(a) Terms/ rights attached to equity shares
The company has only one class of equity shares having par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends only in Indian rupees. The dividend proposed by the board of directors is subject to the approval of the shareholders in the ensuing annual general meeting.
In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
Nature & Purpose of Other Equity
(i) Retained Earnings: Retained Earnings represents profits generated and retained by the company post distribution of dividends to the equity shareholders in the respective years. Retained earnings can be utilized for distribution of
(ii) Securities Premium: Securities premium is used to record Ýthe premium on issue of shares.
(iii) Capital Redemption Reserve: Capital Redemption Reserve was created for redemption of capital.
(iv) Capital Reserve: Capital Reserve has been created on account of amalgamation.
(v) Other Reserves: The Company has elected to recognise changes in the fair value of investments in equity instruments in other comprehensive income. These changes are accumulated within the FVTOCI equity investments within equity.
Note:
(i) Term loans from banks and others are repayable in monthly/quarterly installments. These term loans are secured by way of first pari Dassu charge on entire movable fixed assets (both Dresent and future) and mortgage of industrial DroDerty of the ComDany located at As the accounts of the Company maintained with its lenders had turned NPS during the last financial year, resulting the updated loan
(ii) account statements after the NPA dates are not available in some cases hence the liabilities has been recognised on the basis of latest available loan account statements and balance therein
Note:
(i) Term loans from banks and others are repayable in monthly/quarterly installments. These term loans are secured by way of first pari passu charge on entire movable fixed assets (both present and future) and mortgage of industrial property ofthe Company
As the accounts of the Company maintained with its lenders had turned NPS during the last financial year, resulting the updated
(ii) loan account statements after the NPA dates are not available in some cases hence the liabilities has been recognised on the basis of latest available loan account statements and balance therein
Note:
(i) Working capital facilities from banks and others are secured by way of first pari-passu charge on current assets of the company, both present and future, first pari-passu charge on land & building and movable fixed assets ofthe company located at Faridabad (Haryana), second pari passu charge on land & building and movable fixed assets of the Company located at Baddi (Himachal Pradesh) and these facilities are further secured by collaterals given by directors and their friends and relatives with their personal guarantees.
(ii) As the accounts of the company maintained with its lenders had turned NPS during the earlier financial year, resultantly the updated loan account statements after the NPA date are not available in some cases hence the liabilities has been recognised on the basis of latest available loan account statements and balances therein
Dues to micro and small enterprises have been determined to the extent such parties have been identified on the basis of intimation received from the "suppliers"/ informations available with the company regarding their status under the Micro, Small and Medium Enterprises Development Act 2006.
36 Employee benefit obligations_
The Company has not obtained acturial certificate for employee benefits for the financial year 2022-2023 and therefore employee benefits as per Ind AS 19 has not been recognised in the financials.
(A) Defined benefit plans
Gratuity:
Provision for gratuity is determined based on actuarial valuation using projected unit credit method.
The company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service.
The scheme is funded with Life Insurance Corporation of India in the form of a qualifying insurance policy.
Leave encashment:
The company provides for leave encashment subject to certain rules. The employees are entitled to accumulate leaves subject to certain limits, for future encashment. The liability is provided based on the number of days of unutilized leaves at each balance sheet date on the basis of an independent actuarial valuation.
The following tables summarise the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate and expected salary increase rate. Effect of change in mortality rate is negligible.
Please note that the sensitivity analysis presented below may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumption would occur in isolation of one another as some of the assumptions may be correlated. The results of sensitivity analysis are given below:
(ix) Risk exposure:
Through its defined benefit plans, the company is exposed to a number of risks, the most significant of which are detailed below : Investment risk :
If future investment returns on assets are lower than assumed in valuation, the scheme's assets will be lower, and the funding level higher than expected.
Changes in bond yields :
A decrease in yields will increase plan liabilities, although this will be partially offset by an increase in the value of the plans' bond holdings.
Longevity risk :
If improvements in life expectancy are greater than assumed, the cost of benefits will increase. This will mean the funding level will be higher than expected.
Inflation risk :
Rising salaries will often result in higher future defined benefit payments resulting in a higher present value of liabilities especially unexpected salary increases provided at managements discretion may lead to uncertainties in estimating this risk.
The carrying amounts of financial assets and liabilities carried at amortised cost are reasonable approximation of their fair values.
(b) Fair value hierarchy :
The fair value of financial instruments as referred to in note (a) above have been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements).
The categories used are as follows:
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices, for example listed equity instruments, traded bonds and mutual funds that have quoted prices.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques that 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.
For assets and liabilities which are measured at fair value as at Balance Sheet date, the classification of fair value calculations by category is summarised below:
(c) Calculation of Fair Values
The fair values of the financial assets and liabilities are defined as the price that would be received on sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Methods and assumptions used to estimate the fair values are consistent with those used for the year ended 31st March, 2023.
Financial assets and liabilities measured at fair value as at Balance Sheet date:
# The fair values of investment in quoted investment in equity shares is based on quoted price of respective investment as at the Balance Sheet date.
# Other financial assets and liabilities
- Cash and cash equivalents, trade receivables, investments in term deposits, other financial assets, trade payables, and other financial liabilities have fair values that approximate to their carrying amounts due to their short-term nature.
- Loans have fair values that approximate to their carrying amounts as it is based on the net present value of the anticipated future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities.
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| 46 Financial Risk Management |
The Company's business activities are exposed to market risk, credit risk and liquidity risk. The Company's senior management looks after the management of these risks. The Company's senior management is responsible to ensure that Company's financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company's policies and risk objectives. All activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision.The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.
(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 three types of risk: interest rate risk, foreign currency risk and other price risk. Financial instruments affected by market risk include loans & borrowings, deposits & Investments.
