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Notes to Accounts of Premier Explosives Ltd.

Mar 31, 2023

Provisions, contingent liabilities and contingent assets

Provisions are recognised when the Company has a present
obligation (legal or constructive) as a result of a past event, it
is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation. The
expense relating to any provision is presented in the statement
of profit and loss net of any reimbursement. If the effect of the
time value of money is material, provisions are determined by
discounting the expected future cash flows at a pre-tax rate
that reflects current market assessments of the time value of
money and, where appropriate, the risks specific to the liability.
Where discounting is used, the increase in the provision due to
the passage of time is recognised as other finance expense.

A contingent liability is a possible obligation that arises
from past events whose existence will be confirmed by the
occurrence or non-occurrence of one or more uncertain
future events beyond the control of the Company or a present
obligation that is not recognised because it is not probable that
an outflow of resources will be required to settle the obligation.
A contingent liability also arises in extremely rare cases where
there is a liability that cannot be recognised because it cannot
be measures reliably. The Company does not recognise a
contingent liability but discloses its existence in the standalone
financial statements.

A contingent asset is not recognised unless it becomes virtually

certain that an inflow of economic benefits will arise. When an
inflow of economic benefits is probable, contingent assets are
disclosed in the standalone financial statements.

Provisions, Contingent liabilities and contingent assets are
reviewed at each balance sheet date.

2.16 Employee benefits

(i) Short-term obligations

Liabilities for wages and salaries, including non¬
monetary benefits that are expected to be settled wholly
within 12 months after the end of the period in which
the employees render the related service are recognised
in respect of employees'' services up to the end of the
reporting period and are measured at the amounts
expected to be paid when the liabilities are settled. The
liabilities are presented as current employee benefit
obligations in the balance sheet.

(ii) Other long-term employee benefit obligations

The liabilities for earned leave are not expected to
be settled wholly within 12 months after the end of
the period in which the employees render the related
service. They are therefore measured as the present
value of expected future payments to be made in respect
of services provided by employees up to the end of the
reporting period using the projected unit credit method.
The benefits are discounted using the appropriate market
yields at the end of the reporting period that have terms
approximating to the terms of the related obligation.
Remeasurements as a result of experience adjustments
and changes in actuarial assumptions are recognised in
profit or loss.

The obligations are presented as current liabilities in the
balance sheet if the entity does not have an unconditional
right to defer settlement for at least twelve months after
the reporting period, regardless of when the actual
settlement is expected to occur.

(iii) Post-employment obligations

The company operates the following post-employment
schemes

(a) Defined benefit plans such as gratuity

(b) Defined contribution plans such as provident fund

(c) State plans

(d) Voluntary retirement scheme

(a) Defined benefit plans - Gratuity obligations

The liability or assets recognised in the balance
sheet in respect of defined benefit gratuity
plans is the present value of the defined benefit
obligations at the end of the reporting period less
the fair value of plan assets. The defined benefit
obligation is calculated annually by actuaries using
the projected unit credit method.

The present value of the defined benefit obligation
denominated in INR is determined by discounting
the estimated future cash outflows by reference to
market yields at the end of the reporting period on
government bonds that have terms approximating
to the terms of the related obligation. The benefits
which are denominated in currency other than INR,
the cash flows are discounted using market yields
determined by reference to high-quality corporate
bonds that are denominated in the currency in
which the benefits will be paid, and that have
terms approximating to the terms of the related
obligation.

The net interest cost is calculated by applying the
discount rate to the net balance of the defined
benefit obligation and the fair value of plan assets.
This cost is included in employee benefit expense
in the statement of profit and loss.

Remeasurement gains and losses arising from
experience adjustments and change in actuarial
assumptions are recognised in the period in
which they occur, directly in other comprehensive
income. They are included in retained earnings
in the statement of changes in equity and in the
balance sheet.

Changes in the present value of the defined benefit
obligation resulting from plan amendments or
curtailments are recognised immediately in profit
or loss as past service cost.

(b) Defined contribution plans

The Company pays provident fund contributions
to publicly administered funds as per applicable
regulations. The Company has no further payment
obligations once the contributions have been paid.
The contributions are accounted for as defined
contribution plans and the contributions are
recognised as employee benefit expense when
they are due.

(c) State plans

Employer''s contribution to Employees'' State
Insurance is charged to statement of profit and
loss.

(d) Voluntary retirement scheme

Compensation payable under the voluntary
retirement scheme is being charged to the
Statement of Profit and Loss in the year of
settlement.

2.17 Dividends

Provision is made for the amount of any dividend declared,
being appropriately authorised and no longer at the discretion
of the entity, on or before the end of the reporting period but
not distributed at the end of the reporting period. Dividend
is recognised as a liability in the period in which the interim

dividends are approved by the Board of Directors, or in respect
of the final dividend when approved by shareholders.

2.18 Research and development expenditure

Revenue expenditure pertaining to research is charged to the
statement of profit and loss. Product development costs are
charged to the statement of profit and loss unless a product''s
technological and commercial feasibility has been established,
in which case such expenditure is capitalised.

2.19 Earnings per share

Basic earnings per share are calculated by dividing the net
profit or loss for the period attributable to equity shareholders
by the weighted average number of equity shares outstanding
during the year.

For the purpose of calculating diluted earnings per share,
the net profit or loss for the period attributable to equity
shareholders and the weighted average number of shares
outstanding during the period are adjusted for the effects of all
dilutive potential equity shares.

