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Notes to Accounts of Ador Welding Ltd.
Mar 31, 2025
(a) The Company incurred Rs. 460 lakhs in the year ended 31 March 2025 (31 March 2024: Rs. 429 lakhs) towards expenses relating to short-term leases and leases of low value asstes. The total cash outflow for leases is Rs. 554 lakhs for the year ended 31 March 2025 (31 March 2024: Rs. 509 lakhs), including cash outflow of short-term leases and leases of low value asstes. Interest on lease liabilities is Rs. 11 lakhs for the year 31 March 2025 (31 March 2024: Rs. 14 lakhs). [Refer note 39 and note 45]
During the year, valuations of the Investment properties is performed by a registered valuer as defined under Rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017. The fair value measurement is based on comparable sales approach. The fair value measurement is categorised in level 3 of fair value hierarchy.
The fair valuation is based on current prices in the active market of similar properties. The main inputs used for valuation are quantum, area, location, demand, quality of construction, age of building and trend of fair market etc.
(c) The Company has no restrictions on the reliability of its investment property and no contractual obligations to purchase, construct or develop investment property or for repairs, maintenance and enhancements.
(d) The Company has pledged certain properties against borrowing limits (refer note 54 for details).
(e) The title deeds of all investment properties are held in the name of the Company.
* During the current year, the Company has identified an impairment of Rs. 3,171 lakhs on its investment in unquoted equity shares of 3D Future Technologies Private Limited (3DFT) and loan given to 3DFT. The value of this investment has been estimated by an independent valuation of 3DFT using DCF model. The valuation requires management to take certain assumptions about the model inputs including discount rate, cashflow forecast and growth rate. The probabilities of various estimate within the range can be reasonably assessed and are used in management''s estimate of recoverable value of these investment in unquoted equity shares and loan given. The Company continues to monitor and assess the fair valuex of these investments on a regular basis.
#Inventory write downs/provision for impairment are accounted, considering the nature of inventory, ageing, and net realisable value. Write-downs/Provision for impairment of inventories to net realisable value amounted to Rs. 443 lakhs (31 March 2024: Rs. 80 lakhs). These write down/provision for impairment were recognised as an expense during the year and included in the ''Changes in inventories of finished goods, work-in-progress, and stock-in-trade'' in the Standalone Statement of Profit and Loss.
* Certain imported inventory amounting to Rs. 336 lakhs, which has been detained by the Bureau of Indian Standards (BIS). The Company had filed an application with the Bureau of Indian Standards (BIS) Authorities, for compounding of an alleged Offence under Section 33 of BIS Act, 2016 on 5 May 2023. The Company received an order dated 15 June 2023 allowing the Compounding application, subject to payment of compounding amount of INR 3,643 lakhs, under the BIS Act 2016 and BIS Rules, 2018. As the Compounding amount was unfair, arbitrary and unreasonable, the Company filed a Writ Petition in the Hon''ble Bombay High Court, since the filing of the appeal with DG was not an efficacious remedy, challenging the said compounding order, and got a stay. As the proceedings have not yet started, the pleadings are yet to begin, hence no provision has been made towards compounding amount in the books, as of 31 March 2025, since the final / exact /appropriate amount of compounding is yet to be determined.
Refer note 27 for details on Inventory pledged as security against borrowings of the Company.
(a) Secured by letter of credit
(b) Refer notes 51(A) for information on credit risk and details regarding past dues receivables and, movement in allowance for credit impairment.
(c) No amount is due by directors or other officers of the company or any of them either severally or jointly with any other person or debts due by firms or private companies respectively in which any director is a partner or a director or a member except as disclosed in note no. 48.
(d) Refer note 27, for details on trade receivables pledged as security against the borrowings of the Company.
* During the current year, the Company has identified an impairment of Rs. 3,171 lakhs on its investment in unquoted equity shares of 3D Future Technologies Private Limited (3DFT) and loan given to 3DFT. The value of this investment has been estimated by an independent valuation of 3DFT using DCF model. The valuation requires management to take certain assumptions about the model inputs including discount rate, cashflow forecast and growth rate. The probabilities of various estimate within the range can be reasonably assessed and are used in management''s estimate of recoverable value of these investment in unquoted equity shares and loan given. The Company continues to monitor and assess the fair value of these investments on a regular basis.
Note 22 b- Rights, preferences and restrictions
The Company has only one class of shares referred to as equity shares having at par (face) value of Rs. 10 per share. Each and every shareholder is eligible for one vote per share held.
In the event of liquidation of the Company, the equity shareholders will be entitled to receive the remaining assets of the Company, after distribution of all the preferential amounts, in proportion to their shareholding.
(i) Nature of Security and terms of repayment for short term secured borrowings of Company:
Working capital loan from a bank, balance outstanding amount as at 31 March 2025 is Nil (31 March 2024: Rs 4,000 Lakhs) is secured first pari passu charge by way of hypothecation of Company''s entire stocks and book debts, both present and future, exclusive charge on the entire plant and machinery and other movable fixed assets of the Company and on the land and building of the Company located at survey no. 59/11/1, 59/11/2, 59/11/3, 59/12 and 59/13 situated at village Masat, Silvassa, Dadra and Nagar Haveli and 147 2B 3 Village Akurdi, Pune, Maharashtra .
(ii) Guarantees given by banks to third parties amounting to Rs. 3,458 lakhs (31 March 2024: Rs. 1,744 lakhs) on behalf of the Company are secured against securities mentioned in (i) above. (Refer note 42)
(b) Provision of Rs. 318 lakhs (31 March 2024: Rs. 197 lakhs) has been recognised for expected warranty claims on welding equipment and goods traded during the current financial year. It is expected that all these expenditures will be incurred in next financial year.
(c) Provision of Rs 262 lakhs (31 March 2024: 286 lakhs) has been recognised for expected sales return. This provision is expected to be utilised in next financial year.
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Note 42 - Contingent Liabilities not provided for : (Rs. in lakhs) |
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Particulars |
As at 31 March 2025 |
As at 31 March 2024 |
|
A. Claims against the company not acknowledged as debt: - Disputed sales tax as the matters are in appeal (advance paid 31 March 2025: Rs 82 lakhs; 31 March 2024: Rs 85 lakhs) |
771 |
734 |
|
- Disputed excise duties as the matters are in appeal (advance paid 31 March 2025: Rs 901 lakhs; 31 March 2024:Rs 901 Lakhs) |
936 |
936 |
|
- Disputed income tax as the matters are in appeal (advance paid 31 March 2025: Rs 13 lakhs; 31 March 2024: Rs. 13 lakhs) |
1,576 |
678 |
|
- Custom Duty refund (advance paid 31 March 2025: Rs 46 lakhs; 31 March 2024: Rs. 46 lakhs) |
54 |
46 |
|
B. Guarantees : - Bank guarantees Bank guarantees of Rs. 2,808 lakhs (31 March 2024: Rs. 1,617 lakhs) have been issued to various customers as performance gurantee, Rs. 200 lakhs (31 March 2024: Rs. 321 lakhs) issued for securing supplies of materials and services and Rs. 792 lakhs (31 March 2024: Rs. 250 lakhs) to various agencies including government as security. The Company does not anticipate any liability on these guarantees. |
3,800 |
2,188 |
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C. Other money for which the company is contingently liable : - Other matters - Provident fund Based on the Honorable Supreme Court judgment dated 28 February 201 9, relating to components of salary structure that needs to be taken into account while computing the contribution to provident fund under the Employee Provident Fund Act. Past provident fund liability is not determinable at present in view of uncertainty on the applicability of the judgment to the Company with respect to timing and the components of its compensation structure. In absence of further clarification, the Company has been advised to await further developments in this matter to reasonably assess the implications on its financial statements, if any. |
421 Amount not determinable |
435 Amount not determinable |
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- Inventory Certain imported inventory amounting to Rs. 336 lakhs, which has been detained by the Bureau of Indian Standards (BIS). As, according to BIS, the said imported inventory doesn''t meet the standards as specified in the notification issued by BIS. The Company had filed an application with the BIS Authorities, for compounding of an alleged Offence under Section 33 of BIS Act, 2016 on 05 May 2023. The Company received an order dated 15 June 2023 allowing the Compounding application, subject to payment of compounding amount of Rs. 3,643 lakhs, under the BIS Act 2016 and BIS Rules, 201 8. As the Compounding amount was unfair, arbitrary and unreasonable, the Company filed a Writ Petition in the Hon''ble Bombay High Court, since the filing of the appeal with DG was not an efficacious remedy, challenging the said compounding order, and got a stay. As the proceedings have not yet started, the pleadings are yet to begin, hence no provision has been made towards compounding amount in the books, as of 31 March 2025, since the final / exact /appropriate amount of compounding is yet to be determined. |
3,643 |
3,643 |
Future cash outflows in respect of above matters are determinable only on receipt of judgments/decisions pending at various forums/authorities. The management does not expect these claims to succeed and accordingly, no provision for the contingent liability has been recognised in the financial statements.
The Company''s lease asset primarily consist of leasehold land, Ownership premises and Computers used in its operations. The Company has recognized right-of-use assets and lease liabilities amounting to Rs. 64 lakhs (31 March 2024: Rs. 303 lakhs) and Rs. 64 lakhs (31 March 2024: Rs. 73 lakhs) respectively. During the year ended March 31, 2025, the Company has recognized interest expense on lease amounting to Rs. 11 lakhs (31 March 2024: Rs. 14 lakhs) and depreciation on right-of-use assets amounting to Rs. 97 lakhs (31 March 2024: Rs. 86 lakhs). The weighted average incremental borrowing rate applied to lease liabilities is 8.10% p.a. (31 March 2024: 9.5% p.a).
The Company has opted not to recognise a lease liability for short term leases (leases of expected term of 12 months or less). The Company has taken short term leases with a lease term of 12 months or less and the aggregate amount of operating lease rent debited to statement of profit and loss during the year is Rs. 460 lakhs (31 March 2024: Rs 429 lakhs). [Refer note 39]
As per Indian Accounting Standard-19 ''Employee Benefits'', the disclosure of Employee benefits as defined in the Standard are given below:
Brief description of the plans:
The Company has various schemes for employee benefits such as provident fund, superannuation and gratuity. In case of funded schemes, the funds are administered through trustees/ appropriate authorities. The Company''s defined contribution plans are superannuation, employees state insurance and provident fund as the Company has no further obligation beyond making the contributions. The Company''s defined benefit plans consists of gratuity only. The employees of the Company are entitled to compensated absences as per the Company''s policy.
The average duration of the defined benefit obligation is 6.03 years as at 31 March, 2025 (31 March, 2024 - 7 years). Contribution expected for next one year is Rs. 22,229,922 (31 March, 2024 - Rs. 22,291,440).
Gratuity is a lump sum plan and the cost of providing these benefits is typically less sensitive to small changes in demographic assumptions. The key actuarial assumptions to which the benefit obligation results are particularly sensitive to discount rate and future salary escalation rate. The following table summarizes the impact in percentage terms on the reported defined benefit obligation at the end of the reporting period arising on account of an increase or decrease in the reported assumption by 50 basis points.
These sensitivities have been calculated to show the movement in defined benefit obligation in isolation and assuming there are no other changes in market conditions at the accounting date. There have been no changes from the previous periods in the methods and assumptions used in preparing the sensitivity analysis.
(i) An amount of Rs. 47 lakhs (31 March 2024: Rs 159 lakhs) has been recognised as an expense in the statement of profit and loss account and included in "Salaries, wages and bonus" under Note 37 "Employee benefits expenses".
Risk Exposure - Asset Volatility
The plan is of a final salary defined benefit in nature which is sponsored by the Company and hence it underwrites all the risks pertaining to the plan. In particular, there is a risk for the Company that any adverse salary growth or demographic experience or inadequate returns on underlying plan assets can result in an increase in cost of providing these benefits to employees in future. Since the benefits are lump sum in nature the plan is not subject to any longevity risks.
1. All the above transactions with related parties are net of Goods and Service Tax.
2. The transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free. The settlement for these balances occurs through payment. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2025, the Company has not recorded impairment of receivables relating to amounts owed by related parties except as disclosed in note 8 and 18 (31 March 2024: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
Revenue and expenses have been accounted on the basis of their relationship to the operating activities of the segment. Expenses, which related to the Company as a whole and are not allocable to segments on a reasonable basis, have been included under "Unallocable Income" and "Unallocable Expenses" respectively. Assets and Liabilities, which related to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under "Unallocable Assets / Liabilities". Inter-segment transfers are accounted for at competitive market prices charged to unaffiliated customers for similar goods.
Domestic Segment includes sales and services rendered to customers in India.
Overseas Segment includes sales and services rendered to customers located outside in India.
1. The Company is currently focused on three business segments : Products, Services and M&R Division. The Company''s organisational structure and governance processes are designed to support effective management of multiple businesses while retaining focus on each one of them.
2. The Segment revenue, results, assets and liabilities include the respective amounts identifiable to each of the segment and amounts allocated on a reasonable basis.
3. The geographical information considered for disclosure are :
(i) Sales within India
(ii) Sales outside India
4. No single external customer represents 10% or more of the Company''s revenue from operations for the year ended 31 March 2025 and 31 March 2024.
The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This section explains the judgments and estimates made in determining the fair values of the financial instruments that are
(a) recognised and measured at fair value and,
(b) measured at amortised cost and for which fair values are disclosed in the financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the group has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. For example, listed equity instruments that have quoted market price.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the- counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs are not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.
II. Valuation techniques used to determine fair value
The fair values for Security deposits, loan to employees and deposits are based on discounted cash flows using a discount rate determined considering the borrowing rate charged by the bank on the loan facility availed.
During the years mentioned above, there have been no transfers amongst the levels of hierarchy.
The fair values computed above for assets measured at amortised cost are based on discounted cash flows using a current borrowing rate. Further, the management has assessed that fair value of financial instruments approximates their carrying amounts largely due to the short term maturities of these instruments.
Note 51- Financial risk management
The company is exposed primarily to credit quality, fluctuations in foreign currency exchange rates and liquidity management which may adversely impact the fair value of its financial assets and liabilities. The Company has a risk management policy which covers risk associated with the financial assets and liabilities. The risk management policy is approved by the Board of Directors. The focus of the management is to assess the unpredictability of the financial environment and to mitigate potential adverse effect on the financial performance of the Company. The Company''s principal financial assets include loans, investments, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also holds investments in mutual funds and bonds.
A) Credit risk
Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms and obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and credit worthiness of the customer on continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. The financial instruments that are subject to concentration of credit risk principally consist of trade receivables, loans, cash and bank balances and bank deposits.
To manage credit risk, the Company follows a policy of advance payment or credit period upto 30 to 120 days to customers based on their credit profile. In case of foreign receivables, majority of the sales are made either against advance payments or by way of letter of credit. The credit limit policy is established considering the current economic trends of the industry in which the company is operating. Also, the trade receivables are monitored on a periodic basis for assessing any significant risk of nonrecoverability of dues and provision for credit impairment is recognised accordingly.
