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Notes to Accounts of Bharat Wire Ropes Ltd.
Mar 31, 2025
k) Provisions, contingent liabilities and contingent assets
Provisions represent liabilities for which the amount or timing is uncertain. Provisions are recognized when the
Company has a present obligation (legal or constructive), as a result of past events, and it is probable that an
outflow of resources, that can be reliably estimated, will be required to settle such an obligation.
If the effect of the time value of money is material, provisions are determined by discounting the expected future
cash flows to net present value using an appropriate pre-tax discount rate that reflects current market assessments
of the time value of money and, where appropriate, the risks specific to the liability. Unwinding of the discount is
recognized in the statement of profit and loss as a finance cost. Provisions are reviewed at each reporting date and
are adjusted to reflect the current best estimate.
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the
occurrence or non occurrence of one or more uncertain future events beyond the control of the Company or a
present obligation that is not recognised because it is not probable that an outflow of resources will be required to
settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot
be recognised because it cannot be measured reliably. The Company does not recognize a contingent liability but
discloses its existence in the financial statements.
Contingent assets are not recognised but disclosed in the financial statements when an inflow of economic benefits
is probable.
l) Employee benefit schemes
(i) Short-term employee benefits
Employee benefits payable wholly within twelve months of receiving employee services are classified as
short-term employee benefits. These benefits include salaries and wages, performance incentives and
compensated absences which are expected to occur in next twelve months. The undiscounted amount of
short-term employee benefits to be paid in exchange for employee services is recognised as an expense as the
related service is rendered by employees.
(ii) Post-employment benefits
Defined contribution plan
Post employment and other long-term benefits are recognized as an expense in the statement of Profit and
Loss of the year in which the employees has rendered services. The Expense is recognized at the present value
of the amount payable determined using actuarial valuation technique. Actual gain and losses in respect of
post employment and other long term benefits are recognized in the statement of Profit and loss.
Payments to defined contribution retirement benefits schemes are charged as expenses as and when they fall due.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.
Financial assets
Initial recognition and measurement
All financial assets are initially measured at fair value. Transaction costs that are attributable to the acquisition of
the financial assets (other than financial assets at fair value through profit and loss) are added to or deducted from
the fair value measured on initial recognition of financial asset. The transaction costs directly attributable to the
acquisition of financial assets at fair value through profit and loss are immediately recognised in the statement of
profit and loss. Purchases or sales of financial assets that require delivery of assets within a time frame established
by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date
that the Company commits to purchase or sale the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories as below:
Debt instruments at amortised cost
A ''debt instrument'' is measured at the amortised cost if both the following conditions are met:
a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash
flows, and
b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal
and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective
interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income
in the statement of profit and loss. The losses arising from impairment are recognised in the statement of profit and
loss. This category generally applies to trade and other receivables.
Debt instrument at Fair Value through Other Comprehensive Income
A ''debt instrument'' is classified as at the FVOCI if both of the following criteria are met:
a) The objective of the business model is achieved both by collecting contractual cash flows and selling the
financial assets, and
b) The asset''s contractual cash flows represent SPPI.
Debt instruments included within the FVOCI category are measured initially as well as at each reporting date
at fair value. Fair value movements are recognized in other comprehensive income (OCI). However, the
Company recognizes interest income, impairment losses and reversals and foreign exchange gain or loss in the
statement of profit and loss. On derecognition of the asset, cumulative gain or loss previously recognized in
other comprehensive income is reclassified from equity to the statement of profit and loss. Interest earned
whilst holding fair value through other comprehensive income debt instrument is reported as interest income
using the EIR method.
Debt instrument at Fair Value through Profit and Loss
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for
categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.
In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost or
FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a
measurement or recognition inconsistency (referred to as ''accounting mismatch''). The Company has designated its
investments in debt instruments as FVTPL. Debt instruments included within the FVTPL category are measured at
fair value with all changes recognized in the statement of profit and loss.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is
primarily derecognised when the rights to receive cash flows from the asset have expired.
Impairment of financial assets
The Company follows ''simplified approach''as per Ind AS 109 where the company provides for losses based on
lifetime Expected Credit losses at each reporting date right from initial recognition.
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through statement of profit
and loss, loans and borrowings, payables or as derivatives designated as hedging instruments in an effective hedge, as
appropriate.
All financial liabilities are recognised initially at fair value and, in the case of financial liabilities at amortised cost, net
of directly attributable transaction costs.
The Company''s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts,
financial guarantee contracts and derivative financial instruments.
Subsequent measurement
Financial Liabilities at Fair Value through Profit and Loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as
held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes
derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge
relationships as defined by Ind AS 109.
Gains or losses on liabilities held for trading are recognised in the profit or loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the
initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair
value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/ loss are not
subsequently transferred to profit or loss. However, the Company may transfer the cumulative gain or loss within
equity. All other changes in fair value of such liability are recognised in the statement of profit and loss. The Company
has designated forward exchange contracts as at fair value through profit or loss.
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the
effective interest rate (EIR) method. Gains and losses are recognised in statement of profit and loss when the liabilities
are derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When
an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms
of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of
the original liability and the recognition of a new liability. The difference in the respective carrying amounts is
recognised in the statement of profit and loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated balance sheet if
there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net
basis, to realise the assets and settle the liabilities simultaneously.
n) Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and in hand and short-term deposits with an
original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as
defined above.
o) Cash dividend distributions to equity holders
The Company recognises a liability to make cash distributions to equity holders when the distribution is authorised and
the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is
authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.
p) Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss before OCI for the year attributable to equity
shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of
calculating diluted earnings per share, the net profit or loss before OCI for the period attributable to equity shareholders
and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive
potential equity shares.
q) Share-based payment arrangement
Equity-settled share-based payments to employees are measured at the fair value of the equity instruments/ option at
the grant date.
The fair value determined at the grant date of the equity settled share-based payments is expensed on a straight line
basis over the vesting period, based on the Company''s estimate of equity instruments that will eventually vest, with a
corresponding increase in equity. At the end of each reporting period, the Company revises its estimate of the number
of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in
statement of profit and loss such that the cumulative expense reflects the revised estimate, with a corresponding
adjustment to the share options outstanding reserve.
r) Segment Reporting - Identification of Segments
An operating segment is a component of the Company that engages in business activities from which it may earn
revenues and incur expenses, whose operating results are regularly reviewed by the company''s chief operating
decision maker to make decisions for which discrete financial information is available. Based on the management
approach as defined in Ind AS 108, the chief operating decision maker evaluates the Company''s performance and
allocates resources based on an analysis of various performance indicators by operating segments.
s) Current/Non current classification
An asset is considered as current when it is:
⢠Expected to be realized or intended to be sold or consumed in normal operating cycle, or
⢠Expected to be realized within twelve months after the reporting period, or
⢠Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months
after the reporting period.
All other assets are classified as non-current.
A liability is considered as current when it is:
⢠Expected to be settled in normal operating cycle, or
⢠Due to be settled within twelve months after the reporting period, or
⢠There is no unconditional right to defer the settlement ofthe liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
t) Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of
transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and
item of income or expenses associated with investing or financing cash flows. The cash flows from operating,
investing and financing activities ofthe Company are segregated.
u) Use of estimates and critical accounting judgements
The preparation of the financial statements in conformity with Ind AS requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets,
liabilities, income, expenses and disclosures of contingent assets and liabilities at the date ofthese financial statements
and the reported amounts of revenues and expenses for the years presented. Actual results may differ from these
estimates under different assumptions and conditions.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and future periods affected.
