Mar 31, 2023
1 E ach debenture having face value of '' 100 each shall be compulsorily convertible into 10 equity shares of '' 10 each fully paid up at the end of the 5 years from the date of allotment or as mutually agreed before the end of the tenure.
2 E ach debenture having face value of '' 100 each shall be compulsorily convertible into 10 equity shares of '' 10 each fully paid up at any time after 5 years. Unless converted earlier, the CCDs shall be compulsorily converted into equity shares in the ratio as mentioned earlier, at the end of the Concession Period under the Concession Agreement dated January 9, 2018 or any amendment thereto.
3 Out of 6,931,520 Debenture, 2,074,260 debentures having face value of '' 100 each shall be compulsorily convertible into 10 equity shares of '' 10 each fully paid up at the end of 5 years from date of allotment or as mutually agreed before the end of the tenure and 4,857,260 debentures having face value of '' 100 each shall be compulsorily convertible into 10 equity shares of '' 10 each fully paid up at the end of 10 years or as mutually agreed before the end of the tenure.
4 Each debenture having face value of '' 100 each shall be convertible, at the option of the holder of the Company into 10 equity shares of '' 10 each of the Company at any time during the tenure of OCD ie 10 years. The OCD''s are redeemable at the option of the issuer any time post 1year from date of issue but not later than 10 years. Before redeeming the OCD''s, the issuer shall give option to holder to convert the OCD''s in to equity by issuing 15 days notice thereof. If the holder does not opt for converting, the issuer shall redeem within 7 days of the expiry of notice period.
5 Each debenture having face value of '' 100 each shall be convertible, at the option of the holder or the Company into 10 equity shares of '' 10 each of the Company at any time after the expiry of 5 years and such conversion option shall be available till the expiry of the tenure (10 years from date of allotment) unless redeemed earlier. Besides, the Debenture holder as well as the Company has the right to seek redemption or do redemption, as the case may be, any time after the allotment of debentures. If the debentures are not converted into equity or redeemed until the expiry of the tenure, the debentures shall be redeemed at the expiry of the tenure.
6.6 Each debenture having face value of '' 100 each shall be convertible at the option of the holder at any time during the tenure of the debentures into 10 equity shares of '' 10 each. If the debentures are not redeemed within 18 years from the date of issue, the debentures will be mandatorily converted into equity shares. Debentures shall be redeemable at the option of the Issuer, any-time after a period of 3 months from the date of issue but not later than 18 years. If redeemed after a period of 2 years from the date of issue, the redemption amount shall be the aggregate of the Issue price and premium equivalent to 15% of the aggregate of present value of Free Cash Flow for Equity (FCFE) and cash balance, if any of the Issuer. Before redeeming the OCDs, the issuer shall give option to holder to convert the OCDs in to equity by issuing 15 day''s notice thereto. If the holder does not opt for converting, the issuer shall redeem within 7 days of the expiry of the notice period.
6.7 E ach debenture shall have face value of '' 100 each. The holder shall have option to convert the Debenture amount (Face Value minus interest, if any, already paid) at any time during the tenure of the debentures into equity shares at issue price of '' 10 each. If the debentures are not redeemed within 18 years from the date of issue, the debentures will be mandatorily converted into equity shares. Debentures shall be redeemable at the option of the Issuer, any-time after a period of 3 months from the date of issue but not later than 18 years. If redeemed after a period of 2 years from the date
of issue, the redemption amount shall be the aggregate of the Issue price and premium equivalent to 15% X (Free Cash Flow for Equity (FCFE) plus interest if any already paid by the Issuer) minus interest if any already paid of the Issuer. Before redeeming the OCDs, the issuer shall give option to holder to convert the OCDs in to equity by issuing 15 day''s notice thereto. If the holder does not opt for converting, the issuer shall redeem within 7 days of the expiry of the notice period. Tenure: 18 years from date of allotment Payment of interest: The issuer shall have an option to pay total interest at 15% for the first two years from the date of issue.
6.8 Each debenture having face value of '' 10 each shall at the option of the Company be converted into appropriate number of equity shares of '' 10 each, equity share of '' 10 each fully paid up not later than 10 years from the date of allotment of OCDs.
6.9 became subsidiary w.e.f. September 28, 2022 and ceased to be joint venture entity
6.10 became subsidiary w.e.f. September 5, 2022 and ceased to be joint venture entity
6.11 The Company has pledged below mentioned equity shares, CCD and OCD:-
In the event of liquidation of the Company, the holders of the equity shares are entitled to receive remaining assets of the Company, after distribution of all preferential amounts, in proportion to their shareholding.
i) O n June 9, 2022, the Company has entered definitive agreement with Actis Highway Infra Limited ("Actisâ) and has obtained all necessary approvals for divestment of 49% equity stake in Welspun Infrafacility Private Limited. The balance 51% shall be divested on fulfillment of certain conditions. The carrying value of equity shares amounting to '' 103.58 crores (12,335,567 equity shares of '' 10/- each fully paid up) (March 31, 2022: '' Nil) has been shown as Assets held-for-sale. Out of the above equity shares, 483,759 equity shares has been pledged.
ii) O he Company has identified certain Property, plant and machinery (''PPE'') amounting to '' 12.65 crores (March 31, 2022''24.60 crores) which are available for sale in its present conditions. The Company has taken necessary actions to complete the sale and expect the sale to conclude within one year.
The Company has only one class of equity having par value of '' 10 per share. Each shareholder is entitled to one vote per share held. The dividend, in case proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.
i) Axis Finance Limited (CAFLâ> '' Nil (March 31, 2022: '' 99.59 crores)
Term loan from AFL was secured by second charge on the current assets of the Company at Book Value and exclusive charge over such non-current assets that it provides a minimum security cover of 1.25x
R epayment terms: Repayment in 20 equal quarterly installments w.e.f. June 30, 2022. The loan has been repaid during the year.
Rate of Interest: 1 year Axis Bank MCLR 0.61 % spread
The Company had issued 1,750 rated, listed, secured, redeemable, Non-Convertible Debentures of '' 10 lacs each aggregating to '' 175.00 crores. The debentures beared an interest at 8.85% payable annually. Debentures were secured by way of first pari passu charge on loans, advances and other receivables (including ICDs) from Project SPVs, other than current assets of the Company by way of hypothecation at book value. Second pari passu charge on the Current assets of the Company at book value, and -Exclusive charge on Debt Service Reserve Account. The aggregate book value of the security i.e first pari passu charge on and second pari passu charge on as aforesaid should provide minimum asset cover of 1.10 times during the tenure of the NCDs at all times to be tested on half yearly basis.
The Company had issued 2,000 rated, listed, secured, redeemable, Non-Convertible Debentures of '' 10 lacs each aggregating to '' 200.00 crores. The debentures beared an interest at an agreed upon annual rate of repo rate plus spread of 485 bps payable annually. Debentures were secured by way of first pari passu charge on the Current assets of the company at book value, first paripassu charge over plant and machinery and other moveable assets excluding those specifically charged to other Banks / Financial Institutions. The aggregate book value of the security i.e First Pari pasu charge and Second Pari passu charge as aforesaid should provide minimum asset cover of 1.10 times during the tenure of the NCDs at all times to be tested on half yearly basis.
The Company has carried forward long term capital losses of '' Nil (March 31, 2022''812.76 crores) and short term capital losses of '' Nil (March 31, 2022''77.42 crores) that are available for offsetting against future taxable capital gains. Deferred tax assets of '' Nil (March 31, 2022''185.95 crores) have not been recognized in respect of long term capital losses in view of uncertainty of future taxable capital gains and deferred tax assets of '' Nil (March 31, 2022''19.49 crores) have not been recognized in respect of short term capital losses in view of uncertainty of future taxable capital gains.
T he fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The following methods and assumptions were used to estimate the fair values:
Fair value of the cash and short term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial instruments approximate their carrying amounts largely due to short term maturities of these instruments.
a) Investments included in Level 1 of fair value hierarchy are based on prices quoted in stock exchange and/ or NAV declared by the funds.
b) Investments included in Level 2 of fair value hierarchy have been valued based on inputs from banks and other recognised institutions such as FIMMDA/ FEDAI
c) Investments included in Level 3 of fair value hierarchy have been valued using acceptable valuation techniques such as Net Asset Value and/ or Discounted Cash Flow Method.
N ote: All financial instruments for which fair value is recognised or disclosed are categorised within the Fair Value Hierarchy described as above, based on the lowest level input that is significant to the fair value measurement as a whole.
N he carrying amounts of loans, trade receivables, cash and cash equivalents, Other bank balances, other financial assets, non-current and current borrowings, trade payables and other financial liabilities that are measured at amortised cost are considered to be approximately equal to the fair value due to short-term maturities of these financial assets/ liabilities
Nhe Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company''s financial risk management policy is set by the Managing Board. The Company is exposed to market risk - foreign currency and interest rate, credit risk and liquidity risk.
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. The sensitivity analysis excludes the impact of movements in market variables on the carrying value of post-employment benefit obligations provisions and on the non-financial assets and liabilities. The sensitivity of the relevant profit and loss item is the effect of the assumed changes in respective market risks.
I nterest rate risk is the risk that the fair value or the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to optimize Company''s position with regard to interest income and interest expenses and manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instrument in its total portfolio.
As at March 31, 2023 and March 31, 2022, underlying exposure to IRS was '' 300.00 crores and '' 300.00 crores respectively which was subject to variable interest rates.
The gain/(loss) due to fluctuation in fair value of IRS, recognised in the statement of profit and loss was '' (4.47) crores and '' (2.28) crores for the year ended March 31, 2023 and March 31, 2022 respectively.
Increase/decrease of 50 basis points in interest rates at the balance sheet date would result in an impact (decrease/increase of profit before tax) of '' 2.21 crores and '' 3.45 crores for the year ended March 31, 2023 and March 31, 2022 respectively. .
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 condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.
The Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings for extension of credit to customers. The Company monitors the payment track record of the customers. Outstanding customer receivables are regularly monitored. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets. The Company has also taken advances and security deposits from some of its customers, which mitigate the credit risk to an extent.
The Company considers factors such as track record, size of the institution, market reputation, financial strength / rating and service standards to select the banks with which balances and deposits are maintained. Generally, the balances are maintained with the institutions with which the Company has also availed borrowings.
a) 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 Company''s treasury department is responsible for liquidity, funding as well as settlement. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s net liquidity position through rolling forcasts on the basis of expected cash flows.
For the purpose of Company''s capital management, capital includes issued capital and other equity reserves attributable to the shareholders. The primary objective of the Company''s Capital Management is to maximize shareholders value. The company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial covenants, if any.
The Company monitors capital using gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt - interest bearing borrowings, trade and other payables, less cash and cash equivalents and current investments
a) The amount represents the best possible estimate arrived at on the basis of available information. The Company has engaged reputed professionals to protect its interest and has been advised that it has strong legal positions against such disputes.
b) The Company has received legal notices of claims / lawsuits filed against it relating to other matters. In the opinion of the management, no material liability is likely to arise on account of such claims/ law suits.
2022. The fair value of the above stock option of '' 1.74 crores is calculated at the fair value of '' 37.91 per share is amortised on the straight line basis over the vesting period in accordance with the Ind AS 102 âShare-based paymentâ.
Accordingly, proportionate amount of '' 0.28 crores (March 31, 2022 - '' Nil) is shown as âShare based payment to employeesâ in the statement of profit and loss (Refer note 36).
c) I n accordance with the âWelspun Enterprises Employee Benefit Scheme - 2022â (''Scheme 3'') the company has granted 400,000 equity shares at exercise price of '' 88.00 per share on September 16, 2022. The fair value of the above stock option of '' 2.68 crores is calculated at the fair value of '' 67.14 per share is amortised on the straight line basis over the vesting period in accordance with the Ind AS 102 âShare-based paymentâ.
Accordingly, proportionate amount of '' 0.75 crores (March 31, 2022 - '' Nil) is shown as âShare based payment to employeesâ in the statement of profit and loss (Refer note 36).
In case of termination, the Company is providing corporate guarantee for any shortfall in amount received from the client against the debt obligation of its subsidiaries and joint venture entities. The same has been disclosed as contingent liabilities above in line with Ind AS requirements.
i) The Company has an outstanding commitments of '' 218.00 crores (March 31, 2022''452.37 crores) towards equity contribution in its SPVs under the financing arrangement tied up with bankers.
ii) Pursuant to the understanding with MBL Projects Private Limited, with respect to investment in RGY Roads Private Limited (''RGY''), paid against option for acquisition of balance 51% shares in RGY equivalent to '' Nil (March 31, 2022''14.50 crores). The balance amount is '' Nil (March 31, 2022''1.22 crores).
iii) With respect to investment in MBL (GSY) Road Limited (''GSY'') and MBL (CGRG) Road Limited (''CGRG''), '' Nil (March 31, 2022''0.02 crores) each is paid against option for acquisition of balance 51% shares in GSY & CGRG. The balance amount is '' Nil (March 31, 2022''0.00 crores).
iv) Pursuant to the understanding with Vishvaraj Environment Private Limited, with respect to investment in Corbello Trading Private Limited (''CTPL'') paid against option for acquisition of balance 51% shares in CTPL equivalent to '' Nil (March 31, 2022''7.45 crores). The balance amount is '' Nil (March 31, 2022''0.72 crores).
v) With respect to investment in Chikhali-Tarsod Highways Private Limited (''CTHPL'') '' Nil (March 31, 2022''0.00 crores) is paid against option for acquisition of balance 51% shares in CTHPL. The balance amount is '' Nil (March 31, 2022''0.00 crores).
(ii) Exercise:
Scheme 1 and Scheme 2: In the event of cessation of employment due to death or permanent incapacity, all the vested and unvested options may be exercised immediately but not later than six months from the cessation of employment. In the event of cessation of employment due to normal retirement, all the vested options should be exercised immediately but not later than six months from date of retirement and all unvested options will stand cancelled. In the event of cessation of employment due to resignation prior to retirement, all the vested options should be exercised immediately but not later than one month from date of submission of resignation and all unvested options will stand cancelled. In the event of abandonment of employment/
a) I n accordance with the âWelspun Enterprises Limited - Employees Stock Option Plan 2017â (''Scheme 1'') the company has granted 3,000,000 equity shares (maximum 2,000,000 equity shares to the âManaging Directorâ) at zero cost on October 10, 2017. The fair value of the above stock option of '' 41.79 crores is calculated at the fair value of '' 139.30 per share is amortised on the straight line basis over the vesting period in accordance with the Ind AS 102 âShare-based paymentâ.
Accordingly, proportionate amount of '' (5.07) crores (March 31, 2022 - '' 2.85 crores) is shown as âShare based payment to employeesâ in the statement of profit and loss (Refer note 36).
b) I n accordance with the âWelspun Enterprises Limited - Employee Stock Option Plan 2022â (''Scheme 2'') the company has granted 461,305 equity shares at exercise price of '' 97.55 per share on April 30,
termination of employment, all ESOPs granted including the Vested Options which were not exercised at the time of abandonment/ termination, shall stand cancelled.
Scheme 3: Options can be exercised in either a) Cash Route: The Grantee will receive the Shares equivalent to the number of the Options exercised in accordance with the terms and conditions of the Scheme and as mentioned in grant letter after the Grantee has made the payment of the Exercise Price and applicable income tax, or b) Cashless Route: Tthe Grantee will receive difference between the selling price and the Exercise Price for the Options exercised by the Grantee after deducting taxes payable on exercise/sale, if any, and other amounts, expenses and charges due from the Grantee (including that in connection with the sale of shares).
