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Notes to Accounts of Keltech Energies Ltd.

Mar 31, 2018

Notes to financial statements for the year ended March 31st, 2018 Employee benefit obligations Risk exposure

The defined benefit plans expose the company to actuarial risk, such as longevity risk, interest rate risk and market (investment) risk.

Specific class of employees are covered by the company for the purpose of gratuity obligations by investing in group gratuity scheme of LIC of India and for rest of the employees, though not covered by funded obligation, liability has been created based on actuarial valuation.

(iv) Employer Contributions

Expected contributions to post-employment benefit plans for the year ending 3I March 20I8 are Rs. 32 Lakhs The weighted average duration of the defined benefit obligation is I4.36 years (20I6 -I4.24 years, 20I5 - I3.72 years) for employees who are covered under group gratuity scheme of LIC of India and I3.35 years (20I6 - I3.39 years, 20I5 - I4.02 years) for employees who are not covered by group gratuity scheme of LIC of India.

Notes to financial statements for the year ended March 31st, 2018 Note 27: Financial risk management

The company''s activities expose it to market risk, liquidity risk and credit risk. Market risk is the risk of loss of future earnings, fair value or future cash flows that may result from a change in the price of the financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivable and payables and loans and borrowings.

If the risk exposure is significant than senior management reviews the position and takes decision regarding hedging/other risk strategies to mitigate such risk exposures.

(i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate b cause of changes in the market interest rate. The company is not exposed to significant interest rate risk as at the respective reporting dates.

(ii) Foreign currency risk

The Company is exposed to foreign exchange risk through its sales and services in overseas and purchases from overseas suppliers in various foreign currencies. These exposures are unhedged. (? in Lakhs)

Notes to financial statements for the year ended March 31st, 2018

(iii) Credit Risk

Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial conditions, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.

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 occuring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as :

(i) Actual or expected significant adverse change in business

(ii) Actual or expected significant change in the operating results of the counterparty

(iii) Financial or economic conditions that are expected to cause a significant change to the counterparty''s ability to meet its obligation.

(iv) Significant increases in credit risk on other financial instruments of the same counterparty

A default on a financial asset is when the counterparty fails to make contractual payments within I095 days of when they fall due. This definition of default is determined by considering the business environment in which entity operates and other macro-economic factors.

Financial assets are written off when there is no reasonable expectation of recovery. Where loans or receivables have been written off, the Company may engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized in profit or loss.

The carrying amounts of financial assets represent the maximum credit risk exposure

(iv) Roll rate method for trade receivable

Impairment loss for trade receivable is calculated using the Roll Rate method. In the roll rate method, the entire portfolio balance is segmented by various buckets e.g. Current, I-90 , 9I-I80 , I8I-270 etc. Roll rate technique is a forecast in which the flow of outstanding from one level of delinquency (lower) to another (higher) is applied to the current portfolio outstanding mix. This technique follows the flow from âCurrent'' through all the delinquency buckets to âcharge-off''. The losses are determined as a product of flow rates from the bucket to the final bucket. Once historical net roll rates by bucket have been calculated, their patterns over time are examined and future roll rates are estimated.

Expected credit loss is computed on a collective basis as receivables are in simlar category & amount of individual trade receivables are not individually significant.

Based on management estimation and data available there is no significant increase in credit risk/credit impaired for individual trade receivables.

In computation of the expected credit loss, there is no specific provisioning / write off policy for outstanding for more than certain period.

There are no specific forward looking information estimated by the management.

The following table provides information about the exposure to credit risk and expected credit loss for trade receivables for corporate customers as at 3I March 20I8.

Notes to financial statements for the year ended March 31st, 2018 Note 29: Segment information

An operating segment is a component of the entity that engages in business activities from which it may earn revenue and incur expenses, including revenue & expenses that relate to transactions with any of the company''s other components, and for which discrete financial information is available. All operating segments is evaluated based on profit or loss and is measured consistently with the profit or loss in the financial statements & are reviewed regularly by the entity''s Managing Director to make decisions about resources to be allocated to the segments and access their performance.

For management purposes, the Company is organized into business units based on its products and services and has 2 reportable segment as follows:-

1) Explosives segment which manufactures cartridge explosives, bulk emulsion explosives.

2) Perlite segment which manufactures cryogenic insulation, industrial filter-aid, horticulture products etc.,

Note 1:

In respect of Trade Payable which are Micro, Small and Medium Enterprises, the Company has not availed credit facility beyond 45 days. Further, there is no outstanding payable to such Enterprises beyond 45 days as on Balance Sheet date.

Note 2:

The previous year''s numbers have been re-grouped/re-classified to confirm to current years reporting.

Mar 31, 2017

(i) Property, plant and equipment pledged as security

None of the Property, plant and equipment of the Company are pledged as security Refer to Note 35 for assets mortgaged/hypothecated as security,

(ii) Contractual obligations

Refer to note 32 (commitments) for disclosure of contractual commitments for the acquisition of property, plant and equipment.

(iii) Capital work-in-progress

Capital work-in-progress mainly comprises construction of Mono Methyle Amine Nitrate Plant at Garamsur, Silo Plant at Rayagada, Odisha & Andhra Pradesh State Minerals Development Corporation Ltd, Andhra Pradesh .

(iv) Capitalized Borrowing Costs

a. The amount of borrowing costs capitalized during the year was Rs.58.6I lacs (PY 23.87 lacs) ; and

b. The capitalisation rate used to determine the amount of borrowing costs eligible for capitalisation is 12.49%

1(a) Trade receivables

No trade or other receivable are due from directors or other officers of the company either severally or jointly with any other person. Nor any trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member.