(i) Interest Rate Risk
Interest Rate Risk is the risk that the fair value of the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company's exposure to the risk of changes in market interests rate primarily relates to the Company's long-term debt obligations with floating interest rates. The Company's policy is to manage its interest cost using a mix of balanced portfolio of fixed and variable/ floating rate borrowings.
(ii) Foreign Currency Risk
Foreign Currency Risk is the risk that the fair value of future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates relates primarily to the Company's operating activities (when revenue or expense is denominated in a foreign currency).
The Company has sales and purchases from outside India. The Company has transactional currency exposures arising from sales and purchases by an operating unit in currencies other than the unit's functional currency.
Exposures in foreign currency are managed through a natural hedging policy, which is reviewed periodically to ensure that the results from fluctuating currency exchange rates are appropriately managed. The Company strives to achieve asset liability offset of foreign currency exposures.
The following table demonstrates the sensitivity to a reasonably possible change in USD exchange rates, with all other variables held constant. The impact on the Company's profit/ (loss) before tax is due to changes in the fair value of monetary assets and liabilities. With all the other variables held constant, the Company's profit/ (loss) before tax is affected through the impact of change of foreign currency rate as follows-
(iii) Price Risk
Commodity price risk
The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchase of copper, aluminium, PVC/PE, etc. These inputs are procured based on monthly average prices and the same are further protected with price escalation clause for cables being supplied to various customers.
The Company's Board of Directors has developed and enacted a risk management strategy regarding commodity price risk and its mitigation.
Equity price risk
The Company's non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company's senior management on a regular basis. The Company's Board of Directors reviews and approves all equity investment decisions.
At the reporting date, the Company's exposure to unlisted equity securities at fair value was Rs. Nil.
(b) Credit Risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk for trade receivables, cash and cash equivalents, investments, other bank balances, loans, other financial assets and financial guarantees.
Customer credit risk is managed by the Company subject to the Company's established policy, procedures and controls relating to customer credit risk management. Credit quality of a customer is assessed based on credit rating and individual credit limits are defined in accordance with credit assessment. Outstanding customer receivables are regularly monitored and any shipments to major customers are in some cases covered by letters of credit or other forms of credit assurance.
An impairment analysis is performed at each reporting date on an individual basis for major customers. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The assessment is based on historical information of defaults. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and operate in largely independent markets.
The Company's customer profile includes public sector enterprises, state owned companies and private corporates. Accordingly, the Company's customer credit risk is low to medium.
The Company has a detailed review mechanism of overdue customer receivables at various levels within organisation to ensure proper attention and focus for realisation. Based on assessment performed, management has concluded that the current provision made against trade receivables is adequate to cover the provision on account of expected credit loss.
The Company assesses the recoverability of other financial assets, potentially subject to credit risk, on regular basis. Factors such as business and financial performance of counterparty, their ability to repay, regulatory changes and overall economic conditions are considered to assess future recoverability.
(c) Liquidity Risk
Liquidity risk is the risk that the Company may encounter difficulty in meeting its present and future obligations associated with financial liabilities that are required to be settled by delivering cash or another financial asset.
Company monitors its risk of shortage of funds using cash flow forecasting models. These models consider the maturity of their financial investments, committed funding and projected cash flows from operations.
The Company's objective is to provide financial resources to meet its business objectives in a timely, cost effective and reliable manner. A balance between continuity of funding and flexibility is maintained through the use of bank borrowings. The Company also monitors compliance with its debt covenants.
47 The losses which are of exceptional nature i.e. which are not operational/normal losses and were booked in reporting period have been disclosed separately under "Exceptional items".
| 48 Capital management |
The Company's objectives when managing capital is to safeguard continuity, maintain a strong credit rating and healthy capital ratios in order to support its business and provide adequate return to shareholders through continuing growth. The Company's capital management aims to ensure that it maintains a stable capital structure with the focus on total equity to uphold investor, creditor, and customer confidence and to ensure future development of its business.
The Company sets the amount of capital required on the basis of annual business and long-term operating plans which include capital and other strategic investments. The funding requirements are met through a mixture of equity, internal fund generation and current and non-current borrowings.
50 The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or other kind of funds) to or in any other person or entity, including foreign entity (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
The Company has not received any funds (which are material either individually or in the aggregate) from any person or entity, including foreign entity (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
51 During the Financial year, there is no delay by the Company in the registration of charges or satisfaction with Registrar of Companies beyond statutory period.
52 The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority.
53 Disclosure regarding Relationship with Struck off Companies:
The Company does not have any relationship with companies whose names have been struck off under section 248 of Companies Act, 2013 or section 560 of Companies Act, 1956 in the financial years ended March 31, 2023 and March 31, 2022.
54 Disclosure as required by Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:
(A) Loans & Advances in the nature of Loans: Rs.
(i) To Subsidiary Companies:- Nil
(ii) To Joint Venture or Associate Companies:- Nil
(iii) To Firms/Companies in which directors are interested:- Nil
(B) Investment by Loanee (as disclosed above) in the shares of CMI Limited:- Nil
55 The Quarterly Returns/ Statements read with subsequent revisions filed by the company with the banks are in agreement with the books of accounts.
56 There is no proceedings initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.
57 There are no transactions which are not recorded in the books of account which have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.
59 The Company has not traded or invested in crypto currency or virtual currency during the financial year.
60 The Company has not entered into any scheme of arrangement.
61 Figures are rounded off to nearest rupees in Lakhs.
62 The financial statements were approved for issue by the Board of Directors on 31/10/2023
63 The figures for the corresponding previous year have been regrouped/reclassified wherever necessary, to make them comparable.
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