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Balasore Alloys

BSE: 513142|NSE: ISPATALLOY|ISIN: INE135A01024|SECTOR: Steel - Medium & Small
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Mar 16
Notes to Accounts Year End : Mar '18

1. General Information

Balasore Alloys Limited (the Company) is a public company domiciled in India and incorporated in 1984 under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange and The Calcutta Stock Exchange Limited. The Company have its registered office and manufacturing facility at Balasore and Sukinda, Odisha

The Company is primarily engaged in extraction of Chrome Ore from its captive mines located in Odisha and manufacturing and selling of Ferro Chrome of various grades.

(b) Terms/ Rights Attached to Equity Shares

(i) The company has only one class of equity shares having par value of Rs. 5 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in indian rupees. The dividend proposed by the board of directors is subject to the approval of the shareholders in the ensuing annual general meeting except in case of interim dividend.

(ii) In the event of liquidation of the company, the equity shareholders will be entitled to receive remaining assets of the company. The distribution will be in proportion to the number of equity shares held by the shareholders.

2.1 Nature and Purpose of Reserve

1. Capital Reserve

Capital Reserve is created byway of capital subsidy received from Odisha State Financial Corporation and due to forfeiture of application money received on warrants and partly paid up shares. The reserve will be utilised in accordance with the provisions of the Companies Act ,2013.

2. Securities Premium Account

Securities Premium Account represents the premium received on issue of equity shares. In accordance with the provisions of Section 52 of the Companies Act, 2013 the securities premium account can only be utilised for the purpose of issuing bonus shares , repurchasing the Company''s shares , redemption of preference shares and debentures, and offsetting direct issue costs and discount allowed for the issue of shares or debentures.

3. General Reserve

General Reserve forms part of retained earnings and is permitted to be distributed to shareholders as part of dividend.

4. Debenture Redemption Reserve

The Companies Act requires companies that issue debentures to create a debenture redemption reserve from annual profits until such debentures are redeemed. Companies are required to maintain 25% as a reserve of outstanding redeemable debentures. The amounts credited to the debenture redemption reserve may not be utilised except to redeem debentures.

2.2 Money Received Against Equity Share Warrants

For the year ended 31st March, 2017

Pursuant to the consent of Board of Directors of the Company on 15th March, 2016, the special resolution passed by the members of the Company on 26th September, 2016 and other necessary approvals as required, the Committee for preferential issue of Warrants of the Board of Directors of the Company at its meeting held on 3rd November, 2016 approved the issue and allotment of 2,30,00,000 number of warrants, at the issue price of Rs. 21.50 per warrants, upon receipt of 25% of total consideration of Rs. 1,236.25 lacs, to promoter entities of the Company. Each warrants is convertible into equivalent number of equity shares of Rs. 51- each at premium of Rs. 16.50 per share, which shall be allotted within 18 months from the date of allotment of the said convertible warrants, in one or more tranches. Accordingly the Company has received Rs. 1,244.56 lacs as stated above. During the year on 31st March, 2017 the Company has allotted 1,00,00,000 equity shares of face value of Rs. 5/- each to the warrant holders on exercise of the conversion right and receipt of balance payment.

For the year ended 31st March, 2018

During the year on 30th March, 2018 the Company has allotted 44,35,000 equity shares of face value of Rs. 5/- each to the warrant holders on exercise of the conversion right and receipt of balance payment. Also, Subsequent to the year end , due to non-receipt of balance payment pertaining to 88,65,000 warrants , on 15th May, 2018 the company has forfeited the money received against equity share warrants.

2.3 Security Terms

(i) Deferred Payment Credits

Deferred Payment Credits are Secured Against Hypothecation of Assets Purchased Against Such Loans.

(ii) 11% Redeemable Non-Convertible Debentures

Redeemable Non-Convertible Debentures Referred Above are Secured by Way of Residual Charge on Assets (both movable and non-movable) of the Company and personal guarantee of Mr. Pramod Mittal & Mrs. Vartika Mittal Goenka

(iii) Loans from Body Corporate - Secured against part of promoter''s shareholding.

