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Notes to Accounts of WPIL Ltd.
Mar 31, 2025
3B : GOODWILL AND OTHER INTANGIBLE ASSETS
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The
amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss unless such expenditure forms part of carrying value of another asset.
Intangible assets with indefinite useful lives including Goodwill are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit or loss when the asset is derecognised.
Research and development costs
Research costs are expensed as incurred. Development expenditures on an individual project are recognised as an intangible asset when the Company can demonstrate:
⢠The technical feasibility of completing the intangible asset so that the asset will be available for use or sale
⢠Its intention to complete and its ability and intention to use or sell the asset
⢠How the asset will generate future economic benefits
⢠The availability of resources to complete the asset
⢠The ability to measure reliably the expenditure during development
Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when development is complete and the asset is available for use. It is amortised over the period of expected future benefit. Amortisation expense is recognised in the statement of profit and loss unless such expenditure forms part of carrying value of another asset.
Notes to 3A :
(a) - Includes Rs 249.56 lacs and Rs 19.09 lacs for leaseehold land, and building appartenent thereto respectively (31 March, 2024 - Rs 255.96 lacs
and Rs 21.04 lacs respectively) which are still in the name of merged company (M/S Mody Industries FC. Pvt. Ltd.), and yet to be transferred in the company''s name.
- Includes Rs 2933.32 lacs and Rs 621.75 lacs for leaseehold land, and building appartenent thereto respectively (31 March, 2024 : Rs 2968.20 lacs and Rs 642.76 lacs respectively ) which are still in the name of Hindusthan Udyog Ltd. and yet to be transferred in the company''s name.
(b) Refer Note 19 and 24 for information on property, plant and equipment hypothecated as security by the Company.
(c) For property, plant and equipment and intangible assets existing as at April 1, 2016, i.e date of transition to Ind AS, the Company has used Indian GAAP carrying value as deemed cost. Subsequent measurement is at cost.
(d) The following Right of Use assets are included in the underlying property, plant and equipment :
04 INVESTMENTS Accounting Policy :
Financial Instruments
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
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (OCI), and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial assetâs contractual cash flow characteristics and the Companyâs business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient, the Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient are measured at the transaction price determined under Ind AS 115. Refer to the accounting policies in note 31 Revenue from contracts with customers.
In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are âsolely payments of principal and interest (SPPI)â on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. The Companyâs business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.
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 sell the asset.
Subsequent Measurement
Subsequent measurement of financial assets is described below -
⢠Debt instruments at amortised cost
A âdebt instrumentâ 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.
This category is the most relevant to the Company. 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 profit or loss. The losses arising from impairment are recognised in the profit or loss. This category generally applies to trade and other receivables.
⢠Debt instruments at fair value through other comprehensive income (FVTOCI)
A âdebt instrumentâ is classified as at the FVTOCI 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 assetâs contractual cash flows represent SPPI.
⢠Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)
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. Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss.
⢠Equity instruments measured at fair value through other comprehensive income (FVTOCI)
All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income, subsequent changes in the fair value. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.
If the Company decides to classify an equity instrument as FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to the Statement of Profit and Loss, even on sale of investment.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the Companyâs balance sheet) when:
⢠The rights to receive cash flows from the asset have expired, or
⢠The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a âpass-throughâ arrangement? and either
(a) the Company has transferred substantially all the risks and rewards of the asset, or
(b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Impairment of financial assets
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:
a) Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits, trade receivables and bank balance .
b) Trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 115 .
c) Financial guarantee contracts which are not measured as at FVTPL.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables, the Company applies a simplified approach in calculating ECLs. Therefore, the Company does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Company has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original Effective Interest Rate (EIR). Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the Statement of Profit and Loss. This amount is reflected under the head âother expensesâ (or ''other income'') in the Statement of Profit and Loss.
10 INVENTORIES
Accounting Policy :
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
⢠Raw materials and components: cost includes cost of purchase and other costs excluding taxes subsequently recoverable from tax authorities incurred in bringing the inventories to their present location and condition. The cost is calculated on weighted average method.
⢠Finished goods: cost includes cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity, but excluding borrowing costs. The cost is calculated on weighted average method.
⢠Work in progress: cost includes cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity depending upon the stages of completion, but excluding borrowing costs. The cost is calculated on weighted average method.
⢠Stores and spare parts: cost of purchase and other costs excluding taxes subsequently recoverable from tax authorities incurred in bringing the inventories to their present location and condition. The cost is calculated on weighted average method.
⢠Scrap items are valued at net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
* On and from the Record Date of 12th July, 2024, the equity shares of the Company have been sub- divided, such that 1 (one) equity share having face value of Rs.10/- (Rupees ten only) each, fully paid-up, stands sub-divided into 10 (ten) equity shares having face value of Re 1/- (Rupee one only) each, fully paid-up, ranking pari-passu in all respects.
(d) Terms and Rights attached to Equity Shares
The Company has sub divided its equity shares of the face value of Rs 10/- each into 10 equity shares of the face value of Re 1/- each fully paid up, effective July 12, 2024. Each holder of equity shares is entiled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting and is accounted for in the year in which it is approved by the Shareholders in the General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company after distribution of all preferential amounts. The distribution will be in the proportion to the number of equity shares held by the shareholders.
In its meeting dt 23 May, 2025, the Board of Directors of the company have proposed a final dividend of Rs 2/- per equity share for the one share of the face value of Re 1/- for the financial year ended 31 March 2025 (31 March 2024 : Rs 20/- per equity shares of the face value of Rs 10/- per equity share). The proposal of final dividend is payable subject to the approval of shareholders at the forthcoming Annual General Meeting and if approved would result in a cash outflow of Rs 1,953.42 lacs (31 March 2024 : Rs 1,953.42 lacs). Dividend is accounted for in the year in which it is approved by the shareholders, and paid.
Nature and purpose of reserves :
Capital Reserve
(Reserve created on reissue of forfeited shares. This can be utilised in accordance with the provisions of the Companies Act, 2013.) Capital Redemption Reserve
(This is a non distributable reserve created on account of restatement of certain investments)
Securities Premium
(Premium received on issue of equity shares. This reserve can be utilised in accordance with the provisions of the Companies Act, 2013)
General Reserve
(This reserve is a part of Retained earning, and is available for distribution to the shareholders as free reserve)
Retained Earnings
(Retained earnings are profits that the company has earned till date, less any transfer to general reserve, dividends or other distributions paid to shareholders. It also includes Revaluation reserve transferred on the date of transition)
19 BORROWING Accounting Policy :
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or 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 loans and borrowings and payables, net of directly attributable transaction costs.
The Companyâs financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or 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 or Loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the 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.
Ind AS 116 supersedes Ind AS 17 Leases including its appendices. The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to recognise most leases on the balance sheet.
The Company has adopted Ind AS 116 using the modified retrospective method of adoption under the transitional provisions of the Standards, with the date of initial application on 1st April 2019. The Company also elected to use the recognition exemptions for lease contracts that, at the commencement date, have a lease term of 12 months or less and do not contain a purchase option (short-term leases), and lease contracts for which the underlying asset is of low value (low-value assets).
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Company as a lessee
The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.
Right-of-use assets
The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right of use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets.
If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
The right-of-use assets are also subject to impairment. Refer to the accounting policies in section 2.1 (e) Impairment of nonfinancial assets.
Lease Liabilities
At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees.
In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.
Short-term leases and leases of low-value assets
The Company applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of offices, godowns, equipment, etc. that are of low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.
Company as a lessor
Lessor accounting under Ind AS 116 is substantially unchanged from Ind AS 17. Lessors will continue to classify leases as either operating or finance leases using similar principles as in Ind AS 17. Therefore, Ind AS 116 does not have an impact for leases where the Company is the lessor.
Leases in which the Company does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.
Retirement and other employee benefits
Retirement benefit in the form of Provident Fund and Superannuation Schemes are defined contribution schemes. The Company has no obligation, other than the contribution payable to the respective funds. The Company recognizes contribution payable to the provident fund scheme as an expenditure, when an employee renders the related service.
Gratuity liability is funded defined benefit obligation and is provided for on the basis of actuarial valuation done on projected unit credit method at the end of each reporting period.
Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through other comprehensive income in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.Current and non-current classification is based on the actuarial valuation report.
The Company treats accumulated leaves expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the end of each financial year. The Company presents the leave as current liability in the balance sheet, to the extent it does not have an unconditional right to defer its settlement beyond 12 months after the reporting date. Where the Company has unconditional legal and contractual right to defer the settlement for the period beyond 12 months, the same is presented as non-current liability. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred.
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the Company operates and generates taxable income.
Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences, except, when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except, when the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
The Company determines whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax treatments and uses the approach that better predicts the resolution of the uncertainty. The Company applies significant judgement in identifying uncertainties over income tax treatments.
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Warranty provisions
Provisions for warranty-related costs are recognised on the basis of product sold or service provided to the customer. Initial recognition is based on historical experience and managementâs decision based on technical advice. The initial estimate of warranty-related costs is revised annually.
Onerous contracts
If the Company has a contract that is onerous, the present obligation under the contract is recognised and measured as a provision. However, before a separate provision for an onerous contract is established, the Company recognises any impairment loss that has occurred on assets dedicated to that contract.
An onerous contract is a contract under which the unavoidable costs (i.e., the costs that the Company cannot avoid because it has the contract) of meeting the obligations under the contract exceed the economic benefits expected to be received under it. The unavoidable costs under a contract reflect the least net cost of exiting from the contract, which is the lower of the cost of fulfilling it and any compensation or penalties arising from failure to fulfil it.
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company has generally concluded that it is the principal in its revenue arrangements, because it typically controls the goods or services before transferring them to the customer.
Sale of goods
Revenue from sale of goods is recognised at the point in time when control of the goods is transferred to the customer. The revenue is measured based on the consideration defined in the contract with a customer, net of variable consideration on account of various discounts and schemes offered by the Company as part of the contract. As the period between the date on which the Company transfers the promised goods to the customer and the date on which the customer pays for these goods is generally one year or less, no financing components are considered.
The Company typically provides warranties for general repairs on all its products sold, in line with the industry practice. These assurance-type warranties are accounted for under Ind AS 37 Provisions, Contingent Liabilities and Contingent Assets. Refer to the accounting policy on warranty provisions in note 29 Provisions.
Export entitlements are recognised when the right to receive the credits as per the terms of the schemes is established in respect of the exports made by the Company and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.
The Company recognises revenue on satisfaction of performance obligation to its customers. Revenue is measured based on consideration specified in a contract with a customer and excludes taxes collected on behalf of the government authorities.
Construction Contracts
Revenue on contracts is recognised using input method where revenue is accounted on the basis of the entityâs efforts or inputs to the satisfaction of a performance obligation relative to the total expected inputs to the satisfaction of that performance obligation (in accordance with Percentage of Completion method) as per Ind AS 115.
