Notes to Accounts of GMM Pfaudler Ltd.
Mar 31, 2023
Buyback of Shares, Bonus Shares and Shares issued for Consideration other than cash
1. Pursuant to approval granted by the shareholders of the Company on June 26, 2022 through Postal ballot for issue of Bonus Shares, The Allotment Committee of Board of Directors at their meeting held on July 14, 2022 approved allotment of 2,92,35,000 Equity Shares having face value of D 2/- each as fully paid-up Bonus Equity Shares, in the ratio of 2:1 i.e. 2 (Two) Equity Shares having face value of D 2/- each for every 1 (One) equity share having face value of D 2/- each held by the shareholders of the Company as on July 12, 2022 being the record date.
2. Pursuant to approval granted by the Board of Directors and after obtaining all the relevant approvals on September 01, 2022, The Company has allotted 11,04,724 fully paid-up equity shares of the Company having face value of '' 2 each, at a price of '' 1,542.43 each on a preferential basis to Millars Concrete Technologies Private Limited on September 29, 2022 for consideration other than cash for the transfer of 1,24,84,846 ordinary shares of GMM International S.a.r.l to the Company.
3. The Company has not bought back any shares in the past five years. e Shares reserved for issue under options and contracts:
Refer Note 37 for details of shares to be issued under employee stock option Scheme (ESOP 2021)
Nature and Purpose of Reserves:
Capital Reserve:
Capital Reserve represents excess/short of net assets acquired in business combination. It is not available for the distribution to shareholders as dividend.
Cash Subsidy Reserve:
Cash Subsidy Reserve represents subsidies received from state government. It is not available for distribution as dividend to shareholders.
Securities Premium:
Securities Premium represents Security Premium received at the time of issuance of Equity Shares. Such amount is available for utilisation in accordance with the provisions of the Companies Act, 2013.
General reserve:
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. There is no policy of regular transfer. Items included under General Reserve shall not be reclassified back into the Statement of Profit & Loss.
Share options outstanding reserve:
This reserve relates to share options granted by the Company to its employee stock option scheme. Further information about share-based payments to employees is set out in Note 37.
1 A Rupee Term Loan amounting to D 24.35 Crore (Previous Year 2021-22: D 35.18 Crore) is secured by charge over immovable property and movable property located at Hyderabad. The loan carries interest rate at 9.25 % (Previous Year 2021-22: 6.75%) per annum. The Loan is repayable in 17 quarterly instalments.
2 A Rupee Term Loan amounting to D 39.47 Crore (Previous Year 2021-22: D 51.40 Crore) is secured by charge over movable and immovable property located at Vatva (Ahmedabad) Gujarat. The loan carries interest rate at 9.30% (Previous Year 2021-22: 6.55%) per annum. The Loan is repayable in 14 quarterly instalments. The charge on above securities with respect to mortgage is in process of registration with MCA.
3 A Rupee Term Loan amounting to D 37.99 Crore (Previous Year 2021-22: NIL) is secured by Primary - Pari passu first charge on entire current assets of the Company, present and future and Collateral - Pari passu first charge on the entire fixed assets of Company''s Karamsad factory. The charge on immovable property is in process of registration with MCA. The loan carries interest rate at 8.20% per annum. The Loan is repayable in 20 quarterly instalments.
4 A Rupee Term Loan amounting to '' 75.00 Crore (Previous Year 2021-22: NIL) is secured by Hypothecation of inventories, book debts and all other current assets under first pari passu charge i.e. entire current assets (Current asset shall be hypothecated for all 3 units : Vatva, Karamsad, Hyderabad), Movable Fixed Assets - First Pari Passu charge on the entire movable Fixed Assets of Company''s Karamsad factory and Hyderabad factory. The charge on immovable property is in process of registration with MCA. The loan carries interest rate at 8.73% per annum. The Loan is repayable in 48 monthly instalments.
5 A Rupee Term Loan amounting to D 60.00 Crore (Previous Year 2021-22: NIL) is secured by First pari passu charge on current and movable Fixed assets of Company''s Karamsad factory and First Pari Passu charge on movable Fixed Assets located at Vatva (Ahmedabad) Gujarat. This loan is also secured by charge over immovable property located at Karamsad and Vatva. The charge on immovable property is in process of registration with MCA. The loan carries interest rate at 8.37% per annum. The Loan is repayable in 17 monthly instalments.
6 External Commercial Borrowing (ECB) amounting to D 39.78 Crore (Previous Year 2021-22: D 41.29 Crore) is secured by pari passu charge on the Company''s Karamsad factory, 1st charge by way of hypothecation on the Company''s inventories (stores & spares not relating to the Plant and Machinery), Bills Receivable, Book Debts and all other movables including machineries, equipment''s, spares etc. The loan carries interest rate of 3/6 month Libor plus 245 basis point. Repayments have started from July 2021 and will continue until January 2025. The charge on above securities is in process of registration with MCA.
7 Instalments falling due within a year in respect of all the above Loans aggregating D 60.19 Crore (Previous Year 2021-22: D 27.25 Crore) have been grouped under "Current Maturities of Long term borrowings".
8 Working Capital Loans amounting to D 54.55 Crore (Previous Year 2021-22: NIL) repayable within one year bearing Interest rate ranging from 7.86% to 8.67%.
9 The Company has been sanctioned working capital from banks. Out of total D 54.55 crore working capital loans, D 29.55 crore are secured by current assets of the Company and fixed assets (movable and immovable) at Company''s plants at Karamsad and Hyderabad. The charge on immovable property is in process of registration with MCA. The Company in this regard has been duly submitting with all such banks from whom such facilities are taken, the quarterly statements comprising details of said current assets viz. raw material, stores and spares, finished goods, book debts and reduced by relevant trade payables. The said quarterly statements are in agreement with the unaudited books of account of the Company of the respective quarters and there are no material discrepancies.
10 The Company is in the process of creating a new security offering structure for all lenders whereby the Company has appointed a Security Trustee who will create charge in favour of all lenders along with the related documentation and other compliance activities, post which all borrowings of the Company will be secured. As per the said security offering structure of the Company, all term loan lenders will have a first pari passu charge on the fixed assets (movable & immovable) of the Company and second pari passu charge on the current assets of the Company whereas all secured working capital lenders will have a first pari passu charge on the current assets of the Company and second pari passu charge on the fixed assets (movable and immovable) of the Company.
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Note : 34 Contingent Liabilities and Commitments |
(Rs. in Crore) |
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Particulars |
As at 31.03.2023 |
As at 31.03.2022 |
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A) Contingent Liabilities not provided for: |
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i) Disputed demands relating to Indirect Taxes. - Company has preferred appeal against orders for payment under reverse charge mechanism in respect to Service Tax matter. - Company has filed appeal against assessment order in respect of Sales Tax matter. Management has assessed that no liability is likely to devolve on the Company and hence no provision has made in the books of account. |
0.70 |
0.70 |
|
ii) Matter decided in favour of the Company where the income tax department has preferred appeals. - Commissioner Income Tax (CIT) (Appeal) has passed order and deleted the additions made by The Assessing Officer. Department has filed appeal before Income Tax Appellate Tribunal (ITAT) Ahmedabad for which ITAT has set aside the issue before the Assessing Officer for fresh adjudication with respect to disallowance of warranty provision for AY 2007-08 and 2008-09. - The Company has received order from ITAT Ahmedabad for which ITAT has set aside the issue to CIT (Appeal) in respect of upward adjustment in Arms Length Price for AY 2010-11, 2011-12 and 2012-13. Management has assessed that no liability is likely to devolve on the Company and hence no provision has made in the books of account. |
5.03 |
5.27 |
|
iii) Disputed demands relating to tax against which the Company has preferred appeals. - Company has preferred appeal before CIT (Appeal) against the disallowance of education expenditure under Section 143 (3) for AY 2013-14. - Company has preferred appeal before CIT (Appeal) with respect to disallowance of commission paid to non-resident due to non deduction of Tax deducted at source for AY 2017-18. Management has assessed that no liability is likely to devolve on the Company and hence no provision has made in the books of account. |
0.16 |
0.24 |
|
Note: Against the above, the Company has paid '' 0.35 Crore. The expected outflow will be determined at the time of final outcome in respect of concerned matter. |
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Guarantees |
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The Company has issued various guarantees for performance, deposits, advances etc. The management basis past history and events has considered the probability for outflow of the same to be remote and accordingly no amount has been disclosed here in contingent liability. |
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B) Commitments |
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Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance) |
2.78 |
19.35 |
Compensated absences and earned leaves
The Company''s current policy permits eligible employees to accumulate compensated absences up to a prescribed limit and receive cash in lieu thereof in accordance with the terms of the policy.
