c) Provision and contingent liability:
On an ongoing basis, the Company reviews pending cases, claims by third parties and other contingencies. For contingent losses that are considered probable, an estimated loss is recorded as an accrual in financial statements. Loss Contingencies that are considered possible are not provided for but disclosed as Contingent liabilities in the financial statements. Contingencies the likelihood of which is remote are not disclosed in the financial statements.
dl Useful lives of depreciable assets:
Management reviews the useful lives of depreciable assets at each reporting. As at March 31, 2023 management assessed that the useful lives represent the expected utility of the assets to the Company. Further, there is no significant change in the useful lives as compared to previous year.
el Evaluation of indicators for impairment of assets:
The evaluation of applicable indicators of impairment of assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets.
fl Defined benefit obligation:
Management's estimate of the Defined Benefit obligation is based on a number of underlying assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may impact the obligation amount and the annual defined benefit expenses.
gl Fair value measurements:
Management applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available). This involves developing estimates and assumptions consistent with how market participants would price the instrument.
hi Standards notified but not yet effective
The Ministry of Corporate Affairs has notified Companies (Indian Accounting Standards) Amendment Rules, 2023 dated March 31, 2023, to amend the following IND AS which are effective from April 1,2023.
il Definition of Accounting estimates Amendments to IND AS 8
The amendments clarify the distinction between the changes in accounting estimates and changes in accounting policies and the correction of errors. It has also been clarified how entities use measurement techniques and inputs to develop accounting estimates.
The amendments are effective for annual reporting periods beginning on or after April 01, 2023 and apply changes in accounting policies and changes in accounting estimates that occur on or after the start of the period.
The amendments are not expected to have a material impact on the Company's financial statements.
iil Disclosure of Accounting Policies Amendments to IND AS 1
The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirements for entities to disclose their 'significant' accounting policies with a requirement to disclosure their 'material' accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.
The amendments to Ind AS 1 are applicable for annual periods beginning on or after April 1, 2023. Consequential amendments have been made in Ind AS 107.
The Company is currently revisiting their accounting policy information disclosures to ensure consistency with the amended requirements.
Mil Deferred Tax related to Assets and Liabilities arising from single transaction Amendments to Ind AS 12
This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its consolidated financial statement.
b. Terms/ Rights attached to the Equity Shares
i. Only Equity Shanes of Rs.10/- are outstanding and each holder of Equity Shares is entitled to one vote per share. The company declares and pays Dividend in Indian Rupees and
ii. 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
iii. There are no restrictions attached to equity shares except 2,00,000 shares allotted to the Promoters upon conversion of warrants during the year which have been subjected to lock-in in accordance with SEBI (Issue of Capital and Disclosures Requirements) Regulation 2018
e) Information regarding issue of shares in the last five years
(a) Details of Shares issued without payment being received in cash.
In pursuance of Business Transfer Agreement dated March 08,2018, the Company issued 10,30,000 Shares of Rs.10/- each credited as fully paid-up at an issue price of Rs.197 per share for a total value of Rs.20.29 Crs on March 16,2018 to Salzer Magnet Wires Limited as a consideration for acquisition of its whole of its business undertaking
Cb] On December 07,2022, The Company allotted 17,00,000 shares warrants convertible into equity over the period of 18 months on preferential basis to the Promoters’ bodies corporate at an issue price of Rs.278.50 per share. During the year, 2,00,000 warrants have been converted into equity shares
(c) The Company has not issued any Bonus Shares or undertaken any buy back of Shares
fl Details of Shares held by Holding Company :
There are no Shares held by Holding Company/Subsidiaries of ultimate Holding Company as on 31st March 2023.
Notes
* Security : Assets purchased under the Term Loans, Extension of the equitable mortgage of Land and Building of the Company (Unit III] and guaranteed by Mr. R Doraiswamy, Managing Director and Mr. ? Rajesh Kumar, Joint Managing Director S.CFO
Terms of the repayment: Plant and Machinery Term Loan Repayable within 5 EMIs of ^15,00,000.00 ** Building, Plant and Machinery Term Loan
Secured by the First Charge on Land and Building, Plant and Machinery of Unit IV and Gunaranteed by Mr. R Doraiswamy, Managing Director and Mr. D Rajesh Kumar, Joint Managing Director S.CFO
Terms of the repayment : Plant and Machinery Term Loan Repayable within 29 EMIs of ? 23,55,128.00 and 1 EMI of ?20,07,752.00
B. Defined Benefit plans
In accordance with the Payment of Gratuity Act, 1972, the Company provides for gratuity, as defined benefit plan. The gratuity plan provides for a lump sum payment to the employees at the time of separation from the service on completion of vested year of employment i.e. five years. The liability of gratuity plan is provided based on actuarial valuation using the projected unit credit method as at the end of each financial year based on which the Company contributes the ascertained liability to Life Insurance Corporation of India with whom the plan assets are maintained.
These plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, salary risk and longevity risk.
Investment Risk:The present value of the defined benefit plan liability (denominated in Indian Rupee) is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.
Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan's debt investments.
Salary risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan's liability.
Longevity risk: The present value of defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan's liability.
The carrying amounts of trade receivables, cash and cash equivalents, other bank balances, loans, other financial assets, current borrowings, trade payables and other current financial liabilities are a reasonable approximation of their fair values. Accordingly, the fair values of such financial assets and financial liabilities have not been disclosed separately.
iii. Valuation technique used to determine fair value
• The fair value of the financial assets and liabilities are at the amount that would be received to sell an asset and paid to transfer a liability in an orderly transaction between market participants at the measurement date.