Notes:

(a) Cost of Inventories (COGS) recognized as an expense during the year was Rs.13,098.53 lacs (PY - Rs.12,533.69 lacs)

(b) All Inventories are mortgaged as security against cash credit facility.

Terms and rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.I0 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.

(iii) Details of shareholders holding more than 5% shares in the company

Note 2 (a) Reserves and surplus

Capital Reserves represented subsidy received in earlier years from the Government of Karnataka- Rs. 3.69 Lacs and Government of Maharashtra- Rs. 27.51 Lacs under the Investment subsidy scheme for setting up a new industrial unit in Karnataka and Maharashtra respectively. Under Ind AS these are transferred & accounted for as deferred government grant.

(ii) General Reserve

The General Reserve is used from time to time to transfer profits from retained earnings for appropriation purpose. As a general reservences created by a transfer from one component of equity to another and is not an items of other comprehensives, income, items included in the general reserve will not be reclassified subsequently to profit or loss.

(iii) Retained earnings

Dividends:

The following dividends were declared and paid by the Company during the year:

After the reporting dates the following dividends (excluding dividend distribution tax) were proposed by the directors subject to the approval at the annual general meeting; the dividends have not been recognized as liabilities. Dividends would attract dividend distribution tax when declared or paid.

Secured borrowings and assets mortgaged/ hypothecated as security

(a) All secured borrowings are secured by mortgage of assets and hypothecation of vehicles

(b) The carrying amounts of financial and non-financial assets mortgaged/ hypothecated as security for current and non current borrowings are disclosed in note 35.

Provisions

(i) Movements in provisions

Movements in each class of provision during the financial year, are set out below:

The provision for powder factor deduction is due to non achievement of the required performance of the product. The provision is based on estimates made from technical evaluation and historical data associated with similar services. The company expects to incur the related expenditure over the next year.

(i) Other Long Term Employee Benefits Compensated Absences

The Compensated Absences cover the company''s liability for earned leave.

The amount of the provision of INR 92.91 lacs (3 I March 2016 - INR 49.72 lacs I April 2015 - INR 3 1.40 lacs) is presented as current, since the company does not have an unconditional right to defer settlement for any of these obligations. However, based on past experience, the Company does not expect all employees to take the full amount of accrued leave or require payment within the next I2 months. The following amounts reflect leave that is expected to be taken or paid within the next I2 months.

(ii) Post-employment obligations Gratuity

The company provides for gratuity for employees as per the Payment of Grtuity Act, I972. 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 employees last drawn basic salary per month computed proportionately for I5 days salary multiplied for the number of completed years of service. The gratuity plan is a partly funded plan and the company makes contributions to recognized funds in India. The company does not fully fund the liability.

(iii) Defined Contribution plans

The company also has certain defined contribution plans. Contributions are made to provident fund, Employers Contribution to Employees'' State Insurance and super annuation schemes in India for employees. The Provident Fund and the State defined Contribution plans are operated by the Regional Provident Fund Commissioner and the Superannuation Fund is funded to LIC of India. The obligation of the company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognized during the period towards defined contribution plan is Rs. I09.I4 lacs (3I March 20I6 Rs. 99.6I lacs, I April, 20I5 Rs. 99.30 lacs).

Employee benefit obligations Sensitivity analysis

The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:

Impact on defined benefit obligation

Sensitivity analysis is determined based on the expected movement in liability if the assumptions were not proved to be true on different count.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

Employee benefit obligations

Risk exposure

The defined benefit plans expose the company to actuarial risk, such as longevity risk, interest rate risk and market (investment) risk.

Employer Contributions

Expected contributions to post-employment benefit plans for the year ending 31 March 2018 are INR 32 lacs The weighted average duration of the defined benefit obligation is 14.36 years (2016 -14.24 years, 2015 - 13.72 years) for employees who are covered under group gratuity scheme of LIC of India and 13.35 years (20I6 - 13.39 years, 20I5 - 14.02 years) for employees who are not covered by group gratuity scheme of LIC of India

Note 3(a): Corporate social responsibility expenditure

As per the Section 135 of the Companies Act, 2013 every year the Company is required to spend at least 2% of its Average Net Profit made during the immediately 3 preceding financial years on the Corporate Social Responsibility (CSR) activities. Gross amount required to be spent by the company during the year is Rs.13.52 Lacs (PY - Rs.13.89 Lacs) and actually spent by the Company during the year is Rs.13.56 Lacs (PY- Rs. 13.89 lacs), the details of which is as given below:

Note: The capitalization rate used to determine the amount of borrowing costs to be capitalized is the weighted average interest rate applicable to the entity''s general borrowings during the year, in this case 12.49% (PY - 12.53%).

Note 4: Financial risk management

If the risk exposure is significant than senior management reviews the position and takes decision regarding hedging/ other risk strategies to mitigate such risk exposures.

(i) 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 the market interest rate. The company is not exposed to significant interest rate risk as at the respective reporting dates.

(ii) Foreign currency risk

The Company is exposed to foreign exchange risk through its sales and services in overseas and purchases from overseas suppliers in various foreign currencies. These exposures are unhedged.

Foreign currency sensitivity

5% increase or decrease in foreign exchange rates will have the following impact on profit before tax. Trade Receivable

(iii) Credit Risk

Notes to Financial Statements for the period ended March 31, 2017

(i) Actual or expected significant adverse change in business

(ii) Actual or expected significant change in the operating results of the counterparty

(iii) Financial or economic conditions that are expected to cause a significant change to the counterparty''s ability to meet its obligation.