Notes
(I) Security:
Following securities have been provided ranking parripassu between lenders for Rupee Term Loans and ECB along with working Capital
borrowings mentioned in Note no. 19 given hereinafter :
a) First charge by way hypothecation on all the tangible Fixed Assets including moveable plant and machinery, machinery spares, tools
and accessories, Equipmentâs, Electrical Installations, furniture, fixtures, vehicles, Office Equipmentâs and all other moveable assets,
both present and future
b) First charge by way mortgage on all the Fixed Assets including immovable properties land and building located at (i) Plot no. 1 and
4, Atgaon Industrial Complex, Village: Atgaon, Taluka Shahpur, Mumbai Nasik Road, Dist. Thane, Maharashtra of the company and
(ii) Plot No. 4 at Chalisgaon MIDC, Maharashtra.
c) First charge by way hypothecation on all the current assets including but not limited to stocks of raw materials, work in progress,
semi-finished and finished goods, consumable stores including book debts, bill whether documentary or clean, outstanding monies,
receivables of the Borrower, both present and future;
d) First charge over all accounts, including, the Trust and Retention Account and the Sub-Accounts (or any account in substitution
thereof) and all funds from time to time deposited therein,
e) A first charge by way of pledge of 1,43,98,096 shares of Bharat Wire Ropes Ltd. held by Gyanshankar Investments And Trading
Company Private Limited
f) Personal Guarantees of Managing Director and Jt. Managing Director
g) Corporate Guarantee of Gyanshankar Investment and Trading Company Private Limited.
(ii) Security:
The security is by hypothetication of respective Vehicle
(iii) Repayment Schedule:
Rupee Term Loans ECB are repayable in 46 quarterly structured Instalments commenced from 31-12-20
(iv) Repayment Schedule:
The loan is repayable in 60 equated monthly installments commenced from 05.05.2023.
(v) The Govt. of Maharashtra under Package Scheme of Incentive has extended to the Company, the incentive of sales tax deferral scheme
pursuant to which the sales tax attributable to the sales effected out of production for a period of 8 Years 9 Months from 01.05.2003 to
31.01.2012 is deferred (interest free). The deferred sales tax in respect of above is based upon the sales tax returns. The amount for each year
deferred is payable in 5 equal annual instalments from Financial Year 2014-15 to 2025-26.
31) Financial Risk Management
The Companyâs activities expose it to credit risk, liquidity risk and market risk.
(I) Credit risk
Credit risk is the risk that counterparty will not meet its obligation under a financial instrument or customer contract, leading
to a financial loss. The Company is exposed to credit risk from its operating activities primarily trade receivables.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant
increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase
in credit risk the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default
as at the date of initial recognition.
a) Trade receivables
Credit risk has been managed by the Company through credit approvals, establishing credit limits and continuously
monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.
Outstanding customer receivables are regularly monitored. The company uses a simplified approach as per Ind AS 109 and an
impairment analysis is performed at each reporting date on an individual basis for significant clients.
(II) Liquidity risk
The Company maintain a balance between continuity of funding and flexibility through the use of bank overdrafts and bank
loans (comprising the undrawn borrowing facilities below) by continuously monitoring forecast and actual cash flows and
matching the maturity profiles of financial assets and liabilities.
b) Maturities of financial liabilities
The tables below analyse the Companyâs financial liabilities into relevant maturity groupings based on their contractual
maturities for
All non derivative financial liabilities and derivative financial instruments for which the contractual maturities are essential
for an understanding of the timing of the cash flows
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their
carrying balances as the impact of discounting is not material.
Note : Explanation for change in ratio by more than 25%
i. Net Profit has reduced on account of reduction net sales realisation, increase in manpower cost and fuel cost.
ii Return on Capital employed reduced on account of reduction in profitability and increase in net worth.
iii Return on equity reduced on account of reduction in profitability
iv Return on Investments variation is on account of movement in share price.
v Current ratio decreased on account of increasse in utilisation of short term borrowings and availment of extra credit from
suppliers to fund increae of current assets.
vi Trade Receivable Turnover ratio variation is on account of increase of debtors at the year end.
46) Additional Regulatory Information Required by Schedule III
i. The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for
holding any benami property under the Benami Transactions (Prohibitions) Act, 1988 (45 of 1988) and the rules made
thereunder.
ii. The company has not been declared wilful defaulter by any bank or financial institution or government or any government
authority.
iii. The company does not have any transactions with companies struck- off under section 248 of the Companies Act, 2013 or
section 560 of Companies Act, 1956.
iv. The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.
v. 1. The company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Company (Ultimate Beneficiaries) or
b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries
2. The company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the group shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Company (Ultimate Beneficiaries) or
b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries
vi There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.
vii The Company have not any such transaction which is not recorded in the books or 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.
47) Previous year''s figures have been regrouped or reclassified to conform with the current years'' presentation wherever considered
necessary.
As per our report of even date attached
FOR NGS & CO. LLP. For and on behalf of the Board of Directors
Chartered Accountants
Firm Registration No 119850W
Ashok A. Trivedi Managing Director Whole Time Director Chief Executive °fficer
Partner Murarilal Mittal Sushil Sharda Mahender Singh Arora
Membership No : 042472 DIN: 00010689 DIN: 03117481 PAN : AABPA9704C
Date. 19th May 2025 Chief Financial Officer ComPany Secretary
Date: * ^ 2025 Rakesh Kumar Jain Govinda Soni
place: Mumbai PAN: ABBPJ5834H PAN: CCFPS0647Q
UDIN: 25042472BMGYYX5085
Mar 31, 2024
k) Provisions, contingent liabilities and contingent assets
Provisions represent liabilities for which the amount or timing is uncertain. Provisions are recognized when the Company has a present obligation (legal or constructive), as a result of past events, and it is probable that an outflow of resources, that can be reliably estimated, will be required to settle such an obligation.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows to net present value using an appropriate pre-tax discount rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Unwinding of the discount is recognized in the statement of profit and loss as a finance cost. Provisions are reviewed at each reporting date and are adjusted to reflect the current best estimate.
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
Contingent assets are not recognised but disclosed in the financial statements when an inflow of economic benefits is probable.
l) Employee benefit schemes
(i) Short-term employee benefits
Employee benefits payable wholly within twelve months of receiving employee services are classified as short-term employee benefits. These benefits include salaries and wages, performance incentives and compensated absences which are expected to occur in next twelve months. The undiscounted amount of short-term employee benefits to be paid in exchange for employee services is recognised as an expense as the related service is rendered by employees.
(ii) Post-employment benefits Defined contribution plan
Post employment and other long-term benefits are recognized as an expense in the statement of Profit and Loss of the year in which the employees has rendered services. The Expense is recognized at the present value of the amount payable determined using actuarial valuation technique. Actual gain and losses in respect of post employment and other long term benefits are recognized in the statement of Profit and loss.
Payments to defined contribution retirement benefits schemes are charged as expenses as and when they fall due.
m) Financial instrument
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial assets
Initial recognition and measurement
All financial assets are initially measured at fair value. Transaction costs that are attributable to the acquisition of the financial assets (other than financial assets at fair value through profit and loss) are added to or deducted from the fair value measured on initial recognition of financial asset. The transaction costs directly attributable to the acquisition of financial assets at fair value through
profit and loss are immediately recognised in the statement of profit and loss. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sale the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories as below:
Debt instruments at amortised cost
A ''debt instrument'' is measured at the amortised cost if both the following conditions are met:
a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the statement of profit and loss. The losses arising from impairment are recognised in the statement of profit and loss. This category generally applies to trade and other receivables.
Debt instrument at Fair Value through Other Comprehensive Income
A ''debt instrument'' is classified as at the FVOCI if both of the following criteria are met:
a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and
b) The asset''s contractual cash flows represent SPPI.
Debt instruments included within the FVOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in other comprehensive income (OCI). However, the Company recognizes interest income, impairment losses and reversals and foreign exchange gain or loss in the statement of profit and loss. On derecognition of the asset, cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to the statement of profit and loss. Interest earned whilst holding fair value through other comprehensive income debt instrument is reported as interest income using the EIR method.
Debt instrument at Fair Value through Profit and Loss
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.
In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ''accounting mismatch''). The Company has designated its investments in debt instruments as FVTPL. Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the statement of profit and loss.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognised when the rights to receive cash flows from the asset have expired.
Impairment of financial assets
The Company follows ''simplified approach''as per Ind AS 109 where the company provides for losses based on
lifetime Expected Credit losses at each reporting date right from initial recognition.
Financial liabilities
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through statement of profit and loss, loans and borrowings, payables or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case offinancial liabilities at amortised cost, net of directly attributable transactioncosts.
The Company''s financial liabilities include trade and other payables, loansand borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments.
Subsequent measurement
Financial Liabilities at Fair Value through Profit and Loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109.
