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Notes to Accounts of Nelcast Ltd.

Mar 31, 2022

EARNINGS PER SHARE

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of Equity Shares outstanding during the year. Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of Equity Shares outstanding during the year plus the weighted average number of Equity Shares that would be issued on conversion of all the dilutive potential Equity Shares in to Equity Shares.

. SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the Company’s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Defined employee benefit plans (Gratuity)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Further details about defined benefit gratuity plan are given in Note No. 39.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the discounted cash flow model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a discounted cash flow model.

32. (i) Term Loans from Banks are secured by equitable mortgage of land, building and hypothecation of plant and machinery present and future. Working Capital Loans repayable on demand is fully secured by hypothecation of raw materials, stocks in process, finished goods, stores, book debts and second charge on Plant & Equipment situated at Gudur Plant. (ii) Terms of Repayment

Loan Description Repayment Terms

Term Loan - Banks Quarterly Installment

COMMITMENTS

('' in Lakhs)

Particulars

31st March 2022

31st March 2021

Estimated amount of contracts remaining to be executed and not provided for in these accounts (net of advances) in respect of acquisition of assets.

314.09

1526.07

CONTINGENT LIABILITIES

Particulars

31st March 2022

31st March 2021

Bank Guarantees

80.00

86.05

Claims against the company not acknowledged

as debts primarily towards

(net of amount paid to statutory authorities):

- sales tax

17.11

17.11

Claims against the company not acknowledged as debts represent demands raised by sales tax authorities, as reduced by the amounts paid by the company. Against these demands the company has already filed appeals with concerned appellate authorities. As per the experts’ opinion these disputed matters are likely be decided in company’s favour and as such the management believes the ultimate outcome of the proceedings will not have a material adverse effect on the company’s financial position and results of operations.

LEASES

Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under Ind AS 17. The standard includes two recognition exemptions for lessees - leases of ‘low-value’ assets (e.g., personal computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset). Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset.

Lessees will be also required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in the lease term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The lessee will generally recognise the amount of the re-measurement of the lease liability as an adjustment to the right-of-use asset.

Lessor accounting under Ind AS 116 is substantially unchanged from today’s accounting under Ind AS 17. Lessors will continue to classify all leases using the same classification principle as in Ind AS 17 and distinguish between two types of leases: operating and finance leases.

The Company has only short term leases.

EMPLOYEE BENEFITS

(i) The Company provides Gratuity for employees as per the Payment of Gratuity Act, 1972. Employees who are in continuous services for a period of five 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 fifteen days’ salary multiplied for the number of years of service. The Gratuity plan is a funded plan and maintained with Life Insurance Corporation of India.

FAIR VALUES

The management assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. Further, management has assessed the fair value of the borrowings approximate their current value largely since they are carried at floating rate of interest.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

CAPITAL MANAGEMENT

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company’s capital management is to maximise the shareholder value. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company’s principal financial liabilities comprise borrowings, trade and other payable. The main purpose of these financial liabilities is to finance the Company operations. The Company’s principal financial assets include trade and other receivables and cash and cash equivalents derived directly from its operations.

The Company is exposed to credit risk, liquidity risk and market risk (including input cost risk, interest rate risk and foreign currency risk), which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company. The Company does not enter into or trade financial instruments for speculative purposes.

a. Credit Risk:

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, investments, derivative financial instruments, cash and cash equivalents, loans and other financial assets. None of the financial instruments of the Company result in material concentration of credit risk.

b. Liquidity Risk:

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

c. Market Risk:

Economic recession gripped global economy following the lockdowns and surge in infections due to the Covid-19 pandemic was sudden and unexpected. While India is facing a tough battle with the second wave, a potential third wave or other complications could again impact both the domestic and global economy. External factors such as government policies and rainfall could have a significant impact on sales of Tractors and Commercial Vehicles, which are cyclical in nature. To mitigate the risk of seasonality & cyclicality in the domestic market, the Company has been developing its exports and products in other segmets viz. off-highway, railways etc.

Input Cost Risk:

Our profitability and cost effectiveness may be affected due to change in the prices of raw materials, power and other input costs. While we are typically able to pass on these costs to our customers with a slight lag. This risk is significant and is carefully monitored.

Interest Rate Risk:

The Company aims to judiciously managed the debt-equity ratio. It has been using a mix of debt and internal cash accruals. The company works closely with our banks to minimise the interest costs. The Company works to manage the working capital requirements to reduce the overall interest cost.