2.20 Investment property

Property that is held for long-term rental yields or for capital
appreciation or both, and that is not used in the production
of goods and services or for the administrative purposes, is
classified as Investment property and is measured initially
at cost, including transaction costs. Subsequent to initial
recognition, investment properties are stated at cost less
accumulated depreciation and accumulated impairment loss, if
any.

2.21 Government grants

Government grants relating to income are deferred and
recognised in the profit or loss over the period necessary
to match them with the costs that they are intended to
compensate and presented within other income.

Government grants relating to the purchase of property,
plant and equipment are included in non-current liabilities as
deferred income and are credited to profit or loss on a straight¬
line basis over the expected lives of the related assets and
presented within other income.

Export entitlements from government authorities are
recognised in the statement of profit and loss as a reduction
from "Cost of materials consumed" when the right to receive
credit as per the terms of the scheme is established in respect
of the exports made by the group, and where there is no
significant uncertainty regarding the ultimate realisation of the
entitlement

2.22 Rounding of amounts

All amounts disclosed in the standalone financial statements
and notes have been rounded off to the nearest lakhs as per
the requirement of Schedule III, unless otherwise stated.

2.23 Recent accounting pronouncements (Standards issued but
not yet effective)

Ministry of Corporate Affairs ("MCA") notifies new standard
or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as issued from time to
time. On March 31,2023, MCA amended the Companies (Indian
Accounting Standards) Rules, 2015 by issuing the Companies
(Indian Accounting Standards) Amendment Rules, 2023,
applicable from April 1,2023, as below:

Ind AS 1 - Presentation of Financial Statements

The amendments require companies to disclose their material
accounting policies rather than their significant accounting
policies. Accounting policy information, together with other
information, is material when it can reasonably be expected to
influence decisions of primary users of general purpose financial
statements. The Company does not expect this amendment to
have any significant impact in its financial statements.

Ind AS 12 - Income Taxes

The amendments clarify how companies account for deferred
tax on transactions such as leases and decommissioning
obligations. The amendments narrowed the scope of the
recognition exemption in paragraphs 15 and 24 of Ind AS
12 (recognition exemption) so that it no longer applies to
transactions that, on initial recognition, give rise to equal
taxable and deductible temporary differences. The Company is
evaluating the impact, if any, in its financial statements.

Ind AS 8 - Accounting Policies, Changes in Accounting
Estimates and Errors

The amendments will help entities to distinguish between
accounting policies and accounting estimates. The definition
of a change in accounting estimates has been replaced with a
definition of accounting estimates. Under the new definition,
accounting estimates are "monetary amounts in financial
statements that are subject to measurement uncertainty".
Entities develop accounting estimates if accounting policies
require items in financial statements to be measured in a way
that involves measurement uncertainty. The Company does not
expect this amendment to have any significant impact in its
financial statements.


Mar 31, 2018

1 Background

1.1 Premier Explosives Limited (PEL), (the ‘company’) is a public limited company incorporated under the provisions of erstwhile Companies Act, 1956 having its registered office at Secunderabad in the state of Telangana, India. The equity shares of the company are listed with two stock exchanges in India viz., BSE Limited, Mumbai and the National Stock Exchange of India Limited, Mumbai.

1.2 The company is engaged in manufacture of high energy materials like bulk explosives, packaged explosives, detonators, detonating fuse, solid propellants, pyrogen igniters, pyro devices, etc., having applications in mining, infrastructure, defence, space, homeland security and such other areas. The company also operates and maintains solid propellant plants of defence and space establishments.

1.3 The financial statements are approved for issue by the Company’s Board of Directors on May 23, 2018.

a) Ind AS 21-The effect of changes in exchange rates

On 28 March, 2018, Ministry of Corporate Affairs (MCA) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency.

The amendment will come into force from April 1, 2018 and no material effect is expected on adoption of this standard.

Note 2(a): Trade receivables are hypothecated with banks as security against working capital loans. (refer note: 42)

Note 3 (a): Margin money deposits include Rs. 673.80 lakhs (March 31, 2017: Rs. 375.59 lakhs; April 1, 2016: Rs. 277.29 lakhs) pledged / lien against bank guarantees issued by the banks. (refer note: 37)

Issue of shares by way of QIP

During the year the company has allotted 16,51,000 equity shares of Rs. 10 each at Rs. 400 per share, including a premium of Rs. 390 per share by way of Qualified Institutional Placement (QIP) through private placement by complying with section 42 read with rule 14(1) of the Companies Act, 2013 and other relevant provisions specified by the SEBI. Thus the equity share capital has increased by Rs. 165.10 lakhs and securities premium by Rs. 6438.90 lakhs.

Preferential allotment

During the year the company has made preferential allotment of 1,27,564 equity shares of Rs. 10 each at Rs. 408 per share, including a premium of Rs. 398 per share to promoters (75,020 shares) and others (52,544 shares). Thus the equity share capital has increased by Rs. 12.76 lakhs and securities premium by Rs. 507.70 lakhs.

Issue expenses

Issue expenses incurred towards issue of above equity shares amounting Rs. 232.39 lakhs has been netted off from the securities premium account as these expenses are directly attributable to the issue of shares.

Terms and rights attached to equity shares

The company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. 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.

Note 4 (a): Above secured term loans are secured by first charge on the assets financed out of the above said loans including building and machinery and second charge on current assets of the company and personal guarantee by Chairman and Managing Director of the company.