Defined Benefit Plans
The Company operates a defined benefit plan in form of gratuity plan covering eligible employees, which provide a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employees salary and the tenure of employment.
These plans typically expose the Company to actuarial risks such as investment risk, interest rate risk, longevity risk and salary risk.
Investment risk
The present value of the defined benefit plan liability (denominated in Indian Rupee) is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities and other debt instruments.
Interest risk
A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan''s debt investments.
Longevity risk
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.
Salary risk
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan liability.
In respect of the Defined Benefit Obligation Plan and Compensated absences and earned leaves, the most recent actuarial valuation of the present value of the defined benefit obligation was carried out as at March 31, 2023. The present value of the defined benefit obligation, the related current service cost and past service cost, were measured using the projected unit credit method.
Equity settled share option plan
The Company has instituted Employee Stock Option Scheme (ESOP 2021) to designated employees of the Company and its subsidiaries. In accordance with the terms of the plan, as approved by shareholders through Postal Ballot on 2nd December 2021, designated employees with the Company may be granted options to purchase equity shares.
Each employee share option converts into one equity share of the Company on exercise. Payment of the Exercise Price shall be made by a crossed cheque, or a demand draft drawn in favour of the Company or in such other manner as the Committee may decide from time to time. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time during the set exercise period. The Options not exercised within the Exercise Period shall lapse and the Employee shall have no right over such lapsed or cancelled Options. Options stands cancelled if the employee leaves the Company before the options vest.
Appraisal process for determining the eligibility of the Employees will be based on designation, criticality, high potential, performance linked parameters such as work performance and such other criteria as may be determined by the Committee at its sole discretion, from time to time.
The Company has recognised expenses of D 0.99 Crore and D 0.17 Crore related to equity-settled share-based payment transactions in 2022-23 and 2021-22 respectively on a net basis after considering recharge of D 1.83 Crore and D 0.32 Crore respectively from subsidiary companies for the grant of shares to the employees of subsidiary companies.
*Adjusted for Issue of Bonus shares. Refer Note 18d(1).
Note : 39.3 Financial risk management objectives
The entity''s corporate treasury function provides services to the business, coordinates access to domestic and international financial market, monitors and manages the financial risks relating to the operations of the entity through internal risk reports which analyse exposures by degree and magnitude of the risk. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.
Market risk refers to the possibility that changes in the market rates may have impact on the Company''s profits or the value of its holding of financial instruments. The Company is exposed to market risks on account of foreign exchange rates, interest rates and underlying investment prices.
The entity''s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and investment prices.
(a) Foreign currency exchange rate risk:
The Company''s foreign currency risk arises from its foreign operations, investments in foreign subsidiaries, foreign currency transactions. The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company.
Since a major part of the Company''s revenue and its costs are in Indian Rupees , any movement in currency rates would not have major impact on the Company''s performance. Consequently, the overall objective of the foreign currency risk management is to minimize the short term currency impact on its revenue and cash-flow in order to improve the predictability of the financial performance.
The impact of increase/decrease of 50 basis points in interest rates would result in increase/decrease of D 1.29 Crore (D 0.64 Crore) in the Company''s net profit before tax for the year ended March 31, 2023 and March 31, 2022 respectively.
(c ) Other price risk
The Entity is exposed to price risks arising from its investments which are held for strategic as well as trading purposes.
The sensitivity analysis have been determined based on the exposure to price risks for Investments in equity shares of other companies and mutual funds at the end of the reporting period.
If prices had been 5% higher/lower:
Profit before tax for the year ended March 31, 2023 would increase/decrease by D 0.00# Crore (for the year ended March 31, 2022 by D 0.01 Crore) as a result of the change in fair value of investments.
# Amount less then D 50,000 .
Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Financial instruments that are subject to concentrations of credit risk materially consists of trade receivables.
All trade receivables are subject to credit risk exposure. The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country, in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through established policies, controls relating to credit approvals and procedures for continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company does not have significant concentration of credit risk related to trade receivables except the details given below for the customers contribute to more than 5% of total outstanding accounts receivable as at any reporting period end.
101 ra __
With respect to the Company''s financial instruments (as given above), a 5% increase / decrease in relation to foreign currency rate on the underlying would have resulted in increase / decrease of D 0.04 Crore and D 0.85 Crore in the Company''s profit before tax for the year ended March 31, 2023 and March 31, 2022 respectively.
(b) Interest rate risk
Interest rate risk refers to the possibility that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rate. The Company''s policy is to maintain a balance of fixed and floating interest rate borrowings and the proportion of fixed and floating rate debt is determined by current market interest rates. The borrowings of the Company are principally denominated in Indian Rupees and US dollars with mix of fixed and floating rates of interest. These exposures are reviewed by appropriate levels of management at regular interval.
The Company has outstanding borrowings of D 331.14 Crore and D 127.87 Crore at the end of March 31, 2023 and March 31, 2022 respectively. As at March 31, 2023, none of the Company''s Borrowings are at fixed rate of interest (March 31, 2022 : 27.51%).
Exposure to credit risk:
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk is D 349.95 Crore and ''193.43 Crore as at March 31, 2023 and March 31, 2022 respectively, being the total of the carrying amount of balances with banks, bank deposits, trade receivables, other financial assets and investments excluding investments in subsidiary companies, and these financial assets are of good credit quality including those that are past due.
39.3.3 Liquidity risk management:
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the management of the Company''s short, medium and longterm funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.
Note 45 The Company publishes Standalone financial statements along with the Consolidated financial statements. In accordance with Ind AS 108, Operating Segments, the Company has disclosed the segment information in the audited consolidated financial statements for year ended March 31, 2023.
Note 46 Proposed Dividend:
The Board of Directors, in their meeting held on May 25, 2023 have recommended a final dividend of '' 1 per share, subject to approval by shareholders of the Company.
Note 47 The financial statements for the year ended March 31, 2023 were approved for issue by the Board of Directors on May 25, 2023.
Note 48 No transactions to report against the following disclosure requirements as notified by MCA pursuant to amended Schedule III:
a) Crypto currency or virtual currency
b) Undisclosed income
c) Struck off Companies
d) Benami Property held under Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder
e) Relating to borrowed funds:
(i) Wilful defaulter
(ii) Utilization of borrowed funds
(iii) Discrepancy in utilization of borrowings
(iv) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (intermediaries) with the understanding that the intermediary shall:
(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate beneficiaries.
(v) The Company has not received any fund from any person(s) or entity(ies), including foreign
entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate beneficiaries) or
(b) Provide any guarantee, security or the like to or on behalf of the Ultimate beneficiaries.
Mar 31, 2022
Nature and Purpose of Reserves:
Capital Reserve:
Capital Reserve represents excess/short of net assets acquired in business combination. It is not available for the distribution to shareholders as dividend.
Cash Subsidy Reserve:
Cash Subsidy Reserve represents subsidies received from state government. It is not available for distribution as dividend to shareholders.
Securities Premium:
Securities Premium represents Security Premium received at the time of issuance of Equity Shares. Such amount is available for utilisation in accordance with the provisions of the Companies Act, 2013.
General reserve:
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. There is no policy of regular transfer. Items included under General Reserve shall not be reclassified back into the Statement of Profit & Loss.
Share options outstanding reserve:
This reserve relates to share options granted by the Company to its employee stock option scheme. Further information about share-based payments to employees is set out in Note 37.
1 A Rupee Term Loan amounting to '' 35.18 Crore (Previous Year 2020-21: '' 46.00 Crore) is secured by charge over immovable property and movable property located at Hyderabad. The loan carries interest rate at 6.75% (Previous Year 2020-21: 7.4%) per annum. The Loan is repayable in 17 quarterly instalments.
2 A Rupee Term Loan amounting to '' 51.40 Crore (Previous Year 2020-21: Nil ) is secured by charge over movable and immovable property located at Vatva (Ahmedabad) Gujarat. The loan carries interest rate at 6.55% per annum. The Loan is repayable in 14 quarterly instalments. The charge on above securities with respect to mortgage is in process of registration with MCA.
3 External Commercial Borrowing (ECB) amounting to '' 41.29 Crore (Previous Year 2020-21: '' 44.52 Crore) is secured by parri passu charge on the Company''s Karamsad factory, 1st charge by way of hypothecation on the Company''s inventories (stores & spares not relating to the Plant and Machinery), Bills Receivable, Book Debts and all other movables including machineries, equipments, spares etc. The loan carries interest rate of 3/6 month Libor plus 245 basis point. Repayments have started from July 2021 and will continue until January 2025. The charge on above securities is in process of registeration with MCA.