Foreign Currency Risk:

The Company’s exposure on foreign currency is primarily through earnings from exports. The company also might import some capital goods and raw materials only when prices are favourable. However, this exposure is typically short term. The company does selective hedging of imports and exports to hedge its risks associated with exchange rates. Any substantial longterm liabilities viz. ECBs are fully hedged by the Company.

Previous year’s figures have been regrouped and reclassified wherever necessary to conform to this year’s classification.


Mar 31, 2018

GENERAL INFORMATION

Nelcast Limited (“the Company”) is engaged in the manufacture of Iron Castings. The Company has manufacturing plants at Gudur, Andhra Pradesh and Ponneri, Tamil Nadu. The Company is a public limited Company and is listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

1. The Company has only one class of equity shares having a par value of Rs. 2/- per share. Each holder of equity shares is entitled to one vote per share.

2. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting.

3. For the year ended 31st March 2018, the amount of dividend per share declared as distributions to equity shareholders was Rs. 1.00 (31st March 2017: Rs. 0.90). Refer note 11 for details of dividend declared/recognised in financial statements.

4. 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. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

Reconciliation of tax expense and the accounting profit multiplied by India’s Domestic Tax rate for 31st March 2018 and 31st March 2017:

The tax on the Company’s profit before tax differs from the theoretical amount that would arise using the standard rate of company tax in India (34.608%) as follows:

During the year ended 31st March 2018 and 31st March 2017, the Company has paid Dividend to its shareholders. This has resulted in payment of Dividend Distribution Tax (DDT) to the taxation authorities. The Company believes that DDT represents additional payment to taxation authority on behalf of the shareholders. Hence, DDT paid is charged to Equity.

1. EARNINGS PER SHARE

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of Equity Shares outstanding during the year. Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of Equity Shares outstanding during the year plus the weighted average number of Equity Shares that would be issued on conversion of all the dilutive potential Equity Shares in to Equity Shares.

The Basic and Diluted EPS calculations are given below:

2. SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the Company’s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Judgments

In the process of applying the Company’s accounting policies, management has made the following judgments, which have the most significant effect on the amounts recognised in the financial statements.

Taxes: The Company has unused tax credits (Minimum Alternate Tax (MAT)) of Rs. 24.08 Lakhs as on 31st March 2017 (1st April 2016: Rs. 248.21 Lakhs). The Company based on its business plan along with supporting convincing evidence including future projections of profit believes that the unused tax credits would be utilized within the stipulated time period as per the Income Tax Act, 1961.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Defined employee benefit plans (Gratuity)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Further details about defined benefit gratuity plan are given in Note No. 36.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the discounted cash flow model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a discounted cash flow model.

3. (i). Term Loans from Banks are secured by equitable mortgage of land, building and hypothecation of plant and machinery present and future. Working Capital Loan is fully secured by hypothecation of raw materials, stocks in process, finished goods, stores and book debts.

(ii). Terms of Repayment

Loan Description Repayment Terms

Term Loan - Banks Quarterly Installment

Claims against the company not acknowledged as debts represent demands raised by central excise and sales tax authorities, as reduced by the amounts paid by the company. Against these demands the company has already filed appeals with concerned appellate authorities. As per the experts’ opinion these disputed matters are likely be decided in company’s favour and as such the management believes the ultimate outcome of the proceedings will not have a material adverse effect on the company’s financial position and results of operations.

4. RESEARCH AND DEVELOPMENT EXPENSES

a). Details of Research and Development expenses incurred during the year, debited under various heads of Statement of Profit and Loss is given below:

5. Amount payable to Micro, Small and Medium Enterprises (MSMEs) as on 31st March 2018 is Rs. 150.39 Lakhs (31st March 2017: Rs. 50.04 Lakhs, 1st April 2016 Rs. 149.20 Lakhs) and there is no overdue amount.

6. SEGMENT REPORTING UNDER IND AS 108

The Company operates in a single primary business segment namely Manufacture of Iron Castings. Identification of the secondary segment based on the location of the customers is not mandated since the company’s total exports do not exceed 10% of its gross revenue for the year 2017-18.

7. EMPLOYEE BENEFITS

(i) The Company provides Gratuity for employees as per the Payment of Gratuity Act, 1972. Employees who are in continuous services for a period of five 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 fifteen days salary multiplied for the number of years of service. The Gratuity plan is a funded plan and maintained with Life Insurance Corporation of India.

