(i) Investment property comprise of a commercial building that is leased to third party. Subsequent renewal of license agreement are negotiated with the tenant and average renewal period ranges between three and five years.
(ii) Refer note 24 and 29 for information on investment property pledged as security by the Company.
(iii) (a) As at 31 March 2024, the fair value of the property has been updated to Rs. 2,327.60 lakhs. This represents
a revision from the previous year's fair value of Rs. 2,917.04 lakhs.
(b) For the year ended 31 March 2024, the fair value of the Company's investment property has been determined using the ready reckoner rate published by local municipal authorities, rather than an independent valuation report. The ready reckoner rate provides a standardized valuation for properties similar in type and location for tax and regulatory purposes.
For the year ended 31 March 2023, the fair value of the Company's investment property was based on valuation performed by an accredited independent valuer in the financial year ended 31 March 2022. The management believed that there was no significant fluctuation in the fair value of the property during the year ended 31 March 2023. The fair value of the Company's investment property was arrived at using Composite rate method. Under Composite rate method, rate is arrived using comparable sales instance for similar property with same specification in the adjoining locality and further adjusted for depreciation on building component. The main inputs used are age of the building, life of the building, salvage value and composite rate.
(c) The management believes that the ready reckoner rate is a reliable estimate of the property's fair value, considering the relative stability in property values and minimal market fluctuations during the year.
* Consequent to the approval by the Audit Committee by Circular Resolution and by the General Purpose Committee (GPC) of the Board of Directors in their respective meetings held on 23 September 2022, the Company has increased its % holding in its Subsidiary, Narhari Engineering Works, a partnership firm, by way of further acquisition of 19% holding from the existing partners for a consideration of Rs 197.93 lakhs based on the valuation report by a registered valuer, resulting in total holding of 99% post acquisition. The reconstituted partnership deed is entered between the parties w.e.f. 30 September 2022.
(iii) The Company has neither raised loans during the year on the pledge of securities held in its subsidiaries and associates (as defined under the act) nor has not taken any funds from any entity or persons on account of or to meet the obligations of its subsidiaries and associates. The Company does not hold any investment in any jointly controlled entity (as defined under the act) during the year ended 31 March 2024.
iv) a) During the year, the Company has made further investment in 12,00,000 equity shares of one of its subsidiary, Eltech Engineers Madras Private Limited ("Eltech"), at face value of Rs 10 each on 01 June 2023. The said investment was approved by the Board of Directors in their meeting held on 13 February 2023. Post this investment, the shareholding of the Company in Eltech has increased from 70.00% to 94.00%.
b) The Board of Directors of the Company on 13 February 2023 approved further investment of upto Rs 400.00 lakhs in MEL Power Systems FZC ("MEL"), a foreign subsidiary of the Company, by way of purchase of additional equity shares to be alloted to the Company by MEL. During the year, 59 no. of equity shares of AED 1500 each were issued by MEL for a total consideration of Rs 399.98 lakhs (including premium) on 08 January 2024. Post allotment of these additional equity shares, the shareholding of the Company in MEL has increased from 90.00% to 93.71%.
c) On 17 November 2023, Board of Directors of a subsidiary company, Evigo Charge Private Limited ("Evigo"), has considered and approved allotment of 10,27,777 Equity Shares of face value of Rs 10 each on right issue basis by conversion of loan (including interest) amounting to Rs. 102.78 lakhs given by the Company to Evigo. Post the allotment of shares pursuant to conversion of loan, the shareholding of the Company in Evigo has increased from 98.88% to 99.44%.
d) During the year, the Company has incorporated a subsidiary company named as Xanatech Synergies Private Limited ("Xanatech") on 22 January 2024 consequent to the joint venture agreement with its foreign subsidiary, Xanatos Marine Ltd. and has subscribed 7,400 equity shares of Xanatech of face value of Rs 10 each amounting to Rs 0.74 lakhs comprising 74% stake in Xanatech.