(iv) Significant increases in credit risk on other financial instruments of the same counterparty

The carrying amounts of financial assets represent the maximum credit risk exposure

Roll rate method for trade receivable:

Impairment loss for trade receivable is calculated using the roll rate method. In the roll rate method, the entire portfolio balance is segmented by various buckets e.g. Current, I-90 , 9I-I80 , I8I-270 etc. Roll rate technique is a forecast in which the flow of outstanding from one level of delinquency (lower) to another (higher) is applied to the current portfolio outstanding mix. This technique follows the flow from âCurrent'' through all the delinquency buckets to âcharge-off''. The losses are determined as a product of flow rates from the bucket to the final bucket. Once historical net roll rates by bucket have been calculated, their patterns over time are examined and future roll rates are estimated. Expected credit loss is computed on a collective basis as receivables are in similar category and amount of individual trade receivables are not individually significant.

Based on management estimation and data available there is no significant increase in credit risk/credit impaired for individual trade receivables.

In computation of the expected credit loss, there is no specific provisioning / write off policy for outstanding for more than certain period.

There are no specific forward looking information estimated by the management.

The following table provides information about the exposure to credit risk and expected credit loss for trade receivables for corporate customers as at 31 March 2017

The Company does not otherwise require collateral in respect of trade receivables and loans. The Company does not have trade receivable and loans for which no loss allowance is recognized because of collateral.

The following table summarizes the change in the loss allowances measured using life-time expected credit loss model:

(iv) Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Companyâs treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the companyâs net liquidity position through rolling forecasts on the basis of expected cash flows.

(i) Financing arrangements

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

*Management is confident that the same will be drawn within one year.

Maturity profile of financial liabilities

The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments

Maturity profile of financial assets

The table below provides details regarding the contractual maturities of financial assets at the reporting date

Note 5: Capital Management

For the purposes of the Company''s capital management, capital includes issued capital and all other equity reserves. The primary objective of the Company''s Capital Management is to maximize shareholder value. The company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial statements

The company monitors capital using gearing ratio, which is total debt divided by total capital plus debt.

(i) Loan covenants

Under the terms of the major borrowing facilities, there are no financial covenants which are required to be complied by the company

Note 6: Segment information

An operating segment is a component of the entity that engages in business activities from which it may earn revenue and incur expenses, including revenue and expenses that relate to transactions with any of the company''s other components, and for which discrete financial information is available. All operating segments is evaluated based on profit or loss and is measured consistently with the profit or loss in the financial statements and are reviewed regularly by the entity''s Managing Director to make decisions about resources to be allocated to the segments and access their performance.

For management purposes, the Company is organized into business units based on its products and services and has 2 reportable segment as follows:-

Explosives segment which manufactures cartridge explosives, bulk emulsion explosives.

Perlite segment which manufactures cryogenic insulation, industrial filter-aid, horticulture products etc.,

Note 7: Related party transactions

Information in accordance with the requirements of Indian Accounting Standard 24 on Related Party Disclosures

(a) Entity with significant influence over the Company

(b) Non-cancellable operating leases

The company has taken on lease various office premises, residential premises and godowns for the periods ranging from 3 to 6 years. The leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the leases are renegotiated.

Note 8: Events occurring after the reporting period

Refer to note 28 for the final dividend recommended by the Directors which is subject to the approval of shareholders in the ensuing annual general meeting.

Note 9 a. Prior period error

There are no prior period error identified during the year including corresponding year except provision for employee benefit (gratuity) which was reported in FY 20I5-I6 in previous GAAP as prior period item. The same has been restated in latest available financial statements as per Ind AS i.e. Opening Balance and impact has been given in retained earnings.

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 I have been applied in preparing the financial statements for the year ended 3I March 20I7, the comparative information presented in these financial statements for the year ended 3I March 20I6 and in the preparation of an opening Ind AS balance sheet at I April 20I5 (the 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 Section I33 of the Companies Act, 20I3 read with relevant rules issued thereunder and other relevant provisions of the Act (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: A. Exemptions and Exceptions availed

11. Ind AS Optional exemptions

11.1 Deemed cost

Ind AS I0I permits a first-time adopter to select to continue with the carrying value for all of its property, plant and equipment as recognized 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 after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets and investment property covered by Ind AS 40 Investment Properties. Accordingly, the company has elected to measure all of its property, plant and equipment, intangible assets at their previous GAAP carrying value.

Notes to Financial Statements for the period ended March 31, 2017

12. Ind AS Mandatory Exceptions

12.1 Estimates An entity''s estimates in accordance with Ind AS 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. Ind AS estimates as at 1 April 20I5 are consistent with the estimates as at the same date made in conformity with previous GAAP except for the Impairment of financial assets based on expected credit loss model where application of the Indian GAAP did not require estimation.

13. Classification and measurement of financial assets

The Company has classified financial assets in accordance with Ind AS I09 on the basis of facts and circumstances that exist at the date of transition to Ind AS.

14. Government loans

A first-time adopter shall apply the requirements in Ind AS I09, Financial Instruments, and Ind AS 20, Accounting for Government Grants and Disclosure of Government Assistance, prospectively to government loans existing at the date of transition to Ind AS and shall not recognize the corresponding benefit of the government loan at a below-market rate of interest as a government grant. Consequently, if a first-time adopter did not, under its previous GAAP recognize and measure a government loan at a below-market rate of interest on a basis consistent with Ind AS requirements, it shall use its previous GAAP carrying amount of the loan at the date of transition to Ind ASs as the carrying amount of the loan in the opening Ind AS Balance Sheet. An entity shall apply Ind AS I09 to the measurement of such loans after the date of transition to Ind AS.