Gains or losses on liabilities held for trading are recognised in the profit or loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated asFVTPL, fair value gains/ losses attributable to changes in own credit riskare recognized in OCI. These gains/ loss are not subsequently transferred to profit or loss. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the statement of profit and loss. The Company has designated forward exchange contracts as at fair value through profit or loss.
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate (EIR) method. Gains and losses are recognised in statement of profit and loss when the liabilities are derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
n) Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and in hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above.
o) Cash dividend distributions to equity holders
The Company recognises a liability to make cash distributions to equity holders when the distribution is authorised and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.
p) Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss before OCI for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss before OCI for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive
potential equity shares.
q) Share-based payment arrangement
Equity-settled share-based payments to employees are measured at the fair value of the equity instruments/ option at the grant date.
The fair value determined at the grant date of the equity settled share-based payments is expensed on a straight line basis over the vesting period, based on the Company''s estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in statement of profit and loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the share options outstanding reserve.
r) Segment Reporting - Identification of Segments
An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the company''s chief operating decision maker to make decisions for which discrete financial information is available. Based on the management approach as defined in Ind AS 108, the chief operating decision maker evaluates the Company''s performance and allocates resources based on an analysis of various performance indicators by operating segments.
s) Current/Non current classification
An asset is considered as current when it is:
⢠Expected to be realized or intended to be sold or consumed in normal operating cycle, or
⢠Expected to be realized within twelve months after the reporting period, or
⢠Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is considered as current when it is:
⢠Expected to be settled in normal operating cycle, or
⢠Due to be settled within twelve months after the reporting period, or
⢠There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
t) Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
u) Use of estimates and critical accounting judgements
The preparation of the financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, expenses and disclosures of contingent assets and liabilities at the date of these financial statements and the reported amounts of revenues and expenses for the years presented. Actual results may differ from these estimates under different assumptions and conditions.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and future periods affected.
Note:
The Company has issued unrated unlisted unsecured Compulsory Convertible Preference Shares (CCPS) having face value Rs. of Rs 10/- each at a premium of Rs 99,990 per shares to the extent of Rs. 382.66 crores to lenders as per sanction of resolution Plan.
The tenure of said CCPS is 20 years from the date of allotment. Such CCPS shall be convertible any time after a period of 13 years from the date of allotment. However, from 13 to 20 years from allotment date, 1/8th of outstanding at the end of 12th year to be bought by the Promoters from the existing holders or converted into Equity shares each year only after the payment of the outstanding under Restructured Loan only. At the time of conversion, price of CCPS shall be determined as per SEBI ICDR, RBI regulations, Companies Act and/ or any other regulations applicable. The aggregate value of the Equity shares issued at the time of conversion shall not be less than the aggregate amount of face value and the premium for the securities. The number of Equity Shares to be issued at the time of conversion shall be determined accordingly.
Since the no. of shares to be allotted at the time of conversion is not fixed in the agreement, the nature of this instrument is Compound Financial Instrument(CFI). However, in opinion of the management, since there is no contractual obligation for cash outflow under this agreement except the repayment of sustainable debt portion which is disclosed as financial liability in books of the Company, the value of liability component of this CFI would be Nil. Accordingly, the entire amount of fair value of CFI, Rs. 382.66 Crores which is the transaction price, is determined as the value of equity component and has been presented under âOther Equityâ in the balance sheet. These assumptions for value determination have been relied upon by the Statutory Auditors.
Notes
(I) Security:
Following securities have been provided ranking parripassu between lenders for Rupee Term Loans and ECB along with working Capital borrowings mentioned in Note no. 19 given hereinafter
a) First charge by way hypothecation on all the tangible Fixed Assets including moveable plant and machinery, machinery spares, tools and accessories, Equipmentâs, Electrical Installations, furniture, fixtures, vehicles, Office Equipmentâs and all other moveable assets, both present and future;
b) First charge by way mortgage on all the Fixed Assets including immovable properties land and building located at (i) Plot no. 1 and 4, Atgaon Industrial Complex, Village: Atgaon, Taluka Shahpur, Mumbai Nasik Road, Dist. Thane, Maharashtra of the company and (ii) Plot No. 4 at Chalisgaon MIDC, Maharashtra.
c) First charge by way hypothecation on all the current assets including but not limited to stocks of raw materials, work in progress, semifinished and finished goods, consumable stores including book debts, bill whether documentary or clean, outstanding monies, receivables of the Borrower, both present and future;
d) First charge over all accounts, including, the Trust and Retention Account and the Sub-Accounts (or any account in substitution thereof) and all funds from time to time deposited therein,
e) A first charge by way of pledge of 1,38,14,250 shares of Bharat Wire Ropes Ltd. held by Gyanshankar Investments And Trading Company Private Limited
f) Personal Guarantees of Managing Director and Jt. Managing Director
g) Corporate Guarantee of Gyanshankar Investment and Trading Company Private Limited.
(ii) Security:
The security is by hypothetication of respective Vehicle
(iii) Repayment Schedule:
Rupee Term Loans ECB are repayable in 46 quarterly structured Instalments commenced from 31-12-20
(iv) Repayment Schedule:
The loan is repayable in 60 equated monthly installments commenced from 05.05.2023.
(v) The Govt. of Maharashtra under Package Scheme of Incentive has extended to the Company, the incentive of sales tax deferral scheme pursuant to which the sales tax attributable to the sales effected out of production for a period of 8 Years 9 Months from 01.05.2003 to 31.01.2012 is deferred (interest free). The deferred sales tax in respect of above is based upon the sales tax returns. The amount for each year deferred is payable in 5 equal annual instalments from Financial Year 2014-15 to 2025-26.
i) The carrying amount of trade receivable, current portion of interest accrued on fixed deposit, cash and cash equivalents, bank balances other than cash and cash equivalents, trade payables and other current financial liabilities are considered to be approximately same as their fair value, due to their short-term nature and have been classified as level 3 in the fair value hierarchy.
The fair value for loans and security deposits is calculated based on cash flows discounted using a current lending rates. Further, security deposits and advance recoverable in cash are classified as level 3 fair value in the fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit risk.
The fair value for long term security deposits are based on discounted cash flow using a current borrowing rate.
They are classified as level 3 fair value in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.
The carrying amount of long term borrowings is approximately equal to itâs fair value since the borrowings are at floating rate of interest. Also, the carrying amount of short term borrowing is considered to be approximately same as itâs fair value due to itâs short term nature.
For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.
The above mentioned grouping into Level 2 and Level 3, is described below.
Level 2: Inputs other than the quoted prices included within Level 1 that are observable for the asset or Liability, either directly or indirectly.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included is included in Level 3. This is case for Borrowings and Security Deposit received.
iii. Valuation technique used to determine fair value:
Specific valuation techniques used to value financial instruments include:
a. the fair value of the Borrowings and Other Financial Liabilties is determined using discounted cash flow analysis.
37) Financial Risk Management
The Companyâs activities expose it to credit risk, liquidity risk and market risk.
(I) Credit risk
Credit risk is the risk that counterparty will not meet its obligation under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities primarily trade receivables.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition.
a) Trade receivables
Credit risk has been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. Outstanding customer receivables are regularly monitored. The company uses a simplified approach as per Ind AS 109 and an impairment analysis is performed at each reporting date on an individual basis for significant clients.
(II) Liquidity risk
The Company maintain a balance between continuity of funding and flexibility through the use of bank overdrafts and bank loans (comprising the undrawn borrowing facilities below) by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
b) Maturities of financial liabilities
The tables below analyse the Companyâs financial liabilities into relevant maturity groupings based on their contractual maturities for:
All non derivative financial liabilities and derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the cash flows.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not material.
(IV) Market risk - interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
The Company had borrowed funds at both fixed and floating interest rates. The Company''s interest rate risk arises from long-term borrowings with variable rates, which exposes the Company to cash flow interest rate risk.
a) Interest rate risk exposure
The exposure of the Companyâs borrowing to interest rate changes at the end of the reporting period are as follows:
38) Capital Management (I) Risk management
The companyâs objectives when managing capital are to safeguard the companyâs ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to 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, return capital to shareholders, issue new shares or sell assets to reduce debt.