v) a) During the year, the Board of Directors of the Company at its meeting held on 16 October 2023 accorded its consent to acquire 49.20% of issued and paid-up equity share capital of Marks Marine Radio Private Limited ("Marks Marine") by way of acquiring of 2,460 equity shares from its shareholders for total consideration amounting to Rs 235.18 lakhs. The transfer of shares related to the acquisition were approved by the Board of Marks Marine at its meeting held on 25 October 2023.
b) During the year, the Company has incorporated a company named as Athmar India Private Limited ("Athmar") on 07 February 2024 and has subscribed 5,000 equity shares of Athmar of face value of Rs 10 each amounting to Rs 0.50 lakhs comprising 50% stake in Athmar. As at 31 March 2024, Athmar is yet to commence its business operations.
* Consequent to the approval by the Board of Directors in its meeting dated 22 August 2022 and subsequent approval by the Shareholders by Special Resolution in the Annual General Meeting dated 19 September 2022, the Board, on 30 September 2022 has allotted 1,00,00,000 Convertible Warrants carrying an entitlement to subscribe to an equivalent number of equity shares of face value of Rs 2 each at price of Rs 29.25 per warrant (including premium of Rs 27.25 per warrant), being price not lower than the minimum price calculated in accordance with the Regulations for Preferential Issue in Chapter V of SEBI (ICDR) Regulations, 2018 to the Promoters and Non-Promoters allotees. Each warrant is convertible into one equity share within a period of 18 months from the date of allotment at the option of warrant holder. As per the terms of allotment, the Company has received subscription money equivalent to 25% of the issue price and the balance 75% shall be paid by the warrant holder at the time of allotment of equity shares pursuant to exercise of option.
During the year, 63,50,000 (31 March 2023: 36,50,000) Convertible Warrants have been converted into equivalent number of equity shares by the Promoters/Non-Promoters. As per the terms of allotment, the balance 75% subscription money payable by the warrant holder at the time of allotment of equity shares pursuant to exercise of option have been received by the Company. 15,00,000 (31 March 2023: 36,50,000) equity shares issued on conversion of warrants are reflected in Benpos report of the Company subsequent to year end. b) Rights, preference and restrictions attached to the equity shares:
The Company has single class of equity shares having a par value of Rs. 2 each. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the 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.
f) The Company has neither allotted any fully paid-up equity share by way of bonus shares, or in pursuant to contract without payment being received in cash nor has bought back any class of equity shares during the period of five year immediately preceding the balance sheet date.
Nature and purpose of reserves:
Securities premium: Securities premium is used to record the premium on issue of shares. The reserve is utilized in accordance with the provision of the Companies Act, 2013.
General reserve: General reserve is created from time to time by way of transfer of profits from retained earnings for appropriation purposes. General reserve is created by a transfer of one component of equity to another.
Retained earnings: Retained earnings represents surplus / accumulated earnings of the Company and are available for distribution to shareholders. Further, it also includes the impact of remeasurements of the defined benefit obligations, net of tax.
Other component of equity: Other component of equity represents fair value of financial guarantee.
Money received against share warrants: Represents subscription money received by the Company as per the terms of allotment equivalent to 25% of the issue price of share warrants.
(a) Indian rupee vehicle loan from ICICI Bank Limited carrying value of Rs 0.53 lakhs as at 31 March 2024 (31 March 2023: Rs 1.16 lakhs) secured against hypothecation of vehicles is repayable in 60 monthly installments. The loans carry interest of 9.75% p.a. (31 March 2023: 9.00% p.a. to 9.75% p.a.).
(b) Indian rupee vehicle loan from HDFC Bank Limted carrying value of Rs 12.00 lakhs as at 31 March 2024 (31 March 2023: Rs N.A.) secured against hypothecation of vehicle is repayable in 39 monthly installments. The loan carry interest of 8.80% p.a. (31 March 2023: N.A.).