Note 4 (b): Repayment terms: Loan 1 comprises of one quarterly instalment of Rs. 6.37 lakhs payable in June, 2018. Loan 2 comprises of 16 equal quarterly instalments of Rs. 65.63 lakhs each (June, 2018 to March, 2022), with an applicable interest rate of 9.25% as on the reporting date.

Note 4 (c): Working capital loans are secured by hypothecation of stocks, receivables, other current assets and fixed assets of the company and personal guarantee of two directors of the company.

Note 4 (d): Rate of interest on current borrowings is as per the agreement with the respective banks i.e. bank rate 10.55% ( /-) spread as applicable.

Note 4 (e): The carrying amounts of financial and non-financial assets pledged as security for current and non-current borrowings are disclosed in note 42.

Note 5.1: Unpaid dividend account represents dividend amount unclaimed and no amount is due for deposit in Investor Education and Protection Fund

Note 6(a):

(i) Defined contribution plans

Employer’s contribution to Provident Fund: Contributions are made to provident fund in India for employees at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the government. The obligation of the company is limited to the amount contributed and it has no further contractual or any constructive obligation.

Employer’s contribution to State Insurance Scheme: Contributions are made to State Insurance Scheme for employees at the rate of 4.75%. The contributions are made to Employee State Insurance Corporation (ESI) to the respective State Governments of the Company’s location. This Corporation is administered by the Government and the obligation of the company is limited to the amount contributed and it has no further contractual or any constructive obligation.

(ii) Defined benefits plans

Post-employment obligations - Gratuity

The company provides for gratuity for employees in India as per the payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement / termination is the employee’s last drawn basic salary per month computed proportionately for 15 days’ salary multiplied for the number of years of service. The gratuity plan is a funded plan and the company makes contributions to recognized funds in India. The company does not fully fund the liability and maintains a target level of funding to be maintained over a period of time based on estimations of expected gratuity payments.

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

Defined benefit liability and employer contributions

The company has purchased insurance policy to provide for payment of gratuity to the employees. Every year, the insurance company carries out a funding valuation based on the latest employee data provided by the company. Any deficit in the assets arising as a result of such valuation is funded by the company. The company considers that the contribution rate set at the last valuation date is sufficient to eliminate the deficit over the agreed period and that regular contributions, which are based on service costs, will not increase significantly.

The weighted average duration of the defined benefit obligation is 10.79 years. The expected cash flows over the years is as follows:

Risk management

Through its defined benefit plans, the company is exposed to a number of risks, the most significant of which are detailed below:

Interest rate risk: This may arise from volatility in asset values due to market fluctuations and impairment of assets due to credit losses. These Plans primarily invest in debt instruments such as Government securities and highly rated corporate bonds - the valuation of which is inversely proportional to the interest rate movements

Salary cost inflation risk: The present value of the Defined Benefit Plan liability is calculated with reference to the future salaries of participants under the Plan. Increase in salary due to adverse inflationary pressures might lead to higher liabilities.

Note 7: Income tax expense

Analysis of the company’s income tax expense, given below explains significant estimates made in to relation to company’s tax position and also shows amounts that are recognised directly in equity and the effect of tax expense on account of non-assessable and non-deductible items.

Note 8: Financial Instruments and Risk Management-Fair value hierarchy

Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels:

Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities.

Level 2: Inputs other than quoted price including within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3. This is the case with listed instruments where market is not liquid and for unlisted instruments.

Note:

The carrying amounts of trade payables, other financial liabilities, borrowings, cash and cash equivalents, other bank balances, investment in preference shares, trade receivables and other financial assets are considered to be the same as their fair values due to their short term nature and recoverability from the parties.

Note:

Investments mentioned in note 6 include equity investments in Subsidiaries, Joint venture and Associates which are carried at costs and hence are not required to be disclosed as per Ind AS 107 “Financial Instruments Disclosures”. Hence, the same have been excluded from the above table.

Note 31: Financial Instruments and Risk Management - Financial risk management

The Company’s activities are exposed to Credit risk, Market risk and Liquidity risk. The Company emphasises on risk management and has an enterprise wide approach to risk management. The Company’s risk management and control procedures involve prioritization and continuing assessment of these risks and devises appropriate controls, evaluating and reviewing the control mechanism.

(A) Credit risk

Credit risk is the risk of financial loss to the Company if a customer to a financial instrument fails to meet its contractual obligations. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks. Credit risk of the Company is managed at the corporate level.

The credit risk related to trade receivables is influenced mainly by the individual characteristics of each customer. The credit risk is managed by the company by establishing credit limits and continuously monitoring the credit worthiness of the customers. Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses financial reliability of customers and other counter parties, taking into account the financial condition, current economic trends, analysis of historical bad debts and ageing of financial assets. Individual risk limits are periodically reviewed on the basis of such information. The company also provides for expected credit losses based on the past experience where it believes that there is high probability of default.

(B) Market risk

Market risk is the risk that the future value of a financial instrument will fluctuate due to movements in the market factors. The most common types of market risks are interest rate risk and foreign currency risk.

- Interest rate risk

Interest rate risk is the risk that the future cash flows or the fair value of a financial instrument will fluctuate because of changes in market interest rates. The Company manages its market interest rates by fixed rate interest, rate that is linked to marginal cost of lending rate, etc. Hence, the Company is not significantly exposed to interest rate risks.

- Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The company is not significantly exposed to this risk because of natural hedging in the form of imports and exports being at similar levels.