The Company has continued with the previous GAAP carrying amount of the interest free government loan on the date of transition.

Note 15: In respect of Trade Payable which are Micro, Small and Medium Enterprises, the Company has not availed credit facility beyond 45 days. Further, there is no outstanding payable to such Enterprises beyond 45 days as on Balance Sheet date.

Note 16: The Company''s main clients are PSUs where in Powder Factor deduction is determined after a substantial period of time, the consequential claims and counterclaims on performance bonus/deductions affect the trade receivables on account of which the substantial part of balances outstanding as trade receivables are not confirmed by them. However, the management is confident that such receivables are stated at their realizable value and adequate provisions are made in the accounts, wherever required.

Notes to first time adoption Note 1

Lease of S5 plot in Waidhan, Singrauli District is considered as operating lease as significant risks and rewards of ownership is not transferred to the lessee. According the amount capitalized in the books under the head of fixed assets amounting to Rs. 0.19 lacs is reclassified as prepaid rent under the head Other current assets and amortized over the lease term of 30 years with the resultant adjustment taken to Retained earnings of Rs.0.14 lacs with respect to rent amortization till the date of transition. The profit for the year and prepaid rent is reduced by 0.0I as a result of rent amortization for 3Ist March, 20I6 Note 2 "Ind AS I09 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognized 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 capitalized as part of Capital Work in progress or charged to profit or loss as and when incurred. Accordingly, borrowings as at 3I March 20I6 have been reduced by INR I5.02 with a corresponding adjustment to capital work in progress and finance cost. The profit for the year ended 3I March 20I6 increased by INR 4.54 as a result of the this adjustment."

Note 17

Under the previous GAAP billable cost were presented as part of other current assets. Under Ind AS, inventory for service provider are required to be separately presented in the financial statements. There is no impact on the total equity or profit as a result of this adjustment.

Note 18

Under Ind AS, impairment allowance has been determined based on ECL model. Due to this model, the company impaired its trade receivable by Rs.118.82 lacs as on the date of transition which is recognized in retained earnings. The impairment of Rs. 14.64 lacs for the year ended 31st March, 20I6 is recognized in profit or loss.

Note 19

Under the previous GAAP gratuity were presented as short term and long term provisions. Under Ind AS, gratuity are required to be presented as long term provisions in the financial statements. Amount of Rs. 36.I8 lacks is re-classified from short term provision to long term provisions as on 1st April 20I5 and of Rs. 4.02 lacs for 3Ist March 2016. Liability towards. bonus/ex-gratia is re-classified from short term provisions to other current financial liabilities. Amount of Rs. 25.40 lacs is reclassified from short term provisions to other financial current liabilities as on April, 01, 2015 and Rs. 33.89 lacs as on 3Ist March, 20I6. There is no impact on the total equity or profit as a result of this adjustment.

Note 20

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS I2 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS I2 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP

In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the company has to account for such differences. Deferred tax adjustments are recognized in correlation to the underlying transaction either in retained earnings or a separate component of equity or profit or loss. The net impact on deferred tax liabilities is of INR (3.49) [3I March 20I5: INR (56.27)]

Note 21

Under IGAAP the grant received was presented under Capital Reserve. Ind AS requires grant to be presented as deferred income in the balance sheet and to be recognized in profit and loss on a systematic basis over the periods in which the entity recognizes as expenses the related costs for which the grants are intended to compensate. The grant relating to setting up of industrial unit is recognized as deferred income in the balance sheet and is recognized over the tenure of the sales tax deferral loan since the grant will become refundable if the company defaults in repayment of the sales tax deferral loan. The adjustment relating to grant upto the date of transition of Rs. 25.68 lacs is recognized in retained earnings and the balance grant is recognized as non current and current liability.

Note 22

Lease equalization reserve recognized under Indian GAAP is transferred to retained earnings on the date of transition amounting to I.73 and adjusted lease expenses in 3I March, 20I6 amounting to Rs. 0.90 lacs as the escalation in lease rental is in line with general inflation and therefore the lease rentals need not be straight lined under Ind AS. This has resulted in increase in retained earnings of Rs.1.73 lacs as on the date of transition and profit of Rs. 0.90 lacs for 31 March 20I6.

Note 23

Under the previous GAAP dividends proposed by the Board of Directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognized as a liability. Under Ind AS, such dividends are recognized when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend of INR 30.09 lacs as at 3 I March 20I6 (1 April 2015 - INR 30.09 lacs) included under provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity increased by an equivalent amount.

Note 24

"As per Ind AS 8, an entity shall correct material prior period errors retrospectively in the first set of financial statements approved for issue after their discovery by:

(a) restating the comparative amounts for the prior period(s) presented in which the error occurred; or

(b) if the error occurred before the earliest prior period presented, restaing the opening balances of assets, liabilities and equity for the earliest prior period presented.

Under Indian GAAP prior period error relating to gratuity were recognized in the statement of profit or loss for the year ended 3I March 20I6 of Rs.47.44 lacs under employee benefit expenses. This is adjusted in the opening balance sheet as it related to earlier years resulting in reduction in retained earnings and increase in long term provision relating to gratuity of Rs. 47.44 lacs on the date of transition. The profit for the year ended 3I March 2016 is also increased by an equivalent amount less respective tax effect."