15.1. For the year ended 31st March, 2018 -

Working capital loan from banks referred above are secured by first charge over current assets and fixed assets of the Company. The loans are also secured by pledge of a part of shareholding of the promoter group [including shares held by Mr Pramod Mittal ((ceased to be director w.e.f 22th August, 2017) and Mr V K Mittal (ceased to be director w.e.f 28th July, 2010). The above loans are further guaranteed by personal guarantee of Mr Pramod Mittal, Mrs Vartika Mittal Goenka and corporate guarantee of Shakti Chrome Limited, Ispat Minerals Limited & Balasore Energy Limited. All the mortgages and charges created in favour of the Banks for Working Capital loans rank pari passu interse.

For the year ended 31st March, 2017 -

Working capital loan from banks referred above are secured by first charge over current assets and fixed assets of the Company. The loans are also secured by pledge of a part of shareholding of the promoter group [including shares held by Mr Pramod Mittal (a director) and Mr V K Mittal (ceased to be director w.e.f 28th July, 2010)] . The above loans are further guaranteed by personal guarantee of Mr Pramod Mittal ,Mrs Vartika Mittal Goenka and corporate guarantee of Shakti Chrome Limited, Ispat Minerals Limited & Balasore Energy Limited. All the mortgages and charges created in favour of the Banks for Working Capital loans rank pari passu interse.

For the year ended IstApril, 2016-

Working capital loan from banks referred above are secured by first charge over current assets and fixed assets of the Company. The loans are also secured by pledge of a part of shareholding of the promoter group [including shares held by Mr Pramod Mittal (a director) and Mr V K Mittal (ceased to be director w.e.f 28th July, 2010)] . The above loans are further guaranteed by personal guarantee of Mr Pramod Mittal, Mr V K Mittal(for part of secured loan) ,Mrs Vartika Mittal Goenka (for part of secured loan) and corporate guarantee of Shakti Chrome Limited, Ispat Minerals Limited & Balasore Energy Limited. All the mortgages and charges created infavour of the Banks for Working Capital loans rankpari passu interse.

17.1. These does not include any amounts due and outstanding to be credited to Investor Education and Protection Fund

17.2. It includes Rs. 2,104.11 lacs (31st March, 2017- Rs. 1,103.27 lacs, Ist April, 2016- Rs. 848.80 lacs) payables against arrangement for procurement of raw materials.

3- Note :

a) CSR amount required to be spent as per section 135 of Companies Act, 2013, read with schedule-VII thereof by the company during the year is Rs. 146.08 lacs (Previous year Rs. 99.21 lacs)

b) Expenditure related to Corporate Social Responsibility Expenses is Rs. 108.46 lacs(Previous year Rs. 58.33 lacs)

4. Earnings Per Share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of Equity shares outstanding during the year.

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

(B) Defined Benefit Plan Gratuity

In accordance with the provisions of the Payment of Gratuity Act, 1972, the Company has a defined benefit plan which provides for gratuity payments. The plan provides a lump sum gratuity payment to eligible employees at retirement or termination of their employment. The amounts are based on the respective employee''s last drawn salary and the years of employment with the Company.

Liabilities in respect of the gratuity plan are determined by an actuarial valuation, based upon which the Company makes annual contributions to the Group Gratuity cum Life Assurance Schemes administered by the LIC of India, a funded defined benefit plan for qualifying employees.

The most recent actuarial valuation of the defined benefit obligation along with the fair valuation of the plan assets in relation to the gratuity scheme was carried out as at 31st March, 2018. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

Based on the actuarial valuation obtained in this respect, the following table sets out the details of the employee benefit obligation and the plan assets as at balance sheet date:

The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

These plans typically expose the Company to actuarial risks such as: Investment Risk, Interest Risk, Longevity Risk and Salary Risk.

Investment Risk - The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.

Interest Risk - Adecrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan debt investments.

Longevity Risk-The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Salary Risk - The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.