(c) Indian rupee term loan from Kotak Mahindra Bank Limited carrying value of Rs Nil as at 31 March 2024 (31 March 2023: Rs 298.56 lakhs) was primarily secured by equitable mortgage of industrial property at plot no. 54, 57, 55 and 56, Verna Industrial Estate, Phase IV, Salcete, Goa. The loan was repayable in 60 monthly installments. The loan carried an interest of N.A. (31 March 2023: K-MCLR 6M Spread of 1.15% p.a.). The loan was backed by personal guarantee of Mr. Venkatesh Uchil & Mr. Vinay Uchil and corporate guarantee of KDU Enterprises Private Limited.
The tenure of the loan had completed and the loan has been repaid by the Company during the current year.
(d) Indian rupee term loan from Kotak Mahindra Bank Limited under Guaranteed Emergency Credit Line (GECL) under ECLGS scheme carrying value of Rs 33.28 lakhs as at 31 March 2024 (31 March 2023: Rs 108.79 lakhs) is secured by equitable mortgage of industrial property at plot no. 54, 57, 55 and 56, Verna Industrial Estate, Phase IV, Salcete, Goa. The loan is repayable in 48 monthly installments including moratorium of 12 months. The loan carries an interest of 8.00% p.a. (31 March 2023: 8.00% p.a.). The loan is backed by personal guarantee of Mr. Venkatesh Uchil & Mr. Vinay Uchil and corporate guarantee of KDU Enterprises Private Limited.
(e) Indian rupee term loan from The Karur Vysya Bank Limited carrying value of Rs 1,274.69 lakhs as at 31 March 2024 (31 March 2023: Rs.1,372.97 lakhs) is primarily secured by mortgage of commercial land and building situated at ground 2 upper floors, road no.9, MIDC Marol, Plot No.16, Village Mulgaon, Andheri East, Mumbai -400093. The loan is repayable in 120 monthly installments. The loan carries an interest of 3 months MCL rate of the bank Spread of 0.10% p.a. (31 March 2023: 3 months MCL rate of the bank). The loan is backed by personal guarantee of Mr. Venkatesh Uchil & Mr. Vinay Uchil and corporate guarantee of KDU Enterprises Private Limited.
(f) Indian rupee term loan from Kotak Mahindra Bank Limited carrying value of Rs 508.02 lakhs as at 31 March 2024 (31 March 2023: Rs 629.33 lakhs) is primarily secured by equitable mortgage of industrial property at plot no. 54, 57, 55 and 56, Verna Industrial Estate, Phase IV, Salcete, Goa. The loan is repayable in 60 monthly installments. The loan carries an interest of Repo Rate Spread of 3.25% p.a. (31 March 2023: Repo Rate Spread of 3.25% p.a.). The loan is backed by corporate guarantee of KDU Enterprises Private Limited.
(g) Indian rupee term loan from Kotak Mahindra Bank Limited carrying value of Rs 692.90 lakhs as at 31 March 2024 (31 March 2023: N.A.) is primarily secured by equitable mortgage of industrial property at plot no. 54, 57, 55 and 56, Verna Industrial Estate, Phase IV, Salcete, Goa. The loan is repayable in 120 monthly installments. The loan carries an interest of Repo Rate Spread of 2.50% p.a. (31 March 2023: NA). The loan is backed by corporate guarantee of KDU Enterprises Private Limited.
(h) Indian rupee vehicle loan from Kotak Mahindra Prime Limited carrying value of Rs 9.54 lakhs as at 31 March 2024 (31 March 2023: Rs 13.61 lakhs) secured against hypothecation of vehicle is repayable in 60 monthly installments. The loan carry an interest of 7.72% p.a. (31 March 2023: 7.72% p.a.)
(i) Indian rupee vehicle loan from Kotak Mahindra Prime Limited carrying value of Rs. Nil as at 31 March 2024 (31 March 2023: Rs.5.77 lakhs) secured against hypothecation of vehicle was repayable in 36 monthly installments. The loan carried an interest of N.A. (31 March 2023: 8.50% p.a to 9.00% p.a)
(j) Indian rupee vehicle loan from Mercedes-Benz Financial Services India Private Limited carrying value of Rs. 48.77 lakhs as at 31 March 2024 (31 March 2023: N.A.) secured against hypothecation of vehicle is repayable in 36 monthly installments. The loan carry an interest of 8.02% p.a. (31 March 2023: N.A.)