Note 25

Both under Indian GAAP and Ind AS, the company recognized costs related to its post employment defined benefit plan on actuarial basis. Under Indian GAAP the entire cost, including actuarial gain and loss, are charged to profit or loss. Under Ind AS, remeasurements (comprising of actuarial gains and losses, the effects of asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on the plan assets excluding the amount included in net interest on the net defined benefit liability) are recognized in balance sheet through other comprehensive income. Thus, employee benefits expense is reduced by Rs. 18.04 lacs and is recognized in other comprehensive income during the year ended 31 March 2016.

The notes are an integral part of the Financial Statements

Mar 31, 2016

1. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs..I0 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.

2. Capital Reserves represents subsidy received in earlier years from the Government of Karnataka- Rs. 3.69 Lacs and Government of Maharashtra- Rs. 27.5I Lacs under the Investment subsidy scheme for setting up a new industrial unit in Karnataka and Maharashtra respectively.

* Excise duty on sales amounting to Rs. I9I2.27 lacs (PYRs. 2049.64 lacs) has been reduced from sales in Statement of Profit and Loss and excise duty on closing stock amounting to Rs. 9.48 lacs(PY Rs. 7.20 lacs) has been considered in âOther Expensesâ in note 25 of financial statements.

3. Contingent Liabilities:

4. Disputed demand in respect of Service tax at Vishwasnagar aggregating to Rs.17.16 lacs (PY Rs.17.16 lacs). Amounts aggregating Rs. 10.00 lacs (PYRs. 10.00 lacs) is paid under protest against such demand.

5. Disputed demand of Income tax for the Assessment year 2010-2011,2011-2012, 2012-2013 and 2013-2014 amounting to Rs. 268.81 lacs (PY Rs.189.15 lacs). Amounts aggregating Rs. 50 lacs (PY Rs.45 lacs) is paid under protest against such demand.

6. Disputed demand in respect of Central Sales tax in Maharashtra for the year 2009-10 aggregating Rs. 121.01 lacs (PY Rs. 121.01 lacs). Amounts aggregating Rs. 3 lacs (PY Rs. 3 lacs) is paid under protest against such demand.

7. Letter of credits and Bank guarantees issued to suppliers/customers Rs. 2406.83 lacs (PY Rs. 2637.92 lacs). Management is of the view that above matters are not likely to have any impact on financial position of the Company.

8. Estimated amount of contracts remaining to be executed on Capital Account and not provided for (Net of Advances) Rs. 491.88 lacs(PY Rs. 2.95 lacs).

9. In respect of Sundry Creditors which are Micro,Small and Medium Enterprises, the Company has not availed credit facility beyond 45 days. Further, there is no outstanding payable to such Enterprises beyond 45 days as on Balance Sheet date.

10. The Company''s main clients are PSUs where in Powder Factor deduction is determined after a substantial period of time, the consequential claims and counterclaims on performance bonus/deductions affect the trade receivables on account of which the substantial part of balances outstanding as trade receivables are not confirmed by them. However, the management is confident that such receivables are stated at their realizable value and adequate provisions are made in the accounts, wherever required.

11. Segment Reporting:-

The primary segment reporting format is determined to be business segments as the company''s risks and rate of return are affected predominantly by difference in the products and services provided. Secondary information is reported geographically.

The Company has identified its business into three reportable segments namely, Explosives, Perlite and Site Contracts.

12. Disclosure in respect of Operating Lease in accordance with AS I9 on âLeases''

13. The Company has taken on lease various Office Premises, Residential Premises and Godowns for the periods ranging from 3 years to 6 years.

14. The total of future minimum lease payments under non-cancellable operating leases for each of the following periods:-

15. Not later than one year Rs. 22.58 lacs (PYRs.20.52 lacs).

16. later than one year and not later than five years- Rs.47.44 lacs (PYRs. 69.43 lacs).

17. later than five years - Nil

18. lease payments recognized in the Statement of Profit and Loss for the period from I.4.20I5 to 3I.3.20I6 is Rs. I05.3I lacs (PYRs. I02.62 lacs).

19. The Company has classified various employee benefits as under:-

20. Defined contribution plans

21. Provident Fund

22. Superannuation Fund

23. State defined contribution plans

- Employers'' Contribution to Employees'' State Insurance

The provident fund and the state defined contribution plan are operated by the Regional Provident Fund Commissioner and the superannuation fund is funded to LIC of India. Under the schemes, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

24. Unhedged Foreign Currency Exposure as at the Balance Sheet date

Trade Receivables :- Rs. II9.75 lacs (US $ I87773 @ Closing rate of I USD = Rs. 65.88). Trade Payables :- Rs. 32.67 lacs (US $ 48984 @ Closing rate of I USD = Rs. 66.70).

25. CSR Expenditure

26.. As per the Section I35 of the Companies Act, 20I3 every year the Company is required to spend at least 2% of its Average Net Profit made during the immediately 3 preceding financial years on the Corporate Social Responsibility (CSR) activities. Gross amount required to be spent by the Company during the year is Rs. I3.89 lacs (PYRs.I5.42 lacs) and amount actually spent during the year is also Rs.I3.89 lacs (PYRs.I5.42 lacs), the details of which is as given below:

27. The figures for the previous year have been regrouped/reclassified wherever necessary.

Mar 31, 2015

(i) Terms/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.