4 Installments falling due within a year in respect of all the above Loans aggregating '' 27.25 Crore (Previous Year 2020-21: '' 15.32 Crore) have been grouped under "Current Maturities of Long terms borrowings".
5 Working Capital Loans include Foreign currency Loan amounting to NIL (Previous Year 2020-21: '' 14.84) repayable within one year bearing interest rate minimun FCY FTP 125 bps p.a and having benchmark 3/6/Month LIBOR and the same has been repaid during the Financial Year 21-22.
6 The Company has been sanctioned working capital from banks on the basis of security of current assets. The Company in this regard has been duly submitting with all such banks from whom such facilities are taken, the quarterly statements comprising details of said current assets viz. raw material, stores and spares, finished goods, book debts and reduced by relevant trade payables.
The said quarterly statements are in agreement with the unaudited books of account of the Company of the respective quarters and there are no material discrepancies.
(i) Provision for employee benefits includes amount payable to employees on account of Gratuity and compensated absences. Movement of Provision for employee benefits is disclosed under Note 36.
(ii) As per the contractual terms with customers, the Company provides warranty to the customers for 18 months from date of sales or 12 months from date of installation which ever is earlier. The provision is made for such returns/rejections on the basis of historical warranty trends as per the policy of the Company.
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Note : 34 Contingent Liabilities and Commitments <D in Crore> â .. . As at As at Part''culars 31.03.2022 31.03.2021 |
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A) Contingent Liabilities not provided for: |
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1. Claim against the Company not acknowledged as debts |
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i) Disputed demands Relating to Indirect Taxes. - Company has preferred appeal against orders for payment under RCM in respect to Service Tax matter. - Company has filed appeal against Assessment order in respect of Sales Tax matter. Management will reasonbly confindent that no liability will devolve on company and hence no liabilities have recognized in the books of account. |
0.70 |
1.86 |
|
ii) Matter decided in favour of the company where the income tax department has preferred appeals. - The Assessing Officer has filed appeal with respect to disallowance of warranty provision for AY 2007-08 and 2008-09. - The company has received order from ITAT Ahmedabad for which ITAT has set aside the issue to CIT (Appeal) in respect of upward adjustment in Arms Length Price for AY 2010-11. - Department has preferred appeal before ITAT Ahmedabad againt order passed by CIT (Appeal) in respect of upward adjustment in Arms Length Price and disallowance of warranty provision for AY 2011-12 & 2012-13. The management is reasonbly confident that no liability will arise in future and hence no provision is made in the books of accounts. |
5.27 |
5.27 |
|
iii) Disputed demands relating to tax against which the Company has preferred appeals. - The company has received order from ITAT Ahmedabad in which ITAT has set aside the issue to CIT (Appeal) with respect to upward adjustment of Arms Length Price for AY 2010-11 and the company has filed Misc. application against this order. - The Company has preferred appeal before ITAT Ahmedabad againt order passed by CIT (Appeal) in respect of upward adjustment of Arms Length Price for AY 2011-12 & 2012-13. - Company has preferred appeal before CIT (Appeal) against the disallowance of education expenditure under Section 143 (3) for AY 2013-14. - Company has preferred appeal before CIT (Appeal) with respect to disallowance of commission paid to non-resident due to non deduction of TDS for AY 2017-18. The management is reasonbly confident that no liability will arise in future and hence no provision is made in books of account. |
0.24 |
0.24 |
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Note: Against the above, the company has paid '' 0.35 Crore. The expected outflow will be determined at the time of final outcome in respect of concerned matter. |
19.35 |
57.26 |
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2 Guarantees |
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The group has issued various guarantees for performance, deposits, advances etc. The management basis past history and events has considered the probability for outflow of the same to be remote and accordingly no amount has been disclosed here in contingent liability. |
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B) Commitments |
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Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance) |
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Compensated absences and earned leaves
The Company''s current policy permits eligible employees to accumulate compensated absences up to a prescribed limit and receive cash in lieu thereof in accordance with the terms of the policy.
Defined Benefit Plans
The Company operates a defined benefit plan in form of gratuity plan covering eligible employees, which provide a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employees salary and the tenure of employment.
These plans typically expose the company to actuarial risks such as investment risk, interest rate risk, longevity risk and salary risk.
Investment risk
The present value of the defined benefit plan liability (denominated in Indian Rupee) is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. For other defined benefit plans, the discount rate is determined by reference to market yields at the end of the reporting period on high quality corporate bonds when there is a deep market for such bonds; if the return on planned 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.
Interest risk
A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan''s debt investments.
Longevity risk
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.
Salary risk
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan liability.
In respect of the Defined Benefit Obligation Plan and Compensated absences and earned leaves, the most recent actuarial valuation of the present value of the defined benefit obligation was carried out as at March 31, 2022. The present value of the defined benefit obligation, the related current service cost and past service cost, were measured using the projected unit credit method.
Equity-settled share option plan
The Company has instituted Employee Stock Option Scheme (ESOP 2021) to designated employees of the Parent and its Subsidiaries. In accordance with the terms of the plan, as approved by shareholders through Postal Ballot on 2nd December 2021, designated employees with the Company may be granted options to purchase equity shares.
Each employee share option converts into one equity share of the Company on exercise. Payment of the Exercise Price shall be made by a crossed cheque, or a demand draft drawn in favor of the Company or in such other manner as the Committee may decide from time to time. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time during the set exercise period. The Options not exercised within the Exercise Period shall lapse and the Employee shall have no right over such lapsed or cancelled Options. Options stands cancelled if the employee leaves the Company before the options vest.
Appraisal process for determining the eligibility of the Employees will be based on designation, criticality, high potential, performance linked parameters such as work performance and such other criteria as may be determined by the Committee at its sole discretion, from time to time.
Expected volatility was determined by calculating the historical volatility of the Company''s share price on NSE based on the price data for last 12 months up to the date of grant.
The expected life used in the model has been adjusted, based on management''s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.
The Company has recognised expenses of '' 0.17 Crore related to equity-settled share-based payment transactions in FY 2021-22 on a net basis after considering recharge of '' 0.32 Crore from subsidiary companies for the grant of shares to the employees of subsidiary companies.
For the purposes of the Company''s capital management, capital includes issued capital and all other equity. The primary objective of the Company''s capital management is to maximise shareholder value. The Company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial covenants.
In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period. No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2022 and March 31, 2021.
The entity''s corporate treasury function provides services to the business, coordinates access to domestic and international financial market, monitors and manages the financial risks relating to the operations of the entity through internal risk reports which analyse exposures by degree and magnitude of the risk. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.
Market risk refers to the possibility that changes in the market rates may have impact on the Company''s profits or the value of its holding of financial instruments. The Company is exposed to market risks on account of foreign exchange rates, interest rates and underlying investment prices.
The entity''s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and investment prices.
(a) Foreign currency exchange rate risk:
The Company''s foreign currency risk arises from its foreign operations, investments in foreign subsidiaries, foreign currency transactions. The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company.
Since a major part of the Company''s revenue and its costs are in Indian Rupees , any movement in currency rates would not have major impact on the Company''s performance. Consequently, the overall objective of the foreign currency risk management is to minimize the short term currency impact on its revenue and cash-flow in order to improve the predictability of the financial performance.
With respect to the Company''s financial instruments (as given above), a 5% increase / decrease in relation to foreign currency rate on the underlying would have resulted in increase /decrease of '' 0.85 Crore ('' 2.30 Crore) in the Company''s net profit for the year ended 31-March-2022 and 31-March-2021 respectively.
(b) Interest rate risk
Interest rate risk refers to the possibility that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rate. The Company''s policy is to maintain a balance of fixed and floating interest rate borrowings and the proportion of fixed and floating rate debt is determined by current market interest rates. The borrowings of the Company are principally denominated in Indian Rupees and US dollars with mix of fixed and floating rates of interest. These exposures are reviewed by appropriate levels of management at regular interval. The Company have outstanding borrowings of '' 127.87 Crore and '' 105.36 Crore at the end of 31-March-2022 and 31-March-21 respectively. As at March 31, 2022, approximately 27.51% of the Company''s Borrowings are at fixed rate of interest (March 31, 2021 : 43.66%).
The impact of increase/decrease of 50 basis points in interest rates would result in increase/decrease of '' 0.64 Crore '' 0.53 Crore) in the Company''s net profit for the year ended 31-March-2022 and 31-March-2021 respectively.