(k) Indian rupee vehicle loan from Kotak Mahindra Prime Limited carrying value of Rs. 25.64 lakhs as at 31 March 2024 (31 March 2023: N.A.) secured against hypothecation of vehicle is repayable in 36 monthly installments. The loan carry an interest of 8.97% p.a. (31 March 2023: N.A.)
(a) Cash credit facility from State Bank of India outstanding of Rs 2,768.73 lakhs as at 31 March 2024 (31 March 2023: Rs 2,034.10 lakhs) carrying interest of 2.00% above 6 M MCLR (31 March 2023: 2% above 6M MCLR) is repayable on demand. These are secured by first pari passu charge by way of hypothecation over entire current assets viz. inventory, book debts and other receivables etc. and all movable fixed assets, wherever situated, both present & future at Mumbai & Goa plants. The facility is collaterally secured by:
i) Equitable / Registered Mortgage on Unit No B-1, Ground Floor, Industrial Computer and Software Premises Co. Op. Soc. Ltd., Udyog Sadan-3, Plot no-F4, F5, F6, MIDC, Andheri (E), Mumbai owned by company.
ii) Equitable / Registered Mortgage on factory land & buildings bearing Survey No.30, plot no. 17 & 18, Verna Industrial Estate, Phase-I, Verna Electronic City, Salcete, Goa owned by company.
iii) Hypothecation of all Plant & Machinery, present and future, at Mumbai and Goa plants.
iv) Equitable / Registered Mortgage on Unit No A-2, Ground Floor, Industrial Computer and Software Premises Co. Op. Soc. Ltd., Udyog Sadan No.3, Central Road, Near Seepz Bus Depot, Andheri (E) Mumbai owned by M/s Philins Industrial Corporation
v) Equitable / Registered Mortgage on Unit No B-2, D-1 & B-3 Ground Floor, Industrial Computer and Software Premises Co. Op. Soc. Ltd., Udyog Sadan No.3, Central Road, Near Seepz Bus Depot, Andheri (E) Mumbai owned by KDU Enterprises Private Limited
vi) Equitable / Registered Mortgage on 502/A and 502/B, Fifth Floor, Heritage, Hiranandani gardens, CTS Nos. 20(pt), 21(pt), 22(pt) and 30(pt), Powai, Mumbai - 400076 owned by Mr. Venkatesh Uchil.
The facility is backed by personal guarantee of Mr. Venkatesh Uchil & Mr. Vinay Uchil and corporate guarantee of KDU Enterprises Private Limited and Philins Industrial Corporation.
(b) Cash credit facility from Indusind Bank Ltd outstanding of Rs 1,154.99 lakhs as at 31 March 2024 (31 March 2023: Rs 677.21 lakhs) carrying interest of floating rate of 6M MCLR 0.75% p.a (31 March 2023: 6M MCLR 0.75% p.a.) is repayable on demand. These are secured by first pari-passu charge on entire current assets of the Company. The facility is collaterally secured against fixed deposit of Rs. 1,911.00 lakhs.
The facility is backed by personal guarantee of Mr. Venkatesh Uchil & Mr. Vinay Uchil & corporate guarantee of KDU Enterprises Private Limited.
(c) Cash credit facility from Kotak Mahindra Bank Ltd outstanding of Rs 948.84 lakhs as at 31 March 2024 (31 March 2023: Rs N.A.) carrying interest of floating rate of 3M Repo rate 3.1% (31 March 2023: N.A) is repayable on demand. These are secured by first pari passu hypothecation charge on all existing and future receivables/current assets/ moveable assets/moveable fixed assets of the Company. The facility is collaterally secured by exclusive charge on Land and building at plot no N-51,52,59 and 60 Phase IV Verna Industrial Estate, Salcete, Goa owned by the Company
The facility is backed by personal guarantee of Mr. Venkatesh Uchil & Mr. Vinay Uchil and corporate guarantee of KDU Enterprises Private Limited.