8. RELATED PARTY DISCLOSURE

Related parties under Ind AS 24 with whom transactions have taken place during the year: Subsidiary Company: NC Energy Limited Key Management Personnel (KMP):

1. Mr. P. Deepak, Managing Director

2. Ms. P. Divya, Director

3. Mr. P. Vijaya Bhaskar Reddy, Dy. Managing Director & CFO

4. Mr. S.K. Sivakumar, Group - Chief Financial Officer & Company Secretary Relatives to Key Management Personnel (KMP):

1. Mrs. P. Jamuna

2. Mrs. P. Viraja

9. FAIR VALUES

The management assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. Further, management has assessed the fair value of the borrowings approximate their current value largely since they are carried at floating rate of interest.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

10. CAPITAL MANAGEMENT

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company’s capital management is to maximise the shareholder value.

11. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company’s principal financial liabilities comprise borrowings, trade and other payable. The main purpose of these financial liabilities is to finance the Company operations. The Company’s principal financial assets include trade and other receivables and cash and cash equivalents derived directly from its operations.

The Company is exposed to credit risk, liquidity risk and market risk (including input cost risk, interest rate risk and foreign currency risk), which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company. The Company does not enter into or trade financial instruments for speculative purposes.

a. Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, investments, derivative financial instruments, cash and cash equivalents, loans and other financial assets. None of the financial instruments of the Company result in material concentration of credit risk.

b. Liquidity Risk:

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

c. Market Risk:

The Company’s growth is linked to that of the automotive industry, which is cyclical in nature. The cyclical nature of the Indian commercial vehicle industry and tractor industry might affect the demand. Since automotive industry, plays a major role in determining the economic growth, any slowdown in the overall economy will affect Commercial Vehicle industry. Increasing competition across all segments may put some pressure on market share.

Input Cost Risk:

Our profitability and cost effectiveness may be affected due to change in the prices of raw materials, power and other input costs. Some of the risks that are potentially significant in nature and need careful monitoring are Raw Materials prices, availability of Power etc.

Interest Rate Risk:

The Company has judiciously managed the debt-equity ratio. It has been using a mix of loans and internal cash accruals. The Company has well managed the working capital to reduce the overall interest cost.

Foreign Currency Risk:

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in a foreign currency).

The majority of the Company’s revenue and expenses are in Indian Rupees with the remainder denominated in US Dollars and Euros. The fluctuation in foreign exchange currency may not impact the Company much. However, if any foreign currency risk on the liability side, it is fully hedged.

12. FIRST TIME ADOPTION OF IND AS

These financial statements for the year ended 31st March 2018 are the first the Company has prepared in accordance with Ind AS. In preparing these financial statements, the Company’s opening balance sheet was prepared as at 1st April 2016, the Company’s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1st April 2016 and the financial statements as at and for the year ended 31st March 2017.

Exemptions applied

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

a. The Company has elected to continue with the carrying values under previous GAAP for all the items of property, plant and equipment as deemed cost at the date of the transition. The same election has been made in respect of intangible assets.

b. Ind AS 101 requires a first-time adopter to apply de-recognition requirements in Ind AS 109 prospectively to transactions occurring on or after the date of transition to Ind AS. Accordingly, the Company continues to de-recognize the financial assets and financial liabilities for transactions which have occurred before the date of transition to Ind AS.

c. The Company has opted to carry the investment in subsidiaries as well as in other companies at the previous GAAP carrying amount at the transition date.

Estimates

The estimates as at 1st April 2016 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from impairment of financial assets based on expected credit loss model where application of Indian GAAP did not require estimation.

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at 1st April 2016 (transition date) and as of 31st March 2017.

Effect of the Transition to Ind AS

Reconciliations of the Company’s Balance Sheets under Indian GAAP and Ind AS as at 1st April 2016 and 31st March 2017 are also presented in Note No. 42 & 43. Reconciliations of the Company’s Statement of Profit and Loss for the year ended 31st March 2017 prepared in accordance with Indian GAAP and Ind AS in Note No. 44.