(c) Other price risk
The Entity is exposed to price risks arising from its investments which are held for strategic as well as trading purposes.
The sensitivity analysis have been determined based on the exposure to price risks for Investments in equity shares of other companies and mutual funds at the end of the reporting period.
If prices had been 5% higher/lower:
Profit for the year ended 31 March, 2022 would increase/decrease by '' 0.01 Crore (for the year ended March 31, 2021 by '' 0.03 Crore) as a result of the change in fair value of investments.
Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Financial instruments that are subject to concentrations of credit risk materially consists of trade receivables.
All trade receivables are subject to credit risk exposure. The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country, in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through established policies, controls relating to credit approvals and procedures for continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company does not have significant concentration of credit risk related to trade receivables except the details given below for the customers contribute to more than 5% of total outstanding accounts receivable as at any reporting period end.
Exposure to credit risk:
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk is '' 193.43 Crore and '' 183.77 Crores as at 31-March-2022 and 31-March-2021 respectively, being the total of the carrying amount of balances with banks, bank deposits, trade receivables, other financial assets and investments excluding investments in subsidiary companies, and these financial assets are of good credit quality including those that are past due.
Note : 39.3.3 Liquidity risk management:
Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the Entity''s short, medium and long-term funding and liquidity management requirements. The Entity manages liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
The following tables detail the Entity''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Entity can be required to pay. The table below include only principal cash flows in relation to non-derivative financial liabilities.
46 The Company publishes standalone financial statements along with the consolidated financial statements. In accordance with Ind AS 108, Operating Segments, the Company has disclosed the segment information in the audited consoliated financial statements for year ended March 31, 2022.
47 Proposed Dividend:
The Board of Directors, in their meeting held on May 25, 2022 have recommended a final dividend of '' 3 per equity share of face value of '' 2 each pre bonus (which translates to '' 1 per equity share of face value of '' 2 each post bonus), subject to approval by shareholders of the Company.
48 Bonus shares:
The Board of Directors has approved issuance of Bonus Shares in the ratio of 2 Equity Share of '' 2 each for every 1 Equity Share of '' 2 each held by the shareholders on the record date, subject to shareholders and regulatory approvals.
49 The financial statements for the year ended March 31, 2022 were approved for issue by the Board of Directors on May 25, 2022.
50 The Company has decided to present the results in crore for this financial year onwards. Accordingly, the comparative period presented have been converted from million to crore.
51 No transactions to report against the following disclosure requirements as notified by MCA pursuant to amended Schedule III:
a) Crypto currency or virtual currency
b) Undisclosed income
c) Struck off Companies
d) Benami Property held under Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder
e) Relating to borrowed funds:
(i) Wilful defaulter
(ii) Utilization of borrowed funds
(iii) Discrepancy in utilization of borrowings
(iv) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (intermediaries) with the understanding that the intermediary shall:
(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate beneficiaries.
(v) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate beneficiaries) or
(b) Provide any guarantee, security or the like to or on behalf of the Ultimate beneficiaries.
52 In compliance with Ministry of Corporate Affairs notification w.r.t to amendment in Schedule III to the Companies Act, 2013 effective from April 01, 2021, figures for comparative previous periods has been regrouped/reclassified, wherever necessary.
Mar 31, 2018
1 CORPORATE INFORMATION
GMM Pfaudler Limited, formerly Gujarat Machinery Manufacturers Limited, (âthe Companyâ) was incorporated in India on November 17, 1962. The Companyâs manufacturing unit is located at Karamsad, Gujarat. The Companyâs principal activity is the manufacture of corrosion resistant glass-lined equipment used primarily in the chemical, pharmaceutical and allied industries. The Company also manufactures flouro-polymer products and other chemical process equipment such as agitated nutsche filters, filter dryers, wiped film evaporators and mixing systems.
2 STATEMENT OF COMPLIANCE
The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. The financial statements up to year ended 31st March 2017 were prepared in accordance with the accounting standards notified under Companies (Accounting Standard) Rules, 2006 (as amended) and other relevant provisions of the Act. These financial statements are the first financial statements of the Company under Ind AS. The date of transition to Ind AS is April 1, 2016. Refer Note 5 for the details of significant exemptions availed by the Company on first-time adoption of Ind AS and for an explanation of how the transition from previous GAAP to Ind AS has affected the Companyâs financial position, financial performance and cash flows.
3 BASIS OF PREPERATION OF FINANCIAL STATEMENTS
a) Basis of preparation and presentation
The financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies below. (refer Note No. 4g1)
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/ or disclosure purposes in these financial statements is determined on such a basis, except for leasing transactions that are within the scope of Ind AS 17, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in Ind AS 2 or value in use in Ind AS 36.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
- Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
- Level 3 inputs are unobservable inputs for the asset or liability.
b) Functional and Presentation currency
The financial statements are presented in Indian Rupees, the currency of the primary economic environment in which the Company operates. All the amounts are stated in rupee millions.
4 FIRST-TIME ADOPTION - MANDATORY EXCEPTIONS AND OPTIONAL EXEMPTIONS OVERALL PRINCIPLE
The Company has prepared the opening standalone balance sheet as per Ind AS as of April 1, 2016 (the transition date) by recognising all assets and liabilities whose recognition is required by Ind AS, not recognising items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognised assets and liabilities. However, this principle is subject to the certain exception and certain optional exemptions availed by the Company as detailed below.
Deemed cost for property, plant and equipment and intangible assets
The Company has elected to continue with the carrying value of all of its plant and equipment and intangible assets recognised as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
Investments in subsidiaries
The Company has elected to continue with the carrying value of Investment in Subsidiaries as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
4(v) Notes to the Reconciliations between Previous GAAP and Ind AS
a) Fair Valuation of Investments:
The Company has fair valued all the Investments in Mutual Funds and Equity Shares on the date of transition and the gain or loss on the same has been adjusted in the Retained Earning. Going forward, the Company intends to classify these investments as Fair value through Profit and Loss (FvTPL) and gain or loss will be adjusted in the Statement of Profit and Loss.
The company has opted previous GAAP value as deemed cost for Investments in Subsidiary companies. Going forward, the company intends to value the same at cost only.
b) Fair Valuation of Interest Free Deposit:
The company has given an interest free lease deposit to M/s Ready Mix concrete limited. On the transition date, company has fair valued the same by discounting the deposit with the interest free discount rate and the difference between fair value and previous IGAAP value is recognised in opening reserve. Going forward, the notional interest on deposit at risk free interest rate has been recognised in Statement of Profit and Loss.
c) Declaration of Dividend:
As per the requirements of IND AS 10, the proposed dividend and tax thereon need to be accounted in the period when it is approved by the share holders. Under previous GAAP (before April 1, 2016) the proposed dividend was accounted in the period in which it was proposed by the board of directors. Accordingly, In opening Balance sheet, Proposed dividend is added back to reserves by reducing the provision balance.
d) Actuarial gain or losses regrouping:
In accordance with IND AS 19, the actuarial gain / loss in relation to Defined Benefit Plan (Gratuity) is regrouped under Other Comprehensive Income instead of Statement of Profit and Loss as per previous IGAAP.
e) Excise Duty Gross up:
As per Schedule III to Companies Act, 2013 (as applicable to companies following IND AS) , the excise duty needs to be grossed up in revenue and separately shown as an expense item. As per the above requirement the excise duty has been grossed up and shown separately on the face of the Statement of Profit and Loss.
f) Reclassification of prepaid amount on Leasehold Land:
On the date of transition, the Company has reclassified the amount prepaid on Lease Hold land from Tangible Assets to Prepayments. The Company will amortize the reclassified amount from Prepayments.
g) Implication of Tax Expense:
The impact of deferred tax has been considered for all the Ind AS adjustments recorded and where there are temporary differences, the deferred tax related to same has been adjusted in the Tax Expense of that period.
cash Flow Statement
The Transition from Indian GAAP to Ind AS has not had a material impact on the statement of Cash Flows.
a Reconciliation of equity shares outstanding at the beginning and end of the reporting year
b Terms/rights attached to equity shares
The company has only one class of equity shares having a par value Rs.2 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders 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.
c Details of shareholders holding more than 5% shares in the company
d buyback of Shares, bonus Shares and Shares issued for consideration other than cash.
The company has not bought back any shares, neither has it issued bonus shares nor has it issued shares for consideration other than cash in the past five years.
Nature and Purpose of Reserves General reserve:
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. There is no policy of regular transfer. Items included under General Reserve shall not be reclassified back into the Statement of Profit and Loss.