In the event of cessation of employment due to death or permanent incapacity, all the options granted would be exerciseable within a period of six months from the date of death/ date of permanent disability, respectively, failing which all the unexercised Options shall lapse irrevocably. In the event of cessation of employment due to normal retirement, all the vested options should be exercised immediately but not later than six months from date of retirement and all unvested options will stand cancelled. In the event of cessation of employment due to resignation prior to retirement, all the vested options shall be exercisable by the Grantee by last day of employment in the Organization or before expiry of exercise period, whichever is earlier and all unvested options will stand cancelled.
The expected life of the stock is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may also not necessarily be the actual outcome.
The financial statements of the Company contains both the consolidated financial statements as well as the standalone financial statements of the Company. Hence, the Company has presented segment information based on the consolidated financial statements as permitted by Ind AS - 108 âOperating segmentsâ.
53 Gratuity and other post employment benefits plans
The disclosures of employee benefit as defined in the Ind AS 19 - â Employee Benefitsâ are given below:
a. T he Company makes annual contributions to the employees'' gratuity fund scheme, a funded defined benefit plan which is managed by LIC of India. The present value of obligation is determined based on actuarial valuation using the projected unit credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.
b. Teave encashment is a non-funded defined benefit scheme. The obligation for leave encashment is recognized in the same manner as gratuity.
Welspun India Limited, Welspun Corp Limited, Welspun Steel Limited, Welspun Realty Private Limited, Welspun Global Brands Limited, Welspun Foundation for Health and Knowledge, Welspun Energy Thermal Private Limited (Formerly known as Solarsys Infra Projects Private Limited); Welspun Multiventures LLP; Welassure Private Limited; Welspun Global Services Private Limited; Welspun Specialty Solutions Limited; Welspun Transformation Services Private Limited; Welspun DI Pipes Limited; MGN Agro Properties Private Limited; Welspun Group Master Trust; Welspun Metallics Limited.
* Closing balances are considered after considering the Ind AS adjustments to make comparable with financial
statements for reporting purpose.
Notes:
- During the earlier year, the Company had given undertaking for Welspun Delhi Meerut Expressway Private Limited (''WDMEPL'') for its debt obligations to lenders, pursuant to which maximum exposure aggregates to '' Nil (March 31, 2022''20.38 crores)
- During the earlier year, the Company had given guarantee for Dewas Waterprojects Works Private Limited (''DWWPL'') for its debt obligations to lenders, pursuant to which maximum exposure aggregates to '' 4.34 crores (March 31, 2022''4.61 crores)
- During the earlier year, the Company had given guarantee for Welspun Infrafacility Private Limited (''WIPL'') for its debt obligations to lenders, pursuant to which maximum exposure aggregates to '' Nil (March 31, 2022''111.36 crores).
- During the earlier years, the Company had given guarantee for MBL (GSY) Road Limited (''GSY'') for its debt obligations to lenders, pursuant to which maximum exposure aggregates to '' Nil (March 31, 2022''92.13 crores)
- During the earlier years, the Company had given guarantee for MBL (CGRG) Road Limited (''CGRG'') for its debt obligations to lenders, pursuant to which maximum exposure aggregates to '' Nil (March 31, 2022''29.45 crores)
- During the earlier years, the Company had given guarantee for Chikhali - Tarsod Highways Private Limited (''CTHPL'') for its debt obligations to lenders, pursuant to which maximum exposure aggregates to '' Nil (March 31, 2022: '' 39.86 crores)
- An undertaking (financial guarantee as per Ind AS) is given to lenders for debt obligations to be given to Welspun Aunta-Simaria Private Limited (WASPL''), maximum exposure towards this is '' 98.73 crores (March 31, 2022''74.05 crores)
All transactions with related parties are made on arm''s length basis in the ordinary course of business.
i) The contract assets primarily relate to the Company''s rights to consideration for performance obligation satisfied but not billed at the reporting date. The contract assets are transferred to receivables when the rights become unconditional. Invoices are raised on the customers based on the agreed contractual terms and are collected as per agreed payment terms.
ii) The contract liability primarily relates to the advances from customer towards on-going EPC projects. Revenue is recognised from the contract liability as and when such performance obligations are satisfied.
58 During the year, the Board of Directors and the shareholders of Welspun Natural Resources Private Limited (''WNRPL'') approved the scheme of voluntary liquidation of WNRPL vide resolution dated January 18, 2023 in their respective meetings. Further, pursuant to such resolutions, Insolvency Professional was appointed as the liquidator of WNRPL. Subsequently, the liquidator has distributed all the assets (including equity shares and debentures held in Adani Welspun Exploration Limited (''AWEL'') of WNRPL to its shareholder i.e. Welspun Enterprises Limited (''WEL'') on February 27, 2023 and consequent to such distribution, WEL has become an equity shareholder and debenture holder of AWEL.
P ursuant to liquidation, 4,654,997 Equity Shares and 45,384,543 Compulsorily Convertible Debentures (CCD''s) held by WNRPL in AWEL are now held by WEL. Subsequently, AWEL has allotted 450,591 CCD''s to WEL and now WEL holds 35% directly in AWEL.
59 P he Company has complied with all necessary Conditions Precedents (CP) of definitive agreement entered with Actis Highway Infra Limited (âActisâ) on June 9, 2022 and has obtained all necessary approvals for divestment of Highway Portfolio. The Highway Portfolio comprises of 5 completed HAM (Hybrid Annuity Model) Assets (Welspun Delhi Meerut Expressway Private Limited (''DME''), Welspun Road Infra Private Limited (''WRIPL''), MBL (CGRG) Road Limited (''CGRG''), MBL (GSY) Road Limited (''GSY''), Chikhali Tarsod Highways Private Limited (''CTHPL'')) and one operating BOT-Toll asset (Welspun Infrafacility Private Limited (''WIFPL'')) (Refer note 20(i)). Accordingly, the aforesaid equity stake has been transferred to Actis for a consideration of '' 818.17 crores (towards equity shares) and profit of '' 582.23 crores (net of expenses related to sale) is disclosed as ''exceptional item'' (Refer note 52) in the Statement of Profit and Loss.
60 Details of loans given, investments made and guarantee given covered U/s 186 of the Companies Act, 2013
a) Phe Company is engaged in the business of providing infrastructural facilities as specified under Schedule VI of the Companies Act 2013 (the ''Act'') and hence the provisions of Section 186 of the Act related to loans/ guarantees given or securities provided are not applicable to the Company.
b) Phere are no investments other than as disclosed in Note 6 and 13 forming part of the financial statements.
Promoting education and healthcare, empowerment of women and socially backward, ensuring road safety, ensuring enviromental sustainability, development of art and culture, disaster relief, livelihood enhancement project.
D uring the current year, the unspent amount of WFHK amounting to '' 1.28 crores, which was lying in separate account namely âWelspun Foundation for Health and Knowledge - Unspent CSR Amount FY 2021-22â, was utilised for CSR activities.
65 The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
66 D he Company is not declared as willful defaulter by any bank or financial institution (as defined under the Companies Act, 2013) or consortium thereof or other lender in accordance with the guidelines on willful defaulters issued by the Reserve Bank of India.
67 D he Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
68 D he Company has not revalued any of its Property, Plant and Equipment (including Right-of-Use Assets) during the year.
69 The Company does not have any transactions which are not recorded in the books of accounts that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.
70 The Company has not traded or invested in Crypto currency or virtual currency during the financial year.
71 The Company has complied with the requirement of monthly stock statements and quarterly information statements to the lenders.
72 Utilization of borrowed funds and securities premium
a ) D uring the financial year ended March 31, 2023, the Company has advanced '' 8.85 crores (March 31, 2022: '' 52.53 crores) at various dates to Welspun Natural Resources Private Limited (''WNRPL''), being intermediary (a wholly owned subsidiary), with the understanding that the intermediary shall lend or invest in Adani Welspun Exploration Limited (''AWEL'') being ultimate beneficiary (an associate company). The Company has complied with the relevant provisions of the Foreign Exchange Management Act, 1999 (42 of 1999) and Companies Act and the transactions does not violate the provision of the Prevention of Money Laundering Act, 2002 (15 of 2003).
Dxcept for the above, the Company has not advanced or loaned or invested funds to any other person(s) or entity(is), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
D owever, on February 27, 2023, WNRPL got liquidated and AWEL became associate entity of the Company directly.
b) No fund (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity (''funding parties'') with the understanding, whether recorded in writing or otherwise, that the Company shall whether directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding parties (''Ultimate Beneficieries'') or provided any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
73 The Company has complied with the number of layers for its holding in downstream companies prescribed under clause (87) of Section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017.
74 The Company has granted loans which are repayable on demand during the year to related parties as defined in clause (76) of section 2 of the Companies Act, 2013 are as under.
76 F igures for the previous year are re-classified/ re-arranged/ re-grouped, wherever necessary to be in conformity with the figures of the current year''s classification/ disclosure.
75 Events after the reporting period
Subsequent to the balance sheet date, the Company has bought back 11,750,000 equity shares of '' 10 /-each from the shareholders of the company by way of a tender offer route at a price of '' 200 per equity share for an aggregate amount of '' 235 crores in accordance with the provisions of the Companies Act, 2013 and SEBI (Buy Back of Securities) Regulations, 1998, which has resulted into reduction of equity share capital.
The buyback Committee of the Company, at its meeting held on April 12, 2023, approved the completion and closure of the buyback.
Mar 31, 2018
1 Corporate information
Welspun Enterprises Limited (âWELâ or âthe Companyâ) is a public limited company incorporated in India. Its shares are publicly traded on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) in India. The Company is engaged in infrastructure development (Engineering, Procurement and Construction (âEPCâ) and Build, Operate and Transfer (BOT) basis) and trading activities. It is also engaged in carrying out Operation and Maintenance (âO&Mâ) activities for the transportation sector projects.
The separate financial statements (hereinafter referred to as âFinancial Statementsâ) of the Company for the financial year 2017-18 were authorised for issue in accordance with a resolution of board of directors on 10 May 2018.
2 Basis of preparation of financial statements
The financial statements have been prepared to comply in all material respects with the Indian Accounting Standards (Ind AS) notified under Section 133 of Companies Act, 2013 (the Act) read with Companies (Indian Accounting Standards Rules, 2015 (As amended) and other relevant provisions of the Act and rules framed thereunder and guidelines issued by Securities and Exchange Board of India (SEBI).
The financial statements have been prepared under the historical cost convention and on accrual basis, except for the following:
a) Certain financial assets and liabilities which have been measured at fair value (Refer accounting policy regarding financial instruments).
b) Assets held for sale -measured at fair value less cost to sell
c) Defined benefit plan assets and liabilities
d) Share based payments
The financial statements are presented in Rs in lakhs, except when otherwise indicated.
3(A) Significant estimates, judgements and assumptions
The preparation of financial statements requires management to exercise judgment in applying the
Companyâs accounting policies. It also requires the use of estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses and the accompanying disclosures including disclosure of contingent liabilities . Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis, with revisions recognised in the period in which the estimates are revised and in any future periods affected.
a) Contract estimates
The Company prepares budgets in repect of each EPC projects to compute project profitability and construction revenue under percentage of completion method. The major component of contract estimate is budgeted cost to complete the contract. Due to complexities involved in the budgeting process, contract estimates are sensitive to changes in these assumptions. Budgeted costs are reviewed at each reporting date.
b) Provision for employee benefits
The cost of post-employment and other long term benefits is determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include determination of discount rates, expected rate of return on assets, 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. The assumptions used are disclosed in note 46.
c) Contingencies and commitments
In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. Potential liabilities that have a low probability of crystallising or are very difficult to quantify reliably, are treated as contingent liabilities. Such liabilities are disclosed in the notes, if any, but are not provided for in the financial statements. There can be no assurance regarding the final outcome of these legal proceedings.
d) Impairment testing
i) Impairment of non-financial assets
Impairment exists when the carrying value of an asset or cash generating unit (CGU) 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 armâs 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 DCF model. The cash flows are derived from the budget for the future years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the assetâs performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate.
ii) Impairment of financial assets
The impairment provisions for financial assets disclosed are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
e) Taxes
The Company periodically assesses its liabilities and contingencies related to income taxes for all years open to scrutiny based on latest information available. The Company records its best estimates of the tax liability in the current tax provision. The management believes that they have adequately provided for the probable outcome of these matters.
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits.â
f) Fair value measurement
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. In applying the valuation techniques, management makes maximum use of market inputs and uses estimates and assumptions that are, as far as possible, consistent with observable data that market participants would use in pricing the instrument. Where applicable data is not observable, management uses its best estimate about the assumptions that market participants would make. These estimates may vary from the actual prices that would be achieved in an armâs length transaction at the reporting date. For details of the key assumptions used and the impact of changes to these assumptions (Refer note 37).
g) Share based payments
Estimating fair value for share-based payment requires determination of the most appropriate valuation model. The estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in note 42.
3 (B) Standards issued but not yet effective
The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Companyâs financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective. In March 2018, the Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2018 notifying Indian Accounting Standard (Ind AS) 115 âRevenue from Contracts with Customersâ and notifying amendments to Ind AS 12 âIncome Taxesâ .Ind AS 115 and amendments to the Ind AS 12 are applicable to the Company w.e.f. 1 April 2018.
a) Ind AS 115 âRevenue from Contracts with Customersâ
The core principle of Ind AS 115 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further this standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entityâs contracts with customers.
b) Ind AS 12 âIncome Taxesâ
The amendment considers that tax law determines which deductions are offset against taxable income and that no deferred tax asset is recognised if the reversal of the deductible temporary difference will not lead to tax deductions.
Accordingly, segregating deductible temporary differences in accordance with tax law and assessing them on entity basis or on the basis of type of income is necessary to determine whether taxable profits are sufficient to utilise deductible temporary differences.
The Company is evaluating the disclosure requirements of these amendments and its effect on the financial statements.
# Each debenture having face value of Rs 100 each shall be compulsorily convertible into 10 equity shares of Rs 10 each fully paid up at the end of the 5 years from the date of allotment or as mutually agreed before the end of the tenure.
## Each debenture having face value of Rs 100 each shall be convertible, at the option of the holder or the Company into 10 equity shares of Rs 10 each of the Company at any time after the expiry of 5 years and such conversion option shall be available till the expiry of the tenure (10 years from date of allotment) unless redeemed earlier. Besides, the Debenture holder as well as the Company has the right to seek redemption or do redemption, as the case may be, any time after the allotment of debentures. If the debentures are not converted into equity or redeemed until the expiry of the tenure, the debentures shall be redeemed at the expiry of the tenure.
$ Each debenture having face value of Rs 10 each shall be compulsorily convertible into 1 equity shares of Rs 10 each fully paid up at the end of the 5 years from the date of allotment or as mutually agreed before the end of the tenure.
â The Company has pledged below mentioned shares :-
* Became subsidiary on 27July 2017 and ceased to be subsidiary w.e.f. 19 December 2017 ** Became joint venture w.e.f 13 October 2017 *** Became joint venture w.e.f. 19 January 2018 **** Became joint venture w.e.f. 30 January 2018
@ Investment as at 31 March 2018 includes adjustment for fair value of interest free loan Rs 1,036 lakhs (31 March 2017:Rs 715 lakhs).