Bank balances are held with only high rated banks and majority of other security deposits are placed majorly with government agencies.
Customer credit risk is managed in accordance with the Company''s established policies, procedures, and controls.
An impairment analysis is conducted at each reporting date using a provision matrix based on the transaction date to measure expected credit losses. This calculation incorporates probability-weighted outcomes and considers reasonable and supportable information available at the reporting date, including historical data, current conditions, and forecasts of future economic circumstances. The maximum exposure to credit risk at the reporting date corresponds to the carrying value of each class of financial assets. The Company assesses the concentration of credit risk related to trade receivables as low, given that its customer base is diversified across multiple industries and geographics, with customers operating in largely independent markets.
The Company periodically monitors the recoverability and credit risks of its other financial assets. The Company evaluates lifetime expected credit losses for all the financial assets for which credit risk has not increased significantly.
The Company has considered financial condition, current economic trends, forward looking macroeconomic information, analysis of historical bad or doubtful receivables and ageing of receivables related to cash and cash equivalents, bank balances, bank and margin deposits, security deposits and other financial assets. In most of the cases, risk is considered low since the counterparties are reputed organisations with no history of default to the Company and no unfavourable forward looking macroeconomic factors. Wherever applicable, expected credit loss allowance is recorded.
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company''s objective is to maintain optimum levels of liquidity and to ensure that funds are available for use as per requirement. The liquidity risk principally arises from obligations on account of following financial liabilities viz. borrowings, trade payables and other financial liabilities.
The Company''s corporate finance department is responsible for liquidity and funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.
The maturity profile of the Company''s financial liabilities based on contractual undiscounted payment at each reporting date is :
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: Foreign currency risk, interest rate risk and price risk. The company''s exposure to market risk is primarily on account of foreign currency risk and price risk.
The Company is exposed to foreign exchange risk on their receivables, payables and bank balances which are held in USD, AED, KWD and EUR. The fluctuation in the exchange rate of INR relative to USD, AED, KWD and EUR may have a material impact on the Company''s assets and liabilities.
In respect of the foreign currency transactions, the Company believes some of the exposures which is kept open will be offsetted by the corresponding receivables and payables (in the nature of natural hedge). For the remaining unhedged net outstanding amount, the Company believes it will not have material impact on its financial performance/position.
The following table demonstrates the sensitivity in USD, EUR, AED and KWD with all other variables held constant. The below impact on the Company''s profit before tax is based on changes in the fair value of unhedged foreign currency monetary assets and liabilities at balance sheet date:
The Company is exposed to price risk from its investment in mutual fund and bonds classified in the balance sheet at fair value through profit or loss.
To manage its price risk arising from the investment, the Group has invested in the mutual funds and bonds after considering the risk and return profile of the said investments i.e. the debt profile of the investments indicates that the amount has been invested in creditworthy instruments and equity investment is made after considering the past performance record of the mutual fund.
The Company''s objectives when managing capital are to
⢠safeguard their ability to continue as a going concern, so that they can continue to provide returns to shareholders and benefits to other stakeholders, and
⢠maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders.
The Company monitors its capital by using gearing ratio, which is net debt divided by total equity. Net debt includes interest bearing loans, lease liabilities, interest payable net off cash and cash equivalents. Total equity comprises of Equity share capital, General reserve, Capital redemption reserve and Retained earnings.
(a) Prior to the merger of erstwhile Ador Fontech Limited (ADFL) with Ador Welding Limited (AWL) both entities declared and paid following interim dividends to their respective shareholders for the year ended 31 March 2024 :
(i) AWL declared an interim dividend of Rs. 18.50 per share for each fully paid up share.
(ii) ADFL declared an interim dividend of Rs. 6.00 per share for each fully paid up share.
These interim dividends were declared and paid prior to the effective date of the merger and were recognized in the separate financial statements of AWL and ADFL.
Note 55 - Revenue expenditure incurred during the year on research and development amounts to Rs. 888 lakhs (31 March 2024: Rs. 660 lakhs) (including depreciation Rs. 34 lakhs (31 March 2024: Rs. 30 lakhs) and capital expenditure thereof amounts to Rs. 43 lakhs (31 March 2024: Rs. 109 lakhs).
(i) No funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any person(s) or entity(ies), including foreign entities (''the intermediaries''), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (''the Ultimate Beneficiaries'') or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries.
(ii) No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (''the Funding Parties''), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (''Ultimate Beneficiaries'') or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
Note 57- Revenue from contracts with customers: Ind AS 115
The Company is engaged in providing welding Products Technologies and Services, maintenance & reclamation related products and services and customized solutions for multi-disciplinary projects and contracts related to refineries, oil and gas, petrochemicals, fertilizers, steel plants, pharma, water and other chemical process industries. Trade receivables are non-interest bearing and generally on terms of 30 to 120 days.
The Company determines revenue recognition through the following steps:
1. Identification of the contract, or contracts, with a customer.
2. Identification of the performance obligations in the contract.
3. Determination of the transaction price.
4. Allocation of the transaction price to the performance obligations in the contract.
5. Recognition of revenue when, or as, we satisfy a performance obligation.
a) Disaggregated revenue information
The Company has three reportable segments of its business :
(i) Products Division
(ii) Services Division
(iii) Maintenance and Reclamation Division (M & R)
(ii) Significant changes in the contract assets and the contract liabilities balances during the year are as follows:
1. The significant changes in contract Assets includes contracts for which invoicing/provision has been done/ created during the year for an amount of Rs. 114 lakhs (31 March 2024: Rs. Nil lakhs).
2. The significant changes in contract liabilities includes customer and distributors advance during the year increased by Rs. 57 lakhs (31 March 2024 decreased by Rs. 97 lakhs).
Note 60- Corporate Social Responsibility :
The Company has formed a Corporate Social Responsibility (CSR) Committee as required under Section 135 of the Companies Act, 2013. The Company was required to spend Rs. 179.42 lakhs as per Section 135(5). However, the Company has spent Rs. 181.26 lakhs on the activities mentioned in Schedule VII to the Companies Act, 2013. The Company had spent Rs. 1.84 lakh excess in the current financial year (FY 2024-25) and hence eligible for set off, against next financial year obligation.
(vii) Details of related party transactions:
During the current year, Company has not entered into any related party transaction with respect to CSR expenditure.
(viii) During the year, the Company has not required to make any provision with respect to a liability incurred by entering into a contractual obligation.
Note 61 - Scheme of Arrangement
The Company had filed Draft Composite Scheme of Arrangement on 20th June 2022 with BSE Limited (''BSE'') and National Stock Exchange of India Limited (''NSE'') under Regulation 37 of the SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015 and Circular no. CFD/DIL3/CIR/2017/21 dated 10 March 2017 ("SEBI Circular"). The Scheme inter alia includes amalgamation of Ador Fontech Limited (into the business of Maintenance & Reclamation) with Ador Welding Limited. Further, the meetings of the equity shareholders of AWL and ADFL, as directed by NCLT, were held on 10 August 2023 and 30 October, 2023 respectively and the Shareholders of both the Companies approved the Scheme of Amalgamation by requisite majority.
The Scheme for merger of ADFL with the Company has been approved by the National Company Law Tribunal (NCLT), Mumbai Bench under Section 230 to Section 232 of Chapter XV of the Companies Act, 2013 on 20 August 2024 (received on 3 September 2024), the Scheme has become effective on September 25, 2024 (date of filing with Registrar of Companies) from appointed date i.e., 1 April 2022. The merger has been accounted under the ''pooling of interests'' method in accordance with Appendix C of Ind AS 103 ''Business Combinations'' and comparatives have been restated for merger as detailed in Tables 1, 2 and 3 below.
In accordance with the Scheme, the shares issued by ADFL to its shareholders has been cancelled in the current financial year and 38,04,348 equity shares has been allotted to existing shareholders in current financial year (based on record date fixed by Board of Directors). The swap ratio of 46:5 i.e. for every 46 equity shares of ADFL, 5 equity shares of AWL was issued.
The difference, between the book value of the assets of ADFL and the aggregate of: (a) the book value of liabilities of ADFL vested in the Company pursuant to the Scheme; and (b) the book value of the reserves of ADFL vested in the Company pursuant to the Scheme, recorded as capital reserve. Upon the Scheme becoming effective and with effect from the appointed date, the authorized share capital of ADFL shall stand transferred to and be merged/amalgamated with the authorised share capital of the Company. Consequently, authorised share capital of the Company enhanced to Rs. 4,300 lakhs (divided into 4,30,00,000 equity shares of Rs. 10 each).
Note 63 - The Company has registered all charges or satisfaction with Registrar of Companies during current year and previous year .
Note 64 - During the current year and previous year, the Company has not entered into any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
Note 65 - The Board has recommended a final dividend for the financial year 2024-25 @ Rs. 20 per share, i.e. 200% of the face value of Rs.10 each.
Note 66 - The Company evaluated subsequent events from the balance sheet date to 06 May 2025, the date at which the financial statement were available to be issued and determined that there are no such item to report.
Note 67 - The Ministry of Corporate Affairs (MCA) has prescribed a new requirement for companies under the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 inserted by the Companies (Accounts) Amendment Rules 2021 requiring companies, which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.
a) Other than Maintenance & Reclamation Division: In previous year, the Company as part of its internal review pursuant to MCA notification on audit trail commenced reviewing audit trail and its related requirements. The Company was assured by its accounting software provider that its accounting software is compliant with MCA notification on audit trail, which was further substantiated by related documentation shared by the accounting software provider. However, to ensure compliance, the Company commenced its internal review in previous year and identified that audit trail (edit logs) were getting purged after 30 days. Accordingly, the Company immediately took corrective action with effect from June 2023 and related audit trail (edit logs) were retained after 24 June 2023.
b) Maintenance & Reclamation Division (M&R): The accounting software used by a M&R division of the Company (erstwhile fellow subsidiary of the Company merged pursuant to a Scheme of Amalgamation effective 01 April 2022), for maintaining its books of accounts during the year ended 31 March 2025, has a feature of recording audit trail (edit log) facility, but the audit trail feature was not enabled throughout the year. The management as part of internal alignment and consolidating its operations in one accounting software, has migrated operations of entire division to accounting software used by other divisions from April 1, 2025.
i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
ii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
iii) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
iv) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of layers) Rules, 2017.
v) The Company is not declared wilful defaulter by any bank or financial institution or other lender during the year.
vi) The Company does not have any loan or advance in the nature of loans granted to promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013), except loan given to 3D Future Technologies Private Limited (Wholly owned subsidiary), either severally or jointly with any other person, that are:
(a) repayable on demand; or
(b) without specifying the any terms or period of repayment.
Note 69 - Amounts below Rs 0.50 lakh have been rounded off.
Note 70 - The figures for the previous year have been regrouped / rearranged wherever necessary to confirm to the current year''s classification. Further previous year figures are restated pursuant to merger of fellow subsidiary company (refer note 61).
Mar 31, 2024
(r) Provisions, contingent liabilities and contingent assets
A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on management estimate of the amount required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current management estimates.
Contingent liabilities are disclosed in respect of possible obligations that arise from past events, whose existence would be confirmed by the occurrence or non-occurrence of one or more uncertain future events, not wholly within the control of the Company.
Contingent assets are not recognised in the financial statements. However, it is disclosed only when an inflow of economic benefits is probable.
(s) Earnings per share
Basic earning per share is computed by dividing net profit after tax (excluding other comprehensive income) by the weighted average number of equity shares outstanding during the year.
Diluted earning per share is computed by dividing net profit after tax (excluding other comprehensive income) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of shares considered for deriving basic earning per share and the weighted average number of equity shares which could have been issued on conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share.
(t) Provision for warranty
Warranty costs are provided based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing on the basis of the past experience of the Company. It is expected that this expenditure will be incurred over the contractual warranty period.
(u) Research & Development
Revenue expenditure on research & development (including overheads) are charged out as expense in the year in which they are incurred. Expenditure of a capital nature on research & development is debited to respective fixed assets and depreciation is provided on such assets, as are depreciable.
(v) Recent Pronouncements
The Company applied for the first time these amendments of Ind AS 8, Ind AS 1 and Ind AS 12 and there are no material impact on financial statements.
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to existing standards applicable to the Company.
Note 48- Lease rental income
The investment properties (Office premises) are leased to tenants under operating leases. Lease income from operating leases where the Company is a lessor is recognised in income on a straight-line basis over the lease term. The aggregate amount of rent credited to statement of profit and loss account during the year is Rs. 129 lakhs (31 March 2023: Rs. 126 lakhs). [Refer note 35]
Note 49- With respect to the application for proposed Scheme of amalgamation (Merger by Absorption) of Ador Fontech Limited ("Transferor Company" or "ADFL") with Ador Welding Limited ("Transferee Company" or "AWL" or "Company"), the meetings of the equity shareholders of AWL and ADFL, as directed by NCLT, were held on 10 August 2023 and 30 October, 2023 respectively and the Shareholders of both the Companies approved the Scheme of Amalgamation by requisite majority. Both the Companies have thereafter completed the necessary statutory formalities and the next hearing of the amalgamation petition is scheduled to be held on 7 May 2024.
Note 50 - Employee benefits
As per Indian Accounting Standard-19 ''Employee Benefits'', the disclosure of Employee benefits as defined in the Standard are given below:
Brief description of the plans:
The Company has various schemes for employee benefits such as provident fund, superannuation and gratuity. In case of funded schemes, the funds are administered through trustees/ appropriate authorities. The Company''s defined contribution plans are superannuation, employees state insurance and provident fund as the Company has no further obligation beyond making the contributions. The Company''s defined benefit plans consists of gratuity only. The employees of the Company are entitled to compensated absences as per the Company''s policy.
I. Defined Contribution Plan:
(i) Superannuation fund
(ii) Provident fund
(iii) Employees State Insurance fund
During the year, the Company has recognised the following amounts in the Statement of profit and loss*:
Notes:
1. All the above transactions with related parties are net of Goods and Service Tax.
2. The transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free. The settlement for these balances occurs through payment. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2024, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2023: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates
C) Other disclosures
1. The Company is currently focused on three business segments : Consumables, Equipment and Automation, and Flares & Process Equipment Division. The Company''s organisational structure and governance processes are designed to support effective management of multiple businesses while retaining focus on each one of them.
2. The Segment revenue, results, assets and liabilities include the respective amounts identifiable to each of the segment and amounts allocated on a reasonable basis.
3. The geographical information considered for disclosure are :
(i) Sales within India
(ii) Sales outside India
4. No single external customer represents 10% or more of the Company''s revenue from operations for the year ended 31 March 2024 and 31 March 2023.
I. Fair value hierarchy
The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This section explains the judgments and estimates made in determining the fair values of the financial instruments that are
(a) recognised and measured at fair value and,
(b) measured at amortised cost and for which fair values are disclosed in the financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. For example, listed equity instruments that have quoted market price.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the- counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs are not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.