1 Change in Accounting Estimate related to depreciation and its impact on financials

To comply with the requirements of the Schedule II of the Companies Act, 2013 the Management has re-estimated useful lives and residual values of all its fixed assets.

In respect of assets where the remaining useful life is 'NIL1, Rs. 96.61 lacs (net of tax benefits of Rs. 46.40 lacs) being their carrying amount after retaining the residual value as on Ist April, 2014 has been adjusted against the opening balance of retained earnings as on that date. For other assets, additional depreciation charge of Rs. 111.22 lacs is adjusted during the current year in the statement Profit and loss.

The impact of additional depreciation charge is likely to hold good for future years also.

2 Contingent Liabilities:

a) Disputed demand in respect of Service tax at Vishwasnagar aggregating to Rs. 17.16 lacs (RY. Rs. 17.16 lacs). Amounts aggregating Rs. 10.00 lacs (RY. Rs. 10.00 lacs) is paid under protest against such demand.

b) Disputed demand of Income tax for the Assessment year 2010-201 1,201 I -2012, 2012-2013 amounting to Rs. 189.15 lacs (RY. Rs. 158.96 lacs). Amounts aggregating Rs. 45 lacs (RY. Rs. Nil) is paid under protest against such demand.

c) Disputed demand in respect of Central Sales tax in Maharashtra for the year 2009-10 aggregating Rs. 121.01 lacs (RY. Rs. 536.06 lacs). Amounts aggregating Rs. 3 lacs (RY. 7 Nil) is paid under protest against such demand.

d) Letter of credits and Bank guarantees issued to suppliers/customers Rs. 2637.92 lacs (RY. Rs. 1764.92 lacs). Management is of the view that above matters are not likely to have any impact on financial position of the Company.

3 Estimated amount of contracts remaining to be executed on Capital Account and not provided for (Net of Advances) Rs. 2.95 lacs(Rs. 6.00 lacs).

4 In respect of Sundry Creditors which are Micro,Small and Medium Enterprises, the Company has not availed credit facility beyond 45 days. Further, there is no outstanding payable to such Enterprises beyond 45 days as on Balance Sheet date.

5 The Company's main clients are PSUs where in Powder Factor deduction is determined after a substantial period of time, the consequential claims and counterclaims on performance bonus/deductions affect the trade receivables on account of which the substantial part of balances outstanding as trade receivables are not confirmed by them. How- ever, the management is confident that such receivables are stated at their realizable value and adequate provisions are made in the accounts, wherever required.

6 Segment Reporting:-

The primary segment reporting format is determined to be business segments as the company's risks and rate of return are affected predominantly by difference in the products and services provided. Secondary information is reported geographically.

7 Disclosure in respect of Operating Lease in accordance with AS 19 on 'Leases'

a) The Company has taken on lease various Office Premises and Godowns for the periods ranging from 3 years to 6 years.

b) The total of future minimum lease payments under non-cancellable operating leases for each of the following periods:-

i) Not later than one year Rs. 25.21 lacs (RY. Rs. 22.05 lacs).

ii) later than one year and not later than five years- Rs. 71.74 lacs (RY. Rs. 80.90 lacs).

iii) later than five years - Nil

c) lease payments recognised in the statement of profit and loss for the period from 1.4.2014 to 31.3.2015 is Rs. 102.62 lacs (RY. Rs. 126.96 lacs).

8 The Company has classified various employee benefits as under:-

(A) Defined contribution plans

a. Provident Fund

b. Superannuation Fund

c. State defined contribution plans

- Employers' Contribution to Employees' State Insurance

The provident fund and the state defined contribution plan are operated by the Regional Provident Fund Commissioner and the superannuation fund is funded to LIC of India. Under the schemes, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

9 Unhedged Foreign Currency Exposure as at the Balance Sheet date

Trade Receivables Rs. 278.38 lacs (US $ 449894 @ Closing rate of I USD = Rs. 61.87). Trade Payables Rs. 123.23 lacs (Euro181285 @ Closing rate of I EURO = Rs. 67.98).

10 The figures for the previous year have been regrouped wherever necessary.

Mar 31, 2013

1 Contingent Liabilities:

a) Disputed demand in respect of Sales tax at Waidhan and Anuppur aggregating to Rs. 1.18 lacs (RY. Rs. 1. 18 lacs). Amount aggregating to Rs. 0.33 lacs (RY. Rs. 0.33 lacs) is paid under protest against such demand, which has been included under Long Term Loans and Advances.

b) Disputed demand in respect of Service tax at Vishwasnagar aggregating to Rs. 17.16 lacs (RY. Nil). Amount aggregating to Rs. 10.00 lacs (RY.Nil) is paid under protest against such demand, which has been included under Long Term Loans and Advances.

c) Disputed demand of Income tax for the Assessment year 2010-201 I amounting to Rs. 49.53 lacs (RY.Nil).

d) Letter of credits and Bank guarantees issued to suppliers/customers Rs. 2447.16 lacs (RY. Rs. 1553.68 lacs).

2 Estimated amount of contracts remaining to be executed on Capital Account and not provided for (Net of Advances) Rs. 387.84 lacs(Rs. 60.65 lacs).

3 In the order delivered by Competition Commission of India on 16.04.2012, a penalty of Rs. 3.11 Crores was imposed on the Company for alleged violations of the Competition Act. The Order was appealed against in the Competition Appellate Tribunal. In the judgement delivered on 18.04.2013, the Tribunal acquitted the Company of violations in one out of the two sections charged with and also reduced the penalty amount from Rs. 3.1 I Crores to Rs. 31 lacs, which is shown as part of the Miscellaneous Expenses.