The amount of revenue and profit recognised in a year on projects is dependent, inter alia, on the actual costs incurred, the assessment of the percentage of completion of (long-term) contracts and the forecasted contract revenue and costs to complete of each project. Furthermore, the amount of revenue and profit is influenced by the valuation of variation orders and claims. In cases, where the current estimates of the total contract cost and revenue indicate a loss, such loss is recognized as an expense.
Contract Balances
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional.
A receivable represents the Companyâs right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due). Refer to accounting policies of financial assets in note 4 Financial instruments - initial recognition and measurement.
A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract.
Rendering of services
Revenue from sale of services is recognised upon the rendering of services and are recognised net of goods and services tax and other applicable taxes.
Interest income
Interest income is included in other income in the statement of profit and loss. Interest income is recognised on a time proportion basis taking into account the amount outstanding and the effective interest rate when there is a reasonable certainty as to realisation.
Dividends
Revenue is recognised when the Companyâs right to receive the payment is established, it is probable that the economic benefits associated with the dividend will flow to the Company and the amount of dividend can be measured reliably.
Rental income
Rental income arising from operating leases is accounted for as per the lease terms and is included in revenue in the statement of profit or loss due to its operating nature.
Revenue from operations consist of the following :
Performance Obligation Sale of goods
The performance obligation is recognised at the point in time when control of the goods - pumps, pumping systems and spares is transferred to the customer and the payment is generally due within 30 to 90 days from such delivery.
Sale of services
The performance obligation is satisfied over-time and payment is generally due upon completion of erectioning, commissioning and servicing services by the Company and its due acceptance by the customer.
Construction Contracts
The performance obligation is satisfied over-time and is calculated based on percentage completion method when the outcome of the contract can be estimated reliably. Payment is generally based on financial milestones as per terms set out in the contract and its due acceptance by the customer.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
39 Earnings Per Share (EPS)
Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year 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.
40 40.1 Significant accounting judgements, estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
40.2 Employee benefit plans
Gratuity: The cost of defined benefit gratuity plan and its present value of the obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, an employee benefit obligation is highly sensitive to changes in these assumptions particularly the discount rate and estimate of future salary increase. All assumptions are reviewed at each reporting date. The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds.The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases are based on expected future inflation rates.
Further details about gratuity obligations are given in Note 41.1.
Leave Encashment: The Company has a policy on Leave Encashment which is accumulating in nature. The Expected Cost of Accumulated Leave Encashment is determined by Actuarial Valuation performed by an independent actuary using Project Unit Credit Method as per Ind As 19 on the additional amount expected to be paid/availed as a result of the unused entitlement that has accumulated at the Balance Sheet date.
Further details about leave encashment obligations are given in Note 41.2.
The Code on Social Security, 2020 has been enacted, which may impact the employee related contributions made by the Company. The effective date from which the changes are applicable is yet to be notified. The Ministry of Labour and Employment has released draft rules for the code on November 13, 2020. The Company will complete its evaluation and will give appropriate impact in its financial results in the period in which the code becomes effective and the related rules are published.
40.3 Warranty
Warranty costs are accrued at the time the products are sold. The Company estimates the provision for warranty based on past trend of actual sale of pumps. As at 31 March 2025, the estimated liability towards warranty amounted to approximately Rs. 200.23 lacs (31 March 2024: Rs. 160.28 lacs.)
The provision towards warranty is not discounted as the management, based on past trend, expects to use the provision within twelve months after the Balance Sheet date.
40.4 Estimation of expected useful lives and residual values of property, plant and equipment
Property, plant and equipment are depreciated at historical cost using straight-line method based on the estimated useful life, taking into account the residual value. The assets'' residual value and useful life are based as per policy stated in Note 3A of the Financials.
40.5 Revenue from Construction Contracts
Contract Revenue is recognised under âpercentage of completion methodâ. When the outcome of a construction contract can be estimated reliably contract revenue and contract costs associated with the construction contracts are recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity.
Individual project budgets are reviewed regularly with project leaders to ensure that cost estimates are based upon up to date and as accurate information as possible, and take into account any relevant historic performance experience. Furthermore, all completed projects are reviewed to ensure that all relevant costs have been recorded/accrued at the time of project completion in the relevant period and that no further costs will be incurred in addition to the above costs.
Contract variations are recognized as revenues to the extent that it is probable that they will result in revenue which can be reliably measured, which requires the exercise of judgment by management based on prior experience, application of contract terms and relationship with the contract owners. Claims are recorded as revenue when negotiations have reached to an advance stage such that it is probable, the customer will accept the claim and amount can be measured reliably, which requires the exercise of judgment by management based on prior experience.
For further details, refer Note 53.
40.6 Provision for Expected Credit Losses
The Company measures Expected Credit Loss (ECL) for financial instruments based on historical trend, industry practices and the business environment in which the Company operates. The Company bases the estimates on the ageing and creditworthiness of the receivables and historical write-off experience and variation in the credit risk on year to year basis. The assumptions and estimates applied for determining the provision for impairment are reviewed periodically. For further details refer Note 48.
40.7 Impairment of Investments in Subsidiaries
Determining whether the investments in subsidiaries are impaired requires an estimate of the value in use of investments. In considering the value in use, the management anticipates the order book, operating margins, discount rates and other factors of the underlying businesses/operations of the subsidiaries.
40.8 Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair values are measured using valuation techniques, including the discounted cash flow model, which involve various judgements and assumptions.
40.9 Impairment of non-financial assets
Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at armâs length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The carrying amounts of the Companyâs non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the recoverable amounts of cash-generating units have been determined based on value in use calculations. These calculations require the use of estimates such as discount rates and growth rates.
41 Gratuity and other post-employment benefit plans
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to gratuity on terms not less favourable than the provisions of The payment of Gratuity Act, 1972. The scheme is funded with an insurance company in the form of qualifying insurance policy.
41.1 The following table summarises the components of net benefit expenses recognised in the Statement of Profit and Loss and the funded status and amounts recognised in the Balance Sheet for the post retirement benefit plans (gratuity).
43 Contingent Liabilities
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 recognized 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 recognized because it cannot be measured reliably. After making proper assessments, it has been concluded that the Company is not required to recognize contingent liabilities. However, the Company discloses its existence in the financial statements and makes such assessments regularly.
The company''s financial liabilities comprise loans and borrowings, trade and other payables etc. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s financial assets include trade and other receivables, cash and cash equivalents, that derive directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The company has a risk management policy, and its management is supported by a Risk management committee. The Risk management committee provides assurance to the company''s management that the company''s risk activities are governed by appropriate policies and procedures and that the financial risks are identified, measured and managed in accordance with company''s policies and risk objectives. The Board of Directors review and agrees policies for managing each of these risks which are summarised below:
48.1 Market risks :
Market risk is the risk that the fair value of future cash flow of a future instrument will fluctuate because of changes in market prices. Market risk comprises of three types of risks, currency risk, interest rate risk and other price risk such as commodity price risk and equity price risk. Financial instrument affected by market risk include trade payables, trade receivables, borrowings etc.
48.2 Interest rate risk :
The Company''s exposure to the risk of changes in market interest rates relate primarily to the company''s debt.
Credit risk is the risk that counterparty will not meet its obligation under a financial instrument or a customer contract leading to a financial loss. The company is exposed to credit risk from its operating activities (primarily trade receivables).
Trade receivables :
Customers'' credit risk is managed by the respective department subject to company''s established policy, procedure and control. Credit quality of a customer is assessed based on individual credit limits defined by the Company. Simplified approach is applied to determine the expected credit loss for trade and other receivables by considering historical credit loss experience and also specific identification method on a case to case basis taking into account customers'' credit quality, prevailing market conditions etc. To calculate expected credit loss, the Company has divided its trade receivables into two divisions, viz., product division and project division.
For project division, receivables are from Government departments and PSU''s and hence expected credit loss is determined on closing balance of trade receivables (due) and contract assets at each reporting date at an average ranging from 0.25% to 2.25%.
Liquidity risk is defined as the risk that the company will not be able to settle or meet its obligation or at a reasonable price. The Company''s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are monitored by company''s senior management. Management monitors the company''s net liquidity position through rolling forecast on the basis of company''s expected cash flow.
The company''s objective is to maintain a balance between the continuity of funding and flexibility through the use of cash credit, bank loans amongst others.
For the purpose of Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to equity holders. The primary objective of the Company''s capital management is to maximise the shareholder value and keep the debt equity ratio within acceptable range.
The Company manages its capital structure and makes adjustment in the light of changes in economic conditions and the requirement of financial covenants. The Board of Directors seeks to maintain prudent balance between different components of the Company''s capital. Net debt is defined as current and non current borrowings (including current maturities of long term debts and interest accrued) as reduced by cash and cash equivalents.
50 Categorization of Financial Instruments:
The fair value of the financial assets (excluding investments in subsidiaries and associate) and liabilities approximates their carrying amounts as at the Balance Sheet date.
51 Leases Company as Lessee
The Company has lease contracts for various properties used in its operations having lease terms of 5 years. The Company''s obligations under its leases are secured by the lessorâs title to the leased assets. Generally, the Company is restricted from assigning and subleasing the leased assets.
The Company also has certain leases of properties with lease terms of 12 months or less and leases of properties with low value. The Company applies the âshort-term leaseâ and âlease of low-value assetsâ recognition exemptions for these leases.
Company as a Lessor
The Company has entered into operating lease of its property having lease term of 11 months. The lease contract includes extension clause and a clause to enable upward revision of the rental charge by 5% on such extension. Rental income recognised by the Company during the year is Rs 74.30 lacs (31 March 2024 - Rs 59.07 lacs).
52 Disclosure as required by Ind AS 108, Operating Segments
The Company prepares this financial statements alongwith the consolidated financial statements. In accordance with Ind AS 108, Operating Segments,the Company has disclosed the Segment Reporting and information in its consolidated financial statements.
(i) Significant changes in contract assets and liabilities
Contract assets are initially recognised for revenue earned from designing, developing, manufacturing, erecting, commissioning and servicing of pumps & pumping systems since receipt of consideration is conditional on successful completion of prescribed milestones. Upon completion and acceptance by the customer, the amounts recognised as contract assets are reclassified to trade receivables.
The increase in contract assets in FY 2024-25 is the result of the increase in ongoing supply, erection and commissioning services at the end of the year.
Contract liabilities consist of advance billing in connection with supply, erection and commissioning services of pumps and pumping systems. The outstanding balances on these accounts decreased in FY 2024-25 by Rs.6,082.00 lacs due to the increase in billing on achievement of financial milestones for which certain activities are yet to be provided by the Company.
Apart from above, there was a decrease in advances received from the customers during the year by Rs 2,739.17 lacs.
The Company expects that about 50% of the transaction price allocated to unsatisfied performance obligations as at 31 March, 2025 will be recognised within one year based on the tenure of the project and expected work completion stage. Balance portion is expected to be received after one year without any significant delay.
Other than construction contracts, all other contracts have original expected duration of one year or less. As permitted under Ind AS 115, transaction price allocated to these usatisfied contracts has not been disclosed.
