company did not recognize a contingent liability in notes to accounts for disputed statutory dues, deeming it a technical issue.
Deepak Fertilisers states it has consistently applied IND AS 37, read with Section 129 of the Companies Act, 2013. The company made necessary provisions in its accounts for part of the demand and showed the remaining amount under Contingent Liability. A certificate from the Statutory Auditors, confirming this accounting treatment, was submitted.
Outcome and Impact
The company is confident in the correctness of its accounting treatment. The order states that Deepak Fertilisers need not take any corrective action. The authority considered the issue an unintentional non-compliance. The compounding fees cover a period from 2017-18 to 2021-22.
Key Details
The Regional Director, Western Region, Mumbai, issued the order on December 2, 2025. The order, exercising powers under Section 441 of the Companies Act, 2013, compounded the alleged violation of Section 129 r/w IND AS 28 & 37 of the Companies Act, 2013. It imposed a total compounding fee of Rs. 35,50,000/- (i.e., Rs. 17,75,000/- each) on the Chairman & Managing Director and ex-Chief Financial Officer. There is no impact on the Company’s financials, operations or other activities due to the order.
Source: BSE