II. Valuation techniques used to determine fair value
The fair values for Security deposits, loan to employees and deposits are based on discounted cash flows using a discount rate determined considering the borrowing rate charged by the bank on the loan facility availed.
During the years mentioned above, there have been no transfers amongst the levels of hierarchy.
The fair values computed above for assets measured at amortised cost are based on discounted cash flows using a current borrowing rate. Further, the management has assessed that fair value of financial instruments approximates their carrying amounts largely due to the short term maturities of these instruments.
Note 54- Financial risk management
The company is exposed primarily to credit quality, fluctuations in foreign currency exchange rates and liquidity management which may adversely impact the fair value of its financial assets and liabilities. The Company has a risk management policy which covers risk associated with the financial assets and liabilities. The risk management policy is approved by the Board of Directors. The focus of the management is to assess the unpredictability of the financial environment and to mitigate potential adverse effect on the financial performance of the Company.
The Company''s principal financial assets include loans, investments, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also holds investments in mutual funds and bonds.
A) Credit risk
Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms and obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and credit worthiness of the customer on continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. The financial instruments that are subject to concentration of credit risk principally consist of trade receivables, loans, cash and bank balances and bank deposits.
To manage credit risk, the Company follows a policy of advance payment or credit period upto 30 to 120 days to customers based on their credit profile. In case of foreign receivables, majority of the sales are made either against advance payments or by way of letter of credit. The credit limit policy is established considering the current economic trends of the industry in which the company is operating.
Also, the trade receivables are monitored on a periodic basis for assessing any significant risk of nonrecoverability of dues and provision for credit impairment is recognised accordingly.
Bank balances are held with only high rated banks and majority of other security deposits are placed majorly with government agencies.
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company''s objective is to maintain optimum levels of liquidity and to ensure that funds are available for use as per requirement. The liquidity risk principally arises from obligations on account of following financial liabilities viz. borrowings, trade payables and other financial liabilities.
The Company''s corporate finance department is responsible for liquidity and funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: Foreign currency risk, interest rate risk and price risk. The company''s exposure to market risk is primarily on account of foreign currency risk and price risk.
(i) Foreign currency risk
The Company is exposed to foreign exchange risk on their receivables, payables and bank balances which are held in USD, AED, KWD and EUR. The fluctuation in the exchange rate of INR relative to USD, AED, KWD and EUR may have a material impact on the Company''s assets and liabilities.
In respect of the foreign currency transactions, the Company believes some of the exposures which is kept open will be offsetted by the corresponding receivables and payables (in the nature of natural hedge). For the remaining unhedged net outstanding amount, the Company believes it will not have material impact on its financial performance/position.
(ii) Price Risk
The Company is exposed to price risk from its investment in mutual fund and bonds classified in the balance sheet at fair value through profit or loss.
To manage its price risk arising from the investment, the Company has invested in the mutual funds and bonds after considering the risk and return profile of the said investments i.e. the debt profile of the investments indicates that the amount has been invested in creditworthy instruments and equity investment is made after considering the performance of the stock.
Note 55 - Capital Management
The Company''s objectives when managing capital are to
⢠safeguard their ability to continue as a going concern, so that they can continue to provide returns to shareholders and benefits to other stakeholders, and
⢠maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders.
The Company monitors its capital by using gearing ratio, which is net debt divided by total equity. Net debt includes interest bearing loans. Total equity comprises of Equity share capital, General reserve, Capital redemption reserve and Retained earnings.
Note 59
(i) No funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any person(s) or entity(ies), including foreign entities (''the intermediaries''), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (''the Ultimate Beneficiaries'') or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries.
(ii) No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (''the Funding Parties''), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (''Ultimate Beneficiaries'') or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
Note 60- Revenue from contracts with customers: Ind AS 115
The Company is engaged in providing welding Products Technologies and Services, customized solutions for multi-disciplinary projects and contracts related to refineries, oil and gas, petrochemicals, fertilizers, steel plants, pharma, water and other chemical process industries. Trade receivables are non-interest bearing and generally on terms of 30 to 120 days.
The Company determines revenue recognition through the following steps:
1. Identification of the contract, or contracts, with a customer.
2. Identification of the performance obligations in the contract.
3. Determination of the transaction price.
4. Allocation of the transaction price to the performance obligations in the contract.
5. Recognition of revenue when, or as, we satisfy a performance obligation.
a) Disaggregated revenue information
The Company has three reportable segments of its business :
(i) Consumables
(ii) Equipment and automation
(iii) Flares & Process Equipment
Note 65 - The Company has registered all charges or satisfaction with Registrar of Companies during current year and previous year.
Note 66 - During the current year and previous year, the Company has not entered into any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
Note 67 - The Board has declared/approved an interim dividend for the financial year 2023-24 @ Rs18.5 per share, i.e. 185% of the face value of Rs.10 each.
Note 68 - The Company evaluated subsequent events from the balance sheet date to 30 April 2024, the date at which the financial statement were available to be issued and determined that there are no item to report.
Note 69 - The Ministry of Corporate Affairs (MCA) has prescribed a new requirement for companies under the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 inserted by the Companies (Accounts) Amendment Rules 2021 requiring companies, which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.
The Company as part of its internal review pursuant to MCA notification on audit trail commenced reviewing audit trail and its related requirements prior to commencement of current financial year. During the year, the Company was assured by its accounting software provider that its accounting software is compliant with MCA notification on audit trail, which was further substantiated by related documentation shared by the accounting software provider. However, to ensure compliance, the Company commenced its internal review and identified that audit trail (edit logs) were getting purged after 30 days. Accordingly, the Company immediately took corrective action with effect from June 2024 and related audit trail (edit logs) were retained after 24 June 2023.
Note 70
i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
ii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
iii) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
iv) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of layers) Rules, 2017.
v) The Company is not declared wilful defaulter by any bank or financial institution or other lender during the year.
vi) The Company does not have any loan or advance in the nature of loans granted to promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013), either severally or jointly with any other person, that are:
(a) repayable on demand; or
(b) without specifying the any terms or period of repayment.
Note 71 - Amounts below Rs 0.50 lakh have been rounded off.
Note 72 - The figures of the previous years have been regrouped / rearranged wherever necessary. The impact of restatements/ regroupings in the previous year figures are not material to Financial Statements.
For Walker Chandiok & Co LLP For and on behalf of the Board of Directors
Chartered Accountants
Firm Registration No: 001076N/N500013
Khushroo B. Panthaky Vinayak M. Bhide Surya kant Sethia Aditya T. Malkani N. Malkani Nagpal
Partner Head - HR, Admin, IA, Chief Financial Officer Managing Director Executive Chairman
Membership No. 042423 Legal and Company DIN : 01585637 DIN : 00031985
Secretary
Place : Mumbai Place : Mumbai
Date : 30 April 2024 Date : 30 April 2024
Mar 31, 2022
(a) Includes:
(i) Rs. 0.01 lakh (31 March 2021: Rs. 0.01 lakh) being the aggregate value of shares in Co-operative housing societies.
(ii) Rs. 4 lakhs (31 March 2021: Rs. 4 lakhs) for tenements in an association of apartment owners.
(b) During the financial year 2021-22, a flat at silvassa is classified from "Property, plant and equipment" (Gross carrying amount Rs. 9 lakhs and Accumulated depreciation of Rs. 2 lakhs till 31 March 2022) is classified as "Asset held for sale".
(c) During the year the company has sold Narayana property situated at Delhi having gross block of Rs. 153 lakhs and accumulated depreciation of Rs 25 lakhs under "Property, Plant and Equipment", Rs 55 lakh shown under the head " Investment Property" and Rs 22 lakh shown under "Right of use of assets" for a consideration of Rs. 900 lakhs.
(d) During the previous year, the Company had entered into a Memorandum of Understanding for the sale/transfer of its right in Ahmednagar property admeasuring 66,108 square meters. Gross carrying amount (Land Rs. 1 lakh and building Rs. 406 lakhs) and Accumulated depreciation on building of Rs. 301 lakhs has been classified from "Property, plant and equipment" to âAsset classified as held for sale".
(e) The Company has pledged certain assets against borrowing limits (refer note 57 for details).
(a) The Company incurred Rs. 220 lakhs in the year ended 31 March 2022 (31 March 2021: Rs. 10 lakhs) towards expenses relating to short-term leases and leases of low-value assets. The total cash outflow for leases is Rs. 250 lakhs for the year ended 31 March 2022 (31 March 2021: Rs. 31 lakhs), including cash outflow of shortterm leases and leases of low-value assets. Interest on lease liabilities is Rs. 13 lakhs for the year 31 March 2022 (31 March 2021: Rs. 11 lakhs). [Refer note 40 and note 47]
(b) During the year the Company has sold Narayana property at Delhi having gross block of Rs. 153 lakhs and accumulated depreciation of Rs 25 lakhs under "Property, Plant and Equipment", Rs 55 lakh shown under the head " Investment Property" and Rs 15 lakh shown under "Right of use of assets" for a consideration of Rs. 900 lakhs.
During the year, valuations of the Investment properties is performed by a registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017. During the previous year, valuations of the Investment properties is performed by a independent valuer and not by registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017. The fair value measurement is based on comparable sales approach (Previous year : rental yield approach). The fair value measurement is categorised in level 3 of fair value hierarchy.
The fair valuation is based on current prices in the active market of similar properties. The main inputs used for valuation are quantum, area, location, demand, quality of construction, age of building and trend of fair market etc.
(c) The Company has no restrictions on the reliability of its investment property and no contractual obligations to purchase, construct or develop investment property or for repairs, maintenance and enhancements.
(d) During the year the company has sold Narayana property at Delhi having gross block of Rs. 153 lakhs and accumulated depreciation of Rs 25 lakhs under "Property, Plant and Equipment", Rs 55 lakh shown under the head " Investment Property" and Rs 22 lakh shown under "Right of use of assets" for a consideration of Rs. 900 lakhs.
Inventory write downs are accounted, considering the nature of inventory, ageing, and net realisable value. Write-downs of inventories to net realisable value amounted to Rs. 38 lakhs (31 March 2021: 100 lakhs). These write down were recognised as an expense during the year and included in the ''Changes in inventories of finished goods, work-in-progress, and stock-in-trade'' in the Statement of Profit and Loss.
* Certain imported inventory amounting to Rs. 336 lakhs, which has been detained by the Bureau of Indian Standards (BIS), while the Company''s application for License was pending BIS approval, as BIS is alleging that the said imported inventory doesn''t meet the standards as specified in the notification issued by BIS. The matter is still pending before BIS and Company is awaiting for the outcome of the same.
(a) During the Current year, the Company has sold/transfered its right in Ahmednagar property admeasuring 66,108 square meters, as is where basis, for a consideration of Rs. 1,462 lakhs which has been duly approved by Board.
(b) During the Current year, the Company has entered into an agreement for the sale of one flat at Silvassa , for a consideration of Rs. 20 lakhs which has been duly approved by Board. The Company has received Rs. 14 lakhs as advance against the transactions. The transactions is likely to be completed in FY 2022-23 hence same has been classified as ''Assets classified as held for sale''.
Note 23 b- Rights, preferences and restrictions
The Company has only one class of shares referred to as equity shares having a par (face) value of Rs. 10 per share. Each and every shareholder is eligible for one vote per share held.
In the event of liquidation of the Company, the equity shareholders will be entitled to receive the remaining assets of the Company, after distribution of all the preferential amounts, in proportion to their shareholding.
(i) Nature of Security and terms of repayment for short term secured borrowings of Company:
Working capital loan from a bank, balance outstanding amount as at 31 March 2022 is Rs. Nil (31 March 2021: Rs 2,800 lakhs) is secured first pari passu charge by way of hypothecation of Company''s entire stocks and book debts, both present and future, exclusive charge on the entire plant and machinery and other movable fixed assets of the Company and on the land and building of the Company located at survey no. 59/11/1,59/11/2, 59/11/3, 59/12 and 59/13 situated at village Masat, Silvassa Dadra and Nagar Haveli. Working capital loan repayable on demand, Rate of interest 7% p.a. (31 March 2021: 7.20% p.a.)
(ii) Guarantees given by banks to third parties amounting to Rs. 2,657 lakhs (31 March 2021: Rs. 2,202 lakhs) on behalf of the Company are secured against securities mentioned in (i) above.
|
Note 44 - Contingent Liabilities not provided for : |
(Rs. in lakhs) |
|
|
Particulars |
Year ended 31 March 2022 |
Year ended 31 March 2021 |
|
(a) Disputed sales tax as the matters are in appeal (advance paid 31 March 2022: Rs 105 lakhs; 31 March 2021: Rs 392 lakhs) |
1,376 |
1,199 |
|
(b) Disputed excise duties as the matters are in appeal (advance paid 31 March 2022: Rs 900 lakhs; 31 March 2021: Rs 900 lakhs) |
922 |
922 |
|
(c) Disputed income tax as the matters are in appeal (advance paid 31 March 2022: Rs 13 lakhs; 31 March 2021: Rs. 13 lakhs) |
63 |
63 |
|
(d) Custom Duty refund (advance paid 31 March 2022: Rs 46 lakhs; 31 March 2021: Rs. 46 lakhs) |
46 |
46 |
|
(e) Bank guarantees |
2,657 |
2,202 |
|
(f) Other matters |
98 |
111 |
|
g) Provident fund Based on the Honorable Supreme Court judgment dated 28 February 2019, relating to components of salary structure that needs to be taken into account while computing the contribution to provident fund under the Employee Provident Fund Act. Past provident fund liability is not determinable at present in view of uncertainty on the applicability of the judgment to the Company with respect to timing and the components of its compensation structure. In absence of further clarification, the Company has been advised to await further developments in this matter to reasonably assess the implications on its financial statements, if any. |
Amount not determinable |
Amount not determinable |
|
(h) Inventory Certain imported inventory amounting to Rs. 336 lakhs, which has been detained by the Bureau of Indian Standards (BIS), while Company''s application for License was pending BIS approval, as BIS is alleging that the said imported inventory doesn''t meet the standards as specified in the notification issued by BIS. The matter is still pending before BIS and Company is awaiting for the outcome of the same. |
Amount not determinable |
Future cash outflows in respect of above matters are determinable only on receipt of judgments/decisions pending at various forums/authorities. The management does not expect these claims to succeed and accordingly, no provision for the contingent liability has been recognised in the financial statements.
a) The Bank returns were prepared and filed before the completion of all financial statements closure activities including Ind AS related adjustments / reclassifications, as applicable, which led to these differences between the final books of accounts and the bank returns which were based on provisional books of accounts.
b) Difference is due to restatement as entry was passed in the month of April 21 during closing of Mar 21.
c) Figures reported to bank were before considering provision of Rs.400 lakhs (Penalty for delay in office site Mobilization & Non Maintance of adequate Manpower).
d) Figures reported to bank were before considering provision of Rs.1,400 lakhs of receivable from Binyam International Company for General Trading & Contracting WLL.