56 The above audited standalone Ind AS financial statements include figures for five (31 March 2024 : five) joint operations whose financial results and other financial information reflect total assets of Rs.7,968.32 lacs and Rs 8,257.76 lacs as at 31 March, 2025 and 31 March, 2024 respectively and total revenues of Rs. 2,587.86 lacs and Rs 3,600.01 lacs, total net profit after tax of Rs. NIL and Rs. NIL and total comprehensive income of Rs. NIL and Rs. NIL, and net cash inflow/ (outflow) of Rs.0.08 lacs and Rs 11.23 lacs for the year ended 31 March, 2025 and 31 March, 2024 respectively, as considered in the audited standalone financial results which have been audited by their respective other auditors.
(iii) Borrowings secured against Current Assets:-
The Company has been sanctioned working capital loans from banks on the basis of security of current assets and PPE. There are no material differences in quarterly returns filed with such banks and the books of accounts of the Company.
(iv) Relationship with Struck off Companies
There are no transactions outstanding of the Company with Companies struck off under Section 248 of the Companies Act, 2013/Section 560 of the Companies Act, 1956 as on the Balance Sheet date.
Mar 31, 2024
29 PROVISIONS
Accounting Policy :
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Warranty provisions
Provisions for warranty-related costs are recognised on the basis of product sold or service provided to the customer. Initial recognition is based on historical experience and managementâs decision based on technical advice. The initial estimate of warranty-related costs is revised annually.
Onerous contracts
If the Company has a contract that is onerous, the present obligation under the contract is recognised and measured as a provision. However, before a separate provision for an onerous contract is established, the Company recognises any impairment loss that has occurred on assets dedicated to that contract.
An onerous contract is a contract under which the unavoidable costs (i.e., the costs that the Company cannot avoid because it has the contract) of meeting the obligations under the contract exceed the economic benefits expected to be received under it. The unavoidable costs under a contract reflect the least net cost of exiting from the contract, which is the lower of the cost of fulfilling it and any compensation or penalties arising from failure to fulfil it.
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company has generally concluded that it is the principal in its revenue arrangements, because it typically controls the goods or services before transferring them to the customer.
Sale of goods
Revenue from sale of goods is recognised at the point in time when control of the goods is transferred to the customer. The revenue is measured based on the consideration defined in the contract with a customer, net of variable consideration on account of various discounts and schemes offered by the Company as part of the contract. As the period between the date on which the Company transfers the promised goods to the customer and the date on which the customer pays for these goods is generally one year or less, no financing components are considered.
The Company typically provides warranties for general repairs on all its products sold, in line with the industry practice. These assurance-type warranties are accounted for under Ind AS 37 Provisions, Contingent Liabilities and Contingent Assets. Refer to the accounting policy on warranty provisions in note 29 Provisions.
Export entitlements are recognised when the right to receive the credits as per the terms of the schemes is established in respect of the exports made by the Company and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.
The Company recognises revenue on satisfaction of performance obligation to its customers. Revenue is measured based on consideration specified in a contract with a customer and excludes taxes collected on behalf of the government authorities.
Construction Contracts
Revenue on contracts is recognised using input method where revenue is accounted on the basis of the entityâs efforts or inputs to the satisfaction of a performance obligation relative to the total expected inputs to the satisfaction of that performance obligation (in accordance with Percentage of Completion method) as per Ind AS 115.
The amount of revenue and profit recognised in a year on projects is dependent, inter alia, on the actual costs incurred, the assessment of the percentage of completion of (long-term) contracts and the forecasted contract revenue and costs to complete of each project. Furthermore, the amount of revenue and profit is influenced by the valuation of variation orders and claims.
In cases, where the current estimates of the total contract cost and revenue indicate a loss, such loss is recognized as an expense.
Contract Balances
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional.
A receivable represents the Companyâs right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due). Refer to accounting policies of financial assets in note 4 Financial instruments - initial recognition and measurement.
A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract.
Rendering of services
Revenue from sale of services is recognised upon the rendering of services and are recognised net of goods and services tax and other applicable taxes.
Interest income
Interest income is included in other income in the statement of profit and loss. Interest income is recognised on a time proportion basis taking into account the amount outstanding and the effective interest rate when there is a reasonable certainty as to realisation."
Dividends
Revenue is recognised when the Companyâs right to receive the payment is established, it is probable that the economic benefits associated with the dividend will flow to the Company and the amount of dividend can be measured reliably.
Rental income
Performance Obligation Sale of goods
The performance obligation is recognised at the point in time when control of the goods - pumps, pumping systems and spares is transferred to the customer and the payment is generally due within 30 to 90 days from such delivery.
Sale of services
The performance obligation is satisfied over-time and payment is generally due upon completion of erectioning, commissioning and servicing services by the Company and its due acceptance by the customer.
Construction Contracts
The performance obligation is satisfied over-time and is calculated based on percentage completion method when the outcome of the contract can be estimated reliably. Payment is generally based on financial milestones as per terms set out in the contract and its due acceptance by the customer.
40 40.1 Significant accounting judgements, estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
40.2 Employee benefit plans
Gratuity: The cost of defined benefit gratuity plan and its present value of the obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, an employee benefit obligation is highly sensitive to changes in these assumptions particularly the discount rate and estimate of future salary increase. All assumptions are reviewed at each reporting date. The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds.The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases are based on expected future inflation rates.
Further details about gratuity obligations are given in Note 41.1.
Leave Encashment: The Company has a policy on Leave Encashment which is accumulating in nature. The Expected Cost of Accumulated Leave Encashment is determined by Actuarial Valuation performed by an independent actuary using Project Unit Credit Method as per Ind As 19 on the additional amount expected to be paid/availed as a result of the unused entitlement that has accumulated at the Balance Sheet date.
Further details about leave encashment obligations are given in Note 41.2.
The Code on Social Security, 2020 has been enacted, which may impact the employee related contributions made by the Company. The effective date from which the changes are applicable is yet to be notified. The Ministry of Labour and Employment has released draft rules for the code on November 13, 2020. The Company will complete its evaluation and will give appropriate impact in its financial results in the period in which the code becomes effective and the related rules are published.
40.3 Warranty
Warranty costs are accrued at the time the products are sold. The Company estimates the provision for warranty based on past trend of actual sale of pumps. As at 31 March 2024, the estimated liability towards warranty amounted to approximately Rs. 160.28 lacs (31 March 2023: Rs. 124.84 lacs.)
The provision towards warranty is not discounted as the management, based on past trend, expects to use the provision within twelve months after the Balance Sheet date.
40.4 Estimation of expected useful lives and residual values of property, plant and equipment
Property, plant and equipment are depreciated at historical cost using straight-line method based on the estimated useful life, taken into account at residual value. The assetâs residual value and useful life are based on the Companyâs best estimates and reviewed, and adjusted if required, at each Balance Sheet date
40.5 Revenue from Construction Contracts
Contract Revenue is recognised under âpercentage of completion methodâ. When the outcome of a construction contract can be estimated reliably contract revenue and contract costs associated with the construction contracts are recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity.
Individual project budgets are reviewed regularly with project leaders to ensure that cost estimates are based upon up to date and as accurate information as possible, and take into account any relevant historic performance experience. Furthermore, all completed projects are reviewed to ensure that all relevant costs have been recorded/accrued at the time of project completion in the relevant period and that no further costs will be incurred in addition to the above costs.
Contract variations are recognized as revenues to the extent that it is probable that they will result in revenue which can be reliably measured, which requires the exercise of judgment by management based on prior experience, application of contract terms and relationship with the contract owners. Claims are recorded as revenue when negotiations have reached to an advance stage such that it is probable, the customer will accept the claim and amount can be measured reliably, which requires the exercise of judgment by management based on prior experience.
For further details, refer Note 53.
40.6 Provision for Expected Credit Losses
The Company measures Expected Credit Loss (ECL) for financial instruments based on historical trend, industry practices and the business environment in which the Company operates. The Company bases the estimates on the ageing and creditworthiness of the receivables and historical write-off experience and variation in the credit risk on year to year basis. The assumptions and estimates applied for determining the provision for impairment are reviewed periodically. For further details refer Note 48.
40.7 Impairment of Investments in Subsidiaries
Determining whether the investments in subsidiaries are impaired requires an estimate of the value in use of investments. In considering the value in use, the management anticipates the order book, operating margins, discount rates and other factors of the underlying businesses/operations of the subsidiaries.
40.8 Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair values are measured using valuation techniques, including the discounted cash flow model, which involve various judgements and assumptions.
40.9 Impairment of non-financial assets
Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at armâs length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The carrying amounts of the Companyâs non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the recoverable amounts of cash-generating units have been determined based on value in use calculations. These calculations require the use of estimates such as discount rates and growth rates.
41 Gratuity and other post-employment benefit plans
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to gratuity on terms not less favourable than the provisions of The payment of Gratuity Act, 1972. The scheme is funded with an insurance company in the form of qualifying insurance policy.
41.1 The following table summarises the components of net benefit expenses recognised in the Statement of Profit and Loss and the funded status and amounts recognised in the Balance Sheet for the post retirement benefit plans (gratuity).
43 Contingent Liabilities
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 recognized 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 recognized because it cannot be measured reliably. After making proper assessments, it has been concluded that the Company is not required to recognize contingent liabilities. However, the Company discloses its existence in the financial statements and makes such assessments regularly.
Following are the contingent liabilities of the Company as at the year end :
The company''s financial liabilities comprise loans and borrowings, trade and other payables etc. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s financial assets include trade and other receivables, cash and cash equivalents, that derive directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The company has a risk management policy, and its management is supported by a Risk management committee. The Risk management committee provides assurance to the company''s management that the company''s risk activities are governed by appropriate policies and procedures and that the financial risks are identified, measured and managed in accordance with company''s policies and risk objectives. The Board of Directors review and agrees policies for managing each of these risks which are summarised below:
48.1 Market risks :
Market risk is the risk that the fair value of future cash flow of a future instrument will fluctuate because of changes in market prices. Market risk comprises of three types of risks, currency risk, interest rate risk and other price risk such as commodity price risk and equity price risk. Financial instrument affected by market risk include trade payables, trade receivables, borrowings etc.
48.2 Interest rate risk :
The Company''s exposure to the risk of changes in market interest rates relate primarily to the company''s debt.
Credit risk is the risk that counterparty will not meet its obligation under a financial instrument or a customer contract leading to a financial loss. The company is exposed to credit risk from its operating activities (primarily trade receivables).
Trade receivables :
Customers'' credit risk is managed by the respective department subject to company''s established policy, procedure and control relating to customer credit risk management. Credit quality of a customer is assessed based on individual credit limits as defined by the Company. Outstanding customers'' receivables are regularly monitored.
An impairment analysis is performed at each reporting date on an individual basis. The calculation is based on historical data of credit losses.
The ageing analysis of receivables (gross of provisions) has been considered from the date the invoice falls due.