Securities Premium Reserve
This reserves represents Security Premium received at the time of issuance of Equity Shares.
Note:
In the absence of any information from vendors regarding the status of their registration under the âMicro Small and Medium Enterprise DevelopmentAct2006â the Company is unable to comply with the disclosures required to be made under the saidAct. For the purpose of classifying Trade Payables into Dues to Micro, Small and Medium Enterprises and other creditors, company has relied on the information received in corresponding previous period. This has been relied upon by the Auditors.
The amount of Unclaimed Dividend reflects the position as at March 31, 2018. During the year, the company has transferred an amount of Rs.0.26 Millions (Previous year Rs.0.31 Millions) to the Investorsâ Education and Protection Fund in accordance with the provisions of section 125 of the Companies Act, 2013.
Note:
(i) Provision for employee benefits includes amount payable to employees on account of Gratuity and compensated absences. Movement of Provision for employee benefits is disclosed under Note 35.
(ii) As per the contractual terms with customers, company provides warranty to the customers for 18 months from date of sales or 12 months from date of installation w.e.earlier. The provision is made for such returns/rejections on the basis of historical warranty trends as per the policy of the company.
Post implementation of Goods and Service Tax (GST) with effect from July 1, 2017, revenue from operation is disclosed net off GST. Revenue from operations for the year ended March 31, 2018 includes excise duty upto June 30, 2017. Accordingly, revenue from operations for the year ended March 31, 2018 are not comparable to those of previous years presented
5 DEPOSITS
Security Deposits include Rs.8.22 million (as at 31st March, 2017 : Rs.7.62 million and as at 1st April, 2016 : Rs.9.88 million) of security deposits paid to Ready Mix Concrete Limited (a entity in which Key Managerial Person have significant influence) for use of three additional factory sheds taken under lease by the Company from November 01, 2012.
6 OPERATING LEASE
The Companyâs significant leasing arrangements are in respect of operating leases for factory shed / premises and guest house.These lease agreements range up to 36 months from the end of the current financial year and are usually renewable by mutual consent on mutually agreeable terms.
7 AS PER IND AS 19 âEMPLOYEE BENEFITSâ, THE DISCLOSURES AS DEFINED IN THE ACCOUNTING STANDARD ARE GIVEN BELOW:
Defined Contribution Plans
The Company operates defined contribution retirement benefit plans for all qualifying employees in the form of provident fund, superannuation fund, family pension fund.
Contribution to Defined Contribution Plans, recognised as expense for the year is as under :
Compensated absences and earned leaves
The Companyâs current policy permits eligible employees to accumulate compensated absences up to a prescribed limit and receive cash in lieu thereof in accordance with the terms of the policy.
Defined Benefit Plans
The Company operates a defined benefit plan in form of gratuity plan covering eligible employees, which provide a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employees salary and the tenure of employment.
These plans typically expose the company to actuarial risks such as investment risk, interest rate risk, longevity risk and salary risk.
Investment risk
The present value of the defined benefit plan liability (denominated in Indian Rupee) is calculated using a discount rate which is determined by reference to market yeilds at the end of the reporting period on government bonds. For other defined benefit plans, the discount rate is determined by reference to market yields at the end of the reporting period on high quality corporate bonds when there is a deep market for such bonds; if the return on planned 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.
Interest risk
A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the planâs debt investments.
Longevity risk
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the planâs liability.
Salary risk
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan liability.
In respect of the plan , the most recent actuarial valuation of the present value of the defined benefit obligation was carried out as at March 31, 2018 by M/S K A Pandit, Fellow member of the Institute of the Actuaries of India. The present value of the defined benefit obligation, the related current service cost and past service cost,were measured using the projected unit credit method.
The amounts recognized in the Companyâs financial statements as at the year end are as under:
k Sensitivity analysis for each significant actuarial assumption
The significant actuarial assumptions for the determination of the defined benefit obligations are discount rate and expected salary increase. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligations has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.
l Investment details of plan assets
The Plan assets are managed by Insurance group viz. Life Insurance Corporation of India which has invested the funds substantially as under :
n Asset-liability matching strategies :
In respect of gratuity and Leave encashment plan, Company contributes to the insurance fund based on estimated liability of the next financial year end. The projected liability statement is obtained from the actuarial valuer.
8 FINANCIAL INSTRUMENT:
8.1 capital Management
The entity manages its capital to ensure that entity will be able to continue as going concern while maximising the return to stakeholders through the optimisation of Total Equity balance.
The company is zero debt company and its capital structure consists of own equity only. Hence, Gearing Ratio of the company for the year ended March 31, 2018 as well as March 31, 2017 comes to NIL.
The company is not subject to any externally imposed capital requirement.
8.2 categories of Financial Instruments :
8.3 Financial risk management objectives
The entityâs corporate treasury function provides services to the business, coordinates access to domestic and international financial market, monitors and manages the financial risks relating to the operations of the entity through internal risk reports which analyse exposures by degree and magnitude of the risk. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.
8.3.1 Market Risk management
Market risk refers to the possibility that changes in the market rates may have impact on the Companyâs profits or the value of its holding of financial instruments. The Company is exposed to market risks on account of foreign exchange rates, interest rates and underlying investment prices.
The entityâs activities expose it primarily to the financial risks of changes in foreign currency exchange rates and investment prices.
(a) Foreign currency exchange rate risk:
The Companyâs foreign currency risk arises from its foreign operations, investments in foreign subsidiaries, foreign currency transactions. The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company.
Since a major part of the Companyâs revenue and its costs are in Indian Rupees , any movement in currency rates would not have major impact on the Companyâs performance. Consequently, the overall objective of the foreign currency risk management is to minimize the short term currency impact on its revenue and cash-flow in order to improve the predictability of the financial performance.
The carrying amount of Foreign Currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:
* The value of INR equivalent to USD is 129 and to EUR is 1,575.
With respect to the Companyâs financial instruments (as given above), a 5% increase / decrease in relation to foreign currency rate on the underlying would have resulted in increase /decrease of Rs.1.58 million (Rs.1.13 million) in the Companyâs net profit for the year ended March 31, 2018 and March 31, 2017 respectively.
(b) Interest rate risk
Interest rate risk refers to the possibility that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rate. The company does not have any outstanding borrowings at the end of any reporting period and hence company is not subject to any interest rate risk.
(c ) Other price risk
The Entity is exposed to price risks arising from its investments which are held for strategic as well as trading purposes.
The sensitivity analysis have been determined based on the exposure to price risks for Investments in equity shares of other companies and mutual funds at the end of the reporting period.
If prices had been 5% higher/lower:
Profit for the year ended 31 March, 2018 would increase/decrease by Rs.25.28 millions (for the year ended March 31, 2017 by Rs.22.98 millions) as a result of the change in fair value of investments.
8.3.2 Credit risk management
Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Financial instruments that are subject to concentrations of credit risk materially consists of trade receivables.
All trade receivables are subject to credit risk exposure. The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country, in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through established policies, controls relating to credit approvals and procedures for continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company does not have significant concentration of credit risk related to trade receivables except the details given below for the customers contribute to more than 5% of total outstanding accounts receivable as at any reporting period end.
Exposure to credit risk:
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk is Rs.1187.56 millions and Rs.1131.10 millions as at March 31, 2018 and March 31, 2017 respectively, being the total of the carrying amount of balances with banks, bank deposits, trade receivables, other financial assets and investments excluding investments in subsidiary companies, and these financial assets are of good credit quality including those that are past due.
8.3.3 Liquidity risk management:
Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the Entityâs short, medium and long-term funding and liquidity management requirements. The Entity manages liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
The following tables detail the Entityâs remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Entity can be required to pay. The table below include only principal cash flows in relation to non-derivative financial liabilities.
The following table details the Entityâs expected maturity for its non-derivative financial assets. The table has been drawn up based on the undiscounted contractual maturities of the financial assets. The inclusion of information on non-derivative financial assets is necessary in order to understand the Entityâs liquidity risk management as the liquidity is managed on a net asset and liability basis.
9 FAIR VALUE MEASUREMENTS
This note provides information about how the Entity determines fair values of various financial assets and financial liabilities Fair value of the Entityâs financial assets and financial liabilities that are measured at fair value on a recurring basis
The remuneration of directors and key executives is determined by the remuneration committee having regard to the performance of individuals and market trends.