IND AS NOTES

a. Proposed Dividend:

Under Indian GAAP, proposed dividends including Dividend Distribution Tax thereon were recognised as a liability in the period to which they relate, irrespective of when they are declared. Under Ind AS, a proposed dividend is recognised as a liability in the period in which it is declared by the company (usually when approved by shareholders in a general meeting) or paid. In the case of the Company, the declaration of dividend occurs after period end. Therefore, the liability recognised towards dividend as at 31st March 2017 and 1st April 2016 has been de-recognised against retained earnings and recognised in the year of payment.

b. Financial Assets at Amortised Cost:

Under Indian GAAP, the Company accounted for long term investments in unquoted shares as investment measured at cost less provision for other than temporary diminution in the value of investments, if any. Under Ind AS, the Company has designated such investments as investments at amortised cost.

c. Re-measurement of actuarial (gains) / loss:

Both under Indian GAAP and Ind AS, the Company recognised costs related to its postemployment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, were charged to profit or loss. Under Ind AS, remeasurements comprising of actuarial gains and losses are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through other comprehensive income. Thus the employee benefit cost is reduced by Rs. 19.86 Lakhs for the year 2016-17 and re-measurement gains/losses on defined benefit plans has been recognised in the Other Comprehensive Income net of tax.

d. Excise Duty on sale of Goods

Under Indian GAAP, sale of goods was presented as net of excise duty. However, under Ind AS, sale of goods includes excise duty. Thus sale of goods under Ind AS for the year ended 31st March 2017 has increased with a corresponding increase in other expenses.

e. Subsequent Event

The Board of Directors at their meeting held on 18th May 2018 has recommended a dividend of Rs. 1.00 per equity share (31st March 2017: Rs. 0.90 per equity share), subject to shareholders approval at annual general meeting.

f. MAT Credit Entitlement

MAT credit entitlement is to be presented under loans and advance in accordance with Guidance Note on “Accounting for Credit available in respect of MAT under the Income Tax Act, 1961” issued by ICAI. However, as per Ind AS, MAT credit entitlement is generally recognized as a deferred tax asset with a corresponding deferred tax benefit in the statement of profit and loss. Accordingly, the Company has reclassified the MAT credit entitlement from loans and advances to deferred tax assets.

g. Deferred Tax Assets

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 12 requires accounting for deferred taxes using the Balance sheet approach, which focuses on temporary difference between the carrying amount of an asset or liability in the Balance Sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP. In addition, the various transitional adjustments lead to temporary differences and the Company has accounted for such differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or a separate component in equity.

h. Other Comprehensive Income (OCI)

Under Indian GAAP, the Company had not presented other comprehensive income separately. Hence, it has reconciled Indian GAAP profit or loss to profit or profit or loss as per Ind AS. Further, Indian GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.

i. Cash Flow Statement

The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.


Mar 31, 2017

1. Term Loans from Banks are secured by equitable mortgage of land, building and hypothecation of plant and machinery present and future. Working Capital Loan is fully secured by hypothecation of raw materials, stocks in process, finished goods, stores and book debts.

Claims against the company not acknowledged as debts represent demands raised by central excise and sales tax authorities, as reduced by the amounts paid by the Company. Against these demands the Company has already filed appeals with concerned appellate authorities. As per the experts’ opinion these disputed matters are likely to be decided in Company’s favour and as such the management believes the ultimate outcome of the proceedings will not have a material adverse effect on the Company’s financial position and results of operations.

2. DETAILS OF SPECIFIED BANK NOTES (SBN) AND OTHER DENOMINATION NOTES HELD AND TRANSACTED FROM 8lh NOVEMBER 2016 TO 30lh DECEMBER 2016:

3. Amount payable to Micro, Small and Medium Enterprises (MSMEs) as defined under the Micro Small and Medium Enterprises Development Act, 2006 is Rs, 50.04 Lakhs as on 31st March 2017 (Previous Year: Rs, 149.20 Lakhs) and there is no overdue amount.

4. INTERIM FINANCIAL REPORTING

The Quarterly financial results are published in accordance with the requirements of Listing Regulations with Stock Exchanges.

5. RELATED PARTY DISCLOSURE

As identified by the Management and relied upon by the auditors

(a) List of Related Parties (2016-17)

Subsidiary Company:- NC Energy Limited

Associate Company:- Nelcast USA INC

Key Management Personnel (KMP):-1. Mr. P. Deepak, Managing Director

2. Ms. P. Divya, Director

3. Mr. P. Vijaya Bhaskar Reddy, Dy. Managing Director & CFO

(b) List of Related Parties (2015-16)

Subsidiary Company:- NC Energy Limited

Associate Company:- Nelcast USA INC

Key Management Personnel (KMP):-1. Mr. P. Deepak, Managing Director

2. Ms. P. Divya, Director

3. Mr. P. Vijaya Bhaskar Reddy, Dy. Managing Director & CFO

6. Previous year’s figures have been regrouped/reclassified wherever necessary to correspond with the current year’s classification/disclosure.