Liquidity risk is defined as the risk that the company will not be able to settle or meet its obligation or at a reasonable price. The Company''s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are monitored by company''s senior management. Management monitors the company''s net liquidity position through rolling forecast on the basis of company''s expected cash flow.
The company''s objective is to maintain a balance between the continuity of funding and flexibility through the use of cash credit, bank loans amongst others.
Maturity profile of Financial Liabilities :
The table below provides details regarding remaining contractual maturities of financial liabilities at the reporting date based on contractual undisclosed payments :
For the purpose of Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to equity holders. The primary objective of the Company''s capital management is to maximise the shareholder value and keep the debt equity ratio within acceptable range.
The Company manages its capital structure and makes adjustment in the light of changes in economic conditions and the requirement of financial covenants. The Board of Directors seeks to maintain prudent balance between different components of the Company''s capital. Net debt is defined as current and non current borrowings (including current maturities of long term debts and interest accrued) as reduced by cash and cash equivalents.
50 Categorization of Financial Instruments:
The fair value of the financial assets (excluding investments in subsidiaries and associate) and liabilities approximates their carrying amounts as at the Balance Sheet date.
51 Leases Company as Lessee
The Company has lease contracts for various properties used in its operations having lease terms of 5 years . The Company''s obligations under its leases are secured by the lessorâs title to the leased assets. Generally, the Company is restricted from assigning and subleasing the leased assets.
The Company also has certain leases of properties with lease terms of 12 months or less and leases of properties with low value. The Company applies the âshort-term leaseâ and âlease of low-value assetsâ recognition exemptions for these leases.
Set out below are the carrying amounts of lease liabilities and the movements during the year:
(i) Significant changes in contract assets and liabilities
Contract assets are initially recognised for revenue earned from designing, developing, manufacturing, erecting, commissioning and servicing of pumps & pumping systems since receipt of consideration is conditional on successful completion of prescribed milestones. Upon completion and acceptance by the customer, the amounts recognised as contract assets are reclassified to trade receivables.
The increase in contract assets in FY 2023-24 is the result of the increase in ongoing supply, erection and commissioning services at the end of the year.
Contract liabilities consist of advance billing in connection with supply, erection and commissioning services of pumps and pumping systems. The outstanding balances on these accounts increased in FY 2023-24 by Rs.3,158.43 lacs due to the increase in billing on achievement of financial milestones for which certain activities are yet to be provided by the Company.
Apart from above, there was a decrease in advances received from the customers during the year by Rs 24 lacs.
(ii) Revenue recognised in relation to contract liabilities
The following table shows the amount of revenue recognised in the current reporting period which relates to carried-forward contract liabilities :
(iii) Borrowings secured against Current Assets:-
The Company has been sanctioned working capital loans from banks on the basis of security of current assets and PPE. There are no material differences in quarterly returns filed with such banks and the books of accounts of the Company.
(iv) Relationship with Struck off Companies
There are no transactions outstanding of the Company with Companies struck off under Section 248 of the Companies Act, 2013/Section 560 of the Companies Act, 1956 as on the Balance Sheet date.
As per our Report of even date
For and on behalf of Board of Directors
For Salarpuria & Partners
Chartered Accountants P AGARWAL K. K. GANERIWALA
ICAI Firm Registration No. - 302113E Managing Director Executive Ktectof
DIN 00249468 DIN 00408722
Anand Prakash
Partner U. CHAKRAVARTY
Membership no. - 056485 General Manager (Finance) & Company Secretary
Place : Kolkata, Date : 25 May, 2024 (FCS F5127)
Mar 31, 2023
(a) - Includes Rs 262.35 lacs (31 March 2022 : Rs 268.75 lacs) which are still in the name of merged company (M/S Mody Industries FC. Pvt. Ltd.), and yet to be transferred in the company''s name.
- Rs 3,013.12 lacs acquired by the company during the year , and yet to be transferred in the name of the company.
(b) Refer Note 20 and 24 for information on property, plant and equipment hypothecated as security by the Company.
(c) For property, plant and equipment and intangible assets existing as at April 1, 2016, i.e date of transition to Ind AS, the Company has used Indian GAAP carrying value as deemed cost. Subsequent measurement is at cost.
# Includes Rs 50 lacs (31 March, 2022 : Rs 50 lacs) transferred from the Company''s Bank account fraudulently to a third party, for which necessary legal steps have been initiated by the Company and the matter is sub judice.
* The company has successfully completed the acquisition of assets and certain liabilities of the Nagpur Unit of Hindusthan Udyog Limited , to which the company is an associate, against capital advance paid earlier.
* Includes inventory with third parties of Rs 6.28 lacs (31 March, 2022 : Rs 10.34 lacs)
** Includes inventory with third parties of Rs 275.05 lacs (31 March, 2022 : Rs 138.64 lacs)
# Include Goods in transit Nil (31 March, 2022 : Rs 8.81 lacs)
Refer Note 24 for information on other assets hypothecated as security by the company.
(d) Terms and Rights attached to Equity Shares
The Company has issued Equity Shares having a face value of Rs 10 each. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting and is accounted for in the year in which it is approved by the Shareholders in the General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company after distribution of all preferential amounts. The distribution will be in the proportion to the number of equity shares held by the shareholders.
The Board of Directors, in its meeting on 19 May, 2023 have proposed a final dividend of Rs 20.00 per equity share for the financial year ended 31 March 2023 (31 March 2022 : Rs 10.00/- per equity shares). The proposal is subject to the approval of shareholders at the forthcoming Annual General Meeting and if approved would result in a cash outflow of Rs 1,953.42 lacs (31 March 2022 : Rs 976.71 lacs). Proposed dividend is accounted for in the year in which it is approved by the shareholders.
Nature and purpose of reserves :
Capital Reserve
(Reserve created on reissue of forfeited shares. This can be utilised in accordance with the provisions of the Companies Act, 2013.) Capital Redemption Reserve
(This is a non distributable reserve created on account of restatement of certain investments)
Securities Premium
(Premium received on issue of equity shares. This reserve can be utilised in accordance with the provisions of the Companies Act, 2013)
General Reserve
(This reserve is a part of Retained earning, and is available for distribution to the shareholders as free reserve)
Retained Earnings
(Retained earnings are profits that the company has earned till date, less any transfer to general reserve, dividends or other distributions paid to shareholders. It also includes Revaluation reserve transferred on the date of transition)
* Vehicle loans are secured by hypothecation of the vehicles, repayable as under :
i) Rs 5.09 lacs(RY. 7.67 lacs) in remaining 21 (PY. 33) equal monthly instalments of Rs 0.26 lacs (including interest) bearing interest of 8.6 % p.a
ii) Rs 3.71 lacs (P.Y. 7.42 lacs) in remaining 11 (PY 23) equal monthly instalments of Rs 0.35 lacs (including interest) bearing interest of 9.05% p.a
iii) Rs 36.65 lacs (PY 44.55 lacs) in remaining 15 (PY 27) equal monthly instalments of Rs 0.99 lacs (including interest) bearing interest of 10% p.a
iv) Rs 9.93 lacs (PY 12.67 lacs) in remaining 37 (PY 49) equal monthly instalments of Rs 0.30 lacs (including interest) bearing interest of 6.80% p.a
Performance Obligation Sale of goods
The performance obligation is recognised at the point in time when control of the goods - pumps, pumping systems and spares is transferred to the customer and the payment is generally due within 30 to 90 days from such delivery.
Sale of services
The performance obligation is satisfied over-time and payment is generally due upon completion of erectioning, commissioning and servicing services by the Company and its due acceptance by the customer.
Construction Contracts
The performance obligation is satisfied over-time and is calculated based on percentage completion method when the outcome of the contract can be estimated reliably. Payment is generally based on financial milestones as per terms set out in the contract and its due acceptance by the customer.
40 40.1 Significant accounting judgements, estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
40.2 Employee benefit plans
Gratuity: The cost of defined benefit gratuity plan and its present value of the obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, an employee benefit obligation is highly sensitive to changes in these assumptions particularly the discount rate and estimate of future salary increase. All assumptions are reviewed at each reporting date. The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds.The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases are based on expected future inflation rates. Further details about gratuity obligations are given in Note 41.1.
Leave Encashment: The Company has a policy on Leave Encashment which is accumulating in nature. The Expected Cost of Accumulated Leave Encashment is determined by Actuarial Valuation performed by an independent actuary using Project Unit Credit Method as per Ind As 19 on the additional amount expected to be paid/availed as a result of the unused entitlement that has accumulated at the Balance Sheet date.
Further details about leave encashment obligations are given in Note 41.2.
The Code on Social Security, 2020 has been enacted, which may impact the employee related contributions made by the Company. The effective date from which the changes are applicable is yet to be notified. The Ministry of Labour and Employment has released draft rules for the code on November 13, 2020. The Company will complete its evaluation and will give appropriate impact in its financial results in the period in which the code becomes effective and the related rules are published.
40.3 Warranty
Warranty costs are accrued at the time the products are sold. The Company estimates the provision for warranty based on past trend of actual sale of pumps. As at 31 March, 2023, the estimated liability towards warranty amounted to approximately Rs. 124.84 lacs (31 March, 2022: Rs. 128.80 lacs.)
The provision towards warranty is not discounted as the management, based on past trend, expects to use the provision within twelve months after the Balance Sheet date.
40.4 Estimation of expected useful lives and residual values of property, plant and equipment
Property, plant and equipment are depreciated at historical cost using straight-line method based on the estimated useful life, taken into account at residual value. The assetâs residual value and useful life are based on the Companyâs best estimates and reviewed, and adjusted if required, at each Balance Sheet date.
40.5 Revenue from Construction Contracts
Contract Revenue is recognised under âpercentage of completion method''. When the outcome of a construction contract can be estimated reliably contract revenue and contract costs associated with the construction contracts are recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity.
Individual project budgets are reviewed regularly with project leaders to ensure that cost estimates are based upon up to date and as accurate information as possible, and take into account any relevant historic performance experience. Furthermore, all completed projects are reviewed to ensure that all relevant costs have been recorded/accrued at the time of project completion in the relevant period and that no further costs will be incurred in addition to the above costs.
Contract variations are recognized as revenues to the extent that it is probable that they will result in revenue which can be reliably measured, which requires the exercise of judgment by management based on prior experience, application of contract terms and relationship with the contract owners. Claims are recorded as revenue when negotiations have reached to an advance stage such that it is probable, the customer will accept the claim and amount can be measured reliably, which requires the exercise of judgment by management based on prior experience.
For further details, refer Note 54.
40.6 Provision for Expected Credit Losses
The Company measures Expected Credit Loss (ECL) for financial instruments based on historical trend, industry practices and the business environment in which the Company operates. The Company bases the estimates on the ageing and creditworthiness of the receivables and historical write-off experience and variation in the credit risk on year to year basis. The assumptions and estimates applied for determining the provision for impairment are reviewed periodically. For further details refer Note 49.
