a. Fully paid equity shares have a par value of ' 10 each. Each holder of equity shares is entitled to one vote per share with a right to receive per share dividend declared by the Company. In the event of liquidation, the equity shareholders are entitled to receive remaining assets of the Company (after distribution of all preferential amounts) in the proportion of paid up equity shares held by the shareholders.
e. For the period of five years immediately preceding the date as at which the Balance Sheet is prepared:
i. Aggregate number and class of shares allotted as fully paid up pursuant to contract(s) without payment being received in cash:
19,34,79,240 Equity shares of ' 10 each allotted as fully paid-up pursuant to Scheme of Arrangement approved by the Hon’ble National Company Law Tribunal on January 25, 2022.
ii. Aggregate number and class of shares allotted as fully paid up by way of bonus shares: Nil
iii. Aggregate number and class of shares bought back: Nil
Description of nature and purpose of reserves:
Retained Earnings
This reserve represents the cumulative profits of the company and the effects of remeasurement of defined benefit obligations. The reserve can be utilised in accordance with the provision of the Companies Act, 2013.
Securities premium
Securities premium is used to record the premium on issue of shares. The reserve can be utilised in accordance with the provisions of the Companies Act, 2013.
Capital Reserve
The Capital reserve has been created on cancellation of shares held by then existing shareholders of the company as per the composite scheme of arrangement approved by the national company Law tribunal on January 25, 2022.
Employee stock option scheme reserves
The share-based payments reserve is used to recognise the value of equity settled share-based payments provided to employees, including key management personnel, as part of their remuneration. Refer to Note 37 for further details of these plans.
a. Rupee Term loan (RTL) from ICICI Bank amounting to ' 10,000.00 lakhs (Outstanding as on March 31, 2024 ' 2,500.00 lakhs (March 31,2023: ' 5,000.00 lakhs)) carries interest rate of 1 year MCLR and secured against pari pasu charge on tangible assets (Excluding vehicles and two wheelers purchased under Employee Benefit Scheme). The outstanding amount is payable in 4 equal quarterly instalment starting from June 19, 2024.
b. Secured Short term borrowing from banks is secured by pari-passu charge on hypothecation of stock-in-trade and book debts and carries interest @ 7.50% p.a to 10.60% p.a. during FY 2023-24.
c. No amount are pending to be utilised from the borrowings outstanding as on March 31,2024.
d. The Company has not been declared wilful defaulter by any bank or financial institution or other lender.
NOTE 33 : ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS 33A Contingent liabilities and commitments (to the extent not provided for)
(a) Contingent liabilities:
(i) Disputed Income Tax demands*-' 1,623.73 lakhs (previous year ' 1,706.29 lakhs)
(ii) Disputed Central Excise demands-' 1,442.81 lakhs(previous year ' 1,442.81 lakhs)
(iii) Disputed Sales Tax demands-' 3,389.89 lakhs (previous year ' 3,374.56 lakhs)
(iv) Disputed Service Tax demands-' 858.03 lakhs (previous year ' 1,945.68 lakhs)
(v) Disputed civil suit-' 90.84 lakhs (previous year-' 33.73 lakhs)
(vi) Disputed claims against the company not acknowledged as debt ' 42.85 lakhs (Previous Year ' 42.85 lakhs)
(vii) Disputed Goods and Services Tax demand-' 1,601.02 lakhs (previous year ' 877.39 lakhs)
(viii) Disputed claims against the Company for certain Labour Law & related matters estimated at ' 42.50 lakhs (previous year ' 42.50 lakhs)
* In calculating the tax expense for the current year, the Company has considered taxability of certain income and allowability of certain expenditure for tax purpose based on the orders/judgments passed in further appeals in its own assessment of earlier year. Based on the same, no additional provision is envisaged necessary as on March 31,2024 in respect of earlier years and current year.
(b) Commitments:
(i) Estimated amount of contracts remaining to be executed on capital account and not provided for-' 491.73 lakhs (previous year ' 172.81 lakhs).
