1. Company Overview:
G. G. Dandekar Machine Works Limited ('the Company') is a Public Limited Company domiciled in India, incorporated under the provisions of the Companies Act applicable in India and listed on BSE. The Registered Office of the Company is situated at 211/A, MIDC Butibori Industrial Area, Kinhi Village, Tah. Hingna, Dist. Nagpur441122.
The Company is engaged in the manufacturing of “Food Processing Machineries”.
These standalone financial statements were approved for issue by the Board of Directors on 19th May, 2018.
2. Basis of Preparation and Presentation:
These financial statements of the Company have been prepared to comply, in all material respects, with the Indian Accounting Standards ('Ind AS') specified under Section 133 of the Companies Act 2013 ('Act'), read together with the Companies (Indian Accounting Standards) Rules, 2015, as amended ('Rules') and other relevant provisions of the Act.
For all periods upto and including the year ended 31 March, 2017, the Company prepared its financial statements in accordance with Generally Accepted Accounting Principles in India in force from time to time(Indian GAAP), including the Accounting Standards notified under section 133 of the Companies Act, 2013, read together with Rule 7 of the Companies (Accounts) Rules, 2014(previous GAAP) and Companies (Accounting Standards) Rules, 2006.
These financial statements are the first the Company has prepared in accordance with Ind AS. An explanation of how the transition from previous GAAP to Ind AS has affected the reported Balance Sheet, Profit or Loss and Cash Flows of the Company is provided in Note No.6 herein below.
All assets and liabilities have been classified as Current or Non-Current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Act. Based on the nature of the activities and the time between acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of Current / Non-Current classification of assets and liabilities.
These financial statements are presented in Indian Rupees (?), unless otherwise stated.
3. Basis of Measurement:
These financial statements have been prepared on accrual basis and under historical cost convention, except for certain financial assets and financial liabilities that have been measured at fair value as stated in note number 5.6 herein below.
4. Use of Estimates:
The preparation of Financial Statements in conformity with Ind - AS requires the management to make judgements, estimates and assumptions that may affect the reported amounts in the Balance Sheet, Statement of Profit and Loss and related disclosures of the contingent liabilities and others at the end of each reported period.
The estimates are based on the management's best knowledge of current events and actions. However, due to uncertainties relating to these judgments, assumptions and estimates, the actual amounts may differ. Estimates and underlying assumptions are reviewed on ongoing basis on each reporting date and may change from period to period. Appropriate changes in estimates are made prospectively, when the management becomes aware of changes in circumstances surrounding the estimates and the differences, if any, between the actual results and estimates are recognized in the period in which the results are known or materialized and, if material, their effects are disclosed in the notes to the Financial Statements.
5. Rights, preferences and restrictions attached to equity shares :
The equity shares have rights, preferences and restrictions which are in accordance with the provisions of law, in particular the Companies Act, 2013.
6. During the year, the Company has completely repaid the balance standing to the credit of Cash Credit Account and closed the CC Account. Cash Credit facility was secured by hypothecation of inventory and book debts and collaterally secured by mortgage of land and building of the company at Nagpur. Process of satisfaction of charges with ROC is in process.
** Apart from this certain parties have either filed cases against the company or the Company has been made a party in respect of certain transactions relating to sale of land. The Company has been legally advised that it is in a position to defend its stand and as such does not expect any material financial liability.
v. The funds are managed by LIC who have made investments as per their policy; and a detailed break-up of composition of investments made by LIC in various securities is not, at present, available.
vi. Amount recognized in statement of other Comprehensive Income.
x. General descriptions of defined benefit plans: Gratuity Plan:
The Company has established a gratuity plan wherein every employee is entitled to the benefit equivalent to thirty days' salary for each completed year of service. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service.
b. Leave Encashment:
Net (asset) / liability recognized in the Balance Sheet:
7. Disclosure pursuant to Ind AS - 37 'Provisions, Contingent Liabilities and Contingent Assets'
Details of Warranty provision and its movement during the year
8. Disclosure pursuant to Ind AS 107 -Financial risk management
The activities of the Company expose it to a variety of financial risks. The Company's risk management policies are focused to identify the unpredictability of financial markets, put required controls, monitor and minimize potential adverse effects on its financial performance. The risk management policies and systems are reviewed periodically to reflect changes in market conditions and company's activities. Board of Directors has overall responsibility for the setup and oversight of company's risk management framework.