Mar 31, 2016

1. Term Loans from Banks are secured by equitable mortgage of land, building and hypothecation of plant and machinery present and future. Working Capital Loan is fully secured by hypothecation of raw materials, stocks in process, finished goods, stores and book debts.

Claims against the company not acknowledged as debts represent demands raised by central excise and sales tax authorities, as reduced by the amounts paid by the Company. Against these demands the Company has already filed appeals with concerned appellate authorities. As per the experts'' opinion these disputed matters are likely to be decided in Company''s favor and as such the management believes the ultimate outcome of the proceedings will not have a material adverse effect on the Company''s financial position and results of operations.

2. EXCISE DUTY

Excise Duty on Sales has been disclosed as reduction from the turnover.

The Company has a defined benefit gratuity plan covering eligible employees. The following table summarizes the components of net benefit expenses recognized in the Statement of Profit and Loss and the funded status and amounts recognized in the Balance Sheet.

3. Amount payable to Micro, Small and Medium Enterprises (MSMEs) as defined under the Micro Small and Medium Enterprises Development Act, 2006 is Rs, 149.20 Lakhs as on 31st March 2016 (Previous Year: Rs, 153.97 Lakhs) and there is no overdue amount.

4. INTERIM FINANCIAL REPORTING

The Quarterly financial results are published in accordance with the requirements of Listing Regulations with Stock Exchanges.


Mar 31, 2015

1. Term Loans from Banks are secured by equitable mortgage of land, building and hypothecation of plant and machinery present and future. Working Capital Loan is fully secured by hypothecation of raw materials, stocks in process, finished goods, stores and book debts.

2. CONTINGENT LIABILITIES (Rs. in Lakhs)

Particulars 31st March 31st March 2015 2014

Bank Guarantees 194.02 242.64

Claims against the company not acknowledged as debts primarily towards (net of amount paid to statutory authorities):

(i) Central Excise 331.67 -

(ii) Sales Tax 26.30 -

Claims against the Company not acknowledged as debts represent demands raised by central excise and sales tax authorities during the financial year 2014-15, as reduced by the amounts paid by the Company. Against these demands the Company has already filed appeals with concerned appellate authorities. As per the experts' opinion these disputed matters are likely be decided in Company's favour and as such the management believes the ultimate outcome of the proceedings will not have a material adverse effect on the Company's financial position and results of operations.

3. EXCISE DUTY

Excise Duty on Sales has been disclosed as reduction from the turnover.

4. EMPLOYEE BENEFITS

The Company has a defined benefit gratuity plan covering eligible employees. The following table summarizes the components of net benefit expenses recognised in the Statement of Profit and Loss and the funded status and amounts recognised in the Balance Sheet.

5. Amount payable to Micro, Small and Medium Enterprises (MSMEs) as defined under the Micro Small and Medium Enterprises Development Act, 2006 is Rs. 153.97 Lakhs as on 31st March, 2015 (Previous Year: Rs. 153.22 Lakhs) and there is no overdue amount.

6. INTERIM FINANCIAL REPORTING

The Quarterly financial results are published in accordance with the requirements of Listing Agreement with Stock Exchanges.

7. RELATED PARTY DISCLOSURE

As identified by the Management and relied upon by the auditors

(a) List of Related Parties (2014-15)

Subsidiary Company:- NC Energy Limited

Associate Company:- Nelcast USA INC

Key Management Personnel:- 1. Mr. P. Deepak, Managing Director

2. Ms. P. Divya, Director*

3. Mr. P. Vijaya Bhaskar Reddy, Dy. Managing Director & CFO

8. Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year's classification/disclosure.


Mar 31, 2011

1. Loans from IDBI Bank Ltd. & Kotak Mahindra Bank Ltd. are secured by equitable mortgage of land, building and hypothecation of plant and machinery.

2. Working Capital Loan from State Bank of India is fully secured by hypothecation of raw materials, stocks in process, finished goods, stores and book debts and second charge on fixed assets.