(ii) Rights, preference and restriction on shares
The Company has only one class of equity having par value of Rs. 10 per share. Each shareholder is entitled to one vote per share held. The dividend, incase proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except incase of interim dividend.
In the event of liquidation of the Company, the holders of the equity shares are entitled to receive remaining assets of the Company, after distribution of all preferential amounts, in proportion to their shareholding.
(v) Shares reserved for issue under options
For details of shares reserved for issue under the share based payment plan of the company, please refer note 42
Nature and purpose of reserves
a) Capital reserve
Capital reserve represents capital surplus and not normally available for distribution as dividend.
b) Securities premium reserve
Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.
c) Share options outstanding account
The share options outstanding account represents the value of equity settled share based payment provided to employees as part of their remuneration. Refer note 42 for further details of this plan.
d) Amalgamation reserve
It represents reserve arising out of amalgamation of two subsidiaries with the Company.
e) General reserve
The reserve is a distributable reserve maintained by the Company out of transfers made from profits.
Nature of security and terms of repayments for long term borrowings
i) Industrial Development Finance Corporation Limited (âIDFCâ)
Secured by way of mortgage in favour of IDFC of all movable properties pertaining to the Dewas Water Supply Projects, present and future. A first charge by way of hypothecation of all the movable assets including movable plant and machinery, machinery spares, tools & accessories, furniture and fixtures, vehicles and all other movable assets pertaining to the project, present and future. First charge of all book debts, operating cash flows, revenues and receivables of the Company pertaining to the project, present and future. First charge on all intangibles including but not limited to goodwill, uncalled capital, present and future. Assignment of all rights, title, interest, benifits, claims and demands of the Company in respect of all the assets of the projects agreement and contracts including concession agreement. First charge over the escrow account, debt service reserve account and other reserve and any other bank account the Company wherever maintained.
Repayment terms : Repayment in monthly installments w.e.f.16 April 2016 i.e- FY 17-3%; FY18-7%; FY19-10%; FY20-20%; FY21-22%; FY22-33%; FY23-5%.
Rate of Interest : 11.25% p.a.
* Represents certain obligations related to stamp duty etc of Welspun Maxsteel Limited, an erstwhile subsidiary disposed off in earlier period. There is no movement during the year.
Nature of security and terms of repayment for secured borrowings
Loan from bank is secured by hypothecation of inventories and book debts of the Company. Rate of interest: MCLR 1.45% pa
Terms and conditions of the above financial liabilities:
Acceptances are interest bearing and are normally settled on 90-days terms.
Trade payables are non-interest bearing and are normally settled as per payment terms mentioned in the contract.
d) Unrecognised deferred tax assets on unused tax losses
The Company has brought forward long term capital losses of Rs.84,128 lakhs (31 March 2017 Rs.85,565 lakhs) (majority of which is expiring in 31 March 2023) and short term capital losses of Rs. 7,667 lakhs (31 March 2017 Rs. 11,648 Lakhs) (majority of which is expiring in 31 March 2023) that are available for offsetting against future taxable capital gains. Deferred tax assets of Rs.19,598 lakhs (31 March 2017 Rs. 19,933 Lakhs) have not been recognized in respect of long term capital losses in view of uncertainty of future taxable capital gains and deferred tax assets of Rs. 1,340 lakhs (31 March 2017 Rs. 2,035 lakhs) have not been recognized in respect of these losses in view of uncertainty of future taxable short term capital gains.
Fair value hierarchy
The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The following methods and assumptions were used to estimate the fair values:
1 Fair value of the cash and short term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial instruments approximate their carrying amounts largely due to short term maturities of these instruments.
2 Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for the expected losses of these receivables.
Valuation technique used to determine fair value
a) Investments included in Level 1 of fair value hierarchy are based on prices quoted in stock exchange and/ or NAV declared by the funds.
b) Investments included in Level 2 of fair value hierarchy have been valued based on inputs from banks and other recognised institutions such as FIMMDA/ FEDAI
c) Investments included in Level 3 of fair value hierarchy have been valued using acceptable valuation techniques such as Net Asset Value and/ or Discounted Cash Flow Method.
Note : All financial instruments for which fair value is recognised or disclosed are categorised within the Fair Value Hierarchy described as above, based on the lowest level input that is significant to the fair value measurement as a whole.
The carrying amounts of loans, trade receivables, cash and cash equivalents, Other bank balances, other financial assets, non-current and current borrowings, trade payables and other financial liabilities that are measured at amortised cost are considered to be approximately equal to the fair value due to short-term maturities of these financial assets/ liabilities
4 Financial risk management
The Companyâs financial risk management is an integral part of how to plan and execute its business strategies. The Companyâs financial risk management policy is set by the Managing Board. The Company is exposed to market risk, credit risk and liquidity risk.
A Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Companyâs income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. The sensitivity analysis excludes the impact of movements in market variables on the carrying value of post-employment benefit obligations provisions and on the non-financial assets and liabilities. The sensitivity of the relevant profit and loss item is the effect of the assumed changes in respective market risks.
a) Interest rate risk
Interest rate risk is the risk that the fair value or the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to optimize Companyâs position with regard to interest income and interest expenses and manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instrument in its total portfolio.
(ii) Interest rate sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of borrowings affected. With all other variables held constant, the Companyâs profit before tax is affected through the impact of change in interest rate of borrowings, as follows:
b) Foreign currency risk
Currency risk is the risk that the fair value or future cash flows fluctuate because of changes in market prices of various currencies against the functional currency. However the Company is currently not exposed to foreign currency risk.
B 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 condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.
a) Trade receivables
The Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings for extension of credit to customers. The Company monitors the payment track record of the customers. Outstanding customer receivables are regularly monitored. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets. The Company has also taken advances and security deposits from some of its customers, which mitigate the credit risk to an extent.
b) Financial instruments and cash deposits
The Company considers factors such as track record, size of the institution, market reputation, financial strength / rating and service standards to select the banks with which balances and deposits are maintained. Generally, the balances are maintained with the institutions with which the Company has also availed borrowings.
C Liquidity risk
a) 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. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Companyâs net liquidity position through rolling forcasts on the basis of expected cash flows.
b) Exposure to liquidity risk
The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date based on the contractual undiscounted payments.
5 Capital Management
For the purpose of Companyâs capital management, capital includes issued capital and other equity reserves attributable to the shareholders. The primary objective of the Companyâs Capital Management is to maximize shareholders value. The company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial covenants, if any.
The Company monitors capital using gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing borrowings, trade and other payables, less cash and cash equivalents.
6 Contingencies and Commitments
(a) Leases
Operating lease commitments â Company as lessee
The Company has taken office premises and residential facilities under cancellable operating lease agreements that are renewable on a periodic basis at the option of both the lessor and the lessee. The initial tenure of the lease varies from six months to thirty six months. Lease rental charges for 31 March 2018 is Rs 416 lakhs ( 31 March 2017 : Rs 271 Lakhs)
(c) Commitments
i) The Company has an outstanding commitments of Rs 26,653 lakhs (31 March 2017 Rs Nil) and Rs 3,873 lakhs (31 March 2017 Rs Nil) towards equity contribution in joint venture entities and its subsidiary respectively under the financing arrangement tied up with bankers.
ii) Pursuant to the understanding with MBL Projects Private Limited, with respect to investment in RGY Roads Private Limited (âRGYâ), paid against option for acquisition of balance 51% shares in RGY equivalent to Rs 1,450 lakhs (31 March 2017 Rs Nil) on 22 February 2018. The balance amount is Rs.122 lakhs (31 March 2017 Rs Nil).
iii) With respect to investment in MBL (GSY) Road Limited (âGSYâ) and MBL (CGRG) Road Limited (âCGRGâ), Rs 1.63 lakhs (31 March 2017 Rs Nil) each is paid against option for acquisition of balance 51% shares in GSY & CGRG. The balance amount is Rs. 0.13 lakhs (31 March 2017 Rs Nil).
iv) Pursuant to the understanding with Vishvaraj Environment Private Limited, with respect to investment in Corbello Trading Private Limited (âCTPLâ) paid against option for acquisition of balance 51% shares in CTPL equivalent to Rs 745 lakhs (31 March 2017 Rs Nil) . The balance amount is Rs 72 lakhs (31 March 2017 Rs Nil).
v) With respect to investment in Chikhali-Tarsod Highways Private Limited (âCTHPLâ) Rs. 0.48 lakhs (31 March 2017 Rs Nil) is paid against option for acquisition of balance 51% shares in CTHPL. The balance amount is Rs. 0.03 lakhs (31 March 2017 Rs Nil).
7 Share based payments
a) In accordance with the âWelspun Enterprises Limited - Employees Stock Option Plan 2017â the company has granted 3,000,000 equity shares (maximum 2,000,000 equity shares to the âManaging Directorâ) at zero cost on 10 October 2017. The fair value of the above stock option of Rs 4,179 lakhs is calculated at the average rate of Rs 139.30 per share is amortised on the straight line basis over the vesting period in accordance with the Ind AS 102 âShare-based paymentâ. Accordingly proportionate amount of Rs 904 lakhs (31 March 2017 - Nil) is shown as âShare based payment to employeesâ in the statement of profit and loss (Refer note 32).
b) In accordance with the âWelspun Managing Director Stock Option Plan 2014â the Company has granted 240,000 equity shares to the âManaging Directorâ of the Company at zero Cost on 14 July 2016. The fair value of the above Stock Options of Rs. 128 Lakhs as on 14 July 2016 is calculated at the average rate of Rs. 53.23/- per share is amortized on the straight line basis over the vesting period of one year in accordance with the Ind AS 102 âShare-based paymentâ. Accordingly proportionate amount of Rs.37 Lakhs (31 March 2017 - Rs 121 Lakhs) is shown as âShare based payment to employeesâ in the statement of profit and loss (Refer note 32).
The salient features of the Scheme are as under:
(i) Vesting: Options to vest shall happen at every anniversary of the date of grant in quantum of 20% of the total ESOPs granted, over the period of 5 years from the date of grant. However vesting period may be extended by the entire duration of the leave period for Employees on the long Leave. The Vesting Schedule is as under:
(ii) Exercise: Options granted shall be capable of being exercised in one or more tranches in multiples of 5,000 shares, within a period of 3 years from the date of vesting of the respective Employee Stock Options. In the event of cessation of employment due to death or permanent incapacity, all the vested and unvested options may be exercised immediately but not later than six months from the cessation of employment. In the event of cessation of employment due to normal retirement, all the vested options should be exercised immediately but not later than six months from date of retirement and all unvested options will stand cancelled. In the event of cessation of employment due to resignation prior to retirement, all the vested options should be exercised immediately but not later than one month from date of submission of resignation and all unvested options will stand cancelled.
The expected life of the stock is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may also not necessarily be the actual outcome.
8 Segment Information
The financial statements of the Company contains both the consolidated financial statements as well as the standalone financial statements of the Company. Hence, the Company has presented segment information based on the consolidated financial statements as permitted by Ind AS - 108 âOperating segmentsâ.
9 Gratuity and other post employment benefits plans
The disclosures of employee benefit as defined in the Ind AS 19 - â Employee Benefitsâ are given below :
a. The Company makes annual contributions to the employeesâ gratuity fund scheme, a funded defined benefit plan which is managed by LIC of India. The present value of obligation is determined based on actuarial valuation using the projected unit credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.
b. Leave encashment is a non-funded defined benefit scheme. The obligation for leave encashment is recognized in the same manner as gratuity.
c. Details of post retirement gratuity plan are as follows :-
Sensitivities due to mortality & withdrawals are insignificant & hence ignored. Sensitivities as to rate of inflation, rate of increase of pensions in payment, rate of increase of pensions before retirement & life expectancy are not applicable being a lump sum benefit on retirement.
The average duration of defined benefit obligation is 37.27 years ( 2017 - 33.63 Years)
Notes
1. Amounts recognized as an expense and included in the Note 32 âEmployee benefits expenseâ are gratuity Rs 58 lakhs (31 March 2017 Rs 49 lakhs) and leave encashment Rs 48 lakhs (31 March 2017 Rs 49 lakhs). Net interest cost on defined benefit obligation recognised in Note 33 under âFinance costsâ is Rs 24 lakhs ( 31 March 2017 Rs 18 lakhs)â
2. The estimate of future salary increases considered in the actuarial valuation, takes into account the rate of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
3. Contribution to provident and other funds which is a defined plan is recognized as an expense in Note 32 of the financial statements.
â0â denotes less than Rs 50,000
e) Other related parties with whom transactions have taken place or balances outstanding at the year end : Welspun India Limited, Welspun Corp Limited, Welspun Steel Limited, Welspun Realty Private Limited, Welspun Global Brands Limited, Welspun Energy Private Limited #, Welspun Orissa Steel Private Limited, Rank Marketing LLP, Welspun Foundation for Health and Knowledge, Welspun Energy Thermal Private Limited (Formerly known as Solarsys Infra Projects Private Limited), Welshop Trading Private Limited @, Diameter Trading Private Limited
# Welspun Energy Private Limited (âWEPLâ) merged with Welspun Steel Limited (âWSLâ) w.e.f 21 August 2017 @ Welshop Trading Private Limited merged with Welspun Steel Limited (âWSLâ) w.e.f 19 August 2017
10 Details of loans given, investments made and guarantee given covered U/s 186 of the Companies Act, 20l3
a) The Company is engaged in the business of providing infrastructural facilities as specified under Schedule VI of the Companies Act 2013 (the âActâ) and hence the provisions of Section 186 of the Act related to loans/ guarantees given or securities provided are not applicable to the Company.
b) There are no investments other than as disclosed in Note 6 and 11 forming part of the financial statements.
@ Closing balances are considered after considering the Ind AS adjustments to make comparable with financial statements for reporting purpose.
@@ After considering expected credit loss of Rs 12,073 Lakhs ( 31 March 2017 : Rs 10,545 Lakhs)
* Became Joint venture w.e.f 13 October 2017 ** Became Joint venture w.e.f. 19 January 2018 *** Became Joint venture w.e.f. 30 January 2018
11 Collateral / security pledged
The carrying amount of assets pledged as security for current and non-current borrowings availed (Fund based - 31 March 2018: Rs 6,609 lakhs (31 March 2017 : Rs 5,633 lakhs)) and (Non-fund based -31 March 2018 : Rs 24,789 lakhs (31 March 2017 Rs 164 lakhs)) of the Company are as under:
Proposed dividends on equity shares are subject to approval of shareholders at the annual general meeting and are not recognised as a liability (including dividend distribution tax theron) as at reporting date.
54 Assets classified as held-for-sale
a) Construction equipments :
The Company intends to dispose off the construction equipments as it is not intended to be utilized for business purpose in future. These equipments have been depreciated till 31 March 2015 and thereafter classified as Assets included in disposal group classified as held for sale amounting to Rs 8 lakhs as at 01 April 2015 and Rs 113 lakhs as at 31 March 2016 with no depreciation charged from 01 April 2015. Buyer for these assets has been identified with the terms of sale being under negotiation. During the year ended 31 March 2018, the Company sold assets amounting to Rs 13 Lakhs (31 March 2017 : Rs 72 lakhs). As at 31 March 2018, the Company believes that the fair value of these assets exceeds the carrying amount.
b) Intangible assets :
The Company has reclassified Dewas Water Supply Project (âBOT assetâ) under the head âNon Current Assets held-for-Saleâ as per Ind-AS 105 as the carrying amount is expected to be recovered principally by sale transaction rather than its continuing use. During the year the Company has sold the project to its 100% owned subsidiary Dewas Waterprojects Works Private Limited (âDWWPLâ) for Rs 6,961 lakhs as per concession agreement signed between Madhya Pradesh State Industrial Development Corporation Limited (âMPSIDCâ) and DWWPL against book value of Rs 5,613 lakhs resulting in profit of Rs 1,348 lakhs disclosed as exceptional items.
