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Notes to Accounts of Bharat Wire Ropes Ltd.

Mar 31, 2022

i) Terms and rights attached to equity shares

The company has only one class of equity shares having a face value of Rs 10 per share. Each holder of equity share is entitled to one vote per share. The dividend, if any proposed by Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the events of liquidation of the company the holders of the equity shares will be entitled to receive in remaining assets of the Company after distribution of preferential amounts if any. The distribution will be in proportion to the number of equity shares held by the shareholders.

Note:

The Company has issued unrated unlisted unsecured Compulsory Convertible Preference Shares (CCPS) having face value Rs. of Rs 10/- each at a premium ofRs 99,990 per shares to the extent ofRs. 382.66 crores to lenders as per sanction of resolution Plan.

The tenure of said CCPS is 20 years from the date of allotment. Such CCPS shall be convertible any time after a period of 13 years from the date of allotment. However, from 13 to 20 years from allotment date, 1/8th of outstanding at the end of 12th year to be bought by the Promoters from the existing holders or converted into Equity shares each year only after the payment of the outstanding under Restructured Loan only. At the time of conversion, price of CCPS shall be determined as per SEBI ICDR, RBI regulations, Companies Act and/ or any other regulations applicable. The aggregate value of the Equity shares issued at the time of conversion shall not be less than the aggregate amount of face value and the premium for the securities. The number of Equity Shares to be issued at the time of conversion shall be determined accordingly.

Since the no. of shares to be allotted at the time of conversion is not fixed in the agreement, the nature of this instrument is Compound Financial Instrument(CFI). However, in opinion of the management, since there is no contractual obligation for cash outflow under this agreement except the repayment of sustainable debt portion which is disclosed as financial liability in books of the Company, the value of liability component of this CFI would be Nil. Accordingly, the entire amount of fair value of CFI, Rs. 382.66 Crores which is the transaction price, is determined as the value of equity component and has been presented under “Other Equity” in the balance sheet. These assumptions for value determination have been relied upon by the Statutory Auditors.

(i) Rupee Term Loans, ECB, Working Capital Borrowings and unpaid interest thereon have been restructured as per resolution plan approved by lenders. Accordingly Part of the borrowings is continued as Rupee Term Loans, ECB, Working Capital Borrowings and remaining amount is converted into CCPS and Equity Shares on 30-03-21 after waiver of portion of unpaid interest.

(ii) Security:

Following securities have been provided ranking parripassu between lenders for Rupee Term Loans and ECB along with working

Capital borrowings mentioned in Note no. 19 given hereinafter :

a) First charge by way hypothecation on all the tangible Fixed Assets including moveable plant and machinery, machinery spares, tools and accessories, Equipment’s, Electrical Installations, furniture, fixtures, vehicles, Office Equipment’s and all other moveable assets, both present and future;

b) First charge by way mortgage on all the Fixed Assets including immovable properties land and building located at (i) Plot no. 1 and 4, Atgaon Industrial Complex, Village: Atgaon, Taluka Shahpur, Mumbai Nasik Road, Dist. Thane, Maharashtra of the company and (ii) Plot No. 4 at Chalisgaon MIDC, Maharashtra.

c) First charge by way hypothecation on all the current assets including but not limited to stocks of raw materials, work in progress, semifinished and finished goods, consumable stores including book debts, bill whether documentary or clean, outstanding monies, receivables of the Borrower, both present and future;

d) First charge over all accounts, including, the Trust and Retention Account and the Sub-Accounts (or any account in substitution thereof) and all funds from time to time deposited therein,

e) A first charge by way of pledge of 179,84,854 shares of Bharat Wire Ropes Ltd. held by Gyanshankar Investments And Trading Company Private Limited

f) Personal Guarantees of Managing Director and Jt. Managing Director

g) Corporate Guarantee of Gyanshankar Investment and Trading Company Private Limited.

(iii) Security:

The security is by hypothetication of respective Vehicle

(iv) Repayment Schedule:

Rupee Term Loans ECB are repayable in 46 quarterly structured Instalments commenced from 31-12-20

(v) Repayment Schedule:

The loan is repayable in 84 equated monthly installments commenced from 16.10.2015.

(vi) The Govt. of Maharashtra under Package Scheme of Incentive has extended to the Company, the incentive of sales tax deferral scheme pursuant to which the sales tax attributable to the sales effected out of production for a period of 8 Years 9 Months from 01.05.2003 to 31.01.2012 is deferred (interest free). The deferred sales tax in respect of above is based upon the sales tax returns. The amount for each year deferred is payable in 5 equal annual instalments from Financial Year 2014-15 to 2025-26.