Note : Explanation for change in ratio by more than 25%
i. Net Profit has improved on account of increase in revenue, focus on high value added products and reduction of Interest.
ii Net Capital Turnover ratio variance ratio is on account increase of book debts and other current assets and reduction of current liabilities.
iii Return on equity improved on account of increase in revenue and decrease in finance cost.
iv Return on Investments variation is on account of movement in share price.
v Debt Equity Ratio improved on account of repayment of Borrowings and retained earnings.
vi Current Ratio improved on account of utilisation of cash generated into operations.
vii Trade Receivable Turnover ratio variation is on account of increase of debtors at the year end.
viii Trade payable ratio increased on account of reduction of creditors.
46) Additional Regulatory Information Required by Schedule III
i. The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibitions) Act, 1988 (45 of 1988) and the rules made thereunder.
ii. The company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
iii. The company does not have any transactions with companies struck- off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
iv. The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.
v. 1. The company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign
entities (Intermediaries) with the understanding that the Intermediary shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.
2. The company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the group shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries
vi There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.
vii The Company have not any such transaction which is not recorded in the books or 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.
47) During the previous year (F.Y. 2022-23) Company has decided to opt for New Tax Regime U/s 115BAA. Due to this an additional deffered tax expenses of Rs. 834.52 Lakhs is incurred in previous year.
48) Previous year''s figures have been regrouped or reclassified to conform with the current years'' presentation wherever considered necessary.
As per our report of even date attached
FOR NGS & CO. LLP. For and on behalf of the Board of Directors
Chartered Accountants
Firm Registration No 119850W
Ashok A. Trivedi Managing Director Whole Time Director Chief Executive °ffker
Partner Murarilal Mittal Sushil Sharda Mahender Singh Arora
Membership No : 042472 DIN: 00010689 DIN: 03117481 PAN : AABPA9704C
UDIN: 24042472BKEPFM7733 Chief Financial Officer Company Secretary
Rakesh Kumar Jain G°vmda S°m
Date: 30th April, 2024 PAN: ABBPJ5834H PAN: CCFPS0647Q
Place: Mumbai
Mar 31, 2023
i) Terms and rights attached to equity shares
The company has only one class of equity shares having a face value of Rs 10 per share. Each holder of equity share is entitled to one vote per share. The dividend, if any proposed by Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the events of liquidation of the company the holders of the equity shares will be entitled to receive in remaining assets of the Company after distribution of preferential amounts if any. The distribution will be in proportion to the number of equity shares held by the shareholders.
The Company has issued unrated unlisted unsecured Compulsory Convertible Preference Shares (CCPS) having face value Rs. of Rs 10/- each at a premium ofRs 99,990 per shares to the extent ofRs. 382.66 crores to lenders as per sanction of resolution Plan.
The tenure of said CCPS is 20 years from the date of allotment. Such CCPS shall be convertible any time after a period of 13 years from the date of allotment. However, from 13 to 20 years from allotment date, 1/8th of outstanding at the end of 12th year to be bought by the Promoters from the existing holders or converted into Equity shares each year only after the payment of the outstanding under Restructured Loan only. At the time of conversion, price of CCPS shall be determined as per SEBI ICDR, RBI regulations, Companies Act and/ or any other regulations applicable. The aggregate value of the Equity shares issued at the time of conversion shall not be less than the aggregate amount of face value and the premium for the securities. The number of Equity Shares to be issued at the time of conversion shall be determined accordingly.
Since the no. of shares to be allotted at the time of conversion is not fixed in the agreement, the nature of this instrument is Compound Financial Instrument(CFI). However, in opinion of the management, since there is no contractual obligation for cash outflow under this agreement except the repayment of sustainable debt portion which is disclosed as financial liability in books of the Company, the value of liability component of this CFI would be Nil. Accordingly, the entire amount of fair value of CFI, Rs. 382.66 Crores which is the transaction price, is determined as the value of equity component and has been presented under âOther Equityâ in the balance sheet. These assumptions for value determination have been relied upon by the Statutory Auditors.
Notes
(i) Security:
Following securities have been provided ranking parripassu between lenders for Rupee Term Loans and ECB along with working
Capital borrowings mentioned in Note no. 19 given hereinafter :
a) First charge by way hypothecation on all the tangible Fixed Assets including moveable plant and machinery, machinery spares, tools and accessories, Equipmentâs, Electrical Installations, furniture, fixtures, vehicles, Office Equipmentâs and all other moveable assets, both present and future;
b) First charge by way mortgage on all the Fixed Assets including immovable properties land and building located at (i) Plot no. 1 and 4, Atgaon Industrial Complex, Village: Atgaon, Taluka Shahpur, Mumbai Nasik Road, Dist. Thane, Maharashtra of the company and
(ii) Plot No. 4 at Chalisgaon MIDC, Maharashtra.
c) First charge by way hypothecation on all the current assets including but not limited to stocks of raw materials, work in progress, semi-finished and finished goods, consumable stores including book debts, bill whether documentary or clean, outstanding monies, receivables of the Borrower, both present and future;
d) First charge over all accounts, including, the Trust and Retention Account and the Sub-Accounts (or any account in substitution thereof) and all funds from time to time deposited therein,
e) A first charge by way of pledge of 1,20,86,232 shares of Bharat Wire Ropes Ltd. held by Gyanshankar Investments And Trading Company Private Limited
f) Personal Guarantees of Managing Director and Jt. Managing Director
g) Corporate Guarantee of Gyanshankar Investment and Trading Company Private Limited.
(ii) Security:
The security is by hypothetication of respective Vehicle
(iii) Repayment Schedule:
Rupee Term Loans ECB are repayable in 46 quarterly structured Instalments commenced from 31-12-20
(iv) Repayment Schedule:
The loan is repayable in 60 equated monthly installments commenced from 05.05.2023.
(v) The Govt. of Maharashtra under Package Scheme of Incentive has extended to the Company, the incentive of sales tax deferral scheme
pursuant to which the sales tax attributable to the sales effected out of production for a period of 8 Years 9 Months from 01.05.2003 to
31.01.2012 is deferred (interest free). The deferred sales tax in respect of above is based upon the sales tax returns. The amount for
each year deferred is payable in 5 equal annual instalments from Financial Year 2014-15 to 2025-26.
2. Defined Benefit Plans
(i) Leave Obligations
The leave obligations cover the Companyâs liability for earned leave.
(ii) Post-Employment Obligations - Gratuity
The Company has a defined benefit gratuity plan in India, governed by the Payment of Gratuity Act, 1972. The plan entitles an employee, who has rendered at least five years of continuous service, to gratuity at the rate of fifteen day wages for every completed year of service or part thereof in excess of six months, based on the rate of wages last drawn by the employee concerned.
This defined benefit plans expose the Company to actuarial risks, such as interest rate risk and market (investment) risk.
(iii) Reconciliation of Opening and Closing Balance during the year.
i) The carrying amount of trade receivable, current portion of interest accrued on fixed deposit, cash and cash equivalents, bank balances other than cash and cash equivalents, trade payables and other current financial liabilities are considered to be approximately same as their fair value, due to their short-term nature and have been classified as level 3 in the fair value hierarchy.
The fair value for loans and security deposits is calculated based on cash flows discounted using a current lending rates. Further, security deposits and advance recoverable in cash are classified as level 3 fair value in the fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit risk.
The fair value for long term security deposits are based on discounted cash flow using a current borrowing rate.
They are classified as level 3 fair value in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.
The carrying amount of long term borrowings is approximately equal to itâs fair value since the borrowings are at floating rate of interest. Also, the carrying amount of short term borrowing is considered to be approximately same as itâs fair value due to itâs short term nature.
For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.
ii. Fair Value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are recognised and measured at fair value 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.
The above metioned grouping into Level 2 and Level 3, is described below.
Level 2: Inputs other than the qouted prices included within Level 1 that re observable for the asset or Liability, either directly or indirectly.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included is included in Level 3. This is case for Borrowings and Security Deposit received.
iii. Valuation technique used to determine fair value:
Specific valuation techniques used to value financial instruments include:
a. the fair value of the Borrowings and Other Financial Liabilties is determined using discounted cash flow analysis.