The Group recognized right-of-use assets and lease liabilities amounting to Rs. 400 lakhs (31 March 2021: Rs. 11 lakhs) and Rs. 43 lakhs (31 March 2021: Rs. 11 lakhs) respectively. During the year ended, the Company had recognized interest expense on lease amounting to Rs. 13 lakhs (31 March 2021: Rs. 11 lakhs) and depreciation on right-of-use assets amounting to Rs. 26 lakhs (31 March 2021: Rs. 16 lakhs).
a. The aggregate depreciation expense on Right-of-use assetss is included under ""Depreciation and amortization expense"" in the statement of Profit and Loss.
b. During the current year 2021-22 in Right-of-use assets and lease liabilities, there is addition of Rs 43 lakhs towards laptops taken on rental basis.
c. The accrued finance cost on lease liabilities is included under "Finance cost" in the statement of Profit and Loss.
Lease payments not recognised as a liability
The Company has opted not to recognise a lease liability for short term leases (leases of expected term of 12 months or less). The Company has taken short term leases with a lease term of 12 months or less and the aggregate amount of operating lease rent debited to statement of profit and loss during the year is Rs. 220 lakhs (31 March 2021: Rs 10 lakhs). [Refer note 41]
Note 49- In the current year, Company operations are at normalcy and there is no impact of pandemic on the Company''s financials for the year ended 31 March 2022. However, the Management is continuously monitoring the current COVID-19 developments and possible effects that may result from the current pandemic on it''s financial conditions, liquidity, operations and actively working to minimise the impact of this unprecedented situation.
As per Indian Accounting Standard-19 ''Employee Benefits'', the disclosure of Employee benefits as defined in the Standard are given below:
Brief description of the plans:
The Company has various schemes for employee benefits such as provident fund, superannuation and gratuity. In case of funded schemes, the funds are administered through trustees/ appropriate authorities. The Company''s defined contribution plans are superannuation, employees state insurance and provident fund as the Company has no further obligation beyond making the contributions. The Company''s defined benefit plans consists of gratuity only. The employees of the Company are entitled to compensated absences as per the Company''s policy.
I. Defined Contribution Plan:
(i) Superannuation fund
(ii) Provident fund
(iii) Employees State Insurance fund
During the year, the Company has recognised the following amounts in the Statement of profit and loss*:
Gratuity is a lump sum plan and the cost of providing these benefits is typically less sensitive to small changes in demographic assumptions. The key actuarial assumptions to which the benefit obligation results are particularly sensitive to discount rate and future salary escalation rate. The following table summarizes the impact in percentage terms on the reported defined benefit obligation at the end of the reporting period arising on account of an increase or decrease in the reported assumption by 50 basis points.
These sensitivities have been calculated to show the movement in defined benefit obligation in isolation and assuming there are no other changes in market conditions at the accounting date. There have been no changes from the previous periods in the methods and assumptions used in preparing the sensitivity analyses.
1. The estimate of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.
(i) An amount of Rs. 73 lakhs (31 March 2021: Rs 15 lakhs) has been recognised as an expense in the statement of profit and loss account and included in "Salaries, wages and bonus" under Note 39 "Employee benefits expenses".
Risk Exposure - Asset Volatility
The plan is of a final salary defined benefit in nature which is sponsored by the Company and hence it underwrites all the risks pertaining to the plan. In particular, there is a risk for the Company that any adverse salary growth or demographic experience or inadequate returns on underlying plan assets can result in an increase in cost of providing these benefits to employees in future. Since the benefits are lump sum in nature the plan is not subject to any longevity risks.
1. Mr. S. M. Bhat (DIN:05168265) had resigned from the office of / position of the Managing Director/ Employee/ Director of the Company with effect from 7 September 2020. The Board of Directors accepted his resignation with immediate effect and relieved him from his duties as the Managing Director.
2. Mr. Aditya T. Malkani (DIN:01585637) has been appointed as the Managing Director of the Company with effect from 14 September 2020 for a period of three (3) years by the Board of Directors of the Company.
3. Mr. Girish Anant Patkar had resigned from the office of / position of the Chief Financial Officer & Key Managerial Personnel of the Company with effect from 9 September 2020.
4. Mr. Surya kant Sethia was appointed as Chief Financial Officer & Key Managerial Personnel of the Company with effect from 8 February 2021.
5. All the above transactions with related parties are net of Goods and Service Tax.
The Company''s chief operating decision maker (CODM) examines the Company''s performance and has
identified three reportable segments of its business instead of two segment as reported earlier:
(i) Consumables
(ii) Equipment and automation
(iii) Flares & Process Equipment Division*
The above operating segments have been identified considering:
(i) The internal financial reporting systems
(ii) The nature of the products/ process
(iii) The organisation structure as well as differential risks and returns of these segments.
Revenue and expenses have been accounted on the basis of their relationship to the operating activities of the segment. Expenses, which related to the Company as a whole and are not allocable to segments on a reasonable basis, have been included under "unallocable Income" and "unallocable Expenses" respectively. Assets and Liabilities, which related to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under "Unallocable Assets / Liabilities". Inter-segment transfers are accounted for at competitive market prices charged to unaffiliated customers for similar goods.
1. The Company is currently focused on three business segments : Consumables, Equipment and Automation and Flares & Process Equipment Division*. The Company''s organisational structure and governance processes are designed to support effective management of multiple businesses while retaining focus on each one of them.
2. The Segment revenue, results, assets and liabilities include the respective amounts identifiable to each of the segment and amounts allocated on a reasonable basis.
3. The geographical information considered for disclosure are :
(i) Sales within India
(ii) Sales outside India
4. No single external customer represents 10% or more of the Company''s revenue from operations for the year ended 31 March 2022 and 31 March 2021.
* Earlier known as "Projects".
Note 53 - Fair value measurements Financial assets and liabilities
All the above amounts are net of provisions for impairments.
I. Fair value hierarchy
The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This section explains the judgments and estimates made in determining the fair values of the financial instruments that are
(a) recognised and measured at fair value and,
(b) measured at amortised cost and for which fair values are disclosed in the financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the group has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. For example, listed equity instruments that have quoted market price.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the- counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs are not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.
II. Valuation techniques used to determine fair value
Significant valuation techniques used to value financial instruments include:
⢠the fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date.
The fair values for Security deposits, loan to employees and deposits are based on discounted cash flows using a discount rate determined considering the borrowing rate charged by the bank on the loan facility availed.
During the years mentioned above, there have been no transfers amongst the levels of hierarchy.
The carrying amounts of trade receivables, cash and bank balances, current loans, other current financial assets, current borrowings, other current financial liabilities and trade payables are considered to be approximately equal to the fair value.
The fair values computed above for assets measured at amortised cost are based on discounted cash flows using a current borrowing rate. They have been classified at level 2 in fair value hierarchy due to the use of valuation techniques which measure the use of observable market data.
Note 54- Financial risk management
The company is exposed primarily to fluctuations in foreign currency exchange rates, credit quality and liquidity management which may adversely impact the fair value of its financial assets and liabilities. The Company has a risk management policy which covers risk associated with the financial assets and liabilities. The risk management policy is approved by the Board of Directors. The focus of the management is to assess the unpredictability of the financial environment and to mitigate potential adverse effect on the financial performance of the company. The Company''s principal financial assets include loans, investments, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also holds investments in mutual funds and bonds.
Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms and obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and credit worthiness of the customer on continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. The financial instruments that are subject to concentration of credit risk principally consist of trade receivables, loans, cash and bank balances and bank deposits.
To manage credit risk, the Company follows a policy of advance payment or credit period upto 30 days to reputed customers. In case of foreign receivables, majority of the sales are made either against advance payments or by way of letter of credit. The credit limit policy is established considering the current economic trends of the industry in which the company is operating. Also, the trade receivables are monitored on a periodic basis for assessing any significant risk of non-recoverability of dues and provision is created accordingly.
Bank balances are held with only high rated banks and majority of other security deposits are placed majorly with government agencies.
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company''s objective is to maintain optimum levels of liquidity and to ensure that funds are available for use as per requirement. The liquidity risk principally arises from obligations on account of following financial liabilities viz. borrowings, trade payables and other financial liabilities.
The Company''s corporate finance department is responsible for liquidity and funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.
The maturity profile of the Company''s financial liabilities based on contractual undiscounted payment at each reporting date is :
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: Foreign currency risk, interest rate risk and price risk. The company''s exposure to market risk is primarily on account of foreign currency risk and price risk.
(i) Foreign currency risk
The Company is exposed to foreign exchange risk on their receivables, payables and bank balances which are held in uSD, AED, KWD and EuR. The fluctuation in the exchange rate of INR relative to uSD, AED, KWD and EuR may have a material impact on the Company''s assets and liabilities.
In respect of the foreign currency transactions, the Company manages the exchange rate exposure by entering into forward contracts where the exposure is significant. Further, some of the exposures are kept open since the management believes the same will be offsetted by the corresponding receivables and payables which will be in the nature of natural hedge.
The Company is exposed to price risk from its investment in mutual fund and bonds classified in the balance sheet at fair value through profit or loss.
To manage its price risk arising from the investment, the Company has invested in the mutual funds and bonds after considering the risk and return profile of the said investments i.e. the debt profile of the investments indicates that the debt has been given to creditworthy banks and other institutional parties and equity investment is made after considering the performance of the stock.
The Company''s objectives when managing capital are to
⢠safeguard their ability to continue as a going concern, so that they can continue to provide returns to shareholders and benefits to other stakeholders, and
⢠maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders.
The Company monitors its capital by using gearing ratio, which is net debt divided by total equity. Net debt includes interest bearing loans. Total equity comprises of Equity share capital, General reserve, Capital redemption reserve and Retained earnings.
Note 60- Revenue from contracts with customers: Ind AS 115
The Company is engaged in providing welding Products Technologies and Services, customized solutions for multi-disciplinary projects and contracts related to refineries, oil and gas, petrochemicals, fertilizers, steel plants, pharma, water and other chemical process industries.
The Company determines revenue recognition through the following steps:
1. Identification of the contract, or contracts, with a customer.
2. Identification of the performance obligations in the contract.
3. Determination of the transaction price.
4. Allocation of the transaction price to the performance obligations in the contract.
5. Recognition of revenue when, or as, we satisfy a performance obligation.
a) Disaggregated revenue information
The Company has three reportable segments of its business :
(i) Consumables
(ii) Equipment and automation
(iii) Flares & Process Equipment Division*
(ii) Significant changes in the contract assets and the contract liabilities balances during the year are as follows:
1. The significant changes in contract Assets includes contracts are billed during the year for an amount of Rs. 186 lakhs (31 March 2021: Rs. 3,787 lakhs) and unbilled revenue written off during the year Rs. 3 lakhs (Previous year : 1,320 lakhs).
2. The significant changes in contract liabilities includes customer and distributors advance during the year increased by Rs. 298 lakhs (31 March 2021 increased by Rs. 111 lakhs).
Note 63- Corporate Social Responsibility :
The Company has formed a Corporate Social Responsibility (CSR) Committee as required under Section 135 of the Companies Act, 2013. The Company is required to spend Rs. 48.46 lakhs as per Section 135(5). However, the Company has spent Rs. 47.36 lakhs on the activities mentioned in Schedule VII to the Companies Act, 2013. The Company had spent Rs. 1.10 lakh excess in previous financial year and hence eligible for set off, against current financial year obligation.
Note 65 - The Board has recommended a final dividend for the financial year 2021-22 @ Rs.12.5 per share, i.e. 125% of the face value of Rs.10 each.
Note 66 - The Company evaluated subsequent events from the balance sheet date to 20 May 2022, the date at which the financial statement were available to be issued and determined that there are no item to report.
Note 67 - Amounts below Rs 0.50 lakh have been rounded off.
The accompanying notes form an integral part of the standalone financial statements
This is a summary of significant accounting policies and other explanatory information referred to in our other report of even date.
Mar 31, 2018
I. Background of the Company
Ador Welding Limited (âthe Companyâ) was incorporated in the year 1951 and is one of Indiaâs leading player in the field of Welding Products, Technologies and Services. The Company is also engaged in providing customized solutions for multi-disciplinary projects and contracts related to refineries, oil and gas, petrochemicals, fertilizers, steel plants, pharma, water and other chemical process industries. The Company is a public limited company and domiciled in India and its shares are listed on two recognised stock exchanges in India - the Bombay Stock Exchange Limited (BSE) and the National Stock Exchange (India) Limited (NSE). The registered and corporate office of the Company is situated at Ador House, 6, K. Dubash Marg, Fort, Mumbai.
The separate financial statements were authorised for issue in accordance with the resolution of the Board of Directors on 30 May 2018.
Estimation of fair value
The fair valuation is based on current prices in the active market of similar properties. The main inputs used for valuation are quantum, area, location, demand, quality of construction, age of building and trend of fair market etc.
This fair value is based on valuations performed by an accredited independent valuer. The fair value measurement is based on comparable sales approach. The fair value measurement is categorised in level 2 of fair value hierarchy.
(c) The Company has no restrictions on the realisability of its investment property and no contractual obligations to purchase, construct or develop investment property or for repairs, maintenance and enhancements.
Notes:
(a) Ador Welding Academy Private Ltd (AWAPL) is a 100% subsidiary of the Company. The Board of Directors of AWAPL through its board meeting held on 28 April 2016 resolved to issue further shares to its existing shareholders through rights issue of 29 lacs equity shares of Rs. 10 each at par, aggregating to Rs. 290 lacs in the ratio of 290 equity shares for every share held as on 28 April 2016. Further, the Company had resolved to subscribe to the rights issue of 29 lacs equity shares of AWAPL of Rs. 10 each at par, aggregating to Rs. 290 lacs in their Board meeting held on 10 May 2016, which had been subscribed on 23 May 2016 and said shares were issued during the financial year 2016-17.
(b) Investment in Plasma Laser Technologies Limited (PLT)-
The Company has an investment of Rs. 927 lacs (Previous year Rs. 927 lacs) in PLT, PLT had incurred losses since the date of acquisition, the accumulated losses of PLT as at 31 March 2014 exceeded its net worth. The Company had evaluated its investment for the purpose of determination of potential diminution in value and based on such evaluation and considering the underlying factors including downturn in business and decrease in related activities, had recognised a provision for diminution in the value of investment in PLT as at 31 March 2014 amounting to Rs. 927 lacs .
Notes:
(a) Secured by letter of credit
(b) Includes an amount of Rs. 307 lacs (31 March 2017: Rs. 333 lacs, 1 April 2016: Rs. 320 lacs) on account of retention money of Project engineering business division.
* Amount below Rs. 0.49 lac has been rounded off, as per norms of the Company
Note 2 A- Rights, preferences and restrictions
The Company has only one class of shares referred to as equity shares having a par (face) value of Rs. 10 per share. Each shareholder is eligible for one vote per share held.