40.7 Impairment of Investments in Subsidiaries
Determining whether the investments in subsidiaries are impaired requires an estimate of the value in use of investments. In considering the value in use, the management anticipates the order book, operating margins, discount rates and other factors of the underlying businesses/operations of the subsidiaries.
40.8 Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair values are measured using valuation techniques, including the discounted cash flow model, which involve various judgements and assumptions.
40.9 Impairment of non-financial assets
Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at armâs length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The carrying amounts of the Companyâs non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the recoverable amounts of cash-generating units have been determined based on value in use calculations. These calculations require the use of estimates such as discount rates and growth rates.
41 Gratuity and other post-employment benefit plans
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to gratuity on terms not less favourable than the provisions of The payment of Gratuity Act, 1972. The scheme is funded with an insurance company in the form of qualifying insurance policy.
41.1 The following table summarises the components of net benefit expenses recognised in the Statement of Profit and Loss and the funded status and amounts recognised in the Balance Sheet for the post retirement benefit plans (gratuity).
43 Capital and other commitments
There is no capital commitments during the current year, (31 March, 2022: Rs 15.69 lacs).
|
44 Contingent Liabilities |
(Rs. in Lacs) |
|
|
Particulars |
As at 31st March, 2023 |
As at 31st March, 2022 |
|
Claims against the Company not acknowledged as debts Contingent liabilities not provided for in the Financial Statements - Income Tax matters under appeal - Excise Duty & Service Tax matters under dispute * - Bank Guarantee outstanding - Corporate Guarantee outstanding (Refer Note 46) |
24.17 in respect of the following : 179.94 1,685.04 6,519.03 1,642.20 |
23.35 152.89 1,848.27 3,415.59 6,928.29 |
|
Total |
10,050.38 |
12,368.39 |
|
* The above amount excludes penalty and interest on the demand. |
||
45 Research and Development Expenses
Research and Development Expenses relating to revenue nature aggregating to Rs 166.34 lacs (31 March, 2022: Rs 138.10 lacs) have been charged to respective heads of accounts in the Statement of Profit and Loss.
49 Financial risk management objectives and policies
The Company''s financial liabilities comprise loans and borrowings, trade and other payables etc. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s financial assets include trade and other receivables, cash and cash equivalents, that derive directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The Company has a risk management policy, and its management is supported by a Risk management committee. The Risk management committee provides assurance to the Company''s management that the Company''s risk activities are governed by appropriate policies and procedures and that the financial risks are identified, measured and managed in accordance with Company''s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks which are summarised below :
49.1 Market risks :
Market risk is the risk that the fair value of future cash flow of a future instrument will fluctuate because of changes in market prices. Market risk comprises of three types of risks, currency risk, interest rate risk and other price risk such as commodity price risk and equity price risk. Financial instrument affected by market risk include trade payables, trade receivables, borrowings etc.
49.2 Interest rate risk :
The Company''s exposure to the risk of changes in market interest rates relate primarily to the Company''s debt.
Credit risk is the risk that counterparty will not meet its obligation under a financial instrument or a customer contract leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables).
Trade receivables :
Customers'' credit risk is managed by the respective department subject to Company''s established policy, procedure and control relating to customer credit risk management. Credit quality of a customer is assessed based on individual credit limits as defined by the Company. Outstanding customers'' receivables are regularly monitored.
An impairment analysis is performed at each reporting date on an individual basis. The calculation is based on historical data of credit losses.
The ageing analysis of receivables (gross of provisions) has been considered from the date the invoice falls due.
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligation or at a reasonable price. The Company''s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are monitored by Company''s senior management. Management monitors the Company''s net liquidity position through rolling forecast on the basis of Company''s expected cash flow.
The Company''s objective is to maintain a balance between the continuity of funding and flexibility through the use of cash credit, bank loans amongst others.
50 Capital management
For the purpose of Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to equity holders. The primary objective of the Company''s capital management is to maximise the shareholder value and keep the debt equity ratio within acceptable range.
The Company manages its capital structure and makes adjustment in the light of changes in economic conditions and the requirement of financial covenants. The Board of Directors seeks to maintain prudent balance between different components of the Company''s capital. Net debt is defined as current and non-current borrowings (including current maturities of long term debts and interest accrued) as reduced by cash and cash equivalents.
51 Categorization of Financial Instruments:
The fair value of the financial assets (excluding investments in subsidiaries and associate) and liabilities approximates their carrying amounts as at the Balance Sheet date.
52 Leases
Company as Lessee
The Company has lease contracts for various properties used in its operations having lease terms of 5 years . The Company''s obligations under its leases are secured by the lessorâs title to the leased assets. Generally, the Company is restricted from assigning and subleasing the leased assets.
The Company also has certain leases of properties with lease terms of 12 months or less and leases of properties with low value. The Company applies the âshort-term leaseâ and âlease of low-value assetsâ recognition exemptions for these leases.
Set out below are the carrying amounts of lease liabilities and the movements during the year:
Company as a Lessor
The Company has entered into operating lease of its property having lease term of 11 months. The lease contract includes extension clause and a clause to enable upward revision of the rental charge by 5% on such extension. Rental income recognised by the Company during the year is Rs 31.38 lacs (31 March, 2022 - Rs 30.93 lacs).
53 Disclosure as required by Ind AS 108, Operating Segments
The Company prepares this financial statements alongwith the consolidated financial statements. In accordance with Ind AS 108 for Operating Segments, the Company has disclosed the Segment Reporting and information in its consolidated financial statements.
in I arcl
(i) Significant changes in contract assets and liabilities
Contract assets are initially recognised for revenue earned from designing, developing, manufacturing, erecting, commissioning and servicing of pumps & pumping systems since receipt of consideration is conditional on successful completion of prescribed milestones. Upon completion and acceptance by the customer, the amounts recognised as contract assets are reclassified to trade receivables.
The increase in contract assets in FY 2022-23 is the result of the increase in ongoing supply, erection and commissioning services at the end of the year.
Contract liabilities include advance received / advanced billing in connection with supply, erection and commissioning services of pumps and pumping systems. The outstanding balances of these accounts inreased in FY 2022-23 by Rs. 4,645.42 lacs due to the increase in billing on achievement of financial milestones for which certain activities are yet to be provided by the Company.
Other than above, there was an increase in advances received from the customers during the year amounting to Rs 112.48 lacs.
The Company expects that 48% of the transaction price allocated to unsatisfied performance obligations as at 31 March, 2022 will be recognised within one year based on the tenure of the project and expected work completion stage. Balance portion is expected to be received after one year without any significant delay.
58 The above audited standalone Ind AS financial statements include figures for five (31 March, 2022 : five) joint operations whose financial results and other financial information reflect total assets of Rs.7,739.37 lacs and Rs 7,970.98 lacs as at 31 March, 2023 and 31 March, 2022 respectively and total revenues of Rs. 8,923.27 lacs and Rs 6,973.32 lacs, total net profit after tax of Rs. NIL and Rs. NIL and total comprehensive income of Rs. NIL and Rs. NIL, and net cash inflow/ (outflow) of (Rs.588.32 lacs) and Rs 484.66 lacs for the year ended 31 March, 2023 and 31 March, 2022 respectively, as considered in the audited standalone financial results which have been audited by their respective other auditors.
(iii) Borrowings secured against Current Assets:-
The Company has been sanctioned working capital loans from banks on the basis of security of current assets and fixed assets.There are no material differences in quarterly returns filed with such banks and the books of accounts of the Company.
(iv) Relationship with Struck off Companies
There are no transactions outstanding of the Company with Companies struck off under Section 248 of the Companies Act, 2013/Section 560 of the Companies Act, 1956 as on the Balance Sheet date.
Mar 31, 2018
1. Corporate information
WPIL Limited (âthe Companyâ) is a public company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. The Companyâs registered office is at Trinity Plaza, 3rd Floor, 84/1A, Topsia Road (South) Kolkata - 700046. Its shares are listed on the Bombay Stock Exchange Limited and the Calcutta Stock Exchange Limited in India.
The Company is principally engaged in designing, developing, manufacturing, erecting, commissioning and servicing of pumps & pumping systems. The Company caters to both domestic and international markets.
2. Basis of preparation and compliance with Ind AS
For all periods upto and including the year ended 31st March, 2017, the Company had prepared its financial statements in accordance with Generally Accepted Accounting Principles (GAAP) in India and complied with the accounting standards as notified under Section 133 of the Companies Act, 2013 read together with Rule 7 of the Companies (Accounts) Rules, 2014, as amended (Previous GAAP), to the extent applicable, and the presentation requirements of the Companies Act, 2013.
In accordance with the notification dated February 16, 2015, issued by the Ministry of Corporate Affairs, the Company has adopted Indian Accounting Standards (Ind AS) notified under Section 133 read with Rule 4A of Companies (Indian Accounting Standards) Rules, 2015, as amended, and the relevant provisions of the Companies Act, 2013 (collectively, âInd ASâ) with effect from April 1, 2017 and the Company is required to prepare its financial statements in accordance with Ind AS for the year ended 31st March, 2018. These financial statements for the year ended 31st March, 2018 (the âInd AS Financial Statementsâ) are the first financial statements, the Company has prepared in accordance with Ind AS.
The Company has followed the provisions of Ind AS 101-âFirst Time adoption of Indian Accounting Standardsâ (Ind AS 101), in preparing its opening Ind AS Balance Sheet as of the date of transition, i.e. April 1, 2016. In accordance with Ind AS 101, the Company has presented reconciliations of Shareholdersâ equity under Previous GAAP and Ind AS as at 31st March, 2017, and April 1, 2016 and of the profit after tax as per Previous GAAP and total comprehensive income under Ind AS for the year ended 31st March, 2017.
The financial statements have been prepared on a historical cost convention on accrual basis except for certain financial instruments which are measured in terms of relevant Ind AS at fair value / amortised costs at the end of each reporting period.
These Ind AS financial statements were approved for issue by the Board of Directors on May 30, 2018.
Notes :
(a) Includes Rs. 294.35 lacs (31st March, 2017 : 300.74 lacs, 1st April, 2016: Rs. 307.14 lacs) which are still in the name of merged company (Refer Note 51) and yet to be transferred in the Companyâs name.
(b) Includes Rs. 143.83 lacs (31st March, 2017: Rs . 127.02 lacs, 1st April, 2016: Rs. 66.59 lacs) acquired for Research and Development purpose.
(c) Refer Note 20 for information on property, plant and equipment pledged as security by the Company,
(d) For property, plant and equipment existing as at April 1, 2016, i.e date of transition to Ind AS, the Company has used Indian GAAP carrying value as deemed cost as permitted by Ind AS 101 - First Time Adoption. Accordingly, the net block as per Indian GAAP as on April 1, 2016 has been considered as Gross Block under Ind AS. Ihe accumulated depreciation so netted off as on April 1, 2016 is mentioned below :
(e) For Intangible Assets existing as at 1st April , 2016, i.e date of transition to Ind AS, the Company has used Indian GAAP carrying value as deemed cost as permitted by Ind AS 101 - First Time Adoption. Accordingly, the net block as per Indian GAAP as on April 1, 2016 has been considered as Gross Block under Ind AS. The accumulated amortisation so netted off as on 1st April , 2016 is mentioned below :
(c) There has been no change in the number of equity shares in the current year and comparative previous years.