37) Financial Risk Management
The Companyâs activities expose it to credit risk, liquidity risk and market risk.
(I) Credit risk
Credit risk is the risk that counterparty will not meet its obligation under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities primarily trade receivables.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition.
a) Trade receivables
Credit risk has been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit. The company uses a simplified approach as per Ind AS 109 and an impairment analysis is performed at each reporting date on an individual basis for significant clients.
(II) Liquidity risk
The Company maintain a balance between continuity of funding and flexibility through the use of bank overdrafts and bank loans (comprising the undrawn borrowing facilities below) by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
b) Maturities of financial liabilities
The tables below analyse the Companyâs financial liabilities into relevant maturity groupings based on their contractual maturities for:
All non derivative financial liabilities and derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the cash flows.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not material.
The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed utilising forward foreign exchange contracts.
The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments, highly probable forecast transactions and foreign currency required at the settlement date of certain receivables/payables.
Foreign currency risk exposure a) Foreign currency risk exposure
The Company''s exposure to foreign currency risk at the end of the reporting period expressed in equivalent in INR Rupees is as follows:
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.The Company had borrowed funds at both fixed and floating interest rates. The Company''s interest rate risk arises from long-term borrowings with variable rates, which exposes the Company to cash flow interest rate risk.
38) Capital Management (I) Risk management
The companyâs objectives when managing capital are to safeguard the companyâs ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to 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, return capital to shareholders, issue new shares or sell assets to reduce debt. The Company monitors capital on the basis of the following gearing ratio:
40) Micro, Small and Medium Enterprises Development Act, 2016
No Interest is paid / payable during the year to any enterprise registered under Micro Small and Medium Enterprises Development Act, 2006 ( MSMED). The information has been determined to the extent such parties could be identified on the basis of the status of suppliers under MSMED.
41) Contingent liabilities
The Company has contingent liabilities as at the year end in respect of:
|
As at March 31, 2023 |
As at March 31, 2022 |
|
|
Disputed direct taxes |
156.80 |
156.80 |
It is not practicable for the Company to estimate the timings of cash outflows if any in respect of above pending resolution of the respective proceedings.
The Company does not expect any re-imbursements in respect of the above contingent liabilities.
|
42) |
Capital and other commitments i) Capital commitments Capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows: |
||||
|
As at March 31, 2023 |
As at March 31, 2022 |
||||
|
Property plant and equipment Intangible assets under development |
423.93 14.33 |
775.00 14.33 |
|||
|
ii) Other commitments |
|||||
|
Particulars |
As at March 31, 2023 |
As at March 31, 2022 |
|||
|
Performance Guarantees / Bid bond given by Banks to Company''s customers / government authorities etc |
593.40 |
477.81 |
|||
|
Letter of Credit outstanding for purchase of Raw material |
- |
976.79 |
|||
|
43) |
Operating lease The Company has operating leases for premises and vehicles. These lease arrangements range for a period within one year to three years. The leases have verying terms, escalation clauses and renewal rights. Rent expense with respect to all operating leases: |
||||
|
Particulars |
Year ended March 31 2023 |
Year ended March 31 2022 |
|||
|
Lease payment recognised in the statement of profit and loss during the year |
32.32 |
14.45 |
|||
Vesting: The options granted under the Plan would vest not less than 1 (one) year from the date of grant of options subject to the maximum period of 6 (six) years.The Options so Granted will vest over a period of 1 year from the date of Grant.
Exercise -The Exercise Period pursuant to BWR Employee Stock Option Plan 2017 will be 1 year from the date of last vesting. The Grant of an Option shall entitle the holder of the option to apply for one Share in the Company at the Exercise Price. In the event of cessation of employment due to death, resignation or otherwise, the options may lapse or be exercisable in the manner specifically provided for in the scheme.
Note : Explanation for change in ratio by more than 25%
i. Net Profit has improved on account of increase in revenue.
ii Return on Capital Employed improved on account of increase in revenue
iii Return on equity improved on account of increase in revenue.
iv Return on Investments variation is on account of movement in share price.
v Debt Service coverage Ratio improved on account of improvement in cash generation from operations.
vi Debt Equity Ratio improved on account of repayment of Borrowings, issuance of equity and retained earnings. viiCurrent Ratio improved on account of utilisation of cash generated into operations
viii Trade Receivable Turnover ratio improved on account of faster realization of Book Debts.
46) Additional Regulatory Information Required by Schedule III
i. The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibitions) Act, 1988 (45 of 1988) and the rules made thereunder.
ii. The company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
iii. The company does not have any transactions with companies struck- off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
iv. The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.
v. 1. The company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign
entities (Intermediaries) with the understanding that the Intermediary shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries
2. The company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the group shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries
vi There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.
vii The Company have not any such transaction which is not recorded in the books or 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.
47) During the year Company has decided to opt for New Tax Regime U/s 115BAA. Due to this an additional deffered tax expenses of Rs. 834.52 Lakhs is incurred in this year.
48) Previous year''s figures have been regrouped or reclassified to conform with the current years'' presentation wherever considered necessary.
Mar 31, 2022
i) Terms and rights attached to equity shares
The company has only one class of equity shares having a face value of Rs 10 per share. Each holder of equity share is entitled to one vote per share. The dividend, if any proposed by Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the events of liquidation of the company the holders of the equity shares will be entitled to receive in remaining assets of the Company after distribution of preferential amounts if any. The distribution will be in proportion to the number of equity shares held by the shareholders.
Note:
The Company has issued unrated unlisted unsecured Compulsory Convertible Preference Shares (CCPS) having face value Rs. of Rs 10/- each at a premium ofRs 99,990 per shares to the extent ofRs. 382.66 crores to lenders as per sanction of resolution Plan.
The tenure of said CCPS is 20 years from the date of allotment. Such CCPS shall be convertible any time after a period of 13 years from the date of allotment. However, from 13 to 20 years from allotment date, 1/8th of outstanding at the end of 12th year to be bought by the Promoters from the existing holders or converted into Equity shares each year only after the payment of the outstanding under Restructured Loan only. At the time of conversion, price of CCPS shall be determined as per SEBI ICDR, RBI regulations, Companies Act and/ or any other regulations applicable. The aggregate value of the Equity shares issued at the time of conversion shall not be less than the aggregate amount of face value and the premium for the securities. The number of Equity Shares to be issued at the time of conversion shall be determined accordingly.
Since the no. of shares to be allotted at the time of conversion is not fixed in the agreement, the nature of this instrument is Compound Financial Instrument(CFI). However, in opinion of the management, since there is no contractual obligation for cash outflow under this agreement except the repayment of sustainable debt portion which is disclosed as financial liability in books of the Company, the value of liability component of this CFI would be Nil. Accordingly, the entire amount of fair value of CFI, Rs. 382.66 Crores which is the transaction price, is determined as the value of equity component and has been presented under âOther Equityâ in the balance sheet. These assumptions for value determination have been relied upon by the Statutory Auditors.
(i) Rupee Term Loans, ECB, Working Capital Borrowings and unpaid interest thereon have been restructured as per resolution plan approved by lenders. Accordingly Part of the borrowings is continued as Rupee Term Loans, ECB, Working Capital Borrowings and remaining amount is converted into CCPS and Equity Shares on 30-03-21 after waiver of portion of unpaid interest.
(ii) Security:
Following securities have been provided ranking parripassu between lenders for Rupee Term Loans and ECB along with working
Capital borrowings mentioned in Note no. 19 given hereinafter :
a) First charge by way hypothecation on all the tangible Fixed Assets including moveable plant and machinery, machinery spares, tools and accessories, Equipmentâs, Electrical Installations, furniture, fixtures, vehicles, Office Equipmentâs and all other moveable assets, both present and future;
b) First charge by way mortgage on all the Fixed Assets including immovable properties land and building located at (i) Plot no. 1 and 4, Atgaon Industrial Complex, Village: Atgaon, Taluka Shahpur, Mumbai Nasik Road, Dist. Thane, Maharashtra of the company and (ii) Plot No. 4 at Chalisgaon MIDC, Maharashtra.
c) First charge by way hypothecation on all the current assets including but not limited to stocks of raw materials, work in progress, semifinished and finished goods, consumable stores including book debts, bill whether documentary or clean, outstanding monies, receivables of the Borrower, both present and future;
d) First charge over all accounts, including, the Trust and Retention Account and the Sub-Accounts (or any account in substitution thereof) and all funds from time to time deposited therein,
e) A first charge by way of pledge of 179,84,854 shares of Bharat Wire Ropes Ltd. held by Gyanshankar Investments And Trading Company Private Limited
f) Personal Guarantees of Managing Director and Jt. Managing Director
g) Corporate Guarantee of Gyanshankar Investment and Trading Company Private Limited.