10 CORPORATE SOCIAL RESPONSIBILITY (CSR) EXPENDITURE
Expenditure related to CSR as per section 135 of Companies Act, 2013 read with schedule vII thereof, against the mandatory spend of â 6.29 million is as follows:
11 RESEARCH AND DEVELOPMENT EXPENSES
Break-up of research and development expenses included in statement of profit and loss, is as follows :
12 PROPOSED DIVIDEND:
âThe Board of Directors in their meeting held on May 16, 2018, proposed a final equity dividend of Rs.1.9 per equity share of Rs.2.00 each fully paid up for the financial year 2017-18. The aggregate amount of final equity dividend proposed to be distributed is Rs.27.77 million including dividend distribution tax of Rs.5.71 million.â
13 PREVIOUS YEARS FIGURES HAVE BEEN REGROUPED/RECLASSIFIED WHEREVER NECESSARY TO COMPLY WITH IND AS
14. THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31.03.18 WERE APPROVED FOR ISSUE BY THE BOARD OF DIRECTORS ON 16.05.18.
Mar 31, 2017
1. LONG TERM LOANS AND ADVANCES
Security Deposits include Rs, 27.73 million (previous year Rs, 30.70 million) of security deposits paid to Ready Mix Concrete Limited (a entity in which Key Managerial Person have significant influence) for use of three additional factory sheds taken under lease by the Company from November 01, 2012.
2. CURRENT LIABILITIES - DISCLOSURE UNDER MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006
The amount of dues owed to micro, small and medium enterprises as on March 31, 2017 amounted to Rs, 14.78 Million (previous year Rs, 0.74 Million). This amount has been outstanding for more than 45 days at the balance sheet date. The information regarding micro, small and medium enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.
3. RELATED PARTY DISCLOSURES (I) List of Related parties
(a) Parties where control exists:
(i) Ultimate Holding Company : Pfaudler International S.a.r.l
(ii) Holding Company: : Pfaudler Inc.
(b) Subsidiary Companies : Karamsad Holdings Limited
Karamsad Investments Limited GMM Mavag AG Mavag AG
(c) Fellow Subsidiaries : Pfaudler GMBH
Pfaudler Balfour Limited Edlon PSI Inc.
Suzhou Pfaudler Glass Lined Equipment Co. Limited Glass Steel Parts and Services Pfaudler s.r.l.
Pfaudler Limited
Pfaudler Rochester, USA
Pfaudler Process Solution Group U.K. Limited
Pfaudler LtdA, Brazil
(d) Key management personnel : Mr. Tarak Patel - Managing Director
Mr. Ashok Pillai - Chief Operating Officer Mr. Jugal Sahu - Chief Financial Officer Ms. Mittal Mehta - Company Secretary
(e) Relative of Key management personnel : Mr. Ashok Patel (Father of Mr. Tarak Patel)
Mrs. Urmi Patel (Mother of Mr. Tarak Patel)
Mrs. Uttara Gelhaus (Sister of Mr. Tarak Patel)
Mrs. Payal Patel (Wife of Mr. Tarak Patel)
(f) Enterprises over which key managerial : Skyline Millars Limited personnel have significant influence Ready Mix Concrete Limited
Ashok Patel - HUF J V Patel & Co.
Notes: 1) The Business segments have been identified in line with the Accounting Standard 17 on âSegment Reportingâ, taking into account the nature of product, the nature of manufacturing process, the class of customers, the organization structure and the internal financial reporting system.
4) Segment revenue, results, assets and liabilities include amounts that are directly attributable to the respective segments. Amounts not directly attributable have been allocated to the segments on the best judgment of the management in the absence of detailed internal financial reporting system. Expenses not directly allocable to the segments are treated as âUnallocated Expensesâ.
Mar 31, 2015
1. CORPORATE INFORMATION
GMM Pfaudler Limited, formerly Gujarat Machinery Manufacturers Limited,
("the Company") was incorporated in India on November 17, 1962. The
Company's manufacturing unit is located at Karamsad, Gujarat. The
Company's principal activity is the manufacture of corrosion resistant
glass-lined equipment used primarily in the chemical, pharmaceutical
and allied industries. The Company also manufactures flouro-polymer
products and other chemical process equipment such as agitated nutsche
filters, filter driers, wiped film evaporators and mixing systems.
Pfaudler, Inc., USA owns 50.44% of the total issued share capital of
the Company. On December 30, 2014 National Oilwell Varco, USA sold
Pfaudler Process Solution Group to a German Private Equity firm and
under the new structure Pfaudler, Inc. is a wholly owned subsidiary of
Pfaudler S.a r.l. Luxembourg.
2. BASIS OF PREPARATION
The financial statement have been prepared in accordance with the
generally accepted accounting principles in India. The Company has
prepared these financial statement under the historical cost convention
on an accrual basis to comply in all material respect with the
Accounting Standards specified under section 132 of the Companies Act,
2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and other
accounting principles generally accepted in India and the relevant
provisions of the Companies Act 2013. The accounting policies have been
consistently applied by the Company.
All the assets and liabilities have been classified as current and non
current as per the company's normal operating cycle and other criteria
set out in Schedule III to the Companies Act, 2013. Based on the nature
of product and the time between acquisition of assets for processing
and their realization in cash and cash equivalents, the company has
ascertained it's operating cycle as twelve months for the purpose of
current / non current classification of assets and liabilities.
3. Terms/rights attached to equity shares
The Company has only one class of equity shares having a par value Rs.
2 per share. Each holder of equity shares is entitled to one vote per
share. The dividend proposed by the Board of Directors is subject to
the approval of the shareholders 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.
4. Buyback of Shares, Bonus Shares and Shares issued for Consideration
other than cash.
The company has not boughtback any shares, neither has it issued bonus
shares nor has it issued shares for consideration other than cash in
the past five years.
5. Terms of any Securities convertible into equity/preference shares -
Not Applicable
6. Calls Unpaid - Nil
Security Deposits include Rs. 30.70 million (previous year Rs. 30.70
million) of security deposits paid to Ready Mix Concrete Limited (a
entity in which Key Managerial Person have significant influence) for
use of three additional factory sheds taken under lease by the Company
from November 01, 2012.
As at As at
31.03.15 31.03.14
Rs. in Millions Rs. in Millions
1) Contingent Liabilities
a) Claim against the Company not
acknowledged as debts
i) Dispute relating to Excise,
Service tax and Sales tax 12.99 8.70
ii) Matter decided in favour of
the company where the income
tax department
has preferred appeals. 5.84 0.00
iii)Disputed demands relating
to tax against which the
Company has preferred
appeals. 65.72 24.07
b) Guarantee issued by bank 206.14 241.98
2) Commitments
Estimated amount of contracts
remaining to be executed on
capital account
and not provided for 8.28 7.99
7. RELATED PARTY DISCLOSURES
(I) List of Related parties
(a) Parties where control exists:
(i) Ultimate Holding Company: : National Oilwell Varco Inc.
(Up to December 30, 2014)
Pfaudler S.a r.l. Luxembourg
(From December 31, 2014)
(ii) Holding Company: : Pfaudler Inc.
(b) Subsidiary Companies : Karamsad Holdings Ltd.
Karamsad Investments Ltd.
GMM Mavag AG
Mavag AG
(c) Fellow Subsidiaries : Pfaudler Werke GMBH
Pfaudler Balfour Ltd.
Edlon PSI Inc.
Suzhou Pfaudler Glass Lined
Equipment Co. Ltd.
Glass Steel Parts and Services
Tycon Technoglass
Pfaudler Rochester,USA
National Oilwell Varco LLP
(Formerly Chemineer Inc)
Robbins & Myers DE Mexico, SA.DECV
Robbins & Myers Inc.
(From 21st February 2013)
(d) Key management personnel : Mr. Ashok J. Patel -
Managing Director
Mr. Tarak A. Patel -
Executive Director
Mr. Ashok C. Pillai -
Chief Operating Officer
Mr. Amar Nath Mohanty -
Chief Financial Officer
Ms. Mittal Mehta -
Company Secretary
(e) Relative of Key : Mrs. Urmi A. Patel
management personnel (wife of Mr. Ashok J. Patel)
Mrs. Uttara G. Gelhaus
(Daughter of Mr. Ashok J. Patel)
(f) Enterprises over which
key managerial personnel
have significant influence : Skyline Millars Ltd.
Ready Mix Concrete Ltd.
Ashok J Patel - HUF
J V Patel & Co.
8. Pursuant to notification of Schedule II to The Companies Act,
2013, the Company has assessed the useful life of fixed assets and the
depreciation for the year has been provided on the basis of the useful
lives w.e.f. April 01,2014.This change has resulted in a higher
depreciation of Rs. 27.90 Millions for the year and an amount of Rs.