(ii) Towards product performance guarantee ' 269.55 lakhs (previous year ' 272.69 lakhs)
(iii) Towards service performance guarantee ' 65.28 lakhs (previous year ' 145.09 lakhs)
In respect of all items mentioned in (a) above, till the matter are finally decided, the timing of outflow of economic benefit cannot be ascertained.
b.) The company has given commercial premises under cancellable operating lease. Lease rental income included in the statement of profit and loss for the year is ' 39.68/- Lakhs (Previous Year ' 39.68/- Lakhs) for Premises.
33C The Company is primarily engaged in the business of Health, Hygiene products and its services. Information reported to and evaluated regularly by chief operating decision maker for the purpose of resource allocation and assessing performance focuses on the business as a whole. Accordingly there is no other separate segment as per Indian Accounting Standard 108 dealing with "Operating Segment". The geographical segmentation is insignificant as the export turnover is less than 10% of the total turnover and also company's Non Current assets (other than Financial Instrument, deferred tax, post employment benefits and rights arising under insurance contracts) are located in India.
Revenue from transactions with a single external customer did not amount to 10% or more of the Company's revenue from external customers for current and previous year.
33D The Company did not have any material transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956 during the current year and previous year.
33E 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:
(a) directly or indirectly lend or invest in other persons or entites identfied in any manner whatsoever by or on behalf of the Company (Ultmate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultmate Beneficiaries.
33F The Company has not received any fund from any person(s) or entity(ies), including foreign entities (funding party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entites identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
33G '1,600.82 Lakhs (Previous year '955.34 lakhs) revenue expenses incurred during the year on Research and
Development has been charged to the respective heads of accounts.
33H There are no scheme of arrangements which have been approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013 during the current year.
33I Disclosures required by Indian Accounting Standard 37 “Provisions, Contingent Liabilities and Contingent Assets”.
B) Warranty provision
The company gives warranty on certain products, towards satisfactory performance of products during the warranty period. Warranty provisions are made for expected future outflows where no reimbursements are expected and estimated based on using historical information on the nature frequency and average cost of warranty claims. The table given below gives information about movement in warranty provisions:
Remaining performance obligation towards rendering of maintenance contracts as at the year end is recognized as “Income received in advance” and presented in “Other liabilities”. This obligation pertains to maintenance services that would be carried out over the contract period for which company has received the advance. The service period ranges from 1 year to 4 year Management believes that 75% pertaining to remaining obligation as of the year ended 31 March 2024 will be recognised as revenue during the next financial year, 20% will be recognized as revenue in FY 25-26 and 5% will be recognised in FY 26-27.
33L The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year or previous financial year.
33M The Company does not have any benami property, where any proceeding has been initiated or pending against the Company for holding any benami property.
33N The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Companies Act read with Companies (Restriction on number of Layers) Rules, 2017.
33O The Company does not have any investment property during any reporting period, the disclosure related to fair value of investment property is not applicable.
33P The Company is not covered under Section 8 of the Companies Act, thus related disclosure is not applicable.
33Q The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and postemployment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come in to effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period when the Code becomes effective.
33R The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
33S Impairment testing of goodwill and intangible assets with indefinite useful life:
The Group has identified its business of Health, Hygiene products and its Services as a single Cash Generating Unit (CGU).
The recoverable amount of the CGU has been calculated based on its value in use, estimated as the present value of projected future cash flows.
The values assigned to the key assumptions represent management’s assessment of future trends in the relevant industries and have been based on historical data from both external and internal sources. Market related information and estimates are used to determine the recoverable amount.
Key assumptions on which management has based its determination of recoverable amount include estimated long-term growth rates, weighted average cost of capital and estimated operating margins. Cash flow projections take into account past experience and represent management’s best estimate about future developments.
The discount rate was derived basis the weighted-average cost of capital of debt and equity.
The cash flow projections included specific estimates for five years and a terminal growth rate thereafter. The terminal growth rate was determined based on management’s estimate of the longterm EBITDA growth rate, consistent with the assumptions that a market participant would make. Budgeted EBITDA was estimated taking into account past experience, adjusted for future expectations.