(iii) Security:
The security is by hypothetication of respective Vehicle
(iv) Repayment Schedule:
Rupee Term Loans ECB are repayable in 46 quarterly structured Instalments commenced from 31-12-20
(v) Repayment Schedule:
The loan is repayable in 84 equated monthly installments commenced from 16.10.2015.
(vi) The Govt. of Maharashtra under Package Scheme of Incentive has extended to the Company, the incentive of sales tax deferral scheme pursuant to which the sales tax attributable to the sales effected out of production for a period of 8 Years 9 Months from 01.05.2003 to 31.01.2012 is deferred (interest free). The deferred sales tax in respect of above is based upon the sales tax returns. The amount for each year deferred is payable in 5 equal annual instalments from Financial Year 2014-15 to 2025-26.
Employee Benefit Obligation
(i) Leave Obligations
The leave obligations cover the Companyâs liability for earned leave.
(ii) Post-Employment Obligations - Gratuity
The Company has a defined benefit gratuity plan in India, governed by the Payment of Gratuity Act, 1972. The plan entitles an employee, who has rendered at least five years of continuous service, to gratuity at the rate of fifteen day wages for every completed year of service or part thereof in excess of six months, based on the rate of wages last drawn by the employee concerned.
This defined benefit plans expose the Company to actuarial risks, such as interest rate risk and market (investment) risk.
37 Financial Risk Management
The Companyâs activities expose it to credit risk, liquidity risk and market risk.
(I) Credit risk
Credit risk is the risk that counterparty will not meet its obligation under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities primarily trade receivables.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition.
a) Trade receivables
Credit risk has been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit. The company uses a simplified approach as per Ind AS 109 and an impairment analysis is performed at each reporting date on an individual basis for significant clients.
(II) Liquidity risk
The Company maintain a balance between continuity of funding and flexibility through the use of bank overdrafts and bank loans (comprising the undrawn borrowing facilities below) by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
b) Maturities of financial liabilities
The tables below analyse the Companyâs financial liabilities into relevant maturity groupings based on their contractual maturities for:
All non derivative financial liabilities and derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the cash flows.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not material.
(III)Market risk - foreign currency risk
The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed utilising forward foreign exchange contracts.The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments, highly probable forecast transactions and foreign currency required at the settlement date of certain receivables/payables. Foreign currency risk exposure a) Foreign currency risk exposure
The Company''s exposure to foreign currency risk at the end of the reporting period expressed in equivalent in INR Rupees is as follows:
(IV) Market risk - interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.The Company had borrowed funds at both fixed and floating interest rates.
The Company''s interest rate risk arises from long-term borrowings with variable rates, which exposes the Company to cash flow
interest rate risk.
a) Interest rate risk exposure
38 Capital Management (i) Risk management
The companyâs objectives when managing capital are to safeguard the companyâs ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to 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, return capital to shareholders, issue new shares or sell assets to reduce debt.
Loan covenants
There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period
Micro, Small and Medium Enterprises Development Act, 2016
No Interest is paid / payable during the year to any enterprise registered under Micro Small and Medium Enterprises Development Act, 2006 ( MSMED). The information has been determined to the extent such parties could be identified on the basis of the status of suppliers under MSMED.
|
41 |
Contingent liabilities The Company has contingent liabilities as at the year end in respect of: |
||
|
As at March 31, 2022 |
As at March 31, 2021 |
||
|
Disputed direct taxes |
156.80 |
- |
It is not practicable for the Company to estimate the timings of cash outflows if any in respect of above pending resolution of the respective proceedings.
The Company does not expect any re-imbursements in respect of the above contingent liabilities.
44 The Company was awarded a arbital award ( "the Award") for the sum of Rs. 114.78 Lakhs from the Central Organisation Railway Electrification ("CORE") and Rs. 0.98 Lakhs towards cost of the Company through Arbitration Order dated January 19, 2014. CORE has filed an Arbitration Case No. 478 of 2014 before Court of District Judge Allahabad for setting aside the Award and also allowing a sum of Rs. 120 Lakhs withheld by CORE from our Company towards the Risk Purchase Notice. Our Company has filed a Counter- Claim Petition in the said Arbitration case claiming from CORE the sum of Rs. 120 Lakhs plus a sum of Rs. 57.35 Lakhs being interest at the rate of 18% till date of filing.
Details of Employee Stock Options
During the year, the Company has granted 75,000 equity shares under Employee Stock Option Plan, 2017 â BWR ESOP 2017â to employees of the Company with a right to subscribe to equity shares (âNew Optionsâ) at a price Rs. 60.15/-. The Salient features of the Scheme are as under:
Vesting: The options granted under the Plan would vest not less than 1 (one) year from the date of grant of options subject to the maximum period of 6 (six) years.The Options so Granted will vest over a period of 4 years from the date of Grant in the following manner:
Exercise -The Exercise Period pursuant to BWR Employee Stock Option Plan 2017 will be 1 year from the date of last vesting. The Grant of an Option shall entitle the holder of the option to apply for one Share in the Company at the Exercise Price. In the event of cessation of employment due to death, resignation or otherwise, the options may lapse or be exercisable in the manner specifically provided for in the scheme.
Note : Explanation for change in ratio by more than 25%
i. Net Profit has improved on account of increase in revenue and reduction of Interest
ii Net Capital Turnover variance is on account of impact of restructuring of borrowings
iii Return on Capital Employed improved on account of increase in revenue
iv Return on equity improved on account of increase in revenue and decrease in finance cost.
v Return on Investments variation is on account of movement in share price.
vi Debt Service coverage Ratio for previous year not calculated as the company was in default in payment its obligation to Banks and account was restructured at the end of the financial year 2020-21
vii Inventory Turnover Ratio improved on account of increase of operation without corresponding increase of inventory.
viii Trade Receivable Turnover ratio improved on account increae of turnover without corresponding increas of Book debts.
47 Struck Off Company
The company does not have any transactions with companies struck- off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
48 The Company, based on internal & external sources of information including market research, economic forecast and other information, has assessed that as a result of Covid-19 outbreak, there is no significant financial impact on the financial statements as at the date of approval of these financial statements. Due to the nature of the pandemic, the Company will continue to monitor developments to Identify significant uncertainties in future periods, if any.
49 Previous year''s figures have been regrouped or reclassified to conform with the current years'' presentation wherever considered necessary.
Mar 31, 2018
i) Terms and rights attached to equity shares
The company has only one class of equity shares having a face value of Rs 10 per share. Each holder of equity share is entitled to one vote per share. The dividend, if any proposed by Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the events of liquidation of the company the holders of the equity shares will be entitled to receive in remaining assets of the Company after distribution of preferential amounts if any. The distribution will be in proportion to the number of equity shares held by the shareholders.
Notes
(i) Security:
a. First charge, ranking pari passu between term lenders by way of mortgage/hypothecation of entire immovable and moveable fixed assets of the Company related to expansion project situated at MIDC - Chalisgaon or wherever else;
b. Second charge ranking pari passu between term lenders by way of hypothecation of entire current assets of the Company situated at MIDC - Chalisgaon, Atgaon or wherever else;
c. Personal Guarantee of Managing Director.
d. Corporate Guarantee of Gaji Mercantile Private Limited (Now merged with Gyanshankar Investment And Trading Co. Private Limited as approved by NCLT vide its order dated 29.09.2017 received on 10.01.2018)
Documents for security creation for External Commercial Borrowings (ECB) are yet to be executed.
(ii) Security:
The security is by hypothetication of respective Vehicle
(iii) Repayment Schedule:
The term loan is repayable in 20 equal Quarterly Installments. The first installment is payable after a period of 18 months from the date of C.O.D. (22nd Mar 2017) or as per sanction of the respective Lenders as may be modified from time to time.