4 In respect of Sundry Creditors which are Micro,Small and Medium Enterprises, the Company has not availed credit facility beyond 45 days. Further, there is no outstanding payable to Micro, Small and Medium Enterprises beyond 45 days as on Balance Sheet date.

5 The Company''s main clients are PSUs where in Powder Factor deduction is determined after a substantial period of time, the consequential claims and counterclaims on performance bonus/deductions affect the trade receivables on account of which the substantial part of balances outstanding as trade receivables are not confirmed by them. However, the management is confident that such receivables are stated at their realizable value and adequate provisions are made in the accounts, wherever required.

6 Segment Reporting:-

The primary segment reporting format is determined to be business segments as the company''s risks and rate of return are affected predominantly by difference in the products and services provided. Secondary information is reported geographically.

7 Disclosure in respect of Operating Lease in accordance with AS 19 on ''Leases''

a) The total of future minimum lease payments under non-cancellable operating leases for each of the following periods:-

i) Not later than one year Rs. 19.63 lacs (RY. Rs. I 1.39 lacs).

ii) later than one year and not later than five years- Rs. 14.23 lacs (RY. Rs. 3.60 lacs).

iii) later than five years - Nil

b) Lease payments recognised in the statement of profit and loss for the period from 1.4.2012 to 31.3.2013 is Rs. 16.51 lacs(RY. Rs. 14.67 lacs).

8 The Company has adopted Accounting Standard 15 (revised 2005) in the Financial Year 2007-08 "Employee Benefits". The Company has classified various employee benefits as under:-

(A) Defined contribution plans

a. Provident Fund

b. Superannuation Fund

c. State defined contribution plans

- Employers'' Contribution to Employees'' State Insurance

The provident fund and the state defined contribution plan are operated by the Regional Provident Fund Commissioner and the superannuation fund is funded to LIC of India. Under the schemes, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

9 Unhedged Foreign Currency Exposure as at the Balance Sheet date

Trade Receivables :- Rs. 194.15 lacs (US $ 359400 @ Closing rate of I USD = Rs. 54.02). Trade Payables :- Rs. 159.45 lacs (UK Pounds 227980 @ Closing rate of I EURO = Rs. 69.94).

10 The figures for the previous year have been regrouped wherever necessary.

Mar 31, 2012

1 Contingent Liabilities:

a) Disputed demand in respect of Sales tax at Waidhan and Anuppur aggregating to Rs 1.18 lacs (Rs 14.49 lacs). Amount aggregating to Rs 0.85 lacs is paid under protest against such demand, which has been included under Loans and Advances.

b) The Competition Commission of India (CCI) on 27th April, 2012 has imposed a penalty of Rs 311.77 Lacs on the Company, for certain alleged violation of provisions of the Competition Act, 2002 by several explosives manufacturers (the Company being one of them). The Company is in the process of filing an appeal to the Ap- pellate Tribunal Authority within the stipulated period of two months from receipt of the order. The Company has been advised that such demand is not likely to be materialized.

c) Letter of credits and Bank guarantees issued to suppliers/customers Rs 1553.68 lacs (RY. Rs 1498.96 lacs).

2 Estimated amount of contracts remaining to be executed on Capital Account and not provided for (Net of Advances) Rs 60.65 lacs (Rs 30.47 lacs).

3 In respect of Sundry Creditors which are Micro,Small and Medium Enterprises, the Company has not availed credit facility beyond 45 days. Further, there is no outstanding payable to Micro, Small and Medium Enterprises beyond 45 days as on Balance Sheet date.

4 Segment Reporting: -

The primary segment reporting format is determined to be business segments as the company's risks and rate of return are affected predominantly by difference in the products and services provided. Secondary information is reported geographically.

The Company has identified its business into three reportable segments namely, Explosives, Perlite and Site Contracts.

5 Disclosure in respect of Operating Lease in accordance with AS 19 on 'Leases'

a) The total of future minimum lease payments under non-cancellable operating leases for each of the following periods:-

i) Not later than one year Rs I 1.39 lacs (RY. Rs 12.40 lacs).

ii) later than one year and not later than five years- Rs 3.60 lacs (RY. Rs 22.81 lacs).

iii) later than five years - Nil

b) lease payments recognised in the statement of profit and loss for the period from 1.4.2011 to 31.3.2012 is Rs 14.67 lacs (RY. Rs I 1.72 lacs).

Figures in brackets pertains to previous year.

* Further disclosure in conformity with Clause 32 of Listing Agreement; the maximum outstanding of said loan was Rs 100 Lacs during the year.

6 The Company has adopted Accounting Standard 15 (revised 2005) in the Financial Year 2007-08 "Employee Benefits". The Company has classified various employee benefits as under:-

(A) Defined contribution plans

a. Provident Fund

b. Superannuation Fund

c. State defined contribution plans

- Employers' Contribution to Employees' State Insurance

The provident fund and the state defined contribution plan are operated by the Regional Provident Fund Com- missioner and the superannuation fund is funded to LIC of India. Under the schemes, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

Leave encashment is payable to eligible employees who have earned leaves, during the employment and / or on superannuation as per the Company's policy. During the year an amount of Rs. 16.51 lacs has been charged to Profit & Loss account as per actuarial valuation.

7 Unhedged Foreign Currency Exposure as at the Balance Sheet date

Trade Receivables Rs 230.39 lacs (US $ 454335 @ Closing rate of I USD = Rs 50.71).