Employee Benefit Obligation

(i) Leave Obligations

The leave obligations cover the Company’s liability for earned leave.

(ii) Post-Employment Obligations - Gratuity

The Company has a defined benefit gratuity plan in India, governed by the Payment of Gratuity Act, 1972. The plan entitles an employee, who has rendered at least five years of continuous service, to gratuity at the rate of fifteen day wages for every completed year of service or part thereof in excess of six months, based on the rate of wages last drawn by the employee concerned.

This defined benefit plans expose the Company to actuarial risks, such as interest rate risk and market (investment) risk.

37 Financial Risk Management

The Company’s activities expose it to credit risk, liquidity risk and market risk.

(I) Credit risk

Credit risk is the risk that counterparty will not meet its obligation under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities primarily trade receivables.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition.

a) Trade receivables

Credit risk has been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit. The company uses a simplified approach as per Ind AS 109 and an impairment analysis is performed at each reporting date on an individual basis for significant clients.

(II) Liquidity risk

The Company maintain a balance between continuity of funding and flexibility through the use of bank overdrafts and bank loans (comprising the undrawn borrowing facilities below) by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

b) Maturities of financial liabilities

The tables below analyse the Company’s financial liabilities into relevant maturity groupings based on their contractual maturities for:

All non derivative financial liabilities and derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the cash flows.

The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not material.

(III)Market risk - foreign currency risk

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed utilising forward foreign exchange contracts.The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments, highly probable forecast transactions and foreign currency required at the settlement date of certain receivables/payables. Foreign currency risk exposure a) Foreign currency risk exposure

The Company''s exposure to foreign currency risk at the end of the reporting period expressed in equivalent in INR Rupees is as follows:

(IV) Market risk - interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.The Company had borrowed funds at both fixed and floating interest rates.

The Company''s interest rate risk arises from long-term borrowings with variable rates, which exposes the Company to cash flow

interest rate risk.

a) Interest rate risk exposure

38 Capital Management (i) Risk management

The company’s objectives when managing capital are to safeguard the company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

Loan covenants

There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period

Micro, Small and Medium Enterprises Development Act, 2016

No Interest is paid / payable during the year to any enterprise registered under Micro Small and Medium Enterprises Development Act, 2006 ( MSMED). The information has been determined to the extent such parties could be identified on the basis of the status of suppliers under MSMED.

41

Contingent liabilities

The Company has contingent liabilities as at the year end in respect of:

As at

March 31, 2022

As at

March 31, 2021

Disputed direct taxes

156.80

-

It is not practicable for the Company to estimate the timings of cash outflows if any in respect of above pending resolution of the respective proceedings.

The Company does not expect any re-imbursements in respect of the above contingent liabilities.

44 The Company was awarded a arbital award ( "the Award") for the sum of Rs. 114.78 Lakhs from the Central Organisation Railway Electrification ("CORE") and Rs. 0.98 Lakhs towards cost of the Company through Arbitration Order dated January 19, 2014. CORE has filed an Arbitration Case No. 478 of 2014 before Court of District Judge Allahabad for setting aside the Award and also allowing a sum of Rs. 120 Lakhs withheld by CORE from our Company towards the Risk Purchase Notice. Our Company has filed a Counter- Claim Petition in the said Arbitration case claiming from CORE the sum of Rs. 120 Lakhs plus a sum of Rs. 57.35 Lakhs being interest at the rate of 18% till date of filing.

Details of Employee Stock Options

During the year, the Company has granted 75,000 equity shares under Employee Stock Option Plan, 2017 “ BWR ESOP 2017” to employees of the Company with a right to subscribe to equity shares (“New Options”) at a price Rs. 60.15/-. The Salient features of the Scheme are as under:

Vesting: The options granted under the Plan would vest not less than 1 (one) year from the date of grant of options subject to the maximum period of 6 (six) years.The Options so Granted will vest over a period of 4 years from the date of Grant in the following manner:

Exercise -The Exercise Period pursuant to BWR Employee Stock Option Plan 2017 will be 1 year from the date of last vesting. The Grant of an Option shall entitle the holder of the option to apply for one Share in the Company at the Exercise Price. In the event of cessation of employment due to death, resignation or otherwise, the options may lapse or be exercisable in the manner specifically provided for in the scheme.