(d) Terms and Rights attached to Equity Shares
The Company has issued Equity Shares having a face value of Rs. 10 each. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting and is accounted for in the year in which it is approved by the Shareholders in the General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company after distribution of all preferential amounts. The distribution will be in the proportion to the number of equity shares held by the shareholders.
The Board of Directors, in its meeting on 30th May, 2018, have proposed a final dividend of Rs. 4/- per equity share for the financial year ended 31st March, 2018. The proposal is subject to the approval of shareholders at the forthcoming Annual General Meeting and if approved would result in a cash outflow of Rs. 470.99 lacs including corporate dividend tax. Proposed dividend is accounted for in the year in which it is approved by the shareholders.
1. Cash credit from banks are secured by first charge by way of hypothecation of stocks, consumable stores, book debts and other movables and first mortgage / charge over the Companyâs present and future fixed assets. These are repayable on demand and carries interest in the range of 9.30% to 12.65% (31st March, 2017: 10.40% to 12.70%, 1st April, 2016: 11.65% to 12.75%).
2. Short term loans from Banks are repayable within 30 days and carries interest at the rate of Nil (31st March, 2017: 10.10%, 1st April, 2016: 11.10%).
3. Short term loans from Body Corporates are repayable on demand and carries interest at the rate of Nil (31st March, 2017: Nil, 1st April, 2016: 15%).
Provision for Warranties
As per the requirement of IND AS 37, the management has estimated future expenses with regard to warranty given by the Company on best judgment basis and provision thereof has been made in the accounts. The table below gives information about movement in warranty provisions.
3 Significant accounting judgements, estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
Employee benefit plans
The cost of defined benefit gratuity plan and its present value of the obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, an employee benefit obligation is highly sensitive to changes in these assumptions particularly the discount rate and estimate of future salary increase. All assumptions are reviewed at each reporting date.
The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of Government bonds.
The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases are based on expected future inflation rates. Further details about gratuity obligations are given in Note 36.
Warranty
Warranty costs are accrued at the time the products are sold. The Company estimates the provision for warranty based on past trend of actual sale of pumps. As at March 31, 2018, the estimated liability towards warranty amounted to approximately Rs. 138.47 lacs (March 31, 2017: Rs. 115.56 lacs, April 1, 2016: Rs. 127.49 lacs.)
The provision towards warranty is not discounted as the management, based on past trend, expects to use the provision within twelve months after the Balance Sheet date.
Estimation of expected useful lives and residual values of property, plant and equipment
Property, plant and equipment are depreciated at historical cost using straight-line method based on the estimated useful life, taken into account at residual value. The assetâs residual value and useful life are based on the Companyâs best estimates and reviewed and adjusted if required, at each Balance Sheet date
Revenue from Construction Contracts
Contract Revenue is recognised under âpercentage of completion methodâ. When the outcome of a construction contract can be estimated reliably contract revenue and contract costs associated with the construction contracts are recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity. For further details, Refer note 50.
Provision for Expected Credit Losses
The Company measures Expected Credit Loss (ECL) for financial instruments based on historical trend, industry practices and the business environment in which the Company operates. For further details Refer Note 44.
4 Gratuity and other post-employment benefit plans
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to gratuity on terms not less favourable than the provisions of The payment of Gratuity Act, 1972. The scheme is funded with an insurance company in the form of qualifying insurance policy.
The following table summarises the components of net benefit expenses recognised in the Statement of Profit and Loss and the funded status and amounts recognised in the Balance Sheet for the post retirement benefit plans.
5 Capital and other commitments
Estimated amount of contracts remaining to be executed on Capital Account and not provided for (net of Advances) Rs. 514.35 lacs (31st March, 2017: Nil, and 1st April, 2016: Nil).
6 Research and Development Expenses
Research and Development Expenses relating to material consumption aggregating to Rs. 8.17 lacs (31st March, 2017: Rs. 25.12 lacs), relating to other revenue nature aggregating to Rs. 110.83 lacs (31st March, 2017: Rs 131.03 lacs) have been charged to respective heads of accounts in the Statement of Profit and Loss, and relating to capital nature aggregating to Rs. 44.25 lacs (31st March, 2017: Rs, 80.05 lacs) under different heads in Tangible and Intangible assets in the Balance Sheet.
7 Related Party Transactions :
Related Party disclosures as required under Ind AS 24 on âRelated Party Disclosuresâ as certified by the management, are given below :
A. Relationship :
(i) Associate - Clyde Pump India Private Limited (Clyde)
(ii) Joint Venture - WPIL (Thailand) Company Ltd. (WPIL-Thy.)
(iii) Subsidiaries - Sterling Pumps Pty Limited - Australia (Sterling)
- Aturia International Pte Ltd. - Singapore (Aturia International.)
(Formerly : WPIL - Singapore)
(iv) Stepdown Subsidiaries - Mathers Foundry Limited, U.K. (Mathers)
- WPIL SA Holdings Pty Limited
- APE Pumps Pty Limited (APE Pumps)
- Mather & Platt (SA) Pty Limited
- PSV Zambia Limited (Zambia)
- Global Pumps Services (FZE)
- Gruppo Aturia SpA (Aturia)
- Rutschi Fluid AG
- Pompes Rutschi SAS
(v) Key Management Personnel - Mr. P. Agarwal : Managing Director and their relatives - Mr. V. N. Agarwal : Non Executive Director, Father of Mr. P. Agarwal
- Mrs. Ritu Agarwal : Non Executive Director, Wife of Mr. P. Agarwal
- Mr. K. K. Ganeriwala : Executive Director
- Mr. U. Chakrabarty : General Manager (Finance) and Company Secretary
- Mr Anajan Dasgupta : Non Executive Independent Director (Appointed with effect from 3rd February 2018)
- Mr Binaya kapoor : Non Executive Director (Ceased with effect from 13th December, 2017)
- Mr S.N. Roy : Non Executive Independent Director
- Mr U.K. Mukhopadhyay : Non Executive Independent Director
(vi) Enterprise over which KMP/ - Bengal Steel Industries Limited (Bengal Steel) shareholders/ relatives have - Hindusthan Udyog Limited (HUL) significant influence - Macneill Electricals Limited (MEL)
- Neptune Exports Limited (Neptune)
- Orient International Ltd. (Orient)
- Hindusthan Parsons Ltd. (HPL)
- Tea Time Ltd. (Tea Time)
7 Financial risk management objectives and policies
The companyâs financial liabilities comprise loans and borrowings, trade and other payables etc. The main purpose of these financial liabilities is to finance the Companyâs operations. The Companyâs financial assets include trade and other receivables, cash and cash equivalents, that derive directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The company has a risk management policy, and its management is supported by a Risk management committee. The Risk management committee provides assurance to the companyâs management that the companyâs risk activities are governed by appropriate policies and procedures and that the financial risks are identified, measured and managed in accordance with companyâs policies and risk objectives. The Board of Directors review and agrees policies for managing each of these risks which are summarised below :
Market risks :
Market risk is the risk that the fair value of future cash flow of a future instrument will fluctuate because of changes in market prices. Market risk comprises of three types of risks, currency risk, interest rate risk and other prise risk such as commodity price risk and equity price risk. Financial instrument affected by market risk include trade payables, trade receivables, borrowings etc.
Interest rate risk :
The Companyâs exposure to the risk of changes in market interest rates relate primarily to the companyâs debt.
Interest rate sensitivity :
The following table demonstrates the sensitivity to a reasonable possible change in interest rates. With all other variables held constant, the Companyâs profit before tax is affected through the impact of floating rate as follows :
Credit risk:
Credit risk is the risk that counterparty will not meet its obligation under a financial instrument or a customer contract leading to a financial loss. The company is exposed to credit risk from its operating activities (primarily trade receivables).
Trade receivables :
Customersâ credit risk is managed by the respective department subject to companyâs established policy, procedure and control relating to customer credit risk management. Credit quality of a customer is assessed based on individual credit limits as defined by the Company. Outstanding customersâ receivables are regularly monitored.
An impairment analysis is performed at each reporting date on an individual basis. The calculation is based on historical data of credit losses.
The ageing analysis of receivables (gross of provisions) has been considered from the date the invoice falls due.
Liquidity risk :
Liquidity risk is defined as the risk that the company will not be able to settle or meet its obligation or at a reasonable price. The Companyâs treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are monitored by companyâs senior management. Management monitors the companyâs net liquidity position through rolling forecast on the basis of companyâs expected cash flow.
The companyâs objective is to maintain a balance between the continuity of funding and flexibility through the use of cash credit, bank loans amongst others.
8 Capital management
For the purpose of Companyâs capital management, capital includes issued equity capital and all other equity reserves attributable to equity holders. The primary objective of the companyâs capital management is to maximise the shareholder value and keep the debt equity ratio within acceptable range.
The company manages its capital structure and makes adjustment in the light of changes in economic conditions and the requirement of financial covenants. To maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders, return capital to shareholders and issue new shares.
9 Standard issued but not yet effective
Ministry of Corporate Affairs (âMCAâ) through Companies (Indian Accounting Standards) Amendment Rules, 2018 has notified the following new and amendments to Ind ASs which the Company has not applied as they are effective for annual periods beginning on or after April 1, 2018:
Ind AS 115 - Revenue from Contracts with Customers
The Company is currently evaluating the impact of implementation of Ind AS 115 âRevenue from Contracts with Customersâ which is applicable to it w.e.f 01.04.2018. However, based on the evaluation done so far and based on the arrangement that the Company has with its customers for sale of its products and revenue from construction contracts, the implementation of Ind AS 115 will not have any significant impact on the profit or loss of the Company.
Ind AS 21 - The Effect of Changes in Foreign Exchange Rates
The amendment clarifies on the accounting of transactions that include the receipt or payment of advance consideration in a foreign currency. The appendix explains that the date of the transaction, for the purpose of determining the exchange rate, is the date of initial recognition of the non-monetary prepayment asset or deferred income liability. If there are multiple payments or receipts in advance, a date of transaction is established for each payment or receipt. The company is evaluating the impact of this amendment on its financial statements.
Ind AS 12 - Income Taxes
The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount.
Entities are required to apply the amendments retrospectively. However, on initial application of the amendments, the change in the opening equity of the earliest comparative period may be recognised in opening retained earnings (or in another component of equity, as appropriate), without allocating the change between opening retained earnings and other components of equity. Entities applying this relief must disclose that fact.
These amendments are effective for annual periods beginning on or after 1st April, 2018. These amendments are not expected to have any impact on the Company as the Company has no deductible temporary differences or assets that are in the scope of the amendments.
