a) Rights of Equity Shareholders
The Company has only one class of Equity Shares having par value of Rs. 5/- each, holder of equity shares is
In the event of liquidation of the Company, the holder of equity shares will ne entitled to receive any of the remaining assets of the Company, after distribution of all preferential amount. The distribution will be in portion to the number of equity shares held by the shareholders.
b) In the preceding five years, the Company had issued shares / Convertible warrant and bonus shares for consideration.
1.1 In financial year 2013-14, the following share warrants converted into Equity Shares.
a) During the year 2012-13 Company had made an issue of 3,00,000 (Three Lacs) Convertible Warrants on Preferential Basis convertible into equity shares of face value of Rs. 10/- each fully paid up at a price of Rs. 26/- (including premium of Rs. 16/-) to the Promotors group in accordance with SEBI Guidelines. During the year, the said warrants have been converted into 3,00,000 (Three Lacs) Equity Shares of Rs. 10/- each on 25/04/2013.
1.2 In financial year 2014-15, the following share warrants & equity shares were issued on preferential basis to the promoters & non promoters group.
a) The Company had issued, on preferential basis, 15,00,000 (Fifteen Lacs) Convertible Share Warrants to Promoters Group. Each warrant shall be Convertible into one Equity Share of the Company at a price of Rs. 12.85/- per share i.e. at a premium of Rs. 2.85/- per share within 18 months of their allotment.
b) Out of total 15,00,000 (Fifteen Lacs) warrants, 700000 (Seven Lacs) warrants have been converted into 7,00,000 (Seven Lacs) Equity Shares of Rs. 10/- each on 14/11/2014.
c) The Company had also issued, on preferential basis, another 38,25,000 (Thirty Eight Lacs Twenty Five Thousand) Convertible Share Warrants to Promoters & non promoters Group. Each warrant shall be Convertible into one Equity Share of the Company at a price of Rs. 54/- per share i.e. at a premium of Rs.44/- per share within 18 months of their allotment.
d) The Company had also issued 45,68,348 equity shares at the face value of Rs. 10/- each at a premium of Rs. 44 per share to the Non Promoter’s group on preferntial basis.
1.3 In financial year 2015-16, the following share warrants converted & equity shares were issued on preferential basis to the promoters & non promoters group.
a) The Company had issued 3,52,600 (Three Lacs Fifty Two Thousand Six Hundred) equity shares at the face value of Rs. 10/- each at a premium of Rs. 224 per share to the non Promoter’s group on preferntial basis.
b) During the year 2014-15, the Company had made an issue of 15,00,000 (Fifteen Lacs) Convertible Warrants on Preferential Basis Convertible inot equity Shares of face valve of Rs. 10/- each fully paid up at a price of Rs. 12.85/- (including premium of Rs. 2.85/-) to the Promotors group in accordance with SEBI Guidelines. During the year, Baalance 8,00,000 (Eight Lacs) warrants have been converted into 8,00,000 (Eight lacs) equity shares of Rs. 10/- each on 29/05/2015.
c) During the year 2014-15, the Company had made an issue of 38,25,000 (Thirty Eight Lacs Twenty Five Thousand) Convertible Warrants on Preferential Basis Convertible into equity shares of face valve of Rs. 10/- each fully paid up at a price of Rs. 54/- (including premium of Rs. 44/-) to the Promotors & non promoters Group in accordance with SEBI Guidelines. During the current year, 3,55,000 (Three Lacs Fifty Five Thousand) warrants have been converted into 3,55,000 (Three Lacs Fifty Five Thousand) equity shares of Rs. 10/- each on 30/03/2016.
d) The Authorised Share Capital of the Company has been increased from 20,00,00,000 (Twenty Crores) (divided into 2,00,00,000 (two crores) equity shares of Rs. 10/- each) to Rs. 30,00,00,000 (Thirty Crores) (divided into 3,00,00,000 (Three crores) equity shares of Rs. 10/- each) vide special resolution passed in Annual General meetingof the Company held on 30/09/2015.
1.4 During the financial year 2016-17, the following share warrants converted, issue of bonus & sub division of shares.
a) In financial Year 2014-15, the Company had made an issue of 38,25,000 (Thirty Eight Lacs Twenty Five Thousand) Convertible Warrants on Preferential Basis Convertible into equity shares of face valve of Rs. 10/- each fully paid up at a price of Rs. 54/- (including premium of Rs. 44/-) to the Promotors & Non Promoters group in accordance with SEBI Guidelines. During the current year, 28,25,000 (Twenty Eight Lacs Twenty Five Thousand) warrants have been converted into 28,25,000 (Twenty Eight Lacs Twenty Five Thousand) equity shares of Rs. 10/- each.
b) After conversion of 3,55,000 warrants as mentioned at Note 1.4 c above in 2015-16 & Conversion of 28,25,000 warrants as metioned in Note no.1.5 a above in 2016-17, remaining balance of 6,45,000 warrants for conversion into equity shares got extinguished.
c) During the year under review, Company has issued and allotted 15,49,595 Bonus Equity Shares of face value of Rs. 10/- each to the existing Ordinary Equity Shareholders of the Company in the proportion of 1 (One) new Bonus Equity Share of Rs. 10/- (Rupees Ten only) each fully paid up for every 10 (Ten) existing Ordinary Equity Shares of Rs. 10/- (Rupees Ten only) each fully paid up of the Company by capitalistion of free reserves in accordance with the Companies Act, 2013 and other regulations as applicable.
d) The Face value of share of the company is sub-divided from Rs. 10/- each to Rs. 5/- each from record
1.5 During the financial year 2017-18, the Company had not bought back, issued shares for consideration.
e) Details of members holding equity shares more than 5%
f) Dividend Paid and Proposed:
i) The Board of Directors, in its meeting held on 25th August , 2016 proposed a final dividend of Rs. 0.50 Per equity share and the same was approved by the shareholders at the Annual General Meeting held on 15th September, 2016, this resulted in a cash outflow of Rs. 80.25 Lakhs, including corporate dividend tax of Rs. 13.57 Lakhs .