The company has performed a sensitivity analysis and has concluded that there are no reasonably possible changes to key assumptions that would cause the carrying amount of a CGU to exceed its recoverable amount.
33T (a) Exceptional items for the year ended March 31,2024 amounting to ' 1,514.90 lakhs pertains to the following:
An amount of ' 1,514.90 lakhs (including GST) for the quarter and year ended March 31, 2024 which is charged to Statement of Profit & Loss, on account of a fire at its Delhi warehouse location, resulting in damage to inventory, including raw materials, components, and finished goods. An insurance claim has been filed to cover the losses sustained from this incident.
(b) Exceptional items for the year ended March 31,2023 amounting to ' 4,001.80 lakhs pertains to the following: An amount of ' 2,501.80 lakhs for the year ended March 31,2023, which is charged to Statement of Profit & Loss, on account of phasing out of certain non-moving models and product including its raw material and components, due to change in economic conditions and technological obsolescence. An amount of ' 1,500.00 lakhs which represents stamp duty paid / payable for transfer of title of immovable property in the name of the Company pursuant to the Scheme of Arrangement for merger of Aquaignis Technologies Private Limited and Euro Forbes Financial Services Limited into erstwhile Eureka Forbes Limited, followed by the merger of erstwhile Eureka Forbes Limited into Forbes & Company Limited and demerger of demerged undertaking (as defined in the scheme) of Forbes & Company Limited into the Company.
33U Share-based payments
Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which depends on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option or appreciation right, volatility and dividend yield and making assumptions about them. For the measurement of the fair value of equity-settled transactions with employees at the grant date, the Company uses a Black Scholes model and Monte-Carlo simulation model basis the type of option granted. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 37.
33V Figures for the previous year are re-arranged/regrouped, wherever necessary, to correspond with the current year disclosure.
33W The Financial Statements for the year ended March 31,2024 were approved for issue by Company's Board of Directors on May 28, 2024.
34 Additional information to the financial statements for the year ended 31 March 2024
All transaction with these related parties are priced on an arm's length basis.
Terms and conditions:-
1) All outstanding balances are unsecured and are repayable as per terms of credit and settlement occurs in cash.
2) All related party transactions entered during the year were in ordinary course of business and on arms length basis.
3) The company has not recorded any provision for doubtful debts related to amounts owed by related parties except as stated above.
*The above amounts do not include expenses for gratuity and leave encashment since acturial valuation is carried out at an overall level.
# The company has recognised an expense provision of '2,142.36 Lakhs. (previous year Nil) towards employee stock options granted to key managerial personnel. The said amount represent fair value of option granted. The same has not been considered as managerial remuneration for the current year as defined under section 2(7B) of the Companies Act,2013 as the options have not been vested.
Aggregate remuneration paid/payable to managing director & CEO does not exceed the limit prescribed under section 197 of companies act, 2013.
Rental expense recorded for short-term leases was ' 509.54 Lakhs for the year ended March 31, 2024. (Previous Year: ' 717.92 Lakhs).
Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The Company makes an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised. In evaluating the lease term, the Company considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the importance of the underlying asset to the company's operations taking into account the location of the underlying asset and the availability of suitable alternatives. The lease term in future periods is reassessed to ensure that the lease term reflects the current economic circumstances. After considering current and future economic conditions, the company has concluded that no changes are required to lease period relating to the existing lease contracts.
The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the defined benefit obligation as recognised in the balance sheet.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior year.
NOTE 37 : EMPLOYEE SHARE OPTION SCHEME EXPENSES A Employees Stock Option Plan (ESOP 2022)
The Company instituted an Employee Stock Option Scheme 2022 (""ESOP"") for certain employees which provides for a grant of 1,75,21,597 options (each option convertible into shares) to employees. During the year, company has made grant of total 1,56,79,262 options.
The first grant was made on May 29, 2023 for 1,35,95,130 shares, second grant was made on June 21, 2023 for 13,54,685 options, third grant was made on November 09, 2023 for 4,54,994 options and fourth grant was made on March 21,2024 for 2,74,453 options."