12 (a) Reconciliation between opening and closing balances in the balance sheet for liabilities arising from financing activities as required by Ind AS 7 âStatement of Cash Flowsâ is as under:
(b) Non- cash investing and financing activities for the current year
i) Disposal of asset held-for-sale - Rs 6,961 lakhs (Refer note 54 (b))
ii) Conversion of application money into OCD of Welspun Steel Limited - Rs 182 lakhs
iii) Adjustment of loan against receivable - Rs 425 lakhs
iv) Equity shares alloted pursuant to exercise of stock option - Rs 24 lakhs
13 Figures for the previous year are re-classified/ re-arranged/ re-grouped, wherever necessary to be in conformity with the figures of the current yearâs classification/ disclosure.
Mar 31, 2017
1 FVTPL financial assets
Under the previous GAAP, investments in equity instruments were classified as long-term investments or current investments based on the intended holding period and reliability. Long-term investments were carried at cost less provision for other than temporary diminution in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments have been recognized in retained earnings as at the date of transition and subsequently in the statement of profit and loss for the year ended March 31, 2016. This resulted in decrease in noncurrent investments by Rs. 4,773 lakhs as at March 31, 2016 (April 1 2015: Rs. 4,773 lakhs) and increase in current investments by Rs. 1,624 lakhs as at March 31, 2016 and decrease of retained earnings by Rs.3,150 lakhs as at March 31, 2016 (April 1, 2015: Rs. 4,773 lakhs)
Under the previous GAAP, the Company accounted for investments in debt securities and mutual funds (current investments) as investments measured at lower of cost and fair value. Under Ind AS, these investments are mandatorily classified as debt investments measured at FVTPL as these investments are held for trading. Ind AS requires FVTPL debt instruments to be measured at fair value. At the date of transition to Ind AS, difference between the instruments fair value and previous GAAP carrying amount has been recognized in retained earnings. This resulted in increase in current investments by Rs. 301 lakhs as at March 31, 2016 (April 1, 2015 : Rs 109 lakhs) and corresponding increase in retained earnings by equivalent amounts.
2 Security deposits
Under the previous GAAP, interest free lease security deposits given (that are refundable in cash on completion of the lease term) were recorded at their transaction value. Under Ind AS, all financial assets are required to be measured at fair value. Accordingly, the Company has fair valued lease security deposits under Ind AS. Difference between the fair value and transaction value of the security deposits has been recognized as deferred lease revenue. Consequent to this change, security deposits decreased by Rs. 0.80 lakhs as at March 31, 2016 (April 1, 2015: Rs. 2 lakhs) and deferred lease revenue increased by Rs. 0.76 lakhs as at March 2016 (April 1, 2015: Rs. 2 lakhs). The profit for the year ended on March 31, 2016 decreased by Rs. 0.05 lakhs due to recognition of deferred lease revenue over the lease term amounting to Rs. 2 lakhs which is partially offset by notional interest expense of Rs. 2 lakhs recognized on security deposits.
3 Share based payments
Under the previous GAAP, the cost of stock options granted pursuant to the Company''s stock option scheme was the intrinsic value of the options granted as at the date of the grant which was amortized on straight line basis over the vesting period in accordance with the SEBI Guidelines 1999. Under Ind AS the cost of share based payments is recognized based on the fair value of the options as at the grant date. Consequently, the amount recognized in employee stock options outstanding account increased by Rs. 10 lakhs as at March 31, 2016 (April 1, 2015: Rs. 0.56 lakhs). The proft for the year ended March 31, 2016 increased by Rs 6 lakhs. There is no impact on total equity.
4 Other comprehensive income
Under previous GAAP, the Company was not required to present other comprehensive income (OCI) separately. Hence, it has reconciled profit or loss as per Indian GAAP to profit or loss as per Ind AS. Further, Ind AS profit or loss is reconciled to total comprehensive income as per Ind AS.
5 Remeasurement of post employment benefit obligations
Under Ind AS, remeasurements i.e.actuarial gains and losses on the net defined benefit liability are recognized in other comprehensive income instead of profit and loss. Under the previous GAAP, these remeasurement were forming part of the profit and loss for the year. As a result of this change, the profit for the year ended March 31, 2016 increased by Rs. 2 lakhs (net of deferred tax of Rs. 1 lakhs). There is no impact on the total equity as at March 31, 2016.
6 Assets held-for-sale
The Company intends to dispose off the construction equipments as it is not intended to be utilized for business purpose in future. Construction equipments has been depreciated till March 31, 2015 and thereafter classified as Assets included in disposal group classified as held for sale with no depreciation charged from 1 April 2015. Under the previous GAAP, the carrying value of the construction equipments were shown under Property, plant and equipment. Further refer note 64 for adjustment made for the year ended March 31, 2016.
7 Loans given
Under Ind AS, loans given are valued at present value as compared to being carried at cost in the previous GAAP. This adjustment includes the difference between the book value and the present value of interest free loan given to a subsidiary, which is treated as investment in that subsidiary. The interest on the present value of this loan is recognized over the tenure of the loan using the EIR method.
8 Expected credit loss (''ECL'')
As per Ind AS 109, the Company is required to apply expected credit loss model for recognizing the allowance for doubtful debts. As a result, the Company has recognized, difference between loan balance (net of ECL loss) receivable and present value of recoverable amount of receivable, into retained earnings as at April 1, 2015 which resulted in decrease in equity by Rs. 395 lakhs. Further, the Company has recognized additional ECL loss of Rs. 1,108 lakhs during year ended March 31, 2016 which resulted in decrease in profit and equity by Rs. 1,108 lakhs.
9 Tax adjustments
Tax adjustments include deferred tax impact on account of difference between previous GAAP and Ind AS.
The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The following methods and assumptions were used to estimate the fair values:
1. Fair value of the cash and short term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial instruments approximate their carrying amounts largely due to short term maturities of these instruments.
2. Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for the expected losses of these receivables.
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2:other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
The carrying amounts of loans, trade receivables, cash and cash equivalents, Other bank balances, other financial assets, noncurrent and current borrowings, trade payables and other financial liabilities that are measured at amortized cost are considered to be approximately equal to the fair value due to short-term maturities of these financial assets/ liabilities.
10 Financial risk management
The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company''s financial risk management policy is set by the Managing Board. The Company is exposed to market risk, credit risk and liquidity risk.
A. Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. The sensitivity analysis excludes the impact of movements in market variables on the carrying value of postemployment benefit obligations provisions and on the non-financial assets and liabilities. The sensitivity of the relevant profit and loss item is the effect of the assumed changes in respective market risks.
a) Interest rate risk
Interest rate risk is the risk that the fair value or the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to optimize Company''s position with regard to interest income and interest expenses and manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instrument in its total portfolio.
Foreign currency risk
Currency risk is the risk that the fair value or future cash flows fluctuate because of changes in market prices of various currencies against the functional currency. However the Company is currently not exposed to foreign currency risk.
B. 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 condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.
Trade receivables
The Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings for extension of credit to customers. The Company monitors the payment track record of the customers. Outstanding customer receivables are regularly monitored. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets. The Company has also taken advances and security deposits from some of its customers, which mitigate the credit risk to an extent.
Financial instruments and cash deposits
The Company considers factors such as track record, size of the institution, market reputation, financial strength / rating and service standards to select the banks with which balances and deposits are maintained. Generally, the balances are maintained with the institutions with which the Company has also availed borrowings.
C. 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 Company''s treasury department is responsible for liquidity, funding as well as settlement. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.
11 Buy back of shares
Pursuant to the approval from the Board of Directors and Shareholders, the Company has bought back 26,987,479 equity shares of Rs. 10 /- each from the shareholders of the Company on a proportionate basis by way of a tender offer route at a price of Rs. 62 per equity share for an aggregate amount of Rs.16,732 lakhs in accordance with the provisions of the Companies Act, 2013 and SEBI (Buy Back of Securities) Regulations, 1998.
12 Modification to the scheme of amalgamation and arrangement
The Hon''ble High Court of Gujarat at Ahmadabad vide its order dated February 3, 2016 and the Hon''ble High Court of Judicature of Bombay vide its order dated March 23, 2016 had approved modifications to the Scheme which provided for recording of the equity shares issued by the Company pursuant to the Scheme ("Modified Scheme") at fair value and the same had resulted into reduction of Capital Reserves, and corresponding increase in the Securities Premium of the Company, by Rs.77,307 lakhs. The Modified Scheme had became effective on April 28, 2016 (appointed date April 1, 2014) and had been given effect in the previous financial year.
13 Share based payments
In accordance with the âWelspun Managing Director Stock Option Plan 2014â the Company has granted 720,000 equity shares to the âManaging Directorâ of the Company at zero Cost on February 16, 2015 and 240,000 equity shares on July 14, 2015. The fair value of the above Stock Options of Rs. 193 lakhs as on February 16, 2015 is calculated at the average rate of Rs. 26.75/- per Share and Rs. 106 lakhs as on July 14, 2015 is calculated at the average rate of Rs. 44.35/- per Share is amortized on the straight line basis over the vesting period of one year in accordance with the Ind AS 102 "Share-based payment". Accordingly proportionate amount of Rs. 122 Lakhs (March 31, 2016 - Rs. 245 lakhs) is shown as âEmployee stock option expensesâ in the statement of profit and loss (Refer note 35).
ii) Exercise: Options granted shall be capable of being exercised in one or more tranches in multiples of 5,000 shares, within a period of 3 years from the date of vesting of the respective Employee Stock Options. In the event of cessation of employment due to death or permanent incapacity, all the vested and unvested options may be exercised immediately but not later than six months from the cessation of employment. In the event of cessation of employment due to normal retirement, all the vested options should be exercised immediately but not later than six months from date of retirement and all unvested options will stand cancelled. In the event of cessation of employment due to resignation prior to retirement, all the vested options should be exercised immediately but not later than one month from date of submission of resignation and all unvested options will stand cancelled.
14 Segment information
The financial statements of the Company contain both the consolidated financial statements as well as the standalone financial statements of the Company. Hence, the Company has presented segment information based on the consolidated financial statements as permitted by Ind AS - 108 "Operating segments".
15 The Company had entered into settlement agreement dated September 10, 2015 with ARSS Infrastructure Projects Limited (''ARSS'') and its affiliates. Pursuant to the aforesaid agreement, the Company in the previous year had acquired balance 51% stake in its subsidiary ARSS Bus Terminal Private Limited (''ABTPL'') in consideration of the part of its loan recoverable from ARSS and waiver of interest accrued Rs. 455 lakhs of earlier years. This amount has been included in other expenses for the year ended March 31, 2016. By virtue of this agreement, ABTPL became wholly owned subsidiary (''WOS'') of the Company w.e.f September 10, 2015.
16 Disclosures pursuant to adoption of Ind AS 19 employee benefits
As per Indian Accounting Standard - 19 âEmployee Benefitsâ, the disclosures of employee benefits as defined in the Indian Accounting Standard are given below:
a. The Company makes annual contributions to the employeesâ gratuity fund scheme, a funded defined benefit plan which is managed by LIC of India. The present value of obligation is determined based on actuarial valuation using the projected unit credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.
b. Leave encashment is a non-funded defined benefit scheme. The obligation for leave encashment is recognized in the same manner as gratuity.
d) Other related parties with whom transactions have taken place or balances outstanding at the year end
Welspun India Limited, Welspun Corp Limited, Welspun Steel Limited, Welspun Realty Private Limited, Welspun Mercantile Limited,Welspun Global Brands Limited, Welspun Energy Chattisgarh Private Limited. Welspun Captive Power Generation Limited, Welspun Energy Private Limited, Welspun Orissa Steel Private Limited, Rank Marketing LLP, Welspun Foundation for Health and Knowledge, Welshop Trading Private Limited, Welspun Energy Thermal Private Limited (Formerly known as Solarsys Infra Projects Private Limited)
55 Concession arrangements - main features
a) i) Name of the concession BOT Project at Khandwa Hoshangabad With Madhya Pradesh Road
Development Corporation Ltd
ii) Description of arrangements Toll Collection for 185.6 km length & 5.5 meter width 4.5 meter
unpaved shoulder Road
iii) Significant terms of arrangements Period of Concession: 14 Years from COD
a) Remuneration: Toll Collection
b) Investment grant from concession grantor: Yes
c) Infrastructure return to grantor at end of concession : Yes
iv) Asset Intangible
b) i) Name of the concession BOT Project at Raisen & Rahatgarh With Madhya Pradesh Road
Development Corporation Limited
ii) Description of arrangements Toll Collection for 101.1 km length & 7 meter width 4 meter unpaved
shoulder Road
iii) Significant terms of arrangements Period of Concession: 13 Years from COD
a) Remuneration: Toll Collection
b) Investment grant from concession grantor: Yes
c) Infrastructure return to grantor at end of concession : Yes
iv) Asset Intangible
c) i) Name of the concession BOT Project at Dewas With Madhya Pradesh State Industrial
Development Corporation Limited
ii) Description of arrangements 122 km Transmission line &7 km Gravity line (from MBR )
iii) Significant terms of arrangements Period of Concession: 29 Years from COD
a) Remuneration: Water supply revenue
b) Investment grant from concession grantor: Yes
c) Infrastructure return to grantor at end of concession : Yes
iv) Asset Intangible
d) i) Name of the concession Development of Modern Bus Terminus at Jalandhar with Punjab State
Transport Corporation
ii) Description of arrangements Development of Modern Bus Terminus
iii) Significant terms of arrangements Period of Concession: 8 Years from COD
a) Remuneration: Adda fees, parking fees, rent and advertisement revenue
b) Investment grant from concession grantor: Yes
c) Infrastructure return to grantor at end of concession : Yes
iv) Asset Intangible
e) i) Name of the concession Development of Modern Bus Terminus at Ludhiana with Punjab State
Transport Corporation
ii) Description of arrangements Development of Modern Bus Terminus
iii) Significant terms of arrangements Period of Concession: 10 Years from COD
a) Remuneration: Adda fees, parking fees, rent and advertisement revenue
b) Investment grant from concession grantor: Yes
c) Infrastructure return to grantor at end of concession : Yes
iv) Asset Intangible
17 Under the Micro, Small and Medium Enterprise Development Act, 2006 (âMSMED Actâ), certain disclosures relating to amounts due to micro, small and medium enterprises are required to be made. As the relevant information is not given or confirmed by such enterprises in view of the management, the impact of interest, if any, which may subsequently become payable to such enterprises in accordance with the provisions of the Act, would not be material and the same, if any, would be disclosed in the year of payment of interest.
18 Details of loans/ guarantees given, investments made and securities provided covered u/s 186 of the Companies act, 2013
a) The Company is engaged in the business of providing infrastructural facilities as specified under Schedule VI of the Companies Act 2013 (the âActâ) and hence the provisions of Section 186 of the Act related to loans/ guarantees given or securities provided are not applicable to the Company.
b) There are no investments other than as disclosed in Note 6 and 12 forming part of the financial statements.