Trade Payables Rs 91.26 lacs (US $ 177100 @ Closing rate of I USD = Rs 51.53).

Rs 2.62 lacs (UK Pounds 3176 @ Closing rate of I UK Pound = Rs 82.58). Rs 39.69 lacs (EURO 57485 @ Closing rate of I EURO = Rs 69.05).

8 The Financial Statements for the year ended March 31, 2012 are prepared in accordance with the Revised Schedule VI. The amounts and disclosures included in the Financial Statements of the previous year have been reclassified to conform to the requirements of Revised Schedule VI.

Mar 31, 2011

1. Contingent Liabilities:

a) Disputed demand in respect of Sales tax at Waidhan, Anuppur and Garamsur aggregating to Rs. 14.49 lacs (Rs. 15.92 lacs). Amount aggregating to Rs. 4.04 lacs is paid under protest against such demand, which has been included under Loans and Advances.

b) Letter of credits and Bank guarantees issued to suppliers/customers Rs. 1498.96 lacs (RY. Rs. 1713.67 lacs).

2. Estimated amount of contracts remaining to be executed on Capital Account and not provided for (Net of Advances) Rs. 30.47 lacs (Rs. 85.84 lacs).

3. In respect of Sundry Creditors which are Micro,Small and Medium Enterprises, the Company has not availed credit facility beyond 45 days. There is no outstanding payable to Micro, Small and Medium Enterprises as on Balance Sheet date.

4. Segment Reporting:

a) The Company has identified its business into two reportable segments namely, Explosives and Perlite. Further, the revenue on services earned by the Company with respect to Explosives and Perlite Division are included in respective segments mentioned above.

b) Since all the operations of the Company are largerly conducted with in India, as such there is no separate reportable Geographical Segment.

5. Disclosure in respect of Operating Lease in accordance with AS 19 on 'Leases'

a) The total of future minimum lease payments under non-cancellable operating leases for each of the following periods:-

i) Not later than one year - Rs. 12.40 lacs (RY. Rs. 11.51 lacs).

ii) later than one year and not later than three years - Rs. 22.81 lacs (RY. Rs. 34.53 lacs).

iii) later than five years - Nil

b) Lease payments recognised in the statement of profit and loss for the period from 1.4.2010 to 31.3.2011 is Rs. 11.72 lacs(RYRs. 10.35 lacs).

6. (a) Related party disclosure in accordance with Accounting Standard 18.

Name of the party Relationship

Chowgule & Co Pvt Ltd Major Shareholder

jaigad Ports & Infrastr Enterprises over which major Shareholder -ucture Pvt Ltd is able to exercise significant influence

Santosh L Chowgule Key management personnel

Santosh Chowgule HUF Key management personnel is able to Exercise significant influence 7. Note in the financial statements

The Company has adopted Accounting Standard 15 (revised 2005) in the Financial Year 2007-08 "Employee Benefits". The Company has classified various employee benefits as under:-

(A) Defined contribution plans

a. Provident Fund

b. Superannuation Fund

c. State defined contribution plans

- Employers' Contribution to Employees' State Insurance

The provident fund and the state defined contribution plan are operated by the Regional Provident Fund Commissioner and the superannuation fund is funded to LIC of India. Under the schemes, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

8. i) The figures for the previous year have been regrouped wherever necessary.

ii) The amounts in brackets pertain to the previous year

Mar 31, 2010

1. Contingent Liabilities:

a) Disputed demand in respect of Sales tax at Waidhan, Anuppur and Garamsur aggregating to Rs. 15.92 lacs (Rs. 12.00 lacs). Amount aggregating to Rs.3.18 lacs is paid under protest against such demand, which has been included under Loans and Advances.

b) Letter of credits and Bank guarantees issued to suppliers/customers Rs. 1713.67 lacs (RY.2359.80 lacs).

2. Estimated amount of contracts remaining to be executed on Capital Account and not provided for (Net of Advances) Rs.85.84lacs(Rs.l0.98lacs).

3. The amount payable in future for the employees who have opted for monthly compensation as a part of Voluntary Retirement Scheme, aggregate Rs.4.50 lacs ( Rs.3.25 lacs).

4. In respect of Sundry Creditors which are Micro.Small and Medium Enterprises, the Company has not availed credit facility beyond 45 days. There is no outstanding payable to Micro, Small and Medium Enterprises as on Balance Sheet date.

5. Disclosure in respect of Operating Lease in accordance with AS 19 on Leases

a) The total of future minimum lease payments under non-cancellable operating leases for each of the following periods:-

i) Not later than one year - Rs. 11.51 lacs (RY.Rs.9.01 lacs).

ii) later than one year and not later than three years- 34.53 lacs (RY.Rs.26.69 lacs).

iii) later than five years - Nil

b) lease payments recognised in the statement of profit and loss for the period from 1.4.2009 to 31.3.2010 is Rs. 10.35 lacs(RY8.57lacs).

6. Note in the financial statements

The Company has adopted Accounting Standard 15 (revised 2005) in the Financial Year 2007-08 "Employee Benefits". The Company has classified various employee benefits as under:-

(A) Defined contribution plans

a. Provident Fund

b. Superannuation Fund

c. State defined contribution plans

- Employers Contribution to Employees State Insurance

The provident fund and the state defined contribution plan are operated by the Regional Provident Fund Commissioner and the superannuation fund is funded to LIC of India. Under the schemes, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

7.i)The figures for the previous year have been regrouped wherever necessary.

ii)The amounts in brackets pertain to the previous year

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