In the event of liquidation of the Company, the equity shareholders will be entitled to receive the remaining assets of the Company, after distribution of all the preferential amounts, in proportion to their shareholding.
Note 2 B- The Company has not issued any bonus shares or shares for consideration other than cash nor has there been any buyback of shares during five years immediately preceding 31 March 2018.
Note:
(i) The Board has recommended equity dividend of Rs. 5 per share (previous year Rs. 5 per equity share) for the financial year 2017-18. [Refer note 51]
Notes:
(a) Working capital loan, export packing credit facility and cash credit facility are secured by way of hypothecation of Companyâs entire stocks and book debts, both present and future, exclusive charge on the entire plant and machinery and other movable fixed assets of the Company and on the land and building of the Company located at survey no. 59/11/1, 59/11/2, 59/11/3, 59/12 and 59/13 situated at village Masat, Silvassa, Dadra and Nagar Haveli.
(b) Working capital loan, export packing credit facility, cash credit facility are secured by way of
1. First pari passu charge on current assets of the Company, and
2. Exclusive charge on Raipur Manufacturing facility situated at Bilaspur Road, Industrial Estate, Raipur - 493 221, Chattisgarh (movable and non movable fixed assets) of the Company.
Hypothecation (on current asset of the borrower and movable fixed assets of the borrower at Raipur facility) to be created upfront.
Charge perfection within 90 days of from date of 1st Utilisation of WC limits. Mortgage creation and perfection on Raipur facility within 90 days of 1st Utilisation of WC limits. Letter of Undertaking for Buyerâs Credit (LUT) shall be unsecured facility.
(c) Guarantees given by bank to third parties amounting to Rs. 2,281 lacs (31 March 2017: Rs. 2,558 lacs, 1 April 2016: Rs. 1,198 lacs) on behalf of the Company are secured against securities mentioned in (a) above.
This information has been given in respect of such vendors to the extent they could be identified as Micro & Small enterprises on the basis of information available with the Company.
*Amounts below Rs. 0.49 lac have been rounded off, as per norms of the Company.
Note:
(a) Provision of Rs. 63 lacs (31 March 2017: Rs. 64 lacs, 1 April 2016: Rs. 49 lacs) has been recognised for expected warranty claims on welding equipments and goods traded during the current financial year. It is expected that all these expenditures will be incurred in next financial year.
*There was a fire at Silvassa plant on 16 February 2018. The Company suffered a loss of Rs. 99 lacs on account of damage of Inventory, Property, Plant and Equipments and other incidental expenses, which was fully insured. The management has lodged a claim for the same with the insurance company.
Future cash outflows in respect of above matters are determinable only on receipt of judgments / decisions pending at various forums / authorities. The Management does not expect these claims to succeed and accordingly, no provision for the contingent liability has been recognised in the financial statements.
Note 3- Lease arrangements - Operating lease:
The Companyâs significant leasing arrangements are in respect of residential flats, office premises and vehicles taken on non-cancellable lease. The aggregate amount of operating lease rent debited to statement of profit and loss during the year is Rs. 118 lacs (31 March 2017: Rs. 128 lacs)
Note 4- Lease arrangements - Finance lease
Net carrying amount of carrying asset as at balance sheet date - â Nil lacs (31 March 2017: Rs. 2 lacs, 1 April 2016: Rs. 18 lacs) . The minimum future lease rentals and present value of minimum lease rentals payable are as follows:
Note 5- Lease rental
The Company has significant lease arrangement in respect of office premises given on lease. The aggregate amount of rent credited to statement of profit and loss account during the year is Rs. 103 lacs (31 March 2017: Rs. 114 lacs).
Note 6- Balances of certain debtors, advances and creditors are subject to confirmation / reconciliation, if any. In the opinion of the Management such adjustment are not likely to be material.
Note 7 - Employee benefits
As per Indian Accounting Standard-19 âEmployee Benefitsâ, the disclosure of Employee benefits as defined in the Standard are given below:
Brief description of the plans:
The Company has various schemes for employee benefits such as provident fund, superannuation and gratuity. In case of funded schemes, the funds are administered through trustees/ appropriate authorities. The Companyâs defined contribution plans are superannuation, employees state insurance and provident fund as the Company has no further obligation beyond making the contributions. The Companyâs defined benefit plans consists of provident fund and gratuity. The employees of the Company are entitled to compensated absences as per the Companyâs policy.
I. Defined Contribution Plan:
(i) Superannuation fund
(ii) Provident fund
(iii) Employees State Insurance fund
During the year, the Company has recognised the following amounts in the Statement of profit and loss*:
* included in Note 35- âEmployee benefits expensesâ
** includes payment made to regulatory authorities other than to Ador Welding Employees Provident Fund Trust.
II. Defined Benefit Plan :
(a) Contribution to Gratuity fund (funded scheme):
In accordance with Indian Accounting Standard 19, actuarial valuation was done in respect of the aforesaid defined benefit plan of gratuity based on the following assumptions:-
(viii) Sensitivity Analysis:
Gratuity is a lump sum plan and the cost of providing these benefits is typically less sensitive to small changes in demographic assumptions. The key actuarial assumptions to which the benefit obligation results are particularly sensitive to are discount rate and future salary escalation rate. The following table summarizes the impact in percentage terms on the reported defined benefit obligation at the end of the reporting period arising on account of an increase or decrease in the reported assumption by 50 basis points.
These sensitivities have been calculated to show the movement in defined benefit obligation in isolation and assuming there are no other changes in market conditions at the accounting date. There have been no changes from the previous periods in the methods and assumptions used in preparing the sensitivity analysis.
* Amounts below Rs. 0.49 lac have been rounded off, as per norms of the Company.
** Amount have been recognised based on the information for the period ended 28 February 2018, 28 February 2017 and 29 February 2016.
*** The estimate of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.
III. Compensated absences*
(i) An amount of â (48) lacs (31 March 2017: Rs. 14 lacs,1 April 2016: Rs. 50 lacs) has been recognised as an expense in the statement of profit and loss and included under Note 35 âEmployee benefits expensesâ.
(ii) Balance sheet reconciliation
Note 8 -Related Party Disclosure:
As per Ind AS 24 âRelated party Disclosuresâ, disclosure of transactions with the related parties as defined in the Accounting Standard are given below:
Notes:
1. Related party relationship is as identified by the Company and relied upon by the auditors.
2. The Company has shared facilities limits offered by HDFC Bank Limited to the extent of Rs. 100 lacs (Previous year Rs. 100 lacs) by earmarking working capital funds in favour of Ador Welding Academy Private Limited.
3. Considering the downturn of the operation, the employees of Plasma Laser Technologies (PLT), had approached Israel court in financial year 2014-15 for the purpose of liquidation and considering the same, Israel court has appointed the Official Liquidator to evaluate various option including revival or liquidation.
Hence, the management believes that the Company has lost its control on the affairs and assets of such subsidiary as the same is now vested with such official liquidator appointed by Israel court. Further management believes that there are no claims expected on the Company on account of PLT.
4. Excludes gratuity and compensated absences provided on the basis of acturial valuation on an overall company basis.
* Amounts below Rs. 0.49 lac have been rounded off, as per norms of the Company.
Note 9 - Segment reporting
The Companyâs chief operating decision maker - Chief Financial Officer examines the Companyâs performance and has identified two reportable segments of its business:
(i) Consumables
(ii) Equipments and Project Engineering Business
The above operating segments have been identified considering:
(i) The internal financial reporting systems
(ii) The nature of the products / processes
(iii) The organisation structure as well as differential risks and returns of these segments.
Revenue and expenses have been accounted on the basis of their relationship to the operating activities of the segment. Expenses, which relate to the Company as a whole and are not allocable to segments on a reasonable basis, have been included under âUnallocable Incomeâ and âUnallocable Expensesâ respectively. Assets and Liabilities, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under âUnallocable Assets / Liabilitiesâ. Inter-segment transfers are accounted for at competitive market prices charged to unaffiliated customers for similar goods.
Domestic Segment includes sales to customers located in India and service income accrued in India. Overseas Segment includes sales and services rendered to customers located outside India.
Non-current assets:-
The following are the details of the carrying amount of non current assets, which do not include deferred tax assets, income tax assets and financial assets, by the geographical area in which the assets are located :
C) Major customer
Revenues of approximately Rs. 4,898 lacs (31 March 2017 - Rs. 5,547 lacs) are derived from a single customer. These revenues are attributed to the Equipments and project engineering business segment.
D) Other disclosures
1. The Company has disclosed business segment as its primary segment.
2. The Segment revenue, results, assets and liabilities include the respective amounts identifiable to each of the segment and amounts allocated on a reasonable basis.
I. Fair value hierarchy
The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This section explains the judgements and estimates made in determining the fair values of the financial instruments that are
(a) recognised and measured at fair value and,
(b) measured at amortised cost and for which fair values are disclosed in the financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the group has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. For example, listed equity instruments that have quoted market price.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over the counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs are not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.
II. Valuation techniques used to determine fair value
Significant valuation techniques used to value financial instruments include:
The fair values for security deposits, loan to employees and deposits are based on discounted cash flows using a discount rate determined considering the borrowing rate charged by the bank on the loan facility availed.
During the periods mentioned above, there have been no transfers amongst the levels of hierarchy.
The carrying amounts of trade receivables, cash and bank balances, current loans, other current financial assets, current borrowings, other current financial liabilities and trade payables are considered to be approximately equal to the fair value.
The fair values computed above for assets measured at amortised cost are based on discounted cash flows using a current borrowing rate. They have been classified at level 2 in the fair value hierarchy due to the use of valuation techniques which maximise the use of observable market data.
Note 10- Financial risk management
The Company is exposed primarily to fluctuations in foreign currency exchange rates, credit quality and liquidity management which may adversely impact the fair value of its financial assets and liabilities. The Company has a risk management policy which covers risk associated with the financial assets and liabilities. The risk management policy is approved by the Board of Directors. The focus of the management is to assess the unpredictability of the financial environment and to mitigate potential adverse effect on the financial performance of the Company.
The Companyâs principal financial assets include loans, investments, trade and other receivables, and cash & cash equivalents that derive directly from its operations. The Company also holds investments in mutual funds and debentures.
A. Credit risk
Credit risk is the risk of financial loss arising from counter party failure to repay or service debt according to the contractual terms and obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and credit worthiness of the customer on continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. The financial instruments that are subject to concentration of credit risk principally consist of trade receivables, loans, cash & bank balances and bank deposits.
To manage credit risk, the Company follows a policy of advance payment or credit period upto 30 days to reputed customers. In case of foreign receivables, majority of the sales are made either against advance payments or by way of letter of credit. The credit limit policy is established considering the current economic trends of the industry in which the company is operating.
Also, the trade receivables are monitored on a periodic basis for assessing any significant risk of non-recoverability of dues and provision is created accordingly.
Bank balances are held with only high rated banks and majority of other security deposits are placed majorly with government agencies.
B. Liquidity risk
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Companyâs objective is to maintain optimum levels of liquidity and to ensure that funds are available for use as per requirement.
The liquidity risk principally arises from obligations on account of following financial liabilities viz. borrowings, trade payables and other financial liabilities.
The Companyâs corporate finance department is responsible for liquidity and funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Companyâs net liquidity position through rolling forecasts on the basis of expected cash flows.
The maturity profile of the Companyâs financial liabilities based on contractual undiscounted payment at each reporting date is :
C. Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices.
Market risk comprises three types of risk: Foreign currency risk, interest rate risk and price risk. The Companyâs exposure to market risk is primarily on account of foreign currency risk and price risk.
(i) Foreign currency risk
The Company is exposed to foreign exchange risk on their receivables, payables and bank balances which are held in USD, AED, KWD and EUR. The fluctuation in the exchange rate of INR related to USD, AED, KWD and EUR may have a material impact on the Companyâs assets and liabilities.
In respect of the foreign currency transactions, the Company manages the exchange rate exposure by entering into forward contracts where the exposure is significant. Further, some of the exposures are kept open since the management believes the same will be offsetted by the corresponding receivables and payables which will be in the nature of natural hedge.
Sensitivity Analysis
The following table demonstrates the sensitivity in USD, EUR, AED and KWD with all other variables held constant. The below impact on the Companyâs profit before tax is based on changes in the fair value of unhedged foreign currency monetary assets and liabilities at balance sheet date:
(ii) Price Risk
The Company is exposed to price risk from its investment in mutual fund and debentures classified in the balance sheet at fair value through profit and loss.
To manage its price risk arising from the investment, the Company has invested in the mutual funds after considering the risk and return profile of the mutual funds.
Note 11 - Capital Management
The Companyâs objectives, when managing capital, are to
- safeguard their ability to continue as a going concern, so that they can continue to provide returns to shareholders and benefits to other stakeholders, and
- maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders.
The Company monitors its capital by using gearing ratio, which is net debt divided by total equity. Net debt includes interest bearing loans. Total equity comprises of Equity share capital, General reserve, Capital redemption reserve and Retained earnings.
Note 12- Revenue expenditure incurred during the year on research and development, amounts to Rs. 338 lacs (31 March 2017: Rs. 415 lacs, 1 April 2016: Rs. 371 lacs) (including depreciation Rs. 29 lacs, 31 March 2017: Rs. 23 lacs, 1 April 2016: Rs. 20 lacs) and capital expenditure thereof amounts to Rs. 43 lacs (31 March 2017: Rs. 92 lacs, 1 April 2016: Rs. 14 lacs).
# As on the date of transition, the Company has measured the investments at deemed cost i.e. previous GAAP carrying amounts.
Note 13- First time adoption of Ind AS: A Transition to Ind AS:
These are the Companyâs first separate financial statements prepared in accordance with Ind AS applicable as at 31 March 2018.
The accounting policies set out in note 1 have been applied in preparing the financial statements for the year ended 31 March 2018, the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS balance sheet at 1 April 2016 (the date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2014 and other relevant provisions of the Act (previous GAAP or Indian GAAP).
An explanation of how the transition from previous GAAP to Ind AS has affected the Companyâs financial position, financial performance and cash flows is as follows:
i) Optional exemptions availed Business combinations
The Company has availed the business combination exemption on first time adoption of Ind AS and accordingly the business combinations prior to date of transition have not been restated to the accounting prescribed under Ind AS 103 - Business combinations.
The Company applies the requirements of Ind AS 103 - Business combinations to business combinations occurring after the date of transition to Ind AS.
Deemed cost
Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 - Intangible Assets and investment property covered by Ind AS 40 - Investment Properties.
Accordingly, the Company has elected to measure all of its property, plant and equipment, intangible assets and investment properties at their previous GAAP carrying value.
Investment in subsidiaries, joint controlled entities and associates
Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its subsidiaries, joint controlled entities and associates as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition.
Accordingly, the Company has elected to measure all of its investments in subsidiary at their previous GAAP carrying value.
ii) Mandatory exceptions applied Estimates
An entityâs estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.
Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP except where Ind AS required a different basis for estimates as compared to the previous GAAP
De-recognition of financial assets and liabilities
Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the derecognition requirements in Ind AS 109 retrospectively from a date of the entityâs choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions.
The Company has applied the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.
Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
The Company has classified its financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
All the adjustments on account of Ind AS are non-cash in nature and hence there is no material impact on statement of Cash flows for the year ended 31 March 2017.
* Amounts below Rs. 0.49 lac have been rounded off, as per norms of the Company
Explanations to reconciliations B.1 Reversal of proposed dividend (including tax)
Previous GAAP - Proposed dividends were recognised as a liability as an adjusting event occurring after the balance sheet date
Ind AS - Dividends are non-adjusting events after the balance sheet date and hence recognised as & when approved by the shareholders.
Consequent to the above, dividends proposed (incl. tax thereon) as at 1 April 2016 of Rs. 818 lacs have been reversed in equity. Effect of dividends approved during the year 2016-17 (incl. tax) of Rs. 818 lacs has been recognised in other equity.
B.2 Deferment of revenue Impact on account of deferment of revenue
Previous GAAP - Revenue from sale of goods is recognised on dispatch from the factory premises
Ind AS - Revenue should be recognised when the entity has transferred to the buyer the significant risks & rewards of ownership of goods
Impact on account of Provision for sales return
Previous GAAP - Sales return are accounted as and when they actually occur.
Ind AS - Sales return are accounted on estimated basis. The liability for expected sales returns is recognised at the times of sales. Revenue is presented net of such sales returns.
Impact on account of deferment of freight service
Previous GAAP - Revenue for sale of goods, freight and insurance services is recognised as per the agreed terms. Revenue recognition does not provide guidance on identification of transactions including the requirement to apply the revenue recognition criteria separately to identifiable components or linked transactions.
Ind AS - In an arrangement comprising of more than one performance obligation, the total consideration shall be allocated to each of the obligations i.e. separate component. Revenue for each separate component should be recognised separately as per the respective recognition principles i.e. Sale of goods when the risks and rewards of ownership are transferred to the customer and Sale of services with respect to the stage of completion.
Consequent to the above, the other equity as at 31 March 2017 has decreased by Rs. 59 lacs (1 April 2016: Rs. 86 lacs) and profit and other comphrensive income for the year ended 31 March 2017 increased by Rs 27 lacs.
B.3 Measurement of derivative financial instruments at fair value
Previous GAAP - For derivatives, forward premium (i.e. difference between spot rate on the date of contract and the contractual forward rate) is amortised over the life of the forward contract. Exchange differences on the reporting date are recognised in the statement of profit & loss.
Ind AS - Forward contracts (derivatives) are recognised at fair value on initial recognition and subsequently at fair value through profit or loss.
The gain or loss on settlement of forward contracts recognised under previous GAAP has been restated under Ind AS.
Consequent to the above, the other equity as at 31 March 2017 has decreased by Rs. 13 lacs (1 April 2016: Rs. 0.01 lac) and profit and other comphrensive income for the year ended 31 March 2017 has decreased by Rs 13 lacs.
B.4 Measurement of financial assets at fair value
Impact of financial asset (Loan to subsidiary) measured at amortised cost
Previous GAAP - Interest free loans given to subsidiary were recognised at the gross transaction price and subsequently reduced for repayments.
Ind AS - Loans are financial assets and are initially recognised at fair value and since the loan is from shareholder the difference between the fair value and transaction price is recognised as deemed investment in the subsidiary. Subsequently, loans to subsidiary are measured at amortised cost resulting in interest income recognised in the statement of profit and loss at the effective interest rate.
Impact of financial assets measured at Fair value through profit or loss Previous GAAP - The current investments are measured at lower of cost or fair value
Ind AS - Investment in mutual funds are financial assets. For the purposes of Ind AS 109, mutual fund investments will be considered as debt instruments. Since the cash flows from mutual funds do not represent solely payments of principal and interest (SPPI) criteria, the same will be measured at fair value through profit or loss at each reporting date.
Consequent to the above, the other equity as at 31 March 2017 has increased by Rs. 74 lacs (1 April 2016: Rs. 189 lacs) and profit and other comphrensive income for the year ended 31 March 2017 decreased by Rs. 115 lacs.
B.5 Interest income on unwinding of discount on financial assets
Previous GAAP - The employee loans disbursed at subsidised rate, interest free rent deposits given to lessor are recorded at their gross transaction value.
Ind AS - Loan / deposits given are financial assets and are initially recognised at fair value.
The difference between the fair value and transaction value of the loan / deposits has been recognised as deferred employee cost / prepaid rent and amortised over the agreed period. Subsequently, the loan will be measured at amortised cost resulting into recognition of salary / rent expense and accrual of finance income in the statement of profit & loss.
Consequent to the above, the other equity as at 31 March 2017 has increased by Rs. 14 lacs (1 April 2016: Rs. 0.08 lacs) and profit and other comphrensive income for the year ended 31 March 2017 increased by Rs. 14 lacs.
B.6 Interest expense on unwinding of discount on financial liabilities
Previous GAAP - Interest free rent deposits received from lessees and deposits from trainees / employees were recognised at the gross transaction price.
Ind AS - Interest free deposits are financial liabilities and are initially recognised at fair value.
In case of rent deposits- The difference between the fair value and transaction price is recognised as Advance income and amortised over the agreed term. Deposit is subsequently measured at amortised cost resulting into recognition of rent income / finance income and finance expense in the statement of profit & loss.
Consequent to the above, the other equity as at 31 March 2017 has decreased by Rs. 6 lacs (1 April 2016: Rs. 0.48 lac) and profit and other comphrensive income for the year ended 31 March 2017 decreased by Rs. 6 lacs.
B.7 Reclassification of actuarial gain on employee benefit obligations to Other comprehensive income
Previous GAAP - Actuarial gains/(loss) on defined benefit obligations is recognised in statement of profit & loss.
Ind AS - Actuarial gains/(loss) on defined benefit obligations is recognised in other comprehensive income (OCI).
Consequent to the above, actuarial gains of Rs. 5 lacs and deferred tax liability of Rs 2 lacs, has been recognised in OCI.
B.8 Provision for doubtful debts as per expected credit loss model
Previous GAAP - The provision for doubtful debts are made based on the debtors realisation period and policy framed by the Company i.e. when there is an objective evidence of impairment
Ind AS - An impairment loss shall be recognised as per the expected credit loss model on all financial assets (other than those measured at fair value)
Consequent to the above, the other equity as at 31 March 2017 has decreased by Rs. 6 lacs (1 April 2016: Rs. 12 lacs) and profit and other comphrensive income for the year ended 31 March 2017 increased by Rs. 6 lacs.
B.9 Deferred tax impact
The impact of transition adjustments together with Ind AS mandate of using balance sheet approach (against profit and loss approach in the previous GAAP) for computation of deferred tax has impacted the reserves on date of transition, with consequential impacts to the statement of profit & loss for the subsequent periods.
Note 14- Corporate Social Responsibility :
The Company has formed a Corporate Social Responsibility (CSR) Committee as required under Section 135 of the Companies Act, 2013. The Company is required to spend Rs. 58.29 lacs as per Section 135(5). However, the Company has spent Rs. 32.87 lacs on the activities mentioned in Schedule VII to the Companies Act, 2013
Details of CSR spend for financial year 2017-18:
Total amount spent: Rs. 32.87 lacs Amount unspent: Rs. 25.42 lacs
Note 15- Amounts below Rs. 0.49 lac have been rounded off, as per norms of the Company.
Mar 31, 2017
Note 1 - Background of the Company
Incorporated in 1951, Ador Welding Limited (AWL) is one of Indiaâs leading player in the field of Welding Products Technologies and Services. The Company is also engaged in providing customized solutions for multi-disciplinary projects and contracts related to refineries, oil & gas, petrochemicals, fertilizers, steel plants, pharma, water and other chemical process industries.
Note 2 a - rights, preferences and restrictions attached to shares
The Company has only one class of shares referred to as equity shares having a par (face) value of Rs.10 per share. Each shareholder is eligible for one vote per share held.
In the event of liquidation of the Company, the equity shareholders will be entitled to receive the remaining assets of the Company, after distribution of all the preferential amounts, in proportion to their shareholding.
Note 2 b - The Company has not issued any bonus shares or shares for consideration other than cash nor has there been any buyback of shares during five years immediately preceding 31 March 2017.
Notes :
(a) Investment in Plasma Laser Technologies Limited (PLT) (Subsidiary) - The Company has an investment of Rs.927 lakhs (Previous year Rs.927 lakhs) in PLT. PLT has incurred losses since the date of acquisition. The accumulated losses of PLT as at 31 March 2014 exceeded its net worth. The Company has evaluated its investment for the purpose of determination of potential diminution in value and based on such evaluation and considering the underlying factors including downturn in business and decrease in related activities, has recognised a provision for diminution in the value of investment in PLT as at 31 March 2014 amounting to Rs.927 lakhs.
(b) Ador Welding Academy Private Ltd (AWAPL) is a 100% subsidiary of the Company. The Board of Directors of AWAPL through its board meeting held on 28 April 2016 resolved to issue further shares to its existing shareholders through rights issue of 29 lakhs equity shares of Rs.10 each at par, aggregating to Rs.290 lakhs in the ratio of 290 equity shares for every share held as on 28 April 2016. Further, the company has resolved to subscribe to the rights issue of 29 lakhs equity shares of AWAPL of Rs.10 each at par, aggregating to Rs.290 lakhs in their Board meeting held on 10 May 2016, which has been subscribed on 23 May 2016.
Note 3 a - disclosure of specified Bank Notes:
As per the Ministry of Corporate Affairs notification G.S.R. 308(E) dated 30 March 2017, every Company shall disclose the details of Specified Bank Notes (SBN) held and transacted during the period from 8 November 2016 to 30 December 2016 in the following manner:
The amount of excise duty disclosed as deduction from turnover is the total excise duty for the year except the excise duty related to the difference between the closing stock and opening stock and excise duty paid, but not recovered for free goods, breakages / damages and captive consumption, which has been included under the head âother expensesâ as âmiscellaneous expensesâ.
Note 4 - Revenue expenditure incurred during the year on research and development, through the natural heads of account, amounts to Rs.415 lakhs (previous year Rs.371 lakhs) (including depreciation Rs.23 lakhs; previous year Rs.20 lakhs) and capital expenditure thereof amounts to Rs.92 lakhs (previous year Rs.14 lakhs).
* Amount below Rs.0.49 lakh has been rounded as per norms of the Company.
Notes:
1. Related party relationship is as identified by the Company and relied upon by the auditors.
2. The Company has shared facilities limits offered by HDFC Bank Limited to the extent of Rs.100 lakhs (Previous year Rs.100 lakhs) by earmarking working capital funds in favour of Ador Welding Academy Private Limited.
3. Considering the downturn of the operation, the employees of Plasma Laser Technologies (PLT), had approached Israel court in financial year 2014-15 for the purpose of liquidation and considering the same, Israel court has appointed the Official Liquidator to evaluate various options including revival or liquidation.
Hence, the Management believes that the Company has lost its control on the affairs and assets of such subsidiary as the same is now vested with such official liquidator appointed by Israel court. Further management believes that there are no claims expected on the company on account of PLT. Hence, the same is not considered in related party transactions.
Note 5 - Employee benefits:
The disclosures required as per Accounting Standard 15 - âEmployee Benefits (Revised 2005)â, are as under:
Brief description of the plans:
The Company has various schemes for employee benefits such as provident fund, superannuation and gratuity. In case of funded schemes, the funds are administered through trustees / appropriate authorities. The Companyâs defined contribution plans are superannuation, employees state insurance and provident fund, as the Company has no further obligation beyond making the contributions. The Companyâs defined benefit plans consist of provident fund and gratuity. The employees of the Company are entitled to compensated absences as per the Companyâs policy.
I. Defined contribution plans:
(i) Provident fund
(ii) Superannuation fund
(iii) Employees state insurance fund
During the year, the Company has recognised the following amounts in the statement of profit and loss*:
III. Compensated absences *
(i) An amount of Rs.14 lakhs (Previous year Rs.50 lakhs) has been recognised as an expense in the statement of profit & loss account and included under note 27-âEmployee benefits expenseâ.
(ii) Balance sheet reconciliation
Note 6 - The Company had received an offer letter form Ador Welding Academy Private Limited (AWAPL) with respect to its rights issue of 29 lakhs equity shares of Rs.10 each at par, aggregating to Rs.290 lakhs in the ratio of 290 equity shares for every 1 equity share held as on 28 April 2016, pursuant to the board resolution passed by the board of directors of AWAPL in the board meeting held on 28 April 2016, primarily for its additional working capital, capital expenditure and also for refund of loans, if any.
It had been further resolved by the Board of Directors of the Company in their meeting held on 10 May 2016 to subscribe to the right issue of 29 lakhs equity shares of AWAPL of Rs.10 each at par, aggregating to Rs.290 lakhs.
Note 7- Lease arrangements - operating lease
The Companyâs significant leasing arrangements are in respect of residential flats, office premises and vehicles taken on non-cancellable lease. The aggregate amount of operating lease rent debited to statement of profit & loss during the year is Rs.127 lakhs (Previous year Rs.122 lakhs)
Note 8 - Lease obligation - Finance lease
Net carrying amount of carrying asset as at balance sheet date - Rs.2 lakhs (Previous year Rs.18 lakhs). The minimum future lease rentals and present value of minimum lease rentals payable are as follows:
Note 9 - Lease rental
The Company has significant lease arrangement in respect of office premises given on lease. The aggregate amount of rent credited to statement of profit & loss account during the year is Rs.111 lakhs (previous year Rs.73 lakhs)
Note 10 - Balances of certain debtors, advances and creditors are subject to confirmation / reconciliation, if any. In the opinion of the Management such adjustments are not likely to be material.
Note 11 - The Company has formed a Corporate Social Responsibility (CSR) Committee as required under Section 135 of the Companies Act, 2013. The Company is required to spend Rs.51.67 lakhs as per Section 135(5) of the said Act. However, the Company has spent Rs.41.18 lakhs on the activities mentioned in Schedule VII to the Companies Act, 2013
Details of CsR spend for the financial year 2016-17:
Total amount spent: Rs.41.18 lakhs Amount unspent: Rs.10.49 lakhs
Note 12 - Amounts below Rs.0.49 lakh have been rounded off as per rounding off norms of the Company, note 53 - The figures for the previous year are regrouped / re-arranged, wherever necessary.
Mar 31, 2016
note 1. - rights, preferences and restrictions attached to shares
The Company has only one class of shares referred to as equity shares having a par (face) value of Rs. 10 per share. Each shareholder is eligible for one vote per share held.
In the event of liquidation of the Company, the equity shareholders will be entitled to receive the remaining assets of the Company, after distribution of all the preferential amounts, in proportion to their shareholding.
note 2. - The Company has not issued any bonus shares or shares for consideration other than cash nor has there been any buyback of shares during five years immediately preceding 31 March 2016.