Foreign currency risk - Sensitivity

The analysis is based on the assumption that the foreign currency increases / (decreases) by 2.5% with all other variables held constant. The Company manages its market interest rates by fixed rate interest, rate that is linked to marginal cost of lending rate, etc. Hence, the Company is not significantly exposed to interest rate risks.

(C) Liquidity risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.

The Company’s objective is to maintain a balance between continuity of funds through the use of bank overdrafts, loan from directors, and other means of borrowings. The company invests its surplus funds in deposits with maturity of 12 months, which carry no / low mark to market risk.

Note 9: Capital management

The Company’s financial strategy aims to provide adequate capital for its growth plans for sustained stakeholder value. The company’s objective is to safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders. And depending on the financial market scenario, nature of the funding requirements and cost of such funding, the Company decides the optimum capital structure. The Company aims at maintaining a strong capital base so as to maintain adequate supply of funds towards future growth plans as a going concern.

Note 10 : First-time adoption of Ind AS Transition to Ind AS

These are the company’s first financial statements prepared in accordance with Ind AS.

The accounting policies set out in Note 2 have been applied in preparing the financial statements for the year ended March 31, 2018, the comparative information presented in these financial statements for the year ended March 31, 2017 and in the preparation of an opening Ind AS balance sheet as at April 1, 2016 (company’s date of transition). In preparing its opening Ind AS balance sheet, the company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation on how the transition from previous GAAP to Ind AS has affected the company’s financial position, financial performance and cash flows is set out in the following tables and notes.

A. Exemptions and exceptions availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A.1 Ind AS optional exemptions

A.1.1 Deemed cost

The company has elected to measure items of property, plant and equipment and intangible assets at their carrying values at the transition date except for certain class of assets which are measured at fair value as deemed cost.

A.1.2 Investments in subsidiaries, joint ventures and associates

The company has elected to measure investment in subsidiaries, joint ventures and associates at the previous GAAP carrying amount as their deemed cost as on the date of transaction to Ind AS.

A.2 Ind AS mandatory exceptions

A.2.1 Estimates

An entity’s estimates in accordance with Ind ASs at the date of transition to Ind As shall be consistent with the estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at April 1, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

- Impairment of financial asset based on expected credit loss model

A.2.2 Classification and measurement of financial asset

Ind AS 101 requires an entity to assess classification and measurement of financial assets (investments in debt instruments) on the basis of the facts and circumstances that exist on the date of transition to Ind AS.

B. Reconciliations between previous GAAP and Ind AS

(i) Reconciliation of equity as at the date of transition, April 1, 2016 and as at March 31, 2017

(v) There were no significant reconciliation items between cash flows prepared under previous GAAP and those prepared under Ind AS.

C. Notes to first-time adoption:

Note 1: Remeasurements of defined benefit plan

Under Ind AS, Remeasurements, i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these Remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended March 31, 2017 increased by Rs. 102.40 lakhs. There is no impact on the total equity as at March 31, 2017.

Note 2: Reserves and surplus

Retained earnings as at April 1, 2016 has been adjusted consequent to the above Ind AS transition adjustments.

The Company had received a Government grant towards Central & State Investment Subsidy with an outstanding amount of Rs. 30.57 lakhs. These amounts have been transferred to retained earnings since the assets related to the grant have been fully depreciated as at April 1, 2016.

Note 3 (i): Excise duty

Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented inclusive of excise duty. The excise duty paid is presented on the face of the statement of profit and loss as part of expenses. This change has resulted in an increase in total revenue and total expenses for the year ended March 31, 2017 by Rs. 2284.25 lakhs. There is no impact on the total equity and profit.

Note 3 (ii): Movement of excise duty in finished goods

Movement of excise duty in finished goods, reclassified from changes in inventories to other expenses amounting to Rs. 2284.25 lakhs.

Note 4: Transaction costs on borrowings

Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method. Under previous GAAP, these transaction costs were charged to profit or loss as and when incurred. Accordingly, finance cost and borrowing have been reduced by Rs. 9.97 lakhs.

Note 5: Other comprehensive income

Under Ind AS, all items of income and expense recognised in a period should be included in the profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit or loss as ‘other comprehensive income’ includes Remeasurements of defined benefit plans. The concept of ‘other comprehensive income’ did not exist under previous GAAP.

Note 6: Deferred tax

The impact of transition adjustments together with Ind-AS mandate of using balance sheet approach (against profit and loss approach in the previous GAAP) for computation of deferred taxes has resulted in charge to the Reserves, on the date of transition, with consequential impact to the statement of profit and loss for the subsequent periods.

Note 7: Fair valuation as deemed cost for property, plant and equipment

The Company has considered fair value for property, via land admeasuring over 427.34 acres and 736 square yards, situated in India, with impact of Rs. 5,570.59 lakhs in accordance with stipulations of Ind AS 101 as on transition date April 1, 2016, with the resultant impact being accounted for in the reserves. Accordingly revaluation made during financial year 2016-17 had been reversed with net impact of Rs. 133.56 lakhs.

Note 8: Trade receivables

Under Ind AS, impairment allowance has been determined based on Expected Credit Loss model (ECL). Accordingly, the company impaired its trade receivable by 130.91 lakhs as on April 1, 2016 which has been impacted against retained earnings and in the profit for the year ended March 31, 2017 decreased by Rs. 12.74 lakhs.