The company has exposure to the following risks arising from financial instruments:
(A) Credit risk; (B) Liquidity risk and (C) Market risk.
(A) Credit risk:
Credit risk refers to the risk of default on its obligation by the customer or counterparty in meeting its contractual obligations, resulting into a financial loss to the company. The maximum exposure to the credit risk is primarily from company's trade and other receivables amounting to Rs.1,87,46,002/- as per the table below:
Receivables are reviewed, managed and controlled for each customer separately. Credit risk is managed through credit approvals process by establishing credit limits and continuously monitoring the creditworthiness of customers to whom credit is extended in the normal course of business. An impairment analysis is performed at each reporting date on an individual basis for major customers. Company has a practice to provide for doubtful debts on a case to case basis after considering inter-alia customer's credibility etc.
The allowance for ECL on customer balances for the year ended March 31, 2018 and March 31, 2017 was Rs. 2,440,851/and Rs. 7,728,105/- respectively.
There is no significant credit risk on cash and cash equivalents as the Company generally invest in deposits with banks and financial institutions with good credit ratings assigned by the renowned agencies.
There is no significant credit risk on other receivables, which mainly comprise of security deposits and amounts with statutory authorities.
(B) Liquidity risk
Liquidity risk refers to the risk that the Company may encounter in meeting its obligations associated with its financial liabilities on time or at a reasonable price. The Company's Accounts and Finance department is responsible for liquidity and fund flow management. In addition to that, processes and policies related to such risks are overseen by the Senior Management. Management monitors the Company's net liquidity position through rolling forecasts on the basis of expected cash flows.
The Company has no outstanding term borrowings as on 31 March 2018.
(C) Market risk:
Market risk refers to the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market prices. It comprises of below mentioned three types of risks:
I) Currency risk
ii) Interest rate risk
iii) Other price risk such as equity/debt securities price risk I) Currency risk
Currency risk refers to the risk that arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the Company's functional currency. Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates.
The Company majority operates in Indian domestic market. The maximum exposure to the currency risk is primarily from trade payables on account of goods imported into the country. The Company does not have any foreign currency payables as at the year end hence, the Company does not have any currency risk at present.
ii) Interest rate risk
Interest rate risk refers to the risk that fair value or future cash flows of financial instrument will fluctuate because of changes in market interest rates. The Company does not have any long term or short-term borrowings as on year end date hence, the Company does not have any interest risk at present.
iii) Equity Price risk
Price risk refers to the risk of fluctuations in the value of assets and liabilities as a result of change in market prices of Investments.
The fair value of Company's investments measured at fair value through other comprehensive income exposes the Company to equity price risks. These investments are subject to changes in the market price of securities. The fair value of Company's investment in quoted equity securities as at March 31, 2018; March 31, 2017 and April 1, 2016 was Rs. 275,638,288/-, Rs. 279,896,751/- and Rs. 201,686,893/- respectively.
9. Disclosure pursuant to Ind AS 12 'Income Taxes':
(a) The major components of income tax expense for the year ended March 31, 2018 and March 31, 2017 are:
10. In cases where letters of confirmation have been received from parties, book balance have been generally reconciled and adjusted, if required. In other cases, balance in accounts of sundry debtors, sundry creditors and advances or deposits have been taken as per books of account.
11. During the quarter ended 30th June 2017, the Company had made a provision of Rs. 8,287,634/- against 'receivable against sale of land'. This amount was receivable for last few years from one of the parties to whom the company had sold a portion of its land in an earlier year. This amount was receivable on discharging certain contractual obligations. The management of the company has come to a conclusion that it is very difficult to discharge the contractual obligations and therefore, decided to write off this receivable as on 31st March 2018. Hence, Other Expenses for the year ended 31st March 2018 include this write off of Rs. 8,287,634/-.
12. During the year ended 31st March 2018, the Company sold certain investments being equity shares of listed companies, for Rs. 72,290,156/-. The sale resulted in a Profit of Rs. 64,639,858/- which has been transferred to Retained earnings with corresponding adjustment in the 'Other Comprehensive Income' under Other Equity.
13. The Company owes amounts to suppliers under The Micro, Small and Medium Enterprises Development Act, 2006 [MSMED Act]. The disclosure pursuant to the said Act are as under
14. Previous year's figures have been regrouped and /or rearranged wherever necessary
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