4.68 million (net of deferred tax) has been recognized in the opening
balance of retained earnings.
9. Previous years figures have been regrouped/reclassified wherever
necessary.
Mar 31, 2013
Note 1. BACKGROUND
GMM Pfaudler Limited, formerly Gujarat Machinery Manufacturers Limited,
("the Company") was incorporated in India on November 17, 1962. The
Company''s manufacturing unit is located at Karamsad, Gujarat. The
Company''s principal activity is the manufacture of corrosion resistant
glass-lined equipment used primarily in the chemical, pharmaceutical
and allied industries. The Company also manufactures fouro-polymer
products and other chemical process equipment such as agitated nutsche
flters, flter driers, wiped flm evaporators and mixing systems.
The Company has entered into an investment and technical know-how
agreement with Pfaudler Inc. USA (''Pfaudler'') a Company incorporated in
the United States of America, which owns 50.99 percent of the total
issued share capital of the Company. The Company''s ultimate holding
Company Robbins & Myers Inc, USA, merged with National Oilwell Varco
Inc. (NOV), USA on February 20, 2013. By virtue of this merger NOV has
become the ultimate holding Company from February 21, 2013.
2. CURRENT LIABILITIES
Disclosure of trade payable under current liabilities is based on the
information available with the Company regarding the status of the
suppliers as defned under the "Micro, Small and Medium Enterprises
Development Act, 2006". Amount overdue as on March 31, 2013 to Micro,
Small and Medium Enterprises on account of principal amount together
with interest, aggregate to Rs. 5.50 Millions (previous - Rs. 0.55
Millions)
The information regarding micro, small and medium enterprises have been
determined to the extent such parties have been identifed on the basis
of information available with the Company, which has been relied upon
by the auditors.
3. CONTINGENT LIABILITIES AND COMMITMENTS
As at As at
31.03.13 31.03.12
Rs. in Millions Rs. in Millions
1) Contingent Liabilities
a) Claim against the Company not
acknowledged as debts
i) Dispute relating to Cenvat
and Sales tax 8.32 5.28
ii) Dispute relating to tax demand 15.49 0.49
b) Guarantee issued by bank 239.14 212.79
c) Other Contingent Liability
2) Commitments
a) "Estimated amount of contracts
remaining to be executed on capital
account and not provided for" 7.09 9.89
4. RELATED PARTY DISCLOSURES
(I) List of Related parties
(a) Parties where control exists:
(i) Ultimate Holding Company: : Robbins & Myers Inc. USA (Upto 20th
February 2013)
National Oilwell Varco Inc. USA (from 21st February 2013)
(ii) Holding Company: : Pfaudler Inc. USA
(iii) Subsidiary Companies: : Karamsad Holdings Ltd.
Karamsad Investments Ltd.
GMM Mavag AG
Mavag AG
(b) Related parties with whom transactions have taken place during the
year:
(i) Fellow Subsidiaries: : Pfaudler Werke GMBH
Pfaudler Balfour Ltd. Edlon PSI Inc.
Suzhou Pfaudler Glass Lined Equipment Co. Ltd. Glass Steel Parts and
Services Tycon Technoglass
Robbins & Myers DE Mexico, SA.DECV Robbins & Myers Inc.(Upto 20th
February 2013)
(ii) Key management personnel : Mr. Ashok J. Patel  Managing Director
Mr. Tarak A. Patel  Executive Director Mr. Ashok C. Pillai  Chief
Operating Offcer
(iii) Relative of Key management personnel : Mrs. Urmi A. Patel (wife
of Mr. Ashok J. Patel)
Mrs. Uttara G. Gelhaus (Daughter of Mr. Ashok J. Patel)
(iv) Enterprises over which persons in (b)(ii) or (b)(iii) are able to
exercise signifcant infuence.
: Skyline Millars Ltd.
Ready Mix Concrete Ltd.
5. The shareholders at the Extra Ordinary General Meeting held on
March 11, 2008 appointed Mr. Ashok Patel as the Managing Director of
the Company for a period of fve years from January 1, 2007 to December
31, 2012. On the recommendation of the Remuneration Committee, the
Board of Directors in their meeting held on November 5, 2012, appointed
Mr. Ashok Patel as the Managing Director of the Company for a further
period of three years effective from January 1, 2013. This appointment
is subject to the shareholders'' approval in the forthcoming Annual
General Meeting.
Mar 31, 2012
Note 1. BACKGROUND
GMM Pfaudler Limited, formerly Gujarat Machinery Manufacturers Limited,
("the Company") was incorporated in India on November 17, 1962. The
Company's manufacturing unit is located at Karamsad, Gujarat. The
Company's principal activity is the manufacture of corrosion
resistant glass-lined equipment used primarily in the chemical,
pharmaceutical and allied industries. The Company also manufactures
flouro-polymer products and other chemical process equipment such as
agitated nutsche filters, filter driers .wiped film evaporators and
mixing systems.
The Company has entered into an investment and technical know-how
agreement with Pfaudler Inc. USA ('Pfaudler') a Company
incorporated in the United States of America, which owns 51 percent of
the total issued share capital of the Company. The Company's ultimate
holding Company is Robbins & Myers Inc, USA.
a) Terms/rights attached to equity shares
The company has only one class of equity shares having a par value Rs.
2 per share. Each holder of equity shares is entitled to one vote per
share. The dividend proposed by the Board of Directors is subject to
the approval of the shareholders 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.
Disclosure of trade payable under current liabilities is based on the
information available with the Company regarding the status of the
suppliers as defined under the "Micro, Small and Medium Enterprises
Development Act, 2006". Amount overdue as on March 31, 2012 to Micro,
Small and Medium Enterprises on account of principal amount together
with interest, aggregate to 135 (previous - Rs. Nil)
The information regarding micro, small and medium enterprises have been
determined to the extent such parties have been identified on the basis
of information available with the Company, which has been relied upon
by the auditors.
2. CONTINGENT LIABILITIES AND COMMMITMENTS
(Rs. in Millions)
As at As at
31.03.12 31.03.11
1) Contingent Liabilities
a) Claim against the Company not
acknowledged as debts
i) Dispute relating to Cenvat 5.28 4.17
ii) Dispute relating to tax demand 0.49 0.49
b) Guarantee issued by bank 212.79 188.87
c) Other Contingent Liability - -
2) Commitments
a) Estimated amount of contracts
remaining to be executed on 9.89 31.39
3. Prior Year's Figures have been regrouped where necessary.
Mar 31, 2011
1. BACKGROUND
GMM Pfaudler Limited, formerly Gujarat Machinery Manufacturers Limited,
("the Company") was incorporated in India on November 17, 1962. The
Company's manufacturing unit is located at Karamsad, Gujarat. The
Company's principal activity is the manufacture of corrosion resistant
glass-lined equipment used primarily in the chemical, pharmaceutical
and allied industries. The Company also manufactures fouro-polymer
products and other chemical process equipment such as agitated nutsche
filters, filter driers, wiped film evaporators and mixing systems.
The Company has entered into an investment and technical know-how
agreement with Pfaudler Inc. USA ('Pfaudler') a Company incorporated in
the United States of America, which owns 51 percent of the total issued
share capital of the Company. The Company's ultimate holding Company is
Robbins & Myers Inc, USA.
2. CONVERSION OF LOAN TO MAVAG AG INTO EQUITY
The Company had granted a loan to its 100% subsidiary Company, GMM
Mavag AG Switzerland amounting to CHF 3.50 million for the purpose of
acquisition of 100% Equity Shares of Mavag AG Switzerland, during the
financial year ended March 31, 2008. The Company has, after obtaining
approval from its Board of Directors and the Reserve Bank of India,
converted the said loan together with interest accrued thereon
amounting to Rs. 161,920 thousand as on June 30, 2010 into Equity
Shares of GMM Mavag AG and accordingly disclosed the same under the
head Investments. Application made to Swiss Authorities in this regard
is pending.
3. CURRENT LIABILITIES
Disclosure of sundry creditors under current liabilities is based on
the information available with the Company regarding the status of the
suppliers as defined underthe "Micro, Small and Medium Enterprises
Development Act, 2006". Amount overdue as on March 31, 2011 to Micro,
Small and Medium Enterprises on account of principal amount together
with interest, aggregate to Rs. Nil (previous year -Rs. Nil)
The information regarding micro, small and medium enterprises have been
determined to the extent such parties have been identifed on the basis
of information available with the Company, which has been relied upon
by the auditors.