Note 9: Discontinued operations

i) Profit from discontinued operations of Rs. 19.76 lakhs which was not disclosed separately under previous GAAP, has been reclassified to profit on sale of discontinued operations as per Ind AS 105. Due to this, revenue has been reclassed by Rs. 41.86 lakhs, depreciation by Rs. 11.59 lakhs and other expenses by Rs. 10.51 lakhs. There is no impact on the total equity and profit.

ii) Profit on sale of discontinued operations of Rs. 58.15 lakhs which was disclosed as exceptional items under previous GAAP, has now been reclassified to profit on sale of discontinued operations as per Ind AS 105. There is no impact on the total equity and profit.

Note 11: Discontinued operations

(a) Description

On March 22, 2017, pursuant to approval of the Board of directors, the company has transferred the wind mill division at Dindigul district, Tamilnadu to OPEL Investments Private Limited as a going concern on slump sale basis for a consideration of Rs. 298.83 lakhs.

(b) Financial performance and cash flow information

The financial performance and cash flow information is presented below:

Note: It is not practicable for the company to estimate the timings of cash flows, if any, in respect of the above pending resolution of the respective proceedings.

Note 12 : Payables to Micro, Small & Medium Enterprises

Information pertaining to Micro and Small Enterprises as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 (Act) as given below has been determined to the extent such parties have been identified on the basis of information available with the company:

Note: The list of undertakings covered under MSMED was determined by the company on the basis of information available with the Company and has been relied upon by the auditors.

Note 13: Interest in other entities

The Company’s subsidiaries and Joint ventures as at March 31, 2018 are set out below. Unless otherwise stated, they have share capital consisting solely of equity shares that are held directly by the company.

Note 14: Utilisation of fund raised through Qualified Institutional Placement & Preferential Issue

During the year ended March 31, 2018 the company has raised Rs. 7,273.26 lakhs primarily for Business expansion, working capital purposes and any other purposes as may be permissible under applicable law.

Note 15: Events occurring after the reporting period-Proposed dividend

Final dividend recommended by the directors which is subject to the approval of shareholders in the ensuing annual general meeting


Mar 31, 2016

1 Corporate information

Premier Explosives Limited is engaged in the business of high energy materials (commercial explosives and defense explosives). Commercial explosives comprise of bulk explosives, packaged explosives, detonators, detonating fuse, etc., which are used in mining and infrastructure sectors. Defense explosives comprise of solid propellants, pyroxene igniters, pyre devices, etc. consumed in manufacture of missiles and other defense items. The company also operates and maintains solid propellant plants of defense and space establishments. Having obtained a few industrial licenses, the company is planning to enter into manufacture of ammunition to meet the requirements defense forces.

Premier is an ISO 9001 company having accreditation of National Accreditation Board for Testing & Calibration Laboratories (NABL) and recognition of Department of Scientific & Industrial Research (DSIR). The company is listed on Bombay Stock Exchange.

2 Previous year figures have been regrouped/ recast/ rearranged wherever necessary to conform to current year classification.

4 Confirmation letters have been issued in respect of trade receivables and other receivables, loans and advances and trade payables and other payables of the company but not responded to in some cases. Hence, unconfirmed balances are subject to reconciliation and consequent adjustments, if any, would be determined / made on receipt of confirmation. However, in the opinion of the Board, all assets other than fixed assets and non-current investments have a realizable value in the ordinary course of business which is not different from the amount at which it is stated.

5 Donations in previous year include Rs,0.25 lakhs paid to Communist Party (Marxist) and Rs, 5 lakhs paid to Baratiya Janatha Party.

6 Excise duty

Excise duty on sales for the year has been disclosed as reduction from turnover. Excise duty relating to the difference between closing stock and opening stock has been included in Note no. 23 "Changes in inventories of finished goods, work-in-progress and scrap".

29.2 Other explanatory information

7 In view of inadequacy of profit, managerial remuneration paid to Chairman and Managing Director for the year ended 31st March, 2016 has exceeded the amount payable in terms of Sections 197 read with Schedule V of the Act by an amount of Rs,65.47 lakhs. The company has already sought the approval from the Central Government in respect of the above said amount, which is yet to be received.

8 Details of foreign currency exposures that are not hedged by derivative instruments or otherwise

Note:

Above details have been compiled to the extent the parties have been identified on the basis of information available with the company and relied on by the auditors.

11 Segment reporting

Segments are identified in line with AS 17 "Segment Reporting", taking into consideration the internal organization and management structure as well as the differential risk and returns of the segment.

Identification of reportable segments:

A. Business Segment:

The Company is engaged in manufacture of explosives, which is considered as primary reportable segment.

B. Geographical Segment:

Revenue is segregated into two segments namely India (Sales and services to customers within India) and other countries (Sales and services to customers outside India) on the basis of geographical location of customers for the purpose of reporting geographical segments.

13 Accounting for Leases (Accounting Standard 19)

Operating lease expenses

The company has various operating leases for office facilities that are renewable on a periodic basis, by mutual consent, on mutually agreeable terms and cancellable at its option. Rental expenses on operating leases recognized in the Statement of profit and loss for the year is '' nil (previous year: Rs, 0.84 lakhs)

14. CSR expenditure

a) Gross amount required to be spent by the Company during the year amounting to Rs, 23.82 lakhs

b) Amount spent during the year on:


Mar 31, 2015

1 Corporate information

Premier Explosives Limited is a manufacturer of explosives having its registered office at Secunderabad, Telangana, India. The company's main manufacturing and research and development facilities are located at Peddakandukuru village in Nalgonda district of Telangana with other manufacturing units located in Madhya Pradesh, Maharashtra and Tamilnadu. Listed on Bombay Stock Exchange, Premier is an ISO 9001 company having accreditation of National Accreditation Board for Testing & Calibration Laboratories (NABL) and recognition of Department of Scientific & Industrial Research (DSIR).