(d) Cash credit facility from Axis Bank Limited outstanding of Rs Nil as at 31 March 2024 (31 March 2023: Rs 256.45 lakhs) carrying interest of N.A. (31 March 2023: Repo 4.25%). was repayable on demand. These was secured by hypothecation of entire current assets including stock, raw material, semi-finished goods, consumable stores, receivables, bills, deposits etc. and moveable fixed assets both present and future of the Company in pari passu with other banks. The facility was collaterally secured by exclusive charge on industrial property situated at Plot No. C1, B-71 and C1, B-72, GIDC Industrial Estate, Surat Hazira Road, Ichchpore, Bhatpore, Opp. GAIL Colony, Surat - 394510 and exclusive charge on land and building at Plot No. N-51, 52, 59 & 60, Phase IV, Verna Industrial Estate, Salcete, Goa owned by the Company. The facility was backed by personal guarantee of Mr. Venkatesh Uchil & Mr. Vinay Uchil and corporate guarantee of KDU Enterprises Private Limited.
During the year, the Company has closed cash credit facility and all hypothecation charge & charge on collateral securities have been released. There is a debit balance in the account as at 31 March 2024 which is disclosed as balances with banks under Cash and cash equivalents in note 17.
(e) The quarterly returns/ statements read with subsequent revisions, if any, filed by the Company with the banks are in agreement with the books of accounts.
Trade receivables and contract balances:
(i) The Company classifies the right to consideration in exchange for deliverables as either a receivable or as contract asset.
(ii) A receivable is a right to consideration that is unconditional upon passage of time.
(iii) The contract assets primarily relate to the Company's right to consideration for work completed but not billed at the reporting date. The contract assets are transferred to receivables when the right become unconditional. Contract assets are presented in note 21.
(iv) The contract liabilities primarily relate to the advance consideration received from customers. Contract liabilities are presented in note 32.
* During the previous year, the Company has allotted 1,00,00,000 Convertible Warrants carrying an entitlement to subscribe to an equivalent number of equity shares of face value of Rs 2 each at price of Rs 29.25 per warrant (including premium of Rs 27.25 per warrant). As per the terms of allotment, the Company has received subscription money equivalent to 25% of the issue price and the balance 75% shall be paid by the warrant holder at the time of allotment of equity shares pursuant to exercise of option. Of the above, 63,50,000 (31 March 2023: 36,50,000) Convertible Warrants have been converted into equivalent number of equity shares during the year and the balance 75% subscription money payable by the warrant holder at the time of allotment of equity shares pursuant to exercise of option have been received by the Company.
46 Employee benefits
(i) Defined contribution plans:
The Company makes contributions, determined as a specified percentage of employees salaries, in respect of qualifying employees towards provident fund, employees state insurance scheme and labour welfare scheme, which are defined contribution plans. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The contributions are charged to the statement of profit and loss as they accrue. The amount recognized as an expense towards contribution to provident and other funds for the year aggregated to Rs. 171.24 lakhs (31 March 2023: Rs 117.16 lakhs).
(ii) Defined benefit plans:
The Company operates an unfunded post-employment defined benefit plan that provides for gratuity benefit. The gratuity plan entitles an employee, who has rendered at least five years of continuous service, to receive gratuity at 15 days salary (salary last drawn) for each completed years of service at the time of retirement / exit.
The Company determines the gratuity liability based on the actuarial valuation using Projected Unit Credit Method by an Independent firm of Actuaries that is registered with The Institute of Actuaries of India.
The following table summarizes the position of obligation relating to gratuity plan:
Sensitivity analysis
Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amount shown below:
The sensitivity is performed on the DBO at the respective valuation date by modifying one parameter whilst retaining other parameters constant. The sensitivity analysis presented above may not be representative of the actual change in the projected 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 projected 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 projected benefit obligation as recognised in the balance sheet.
Risk exposures:
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
(A) Salary Increases: Actual salary increases will increase the plan’s liability. Increase in salary increase rate assumption in future valuations will also increase the liability.