Notes:
(a) As per transitional provision as stated in paragraph 7(b) of Schedule II to the Companies Act 2013, assets having carrying value but not having remaining useful life as on 1 April 2014, after retaining residual value needs to be written off against the opening balance of retained earnings.
Net carrying value of such fixed assets as on 1 April 2014 aggregates to Rs. 108 Lacs (net of deferred tax assets aggregates to Rs. 55 Lacs) have been adjusted on account of the above.
(b) The Board has proposed dividend of Rs. 5 per share (for previous year, proposed and approved dividend amounts to Rs. 5 per equity share).
Notes:
(a) Investment in Plasma Laser Technologies Limited (PLT) (Subsidiary)- The Company has an investment of Rs. 927 Lacs (Previous year Rs. 927 Lacs) in PLT. PLT has incurred losses since the date of acquisition, the accumulated losses of PLT as at 31 March 2014 exceeded its net worth. The Company has evaluated its investment for the purpose of determination of potential diminution in value and based on such evaluation and considering the underlying factors including downturn in business and decrease in related activities, has recognized a provision for diminution in the value of investment in PLT as at 31 March 2014 amounting to Rs. 927 Lacs .
(b) Ador Welding Academy Private Ltd (AWAPL) is a 100% subsidiary of the Company. AWAPL caters to informed, demanding and resource seeking customers who are at the cutting edge of metallurgy and metal fabrication technology. It forms the backbone of their quest for new generation products, welding techniques and correct welding procedures and has also made a substantial contribution to the technical upgradation of the human resource base in the welding industry.
note 3 - Revenue expenditure incurred during the year on Research and Development, through the natural heads of account, amounts to Rs. 371 Lacs (Previous year Rs. 307 Lacs) (including depreciation Rs. 20 Lacs; Previous year Rs. 20 Lacs) and capital expenditure thereof amounts to Rs. 14 Lacs (Previous year Rs. 46 Lacs).
C) other disclosures
1. Segments have been identified in line with the Accounting Standard on "Segment Reporting" (AS - 17) taking into account the organization structure as well as differential risks and returns of these segments.
2. The Company has disclosed business segment as the primary segment.
Notes:
1. Related Party relationship is as identified by the Company and relied upon by the Auditors.
2. Company has paid Rs. Nil (Previous year Rs.74 Lacs) on devolvement of bank guarantee on the Company which was issued to the overseas subsidiary of the Company.
3. The Company has shared facilities limits offered by HDFC Bank Limited to the extent of Rs. 100 Lacs (Previous year Rs.100 Lacs) by ear marking working capital funds in favour of Ador Welding Academy Private Limited.
4. Considering the downturn of the operation, the employees of Plasma Laser Technologies Limited (PLT), had approached Israel court in financial year 2014-15 for the purpose of liquidation and considering the same, Israel court has appointed the Official Liquidator to evaluate various options including revival or liquidation.
Hence, the Management believes that the Company has lost its control on the affairs and assets of such subsidiary, as the same is now vested with such official liquidator appointed by Israel court. Further, the Management believes that there are no claims expected on the Company on account of PLT.
note 4 - Employee Benefits
The dsclosures required as per Accounting Standard 15 - "Employee Benefits (Revised 2005)", are as under:
Brief description of the plans:
The Company has various schemes for employee benefits such as provident fund, superannuation and gratuity. In case of funded schemes, the funds are administered through trustees / appropriate authorities. The Company''s defined contribution plans are superannuation, employees state insurance and provident fund as the Company has no further obligation beyond making the contributions. The Company''s defined benefit plans consists of provident fund and gratuity. The employees of the Company are entitled to compensated absences as per the Company''s policy.
I. Defined contribution plans:
(i) Provident fund
(ii) Superannuation fund
(iii) Employees state insurance fund
III. Compensated Absences*
(i) An amount of Rs. 50 Lacs (Previous year Rs. 39 Lacs) has been recognized as an expense in the statement of profit and loss account and included under Note 26 "Employee benefits expense".
note 5 - The Company has received an offer letter from Ador Welding Academy Private Limited (AWAPL) with respect to its Rights Issue of 29 Lacs Equity Shares of Rs. 10 each at par, aggregating Rs. 290 Lacs in the ratio of 290 Equity Shares for every 1 Equity Share held as on 28 April 2016, pursuant to the board resolution passed by the Board of Directors of AWAPL in the board meeting held on 28 April 2016, primarily for its additional working capital, CAPEX and also for refund of loans, if any.
It has been further resolved by the Board of Directors in their meeting held on 10 May 2016 to subscribe to the Right Issue of 29 Lacs equity shares of AWAPL of Rs. 10 each at par, aggregating to Rs. 290 Lacs.
note 6 - Lease arrangements - operating Lease
The Company''s significant leasing arrangements are in respect of residential flats and office premises taken on cancellable lease. The aggregate amount of operating lease rent debited to statement of profit and loss during the year is Rs. 122 Lacs (Previous year Rs. 85 Lacs).
note 7 - Lease obligation- Finance Lease
Net carrying amount of carrying assets as at balance sheet date - Rs.17 Lacs (Previous year Rs.43 Lacs)
note 8 - Lease Rental
The Company has significant lease arrangement in respect of office premises given on lease. The aggregate amount of rent credited to statement of profit and loss account during the year is Rs.73 Lacs (Previous year Rs.72 Lacs)
note 9 - Balances of certain debtors, advances and creditors are subject to confirmation / reconciliation, if any. In the opinion of the Management such adjustment are not likely to be material.
note 10 - The Company has formed a Corporate Social Responsibility Committee (CSR) as required under Section 135 of the Companies Act, 2013. The Company is required to spend Rs. 46.64 Lacs as per Section 135(5). However, the Company has spent Rs.18.20 Lacs on the activities mentioned in Schedule VII to the Companies Act, 2013.
details of CsR spend for financial year 2015-16:
Total amount spent: Rs. 18.20 Lacs Amount unspent: Rs. 28.44 Lacs
note11 - Amounts below Rs. 0.49 Lac have been rounded off as per the rounding off norms of the Company.
note 12 - Financial statements for the previous year ended were audited by another firm of Chartered Accountants.
note 13 - The figures for the previous year are regrouped / re-arranged, wherever necessary.
Mar 31, 2015
Note 1- Background of the Company
Incorporated in 1951, Ador Welding Ltd. (AWL) is one of India's leading
player in the field of Welding Products, Technologies and Services. The
Company is also engaged in providing customized solutions for
multi-disciplinary projects and contracts related to Refineries, Oil &
Gas, Petrochemicals, Fertilizers, Steel Plants, Pharma, Water, other
chemical process industries, etc.
Note 2 - Contingent Liabilities not provided for
(Rs. in lacs)
Particulars Year ended Year ended
31st March, 2015 31st March, 2014
a) Disputed Sales Tax as the matters
are in appeal (advance paid Rs.31 lacs
Previous Year Rs.27 lacs) 287 279
b) Disputed Excise duties as the
matters are in appeal (advance paid
Rs.2 lacs; Previous Year Rs.2 lacs) 115 123
c) On account of bills discounted by
the Company 27 222
d) Bonds / Undertakings given by the
Company under Concessional duty /
exemption scheme / Waiver of
penalty to Customs Authorities. 96 90
e) Standby Letter of Credit issued to Bank
Hapoalim Ltd. / HDFC Bank Ltd.- Hongkong for
loans drawn / to be drawn by a subsidiary - 73
f) Other matters 152 110
Note 3 - Revenue expenditure incurred during the year on Research and
Development, through the natural heads of account, amounts to Rs. 307
lacs (Previous year Rs. 296 lacs) (including Depreciation Rs. 20 lacs;
Previous year Rs. 29 lacs) and Capital expenditure thereof amounts to
Rs. 46 lacs (Previous year Rs. 63 lacs).
C) Other Disclosures
1. Segments have been identified in line with the Accounting Standard
on Segment Reporting (AS - 17) taking into account the organisation
structure as well as differential risks and returns of these segments.
2. The Company has disclosed Business Segment as the primary segment.
3. Types of Products and Services in each Business Segment:
Business Segment Types of Products and Services
a) Consumables - Electrodes, Wires, Agency Items related to
consumables.
b) Equipment & - Equipment, Spares, cutting products and Agency Items
Project Engineering related to Equipment and Cutting Products & Design,
Engineering, Procurement and commissioning of Flares
Incinerators, Furnaces, etc.
4. Segment Revenues, Results, Assets and Liabilities include the
respective amounts identifiable to each of the segment and amounts
allocated on a reasonable basis.
Note 4 - Related Parties Disclosure A. Relationships
Relationship Name of the Person / Company
i. Where control exists
a) Holding Company : J. B. Advani & Co. Private Limited
b) Subsidiary Company Ador Welding Academy Private Limited
& Fellow subsidiaries Plasma Laser Technologies Ltd.
(Under Liquidation)
Plasma Laser Technologies, North America Inc.
(Under Liquidation)
Aluminium Hybrid Systems Ltd.
(Under Liquidation)
ii. Other related parties with whom transactions have taken place
during the year
a) Companies in which Holding Company has significant influence and
its associates :
Ador Powertron Limited Ador Fontech Limited Ador Multiproducts Limited
Mack Valves India Private Limited Ador Digatron Private Limited Ador
Green Energy Private Limited
b) Key Management Personnel Ms. A. B. Advani
Mr. S. M. Bhat
c) Relative of Director Mr. Ajit T. Mirchandani
Notes:
1. Related Party relationship is as identified by the Company and
relied upon by the Auditors.
2. The Company has issued Standby Letter of Credit to Bank Hapoalim
Limited and HDFC Bank Limited - Hongkong for Rs. Nil (Previous year Rs.
1,127 lacs) towards security for loan taken by M/s. Plasma Laser
Technologies Limited.
3. The Company has shared facility limits offered by HDFC Bank Limited
to the extent of Rs. 100 lacs by ear marking working capital funds in
favour of Ador Welding Academy Private Limited.
4. Considering the downturn of the operation, the Employees of Plasma
Laser Technologies Ltd. (PLT), had approached Israel Court in FY
2014-15 for the purpose of liquidation and considering the same, Israel
Court has appointed the Official Liquidator to evaluate various
options, including revival or liquidation. Hence, the management
believes that the Company has lost its control on the affairs and
assets of such subsidiary, as the same is now vested with such Official
Liquidator appointed by Israel Court. Further, the Management believes
that there are no claims expected on the Company on account of PLT.
Note 5 - Employee Benefits
The disclosures required as per Accounting Standard 15 - Employee
Benefits (Revised 2005), are as under: Brief description of the Plans:
The Company has various schemes for employee benefits such as provident
fund, superannuation and gratuity. In case of funded schemes, the funds
are administered through trustees / appropriate authorities. The
Company's defined contribution plans are superannuation and provident
fund and the Company has no further obligation beyond making the
contributions. The Company's defined benefit plans consist of provident
fund and gratuity. The employees of the Company are entitled to
compensated absences as per the Company's policy.
I. Defined Contribution Plans:
(i) Provident Fund
(ii) Superannuation Fund
(iii) Employees State Insurance Fund
During the year, the Company has recognized the following amounts in
the Statement of Profit and Loss*:
*included in Note 27- 'Employee Benefits Expense'
II. Defined Benefit Plans (Disclosure based on actuarial reports):
(a) Contribution to Gratuity Fund (Funded Scheme)
(x) The Liability for compensated absence as at 31st March 2015
aggregates to Rs. 183 lacs as against Rs. 150 lacs in the previous
year.
Note 44 - Lease arrangements - Operating Lease
The Company's significant leasing arrangements are in respect of
residential flats and office premises taken on cancellable lease. The
aggregate amount of operating lease rent debited to Statement of Profit
and Loss during the year is Rs. 85 lacs (Previous year Rs. 79 lacs).
Note 6 - Lease Obligation - Finance Lease
Net carrying amount of carrying assets as at Balance Sheet date - Rs.
42 lacs (Previous year Rs. 140 lacs). The minimum future lease rentals
and present value of minimum lease rentals payable are as follows:
Note 7 - Amounts below Rs 0.49 lac have been rounded off as per
rounding off norms of the Company.
Note 8 - The Figures for the previous year are regrouped / re-arranged, wherever necessary.
Mar 31, 2014
Note 1 - Background of the Company
Incorporated in 1951, Ador Welding Ltd. (AWL) is one of India''s leading
players in the field of Welding Products, Technologies & Services. The
Company is also engaged in providing customized solutions for
multi-disciplinary projects and contracts related to Refineries, Oil &
Gas, Petrochemicals, Fertilizers, Steel Plants, Pharma, Water & other
chemical process industries.
Note 2 - Contingent Liabilities not provided for
(Rupees in lacs)
Particulars As at As at
31st March,2014 31st March,2013
a) Disputed Sales Tax as the
matters are in appeal
(advance paid Rs. 27 lacs;
Previous Year Rs. 9 Lacs) 279 68
b) Disputed Excise duties as
the matters are in appeal
(advance paid Rs. 2 lacs;
Previous Year Rs. 2 lacs) 123 115
c) On account of bills
discounted by the Company 222 130
d) Bonds / Undertakings given
by the Company under Concessional
duty / exemption scheme / Waiver of
penalty to Customs Authorities 90 110
e) Standby Letter of Credit issued
to Bank Hapoalim Ltd. /
HDFC Bank Ltd. - Hongkong for
loans drawn / to be
drawn by a subsidiary 73 187
f) Other matters 110 83
Note 3 - Revenue expenditure incurred during the year on Research &
Development, through the natural heads of account, amounts to Rs. 296
Lacs (Previous Year Rs. 449 Lacs) (including Depreciation Rs. 29 Lacs;
Previous Year Rs. 31 Lacs) and Capital expenditure thereof amounts to
Rs. 63 Lacs (Previous Year Rs. 11 Lacs).
Note 4 - Exceptional Items
a) Investment in Plasma Laser Technologies Ltd (PLT) (Subsidiary).
The Company has an investment of Rs. 927 Lacs (PY Rs. 543 Lacs) in PLT
and has also issued Standby Letter of Credits (SBLC) to Banks
aggregating to Rs. 1,127 Lacs (PY Rs. 187 Lacs) for loans drawn / to be
drawn by PLT.