Note : Explanation for change in ratio by more than 25%

i. Net Profit has improved on account of increase in revenue and reduction of Interest

ii Net Capital Turnover variance is on account of impact of restructuring of borrowings

iii Return on Capital Employed improved on account of increase in revenue

iv Return on equity improved on account of increase in revenue and decrease in finance cost.

v Return on Investments variation is on account of movement in share price.

vi Debt Service coverage Ratio for previous year not calculated as the company was in default in payment its obligation to Banks and account was restructured at the end of the financial year 2020-21

vii Inventory Turnover Ratio improved on account of increase of operation without corresponding increase of inventory.

viii Trade Receivable Turnover ratio improved on account increae of turnover without corresponding increas of Book debts.

47 Struck Off Company

The company does not have any transactions with companies struck- off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

48 The Company, based on internal & external sources of information including market research, economic forecast and other information, has assessed that as a result of Covid-19 outbreak, there is no significant financial impact on the financial statements as at the date of approval of these financial statements. Due to the nature of the pandemic, the Company will continue to monitor developments to Identify significant uncertainties in future periods, if any.

49 Previous year''s figures have been regrouped or reclassified to conform with the current years'' presentation wherever considered necessary.


Mar 31, 2018

i) Terms and rights attached to equity shares

The company has only one class of equity shares having a face value of Rs 10 per share. Each holder of equity share is entitled to one vote per share. The dividend, if any proposed by Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the events of liquidation of the company the holders of the equity shares will be entitled to receive in remaining assets of the Company after distribution of preferential amounts if any. The distribution will be in proportion to the number of equity shares held by the shareholders.

Notes

(i) Security:

a. First charge, ranking pari passu between term lenders by way of mortgage/hypothecation of entire immovable and moveable fixed assets of the Company related to expansion project situated at MIDC - Chalisgaon or wherever else;

b. Second charge ranking pari passu between term lenders by way of hypothecation of entire current assets of the Company situated at MIDC - Chalisgaon, Atgaon or wherever else;

c. Personal Guarantee of Managing Director.

d. Corporate Guarantee of Gaji Mercantile Private Limited (Now merged with Gyanshankar Investment And Trading Co. Private Limited as approved by NCLT vide its order dated 29.09.2017 received on 10.01.2018)

Documents for security creation for External Commercial Borrowings (ECB) are yet to be executed.

(ii) Security:

The security is by hypothetication of respective Vehicle

(iii) Repayment Schedule:

The term loan is repayable in 20 equal Quarterly Installments. The first installment is payable after a period of 18 months from the date of C.O.D. (22nd Mar 2017) or as per sanction of the respective Lenders as may be modified from time to time.

(iv) Repayment Schedule:

The term loan is repayable in 10 quarterly instalments commencing from 31.05.2018.

(v) Repayment Schedule:

The term loan is repayable in 12 equal quarterly instalments commenced from 30.06.2017.

(vi) Repayment Schedule:

The term loan is repayable in 24 equal quarterly instalments commencing from June 2020

(vii) Repayment Schedule:

The loan is repayable in 84 equal monthly instalments commenced from 03.04.2016

(viii) Repayment Schedule:

The loan is repayable in 36 equal monthly instalments commenced from 05.01.2018.

(ix) Repayment Schedule:

The loan is repayable in 84 equal monthly installments commenced from 16.10.2015

(x) Repayment Schedule:

The loan is repayable in 35 equal monthly instalments commenced from 02.08.2016

(xi) The Govt. of Maharashtra under Package Scheme of Incentive has extended to the Company, the incentive of sales tax deferral scheme pursuant to which the sales tax attributable to the sales effected out of production for a period of 8 Years 9 Months from 01.05.2003 to 31.01.2012 is deferred (interest free). The deferred sales tax in respect of above is based upon the sales tax returns. The amount for each year deferred is payable in 5 equal annual instalments from Financial Year 2014-15 to 2027-28.

Note:

Nature & Security for Current Borrowings

(i) Cash Credit / Working Capital demand loan / Pre-shipment credit from Banks are secured by way of first charge on raw materials, goods in process, finished goods, stores and book debts and first charge on immovable and movable fixed assets at Atgaon and second charge on immovable and movable fixed assets at Chalisgaon both present and future of the Company. It is also secured by the personal guarantee of Managing Director and Corporate Guarantee of Gaji Mercantile Pvt. Limited (Now merged with Gyanshankar Investment And Trading Co. Private Limited as approved by NCLT vide its order dated 29.09.2017 received on 10.01.2018)

1 Employee Benefit Obligation

(i) Leave Obligations

The leave obligations cover the Company’s liability for earned leave.