Proposed dividend on equity shares are subject to approval of shareholders at the annual general meeting and are not recognized as a liability (including dividend distribution tax theron) as at reporting date.
19 Assets classified as held-for-sale
a) Construction equipments
The Company intends to dispose off the construction equipments as it is not intended to be utilized for business purpose in future. These equipments have been depreciated till March 31, 2015 and thereafter classified as Assets included in disposal group classified as held for sale amounting to Rs. 8 lakhs as at 1 April 2015 and Rs. 113 lakhs as at March 31, 2016 with no depreciation charged from April 1, 2015. Buyer for these assets has been identified with the terms of sale being under negotiation. During the year ended March 31, 2017, the Company sold assets amounting to Rs. 72 lakhs. As at March 31, 2017, the Company believes that the fair value of these assets exceeds the carrying amount.
b) Intangible assets
The Company has reclassified Dewas Water Supply Project (BOT Asset) of Rs. 5,613 lakhs under the head "Non Current Assets held for Sale" as per Ind-AS 105 as the carrying amount is expected to be recovered principally by sale transaction rather than its continuing use.
20 Claim revenue
The Company had executed widening, strengthening, updation and maintenance of Hoshngabad-Harda-Khandwa road project on BOT basis pursuant to a concession agreement dated May 20, 2002. At later stage during the execution of the project, Madhya Pradesh Road Development Corporation Limited (''MPRDC'') suggested change of scope which was adhered to by the Company. The cost incurred for this change of scope was claimed by the Company from the MPRDC. Finally during the current year, MPRDC has agreed to compensate the Company for the claim amount via extension of concession period. On acceptance by MPRDC, the company has decided to recognize the claim revenue in the current year in line with its accounting policy. The Company has calculated the equivalent amount of claim Rs. 765.54 lakhs in INR and capitalized the same as Intangible asset -(BOT toll collection right) with corresponding credit being recorded as claim revenue under the head Other income.
21 In the opinion of the Board of Directors, Current Assets, Loans and Advances have value at which they are stated in the Balance Sheet, if realized in the ordinary course of business. The provision for depreciation and for all known liabilities is adequate and not in excess of the amount reasonably necessary.
22 Figures for the previous year are re-classified/ re-arranged/ re-grouped, wherever necessary to be in conformity with the figures of the current yearâs classification/ disclosure.
Mar 31, 2016
1. MODIFICATION TO THE SCHEME OF AMALGAMATION AND ARRANGEMENT
The Hon''ble High Court of Gujarat at Ahmadabad vide its order dated February 3, 2016 and the Hon''ble High Court Judicature of Bombay vide its order dated March 23, 2016 have approved modifications to the Scheme (Refer note below) which provided for recording of the equity shares issued by the Company pursuant to the Scheme ("Modifi Scheme") at fair value and the same has resulted into reduction of Capital Reserves, and corresponding increase in t Securities Premium of the Company, by Rs.7,730,680,020. The Modified Scheme has become effective on April 28, 20 (appointed date April 1, 2014) and has been given effect in these financial statements.
2. SCHEME OF AMALGAMATION AND ARRANGEMENT
During the previous year, the Board of Directors of Welspun Projects Limited (WPL) and Welspun Enterprises Limit (WEL) at their respective meeting held on November 4, 2014 approved the Scheme of Amalgamation and Arrangemc under Sections 391 and 394 of the Companies Act, 1956 ("the Scheme") of WEL and its subsidiaries Welspun Infrate Limited (WITL), Welspun Infra Projects Private Limited (WIPPL) and Welspun Plastics Private Limited (WPPL) with WP
Pursuant to the Scheme approved by the Hon''ble High Court of Bombay vide its Order dated April 10, 2015 and t Hon''ble High Court of Gujarat at Ahmadabad vide its Order dated April 23, 2015, and the orders since filed with Regist of Companies on May 11, 2015 (''Effective Date'') the following Companies (Transferor Companies) whose nature business stated there against are merged with WPL (Transferee Company) with effect from April 1, 2014 (the ''appoint date'').
3. In accordance with the "Welspun Managing Director Stock Option Plan 2014" the Company has granted 240,000 equity shares to the "Managing Director" of the Company at zero Cost on July 14, 2015. The intrinsic value of the above Stock Option of Rs. 12,060,000 calculated at the average rate of Rs. 50.25 per Share is amortized on the straight line basis over the vesting period of one Year in accordance with the Guidance note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants of India. Accordingly proportionate amount of Rs.8,609,591 on aforesaid option along with charge for 720,000 options granted during the previous year amounting to Rs 16,532,852 aggregating to Rs 25,142,444 is shown as "Employees stock option expenses" in the Statement of Profit and Loss (Refer note 25).
The expected life of the stock is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may also not necessarily be the actual outcome.
4. SEGMENT INFORMATION
The financial statements of the Company contain both the consolidated financial statements as well as the standalone financial statements of the Company. Hence, the Company has presented segment information based on the Consolidated Financial Statements as permitted by Accounting Standard - 17.
5. The Company has entered into settlement agreement dated 10 September, 2015 with ARSS Infrastructure Projects Limited (''ARSS'') and its affiliates. Pursuant to the aforesaid agreement, the Company has acquired balance 51% stake in ARSS Bus Terminal Private Limited (''ABTPL'') in consideration of the part of its loan recoverable from ARSS and waiver of interest accrued Rs 45,523,970 of earlier years. This amount has been included in other expenses for the year ended March 31, 2016. By virtue of this agreement, ABTPL became wholly owned subsidiary (''WOS'') of the Company w.e.f September 10, 2015.
i) During the year, the Company has sold 74% (proportionate share 37%) of its stake in Dewas Bhopal Corridor Private Limited (a 50% Joint Venture of the Company). Profit on such sale of Rs. 520,821,086 (net of selling expenses) has been shown under the head ''exceptional items''.
ii) During the year, the Company has reassessed useful life of Water Pipe Line project (on Public-Private Partnership basis) due to economic and policy developments and has revised the remaining useful life to 2.5 years in respect of the said asset w.e.f, 1 April 2015. Additional amortization charge in respect of this amounting to Rs. 449,030,805 has been recognized and included under the head ''exceptional items''.
6. Disclosures pursuant to adoption of Accounting Standard 15 (Revised 2005) Employee Benefits:
The employees'' gratuity fund scheme is managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is based on the actuarial valuation using the projected unit credit method. The obligation for leave encashment is recognized in the same manner as gratuity.
During the year, Company has recognized the following amount in the financial statements
d) Other related parties with whom transactions have taken place or balances outstanding at the year end
Welspun India Limited, Welspun Corp Limited, Welspun Steel Limited, Welspun Realty Private Limited, Welspun Mercantile Limited, Welspun Global Brands Limited, Welspun Energy Chattisgarh Private Limited, Welspun Captive Power Generation Limited, Welspun Logistics Limited, Welspun Energy Private Limited.
f) Disclosure in respect of transactions with more than 10% of the total transactions of the same type with related party during the year.
i. Purchase of traded goods :
a) Welspun Maxsteel Limited Rs Nil (Previous year Rs. 330,950,094)
ii. Rent expenses :
a) Welspun Realty Private Limited Rs 21,905,260 (Previous year Rs. 26,257,260)
iii. Hire charges :
a) Welspun Logistics Limited Rs Nil (Previous year Rs. 400,000)
iv. Miscellaneous income :
a) Adani Welspun Exploration Limited Rs 6,663,000 (Previous year Rs Nil)
b) Dewas Bhopal Corridor Private Limited Rs Nil (Previous year Rs. 39,113,662)
c) Welspun Steel Limited Rs Nil (Previous year Rs 937,407)
d) Welspun India Limited Rs Nil (Previous year Rs 1,296,067)
v. Material purchased :
a) Welspun Corp Limited Rs Nil (Previous year Rs. 2,109,146)
vi. Reimbursement of expenses (net):
a) MSK Projects (Himmatnagar Bypass) Private Limited Rs 3,835,496 (Previous year Rs Nil)
b) Welspun Corp Limited Rs 105,892 (Previous year Rs. 4,556,607)
vii. Business /promotion expenses :
a) Welspun Global Brands Limited Rs. 1,231,839 (Previous year Rs. Nil)
viii.Staff welfare expenses :
a) Welspun Global Brands Limited Rs. 1,119,235 (Previous year Rs. Nil)
ix. Electricity expenses
a) Welspun Global Brands Limited Rs. 3,327,327 (Previous year Rs. Nil)
x. Construction contract revenue (including unbilled work-in-progress):
a) MSK Projects (Himmatnagar Bypass) Private Limited Rs. 11,250,000 (Previous year Rs.Nil)
b) MSK Projects (Kim Mandvi Corridor) Private Limited Rs. 7,500,000 (Previous year Rs. Nil)
c) Welspun Delhi Meerut Expressway Private Limited Rs 2,294,635 (Previous year Rs Nil)
d) Welspun India Limited Rs. 74,945,522 (Previous year 214,752,672)
xi. Interest income :
a) Dewas Bhopal Corridor Private Limited Rs. 10,247,069 (Previous year Rs. Nil)
b) Welspun Energy Chhattisgarh Private Limited Rs. 632,877 (Previous year Rs. Nil)
c) Welspun Steel Limited Rs. 394,521 (Previous year Rs. Nil)
xii.Sale of materials :
a) Welspun India Limited Rs. 5,220,317 (Previous year Rs. Nil)
b) Welspun Captive Power Generation Limited Rs. 2,446,684 (Previous year Rs. Nil)
xiii.Sale of fixed assets :
a) Welspun India Limited Rs. 349,131 (Previous year Rs. Nil)
xiv.Loans/ advances received :
a) ARSS Bus Terminal Private Limited (ABTPL) Rs 71,650,000 (Previous year Rs. Nil)
xv.Trade advance received :
a) MSK Projects (Himmatnagar Bypass) Private Limited Rs 19,000,000 (Previous year Rs. Nil)
xvi.Repayment of loans/ advances received :
a) MSK Projects (Himmatnagar Bypass) Private Limited Rs Nil (Previous year Rs 8,700,309)
xvii.Loans/advances given :
a) MSK Projects (Kim Mandvi Corridor) Private Limited Rs 9,718,443 (Previous year Rs 124,437,997)
b) Welspun Natural Resources Private Limited Rs. 295,925 (Previous year Rs. 84,727,398)
c) Dewas Bhopal Corridor Private Limited Rs. 11,260,767 (Previous year Rs. 1,394,952)
d) Welspun India Limited Rs Nil (Previous year Rs 172,250)
xviii.Repayment of loans/ advances given :
a) MSK Projects (Kim Mandvi Corridor) Private Limited Rs 9,718,443 (Previous year Rs 218,285,062)
b) Welspun Natural Resources Private Limited Rs Nil (Previous year Rs 84,727,323)
c) ARSS Bus Terminal Private Limited Rs 5,238,647 (Previous year Rs. Nil)
d) Dewas Bhopal Corridor Private Limited Rs 353,388,945 (Previous year Rs 2,654,505)
xix. Security deposit given refunded :
a) Welspun Realty Private Limited Rs. 10,000,000 (Previous year Rs. Nil)
xx. Guarantee given :
a) MSK Projects (Kim Mandvi Corridor) Private Limited Rs. Nil (Previous year Rs. 10,300,000)
xxi. Mobilisation advance received :
a) MSK Projects (Himmatnagar Bypass) Private Limited Rs 11,025,000 (Previous year Rs 19,427,192)
b) Welspun India Limited Rs Nil (Previous year Rs 17,882,653)
xxii. Mobilisation advance received repaid :
a) Welspun India Limited Rs 9,039,505 (Previous year Rs 44,544,869)
xxiii.Investment in compulsorily convertible debentures (CCD) :
a) Welspun Natural Resources Private Limited Rs 472,709,900 (Previous year Rs. 1,269,692,300)
b) Welspun Build-Tech Private Limited Rs. 11,177,500 (Previous year Rs. Nil)
c) MSK Projects (Kim Mandvi Corridor) Private Limited Rs 10,178,400 (Previous year Rs.205,000,000)
xxiv. Sale of compulsorily convertible debentures of MSK Projects (Kim Mandvi Corridor) Private Limited to :
a) ARSS Bus Terminal Private Limited (ABTPL) Rs. 115,000,000 (Previous year Rs. Nil)
xxv. Investment in shares :
a) Welspun Delhi Meerut Expressway Private Limited Rs 100,000 (Previous year Rs Nil)
b) Welspun Natural Resources Private Limited Rs Nil (Previous year Rs. 300,000,000)
xxvi. Inter-corporate deposits given:
a) Welspun Steel Limited Rs. 50,000,000 (Previous year Rs Nil)
b) Welspun Energy Chattisgarh Private Limited Rs. 100,000,000 (Previous year Rs Nil)
xxvii.Inter-corporate deposits given repaid :
a) Welspun Energy Chattisgarh Private Limited Rs. 100,000,000 (Previous year Rs Nil)
xxviii.Sale of equity shares of subsidiary to :
a) Welspun Mercantile Limited (WML) Rs. 100,000 (Previous year Rs Nil)
xxix. Remuneration to Key Managerial Personnel :
a) Mr Sandeep Garg - Rs 72,701,105 (Previous year Rs 19,869,996)
b) Mr B. K. Goenka - Rs 10,096,774 (Previous year Rs Nil)
c) Mr Lalit Jain* - Rs 911,319 (Previous year Rs 5,469,819)
* Ceased to be chief financial officer w.e.f. May 29, 2015.
Closing Balances as at March 31, 2016
i) Receivable at the end of the year
a) Loans, advances and deposits given
â Welspun Natural Resources Private Limited Rs. 1,581,046,464 (Previous year Rs. 1,580,750,539)
â Dewas Bhopal Corridor Private Limited Rs. Nil (Previous year Rs. 332,930,355)
â Welspun Realty Private Limited Rs 30,000,000 (Previous year Rs 40,000,000)
â Welspun Steel Limited Rs 50,000,000 (Previous year Rs.Nil)
b) Trade and other receivables
â Adani Welspun Exploration Limited Rs 6,750,000 (Previous year Rs. Nil)
â Welspun India Limited Rs 11,472,441 (Previous year Rs.20,582,763)
c) Interest receivable
â Welspun Steel Limited Rs 394,521 (Previous year Rs. Nil)
ii) Payable at the end of the year
a) Trade advances and deposits received
â MSK Projects (Himmatnagar Bypass ) Private Limited Rs. 19,000,000 (Previous year Rs.10,726,883)
b) Other payables
â Welspun Global Brands Limited Rs 1,764,476 (Previous year Rs. Nil)
â Welspun India Limited Rs. Nil (Previous year Rs.10,645,207)
iii) Provision for doubtful loans
â Welspun Natural Resources Private Limited Rs 1,493,282,970 (Previous year Rs 1,493,282,970)
iv) Bank guarantee outstanding
â MSK Projects (Kim Mandvi Corridor) Private Limited Rs 2,100,000 (Previous year Rs 10,300,000)
â MSK Projects (Himmatnagar Bypass) Private Limited Rs 1,000,000 (Previous year Rs 1,000,000)
â Adani Welspun Exploration Limited Rs Nil (Previous year Rs 234,500,000)
v) Corporate guarantee outstanding
â MSK Projects (Kim Mandvi Corridor) Private Limited Rs 372,000,000 (Previous year Rs 232,350,891)
â Welspun Maxsteel Limited Rs Nil (Previous year Rs 3,200,000,000)
â Adani Welspun Exploration Limited Rs 236,000,000 (Previous year Rs 270,100,000)
â Dewas Bhopal Corridor Private Limited Rs Nil (Previous year Rs 3,225,649,641)
vi) Investment in shares
â Welspun Natural Resources Private Limited Rs 300,000,000 (Previous year Rs 300,000,000)
â ARSS Bus Terminal Private Limited Rs 310,129,510 (Previous year Rs 91,274,510)
â Welspun Energy Private Limited Rs 3,262,600,000 (Previous year Rs 3,262,600,000)
vii) Investment in compulsorily convertible debentures
â Welspun Natural Resources Private Limited Rs 1,442,402,200 (Previous year Rs 969,692,300)
â Welspun Build-Tech Private Limited Rs 171,177,500 (Previous year Rs 160,000,000)
â MSK Projects (Kim Mandvi Corridor) Private Limited Rs 100,178,400 (Previous year Rs 205,000,000)
7. Confirmations of certain parties for amounts due from them as per accounts of the Company are not obtained. Amount due from customers include amounts due/with held on account of various claims. The claims will be verified and necessary adjustments, if any, shall be made in the year of settlement. Subject to this, Company is confident of recovering the dues and accordingly they have been classified as "debt considered good" and therefore no provision is considered necessary, there against.