2 Previous year figures have been regrouped/ recast/ rearranged wherever necessary to conform to current year classification.

3 Change in accounting estimates

As per the requirements of the Companies Act, 2013 ("the Act"), the Company has computed depreciation on the basis of the useful lives of tangible fixed assets in the manner prescribed in Schedule II of the Act. Consequently, depreciation for the year is higher by Rs. 76.91 lakhs and depreciation of Rs. 66.66 lakhs (net of deferred tax of Rs. 35.28 lakhs) on account of assets whose useful life is already exhausted as on 1st April, 2014 has been adjusted to Retained Earnings.

4 Confirmation letters have been issued in respect of trade receivables and other receivables, loans and advances and trade payables and other payables of the company but not responded to in some cases. Hence, unconfirmed balances are subject to reconciliation and consequent adjustments, if any, would be determined / made on receipt of confirmation. However, in the opinion of the Board, all assets other than fixed assets and non-current investments have a realizable value in the ordinary course of business which is not different from the amount at which it is stated.

5. Donations include Rs. 0.25 lakhs (Previous year: Rs. Nil) paid to Communist Party (Marxist) and Rs. 5.00 lakhs (Previous year: Rs. Nil) paid to Bharatya Janata Party.

6. Excise duty

Excise duty on sales for the year has been disclosed as reduction from turnover. Excise duty relating to the difference between closing stock and opening stock has been included in Note no. 24 "Changes in inventories of finished goods, work-in-progress and scrap".

7. Disclosure on utilization of proceeds of preferential issues in terms of SEBI (ICDR) Regulation 2009:

On 12th July, 2014 the company converted 5,00,000 warrants into equity shares. With this, entre 7,31,000 warrants have been converted into equity shares of Rs. 10.00 each at a premium of Rs. 51.77. The total amount of Rs. 451.54 lakhs thus received has been utilized for the objects of the preferential issue.

8. Other explanatory information

9. Segment reporting (Accounting Standard 17)

In accordance with Accounting Standard - 17 "Segment Reporting" issued under the Companies (Accounting Standard) Rules 2006, the Company's business consists of two reportable segments i.e., Explosives & Accessories and Wind power.

Segment information has been prepared in conformity with the accounting policies adopted for preparing and presenting the financial statements of the company.

As part of secondary reporting, revenues are attributed to geographical markets based on the location of the customers.


Mar 31, 2013

1.1 Other explanatory information

1. Corporate information

Premier Explosives Limited is a manufacturer of explosives having its registered office at Secunderabad, Andhra Pradesh, India. The company''s main manufacturing and research and development facilities are located at Peddakandukuru village in Nalgonda district of Andhra Pradesh with other manufacturing units located in Madhya Pradesh, Maharashtra and Tamilnadu. Listed on Bombay Stock Exchange, Premier is an ISO 9001 company having accreditation of National Accreditation Board for Testing & Calibration Laboratories (NABL) and recognition of Department of Scientific & Industrial Research (DSIR).

2. Previous year figures have been regrouped/ recast/ rearranged wherever necessary to conform to current year classification.

3. Contingent liabilities and commitments (Rs. in lakhs)

As at As at Particulars 31st March, 2013 31st March, 2012

Contingent liabilities

On account of guarantees issued by the banks on behalf of the company 2,488.29 1,805.80

Sales tax demands disputed by the company pending in appeal 151.31 151.31

Guarantees issued by the company on behalf of an associate company 128.58 171.91

Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) 57.75 345.44

4. Confirmation letters have been issued in respect of trade receivables and other receivables, loans and advances and trade payables and other payables of the company but not responded to in some cases. Hence, unconfirmed balances are subject to reconciliation and consequent adjustments, if any, would be determined / made on receipt of confirmation. However, in the opinion of the Board, all assets other than fixed assets and non-current investments have a realizable value in the ordinary course of business which is not different from the amount at which it is stated.

5. Donations include Rs.0.25 lakh (Previous year: Rs.0.50 lakh) paid to Communist Party (Marxist).

6. Excise duty

Excise duty on sales for the year has been disclosed as reduction from turnover. Excise duty relating to the difference between closing stock and opening stock has been included in Note no. 24 "Changes in inventories of finished goods, work-in-progress and scrap".

7. Remuneration of Chairman and Managing Director, for a period of three years, had been approved by the shareholders in the Annual General Meeting held on 31st July, 2010, subject to the approval of Central Government, if required.

In view of satisfactory financial performance, approval of the Central Government had not been required for the managerial remuneration paid during the years 2010-11 and 2011-12. However, during the year 2012-13 there was an accident in the detonators plant and the operations had been adversely affected. Consequential inadequacy of profit resulted in the managerial remuneration being in excess of the amount payable in terms of sections 198 and 309 read with schedule XIII of the Companies Act, 1956 by an amount of Rs.51.29 lakhs. The company is taking necessary steps to obtain the approval of Central Government.

8.1. The Company had announced Voluntary Retirement Scheme (VRS) for the employees during the previous year. A sum of Rs.37.06 lakhs (Prevoius year: Rs.48.73 lakhs) has been paid during the year and debited to Statement of profit and loss under the head "Exceptional Items".