The fair value of the share options is estimated at the grant date using Black Scholes Option Pricing (“BSOP”) method, taking into account the terms and conditions upon which the share options were granted.
Terms of Category 2 (Performance based) options
14,699,290 tenure and performance based options to vest only upon the following conditions being met
1 If 6 months Volume weighted average price of the share (VWAP) > 2.5x/ 3x/ 4.5x USD Multiple of Money (MoM) then employee will get variable number of ESOP depending on various range of MoM. (Range- minimum 2.5X MoM till more than 5X MoM)
2 If investor sales the stake and Internal Rate of Return (IRR)/ MoM /VWAP achieved, employee will get variable number of ESOP which will vest in proportion to stake sale and range of MoM/ IRR.
NOTE 38 : FINANCIAL INSTRUMENTS Capital management
The Company’s objectives when managing capital are to:
- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and
- Maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may return capital to shareholders, issue new shares or sell assets to reduce debt.
Consistent with the industry, the Company, primarily, uses the gearing ratio to monitor and maintain the capital structure which is as follows:
Valuation techniques and significant unobservable inputs
Specific valuation techniques used to value financial instruments include:
• the use of quoted market prices or dealer quotes for similar instruments.
• All of the resulting fair value estimates are included in level 1 except for unlisted equity securities where the fair values have been determined based on present values and the discount rates used were adjusted for counterparty or own credit risk.
• The carrying amount of Trade receivables, Trade payables, cash and Cash Equivalents are considered to be the same as their Fair Values, due to their short term in nature.
• The Fair value of financial Instrument that are not traded in an active market is determined using valuation technique. The company uses its Judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period.
NOTE 40 : FINANCIAL INSTRUMENTS - FINANCIAL RISK MANAGEMENT
The Company's activities expose it to market risk, liquidity risk and credit risk. In order to minimise any adverse effects
on the financial performance of the Company, such as foreign exchange forward contracts are entered to hedge certain
foreign currency risk exposure.
This note explains the sources of risk which the entity is exposed to and how the entity manages the risk in the
financial statements.
The Company's risk management is carried out by the Treasury team under policies approved by the Finance committee. Treasury team identifies and evaluates financial risks.
(a) Credit risk
Credit risk arises from cash and cash equivalents, investments and deposits with banks, as well as credit exposures to customers including outstanding receivables.
The carrying amounts of financial assets represent the maximum credit risk exposure. The maximum exposure to credit risk at the reporting date was:
The Company held cash and cash equivalents of ' 5,551.79 lakhs at March 31, 2024 (March 31, 2023: ' 1,236.00 lakhs). The cash and cash equivalents are held with bank ' 5,390.06 lakhs at March 31, 2024 (March 31, 2023: ' 1,182.02 lakhs)
(b) 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.
The sensitivity analyses below have been determined based on the exposure to interest rates for non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management's assessment of the reasonably possible change in interest rates.
If interest rates had been 50 basis points higher/lower and all other variables were held constant, the company's: i) profit for the year ended March 31,2024 would decrease/increase by ' 13.87 lakhs (2023: decrease/ increase by ' 25.43 lakhs). This is mainly attributable to the company’s exposure to interest rates on its variable rate borrowings.
The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment, showing a significantly higher volatility than in prior year.
Notes: Explanation for change in the ratio by more than 25%
(a) Repayment of borrowings during current year.
(b) Higher earning and repayment of borrowings during current year.
(c) Higher net profit after tax during the current year with improved efficiency.
(d) Better working capital management and strong cash flow.
(e) Revenue growth along with higher efficiency on working capital improvement has resulted in an improvement in the ratio.
(f) Higher net profit after tax during the current year with improved efficiency.
(g) Increase in earnings and reduction in borrowings on account of repayment.
(h) There is a significant change in return on investment ratio due to increase in market rates.
(i) The calculation for above ratios is in accordance with formula prescribed by Guidance note on Schedule III issued by the Institute of Chartered Accountants of India.
(j) Capital employed = Tangible Net Worth# Total Debt Deferred Tax Liability.
# In order to derive to the tangible net worth, goodwill and other intangibles assets has been reduced from the total net worth.
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