2 Financial instruments
The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values:
1. Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to short term maturities of these instruments.”
2. Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counter party. Based on this evaluation, allowances are taken to account for expected losses of these receivables. Accordingly, fair value of such instruments is not materially different from their carrying amounts.
The Financial Instruments are categorised in two level based on the inputs used to arrive at fair value measurements as described below
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: Inputs which are not based on observable market data
The carrying amounts and fair values of financial instruments by catergory are as follows: a. Financial assets
3 DISCLOSURE PURSUANT TO IND AS - 19 “EMPLOYEE BENEFITS”
i) Gratuity : In accordance with the applicable laws, the Company provides for gratuity, a defined benefit retirement plan (“The Gratuity Plan”) covering eligible employees. The Gratuity Plan provides for a lump sum payment to vested employees on retirement (subject to completion of five years of continuous employment), death, incapacitation or termination of employment that are based on last drawn salary and tenure of employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation on the reporting date and the Company makes annual contribution to the gratuity fund administered by Life Insurance Corporation of India under Group Gratuity Scheme.
D. Assumptions
With the objective of presenting the plan assets and plan liabilities of the defined benefits plans at their fair value on the balance sheet, assumptions under Ind AS 19 are set by reference to market conditions at the valuation date.
Demographic Assumptions
Mortality in Service : Indian Assured Lives Mortality (2006-08)
Note 4 -Financial Risk Management Financial risk management objectives and policies
The Company Financial risk management is an integral part of how to plan and execute its business strategies. The company risk management policy is set by the Managing Board.
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and loans and borrowings.
(i) Market Risk- Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the company’s position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.
(ii) Market Risk- Foreign currency risk.
The Volatility of the rupee against the dollar which severely affects the import dependent industries such as ours. We are importing the raw material (API) .
(iii) Credit risk
Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the company periodically assess financial reliability of customer, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.
The company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as :
i) Actual or expected significant adverse changes in business,
ii) Actual or expected significant changes in the opertaing results of the counterparty,
iii) Financial or economic conditions that are expected to cause a significant change to the counterparty’s ability to meet its obligations,
iv) Significant increase in credit risk on other financial instruments of the same counterparty,
v) Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees or credit enhancements .
(iv) Liquidity Risk
Liquidity risk is defined as the risk that the company will not be able to settle or meet its obligations on time, or at a reasonable price. The company’s treasury deparment is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related such risk are overseen by senior management. Management monitors the company’s net liquidity position through rolling forecasts on the basis of expected cash flows.
(vi) Capital risk management
The Company’s objectives when managing capital are to
* safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders
* maintain an optimal capital structure to reduce the cost of capital.
The Company Monitors Captial on the basis of the following debt equity ratio :-
The Company has adopted Indian Accounting Standards (Ind AS) as notified by the Ministry of Corporate Affairs with effect from 1st April, 2017, with a transition date of 1st April, 2016. The adoption of Ind AS has been carried out in accordance with Ind AS 101, First-time Adoption of Indian Accounting Standards. Ind AS 101 requires that all Ind AS standards and interpretations that are issued and effective for the first Ind AS financial statements for the year ended 31st March, 2018, be applied retrospectively and consistently for all financial years presented. However, in preparing these Ind AS financial statements, the Company has availed of certain exemptions and exceptions in accordance with Ind AS 101, as explained below. The resulting difference between the carrying values of the assets and liabilities in the financial statements as at the transition date under Ind AS and Previous GAAP have been recognised directly in equity (retained earnings or another appropriate category of equity).
Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.
A. Optional Exemptions Deemed Cost
The Company has opted para D7 AA and accordingly considered the carrying value of property, plant and equipments and Intangible assets as deemed cost as at transition date.
B. Applicable Mandatory Exceptions
(a) Estimates
An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies).
“Ind AS estimates as at 1 April, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:-Impairment of financial assets based on expected credit loss model.”
C. Transition to Ind AS - Reconciliations
I. Reconciliation of Balance sheet as at April 1, 2016 and March 31, 2017
II. Reconciliation of Statement of total Comprehensive Income for the year ended March 31, 2017
III. Reconcilition of Equity as at April 1, 2016 and March 31, 2017
The presentation requirements under Previous GAAP differs from Ind AS and hence Previous GAAP information has been regrouped for ease of reconciliation with Ind AS. The Regrouped Previous GAAP information is derived from the Financial Statements of the Company prepared in accordance with Previous GAAP.
The presentation requirements under Previous GAAP differs from Ind AS and hence Previous GAAP information has been regrouped for ease of reconciliation with Ind AS. The Regrouped Previous GAAP information is derived from the Financial Statements of the Company prepared in accordance with Previous GAAP.
I. Reconciliation of Balance sheet as at April 1, 2016 and March 31, 2017
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