3. Provision, Contingent Liabilities and Contingent Assets :

31.03.2011 31.03.2010

Rs. Rs.

a) Contingent liability not provided for on account of Letters of Credit/Bank Guarantee 25,00,000 1,27,43,200

b) Estimated amount of contracts remaining to be 4,00,84,400 2,06,21,000 executed on Capital Account and not provided for

4. During the year, a sum of Rs.4.79 Crores (Previous year Rs. 8.21 Crores) being interest on borrowings attributable to qualifying assets has been capitalized.

5. Disclosure required by the AS – 15 (Revised) – Employee Benefits – Gratuity

The Company has a defined benefit gratuity plan covering eligible employees. The following tables summarise the components of net benefit expenses recognised in the profit and loss account and the funded status and amounts recognised in the Balance Sheet.

6. Balances of Sundry Debtors, Sundry Creditors, Loans & Advances or receivables are subject to confirmations to be obtained from the parties.

7. Amount payable to Micro, Small and Medium Enterprises (MSMEs) as defined under the Micro Small and Medium Enterprises Development Act 2006, is Rs. 5,52,01,303/- as on 31.03.2011 and there is no overdue amount.

8. Interim Financial Reporting :

The quarterely financial results are published in accordance with the requirements of Listing agreement with stock exchanges.

9. Segment Information :

The Company is principally engaged only in the business of manufacture and sale of Iron Castings, there are no reportable segments as per Accounting Standard No.17 issued by The Institute of Chartered Accountants of India on "Segmental Reporting".

10. Related Party Disclosure :

Disclosure as required by the Accounting Standard 18 on "Related Party Disclosures" are given below:

11. Figures for the previous year have been regrouped and reclassified WHEREVER NECESSARY TO BE IN CONFORMITY WITH THE FIGURES FOR THE CURRENT period.


Mar 31, 2010

1. Loans from Industrial Development Bank of India & Kotak Mahindra Bank Ltd are secured by equitable mortgage of land, building and hypothecation of plant and machinery, both present and future.

2. Working Capital Loan from State Bank of India is fully secured by hypothecation of raw materials, stocks in process, finished goods, stores and book debts and second charge on fixed assets. The said loan is further guaranteed by personal guarantee of two directors of the Company including the Chairman.

3. Provision, Contingent Liabilities and Contingent Assets :

31.03.2010 31.03.2009 Rs. Rs.

a) Contingent liability not provided for on account of Letters of Credit/Bank Guarantee 1,27,43,200 3,75,000

b) Estimated amount of contracts remaining to be 2,06,21,000 2,47,93,000 executed on Capital Account and not provided for

4. Travelling expenses in Schedule S include Rs.13,866/- out of pocket expenses reimbursed to the Auditors. (Previous year Rs. 14,992/-)

5. During the year, a sum of Rs.8.21Crores (Previous year Rs. 10.06 Crores) being interest on borrowings attributable to qualifying assets has been capitalized.

6. Balances of Sundry Debtors, Sundry Creditors, Loans & Advances or receivables are subject to confirmations to be obtained from the parties.

7. Amount payable to Micro, Small and Medium Enterprises (MSMEs) as defined under the Micro Small and Medium Enterprises Development Act 2006, is Rs. 3,75,88,903/- as on 31.3.2010 and there is no overdue amount.

8. Interim Financial Reporting :

The quarterely financial results are published in accordance with the requirements of Listing agreement with stock exchanges.

9. Segment Information :

The Company is principally engaged only in the business of manufacture and sale of Iron Castings, there are no reportable segments as per Accounting Standard No.17 issued by The Institute of Chartered Accountants of India on "Segmental Reporting".

10. Related Party Disclosure :

Disclosure as required by the Accounting Standard 18 on "Related Party Disclosures" are given below:

(a) List of Related Parties.( 2009-10)

Subsidiary Company:- Nelcast USA Inc

Associate company:- Nelcast Energy Corporation Limited

Key Management personnel 1. Mr.P.Radhakrishna Reddy,

Chairman and Managing Director

2. Mr. P.Vijaya Bhaskar Reddy, Deputy Managing Director

(a) List of Related Parties.(2008-09)

Subsidiary Company:- Nelcast USA Inc

Associate company:- Nelcast Energy Corporation Limited

Key Management personnel 1 . Mr.J.Joseph,

Managing Director (Part of the year)

2. Mr.P.Radhakrishna Reddy, , /

Chairman and Managing Director

3 Mr. P.VijayaBhaskar Reddy, Deputy Managing Director

11. Figures for the previous year have been regrouped and reclassified wherever necessary to be in conformity with the figures for the current period.

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