1. CORPORATE INFORMATION
The Company is a Public Company domiciled in India and incorporated Company incorporated on 10.06.1992 The Company is engaged in the manufacture and sale of extensive range of Heat Exchangers such as Shell & Tube Type, Finned Tube Type and Air Cooled Heat Exchangers, Pressure Vessels, Air-conditioning and Refrigeration equipments and Turnkey HVAC Projects in India & marketing of equipments even outside India. All these products are supplied to leading Industrial Sections like Power Projects, Refineries, Fertilizers, Cements, Petrochemicals, Pharmaceuticals, Textile and Chemical Industries.
a. Terms/rights attached to equity shares
The Company has only one class of shares i.e. equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends, if any, in Indian rupees. The dividend, if proposed, by the Board of Directors is subject to the approval of the share holders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
Note :
Working Capital facilities from Bank of Baroda is secured by way of hypothecation of raw-materials, stores and spares, work-in-progress of finished goods and book debts of the company both present and future and first charge on company's plant & machinery, other movable assets of the company as well as secured by mortgage of companies factory land and building situated at Plot no. 805, 806, 807, and 810 at Rakanpur, Tal. Kalol, Dist. Gandhinagar and secured by equitable mortgage of plot no 811 of the company situated at village Rakanpur Taluka Kalol Dist Gandhinagar as collateral security and is also personally guaranteed by the Promoters of the company.
Consequent to introduction of Goods and Service Tax (GST) with effect from 1st July' 2017, Central Excise, Value Added tax (VAT) etc; have been subsumed in to GST. IN accordance with Indian Accounting Standard-18 on Revenue and Schedule III of the Companies Act, 2013, unlike excise duty levies like GST,VAT etc; are not part of revenue. Accordingly, the figures for the year ended on 31st March,2018 is not strictly relateable to previous year.
Capital Commitments
Estimated amount of contracts remaining to be executed on capital account [net of advances] and not provided for Rs. NIL Lacs (P.Y Rs.NIL)
2. SEGMENT INFORMATION
Primary Segment - Business Segment
The Company's operation predominantly comprise of only one segment .In view of the same, separate segmental information is not required to be disclosed as per the requirement of Indian Accounting Standard 108 Operating Segment Secondary Segment - Geographical Segment
The analysis of geographical segment is based on the geographical location of the customers. The geographical segments considered for disclosure are as follows:
Sales within India include sales to customers located within India. Sales outside India include sales to customers located outside India.
3. In the opinion of the Board of Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business. The provisions for depreciation and all known and ascertained liabilities are adequate and not in excess of the amounts reasonably necessary.
4. Balances of Unsecured Loan, Trade Receivable and Payables & loans and advances are subject to confirmation from respective parties.
5. Corporate Social Responsibility
(a) Gross amount required to be spent by the company during the year Rs.21,94,975/- (Previous year Rs.18,66,555/-)
6. EMPLOYEE BENEFIT OBLIGATION
As per Indian Accounting Standard (Ind AS) 19 "Employee Benefits", the disclosures of Employee benefits as defined in the Accounting Standard are given below :
(i) Defined Contribution Plan: Employee benefits in the form of Provident Fund are considered as defined contribution plan and the contributions to Employees Provident Fund Organization established under The Employees Provident Fund and Miscellaneous Provisions Act 1952 and Employees State Insurance Act, 1948, respectively, are charged to the profit and loss account of the year when the contributions to the respective funds are due.
(ii) Defined Benefit Plan: Retirement benefits in the form of Gratuity are considered as defined benefit obligation and are provided for on the basis of third party actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet. Every Employee who has completed five years or more of service is entitled to Gratuity on terms not less favorable than the provisions of The Payment of Gratuity Act, 1972.
(iii) Following are the risks associated with the plan:
Interest rate risk:
A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
Salary Risk:
The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan's liability.
Investment Risk:
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
Asset Liability Matching Risk:
The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.
Mortality risk:
Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
Concentration Risk:
Plan is having a concentration risk as all the assets are invested with the insurance company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.
Notes to the Reconciliations of figures reported under IGAAP and IND-AS as at & for the financial year ended on 31st March,2017 (end of last period presented as per IGAAP) and as at 1st April,2016 (Date of Transition):
(a) (i) Assets / liabilities which do not meet the definition of financial asset / financial liability have been reclassified to other asset / liability.
(ii) The Company has re-classified Fixed Deposit Investment from cash and cash equivalents to other bank balances.
(b) Excise Duty
Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented on the face of statement of profit and loss as part of expenses. The excise duty on closing stocks of finished goods also reclassified/regrouped from Other expenses.
(c) Deferred Tax
IGAAP 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 IGAAP. In addition, the various transitional adjustments lead to temporary differences. Deferred tax adjustments are recognized in correlation to the underlying transaction in retained earnings."
(d) Actuarial gain/(loss) on Defined Benefit plans for Employee Benefits:
"Under Ind AS, the change in defined benefit liability is split into changes arising out of service and interest cost and changes arising out of re measurements. Changes due to service and interest cost are to be recognized in Profit and Loss account and the changes arising out of re-measurements are to be recognized directly in Other Comprehensive Income (OCI)."
(e) Proposed Dividend:
Under the Previous GAPP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognized as liability. Under Ind AS, such dividends are recognized when the same is approved by the shareholders in the General Meeting.
(f) Under IGAAP, Foreign exchange rate difference was treated as Finance cost and now under IND AS the same has been reclassified to Other Expenses.
(g) Under IGAAP, the amount of loss on sale of fixed assets shown under the head extraordinary item. In IND AS the same has been reclassified and shown under the head Other Expenses.
(h) Re-measurement of defined benefit plan in accordance with IND AS 19 Employee Benefits and under IND AS, the actuarial gains and losses form part of re-measurement of the net defined liability/asset which is recognized in other comprehensive Income.
7. APPROVAL OF FINANCIAL STATEMENT
The financial statements were approved for issue by the board of directors on 26th May, 2018. As per our report of even date attached.
|