Secured Borrowing
(i) Loans from Banks/NBFC are secured by way of hypothecation charge over movable Property, Plant and Equipment, both present and future and charge created by way of mortgage by deposit of title deeds of certain immovable properties of the Company, ranking pari-passu interse amongst the consortium lender banks and term loan lender (including Buyer’s Credit and Supplier’s Credit). Loans from Banks/NBFC are further secured by first/ or second pari-passu charge (specific to a term loan) by way of hypothecation of entire Current Assets, both present and future, of the Company viz. inventories, bills receivables, book debts, claims, etc. The Rupee Term Loan is repayable in 16 quarterly instalments commencing from March, 2024 and ending on December, 2027 and carry a rate of interest of 10.25% p.a on the reporting date. Buyer’s Credit in foreign currency availed from a bank is due for repayment between July, 2025 to March, 2O26 and carry rate of interest varying from 4.52% to 6.42% p.a. Supplier’s Credit in foreign currency availed from banks are due for repayment between June, 2024 and June, 2026 and carry rate of interest varying from 4.71% to 6.84 % p.a. on the reporting date. The Buyer’s Credit and Supplier’s Credit are also backed by cross corporate guarantee of Vindhya Telelinks Limited, a body corporate.
(ii) Neither registration nor satisfaction of any charge is pending to be filed/registered with the Jurisdictional Registrar of Companies beyond the statutory period in respect of security created by the Company in favour of lenders except as referred in Note no. 43 (a).
(iii) Term loan was applied for the purpose for which the loan was obtained.
Unsecured Borrowing
Loan from Bodies Corporate amounting to ' 1500.00 lakhs carry rate of interest varying from 8.85% to 9.50 % p.a and are due
for repayment between November, 2025 and March, 2026.
(i) Working Capital Loans/Borrowings from Banks are generally renewable within twelve months from the date of sanction or immediately previous renewal date, unless otherwise stated. The lender banks have a right to cancel the credit limits (either fully or partially) and, inter-alia, demand repayment in case of non-compliance of terms and conditions of sanctions or deterioration in the sanctioned loan accounts in any manner.
(ii) Working Capital Loans/Borrowings (both fund and non fund based) from Banks are secured by first charge by way of hypothecation of entire Current Assets both present and future, of the Company viz. inventories, bills receivables, book debts (trade receivables), claims, etc. ranking pari-passu amongst working capital consortium banks and are further secured by way of hypothecation of movable Property, Plant and Equipment, both present and future, and charge created by way of mortgage by deposit of title deeds of certain immovable properties of the Company, ranking pari-passu interse amongst the consortium lenders and a term lender. The Working Capital Borrowings are also backed by cross corporate guarantee of Vindhya Telelinks Limited, a body corporate.
(iii) Funds raised on short term basis have not been utilised for long term purpose and deployed for the prupose(s) they were obtained.
(iv) Bank Returns/Stock Statements filed by the Company with its bankers are materially in agreement with the books of account.
(v) Neither registration nor satisfaction of any charge is pending to be filed/registered with the Jurisdictional Registrar of Companies beyond the statutory period in respect of security created by the Company in favour of lenders except as referred in Note no. 43 (a).
35. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR):
(a) Contingent liabilities:
(i) Cross corporate guarantee given to consortium of banks as collateral against term loan(s) and working capital credit facilities granted to a Body Corporate - Refer Note No.43(a).
(ii) Claims against the Company not acknowledged as debts ' 20.85 lakhs (' 20.85 lakhs).
(b) Commitments:
Estimated amount of contracts remaining to be executed on Capital Account (Net of advances) and not provided for ' 333.97 lakhs (' 2288.79 lakhs).
36. DIVIDEND:
The Board of Directors in its Meeting held on 10th May, 2024 has recommended a dividend of ' 1.75 (17.50%)per share (' 2.50 (25%)per share) per fully paid up equity shares of ' 10/- each for the financial year ended on 31st March, 2024. The same is subject to approval by the shareholders in the ensuing Annual General Meeting of the Company.
(x) Risk Exposure:
The Defined Benefit Plan is exposed to number of risks like asset volatility, inflation rate risk, life expectancy assumptions. etc.
(b) Defined Contribution Plans:
Company’s contribution to defined contribution schemes such as Government administered Provident/Family Pension and approved Superannuation Fund are charged to the Statement of Profit and Loss as incurred. The Company has no further obligations beyond its contributions.
The Company has recognised the following contributions to Provident/Family Pension and Superannuation Funds as an expense and included in employee benefits expense in the Statement of Profit and Loss.