Ind AS 28 - Investments in Associates and Joint ventures
Clarification that measuring investees at fair value through profit or loss is an investment-by-investment choice :
i) An entity that is a venture capital organisation, or other qualifying entity, may elect, at initial recognition on an investment-by-investment basis, to measure its investments in associates and joint ventures at fair value through profit or loss.
ii) If an entity, that is not itself an investment entity, has an interest in an associate or joint venture that is an investment entity, the entity may, when applying the equity method, elect to retain the fair value measurement applied by that investment entity associate or joint venture to the investment entity associateâs or joint ventureâs interests in subsidiaries. This election is made separately for each investment entity associate or joint venture, at the later of the date on which: (a) the investment entity associate or joint venture is initially recognised; (b) the associate or joint venture becomes an investment entity; and
(c) the investment entity associate or joint venture first becomes a parent.
The amendments should be applied retrospectively and are effective from 1st April, 2018. These amendments are not applicable to the Company.
Amendments to Ind AS 112 Disclosure of Interests in Other Entities: Clarification of the scope of disclosure requirements in Ind AS 112
The amendments clarify that the disclosure requirements in Ind AS 112, other than those in paragraphs B10-B16, apply to an entityâs interest in a subsidiary, a joint venture or an associate (or a portion of its interest in a joint venture or an associate) that is classified (or included in a disposal group that is classified) as held for sale. These amendments are not applicable to the Company.
Amendments to Ind AS 40 Investment Property are not applicable to the Company.
10 Categorization of Financial Instruments:
The fair value of the financial assets (excluding investments in subsidiaries and associate) and liabilities approximates their carrying amounts as at the Balance Sheet date.
The obligations on long-term, non-cancellable operating leases payable as per the rentals stated in the respective agreements are as follows:
The operating lease arrangements are renewable on a periodic basis. The period of extension depends on mutual agreement. These lease agreements have price escalation clauses.
11 Disclosure as required by Ind AS 108, Operating Segments
As the Companyâs business activity falls within a single operating segment, comprising of engineering, manufacturing, installation and servicing of pumps of various sizes, no separate segment information is disclosed.
The revenue information above is based on the locations of the customers. The operating facilities of the Company are situated in India and are common for production of both domestic and export market.
12 In July, 2017, the National Company Law Tribunal had sanctioned the Scheme of amalgamation of the wholly owned subsidiary namely Mody Industries (Foreign Collaboration) Private Limited with WPIL Limited pursuant to the provisions of Sections 391 to 394 and other applicable provisions of the Companies Act, 1956 and the Companies Act, 2013. The certified true copy of the said order was received and filed with the Registrar of Companies, West Bengal on 8th July, 2017, thus making the Scheme effective from that date. Since, the appointed date of the Scheme was 1st April, 2016, the effect of amalgamation has been considered in the books retrospectively.
13 The comparative financial information of the Company for the year ended 31st March, 2017 and 1st April, 2016 included in these standalone Ind AS financial statements, are based on previously issued standalone financial statements prepared in accordance with the Previous GAAP and audited by the predecessor auditor as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS and audited by the Statutory auditors of the Company.
14 FIRST TIME ADOPTION OF IND AS
These financial statements, for the year ended 31st March, 2018, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31st March, 2017, the Company had prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Previous GAAP).
Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for period ending on 31st March, 2018, together with the comparative period data as at and for the year ended 31 March, 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Companyâs opening balance sheet was prepared as at 1st April, 2016, the Companyâs date of transition to Ind AS. The reconciliation of Total Equity as at 31st March, 2017 and 1st April, 2016 and Net Profit after Tax for the year ended 31st March, 2017 between previous GAAP and Ind AS is as under:
(III) Footnotes to the reconciliation of Total Equity as at 31st March, 2017 and 1st April, 2016 and Net Profit after tax for the year ended 31st March, 2017
a) Dividend
Under Indian GAAP, proposed dividends including Dividend Distribution Taxes (DDT) are recognised as a liability in the period to which they relate, irrespective of when they are approved by the shareholders. Under Ind AS, a proposed dividend is recognised as a liability in the period in which it is declared by the company (usually when approved by shareholders in a general meeting) or paid.
In case of the Company, the declaration of dividend occurs after period end. Therefore, the liability recorded for dividend has been derecognised against retained earnings on 1st April, 2016 and recognised in year ended 31st March, 2017. The proposed dividend for the year ended on 31st March, 2017, recognized under Indian GAAP was reduced from other payables and with a corresponding impact in the retained earnings.
b) Deferred Tax
Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP.
Further, the various transitional adjustments arising on adoption of IND-AS also create temporary differences, deferred tax adjustments whereon are also recognised in Retained earnings, Statement of Profit and Loss or OCI along with the corresponding item of adjustment.
c) Impact of Merger of wholly owned Subsidiary - Common Control business combination
As mentioned in note 51, in July, 2017, the National Company Law Tribunal had sanctioned the Scheme of amalgamation of the wholly owned subsidiary namely Mody Industries (Foreign Collaboration) Private Limited (Mody) with WPIL Limited pursuant to the provisions of Sections 391 to 394 and other applicable provisions of the Companies Act, 1956 and the Companies Act, 2013. The certified true copy of the said order was received and filed with the Registrar of Companies, West Bengal on 8th July, 2017, thus making the Scheme effective from that date. Since, the appointed date of the Scheme was 1st April, 2016, the effect of amalgamation has been considered in the books retrospectively w.e.f 1st April, 2016. Accordingly, all assets and liabilities including goodwill were recognised in accordance with Ind AS 103 based on the principles of common control business combinations.
d) Trade receivables
The Company is required to apply expected credit loss model as per Ind AS 109, for recognising the loss allowance. As a result, the loss allowance on trade receivables increased by Rs. 57.45 lacs as at 31st March, 2017 (1st April, 2016: Rs. 86.80 lacs). Consequently, the total equity as at 31st March, 2017 decreased by Rs. 144.25 lacs (1st April, 2016: Rs. 86.80 lacs).
e) Gratuity expense
As per the requirements of Ind AS 19, the Company has provided for gratuity expense. As a result, the provision for employee benefits increased by Rs. 14.14 lacs (1st April, 2016: Rs. 290.42 lacs). Consequently, the total equity as at 31st March, 2017 decreased by Rs. 304.56 lacs (1st April, 2016: Rs. 290.42 lacs).
f) Other comprehensive income
IND-AS requires preparation of Other Comprehensive Income in addition to Statement of Profit and Loss.
g) IND-AS 101 Exemption applied
The Company has adopted following exemptions from retrospective application of certain requirements under IND-AS, as allowed by IND-AS 101 - First-time Adoption of Indian Accounting Standards:
(i) The Company has opted not to apply IND-AS 103 - Business Combinations, to acquisitions occurred before 1st April 2016 i.e. date of transition.
(ii) Since there is no change in the functional currency, the Company has elected to continue with the carrying value for all of its property, plant and equipment as recognised in its Indian GAAP financial as deemed cost at the transition date. This exemption is also available for intangible assets covered by Ind AS 38 Intangible Assets.
(iii) The estimates at 1st April, 2016 and at 31st March, 2017 are consistent with those made for the same dates in accordance with Previous GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items where application of Previous GAAP did not require estimation:
- Impairment of financial assets based on expected credit loss model
(iv) Ind AS 101 allows a first-time adopter to elect to continue with the carrying amount of its investments in subsidiaries and joint ventures as recognised in the separate financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition.
Accordingly, the Company has elected to measure all of its investments in subsidiaries and joint ventures as recognised in the separate financial statements at their previous GAAP carrying value.
(v) In respect of its interest in joint operations, Ind AS 101 allows an entity to de-recognise the investment that was previously accounted for at cost, and recognise the assets and the liabilities in respect of its interest in the joint operation. Accordingly, the Company has elected to de-recognise the investments in joint operations recognised under previous GAAP and recognise share of each of the assets and the liabilities in respect of its interest in the joint operations as at the date of transition.
15 The Board of Directors of the Company at its meeting held on July 14, 2017 have approved a proposal for acquisition of an Alloy and Stainless Steel Castings Foundry unit in Nagpur from Hindusthan Udyog Limited as slump sale on a going concern basis. Pending necessary approvals and formalities for the acquisition, no adjustment has been made in the financials.
16 The Company has identified that its only reportable segment and Cash generating unit (CGU) is âPump and pump accessoriesâ. The carrying amount of goodwill as at 31st March, 2018 is Rs. 1,372.93 lacs. Before the year end, the management has tested the goodwill for impairment. In this regard, discounting factor of 8% has been considered. The management has also performed sensitivity analysis around the base assumptions and have concluded that no reasonable changes in key assumptions would cause the recoverable amount of the CGU to be less than the carrying value.
Mar 31, 2016
Cost of Product Warranties including provisions are included under the head âMiscellaneous Expensesâ, which includes cost of raw materials and components for free replacement of spares and other overheads.
(c) The Company has issued Ordinary Shares having a face value of Rs 10/- each. Each holder of Ordinary Shares is entitled to one vote per share. The Company declares dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders at the Annual General Meeting.
(d) In the event of liquidation of the Company, the holders of Ordinary Shares will be entitled to receive any of the remaining assets of the Company after distribution of all preferential amounts. The distribution will be in the proportion to the number of Ordinary Shares held by the shareholders.
d) Accrued liability on account of Gratuity payable to the employees of the Company on retirement at future dates as per actuarial valuation as at 31st March, 2016 amounts to Rs. 2,99,61,705/- ( 2015 - Rs. 2,78,45,752/- ). A total sum of Rs. 5,67,69,560/- (NIL amount during the current year) has been charged in the Financial Statements and paid to LICI by way of premium under Group Gratuity Scheme for its employees to cover current as well as past liability.
e) Warranty costs are accrued at the time the products are sold. Based on past experience, the provision is discharged over the contractual warranty period from the date of sale. During the year, Rs. 1,04,19,521/- have been incurred against earlier provisions and Rs. 1,12,00,000/- have been provided.
f) Research and Development Expenses
Research and Development Expenses relating to revenue nature aggregating to Rs. 100.66 lacs (2015 - Rs. 71.03 lacs) have been charged to respective heads of accounts in the Statement of Profit and Loss and relating to capital nature aggregating to Rs. 60.02 lacs (2015 - Rs. 10.75 lacs) under different heads in Fixed Assets in the Balance Sheet.
k) Disclosure pertaining to Corporate Social Responsibility expenditures as per section 135 of the Companies Act, 2013:
- Gross amount required to be spent by the Company during the year : Rs 48,23,453/
- Amount spent by the Company : Rs. 5,00,000/-
Notes :
- The Company is primarily engaged in the business of design, development, manufacture, marketing, installation and servicing of vertical and horizontal pumps of various sizes required for lift irrigation / major irrigation schemes, thermal / nuclear power plants etc., and accordingly there are no business segment. The primary segment is geographical based on location of customer, i.e domestic and export sales.