(ii) Post-Employment Obligations - Gratuity

The Company has a defined benefit gratuity plan in India, governed by the Payment of Gratuity Act, 1972. The plan entitles an employee, who has rendered at least five years of continuous service, to gratuity at the rate of fifteen day wages for every completed year of service or part thereof in excess of six months, based on the rate of wages last drawn by the employee concerned.

This defined benefit plans expose the Company to actuarial risks, such as interest rate risk and market (investment) risk.

2 Financial Risk Management

The Company’s activities expose it to credit risk, liquidity risk and market risk.

(I) Credit risk

Credit risk is the risk that counterparty will not meet its obligation under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities primarily trade receivables.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition.

a) Trade receivables

Credit risk has been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit. The company uses a simplified approach as per Ind AS 109 and an impairment analysis is performed at each reporting date on an individual basis for significant clients.

(II) Liquidity risk

The Company maintain a balance between continuity of funding and flexibility through the use of bank overdrafts and bank loans (comprising the undrawn borrowing facilities below) by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

a) Financing arrangements

The Company had access to the following undrawn borrowing facilities for working capital at the end of the reporting period:

b) Maturities of financial liabilities

The tables below analyse the Company’s financial liabilities into relevant maturity groupings based on their contractual maturities for:

All non derivative financial liabilities and derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the cash flows.

The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not material.

(III) Market risk - foreign currency risk

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed utilising forward foreign exchange contracts.

The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments, highly probable forecast transactions and foreign currency required at the settlement date of certain receivables/payables.

Foreign currency risk exposure

a) Foreign currency risk exposure

The Company’s exposure to foreign currency risk at the end of the reporting period expressed in equivalent in INR Rupees is as follows:

(IV) Market risk - interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

The Company had borrowed funds at both fixed and floating interest rates. The Company’s interest rate risk arises from long-term borrowings with variable rates, which exposes the Company to cash flow interest rate risk.

3 Capital Management (I) Risk management

The company’s objectives when managing capital are to safeguard the company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The Company monitors capital on the basis of the following gearing ratio:

Loan covenants

The Company has complied with all the loan covenants applicable, mainly debt service coverage ratio, debt equity ratio and fixed assets coverage ratio attached to the borrowings.

4 Related Party Transactions

a) Key management personnel

Name Nature of relationship

Mr. Murarilal Mittal Managing Director

Mr. Sushil Radheyshyam Sharda Whole Time Director

Mr. Sumit Kumar Modak Whole Time Director

Mr. Venkateshwara Rao Kandikuppa Whole Time Director

Mr. Mayank Mittal Joint Managing Director

Mr. M S Arora Chief Executive Officer

Mr. Rakesh Kumar Jain Chief Financial Officer

Mr. Shailesh Rakhasiya Company Secretary

b) List of Others over which key management personnel or relatives of such personnel exercise significant influence or control and with whom transaction have taken place during the year:

Gyanshankar Investment & Trading Co. Pvt. Ltd

Stellar Credit and E-Trading Pvt Ltd till 10.01.2018 (Refer note on Amalgamation below)

Gaji Mercantile Pvt. Ltd. till date 10.01.2018 (Refer note on Amalgamation below)

Note of Amlagamation:

* Gaji Merchantile Pvt Ltd and Stellar Credit and E-Trading Pvt Ltd has been merged with Gyanshankar Investment And Trading Co. Private Limited pursuant to the scheme of amalgamation as approved by NCLT vide its order dated 29.09.2017 received on 10.01.2018.

5 Micro, Small and Medium Enterprises Development Act, 2016

There are no dues to Micro, Small and Medium Enterprises as defined under “The Micro, Small and Medium Enterprises Development Act, 2006” as at March 31,2018. This information has been determined to the extent such parties have been identified on the basis of the information available with the Company.

It is not practicable for the Company to estimate the timings of cash outflows if any in respect of above pending resolution of the respective proceedings.

The Company does not expect any re-imbursements in respect of the above contingent liabilities.

6 Capital and other commitments

i) Capital commitments

Capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows:

7 Operating lease

The Company has operating leases for premises and vehicles. These lease arrangements range for a period within one year to three years. The leases have verying terms, escalation clauses and renewal rights.