9. Segment reporting (Accounting Standard 17)

In accordance with Accounting Standard - 17 "Segment Reporting" issued under the Companies (Accounting Standard) Rules 2006, the Company''s business consists of two reportable segments i.e., Explosives & Accessories and Wind power.

Segment information has been prepared in conformity with the accounting policies adopted for preparing and presenting the financial statements of the company.

As part of secondary reporting, revenues are attributed to geographical markets based on the location of the customers.

10. Accounting for Leases (Accounting Standard 19)

Operating lease income

Rental income received during the year on operating lease is Rs.1.43 lakhs (Previous year: Rs.1.56 lakhs). Operating lease expenses

The company has various operating leases for equipment, office facilities and vehicles that are renewable on a periodic basis, by mutual consent, on mutually agreeable terms and cancellable at its option. Rental expenses on operating leases recognised in the Statement of profit and loss for the year is Rs.1.43 lakhs (previous year: Rs.1.61 lakhs)


Mar 31, 2012

1. Corporate information

Premier Explosives Limited is a manufacturer of explosives having its registered office at Secunderabad, Andhra Pradesh, India. The company's main manufacturing and research and development facilities are located at Peddakandukuru village in Nalgonda district of Andhra Pradesh with other manufacturing units located in Madhya Pradesh, Maharashtra and Tamilnadu. Listed on Bombay Stock Exchange, Premier is an ISO 9001 company having accreditation of National Accreditation Board for Testing & Calibration Laboratories (NABL) and recognition of Department of Scientific & Industrial Research (DSIR).

2. Presentation and disclosure of financial statements

During the year ended 31st March 2012, the Revised Schedule VI notified under the Companies Act 1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of Revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

3. Contingent liabilities and commitments

(Rs. in lakhs) As at As at

Particulars 31st March, 2012 31st March, 2011

Contingent liabilities

On account of guarantees issued by the banks on behalf of the company 1,805.80 2,656.13

Sales tax demands disputed by the company pending in appeal 151.31 151.31

Guarantees issued by the company on behalf of associate company 171.91 253.91

Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) 345.44 178.80

4. Confirmation letters have been issued in respect of trade receivables and other receivables, loans and advances and trade payables and other payables of the company but not responded to in some cases. Hence, unconfirmed balances are subject to reconciliation and consequent adjustments, if any, would be determined / made on receipt of confirmation. However, in the opinion of the Board, all assets other than fixed assets and non- current investments have a realizable value in the ordinary course of business which is not different from the amount at which it is stated.

5. Donations include Rs.0.50 lakh paid to Communist Party (Marxist). (Previous year Rs.1.00 lakh paid to Telangana Rashtra Samithi.)

6. Excise duty

Excise duty on sales for the year has been disclosed as reduction from turnover. Excise duty relating to the difference between closing stock and opening stock has been included in Note no. 25 "Changes in inventories of finished goods, work-in-progress and scrap".

7. Segment reporting

In accordance with Accounting Standard - 17 "Segment Reporting" issued under the Companies (Accounting Standard) Rules 2006, the Company's business consists of two reportable segments i.e., Explosives & Accessories and Wind power.

Segment information has been prepared in conformity with the accounting policies adopted for preparing and presenting the financial statements of the company.

As part of secondary reporting, revenues are attributed to geographical markets based on the location of the customers.

Operating lease expenses

The company has various operating leases for equipment, office facilities and vehicles that are renewable on a periodic basis, by mutual consent, on mutually agreeable terms and cancellable at its option. Rental expenses on operating leases recognised in the Statement of profit and loss for the year is Rs.1.61 lakhs (previous year: Rs.3.46 lakhs)

8. Provision for taxation

(i) Provision for current tax has been made based on an estimate of assessable income determined by the company under the Income Tax Act, 1961.

(ii) The company estimates the deferred tax charge/(credit) using the applicable rate of taxation based on the impact of timing differences between financial statements and estimated taxable income for the current year.


Mar 31, 2011

1. Previous years figures have been regrouped wherever necessary to conform to this years classification.

2. Contingent liabilities (Amount in Rupees)

For the year ended For the year ended

Particulars 31st March, 2011 31st March, 2010

(a) On account of guarantees issued by the banks on behalf of the company 26,56,13,213 14,56,16,183

(b) Sales tax demands disputed by the company pending in appeal 1,51,30,507 1,51,30,507

(c) Income tax demands disputed by the company pending in appeal - 3,86,660

(d) Guarantees issued by the company on behalf of associate company 2,53,90,911 2,65,05,248

3. Revaluation reserve

During the year, the company has reversed the effect of the revaluation of fixed assets with the following result on the accounts:

Fixed assets net block has been reduced by Rs.34,02,055/-

Revaluation reserve has been reduced by Rs.34,02,055/-

4 Confirmation letters have been issued in respect of debts, loans and advances and sundry creditors of the company but no responses have been received in many cases. Hence, unconfirmed balances are subject to reconciliation and consequent adjustments, if any, would be determined / made on receipt of confirmation. However, in the opinion of the management the current assets, loans and advances are realisable in the ordinary course of business equal to the amount at which they are stated and provision for all known liabilities has been made.