(iv) Repayment Schedule:
The term loan is repayable in 10 quarterly instalments commencing from 31.05.2018.
(v) Repayment Schedule:
The term loan is repayable in 12 equal quarterly instalments commenced from 30.06.2017.
(vi) Repayment Schedule:
The term loan is repayable in 24 equal quarterly instalments commencing from June 2020
(vii) Repayment Schedule:
The loan is repayable in 84 equal monthly instalments commenced from 03.04.2016
(viii) Repayment Schedule:
The loan is repayable in 36 equal monthly instalments commenced from 05.01.2018.
(ix) Repayment Schedule:
The loan is repayable in 84 equal monthly installments commenced from 16.10.2015
(x) Repayment Schedule:
The loan is repayable in 35 equal monthly instalments commenced from 02.08.2016
(xi) The Govt. of Maharashtra under Package Scheme of Incentive has extended to the Company, the incentive of sales tax deferral scheme pursuant to which the sales tax attributable to the sales effected out of production for a period of 8 Years 9 Months from 01.05.2003 to 31.01.2012 is deferred (interest free). The deferred sales tax in respect of above is based upon the sales tax returns. The amount for each year deferred is payable in 5 equal annual instalments from Financial Year 2014-15 to 2027-28.
Note:
Nature & Security for Current Borrowings
(i) Cash Credit / Working Capital demand loan / Pre-shipment credit from Banks are secured by way of first charge on raw materials, goods in process, finished goods, stores and book debts and first charge on immovable and movable fixed assets at Atgaon and second charge on immovable and movable fixed assets at Chalisgaon both present and future of the Company. It is also secured by the personal guarantee of Managing Director and Corporate Guarantee of Gaji Mercantile Pvt. Limited (Now merged with Gyanshankar Investment And Trading Co. Private Limited as approved by NCLT vide its order dated 29.09.2017 received on 10.01.2018)
1 Employee Benefit Obligation
(i) Leave Obligations
The leave obligations cover the Companyâs liability for earned leave.
(ii) Post-Employment Obligations - Gratuity
The Company has a defined benefit gratuity plan in India, governed by the Payment of Gratuity Act, 1972. The plan entitles an employee, who has rendered at least five years of continuous service, to gratuity at the rate of fifteen day wages for every completed year of service or part thereof in excess of six months, based on the rate of wages last drawn by the employee concerned.
This defined benefit plans expose the Company to actuarial risks, such as interest rate risk and market (investment) risk.
2 Financial Risk Management
The Companyâs activities expose it to credit risk, liquidity risk and market risk.
(I) Credit risk
Credit risk is the risk that counterparty will not meet its obligation under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities primarily trade receivables.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition.
a) Trade receivables
Credit risk has been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit. The company uses a simplified approach as per Ind AS 109 and an impairment analysis is performed at each reporting date on an individual basis for significant clients.
(II) Liquidity risk
The Company maintain a balance between continuity of funding and flexibility through the use of bank overdrafts and bank loans (comprising the undrawn borrowing facilities below) by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
a) Financing arrangements
The Company had access to the following undrawn borrowing facilities for working capital at the end of the reporting period:
b) Maturities of financial liabilities
The tables below analyse the Companyâs financial liabilities into relevant maturity groupings based on their contractual maturities for:
All non derivative financial liabilities and derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the cash flows.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not material.
(III) Market risk - foreign currency risk
The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed utilising forward foreign exchange contracts.
The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments, highly probable forecast transactions and foreign currency required at the settlement date of certain receivables/payables.
Foreign currency risk exposure
a) Foreign currency risk exposure
The Companyâs exposure to foreign currency risk at the end of the reporting period expressed in equivalent in INR Rupees is as follows:
(IV) Market risk - interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
The Company had borrowed funds at both fixed and floating interest rates. The Companyâs interest rate risk arises from long-term borrowings with variable rates, which exposes the Company to cash flow interest rate risk.
3 Capital Management (I) Risk management
The companyâs objectives when managing capital are to safeguard the companyâs ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to 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, return capital to shareholders, issue new shares or sell assets to reduce debt.
The Company monitors capital on the basis of the following gearing ratio:
Loan covenants
The Company has complied with all the loan covenants applicable, mainly debt service coverage ratio, debt equity ratio and fixed assets coverage ratio attached to the borrowings.
4 Related Party Transactions
a) Key management personnel
Name Nature of relationship
Mr. Murarilal Mittal Managing Director
Mr. Sushil Radheyshyam Sharda Whole Time Director
Mr. Sumit Kumar Modak Whole Time Director
Mr. Venkateshwara Rao Kandikuppa Whole Time Director
Mr. Mayank Mittal Joint Managing Director
Mr. M S Arora Chief Executive Officer
Mr. Rakesh Kumar Jain Chief Financial Officer
Mr. Shailesh Rakhasiya Company Secretary
b) List of Others over which key management personnel or relatives of such personnel exercise significant influence or control and with whom transaction have taken place during the year:
Gyanshankar Investment & Trading Co. Pvt. Ltd
Stellar Credit and E-Trading Pvt Ltd till 10.01.2018 (Refer note on Amalgamation below)
Gaji Mercantile Pvt. Ltd. till date 10.01.2018 (Refer note on Amalgamation below)
Note of Amlagamation:
* Gaji Merchantile Pvt Ltd and Stellar Credit and E-Trading Pvt Ltd has been merged with Gyanshankar Investment And Trading Co. Private Limited pursuant to the scheme of amalgamation as approved by NCLT vide its order dated 29.09.2017 received on 10.01.2018.
5 Micro, Small and Medium Enterprises Development Act, 2016
There are no dues to Micro, Small and Medium Enterprises as defined under âThe Micro, Small and Medium Enterprises Development Act, 2006â as at March 31,2018. This information has been determined to the extent such parties have been identified on the basis of the information available with the Company.
It is not practicable for the Company to estimate the timings of cash outflows if any in respect of above pending resolution of the respective proceedings.
The Company does not expect any re-imbursements in respect of the above contingent liabilities.
6 Capital and other commitments
i) Capital commitments
Capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows:
7 Operating lease
The Company has operating leases for premises and vehicles. These lease arrangements range for a period within one year to three years. The leases have verying terms, escalation clauses and renewal rights.
8 The Company was awarded a arbital award ( âthe Awardâ) for the sum of Rs. 114.78 Lakhs from the Central Organisation Railway Electrification (âCOREâ) and Rs. 0.98 Lakhs towards cost of the Company through Arbitration Order dated January 192014. CORE has filed an Arbitration Case No. 478 of 2014 before Court of District Judge Allahabad for setting aside the Award and also allowing a sum of Rs. 120 Lakhs withheld by CORE from our Company towards the Risk Purchase Notice. Our Company has filed a Counter- Claim Petition in the said Arbitration case claiming from CORE the sum of Rs. 120 Lakhs plus a sum of Rs. 57.35 Lakhs being interest at the rate of 18% till date of filing.
9 First-time adoption of Ind AS Transition to Ind AS
These are the Companyâs first financial statements prepared in accordance with Ind AS.
The accounting policies set out in note 1 have been applied in preparing the financial statements for the year ended March 31, 2018, the comparative information presented in these financial statements for the year ended March 31, 2017 and in the preparation of an opening Ind AS balance sheet as at April 01, 2016. 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, 2006 (as amended) 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 set out in the following tables and notes.
1. Exemptions and exceptions availed
Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.
A.1 Ind AS optional exemptions
A.1.1Deemed 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. This exemption can also be used for intangible assets covered by Ind AS 38 - Intangible Assets.
Accordingly, the Company has elected to measure all of its property, plant and equipment & intangible assets at their previous GAAP carrying value.
A.1.2Exchange differences arising from translation of long-term foreign currency monetary item
Ind AS 101 permits a first-time adopter to elect to continue the policy adopted for accounting for exchange differences arising from translation of long-term foreign currency monetary items recognised in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period as per the previous GAAP.
The Company has elected to apply this exemption.
A.1.3Leases
Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material. The Company has elected to apply this exemption for such contracts/arrangements.