38. SEGMENT INFORMATION:
(a) The Company has only one reportable primary business segment i.e. Cables, based on guiding principles given in Ind AS 108" Operating Segments” notified pursuant to Companies (Indian Accounting Standards) Rules, 2015. Accordingly, the disclosure requirements of Ind AS 108 are not applicable.
(b) The following table shows the disaggregation of Company’s Revenue from Operations (predominantly telecom cables) by geographical market, regardless of where the goods were produced:
(a) The remuneration to Key Managerial Personnel(s) other than Non-Executive Directors stated above does not include provision/payment towards incremental liability on account of gratuity and compensated absences since actuarial valuation is done for the Company as a whole.
(b) Remuneration to Non-Executive Directors save and except Shri Harsh V. Lodha, Chairman includes provision of ' 18.00 lakhs (' 36.00 lakhs) towards remuneration/compensation by way of profit related commission (excluding Goods and Services Tax, if any, thereon) for the year. Shri Harsh V.Lodha, Chairman, has decided not to take remuneration/compensation by way of profit related commission pertaining to the financial year 2023-24.
(c) Transactions mentioned above are exclusive of Goods and Services Tax (GST), wherever applicable.
(d) No amount has been provided as doubtful debt or advance written off or written back in the year in respect of debts due from/to above Related Parties.
(e) Transactions and balances relating to reimbursement of expenses to/from the above Related Parties have not been considered in the above disclosure.
(b) The Company has taken certain offices and residential premises/facilities under operating lease agreements for short period. The aggregate lease rental of ' 44.76 lakhs (' 9.11 lakhs) on such leases has been charged to the Statement of Profit and Loss.
42. DISCLOSURE ON CORPORATE SOCIAL RESPONSIBILITY EXPENSES:
(a) Gross amount required to be spent by the Company during the year 2023-24 in pursuance to the provision of Section 135 of the Companies Act, 2013 and rules made there under is ' 57.12 lakhs (' 27.43 lakhs) including interest of ' Nil (' 0.61 lakh).
(a) Excess amount of CSR contribution of ' 1.67 lakhs of the financial year 2022-23 is set-off against CSR liability/ obligation of the Company for the current financial year 2023-24.
(b) Expenditure includes excess amount of CSR contribution of ' 0.40 lakh which will be set-off against CSR liability/ obligation of the Company for the next financial year 2024-25.
(b) Investments made: Detail of Investments made are given in Note No.4. Further, no loans within the meaning of Section 186 of the Companies Act, 2013 have been given by the Company requiring disclosure, save and except loans and/or advances made by the Company to its employee in accordance with the conditions of service applicable to employees read together with remuneration policy of the Company as disclosed in Note No.5 & Note No.12.
The fair value of financial assets and liabilities are included at the amount at which instruments could be exchanged in a
current transaction between the willing parties. The following methods and assumptions were used to estimate the fair value:
(A) The Company has opted to fair value its quoted equity instruments at its market quoted price through OCI.
(B) The Company has opted to fair value its unquoted equity instruments at its Net Asset Value(NAV)/Discounted Cash Flow(DCF) through OCI.
(C) The fair values of cash and cash equivalents, other bank balances, trade receivables, loans, other financial assets, short term borrowings, trade payables, and other financial liabilities approximates their carrying amounts largely due to the short-term maturities of these instruments. Company has adopted Effective Interest Rate Method (EIR) for fair valuation of long term borrowings and non-current financial assets and non-current financial liabilities.
(D) The fair value of forward exchange contracts is based on certificate given by respective banks.
Fair Value Hierarchy
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
45. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES:
The Company’s activities are exposed to a variety of Financial Risks from its Operations. The key financial risks include
Market risk, Credit risk and Liquidity risk.
(a) Market Risk:
Market Risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market Risk comprises mainly three types of Risk: Foreign Currency Risk, Interest Rate Risk, Other Price Risk such as Commodity Price Risk and Equity Price Risk.
(i) Foreign Currency Risk:
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company is exposed to foreign exchange risk arising from foreign currency transactions of imports, exports and borrowing primarily with respect to USD, EURO and GBP. The Company’s exports are denominated generally in USD and EURO, providing a natural hedge to some extent against foreign currency payments on account of imports of raw materials and/or the payment of borrowings. The foreign currency transaction risk are managed through selective hedging programmes by way of forward contracts including for underlying transactions having firm commitments or highly probable forecast of crystallisation.