5. Dues of micro and small enterprises

Information as required to be disclosed under schedule VI of the Companies Act,1956 with reference to micro and small enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 (Act) as given below and the information mentioned at Schedule No.12 - Current Liabilities w.r.t. dues of micro and small enterprises, has been determined to the extent such parties have been identified on the basis of information available with the company and relied on by the auditors:


Mar 31, 2010

1. Previous years figures have been regrouped wherever necessary to conform to this years classification.

2. Contingent liabilities (Rupees) For the year ended For the year ended 31st March, 2010 31st March, 2009 (a) On account of guarantees issued by the banks on behalf of the company 14,56,16,183 13,65,32,390 (b) Sales tax demands disputed by the company pending in appeal 1,51,30,507 1,51,30,507 (c) Income tax demands disputed by the company pending in appeal 3,86,660 6,61,369 (e) Guarantees issued by the company on behalf of associate company 2,65,05,248 3,07,41,667

3. Estimated amount of contracts remaining to be executed

on capital account and not provided for (net of advances). 3,89,039 3,83,090

4. Confirmation letters have been issued in respect of debts, loans and advances and sundry creditors of the company but not responded to in many cases. Hence, unconfirmed balances are subject to reconciliation and consquent adjustments, if any, would be determined / made on receipt of confirmation.However, in the opinion of the management the current assets, loans and advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated and provision for all known liabilities has been made.

5. Dues of micro and small enterprises :

Information as required to be disclosed under schedule VI of the Companies Act,1956 with reference to Micro and Small Enterprises under the Micro,Small and Medium Enterprises Development Act, 2006 (Act) as given below and the information mentioned at Schedule No.12 - Current Liabilities w.r.t. dues of Micro and Small Enterprises, has been determined to the extent such parties have been identified on the basis of information available with the Company and relied on by the auditors:

6. Write offs/provisions relating to Joint Ventures:

The exceptional items in the Profit and Loss Account amounting to Rs.7,40,97,008 refer to the provisions in respect of loans, advances etc. made in Joint Ventures in Turkey and Georgia. Operations of these units have been closed as they have been found unviable. The amounts receivable from the Joint Ventures towards supply of machinery, materials, technical know how as well as the amounts of loans, interest thereon and royalty are found not recoverable. In the absence of any operations, value of equity also has diminished. In these circumstances it is considered prudent to make necessary provisions towards the said items. Accordingly an amount of Rs.7,40,97,008 in the current year and Rs.5,37,01,176 in the previous year have been provided as exceptional items to their full extent. Necessary regulatory permissions have already been received for writing off the export receivables and permissions for write off of other amounts are in process.

7. Segmental reporting:

In accordance with Accounting Standard - 17 " Segment Reporting" issued under the Companies (Accounting Standard) Rules 2006, the Companys business consists of two reportable segments i.e., Explosives and Accessories and Wind Power.

Segment information has been prepared in conformity with the accounting policies adopted for preparing and presenting the financial statements of the company.

As part of secondary reporting, revenues are attributed to geographic areas based on the location of the customers.

The following tables present the revenue, profit, assets and liabilites information relating to the business/geographical segment for the year ended 31st March, 2010

8. As per Accounting Standard (AS - 18) on Related Party disclosures issued by the Institute of Chartered Accountants of India and notified by Companies (Accounting Standards), Rules 2006 the disclosure of transactions with the related party as defined in the accounting standard are given below :

I. List of Related parties with whom transactions have taken place and nature of relationships : a) Key management personnel : Mr.A.N.Gupta Mr. T.V.Chowdary Mr. K.Chalil Dr.N.V.Srinivasa Rao

b) Relatives of key management personnel :

Dr. (Mrs.) Kailash Gupta

Mrs. Shonika Gupta

Mrs. Parvathi Latish

Mrs.T.Malati

Ms.T.Shruti

Mr.T.Lohit

Mrs.P.P.Malu

c) Concerns in which key management personnel have substantial interest (Significant interest entities) :

Amar Leasing

A. N. Gupta (HUF)

Godavari Farms & Plantations

d) Concerns in which relatives of key management personnel have substantial interest (Significant interest entities) :

Godavari Explosives Limited

Ask Consultants Private Limited

Aims

Team Industries

e) Concerns in which the company has substantial interest : Premier Wire Products Limited

f) Joint Ventures : Premier Georgia Limited

Premier Sentas Patalayici Maddeler Ticaret Ve Sanayi A.S.

9. Information on leases as per Accounting Standard 19 on "Accounting for Leases":

Operating Lease Expenses:

The company has various operating leases for equipments, office facilities and vehicles that are renewable on a periodic basis by mutual consent on mutually agreeable terms and cancellable at its option. Rental expenses for operating leases recognised in the Profit and Loss Account for the year is Rs.5,51,200/- (Previous Year : Rs.2,42,447/-).

10. (i) Provision for current tax has been made based on an estimate of assessable income determined by the company under the Income Tax Act, 1961.

(ii) The Company estimates the deferred tax charge/(Credit) using the applicable rate of taxation based on the impact of timing differences between financial statements and estimated taxable income for the current year.

The companys interests in the Joint Ventures are reported as Long Term Investments (Schedule 7).

The companys share of each of the assets, liabilities, income and expenses, etc. related to its interests in the joint ventures are not given as audited / unaudited financial statements are not available.

11. Excise duty on sales for the year has been disclosed as reduction from turnover. Excise duty relating to the difference between closing stock and opening stock has been included in Schedule 24 "Increase/(Decrease) in stocks".

12. Information as required under part IV of Schedule VI of the Companies Act, 1956 is given in Annexure A.

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