8. Under the Micro, Small and Medium Enterprise Development Act, 2006 ("MSMED Act") which came into force effective from October 2, 2006, certain disclosures relating to amounts due to micro, small and medium enterprises are required to be made. As the relevant information is not yet readily available and /or not given or confirmed by such enterprises, it is not possible to give required information in the accounts. However, in view of the management, the impact of interest, if any, which may subsequently become payable to such enterprises in accordance with the provisions of the Act, would not be material and the same, if any, would be disclosed in the year of payment of interest.
In the absence of the necessary information with the Company relating to the registration status of the suppliers under the Micro, Small and Medium Enterprises Development Act'' 2006, the information required under the said Act could not be compiled and disclosed.
9. Expenditure in Foreign currency : Rs. 2,616,249 (Previous year Rs. 665,364 ) (Legal and professional fees)
10. Details of loans given, investments made and guarantee given covered U/s 186 of the Companies Act, 2013
a) The Company is engaged in the business of providing infrastructural facilities as specified under Schedule VI of the Companies Act 2013 (the ''Act'') and hence the provisions of Section 186 of the Act related to loans/ guarantees given or securities provided are not applicable to the Company.
b) There are no investments other than as disclosed in Note 12 and 15 forming part of the financial statements.
11. OPERATING LEASE
The Company has taken office premises and residential facilities under cancellable operating lease agreements that are renewable on a periodic basis at the option of both the less or and the lessee. The initial tenure of the leases varies from six months to twenty four months. Lease rental charges for the year is Rs 28,569,108 (Previous year Rs 34,708,915)
12. In the opinion of the Board of Directors, Current Assets, Loans and Advances have value at which they are stated in the Balance Sheet, if realized in the ordinary course of business. The provision for depreciation and for all known liabilities is adequate and not in excess of the amount reasonably necessary.
13. Figures for the previous year are re-classified/ re-arranged/ re-grouped, wherever necessary to be in conformity with the figures of the current year''s classification/ disclosure.
Mar 31, 2014
1). CONTINGENT LIABILITIES & COMMITMENTS:
I. Contingent Liabilities
Rs. In Lacs
As At AS At
31-03-2014 31-03-2013
a. Claims against the Company / 370.15 499.01
Disputed Liabilities not
acknowledged as debts
b. Guarantee issued by the bankers 4612.48 11141.32
on behalf of the Company
c. Guarantee given by the Company
to the bankers for the
facilities granted :-
1. Wholly owned subsidiaries. 3257.19 995.11
2. Joint Ventures 33153.42 36030.45
d. Income Tax demand disputed 5069.59 1107.31
by the Company
e. Service Tax demand disputed 347.76 -
by the Company
2) Security Deposits and Retention money deducted from contract
receipt are subject to confirmation and adjustment, if any, on
finalization of account.
3). BUILD, OPERATE & TRANSFER PROJECTS :
The Company obtained a contract on Build, Operate and Transfer (BOT)
basis from the Madhya Pradesh State Industrial Development Corporation
(MPSIDC) for execution of Dewas Water Supply project.
In terms of contract the ownership of the said property vests in the
government immediately. Under the contract the Company is entitled to
collect the water supply charge during the concession period of 32
years including the period of construction or reconstruction.
In earlier year the Company finished the construction and obtained the
provisional certificate for commissioning and started operations.
However the Company could not achieve the optimal capacity and was
advised to complete the project to achieve the desired and specified
results by MPSIDC as al so to expand the capacity and to under take
reconstruction and completion
Accordingly the Company has undertaken reconstruction and completion of
the project so as to achieve the desired capacity as also increase the
capacity for supply of water from BOT Project.
Having, regard to the accounting policies followed by the Company, the
entire expenditure incurred thereon (net of revenue for supply of
water) is shown as Build, Operate and Transfer project expenditure
(Toll collection rights) under the head in tangible assets under
development and would be amortized / written off based on the projected
toll revenue for the balance toll period.
In the prior financial year(s) the Company had written off, operation
and maintenance expenses including interest. However due to
reconstruction and completion under taken, the Company has discontinued
that practice from the year 2011-12.
4). EXCEPTIONAL ITEM :
Pursuant to agreement for sale Dtd.5th March 2013 entered in to between
the Company and Leighton Wels pun Contractors Private Limited, the
Company has transferred indentified EPC division / works of GMADA
Mohali Water Division, Chirai Anjar Road Work and Dewas Water Projects
aggregate value of Rs. 556 Crores for the composite consideration of
Rs.1,15,03,48,500/- subject to the terms and condition as contained in
the said agreement.
As a consideration for the transfer of the above business the Company
had received 11503485 equity shares in the Leighton Wel spun
Contractors Private Limited, of the face value of Rs. 10/- each fully
paid up at a premium of Rs. 90/- per share aggregating consideration of
Rs. 1150348500/- Surplus of Rs. 107,92,49,055 arising in respect of the
said transfer was shown as income from transfer of business under the
head Other Operating Revenue in the statement of profit & loss for the
year ended 31st M arch 2013.
As per the Clause 14.4.2 of the said Agreement To Sell (ATS), if the
Company is unable to issue Notice to Proceed (NTP) for any of the above
projects, it has an obligation to give Replacement Project (s) to LWIN
of equivalent contract value.
If NTP i s not issued, and Replacement Project(s) are not arranged, the
proportionate shareholding based on the value of projects for which NTP
is not issued will be extinguished. Due to various circumstances, it
became clear that a NTP could not be issued to LWIN for either of the
balance projects. Following these developments, the Company obtained an
opinion from an external valuator on the cost of the obligation to
arrange for Replacement Projects for LWIN (''replacement obligation'').
Based on valuation carried out, Wel spun Infra Projects Private Limited
("WIPPL") (Group Company) holding 32.38% in LWIN has agreed to purchase
the Company s stake in LWIN @ Rs 81 Crores. Loss of Rs. 34,06,82,111/-
on sales of the said Company s stake in "LWIN" is shown under the head
Exceptional Item in the statement of Profit & Loss.
Further as per agreement Mohali Project was assigned back to the
Company, by LWIN along with all rights, asset and liabilities
pertaining to the said business.
5). The Company has given Inter corporate deposits of Rs. 27.50 Crores
to ARSS and Rs. 2.50 Crores to Anil Construction P Ltd, during the year
2012-13 and also charged interest of Rs. 4.15 Crores thereon, which is
not received. No interest is charged on the said ICD''s during the year
2013-14
The matter is constantly pursued by the company and legal proceeding is
also initiated for recovery of the said amount. There is no need to
make any provision for the said amount as the Company is hope full for
the recovery in near future.
6). The Company is operating in a single segment only during the year
i.e. Civil Construction Contract.
7) Transaction with related parties (as certified by the management)
A. Holding Companies!
* Wels pun Corp Limited (up to 24- Jan 2014)
* Welspun Infratech Limited
* Wels pun Enterprise Ltd
B. Subsidiary Companies!
* MSK Projects (Himmatnagar Bypass) Private Limited
* MSK Projects (Kim Mandvi Corridor) Private Limited
* Anjar Road Private Limited
C. Integrated Joint Ventures!
* Dewas Bhopal Corridor Limited
a. Associate Concern!
* We spun Corp Limited (after 24- Jan 2014)
* Wels pun M ax Steel Limited
* Welspun Steel Limited
* Welspun India Limited
* Wels pun Retails Limited
* Wels pun Reality Private Limited
b. Key Management Personnel!
* Mr. B.K. Goenka- Chairman
* Mr. Sandeep Garg - (Managing Director)
* Mr. R.R. Mandawewala - Director
8). Based on the legal opinion taken by the Company, Subsidy of
Rs.82.87 Crores (P.Y. 82.87 Crores) received from Madhya Pradesh Rajya
Setu Nirman Nigam Limited, against the Build, Operate & Transfer
Project Expenditure is in the nature of promoter contribution and
accordingly treated as Capital Reserve in the books of accounts of the
Company.
9). Confirmations of certain parties for amounts due from them as per
accounts of the company are not obtained. Amount due from customers
include amounts due/with held on account of various claims. The claims
will be verified and necessary adjustments, if any, shall be made in
the year of settlement. Subject to this, company is confident of
recovering the dues and accordingly they have been classified as debt
considered good and therefore no provision is considered necessary,
there against.
10). Under the Micro, Small and Medium Enterprise Development Act, 2006
("MSMED Act") which came into force effective from 2nd October, 2006,
certain disclosures relating to amounts due to micro, small and medium
enterprises and remained unpaid after the appointed date etc. of
principal and interest amounts are required to be made. The Company is
in the process of compiling the relevant information. As the relevant
information is not yet readily available and / or not given or
confirmed by such enterprises, it is not possible to give required
information in the accounts. However, in view of the management, the
impact of interest, if any, which may subsequently become payable to
such enterprise in accordance with the provisions of the Act, would not
be material and the same, if any, would be disclosed in the year of
payment of interest.
In the absence of the necessary information with the Company relating
to the registration status of the suppliers under the Micro, Small and
Medium Enterprises Development Act'' 2006 , the information required
under the said Act could not be compiled and disclosed.
Mar 31, 2013
Note No. 1.1 Income from Transfer of Business
Pursuant to agreement for sale Dtd. 5th March 2013 entered in to
between the Company and Leighton Welspun Contractors Private Limited,
the Company has transferred the following indentified EPC division /
works of aggregate value of Rs. 556 Crores for the composite
consideration of Rs.1,15,03,48,500/ subject to the terms and condition
as contained in the said agreement.
Water Division:
EPC Works in relation to the transmission of water from Kaluji, head
works by laying of approximately 22 Km of 2200 Millimeter diameter pipe
line in Mohali, Punjab awarded by Greater Mohali Area Development
Authority as a going concern by way of slump sales along with all
rights, assets and liabilities pertaining to the said division.
EPC Works in relation to laying a pipe with a larger diameter in order
to increase the supply of water to the industrial units in Dewas,
Madhya Pradesh from 23 Million liters, per days to 30 million liter per
day emanating out of Dewas Water Supply projects of the Company.
EPC Works:
Chairai EPC Works EPC Works relation to the projects for four laning of
approximately 28.853 Km of the Chirai Anjar Road including the Anjar
bypass in the state of Gujarat, emanating out of the Build, Operate
Transfer project awarded by the Gujarat State Road Development
Corporation to the Company. As a consideration for the transfer of the
above business the Company has received 11503485 equity shares in the
Leighton Welspun Contractors Private Limited, of the face value of Rs.
10/ each fully paid up at a premium of Rs. 90/ per share agreegating
consideration of Rs. 1,15,03,48,500/ Surplus of Rs.1,07,92,49,055
arising in respect of the said transfer has been shown as ''income from
transfer of business'' under the head "Other Operating Revenue" in the
statement of profit & loss and value of 1,15,03,485 equity shares
received by the Company has been shown as Investment in shares under
the head "Non Current Investment".
2). Security Deposits and Retention money deducted from contract
receipt are subject to confirmation and adjustment, if any, on
finalization of account.
3). Build, Operate & Transfer Projects (BOT Projects)
The Company obtained a contract on Build, Operate and Transfer (BOT)
basis from the Madhya Pradesh State Industrial Development Corporation
(MPSIDC) for execution of Dewas Water Supply project.
In terms of contract the ownership of the said property vests in the
government immediately. Under the contract the Company is entitled to
collect the water supply charge during the concession period of 32
years including the period of construction or reconstruction.
In earlier year the Company finished the construction and obtained the
provisional certificate for commissioning and started operations.
However the Company could not achieve the optimal capacity and was
advised to complete the project to achieve the desired and specified
results by MPSIDC as also to expand the capacity and to under take
reconstruction and completion
Accordingly the Company has undertaken reconstruction and completion of
the project so as to achieve the desired capacity as also increase the
capacity for supply of water from BOT Project.
Having, regard to the accounting policies followed by the Company, the
entire expenditure incurred thereon (net of revenue for supply of
water) is shown as Build, Operate and Transfer project expenditure and
would be amortized / written off based on the projected toll revenue
for the balance toll period.
In the prior financial year(s) the Company had written off, operation
and maintenance expenses including interest. However due to
reconstruction and completion under taken, the Company has discontinued
that practice from the year 2011-12.
4). CHANGE OF ACCOUNTING POLICIES OF AMORTIZATION :
Hitherto up to 31st March 2012 expenditure incurred on Build, Operate &
Transfer projects, of Hoshanagabd  Harda  Khanadwa and Raisen
Rahatgarh Road Project, was amortized / written off after reducing the
"Cash Subsidy" received from Madhya Pradesh Rajya Setu Nirman Nigam
Limited from the total BOT cost on the basis of projected toll revenue
over the period of concession. Based on the legal opinion received by
the Company the Company has changed the policy and the said BOT
Expenditure is amortized / written off without deducting the Cash
Subsidy received from Madhya Pradesh Rajya Setu Nirman Nigam Limited
retrospectively,
Had there been no change in the method of amortization, the amount of
amortization would have been lower by Rs. 42,20,29,603/- (including
Rs. 5,96,44,959/-for the current year). Consequently Profit and
reserves and surplus would have been higher to that extent.
5). The Company is operating in a single segment only during the year
i.e. Civil Construction Contract.
6). Disclosure in accordance with Accounting Standard - 7 (Revised).