5. Operating leases

The Company''s leasing arrangements are generally from 1 month to 72 months. In respect of above arrangement, lease rentals payable are recognised in the statement of profit and loss for the year and included under Rent and Hire charges

The company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

Significant management judgement is required in determining provision for income tax, deferred income tax assets and liabilities and recoverability of deferred income tax assets. The recoverability of deferred income tax assets is based on estimates of taxable income in which the relevant entity operates and the period over which deferred income tax assets will be recovered.

6. Financial instruments - Fair values and risk management

A. Accounting classification and fair values

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

B. Measurement of fair values

Ind AS 113, ''Fair Value Measurement - Disclosure'' requires classification of the valuation method of financial instruments measured at fair value in the Balance Sheet, using a three level fair-value-hierarchy (which reflects the significance of inputs used in the measurements). The hierarchy gives the highest priority to un-adjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to un-observable inputs (Level 3 measurements). The three levels of the fair-value-hierarchy under Ind AS 113 are described below:

Level 1: Level 1 heirarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3. This is the case for unlisted equity securities included in Level 3.

Following methods and assumptions are used to estimate the fair values:

a) Fair value of cash and short-term deposits, trade and other short-term receivables, trade payables, other current liabilities and short-term borrowings carried at amortised cost is not materially different from its carrying cost largely due to short term maturities of these financial assets and liabilities.

b) Fair value of the non-current borrowing items fall within Level 2 of the fair value hierarchy and is calculated on the basis of discounted future cash flows.

Transfers between Levels

There have been no transfers between Levels during the reporting periods.

The following tables show the valuation techniques used in measuring Level 3 fair values, as well as the significant unobservable inputs used.

Sensitivity analysis

Adjusted NAV method is used for the purpose of calculating fair value of unquoted equity shares. In the adjusted NAV methodology there are no significant unobservable inputs used, hence the sensitivity analysis would not be applicable.

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- Credit risk;

- Liquidity risk ; and

- Market risk

i. Counterparty and Concentration of Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults.

The Company is exposed to credit risk for trade receivables, investments, loans, other financial assets, and derivative financial instruments.

Credit risk on receivables is limited as almost all credit sales are against letters of credit.

Moreover, given the diverse nature of the Company''s businesses trade receivables are spread over a number of customers with no significant concentration of credit risk. The history of trade receivables shows a negligible provision for bad and doubtful debts. Therefore, the Company does not expect any material risk on account of non-performance by any of the Company''s counterparties.

The Company has clearly defined policies to mitigate counterparty risks. For short-term investments, counterparty limits are in place to limit the amount of credit exposure to any one counterparty. This, therefore, results in diversification of credit risk for our mutual fund investments. For derivative and financial instruments, the Company attempts to limit the credit risk by only dealing with reputable banks and financial institutions.

The carrying value of the financial assets represents the maximum credit exposure. The Company''s maximum exposure to credit risk is Rs. 17,007.04 lacs and Rs. 16,886.77 lacs as at 31st March, 2018 and 31st March, 2017 respectively.

None of the Company''s cash equivalents, including time deposits with banks, are past due or impaired. Regarding trade receivables, loans and other financial assets (both current and non-current), there were no indications as at 31st March, 2018, that defaults in payment obligations will occur.

Of the year end trade receivable balance the following, though overdue, are expected to be realised in the normal course of business and hence, are not considered impaired as at 31st March, 2018 and 31st March, 2017:

Receivables are deemed to be past due or impaired with reference to the Company''s normal terms and conditions of business. These terms and conditions are determined on a case to case basis with reference to the customer''s credit quality and prevailing market conditions. Receivables that are classified as ''past due'' in the above tables are those that have not been settled within the terms and conditions that have been agreed with that customer. The Company based on past experience does not expect any material loss on its receivables and hence no provision is deemed necessary on account of ECL.

The credit quality of the Company''s customers is monitored on an ongoing basis and assessed for impairment where indicators of such impairment exist. The Company uses simplified approach for impairment of financial assets. If credit risk has not increased significantly, 12-month expected credit loss is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime expected credit loss is used. The solvency of the debtor and their ability to repay the receivable is considered in assessing receivables for impairment. Where receivables have been impaired, the Company actively seeks to recover the amounts in question and enforce compliance with credit terms.

ii. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

iii. 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. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. We are exposed to market risk primarily related to foreign exchange rate risk and interest rate risk.Thus, our exposure to market risk is a function of borrowing activities, and revenue generating and operating activities in foreign currency. The objective of market risk management is to avoid excessive exposure in our foreign currency revenues and costs.