(B) Discount Rate: Reduction in discount rate in subsequent valuations can increase the plan’s liability.
(C) Withdrawals: Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent valuations can impact plan’s liability.
(D) Mortality & disability: Actual deaths and disability cases proving lower or higher than assumed in the valuation can impact the liabilities.
(iii) Other long-term employee benefits:
Compensated absences
The compensated absences cover the company’s liability for earned leave.
The Company has recognised an amount of Rs. 59.70 lakhs (31 March 2023: Rs. 46.56 lakhs) as an expense towards compensated absences and included in “Employee benefits expense” in the Statement of Profit and Loss. The Company has determined the liability for compensated absences based on the actuarial valuation using Projected Unit Credit Method.
49.Segment information
The Company is primarily engaged into the business of providing integrated electrical and automation solution. The main segments of the Company are:
a. Marine: Providing products and services of navigational equipment's etc in new ship building.
b. Industry: Providing products and services of power distribution and solutions for industries like data centre, industrial and large buildings.
As per Ind AS 108 - "Operating Segments", operating segments are those components of the business whose operating results are reviewed by the Chief Operating Decision Maker ("CODM") to make decisions for performance assessment and resource allocation. Previously, the Company was disclosing two business segments i.e. Electricals & Electronics and Solar. In the board meeting dated 29 May 2023, board approved change in operating segment reporting between two business segments i.e. Marine and Industry, as segments based on how CODM make decision internally for performance assessment and resource allocation.
Pursuant to approval by Board, the Company has identified its reportable segment as Marine and Industry during the year and accordingly previous period / year figures have been regrouped / rearranged among those segments.
The CODM does not review assets and liabilities for each operating segment separately, hence segment disclosure relating to assets and liabilities have not been furnished.
Information about major customers
There is 1 (31 March 2023: 2) customers contributing in excess of 10% of the total revenue of the Company amounting to Rs 7,728.44 lakhs for the year ended 31 March 2024 (31 March 2023: Rs 10,089.88 lakhs).
There are no financial instruments that have been classified as Fair Value through Profit and Loss (FVTPL) and Fair Value through Other Comprehensive Income (FVTOCI).
A Fair values for these financial instruments have not been disclosed because their carrying amount are a reasonable approximation of their fair values.
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). Financial instruments - risk management
The Company has exposure to the following risks arising from financial instruments: credit risk (refer note (b) below); liquidity risk (refer note (c) below) and market risk (refer note (d) below):
(a) Risk management framework
The Company's board of directors has overall responsibility for the establishment and oversight of the Company's risk management framework. The Company's risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities.
The Company's board oversees how management monitors compliance with the Company's risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
(b) Credit risk
Credit risk is the risk that a counter party fails to discharge its obligation to the Company. The maximum credit risk comprises the carrying amounts of the financial assets. The Company's exposure to credit risk arises mainly from cash and cash equivalents, other bank balances, trade receivables, loans and other financial assets. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls.
(i) Credit risk management
Credit risk rating
The Company assesses and manages credit risk of financial assets based on following categories arrived on the basis of assumptions, inputs and factors specific to the class of financial assets.
A: Low credit risk B: Moderate credit risk C: High credit risk
(ii) Credit risk exposure
Cash and cash equivalents and other bank balances
Credit risk related to cash and cash equivalents and other bank balances is managed by accepting highly rated banks and diversifying bank deposits and accounts in different banks. Management does not expect any losses from non-performance by these counterparties.
Loans and other financial assets measured at amortized cost
Loans and other financial assets measured at amortized cost includes deposits, staff advances, interest accrued on loans/deposits, unbilled revenue, loans and other receivables. Credit risk related to these is managed by monitoring the recoverability of such amounts continuously, while at the same time internal control system in place ensures that amounts are within defined limits. The expected credit loss on these financial instruments is expected to be insignificant.
Trade receivables
Credit risk arise from possibility that customer may default on its obligation to make timely payments, resulting into financial loss. The maximum exposure to the credit risk is primarily from trade receivables. The expected credit loss allowance is based on the ageing of the days for which the receivables are due and the expected loss rates.