A.2 Ind AS mandatory exceptions
A.2.1 Estimates
An entityâs estimates in accordance with Ind ASs 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.
Upon an assessment of the estimates made under Previous GAAP, the Company has concluded that there was no necessity to revise such estimates under Ind AS, except where estimates were required by Ind AS and not required by previous GAAP.
A.2.2Classification and measurement of financial assets
An entityâs estimates in accordance with Ind ASs 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.
A.2.3De-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 of Ind AS 109 retrospectively from a date the entity chooses, 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 elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.
A.2.4Impairment of financial assets
Ind AS 101 requires an entity to use reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognised and compare that to the credit risk at the date of transition to Ind AS.
B. Reconciliation between previous GAAP and Ind AS
Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.
C. Notes for the first time adoption
(i) Security deposits
Under the previous GAAP, interest free lease security deposits (that are refundable in cash on completion of the lease term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognised at fair value. Accordingly, the company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognised as prepaid rent. Consequent to this change, the amount of security deposits decreased by Rs. 0.51 lakhs as at March 31, 2017 (April 01, 2016: Rs. Nil). The deferred lease expenses increased by Rs. 0.23 lakhs as at March 31, 2017 (April 01, 2016: Rs. Nil). Total equity decreased by Rs. 0.01 lakh as at March 31, 2017 (April 01, 2016: Rs. Nil). The profit for the year ended March 31, 2017 decreased by Rs. 0.01 lakh due to amortization of deferred lease expenses of Rs. 0.23 lakhs which is partially off-set by the notional interest income of Rs. 0.22 lakhs recognised on security deposits.
(ii) Excise duty
Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented as part of expenses. This change has resulted in an increase in total revenue and total expenses for the year ended March 31, 2017 by Rs. 624.52 lakhs. There is no impact on the total equity and profit.
(iii) Remeasurements of post-employment benefit obligations
Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended March 31, 2017 increased by Rs. 1.13 lakhs. There is no impact on the total equity as at March 31, 2017.
(iv) Retained earnings
Retained earnings as at April 01, 2016 has been adjusted consequent to the above Ind AS transition adjustments.
(v) Other comprehensive income
Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit and loss as âother comprehensive incomeâ includes remeasurements of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP.
(vi) Deferred tax
Deferred taxes impact of the above adjustments, wherever applicable have been recognised on transition to Ind AS.
(vii) Utilisation of IPO Expenses
Under the previous GAAP, IPO Expenses were to be adjusted against Securities Premium. However, under IND AS the same is to be charged in revenue. As a result of this change, the profit for the year ended March 31, 2017 decreased by Rs Rs 11.01 lakhs
10 Exchange differences on long term foreign currency monetary items outstanding
In accordance with para D13AA of Ind AS 101 First time adoption of Indian Accounting Standards and the option available in the Companies (Accounting Standards) (Second Amendment) Rules, 2011, vide notification dated December 29, 2011 issued by the Ministry of Corporate Affairs, the Company has adjusted the exchange rate difference arising on long term foreign currency monetary items, in so far as they relate to the acquisition of a depreciable capital asset, to the cost of the asset. Accordingly, the Company has adjusted exchange loss of Rs. 252.87 lakhs (March 31, 2017 - Rs 414.27 lakhs) to the cost of property, plant and equipment as the long term monetary items relate to depreciable capital asset.
11 Details of Employee Stock Options
During the year, the Company has granted Employee Stock Options (ESOP) under the Bharat Wire Ropes Limited Employee Stock Option Plan, 2017 â BWR ESOP 2017â or the âPlanâ to the employees of the Company with a right to subscribe to equity shares (âNew Optionsâ) at a price Rs. 90/-. The Salient features of the Scheme are as under:
Mar 31, 2016
** Represents the Equity Shares held by M/s. Visu Associates, having partners Mr. Motilal Gopilal Oswal, Mr. Raamdev Ramgopal Agarwal and Passionate Investment Management Private Limited.
2.1.4 Shares held by holding/ultimate holding company and /or their subsidiaries
Out of Equity Shares issued by the Company, shares held by its holding company, ultimate holding company and their subsidiaries / associates are as below:-
1. Terms/right attached to Equity shares
The Company has only one class of equity shares having a face value of ''10 per share. Each holder of equity share is entitled to one vote per share. The dividend, if any proposed by Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. During the year ended 31 March, 2016, '' Nil per share (31 March, 2015 : '' NIL) is recognised as dividend distributions to equity shareholders.
In the event of liquidation of the Company, the holder of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts if any. The distribution will be in proportion to the number of equity shares held by shareholders.
a. First charge, ranking pari passu between term loan consortium banks by way of mortgage / hypothecation of entire immovable and moveable fixed assets of the Company related to expansion project situated at MIDC - Chalisgaon or wherever else;
b. Second charge ranking pari passu between term loan consortium banks by way of hypothecation of entire current assets of the Company situated at MIDC - Chalisgaon, Atgaon or wherever else;
c. Personal Guarantee of Managing Director.
d. Corporate Guarantee of Gaji Mercantile Private Limited.
Repayment:
The term loan is repayable in 20 equal Quarterly Instalments. The first instalment is payable after a period of 18 months from the date of C.O.D. ( 31st Dec, 2016) or as per sanction of the respective Lenders as may be modified from time to time.
2. (b) The Security is created by way of hypothecation of Vehicle.
Repayment:
The loan is repayable in 84 equal monthly instalments of Rs, 42,681/- commencing from 03.04.2016
3. The Security is created by way of hypothecation of Vehicle.
Repayment:
The loan is repayable in 84 equal monthly instalments of Rs,148,953/- which has commenced from 16.10.2015
4 The Govt. of Maharashtra under Package Scheme of Incentive has extended to the Company, the incentive of sales tax deferral scheme pursuant to which the sales tax attributable to the sales effected out of production is deferred (interest free) for a period of 8 Years 9 Months from 01.05.2003 to 31.01.2012. The deferred sales tax in respect of above is based upon the sales tax returns. The amount for each year deferred is payable in 5 equal annual instalments from Financial Year 2014-15 to 2027-28.
5. Disclosure as per new amendments in Schedule III in respect of Micro Small & Medium Enterprises Development Act, 2006:
There are no dues to Micro, Small and Medium Enterprises as defined under âThe Micro, Small and Medium Enterprises Development Act, 2006âas at March 3J20B. This information has been determined to the extent such parties have been identified on the basis of the information available with the Company.
6. The buyers credit has been taken for the import of Capital goods under term loans sanctioned by the banks, repayment thereof shall be as per terms of sanction as specified in note 2.3.2 (a).
7. The Company has filed case on 2 vendors for recovery of advances aggregating to Rs. 10 Lacs with Judicial Magistrate Court, Chalisgaon.
8. The Company was awarded a arbitral award ( "the Award") for the sum of Rs,. 114.78 Lacs from the Central Organisation Railway Electrification ("CORE") and Rs, 098 Lacs towards cost of the Company through Arbitration Order dated January 19,2014. CORE has filed an Arbitration Case No. 478 of 2014 before Court of District Judge, Allahabad for setting aside the Award, and also allowing a sum of 120 Lacs, withheld by CORE, from our Company, towards the Risk Purchase Notice. Our Company has filed a Counter- Claim Petition in the said Arbitration case claiming from CORE, the sum of Rs, 120 Lacs plus a sum of Rs, 57.35 Lacs being interest at the rate of 18% till date of filing.
9. Pursuant to Accounting Standard 26 - âIntangible Assetsâ, the Purchased goodwill in the balance sheet as at March 3 \ 204 is written off during the year ended March 3P05.
10. Figures for the previous year have been re-grouped/re-classified wherever necessary.
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Stocks To Buy Today, Dec 9: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Tuesday -
Stocks To Buy Today, Dec 8: Top 4 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Monday -
Stock Market Alert! Major Pre-Open Session Change From Dec 8: Full Timings, Rules & All You Need To Know -
Bank Nifty Surges: RBI’s 25 bps Rate Cut Triggers Strong Upside in Major Banking Stocks -
Closing Bell: Sensex Ends 158 pts Higher, Nifty Climbs Above 26,000; Hero MotoCorp, HAL Up 2% Each -
Stocks To Buy Today, Dec 4: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Thursday
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