PLT has incurred losses since the date of acquisition. The accumulated
losses of PLT as at 31st March 2014 exceeded its net worth. The Company
has evaluated its investment for the purpose of determination of
potential diminution in value and based on such evaluation and
considering the underlying factors including downturn in business and
decrease in related activities, has recognized a provision for
diminution in the value of investment in PLT as at 31st March 2014
amounting to Rs. 927 Lacs and has also provided for the SBLC amounting
to Rs. 1,054 Lacs (being the amount drawn by PLT) both of which have
been shown as exceptional items in the Statement of Profit and Loss
Account.
b) Surplus on sale of property of Rs 503 Lacs (Refer Note 39B(a))
Note 5 - Employee Benefits
a) An amount of Rs.113 Lacs (Previous year Rs. 130 Lacs) towards
defined contribution plans is recognised as expense in the Statement of
Profit and Loss.
b) The following table sets out the status of the gratuity plan as
required under AS 15 (Revised 2005) and the reconciliation of opening
and closing balances of the present value of the defined benefit
obligation:
Note 6 - Lease arrangements - Operating Lease
The Company''s significant leasing arrangements are in respect of
residential flats and office premises taken on cancellable lease. The
aggregate amount of operating lease rent debited to Statement of Profit
and Loss during the year is Rs 79 Lacs (Previous year Rs. 89 Lacs)
Note 7 - Lease Obligation - Finance Lease
Net carrying amount of carrying assets as at Balance Sheet date -
Rs.141 Lacs (Previous year Rs 170 Lacs)
Note 8 - Amounts below Rs 0.50 lac have been rounded off as per
rounding off norms of the Company.
Note 9 - The Figures for the previous year are regrouped/
re-arranged, wherever necessary.
Mar 31, 2013
Note 1 A - Rights, preferences and restrictions attached to shares
The Company has only one class of shares referred fo as equity shares
having a par (face) value of Rs. 10/- per share. Each shareholder is
eligible for one vote per share held. The dividend proposed by the
Board of Directors is subject to the approval of the shareholders in
the ensuing Annual General Meeting, except in case of interim dividend.
In the event of liquidation of the Company, the equity shareholders
will be entitled to receive the remaining assets of the Company, after
distribution of all the preferential amounts, in proportion to their
shareholding.
Note 2 - In the opinion of the Management, no item of current assets,
including inventories has a value on realisation in the ordinary course
of business, which is less than the amount at which it is stated in the
Balance Sheet.
Note 3 - Revenue expenditure incurred during the year on Research and
Development, through the natural heads of account, amounts to Rs.
448.76 lacs (Previous year Rs. 253.62 lacs) (including Depreciation Rs.
30.80 lacs; Previous year Rs. 36.66 lacs) and Capital expenditure
thereof amounts to Rs. 11.45 lacs (Previous year Rs. 64.27 lacs).
Note 4 - Employee Benefits
a) An amount of Rs,118.23 Lacs (Previous year Rs.106.86 lacs) towards
Defined Contribution Plans is recognised as expense in the Profit and
Loss Account.
b) The following table sets out the status of the gratuity plan as
required under AS 15 (Revised 2005) and the reconciliation of opening
and closing balances of the present value of the Defined Benefit
Obligation.
Mar 31, 2012
Note 1 - Rights, preferences and restrictions attached to shares
The Company has only one class of shares referred to as equity shares
having a par (face) value of Rs. 10/- per share. Each shareholder is
eligible for one vote per share held. The dividend proposed by the
Board of Directors is subject to the approval of the shareholders in
the ensuing Annual General Meeting, except in case of interim dividend.
In the event of liquidation of the Company, the equity shareholders
will be entitled to receive the remaining assets of the Company, after
distribution of all the preferential amounts, in proportion to their
shareholding.
(i) Working Capital facilities from Banks are secured by hypothecation
of stocks and other tangible movable assets of the Company, both
present & future and book debts in favour of Bank of Baroda and HDFC
Bank Limited. The said facilities are also secured by way of pari-passu
charge on the entire plant and machinery and other moveable fixed
assets of the Company and on the land & building at the Company's
Silvassa Unit.
(ii) Guarantees given by banks to third parties amounting to Rs.848.05
lacs; (Previous year Rs. 400.48 lacs) on behalf of the Company are
secured against securities mentioned in (i) above.
Note 2 - Contingent Liabilities not provided for
(Rupees in lacs)
Particulars 31.03.2012 31.03.2011
a) Disputed Sales Tax as the matters are
in appeal (advance paid Rs.9.21 lacs;
Previous year Rs.9.21 lacs) 67.52 67.52
b) Disputed Excise duties as the matters
are in appeal (advance paid Rs.3.15
lacs; Previous year Rs.3.15 lacs) 113.78 103.39
c) On account of bills discounted by the
Company 999.98 Nil
d) Bonds / Undertakings given by the Company
under Concessional duty / exemption
scheme to Customs Authorities. 78.79 147.28
e) Other matters 72.09 74.86
Note 3 - Estimated amount of Contracts remaining to be executed on
Capital Account and not provided for (Net of advances) 312.90 215.65
Note 4 - In the opinion of the Management, no item of current assets,
including inventories has a value on realisation in the ordinary course
of business, which is less than the amount at which it is stated in the
Balance Sheet.
Note 5 - Revenue expenditure incurred during the year on Research and
Development, through the natural heads of account, amounts to Rs.253.62
lacs (Previous year Rs. 170.00 lacs) (including Depreciation Rs. 36.66
lacs; Previous year Rs.30.97 lacs) and Capital expenditure thereof
amounts to Rs.64.27 lacs (Previous year Rs.69.82 lacs).
C. Other Disclosures:
1. Segments have been identified in line with the Accounting Standard
on Segment Reporting (AS - 17) taking into account the organisation
structure as well as differential risks and returns of these segments.
2. The Company has disclosed Business Segment as the primary segment.
4. The Segment Revenues, Results, Assets and Liabilities include the
respective amounts identifiable to each of the segment and amounts
allocated on a reasonable basis.
Note 6 - Employee Benefits
a) An amount of Rs. 106.86 lacs (Previous year Rs.98.77 lacs) towards
defined contribution plans is recognised as expense in the Profit and
Loss Account.
c) Provident Fund Liability
In case of certain employees, the Provident Fund contribution is made
to a trust administered by the Company. In terms of the guidance note
issued by the Institute of Actuaries of India, the actuary has provided
a valuation of Provident Fund liability based on the assumptions listed
below. The assumptions used in determining the present value obligation
of the interest rate guarantee under deterministic approach are:-
Remaining terms of maturity - 7 years Expected guaranteed interest rate
- 8.25% Discount rate for the remaining term to maturity of interest
portfolio - 8.60%* takes into account the inflation, promotions and
other relevant factors.
Note 7 - The financial statements for the year ended 31st March,2011
had been prepared as per the then applicable, pre-revised Schedule VI
to the Companies Act 1956. Consequent to the notification under the
Companies Act,1956,the financial statements for the year ended 31st
March,2012 are prepared under revised Schedule VI. Accordingly, the
previous year figures have also been reclassified to conform to this
year's classification.
Note 8 - Significant accounting policies and practices adopted by the
Company are as disclosed in the Statement annexed to these Financial
Statements as Annexure I.
Mar 31, 2011
1) Secured Loans and Guarantees:
(i) Working Capital facilities from Banks are secured by hypothecation
of stocks and other tangible movable assets of the Company, both
present and future and book debts in favour of Bank of Baroda and HDFC
Bank Limited. The said facilities are also secured by way of pari-passu
charge on the entire plant and machinery and other moveable fixed
assets of the Company and on the land & building at the Companys
Silvassa Unit.
(ii) Guarantees given by banks to third parties amounting to Rs400.48
lacs; (previous year Rs379.51 lacs) on behalf of the Company are secured
against securities mentioned in (i) above.
(Rupees in lacs)
2) Contingent Liabilities not provided for : 31.03.2011 31.03.2010
a) Disputed income tax as the matters
are in appeal (advance paid RsNil; previous
year Rs14.38 lacs) Nil 14.38
b) Disputed Sales Tax as the matters are
in appeal (advance paid Rs9.21 lacs; previous
year Rs9.21 lacs) 67.52 67.52
c) Disputed Excise duties as the matters
are in appeal (advance paid Rs3.15 lacs;
previous year Rs3.15 lacs) 103.39 118.38
d) On account of bills discounted by the
Company Nil Nil
e) Bonds / Undertakings given by the
Company under concessional duty / exemption
scheme to Customs Authorities. 147.28 294.31
f) Other matters 74.86 Nil
3) Estimated amount of Contracts remaining
to be executed on Capital Account and not
provided for (Net of advances) 215.65 13.00
4) a) Sundry Creditors in Schedule ÃKÃ to the Accounts include; (i)
Rs541.72 lacs (previous year Rs249.95 lacs) due to micro and small
enterprises registered under The Micro, Small and Medium Enterprises
Development Act, 2006 (MSME); and (ii) Rs824.90 lacs (previous year
Rs720.21 lacs) due to other creditors. During the year no amounts have
been paid beyond the appointed day in terms of the MSME and, there are
no amounts paid towards interest. Further, there is no interest accrued
/ payable under the said Act at the close of the year. b) The
disclosure in (a) above is based on the information available with the
Company regarding the status of suppliers under the MSME.
5) In the opinion of the Management, no item of current assets,
including inventories has a value on realisation in the ordinary course
of business, which is less than the amount at which it is stated in the
Balance Sheet.
6) Revenue expenditure incurred during the year on Research and
Development, through the natural heads of account, amounts to Rs170 lacs
(previous year Rs146.72 lacs) (including Depreciation Rs30.97 lacs;
previous year Rs22.06 lacs) and Capital expenditure thereof amounts to
Rs69.82 lacs (previous year Rs0.63 lac).
11) B) i) Turnover quantity is derived on the basis of opening stock
plus production and purchases for trading activity, less physical
quantities of closing stock.
ii) Annual Installed Capacity in Note 11(A) above is as certified by
the Managing Director, and being a technical matter, is accepted by the
Auditors as correct.
C) Other Disclosures:
1. Segments have been identified in line with the Accounting Standard
on Segment Reporting (AS Ã 17) taking into account the organisation
structure as well as differential risks and returns of these segments.
2. The Company has disclosed Business Segment as the primary segment.
3. Types of Products and Services in each Business Segment:
4. The Segment Revenues, Results, Assets and Liabilities include the
respective amounts identifiable to each of the segment and amounts
allocated on a reasonable basis.
18) Fixed Assets under Schedule ÃE to the Accounts, include net book
value of assets at the Companys Ahmednagar division aggregating Rs72.57
lacs, which have been retired from active use. As per the estimates
made by the Management, the net realisable value of such fixed assets
would atleast be equal to the carrying value of the fixed assets.
Hence, in the opinion of the Management, no expected loss needs to be
recognised.
19) Employee Benefits:
An amount of Rs77.58 lacs (previous year Rs42.11 lacs) towards defined
contribution plans is recognised as expense in the Profit and Loss
Account.
The following table sets out the status of the gratuity plan as
required under AS-15 (Revised 2005) and the reconciliation of opening
and closing balances of the present value of the defined benefit
obligation:
*The estimate of future salary increases considered in actuarial
valuation takes into account inflation, seniority, promotion and other
relevant factors.
Note : During the year, the Management of Gratuity fund has been
outsourced to Life Insurance Corporation of India.
22) Previous years figures have been regrouped wherever necessary.
Mar 31, 2010
1) Secured Loans and Guarantees:
i) Working Capital facilities from Banks are secured by hypothecation
of stocks and other tangible movable assets of the Company, both
present and future and book debts in favour of Bank of Baroda and HDFC
Bank Limited. The said facilities are also secured by way of pari-passu
charge on the entire plant and machinery and other moveable fixed
assets of the Company and on the land & building at the Companys
Silvassa Unit.
ii) Guarantees given by banks to third parties amounting to Rs.379.51
lacs; (Previous year Rs. 315.89 lacs) on behalf of the Company are
secured against securities mentioned in (i) above.
(Rupees in lacs)
2) Contingent Liabilities
not provided for : 31.03.2010 31.03.2009
a) Disputed income tax as the matters
are in appeal (advance paid
Rs.14.38 lacs; Previous Year
Rs.15.65 lacs) 14.38 15.65
b) Disputed Sales Tax as the matters
are in appeal (advance paid Rs.9.21
lacs; Previous Year Rs.9.21 lacs) 67.52 67.52
c) Disputed Excise duties as the
matters are in appeal (advance paid
Rs.3.15 lacs; Previous Year Rs.1 lac) 118.38 117.99
d) On account of bills discounted by
the Company Nil 105.26
e) Bonds/Undertakings given by the
Company under concessional
duty/exemption scheme to Customs
Authorities. 294.31 232.29
3) Estimated amount of Contracts
remaining to be executed on Capital
Account and not provided for
(Net of advances) 13.00 177.57
4) a) Sundry Creditors in Schedule ÃJÃ to the Accounts include (i)
Rs.0.99 lac (Previous Year Rs.Nil) due to micro and small enterprises
registered under The Micro, Small and Medium Enterprises Development
Act, 2006 (MSME); and (ii) Rs. 969.17 lacs (Previous Year Rs.1,296.59
lacs) due to other creditors. During the year no amounts have been
paid beyond the appointed day in terms of the MSME and, there are
no amounts paid towards interest. Further, there is no interest
accrued / payable under the said Act at the close of the year.
b) The disclosure in (a) above is based on the information available
with the Company regarding the status of suppliers under the MSME.
5) In the opinion of the Management, no item of current assets,
including inventories has a value on realisation in the ordinary course
of business, which is less than the amount at which it is stated in the
Balance Sheet.
6) Revenue expenditure incurred during the year on Research and
Development, through the natural heads of account, amounts to Rs 146.72
lacs (Previous year Rs. 77.91 lacs) (including Depreciation Rs.22.06
lacs; Previous year Rs. 25.57 lacs) and Capital expenditure thereof
amounts to Rs.0.63 lac (Previous year Rs. 0.52 lac).
Notes : 1. The Companys products are exempt from licencing
requirements under New industrial Policy in terms of Notification
No.477 (E) dated 25th July 1991 and F.No. 10/43/91-LP dated 02nd August
1991.The Company has registered all its products (including existing
products) with Secretariat for Industrial Assistance.
2. Opening Stock,Turnover,Closing Stock in respect of Goods for Resale
are included in respective catagories in item no.1 to 3
3. Figures in bracket indicate figures relating to the previous year.
4. Figures have been regrouped wherever necessary.
11) B) i) Turnover quantity is derived on the basis of opening stock
plus production and purchases for trading activity, less physical
quantities of closing stock.
ii) ÃAnnual Installed Capacity in Note 11(A) is as certified by the
Managing Director, and being a technical matter, is accepted by the
Auditors as correct.
C) Other Disclosures:
1. Segments have been identified in line with the Accounting Standard
on Segment Reporting (AS Ã 17) taking into account the organisation
structure as well as differential risks and returns of these segments.
2. The Company has disclosed Business Segment as the primary segment.
7) Disclosure in respect of derivative instruments:
a) Derivative instruments for hedging purposes,outstanding : Nil
8) Fixed Assets under Schedule D to the Accounts, include net book
value of assets at the Companys Ahmednagar division aggregating Rs.
76.84 lacs, which have been retired from active use. As per the
estimates made by the Management, the net realisable value of such
fixed assets would atleast be equal to the carrying value of the fixed
assets. Hence, in the opinion of the Management, no expected loss needs
to be recognised.
9) Previous years figures have been regrouped wherever necessary
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