4. OPERATING LEASE
The Company's significant leasing arrangements are in respect of
operating leases for factory shed/premises and guesthouse. These lease
agreements, which are not non-cancellable, range up to 26 months from
the end of the current financial year and are usually renewable by
mutual consent on mutually agreeable terms.
5. CONTINGENT LIABILITIES
(Rs. in '000')
As at As at
31.03.11 31.03.10
a) Claim against the Company not acknowdgeld
as debts
i) Dispute relating to Cenvat 4,170 3,913
ii) Dispute relating to tax demand 488 19,666
b) Gurantee issued by bank 188,868 135,942
6. CAPITAL COMMITMENTS
Estimated value of contracts remaining to be executed on capital
account, to the extent not provided Rs. 31,390 thousand (previous year
Rs. 12,467 thousand)
7. Turnover includes sales commission Rs. Nil (previous year Rs. Nil)
8. RELATED PARTY DISCLOSURES
(I) List of Related parties
(a) Parties where control exists:
(i) Ultimate Holding Company Robbins & Myers Inc.
(ii) Holding Company Pfaudler Inc.
(iii) Subsidiary Companies Karamsad Holdings Ltd.
Karamsad Investments Ltd.
GMM Mavag AG
Mavag AG
(b) Related parties with whom transactions have taken place during the
year:
(i) Fellow Subsidiaries: Pfaudler Werke GMBH
Pfaudler Balfour Ltd.
Edlon PSI Inc.
Chemineer Inc.
Suzhou Pfaudler Glass Lined Equipment Co. Ltd.
Robbins & Myers Singapore Private Ltd.
Glass Steel Parts and Services
(ii) Key management personnel Mr. Ashok J. Patel - Managing Director
Mr. Tarak A. Patel - Executive Director
Mr. Ashok C. Pillai à Chief Operating Officer
(iii) Relative of Key management personnel Mrs. Urmi A. Patel (wife of
Mr. Ashok J. Patel)
Mrs. Uttara G. Gelhaus (Daughter of Mr. Ashok J. Patel)
(iv) Enterprises over which persons in (b)(ii) or
(b)(iii) are able to exercise significant infuence.
Skyline Millars Ltd.
Glass Lined Equipment Company Ltd.
Ready Mix Concrete Ltd.
Dietrich Engineering Consultant India Private Ltd.
J. V. Patel & Co.
9. Prior year's fgures have been regrouped where necessary.
10. Additional Information as required under Part IV of Schedule VI to
the Companies Act, 1956.
Mar 31, 2010
1. Background
GMM Pfaudler Limited, formerly Gujarat Machinery Manufacturers Limited,
("the Company") was incorporated in India on November 17, 1962. The
Companys manufacturing unit is located at Karamsad, Gujarat. The
Companys principal activity is the manufacture of corrosion resistant
glass-lined equipment used primarily in the chemical, pharmaceutical
and allied industries. The Company also manufactures flouro-polymer
products and other chemical process equipment such as agitated nutsche
filters, filter driers and wiped evaporators and Mixing systems.
The Company has entered into an investment and technical know-how
agreement with Pfaudler Inc. USA (Pfaudler) a Company incorporated in
the United States of America, which owns 51 percent of the total issued
share capital of the Company. The Companys ultimate holding Company is
Robbins & Myers Inc, USA.
2. CHANGE IN ACCOUNTING POLICY
The Company has changed its accounting policy for revenue recognition
for large contracts, from recognition on completion basis to
recognition on percentage of completion basis, with effect from April
1, 2009.
Large contracts for said purpose are contracts exceeding Rupee
equivalent of USD 1 million at the time of order receipt and the
contract term is at least six months from contract signing through
product delivery.
This change has neither resulted in any change in revenue nor on profi
ts for the year ended March 31, 2010.
b. Deposits include earnest deposit of Rs. 961 thousand (Previous year Rs.
961 thousand) paid to Skyline Millars Limited (formerly Millars India
Limited) and Rs. 10,703 thousand (Previous year Rs. 9,411 thousand) to
Ready Mix Concrete Limited, being companies in which two directors of
the Company are interested. Deposits given are for use of factory sheds
under the lease agreements.
3. CURRENT LIABILITIES
Disclosure of sundry creditors under current liabilities is based on
the information available with the company regarding the status of the
suppliers as defi ned under the "Micro, Small and Medium Enterprises
Development Act, 2006". Amount overdue as on March 31, 2010 to Micro,
Small and Medium Enterprises on account of principal amount together
with interest, aggregate to Rs. Nil (Previous year - Rs. Nil)
The information regarding micro, small and medium enterprises have been
determined to the extent such parties have been identifi ed on the
basis of information available with the Company, which has been relied
upon by the auditors.
4. OPERATING LEASE
The companys signifi cant leasing arrangements are in respect of
operating leases for factory shed/premises and guesthouse. These lease
agreements, which are not non-cancellable, range up to 120 months and
are usually renewable by mutual consent on mutually agreeable terms.
5. CONTINGENT LIABILITIES
As at As at
31.03.10 31.03.09
Rs. 000 Rs. 000
a) Claims against the Company not
acknowledged as debts:
i) Dispute relating to Cenvat Credit 3,913 4,100
ii) Disputed Income Tax demands 19,666 15,151
b) Guarantees issued by bank 135,942 176,450
13. Turnover includes sales commission Rs. Nil (previous year Rs. Nil
thousand)
Notes:
(i) Licensed capacity is not applicable in terms of Government of
Indias Notifi cation No. S.O.477 (E) dated 25th July,1991.
(ii) Installed capacities have been certifi ed by the management of the
Company and not verifi ed by the auditors.
(iii) Installed capacities in respect of products not currently
manufactured have not been given.
(iv) Production quantities in items 2 and 4 include job orders
subcontracted to third parties and broad-banding of installed
capacities.
(v) The installed capacity of Mild Steel equipments and Stainless steel
equipment is not determined and therefore not included in the above
table.
The Company has made an application to the central government for
increasing the remuneration of the Managing Director. The remuneration
for the current year includes a provision of Rs. 204 thousand payable to
the Managing Director only after receipt of approval from the central
government.
During the current year, the Company has paid Rs. 1,963 thousand as
arrears of remuneration relating to the earlier fi nancial years to the
Managing Director and the same has not been included above. The above
arrears are within the limit specifi ed by Section 349 of the Companies
Act, 1956.
h Other Details
Gratuity is payable at the rate of 15 days salary for each year of
service subject to a maximum of Rs. 350 thousand Salary escalation is
considered as advised by the company which is in line with the industry
practice considering promotion and demand and supply of the employees.
6. RELATED PARTY DISCLOSURES
(I) List of Related parties
a) Parties where control exists:
(i) Ultimate Holding Company : Robbins & Myers Inc.
(ii) Holding Company: : Pfaudler Inc.
(iii) Subsidiary Companies: : Karamsad Holdings Limited
Karamsad Investments Limited GMM Mavag AG Mavag AG
(b) Related parties with whom transactions have taken place during the
year:
(i) Fellow Subsidiaries: : Pfaudler Werke GMBH
Pfaudler Balfour Ltd. Edlon PSI Inc. Chemineer Inc.
Suzhou Pfaudler Glass Lined Equipment Company Limited Robbins & Myers
Singapore Private Limited Glass Steel Parts and Services
(ii) Key management personnel: : Mr. Ashok J. Patel - Managing Director
Mr. Tarak A. Patel - Executive Director Mr. Ashok C. Pillai - Chief
Operating Offi cer
(iii) Relative of Key management personnel: : Mrs. Urmi A. Patel (wife
of Mr. Ashok J. Patel)
Mrs. Uttara G. Gelhaus (Daughter of Mr. Ashok J. Patel)
(iv) Enterprises over which persons in (b)(ii) or (b)(iii) : Skyline
Millars Limited are able to exercise signifi cant infl uence. Glass
Lined Equipment Company Limited
Ready Mix Concrete Limited
Dietrich Engineering Consultants India Private Limited J. V. Patel &
Co. Unifrax India Limited SKF India Limited Siemens Limited Bayer
Material Science Private Limited
Notes:
1) The Business segments have been identifi ed in line with the
Accounting Standard 17 on "Segment Reporting", taking into account the
nature of product, the nature of manufacturing process, the class of
customers, the organization structure and the internal fi nancial
reporting system.
2) Segment revenue, results, assets and liabilities include amounts
that are directly attributable to the respective segments. Amounts not
directly attributable have been allocated to the segments on the best
judgment of the management in the absence of detailed internal fi
nancial reporting system. Expenses not directly allocable to the
segments are treated as "Unallocated Expenses".
7. Prior years figures have been regrouped where necessary.
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