Currency risk

The Company is exposed to currency risk on account of its Trade receivables, Trade & other payables in foreign currency. The functional currency of the Company is Indian Rupee. The Company uses forward exchange contracts and options to hedge its currency risk, most with a maturity of less than one year from the reporting date.

Sensitivity analysis

A reasonably possible strengthening (weakening) of the Indian Rupee against the foreign currencies at 31st March would have affected the measurement of financial instruments denominated in foreign currencies and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing borowings because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing borrowings will fluctuate because of fluctuations in the interest rates.

Fair value sensitivity analysis for fixed-rate instruments

The company''s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flow will fluctuate because of a change in market interest rates.

Cash flow sensitivity analysis for variable-rate instruments

A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.

7. Capital Management

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders.

The Company monitors capital using a ratio of ''adjusted net debt'' to ''adjusted equity''. For this purpose, adjusted net debt is defined as total liabilities, comprising interest-bearing loans and borrowings, less cash and cash equivalents. Adjusted equity comprises all components of equity other than amounts accumulated in the hedging reserve (if any)

8. Segment Reporting

A. General Information

Factors used to identify the entity''s reportable segments including the basis of organisation

For management purposes the Company has only one reportable segment as follows:

- Manufacturing/Minning of Ferro Alloys

The Executive Committee of the Company acts as the Chief Operating Decision Maker (CODM).

The CODM evaluates the Company''s performance and allocates resources based on an analysis of various performance indicators by operating segments.

C. Information about major customers

Revenue from major customers of the Company was Rs. 22,476.11 lacs is 18.29% of total sales (Rs. 22,999.97 lacs is 22.08 %of total sales)

D. Broad Category of Sales

Company deals mainly in Ferro Chrome.

9 The Income-Tax Assessments of the Company have been completed up to Assessment Year 2014-15. The disputed demand up to the said assessment years is Rs. 400.34 lacs. Based on the decisions of the Appellate authorities and the interpretations of other relevant provisions, the demand raised is likely to be either deleted or substantially reduced and accordingly no provision is considered necessary.

10 A revised demand notice dated 11th April, 2018 has been issued by Deputy Director of Mines, Jajpur Road, Odisha amounting to Rs. 32,803.28 Lacs for the production in excess of the approved limit under, environment clearance during the period 2001-02 to 2007-08. The demand notices has been issued under Section 21(5) of the Mines & Minerals (Development and Regulations) Act,1957 (MMDRAct).

The company filed a Revision Application before the Mines Tribunal, Delhi on 2nd May, 2018 in regard to the above revised demand notice praying for stay of the operation and/or execution of the notice and not to take any coercive action as the demand is without any basis and there is no legislative and/or statutory sanction for the same as the Section 21(5) of the MMDRAct is applicable only in respect of unauthorised raising and disposal of minerals, which is not the case of the Company.

The Revision application was heared on 10th May, 2018 and the Tribunal passed an order Staying the Demand Notice.

Based on the opinion of external legal counsel, the company believes that, the demand is legally unjustifiable and does not expect any liability in above matter.

11 The State Trading Corporation of India on 13th May, 2015 through the Ministry of Commerce and Industry has recorded a statement on the floor of the Rajya Sabha that a sum of Rs. 5,855 Lacs is recoverable from the Company as on 31st March, 2015. The alleged demand is very much disputed by the Company and is the subject matter for ascertainment by the Hon''ble Arbitral Tribunal consisting of two Hon''ble Retired Judges of Hon''ble Supreme Court and one Hon''ble Retired Judge of Hon''ble Calcutta High Court. Pursuant to order dated 23rd March, 2017 by Hon''ble Arbitral Tribunal which is passed without prejudice to the rights and contentions of the parties and subject to further adjustment about the final amount to be paid , if any, the Company by way of abundant caution and prudence, has accounted for such alleged diputed amount without admitting the same in the financial year 2016-17. Pending final adjudication the company has paid Rs. 5,855 lacs towards such diputed dues as at 31st March, 2018

12 The Enforcement Directorate (ED) on 15th December, 2017 had passed a Provisional Attachment Order against M/s Balasore Alloys Ltd. (BAL) for the value ofRs. 24,489.07 lacs on the alleged ground that Sri Pramod Kumar Mittal and Global Steel Holdings Ltd. (GSHL) allegedly holds 30.35% of the shares of BAL through various Indian / Foreign promoter and investment companies.