- The segment wise revenue and assets figures relate to amounts directly identifiable to each of the segments. The operating facilities of the Company are situated in India and are common for production of both domestic and export market.
s) Previous year''s figures have been rearranged / regrouped wherever found necessary.
Mar 31, 2014
Not Available
Mar 31, 2013
A) Accrued liability on account of Gratuity payable to the employees of
the Company on retirement at future dates as per actuarial valuation as
at 31st March, 2013 amounts to Rs. 2,30,97,562/- (2012 Â Rs.
2,19,47,713/-). A total sum of Rs. 5,13,38,560/- (including Rs.
34,32,000/- during the current year) has been charged in the Financial
Statements and paid to LICI by way of premium under Group Gratuity
Scheme for its employees to cover current as well as past liability.
b) Warranty costs are accrued at the time the products are sold. Based
on past experience, the provision is discharged over the contractual
warranty period from the date of sale. During the year, Rs.
1,18,16,421/- have been incurred against earlier provisions, and Rs.
91,25,000/- have been provided.
c) Research and Development Expenses
Research and Deveopement Expenses relating to revenue nature
aggregating to Rs. 74.32 lacs (2012 - Rs. 66.97 lacs) have been charged
to respective heads of accounts in the Statement of Profit and Loss,
and relating to capital nature aggregating to Rs. 3.78 lacs (2012 - Rs.
Nil) have been capitalised under different heads in Fixed Assets in the
Balance Sheet.
d) Disclosure on Joint Venture Entity :
a) Details of Joint Venture :
 Name of Joint Venture Entity : Clyde Pump India Private Limited
 Country of Incorporation : India
 Proportion of Ownership Interest : 40%
e) Related Party Transactions :
Related party disclosures as required under Accounting Standard - 18 on
"Related Party Disclosures" issued by the Institute of Chartered
Accountants of India, as certified by the management, are given below :
A. Relationship
i) Joint Venture  Clyde Pump India Private Limited (Clyde)
ii) Subsidiaries  Sterling Pumps Pty Limited - Australia (Sterling)
 WPIL International Ltd. - Singapore (WPIL-Sing.)  Mody Industries
(F.C.) Private Limited (Mody)
iii) Stepdown Subsidiaries  Mathers Foundry Limited, Manchester, U.K.
(Mathers)
 WPIL SA Holding Pty Limited
 APE Pumps Pty Limited
 Mather & Platt (SA) Pty Limited
 PSV Services Pty Limited
 PSV Properties 2 Pty Limited
 PSV Zambia Limited (Zambia)
 Global Pumps Services (FZE)
iv) Key Management Personnel and their relatives
 Mr. P. Agarwal : Managing Director
 Mr. V. N. Agarwal : Director, Father of Mr. P. Agarwal
 Mr. K. K. Ganeriwala : Executive Director
v) Companies over which key management personnel or relatives are able
to exercise control/significant influence control/significant influence
 Bengal Steel Industries Limited (Bengal Steel)
 Hindusthan Udyog Limited (HUL)
 WPIL (Thailand) Company Ltd. (WPIL-Thy.)
Mar 31, 2012
Cost of Product Warranties including provisions are included under the
head "Miscellaneous Expenses", which includes cost of raw materials
and components for free replacement of spares, and other overheads.
(a) The Company has issued ordinary shares having a face value of Rs
10/- each. Each holder of ordinary share is entitled to one vote per
share. The Company declares dividends in Indian rupees. The dividend
proposed by the Board of Directors is subject to the approval of the
shareholders at the Annual General Meeting.
(b) In the event of liquidation of the company, the holder of ordinary
shares will be entitled to receive any of the remaining assets of the
company after distribution of all preferential amounts. The
distribution will be in the proportion to the number of ordinary shares
held by the shareholders.
Note A - "Others" represent Term Loan comprising of two loans amounting
to Rs. 15 crores each, repayable as under :
i) Term Loan of Rs. 15 crores repayable in three equal installments of
Rs. 5 crores each on 20.10.2013, 20.10.2014 and 20.10.2015.
ii) Term Loan of Rs. 15 crores repayable in two equal installments of
Rs. 7.50 crores each on 20.06.2013 and 20.09.2013.
5 DEFERRED TAX LIABILITIES (Net)
In compliance with the Accounting Standard 22 on "Accounting for Taxes
on Income" issued by the Institute of Chartered Accountants of India,
the Company has adjusted the Deferred Tax Liability (net) of Rs.
45.59,217/- for the year has been recognized in the Profit and Loss
Account. The Deferred Tax Liability (net) comprises of:
As required to be disclosed under the Micro, Small and Medium
Enterprises Development Act, 2006 and to the extent such parties are
identified on the basis of information available with the Company,
there are no Micro enterprises or Small Scale enterprises to whom the
Company owes any due which are outstanding as at 31st March, 2012;
(2011 - Rs Nil).
c) Accrued liability on account of Gratuity payable to the employees of
the Company on retirement at future dates as per actuarial valuation as
at 31st March, 2012 amounts to Rs. 2,19,47,713/- ( 2011 - Rs.
2.15,05,000/- ). A total sum of Rs. 4,79,06,560/- (including Rs.
35.00,000/- during the current year) has been charged in the Financial
Statements and paid to LICI by way of premium under Group Gratuity
Scheme for its employees to cover current as well as past liability.
d) Warranty costs are accrued at the time the products are sold. Based
on past experience, the provision is discharged over the contractual
warranty period from the date of sale. During the year, Rs. 72.50.892/-
have been adjusted against the earlier provisions and Rs. 89,25,000/-
have been provided afresh.
e) Research and Development Expenses
Research and Development Expenses relating to revenue nature
aggregating to Rs. 66.97 lacs (2011- Rs. 59.80 lacs) have been charged
to respective heads of accounts in the Statement of Profit and Loss,
and relating to capital nature aggregating to Rs. Nil (2011- Rs. 28.17
lacs) have been debited to different heads in Fixed Assets in the
Balance Sheet.
f) Segment Reporting :
The Company is engaged in the business of design, development,
manufacture, marketing, installation and servicing of vertical and
horizontal pumps of various sizes required for lift irrigation/major
irrigation schemes, thermal/nuclear power plants etc. and accordingly
there is no business segment. The provisions of reporting of
geographical segments based on location of customers, i.e. domestic and
export as per Accounting Standard 17 does not apply, and hence not
reported here.
Previous year's figures have been rearranged/regrouped wherever found
necessary.-
Mar 31, 2011
1. Contingent liabilities not provided for in the Accounts in respect
of the following :
i) Sales Tax matters under dispute 1,85,41,301 6,75,70,262
ii) Excise Duty matters under dispute 1,85,700 1,85,700
iii) Bank Guarantee outstanding 41,77,91,130 29,64,38,369
2. Land and Buildings were revalued in 1980 and Plant & Machinery were
revalued in 1984 and the surplus on revaluation was transferred to
Revaluation Reserve Account. Depreciation for the year ended 31st
March, 2011 on the amounts added on revaluation amounting to Rs.
2,22,598/- (2010 - Rs. 2,23,979/-) has been credited to the Profit and
Loss Account by transfer from Revaluation Reserve Account.
3. There are no Micro enterprises or Small Scale enterprises to whom
the Company owes any due which are outstanding as at 31st March, 2011
(2010 - Rs. Nil).
The above information, as required to be disclosed under the Micro,
Small and Medium Enterprises Development Act, 2006 has been determined
to the extent such parties are identified on the basis of information
available with the Company.
4. Accrued liability on account of Gratuity payable to the employees
of the Company on retirement at future dates as per actuarial valuation
as at 31st March, 2011 amounts to Rs. 2,15,05,000/- (2010 - Rs.
2,13,07,000/-). A total sum of Rs. 4,48,06,560/- (including Rs.
76,57,000/- during the current year) has been charged in the accounts
and paid to LICI by way of premium under Group Gratuity Scheme for its
employees to cover current as well as past liability.
5. Warranty costs are accrued at the time the products are sold. Based
on past experience, the provision is discharged over the contractual
warranty period from the date of sale.
6. Revenue Expenses aggregating to Rs.59.80 lacs (2010 - Rs. 46.26
lacs) incurred on Research & Development activities have been charged
to respective heads of accounts in the Profit and Loss Account.
7. Figures for the previous year have been rearranged/regrouped
wherever found necessary.
Mar 31, 2010
Year ended Year ended
31st March, 2010 31st March. 2009
Rs. Rs.
1. Contingent liabilities not
provided for in the Accounts in
respect of the following :
i) Sales Tax matters under dispute 6,75,70,262 7.25,35.982
ii) Excise Duty matters under
dispute 1,85,700 19.93,402
iii) Bank Guarantee outstanding 29,64,38,369 20,02,11.561
2. Land and Buildings were revalued in 1980 and Plant & Machinery were
revalued in 1984 and the surplus on revaluation was transferred to
Revaluation Reserve Account. Depreciation for the year ended 31st
March, 2010 on the amounts added on revaluation amounting to Rs.
2.23,979/- (2009 - Rs. 2,25,532/-) has been credited to the Profit and
Loss Account by transfer from Revaluation Reserve Account.
3. There are no Micro enterprises or Small Scale enterprises to whom
the Company owes any due which are outstanding as at 31st March, 2010
(2009 - Rs. Nil).
The above information, as required to be disclosed under the Micro,
Small and Medium Enterprises Development Act, 2006 has been determined
to the extent such parties are identified on the basis of information
available with the Company.
4. Accrued liability on account of Gratuity payable to the employees
of the Company on retirement at future dates as per actuarial valuation
as at 31st March, 2010 amounts to Rs. 2,13,07,000/- (2009 - Rs.
2,00,01,000/-). A total sum of Rs. 3,71.49,560/- (including Rs.
41,72,000/- during the current year) has been charged in the accounts
and paid to LICI by way of premium under Group Gratuity Scheme for its
employees to cover current as well as past liability.
5. Warranty costs are accrued at the time the products are sold, based
on past experience. The provision is discharged over the contractual
warranty period from the date of sale.
6. Revenue Expenses aggregating to Rs. 46.26 lacs (2009-Rs. 42.32
lacs) incurred on Research & Development activities have been chargedto
respective heads of accounts in the Profit and Loss Account.
7. Related Party Transactions :
Related party disclosures as required under Accounting Standard - 18 on
"Related Party Disclosures" issued by the Institute of Chartered
Accountants of India, as certified by the management, are given below :
A. Relationship
i) Associates - Hindusthan Udyog Ltd.
- Clyde Pumps India Private Limited
ii) Key Management Personnel - Mr. P. Agarwal : Managing Director
and their relatives - Mr. V. N. Agarwal : Director; Father
of Mr. P. Agarwal
- Mr. K. K. Ganeriwal : Executive
Director
iii) Companies over which key management personnel or their relatives
are able to exercise control/significant influence :
-Bengal Steel Industries Ltd.
8. Figures for the previous year have been rearranged/regrouped
wherever necessary.
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