7). Disclosures relating to Employee Benefits  As per Revised AS-15:
During the year Company has recognized the following amount in the
financial statements.
a). DEFINED CONTRIBUTION PLAN
Contribution to Defined Contribution Plan recognized as Expense for the
year as under:
8). Transaction with related parties (as certified by the management)
A. Holding Companies:
- Welspun Corp Limited
- Welspun Infra-tech Limited
B. Subsidiary Companies:
- MSK Projects (Himmatnagar Bypass) Private Limited
- MSK Projects (Kim Mandvi Corridor) Private Limited
- Welspun BOT Projects Private Limited
- Anjar Road Private Limited
C. Integrated Joint Ventures:
- Bul MSK Infrastructure Private Limited
- Dewas Bhopal Corridor Private Limited
a. Associate Concern:
- Welspun Max Steel Limited
- Welspun Steel Limited
- Welspun India Limited
- Welspun Retails Limited
- Welspun Captive Power Generation Limited
- Rami Metal Limited
- Welspun Reality Private Limited
b. Key Management Personnel:
- Mr. B.K. Goenka- Chairman
- Mr. Sunil Shinde - Managing Director & CEO Â (Resigned on 19-05-2012)
- Mr. Sandeep Garg - (Managing Director & CEO w.e.f. 16-07-2012)
- Mr. R.R. Mandawewala  Director
9). Based on the experts'' s opinion taken by the Company, Subsidy of
Rs.82.87 Crores (P.Y. 82.87 Crores) received from Madhya Pradesh Rajya
Setu Nirman Nigam Limited, against the Build, Operate & Transfer
Project Expenditure is in the nature of promoter contribution and
accordingly treated as Capital Reserve in the books of accounts of the
Company.
10). Confirmations of certain parties for amounts due from them as per
accounts of the company are not obtained. Amount due from customers
include amounts due/with held on account of various claims. The claims
will be verified and necessary adjustments, if any, shall be made in
the year of settlement. Subject to this, company is confident of
recovering the dues and accordingly they have been classified as "debt
considered good" and therefore no provision is considered necessary,
there against.
11). Under the Micro, Small and Medium Enterprise Development Act, 2006
("MSMED Act") which came into force effective from 2nd October, 2006,
certain disclosures relating to amounts due to micro, small and medium
enterprises and remained unpaid after the appointed date etc. of
principal and interest amounts are required to be made. The Company is
in the process of compiling the relevant information. As the relevant
information is not yet readily available and / or not given or
confirmed by such enterprises, it is not possible to give required
information in the accounts. However, in view of the management, the
impact of interest, if any, which may subsequently become payable to
such enterprise in accordance with the provisions of the Act, would not
be material and the same, if any, would be disclosed in the year of
payment of interest.
In the absence of the necessary information with the Company relating
to the registration status of the suppliers under the Micro, Small and
Medium Enterprises Development Act'' 2006, the information required
under the said Act could not be compiled and disclosed.
12). In the opinion of the Directors, Current Assets, Loans and
Advances have value at which they are stated in the Balance Sheet, if
realized in the ordinary course of business. The provision for
depreciation and for all known liabilities is adequate and not in
excess of the amount reasonably necessary.
13). CIF Value of Import Rs. ÂNil-
Rs. ÂNil- 44). Expenditure in Foreign currency Rs. ÂNil- Rs. ÂNil- 45).
Earning in Foreign Exchange Rs. ÂNil- Rs. ÂNil- 46) Remittance in
Foreign Currency Rs. ÂNil- Rs. ÂNil- 47) The previous year figures are
regrouped / rearranged / recast wherever considered necessary.
Mar 31, 2012
1. CONTINGENT LIABILITIES & COMMITMENTS:
I. Contingent Liabilities Rs in Lacs
As At As At
31-03-2012 31-03-2011
a. Claims against the Company /
Disputed Liabilities not
acknowledged as debts 380.88 38.58
b. Guarantee issued by the
bankers on behalf of the Company 13580.34 17543.18
c. Guarantee given by the
Company to the bankers for the
facilities granted
1. Wholly owned subsidiaries 1131.78 1267.44
2. Joint Ventures 37231.88 38597.66
d. Letter of credit issued by
the Company's Bank on behalf of the
Company. 322.82 502.05
e. Income Tax demand disputed
by the Company - 1045.79
2. In completed contract work under contract work in progress at the
various sites is estimated by the management having regards unbilled
work, out standing running bill and expected recovery there of.
3. Security Deposits deducted from contract receipt and mobilization
advances received against contracts are subject to confirmation and
adjustment, if any, on finalization of account.
4. BUILD, OPERATE & TRANSFER (BOT) PROJECTS:
i) The Company obtained a contract on Build, Operate and Transfer (BOT)
basis from the Madhya Pradesh State Industrial Development Corporation
(MPSI DC) for execution of Dewas Water Supply project.
In terms of contract the ownership of the said property vests in the
government immediately. Under the contract the Company is entitled to
collect the water supply charge during the concession period of 32
years including the period of construction or reconstruction.
In earlier year the Company finished the construction and obtained the
provisional certificate for commissioning and started operations.
However the Company could not achieve the optimal capacity and was
advised to complete the project to achieve the desired and specified
results by MPSIDC as also to expand the capacity and to undertake
reconstruction and completion.
Accordingly the Company has undertaken reconstruction and completion of
the project so as to achieve the desired capacity as also increase the
capacity for supply of water from BOT Project.
Having, regard to the accounting policies followed by the Company, the
entire expenditure incurred thereon on (net of revenue for supply of
water) is shown as Build, Operate and Transfer project expenditure and
would be amortized / written off based on the projected toll revenue.
In the prior financial year(s) the Company had written off, operation
and maintenance expenses including interest. However due to
reconstruction and completion under taken, the Company has discontinued
that practice.
ii) The Company has obtained the contract on Build, Operate and
Transfer (BOT) basis from the Punjab Infrastructure Development Board
for execution of Jalandhar Bus Terminal project.
In terms of the contract the ownership of the said property vests in the
government immediately. Under the contract the Company is entitled to
collect Toll Charge and Rent on Shops during the concession period of 8
years 5 months and 2 days for Jalandhar Bus Terminal Project (including
the period of construction).
The Company has completed construction of the said project in the
earlier year. Having regard to the accounting policies followed by the
Company the entire expenditure incurred is treated as BOT Project
Expenditure and proportionate amount of Rs.241.38 Lacs (P.Y. Rs. 235.15
Lacs) has been written off during the year.
iii) The Company has obtained the contract on Build, Operate and
Transfer (BOT) basis from the Punjab Infrastructure Development Board
for execution of Ludhiana Bus Terminal Project.
In terms of the contract the ownership of the said property vests in the
government immediately. Under the contract the Company is entitled to
collect Toll Charge and Rent on Shops during the concession period of
10 years 3 months for Ludhiana Bus Terminal Project (including the
period of construction).
The Company has completed construction of the said project in the
earlier year. Having regard to the accounting policies followed by the
Company the entire expenditure incurred is treated as BOT Project
Expenditure and proportionate amount of Rs.179.22 Lacs (P.Y. Rs. 172.11
Lacs) has been written off during the year.
iv) The MSK Infrastructure & Toll Bridge Private Limited ('Transferor
Company1) had obtained the contract on Build, Operate and Transfer
(BOT) basis from Madhya Pradesh Road Development Authority for
construction of Hoshangabad-Harda-Khandwa Road Project. In Terms of the
Contract the Transferor Company was entitled to collect the toll during
the concession period of 5440 days (Including the period of the
construction). The Transferor Company was amalgamated with MSK Projects
(India) Limited pursuant to scheme of amalgamation as approved by the
Honorable High Court of Gujarat on 2nd November, 2006 with effect from
01.01.2005.
The Transferor Company had completed the construction of the above
project and was put open to traffic during the earlier year.
The Cost of the said project and right to collect the toll charges is
transferred to and vested in the Company as per the scheme of
amalgamation.
Having, regard to the accounting policies followed by the Company the
expenditure incurred thereon, is treated as BOT Project Expenditure and
proportionate amount of Rs. 240.15 Lacs (P.Y. 241.09 Lacs) has been
written off during the year after considering the Cash Subsidy
received/receivable from Madhya Pradesh State Road Development
Authority.
v) The MSK Highways Limited ("Transferor Company) had obtained the
contract on Build, Operate and Transfer (BOT Basis) from Madhya Pradesh
Road Development Authority for construction of Raisen-Rahatgarh. In
Terms of the Contract the Transferor Company entitled to collect the
toll during the concession period of 5440 days (Including the period of
the construction). The Transferor Company was amalgamated with MSK
Projects (India) Limited pursuant to scheme of amalgamation as approved
by the Honorable High Court of Gujarat on 2nd November, 2006 with
effectfrom 01.01.2005.
The Transferor Company had completed the construction of the above
project and was put open to traffic during the earlier year.
The Cost of the said project and right to collect the toll charges is
transferred to and vested in the Company as per the scheme of
amalgamation.
Having, regard to the accounting policies followed by the Company the
expenditure incurred thereon, is treated as BOT Project Expenditure and
proportionate amount of Rs.173.53 Lacs (P.Y. 158.81 Lacs) has been
written off during the year after considering the Cash Subsidy
received/receivable from Madhya Pradesh State Road
Development Authority.
5) The Company is operating in a single segment only during the year
i.e. Civil Construction Contract.
In respect of the construction contracts, the Company follows the
percentage of completion method for recognizing profit / loss but no
provision is made for contingencies in respect of contract in progress,
consistent with the practice of the Company. Accounting Standard (AS) 7
on "Accounting for Construction Contracts" issued by the institute of
Chartered Accountant of India requires that an appropriate allowance be
made for future unforeseen factors. In the opinion of the Company, such
a provision is not required and has no financial effect.
6) Disclosures relating to Employee Benefits - As per Revised AS-15:
During the year Company has recognized the following amount in the
financial statements
7) Transaction with related parties (as certified by the management)
A. Holding Companies:
Welspun Corp Limited Welspun Infratech Limited
B. Subsidiary Companies:
MSK Projects (Himmatnagar Bypass) Private Limited MSK Projects (Kim
Mandvi Corridor) Private Limited Welspun BOT Projects Private Limited
Anjar Road Private Limited
C. Integrated Joint Ventures:
BUL MSK Infrastructure Private Limited Dewas Bhopal Corridor Limited
a) Associate Concern:
Welspun Max Steel Limited
Welspun Steel Limited
Welspun India Limited
Remi Metal Limited
Welspun Retails Limited
Welspun Captive Power Generation Limited
Welspun Infra Projects Private Limited
b) Key Management Personnel:
B.K. Goenka - Chairman Sunil Shinde (Director)
8) Cash Subsidy of Rs.82.87 Crores (P.Y. 82.87 Crores) received from
Madhya Pradesh Rajya Setu Nirman Nigam Limited, against the Build,
Operate & Transfer Project Expenditure Cost, is not reduced from the
relevant project cost but the same is shown as "Capital Reserve" in the
Balance Sheet.
9) Confirmations of certain parties for amounts due from them as per
accounts of the company are not obtained. Amount due from customers
include amounts due/with held on account of various claims. The claims
will be verified and necessary adjustments, if any, shall be made in
the year of settlement. Subject to this, company is confident of
recovering the dues and accordingly they have been classified as "debt
considered good" and therefore no provision is considered necessary,
there against.
10) Under the Micro, Small and Medium Enterprise Development Act, 2006
("MSMED Act") which came into force effective from 2nd October, 2006,
certain disclosures relating to amounts due to micro, small and medium
enterprises and remained unpaid after the appointed date etc. of
principal and interest amounts are required to be made. The Company is
in the process of compiling the relevant information. As the relevant
information is not yet readily available and / or not given or
confirmed by such enterprises, it is not possible to give required
information in the accounts. However, in view of the management, the
impact of interest, if any, which may subsequently become payable to
such enterprise in accordance with the provisions of the Act, would not
be material and the same, if any, would be disclosed in the year of
payment of interest.
In the absence of the necessary information with the Company relating to
the registration status of the suppliers under the Micro, Small and
Medium Enterprises Development Act1 2006, the information required
under the said Act could not be compiled and disclosed.
11) In the opinion of the Directors, Current Assets, Loans and Advances
have value at which they are stated in the Balance Sheet, if realized
in the ordinary course of business. The provision for depreciation and
for all known liabilities is adequate and not in excess of the amount
reasonably necessary.
Mar 31, 2011
1. CONTINGENT LIABILITIES NOT PROVIDED FOR INRESPECT OF:
a. Guarantees issued by the Company's banker on behalf of the Company
amounting to Rs.17543.18 Lacs (P.Y.Rs. 9733.75 Lacs)
b. Guarantee given by the Company to the bankers for the facilities
granted to its wholly owned subsidiary companies MSK Projects
(Himmatnagar Bypass) Private Limited & MSK Projects (Kim Mandvi
Corridor) Private Limited. Amounting to Rs.1667 Lacs (P.Y. Rs. 1667
Lacs) Outstanding amount as on 31st March, 2011 Rs 1267.44 Lacs
(Previous Year 1345.75 Lacs) and to integrated joint venture Dewas
Bhopal Corridor Limited, amounting to Rs. 38500 Lacs (Previous year Rs.
34500 Lacs) Out standing amount as on 31st March 2011 Rs. 38597.66 Lacs
( P.Y Rs. 34831.35 Lacs)
c. Letter of credit issued by the Company's bank on behalf of the
Company Rs.502.05 Lacs (P.Y.Rs. 1353.72 Lacs)
d. Income Tax Demand of Rs.1045.79 Lacs (PreviousYear Rs. 282.40 Lacs)
disputed by the Company.
e. Civil suit filed against the Company Rs.38.58 Lacs (Previous year
Rs. 23.46 Lacs)
2. Incomplete Contract work under Contract Work In Progress at the
various sites is estimated by the management having regards to unbilled
work, outstanding running bill and expected recovery thereof.
3. Security Deposits deducted from contract receipt and mobilization
advances received against contracts are subject to confirmation and
adjustment, if any, on finalization of account.
4. BUILD, OPERATE & TRANSFER (BOT) PROJECTS:
i. The Company has obtained the contract on Build, Operate and
Transfer (BOT) basis from the Madhya Pradesh State Industrial
Development Corporation for execution of Dewas Water Supply project.
In terms of the contract the ownership of the said property vests in
the government immediately. Under the contract the Company is entitled
to collect Water supply charge during the concession period of 32 years
(including the period of construction).
The Company has completed construction of the said project inthe
earlier year. Having regard to the accounting policies followed by the
Company the entire expenditure incurred is treated as BOT Project
Expenditure and proportionate amount of Rs.49.43Lacs
(P.Y.Rs.388.36Lacs) has been written off during the year.
ii. The Company has obtained the contract on Build, Operate and
Transfer (BOT) basis from the Punjab Infrastructure Development Board
for execution of Jalandhar Bus Terminal project.
In terms of the contract the ownership of the said property vests in
the government immediately. Under the contract the Company is entitled
to collect Toll Charge and Rent on Shops during the concession period
of 8 years 5 months and 2days for Jalandhar Bus Terminal Project
(includingthe period of construction).
The Company has completed construction of the said project inthe
earlier year. Having regard to the accounting policies followed by the
Company the entire expenditure incurred is treated as BOT Project
Expenditure and proportionate amount of Rs.235.15 Lacs
(P.Y.Rs.320.35Lacs) has been written off during the year.
iii. The Company has obtained the contract on Build, Operate and
Transfer (BOT) basis from the Punjab Infrastructure Development Board
for execution of Ludhiana Bus Terminal Project.
In terms of the contract the ownership of the said property vests in
the government immediately. Under the contract the Company is entitled
to collect Toll Charge and Rent on Shops during the concession period
of 10 years 3 months for Ludhiana Bus Terminal Project (including the
period of construction).