On 5th of February, 2018 the Adjudicating Authority issued a show cause to BAL as to why the aforesaid Provisional Attachment Order should not be confirmed.

The Company filed an Appeal before the Appellate Tribunal on 17th May, 2018 challenging the said Show Cause Notice dated 5th February, 2018.

The Hon’ble Appellate Tribunal after hearing the matter on merits on 23rd May, 2018 delivered an Order/Judgment inter-alia recording that BAL is an independent publicly quoted company and is not an accused and there is no complaint against BAL under the Prevention of Money Laundering Act, 2002 (PMLA) and the alleged proceedings of Provisional Attachment are contrary to the earlier Order of the Hon’ble Tribunal. It also recorded that BAL is not involved in any schedule offence under the PMLA and inter-alia duly recorded that the purported notice under Section 8(1) of the PMLA has been wrongly issued to BAL and that the Hon’bleAppellate Tribunal had fixed the Appeal for final hearing on 17th of July, 2018 and directed the Adjudicating Authority to adjourn the proceedings before it until thereafter.

The Directors would like to inform that, the company has no business relationship with GSHL and Global Steel Phillippines Inc. (GSPI) in any manner. Further, company had nothing to do with the alleged transactions between M/s State Trading Corporations (STC), GSHL & GSPI which is the basis of the cause of action of ED.

The action on the part of ED in relation to the Company is arbitrary and contrary to the well-established principle of the law as pronounced by Hon’ble Supreme Court as the Company is a separate legal entity independent from its shareholders as advised by the legal counsels and therefore, the company believe that, the above proceedings will not affect its operations of the company and would not impact it as a going concern. The purported Order of ED involving BAL is wholly without any jurisdiction, illegal and void abinitio.

13 North Eastern Electricity Supply Company of Orissa Limited (NESCO) had raised total claim of approximately Rs. 20,155.96 Lacs (including delayed payment surcharge) against the company as on 30th June, 2017. The company had paid Rs. 3,400 Lacs to NESCO in the past which was debited as power cost. As per the order of Hon''ble Supreme Court the matter was referred to Grievance Redressal Forum (GRF) of NESCO. GRF passed an order dated October 12, 2017 vide which it inter alia directed NESCO to recalculate its claim in the mode and manner as specified in the said order within a period of one month from the date of such order. NESCO has not yet intimated the Company of any recalculation.

Following the guidelines laid down in the aforesaid order passed by the GRF, the Company has made a calculation and a sum of Rs. 2,743.90 lacs is recoverable by the Company from NESCO and the same has been accounted for in other income.

14 The Company being one of the Promoter of Ispat Profile India Limited (IPIL), has given an interest bearing loan of Rs. 2,267 Lacs to IPIL in Past, to facilitate the one time settlement of outstanding dues of IPIL with its some of the common lenders , so that Company can get working capital limits for its operation and financial facilities for its ongoing projects, growth and expansion plans.

IPIL has submitted revival plan to Hon''ble Kolkata High Court which is pending for approval.

Company based on conservative approach, written off the said loan along with its accumulated interest aggregating to Rs. 2,661.81 lacs and shown as an exceptional item.