(c) Liquidity risk
Liquidity risk is the risk that the Company will not be able to settle or meet its obligations on time. The Company's primary sources of liquidity are cash generated from operations. The cash flows from operating activities are driven primarily by operating results and changes in the working capital requirements.
The Company believe that its liquidity position is adequate to fund the operating and investing needs and to provide with flexibility to respond to further changes in the business environment.
(d) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, which will affect the Company's income. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
i) Foreign currency risk
The transactions of the Company are denominated in both Indian rupees and foreign currencies and accordingly, the Company is exposed to foreign exchange risk in relation to operating activities (when revenue or expense is denominated in a foreign currency) arising from foreign currency transactions.
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 profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant. This calculation also assumes that the change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date. The year end balances are not necessarily representative of the average debt outstanding during the year.
51 Capital management
The funding requirements of the Company are met through a mixture of equity shares and borrowings. The Company's policy is to use current and non-current borrowings to meet anticipated funding requirements.
The Company manages its capital to ensure that the Company will be able to continue as a going concern while maximizing the return to stakeholders through optimisation of debt and equity balance.
The Company is contesting the demands and the management, including its tax advisors, believe that its position will likely be upheld in the appellate process. No tax expense has been accrued in the standalone financial statements for the tax demand raised. The management believes that the ultimate outcome of this proceedings will not have a material adverse effect on the Company's financial position and results of operations.
(ii) The Company has received a demand order dated 31.08.2020 from the office of The Commissioner of Customs raising a demand of Rs 120.62 lakhs on the Company u/s 28(8) of the Customs Act, 1962 read with section 5(1) of IGST Act, 2017 with regards to classification under incorrect CTH of copper busbar imported by the Company during the period from 13.08.2014 to 30.10.2018. The order also imposes a penalty of Rs 12 lakhs on the Company and interest u/s 28AA of the Customs Act, 1962. The amount disclosed above is exclusive of interest as the same is not currently quantifiable. The Company has filed an appeal against the said order on 23.10.2020. Based on the legal opinion obtained by the Company from an independent firm of advocates, the management believes that the ultimate outcome of the proceedings will not have an adverse effect on the Company's financial position.
(iii) The Company in the year 2017 was awarded a contract for setting up a 50 MW capacity solar power project (the "Project") in Tamilnadu. The Company subcontracted the EPC portion to a sub-contractor. The obligations of the sub-contractor for the project were not completely fulfilled by the sub-contractor leading to dispute and arbitration between the Company and the sub-contractor. Both the parties have filed Statement of Defence and Counterclaim against each other. The matter is currently in the final argument stage before the arbitrator. Pending arbitration, the impact of the outcome of the proceedings on these financial statements of the Company is currently not ascertainable.
(iv) During the F.Y.2021-22, pursuant to inspection by GST Department, the Company paid Rs. 120.14 lakhs towards GST on bank guarantee invocation. The Company during F.Y. 2022-23 filed application for refund of the said amount which was rejected by the Department vide its order dated 27 January 2023. The Company has filed an appeal against the rejection order with the appellate authorities on 06 March 2023. Pending final outcome, the Company continues to carry the amount paid as balance with government authorities. The management believes that the ultimate outcome of the proceedings will not have an adverse effect on the Company's financial position.
(v) The Supreme court of India had passed a judgement in the month of February 2019 relating to definition of wages under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. The Management is of the view that there are interpretative challenges on the application of the judgement. However, the Company is in the process of determining the possible impact and update its provision, if required. The Management does not expect any material impact of the same for financial year 2023-24 based on the present salary structure followed by the Company for its class of employees.
60 Subsequent events
There are no significant reportable subsequent events that have occurred after the reporting period till the date of this financial statements.