• The carrying amounts of trade receivables, cash and cash equivalents, other bank balances, loans, other financial assets, current borrowings, trade payables and other current financial liabilities are a reasonable approximation of their fairvalues.
• The investment included in Level 3 hierarchy have been valued at cost approach to arrive at the fairvalues. The cost of unquoted investment approximate the fair value as there is a wide range of possible fair value measurement and the cost represents estimate of fairvalue within that range.
• The estimated fairvalue amounts as at March 31,2023 have been measured as at that date. As such, the fair values of these financial instruments subsequent to reporting date may be different than the amounts reported at each year-end.
• There were no transfers between Level 1, Level 2 and Level 3 during the year.
NOTE No. 4^ FINANCIAL RISK MANAGEMENT
The Company's activities expose it to credit risk, liquidity risk, market risk - interest rate risk and foreign currency risk. The Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.
Credit Risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks.
The company's credit risk generally arises from Cash and cash equivalents, trade receivables, and other financial assets.
Credit Risk Management
The Group 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.
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 overall strategy remains unchanged from previous year.
The funding requirements are met through a mixture of equity, internal fund generation and other non-current borrowings. The Company's policy is to use current and non-current borrowings to meet anticipated funding requirements.
The Company monitors capital on the basis of the gearing ratio which is net debt divided by total capital (equity plus net debt).
NOTE No. 4^ RELATED PARTY DISCLOSURES
il Related party transactions
Related Party Relationships iil Key Management Personnel
a. Mr. R. Doraiswmay - Managing Director
b. Mr. ?. Rajeshkumar - Joint Managing Director & Chief Financial Officer
c. Mr. R Ramachandran - Whole Time Director and
d. Mr. S. Baskarasubramanian - Director (Corporate Affairs) & Company Secretary iiil Subsidiary Company
a. Kaycee Industries Limited
b. Salzer EV Infra Private Limited ivl Post-employment benefit plans
a. Salzer Electronics Limited Employees Gratuity Trust (vl Other related Parties
i. Board Members relative to Key Management Personnel
1. Dr. (Mrs.) Thilagam Rajeshkumar - Non Executive & Non Independent Director - Spouse of Mr. ? Rajesh Kumar, Jt MD and CFO
The Company, which entered into Lease Agreements with various Parties during the previous financial years for hiring the premises at different locations for manufacturing activities, has modified those agreement with the term of 11 Months with an option to extend further period with mutual consent of the parties to the agreement and the agreement has no clauses of controlling the let out of assets
During the financial year 2022-23, the Company has also taken out lease of Land and Buildings for Rent from two more parties and the Rental Agreements have been executed for a period of 11 months with an options for extending further periods with mutual consent of the parties. The Agreement don’t have any clauses enabling the tenant to have control over the Property The Company does not have any lease within the purview of IND AS 116
• The Title deeds of the immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) are held in the name of the Company.
• As per the Company's accounting policy, Property, Plant and Equipment (including Right of Use Assets) and intangible assets are carried at historical cost (less accumulated depreciation & impairment, if any), hence the revaluation related disclosures required as per Additional Regulatory Information of Schedule III (revised) to the Companies Act, is not applicable.
• The Company has not granted Loans or Advances in the nature of loan to any promoters, Directors, KMPs and the related parties (As per Companies Act, 2013) , which are repayable on demand or without specifying any terms or period of repayments.
• No proceedings have been 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.
• The Company has sanctioned facilities from banks on the basis of security of current assets. The periodic returns filed by the Company with such banks are in agreement with the books of accounts of the Company.
• The Company has adhered to debt repayment and interest service obligations on time. Wilful defaulter related disclosures required as per Additional Regulatory Information of Schedule III (revised) to the Companies Act, is not applicable.
• There are no transactions with the Companies whose name are struck off under Section 248 of The Companies Act, 2013 or Section 560 of the Companies Act, 1956 during the year ended 31st March 2023.
• All applicable cases where registration of charges or satisfaction is required to be filed with Registrar of Companies have been filed. No registration or satisfaction is pending at the year ended 31st March 2023.
• The Company has complied with 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.
• No scheme of arrangement has been approved by the competent authority in terms of Section 230 to 237 of the Companies Act, 2013.
• 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 beneficiary
• The Company have 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 ofthe Funding Party (Ultimate Beneficiaries) or
b) provide any guarantee, security orthe likeon behalf of the Ultimate Beneficiaries
• The Company has not operated in any crypto currency or Virtual Currency transactions
• During the year the Company has not disclosed or surrendered, any income other than the income recognised in the books of accounts in the tax assessments underincome Tax Act, 1961.
• Previous yearfigures have also been reclassified, regrouped, recast to conform to current year classification.
In terms of our report attached
N. RANGACHARY R. DORAISWAMY For. JDS ASSOCIATES
Chairman Managing Director Chartered Accountants
(DIN :00054437) (DIN :00003131) FRN: 008735S
D. RAJESHKUMAR S. BASKARA SUBRAMANIAN B. JAYARAM
Joint Managing Director & Director (Corporate Affairs) & Partner
Chief Financial Officer Company Secretary Memb.No. 028346
(DIN: 00003126) (DIN :00003152& FCS No.4605)
Coimbatore - 47 May 24, 2023
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