15 Company started incurring cost for development of underground mines at Sukinda to secure the additional raw materials for its ferro chrome plants. As at 31st March, 2018 company has incurred cost of Rs. 8,621.20 lacs for development of underground mines which has been shown as Capital work in progress and has also advanced Rs.15,940.64 lacs to vendors which has been shown under advances to vendors for equipment''s and services for aforesaid project. A significant part of the project cost would be financed through long term borrowings. Pending financial closure, some cost has been incurred during the year. Management is confident of achieving the financial closure for the project and revitalise the project activities and therefore, no adjustments to the carrying value of capital work in progress and advances relating to project is considered. Further, vendors have confirmed outstanding advances of Rs.15,898.88 lacs and has also committed to provide the contracted equipment''s and services as and when required.

16 An advance of Rs. 3,683.57 lacs was contracted in March, 2015 to a supplier for supply of raw material at fixed price over a period of eighteen months. Due to adverse price movements, supplier was not able to meet the contractual commitments and did not supply raw material. In March, 2017 company entered into a memorandum of understanding (MOU), whereby the supplier had agreed to repay the advance, in a phased manner starting June, 2017 and ending March, 2019, without interest. Supplier has not paid any installment as per MOU. However, it has confirmed the outstanding balance of Rs. 3,683.57 lacs as at year end. Based on the negotiations with the supplier where he expressed his inability to honour the financial commitments as agreed in past has now offered to supply material which is accepted by the company and will be supplied by the supplier during contracted period.

17 Details of Loans given, Investment made and Guarantee given covered u/s 186 (4) of the Companies Act, 2013:

I) Loans given by the company to body corporate as at 31st March, 2018 (Refer Note No. 4).

II) All the said loans and advances are given for business purposes.

III) Investments made by the company as at 31st March, 2018 (Refer Note No. 3).

IV) Guarantee given by the Company as at 31st March, 2018 (Refer Note No. 36).

18 The figure for the corresponding previous year have been restated/regrouped where ever necessary to make them comparable with the current period.

19 Subsequent Events

The Board of Directors have recommended dividend of Rs. 0.75 per fully paid up equity share of Rs. 5/-each, aggregating Rs. 847.83 lacs, including Rs. 147.89 lacs dividend distribution tax for the financial year 2017-18, which is based on relevant share capital as on 31st March, 2018. The actual dividend amount will be dependent on the relevant share capital outstanding as on the record date/book closure.

20 Approval of Financial Statement

The financial statements were approved for issue by the board of directors on May 28,2018

Notes to the reconciliation:

1A Deemed Cost for Property, Plant and Equipment (PPE) and Intangible Assets

Ind AS 101 permits to consider the carrying value for all its PPE and intangible assets as recognised in the financial statements as atthe date of transition to IndAS i.e. IstApril, 2016 measured as per the previous GAAP and use that as its deemed cost as at the date of transition. Opening values of PPE as on Ist April, 2016 were adjusted as per the transition provisions of Revised AS 10 to adjust revalued component of PPE against the revaluation reserve. The deemed cost adopted as per IndAS 101 is after considering the transition effect to opening reserves.

1B Under the previous GAAP, depreciation on the revalued portion of the mining lease was withdrawn from revaluation reserve. Under Ind AS, depreciation is charged to the Statement of Profit and Loss based on depletion using unit of production method instead of depreciation based on remaining life of the lease under IGAAP.

2 Fair valuation for financial assets

The company has valued financial assets at fair value. Impact of fair value changes as on the date of transition is recognised in opening reserve and changes there after are recognised in Profit and Loss Account.

3 Proposed dividend

Under Indian GAAP, proposed dividends are recognised as a liability in the period to which they relate, irrespective of when they are declared. Under Ind-AS, a proposed dividend is recognised as a liability in the period in which it is declared by the company (usually when approved by shareholders in a general meeting) or paid.

In the case of the Company, the declaration of dividend occurs after transition date. Therefore, the liability recorded for this dividend has been derecognised against retained earnings.

4 Deferred Tax

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

5 Remeasurement of defined benefit liabilities:

Under previous GAAP, the Company recognised remeasurement of defined benefit plans under profit or loss. Under Ind AS, remeasurementof defined benefit plans are recognised in Other Comprehensive Income.

6 Reclassification as per Ind As Schedule III 49. (d) Reconciliation of statement of Cash Flow

There are no material adjustments to the statement of cash flow as reported under previous GAAP.

Source : Dion Global Solutions Limited
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