61 Additional regulatory information required by Schedule III
i) Details of benami property held:
The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
ii) Wilful defaulter:
The Company is not declared wilful defaulter by any bank or financial institution or other lender during the year.
iii) Relationship with struck off companies:
The Company does not have any transactions with companies struck off.
iv) Registration of charges or satisfaction with Registrar of Companies (ROC):
The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
v) Utilisation of borrowed funds and share premium:
A. 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 entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
B. 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 entities 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.
vi) Compliance with number of layers of companies:
The Company has complied with the requirements of the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017.
vii) Valuation of Property, Plant and Equipment (including Right-of-use assets) and Intangible assets:
The Company has not revalued its property, plant and equipment (including Right-of-use assets) or intangible assets or both during the current or previous year.
viii) Compliance with approved Scheme of Arrangement:
The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.
62 Details of crypto currency or virtual currency:
The Company has not traded or invested in Crypto currency or Virtual currency during the financial year.
63 Undisclosed income:
The Company does not have any such 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).
64 In the opinion of the board of directors, assets, loans and advances have a value on realization in the ordinary course of the business at least equal to the amounts at which they are stated and provision for all known liabilities have been made.
65 The Company did not have any long-term contracts including derivative contracts for which there were any foreseeable losses as at 31 March 2024.
66 The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the Company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on 13 November 2020, and has invited suggestions from stakeholders which are under active consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.
67 The Company had paid an advance of USD 800,000 to a supplier in China during the financial year 2017-18 for procurement of solar PV modules. This advance was carried at Rs 584.48 lakhs as at 31 March 2023. Due to nonreceipt of the material from the supplier and since the supplier has filed for insolvency during the year, the Company has determined that the said advance is no longer recoverable and the entire amount of Rs 584.48 lakhs have been charged to standalone statement of profit and loss in the current financial year ended 31 March 2024.
68 During the previous year, the Company became successful bidder in the e-auction dated 08 April 2022 conducted by a liquidator of the sole liquidation estate / premise of a corporate debtor under section 61 of the Insolvency and Bankruptcy Code, 2016. The Company purchased the said liquidation estate / premise vide sale certificate dated 11 May 2022. The consideration paid by the Company amounted to Rs 1,160.00 lakhs and also incurred other expenditures amounting to Rs 177.80 lakhs as on 31 March 2024. The process of e-auction was challenged by another unsuccessful bidder in National Company Law Tribunal (NCLT). The entire e-auction process was set aside by NCLT vide its order dated 02 March 2023 as not in compliance with law. The Company had filed an appeal against the order of NCLT in National Company Law Appellate Tribunal (NCLAT) on 28 March 2023. During the year, the decision of NCLT was upheld by NCLAT and Supreme Court. On 21 November 2023, the Company filed a reply in response to the liquidator’s request to vacate the premises, seeking refund of the entire consideration paid and expenditure incurred if the premise is to be vacated, while the Company still aims to retain the ownership. Pending the final resolution and the refund of the payment, the Company continues to carry the total payments made towards the purchase of the liquidation estate/premise as a capital advance in its financial statements.
69 The Company has entered into Memorandum Of Understanding ("MOU") dated 07 May 2021 with an individual and his HUF to purchase their entire shareholding held in Marks Marine Radio Private Limited ("MMRPL") engaged in marine electronic products. As per the terms of MOU, the Company subject to valuation of shares had lend Rs 100.00 lakhs as advance.
During previous year, pending final due diligence and share valuation, the Company has recognised an interest income of Rs 12.07 lakhs on the said advance for the year ended 31 March 2023.
During current year, the Board of Directors of the Company at its meeting held on 16 October 2023 accorded its consent to acquire 49.20% of issued and paid-up equity share capital of MMRPL by way of acquiring of 2460 equity shares from its shareholders for total consideration amounting to Rs 235.18 lakhs. The transfer of shares related to the acquisition were approved by the Board of MMRPL at its meeting held on 25 October 2023. Post completion of acquisition, MMRPL has become associate of the Company w.e.f. 25 October 2023.
70 There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31 March 2024.
71 Previous year’s figures
Previous year’s figures have also been regrouped / recasted, wherever necessary, to conform to the current year’s presentation.
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