(ii) Interest Rate Risk and Sensitivity:
Interest rate risk has underlying risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Any changes in the interest rates could have unforeseen impact on Company’s cost of borrowings, thus impacting the profit and loss. The Company mitigates this risk by regularly assessing the market scenario, finding appropriate financial instruments like interest rate negotiations and low cost instruments.
(iii) Commodity Price Risk:
The Company is affected by the price volatility of certain commodities. Its operating activities require the purchase of raw material for manufacturing of Cables and therefore, require a continuous supply of certain raw materials such as optical fibre, plastic and polymers, copper etc. To mitigate the commodity price risk, the company has an approved supplier base to get the best competitive prices for the commodities and to manage the cost without any compromise on quality.
(iv) Equity Price Risk:
The Company’s exposure to equity instruments price risk arises from investments held by the company and classified in the Balance Sheet at Fair Value through OCI. Having regard to the nature of securities, intrinsic worth, intent and long term nature of investment in securities held by the company, fluctuation in their prices are considered acceptable and do not warrant any management estimation.
(b) Credit Risk:
(i) Trade Receivables/Corporate Guarantee
The Company has an established policy, procedures and control relating to customer credit risk management. The Company assesses the credit quality of the counterparties taking into account their financial position, past experience and other factors. Some of the customers are Government owned entities and private telecom sector operators. Credit risk is reduced to a significant extent if the supplies are part of a project which is funded by the Central / State Government. Outstanding customer receivables are regularly monitored and assessed. At the end of the reporting period, there were no significant concentrations of credit risk expected in outstanding receivable.
The lenders assesses the credit quality of Vindhya Telelinks Limited and after considering its financial position, intrinsic value, its business profile and future prospects, Credit risk is low. The Company has also accepted corporate guarantee from Vindhya Telelinks Limited (Cross Corporate Guarantee) against total credit facilities and term loan(s) availed from consortium of banks.
(ii) Deposits with Bank:
The fixed deposits with banks predominantly comprises of margin money against bank guarantees, letter(s) of credit, etc. as per the terms of sanction of non fund based credit facilities and the Company is not exposed to credit risk based on historical records of no or stray cases of invocation of bank guarantees or devolvement of LC’s.
(c) Liquidity risk:
Liquidity risk is the risk, where the Company may 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 is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due.
The table below summarises the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments:
47. CAPITAL MANAGEMENT:
The Company’s primary objective with respect to capital management is to ensure continuity of business and support the growth of the Company while at the same time provide reasonable returns to its various stakeholders and maximise shareholders value. In order to achieve these objectives, requirement of capital is reviewed periodically with reference to operating and business plans that take into account capital expenditure and strategic investments. Sourcing of capital is done through judicious combination of equity/ internal accruals and borrowings, both short term and long term. The capital structure is governed by policies approved by the Board of Directors and the Company monitors capital by applying net debt (total borrowings less investments and cash and cash equivalents) to equity ratio. The Company manages its capital structure and make adjustments in the light of changes in economic conditions and the requirements of financial covenants attached to the interest bearing loans and borrowings that define capital structure requirements. No changes were made in the objectives, policies or processes for managing capital during the year ended 31st March, 2024 or corresponding previous year.
48. ADDITIONAL DISCLOSURES/ REGULATORY INFORMATION AS REQUIRED BY NOTIFICATION NO. GSR 207(E) DATED 24.03.2021 (TO THE EXTENT APPLICABLE):
(a) Compliance with number of layers of companies:
No layers of companies has been established beyond the limits prescribed under clause 87 of section 2 of the Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017.
(c) Undisclosed income:
No transactions have been recorded in the books of account that has been surrendered/ disclosed as income during the year in the tax assessments.
(d) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(i) 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
(ii) Provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(e) The Company has not received any fund from any other person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(i) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries); or
(ii) Provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
Notes: Explanation for changes in Ratio by more than 25%
(i) Debt Service Coverage ratio is decreased due to decrease in profitability.
(ii) Return on Equity is decreased due to decrease in profitability of the current year as compared to previous year.
(iii) Trade Receivable Turnover Ratio is decreased due to decrease in Sales turnover during the current year as compared to previous year.
(iv) Trade Payable Turnover Ratio is improved due to decrease in trade payables.
(v) Return on Capital Employed is declined due to decrease in profitability of the Company in the current year as compared to previous year.
(vi) Return on Investment in Shares is declined due to less increase in the market price of quoted shares in the current year as compared to previous year.
49. Previous year figures have been regrouped/ rearranged, wherever considered necessary to confirm to current year’s classification. The figures in brackets are those in respect of the previous accounting year.
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