8 The Company was awarded a arbital award ( “the Award”) for the sum of Rs. 114.78 Lakhs from the Central Organisation Railway Electrification (“CORE”) and Rs. 0.98 Lakhs towards cost of the Company through Arbitration Order dated January 192014. CORE has filed an Arbitration Case No. 478 of 2014 before Court of District Judge Allahabad for setting aside the Award and also allowing a sum of Rs. 120 Lakhs withheld by CORE from our Company towards the Risk Purchase Notice. Our Company has filed a Counter- Claim Petition in the said Arbitration case claiming from CORE the sum of Rs. 120 Lakhs plus a sum of Rs. 57.35 Lakhs being interest at the rate of 18% till date of filing.

9 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 1 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 01, 2016. 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 of 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.

1. 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.1.1Deemed cost

Ind AS 101 permits a first -time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. This exemption can also be used for intangible assets covered by Ind AS 38 - Intangible Assets.

Accordingly, the Company has elected to measure all of its property, plant and equipment & intangible assets at their previous GAAP carrying value.

A.1.2Exchange differences arising from translation of long-term foreign currency monetary item

Ind AS 101 permits a first-time adopter to elect to continue the policy adopted for accounting for exchange differences arising from translation of long-term foreign currency monetary items recognised in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period as per the previous GAAP.

The Company has elected to apply this exemption.

A.1.3Leases

Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material. The Company has elected to apply this exemption for such contracts/arrangements.

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 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.

Upon an assessment of the estimates made under Previous GAAP, the Company has concluded that there was no necessity to revise such estimates under Ind AS, except where estimates were required by Ind AS and not required by previous GAAP.

A.2.2Classification and measurement of financial assets

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

A.2.3De-recognition of financial assets and liabilities

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the derecognition requirements of Ind AS 109 retrospectively from a date the entity chooses, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions. The Company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.

A.2.4Impairment of financial assets

Ind AS 101 requires an entity to use reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognised and compare that to the credit risk at the date of transition to Ind AS.

B. Reconciliation between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

C. Notes for the first time adoption

(i) Security deposits

Under the previous GAAP, interest free lease security deposits (that are refundable in cash on completion of the lease term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognised at fair value. Accordingly, the company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognised as prepaid rent. Consequent to this change, the amount of security deposits decreased by Rs. 0.51 lakhs as at March 31, 2017 (April 01, 2016: Rs. Nil). The deferred lease expenses increased by Rs. 0.23 lakhs as at March 31, 2017 (April 01, 2016: Rs. Nil). Total equity decreased by Rs. 0.01 lakh as at March 31, 2017 (April 01, 2016: Rs. Nil). The profit for the year ended March 31, 2017 decreased by Rs. 0.01 lakh due to amortization of deferred lease expenses of Rs. 0.23 lakhs which is partially off-set by the notional interest income of Rs. 0.22 lakhs recognised on security deposits.

(ii) 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 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. 624.52 lakhs. There is no impact on the total equity and profit.

(iii) Remeasurements of post-employment benefit obligations

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. 1.13 lakhs. There is no impact on the total equity as at March 31, 2017.

(iv) Retained earnings

Retained earnings as at April 01, 2016 has been adjusted consequent to the above Ind AS transition adjustments.

(v) Other comprehensive income

Under Ind AS, all items of income and expense recognised in a period should be included in 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 and loss as ‘other comprehensive income’ includes remeasurements of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP.

(vi) Deferred tax

Deferred taxes impact of the above adjustments, wherever applicable have been recognised on transition to Ind AS.

(vii) Utilisation of IPO Expenses

Under the previous GAAP, IPO Expenses were to be adjusted against Securities Premium. However, under IND AS the same is to be charged in revenue. As a result of this change, the profit for the year ended March 31, 2017 decreased by Rs Rs 11.01 lakhs

10 Exchange differences on long term foreign currency monetary items outstanding

In accordance with para D13AA of Ind AS 101 First time adoption of Indian Accounting Standards and the option available in the Companies (Accounting Standards) (Second Amendment) Rules, 2011, vide notification dated December 29, 2011 issued by the Ministry of Corporate Affairs, the Company has adjusted the exchange rate difference arising on long term foreign currency monetary items, in so far as they relate to the acquisition of a depreciable capital asset, to the cost of the asset. Accordingly, the Company has adjusted exchange loss of Rs. 252.87 lakhs (March 31, 2017 - Rs 414.27 lakhs) to the cost of property, plant and equipment as the long term monetary items relate to depreciable capital asset.