The Company has completed construction of the said project inthe
earlier year. Having regard to the accounting policies followed by the
Company the entire expenditure incurred is treated as BOT Project
Expenditure and proportionate amount of Rs.172.11 Lacs (P.Y.Rs.256.05
Lacs) has been written off during the year.
iv. The MSK Infrastructure & Toll Bridge Private Limited ('Transferor
Company') had obtained the contract on Build,
Operate and Transfer (BOT) basis from Madhya Pradesh Road Development
Authority for construction of Hoshangabad à Harda à Khandwa Road
Project. In Terms of the Contract the Transfer or Company was entitled
to collect the toll during the concession period of 5440 days
(Including the period of the construction). The Transfer or Company was
amalgamated with MSK Projects (India) Limited pursuant to scheme of a
malgamation as approved by the Honorable HighCourt of Gujarat on 2nd
November, 2006 with effect from 01.01.2005.
The Transferor Company had completed the construction of the above
project and was put open to traffic during the earlier year.
The Cost of the said project and right to collect the toll charges is
transferred to and vested in the Company as pertheschemeofamalgamation.
Having, regard to the accounting policies followed by the Company the
expenditure incurred thereon, is treated as BOT Project Expenditure and
proportionate amount of Rs. 241.09 Lacs (P.Y. 356.84 Lacs) has been
written off during the yearafter considering the Cash Subsidy
received/receivable from Madhya Pradesh State Road Development
Authority.
v. The MSK Highways Limited ("Transferor Company) had obtained the
contract on Build, Operate and Transfer
(BOT Basis) from Madhya Pradesh Road Development Authority for
construction of RaisenÃRahatgarh. In Terms of the Contract the
Transferor Company entitled to collect the toll during the concession
period of 5440 days (Including the period of the construction).The
Transferor Company was amalgamated with MSK Projects (India) Limited
pursuant to scheme of amalgamation as approved by the Honorable High
Court of Gujarat on 2ndNovember, 2006 with effectfrom 01.01.2005.
The Transferor Company had completed the construction of the above
project and was put open to traffic duringtheearlier year.
The Cost of the said project and right to collect the toll charges is
transferred to and vested in the Company as per the scheme of
amalgamation.
Having, regard to the accounting policies followed by the Company the
expenditure incurred thereon, is treated as BOT Project Expenditure and
proportionate amount of Rs.158.81 Lacs (P.Y. 289.08 Lacs) has been
written off during the yearafter considering the Cash Subsidy
received/receivable from Madhya Pradesh State Road Development
Authority.
5-A CHANGE OF POLICY OF AMORTISATION:
Hither to up to 31st March 2010 expenditure incurred on above i to v,
Build, Operate & Transfer (BOT) Projects was amortized / written off
over the period of concession. The Company has changed the policy and
the said BOT expenditure is amortized/written off on the basis of
projected toll revenue over the period of concession.
Had there been on change in the method of amortization the amount of
the amortization for the year would have been higher by Rs.688.30 Lacs.
Consequently loss for the year would have been higher and Reserves and
Surplus would have been lower to that extent.
As the policy of amortization is changed prospectively no effect of
changeup to 31st March 2010 is given to the accounts.
6. The Company is operating in a single segment only during the year
i.e. Civil Construction Contract.
7. During the year, the Company has accounted for deferred tax in
accordance with the Accounting Standard 22Ã " Accounting for Taxes on
Income " issued by the Institute of Chartered Accountants of India.
In respect of the construction contracts, the Company follows the
percentage of completion method for recognizing profit/loss but no
provisionis made for contingencies in respect of contract in progress,
consistent with the practice of the Company. Accounting Standard (AS) 7
on " Accounting for Construction Contracts" issued by the institute of
Chartered Accountant of India requires that an appropriate allowance be
made for future unfore seen factors. In the opinion of the Company,
such a provision is not required and has no financial effect.
8. Disclosures relating to Employee Benefits à As per Revised AS-15:
During the year Company has recognized the following amount in the
financial statements
9. Transaction with related parties(as certified by the management)
A. Holding Companies:
- Welspun Corp Limited
- Welspun Infratech Limited
B. Subsidiary Companies:
- MSK Projects (Himmatnagar Bypass) Private Limited
- MSK Projects (Kim Mandvi Corridor) Private Limited
- Welspun Energy Maharashtra Private Limited
C. Integrated JointVentures:
- Bul MSK Infrastructure Private Limited
- Dewas Bhopal Corridor Limited
D. Associate Concern:
- Welspun Maxsteel Limited
- Welspun Steel Limited
- Welspun India Limited
- Welspun Retail Limited
- Welspun Captive Power Generation Limited
E. KeyManagementPersonnel:
- B.K. Goenka- Chairman
- R.R. Mandawewala
- M.L. Mittal
- Asim Chakraborthy
- Ashok M Khurana -Director
10. Cash Subsidy of Rs.82.87 Crores (P.Y. 82.87 Crores) received from
Madhya Pradesh Rajya Setu Nirman Nigam Limited, against the Build,
Operate & Transfer Project Expenditure Cost, is not reduced from the
relevant project cost but the same is shown as " Capital Reserve " in
the Balance Sheet.
11. Confirmations ofcertain parties for amounts due from them as per
accounts ofthe company are not obtained. Amount due from customers
include amounts due/with held on account of various claims.The claims
will be verified and necessary adjustments, ifany, shall be made in the
yearof settlement. Subject to this, company is confident of recovering
the dues and accordingly they have been classified as "debt considered
good" and therefore no provision is considered necessary, there
against.
12. Under the Micro, Small and Medium Enterprise DevelopmentAct, 2006
(" MSMED Act ")which came into force effective from 2nd October, 2006,
certain disclosures relating to amounts due to micro, small and medium
enterprises and remained unpaid after the appointed date etc. of
principal and interest amounts are required to be made.The Company is
in the process of compiling the relevant information. As the relevant
information is not yet readily available and / or not given or
confirmed by such enterprises, it is not possible to give required
information in the accounts. However, in view of the management, the
impact of interest, if any, which may subsequently become payable to
such enterprise in accordance with the provisions of the Act, would not
be material and the same,ifany, would be disclosed in the year of
payment of interest.
In the absence of the necessary information with the Company relating
to the registration status of the suppliers under the Micro, Small and
Medium Enterprises Development Act' 2006, the information required
under the said Act could not be compiled and disclosed.
13. In the opinion of the Directors, Current Assets, Loans and
Advances have value at which they are stated in the
Balance Sheet, if realized in the ordinary course of business.The
provision for depreciation and for all known liabilities is adequate
and not in excess of the amount reasonably necessary.
14. Previous year's figures have been regrouped, rearranged and
reclassified wherever necessary.
15. Additional information as required by Para 3,4 and 4-Ato4-Dof Part
à II of Schedule VI to the Companies Act, 1956.
a. TURNOVER
1. Civil Work/Supply Rs. 2,08,05,55,984 (Rs 3,99,22,98,353)
2. Toll Collection Rs. 27,86,67,496 (Rs.29,84,90,230)
Mar 31, 2010
1) CONTINGENT LIABILITIES MOT PROVIDED FOR IN RESPECT OF:
a) Guarantees issued by the Companys banker on behalf of the Company
amounting to Rs.9733.75Lacs (P. Y. Rs. 10650.64 Lacs)
b) Guarantee given by the Company to the bankers for the facilities
granted to its wholly owned subsidiary companies MSK PROJECTS
(HIMMATNAGAR BYPASS) PRIVATE LIMITED & MSK PROJECTS (KIM MANDVI
CORRIDOR) PRIVATE LIMITED, amounting to Rs. 1667 Lacs (P.Y. Rs. 1567
Lacs) Outstanding amount as on 31st March, 2010 Rs 1345.75 Lacs
(Previous Year 1086.70 Lacs) and to integrated joint venture Dewas
Bhopal Corridor Limited, amounting to Rs. 34500 Lacs (Previous year Rs.
34500 Lacs) Out standing amount as on 31st March 2010 Rs.34831.35 Lacs
(P.Y Rs. 25514.75 Lacs)
c) Letter of credit issued by the Companys bank on behalf of the
Company Rs.1353.72 Lacs (P.Y.Rs. 837.05 Lacs)
d) Income Tax Demand of Rs.282.40 Lacs (Previous Year Rs. 155.41 Lacs)
disputed by the company.
e) Civil suit filed against the Company Rs. 23.46 Lacs
2) Incomplete Contract work under Contract Work In Progress at the
various sites is estimated by the management having regards to unbilled
work, outstanding running bill and expected recovery thereof.
4) Security Deposits deducted from contract receipt and mobilization
advances received against contracts are subject to confirmation and
adjustment, if any, on finalization of account.
3) The Company has obtained the contract on Build, Operate and Transfer
(BOT) basis from the Madhya Pradesh State Industrial Development
Corporation for execution of Dewas Water Supply project.
In terms of the contract the ownership of the said property vests in
the government immediately. Under the contract the Company is entitled
to collect Water supply charge during the concession period of 32 years
(including the period of construction).
The Company has completed construction of the said project in the
earlier year. Having regard to the accounting policies followed by the
Company the entire expenditure incurred is treated as BOT Project
Expenditure and proportionate amount of Rs.388.36 Lacs (P.Y. Rs. 177.20
Lacs) has been written off during the year.
4) The Company has obtained the contract on Build, Operate and Transfer
(BOT) basis from the Punjab Infrastructure Development Board for
execution of Jalandhar Bus Terminal project.
In terms of the contract the ownership of the said property vests in
the government immediately. Under the contract the Company is entitled
to collect Toll Charge and Rent on Shops during the concession period
of 8 years 5 months and 2 daysforJalandhar Bus Terminal Project
(including the period of construction).
The Company has completed construction of the said project in the
earlier year. Having regard to the accounting policies followed by the
Company the entire expenditure incurred is treated as BOT Project
Expenditure and proportionate amount of Rs.320.35 Lacs (P.Y. Rs. 320.35
Lacs) has been written off during the year.
5) The Company has obtained the contract on Build, Operate and Transfer
(BOT) basis from the Punjab Infrastructure Development Board for
execution of Ludhiana BusTerminal Project.
In terms of the contract the ownership of the said property vests in
the government immediately. Under the contract the Company is entitled
to collect Toll Charge and Rent on Shops during the concession period
of 10 years 3 monthsforLudhiana BusTerminal Project(includingthe period
ofconstruction).
The Company has completed construction of the said project in the
earlier year. Having regard to the accounting policies followed by the
Company the entire expenditure incurred is treated as BOT Project
Expenditure and proportionate amount of Rs.256.05 Lacs (P.Y. Rs. 256.05
Lacs) has been written off during the year.
6) MSK Infrastructure & Toll Bridge Private Limited (Transferor
Company) had obtained the contract on Build, Operate and Transfer
(BOT) basis from Madhya Pradesh Road Development Authority for
construction of Hoshangabad-Harda-Khandwa Road Project. In Terms of the
Contract the Transferor Company was entitled to collectthetoll during
the concession period of5440days (Including the periodofthe
construction). The Transferor Company was amalgamated with MSK Projects
(India) Limited pursuant to scheme of amalgamation as approved bythe
Honorable High Court of Gujaraton 2nd November, 2006 with effectfrom
01.01.2005.
The Transferor Company had completed the construction of the above
project and was put open to traffic during the earlieryear.
The Cost of the said project and right to collect the toll charges is
transferred to and vested in the Company as per the scheme of
amalgamation.
Having, regard to the accounting policies followed by the Company the
expenditure incurred thereon, is treated as BOT Project Expenditure and
proportionate amount of Rs. 356.84 Lacs (P.Y. 355.84 Lacs) has been
written off during the year after considering the Cash Subsidy
received/receivable from Madhya Pradesh State Road Development
Authority.
7)MSK Highways Limited ("Transferor Company) had obtained the contract
on Build, Operate and Transfer (BOT Basis) from Madhya Pradesh Road
Development Authority for construction of Raisen-Rahatgarh. In Terms of
the Contract the Transferor Company entitled to collect the toll during
the concession period of 5440 days (Including the period of the
construction). The Transferor Company was amalgamated with MSK Projects
(India) Limited pursuant to scheme of amalgamation as approved by the
Honorable High Court of Gujarat on 2nd November, 2006 with effectfrom
01.01.2005.
The Transferor Company had completed the construction of the above
project and was put open to traffic during theearlieryear.
The Cost ofthe said project and right to collect the toll charges is
transferred to and vested in the Company as per the scheme of
amalgamation.
Having, regard to the accounting policies followed by the Company the
expenditure incurred thereon, is treated as BOT Project Expenditure and
proportionate amount of Rs.289.08 Lacs (P.Y. 281.01 Lacs) has been
written off during the year after considering the Cash Subsidy
received/receivable from Madhya Pradesh State Road Development
Authority.
8) The Company is operating in a single segment only during the year
i.e. Civil Construction Contract.
9) Disclosures relating to Employee Benefits - As per Revised AS-15:
During the year Company has recognized the following amountinthe
financial statements
10) Transaction with related parties (as certified by the management)
A. Subsidiary Companies:
- Super Infrastructure & Toll Bridge Private Limited
- MSK Projects (Himmatnagar Bypass) Private Limited
- MSK Projects (Kirn Mandvi Corridor) Private Limited
B. Integrated Joint Ventures:
- Bui MSK Infrastructure Private Limited
- Dewas Bhopal Corridor Limited
C. Associate Concern:
- ManshaTextiles Private Limited
D. Key Management Personnel:
- Ashok M Khurana-Chairman
- AmitA Khurana-Managing Director
- ManjuA Khurana-Director
- C. Mohanan-Director
E. Relativeto Key Management
- Rashika AKhurana
- BindiyaAKhurana
- NeelakshiAKhurana
11) Cash Subsidy of Rs.82.87 Crores (P.Y. 83.80 Crores) received from
Madhya Pradesh Rajya Setu Nirman Nigam Limited, against the B.O.T.
Project cost, is not reduced from the relevant project cost but the
same is shown as "Capital Reserve" in the Balance Sheet.
12) Confirmations of certain parties for amounts due from them as per
accounts of the company are not obtained. Amount due from customers
include amounts due/with held on account of various claims. The claims
will be verified and necessary adjustments, if any, shall be made in
the year of settlement. Subject to this, company is confident of
recovering the dues and accordingly they have been classified as "debt
considered good" and therefore no provision is consider necessary,
there against.
13) Under the Micro, Small and Medium Enterprise Development Act, 2006
("MSMEDAct") which came into force effective from 2nd October, 2006,
certain disclosures relating to amounts due to micro, small and medium
enterprises and remained unpaid after the appointed date etc. of
principal and interest amounts are required to be made. The Company is
in the process of compiling the relevant information. As the relevant
information is not yet readily available and / or not given or
confirmed by such enterprises, it is not possible to give required
information in the accounts. However, in view of the management, the
impact of interest, if any, which may subsequently become payable to
such enterprise in accordance with the provisions of the Act, would not
be material and the same, ifany, would be disclosed intheyearof
paymentofinterest.
In the absence of the necessary information with the Company relating
to the registration status of the suppliers under the Micro, Small and
Medium Enterprises Development Act 2006, the information required
under the said Act could not be compiled and disclosed.
14) In the opinion of the Directors, Current Assets, Loans and Advances
have value at which they are stated in the Balance Sheet, if realized
in the ordinary course of business. The provision for depreciation and
for all known liabilities is adequate and not in excess of the amount
reasonably necessary.
15) Previous years figures have been regrouped, rearranged and
reclassified wherever necessary.
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