11 Details of Employee Stock Options

During the year, the Company has granted Employee Stock Options (ESOP) under the Bharat Wire Ropes Limited Employee Stock Option Plan, 2017 “ BWR ESOP 2017” or the “Plan” to the employees of the Company with a right to subscribe to equity shares (“New Options”) at a price Rs. 90/-. The Salient features of the Scheme are as under:


Mar 31, 2016

** Represents the Equity Shares held by M/s. Visu Associates, having partners Mr. Motilal Gopilal Oswal, Mr. Raamdev Ramgopal Agarwal and Passionate Investment Management Private Limited.

2.1.4 Shares held by holding/ultimate holding company and /or their subsidiaries

Out of Equity Shares issued by the Company, shares held by its holding company, ultimate holding company and their subsidiaries / associates are as below:-

1. Terms/right attached to Equity shares

The Company has only one class of equity shares having a face value of ''10 per share. Each holder of equity share is entitled to one vote per share. The dividend, if any proposed by Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. During the year ended 31 March, 2016, '' Nil per share (31 March, 2015 : '' NIL) is recognised as dividend distributions to equity shareholders.

In the event of liquidation of the Company, the holder of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts if any. The distribution will be in proportion to the number of equity shares held by shareholders.

a. First charge, ranking pari passu between term loan consortium banks by way of mortgage / hypothecation of entire immovable and moveable fixed assets of the Company related to expansion project situated at MIDC - Chalisgaon or wherever else;

b. Second charge ranking pari passu between term loan consortium banks by way of hypothecation of entire current assets of the Company situated at MIDC - Chalisgaon, Atgaon or wherever else;

c. Personal Guarantee of Managing Director.

d. Corporate Guarantee of Gaji Mercantile Private Limited.

Repayment:

The term loan is repayable in 20 equal Quarterly Instalments. The first instalment is payable after a period of 18 months from the date of C.O.D. ( 31st Dec, 2016) or as per sanction of the respective Lenders as may be modified from time to time.

2. (b) The Security is created by way of hypothecation of Vehicle.

Repayment:

The loan is repayable in 84 equal monthly instalments of Rs, 42,681/- commencing from 03.04.2016

3. The Security is created by way of hypothecation of Vehicle.

Repayment:

The loan is repayable in 84 equal monthly instalments of Rs,148,953/- which has commenced from 16.10.2015

4 The Govt. of Maharashtra under Package Scheme of Incentive has extended to the Company, the incentive of sales tax deferral scheme pursuant to which the sales tax attributable to the sales effected out of production is deferred (interest free) for a period of 8 Years 9 Months from 01.05.2003 to 31.01.2012. The deferred sales tax in respect of above is based upon the sales tax returns. The amount for each year deferred is payable in 5 equal annual instalments from Financial Year 2014-15 to 2027-28.

5. Disclosure as per new amendments in Schedule III in respect of Micro Small & Medium Enterprises Development Act, 2006:

There are no dues to Micro, Small and Medium Enterprises as defined under “The Micro, Small and Medium Enterprises Development Act, 2006’as at March 3J20B. This information has been determined to the extent such parties have been identified on the basis of the information available with the Company.

6. The buyers credit has been taken for the import of Capital goods under term loans sanctioned by the banks, repayment thereof shall be as per terms of sanction as specified in note 2.3.2 (a).

7. The Company has filed case on 2 vendors for recovery of advances aggregating to Rs. 10 Lacs with Judicial Magistrate Court, Chalisgaon.

8. The Company was awarded a arbitral award ( "the Award") for the sum of Rs,. 114.78 Lacs from the Central Organisation Railway Electrification ("CORE") and Rs, 098 Lacs towards cost of the Company through Arbitration Order dated January 19,2014. CORE has filed an Arbitration Case No. 478 of 2014 before Court of District Judge, Allahabad for setting aside the Award, and also allowing a sum of 120 Lacs, withheld by CORE, from our Company, towards the Risk Purchase Notice. Our Company has filed a Counter- Claim Petition in the said Arbitration case claiming from CORE, the sum of Rs, 120 Lacs plus a sum of Rs, 57.35 Lacs being interest at the rate of 18% till date of filing.

9. Pursuant to Accounting Standard 26 - “Intangible Assets”, the Purchased goodwill in the balance sheet as at March 3 \ 204 is written off during the year ended March 3P05.

10. Figures for the previous year have been re-grouped/re-classified wherever necessary.

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