d) During the financial year 2019-20 pursuant to the provisions of Sections 68, 69, 70 and all other applicable provisions of the Companies Act, 2013, the provisions of the SEBI (Buy Back of Securities) Regulations, 2018, Article 62 of the Articles of Association of the Company and pursuant to the resolutions passed by the Board of Directors of the Company at their meeting held on May 16, 2019, the Company had bought back 3,839,804 equity shares of R 2 each in electronic form.
e) During the financial year 2021-22, the Qualified Institutions Placement Committee ("QIP Committee") in its meeting held on September 24, 2021 had approved the allotment of 56,00,000 Equity Shares of face value of R 2 each to eligible qualified institutional buyers at the issue price of R 242 per Equity Shares (including a premium of R 240 per Equity Share) against the Floor Price of R 254.55 per Equity Shares , aggregating to R 13,552.00 lakhs pursuant to the issue in accordance with the SEBI ICDR Regulations.
f) Rights, preferences and restrictions attached to equity shares
The Company has only one class of shares referred to as equity shares having a par value of R 2/-. 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 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.
Nature and purpose of reserves and surplus
a) General reserve
General reserve are free reserves of the Company which are kept aside out of the Company's profit to meet the future requirements as and when they arise.
b) Capital redemption reserve
In accordance with Section 69 of the Companies Act, 2013, the Company creates a capital redemption reserve equal to the nominal value of the shares bought back as an appropriation from the general reserve.
c) Securities premium
Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of the Companies Act, 2013
d) Retained earnings
Retained earnings comprises of accumulated balance of profits/(losses) of current and prior years including transfers made to / from other reserves from time to time. The reserve can be utilised or distributed by the Company in accordance with the provisions of the Companies Act, 2013.
i. During the year ended March 31, 2023 and March 31, 2022, the Company has issued and repaid 1,200 numbers and 2,100 numbers of commercial papers (unsecured), respectively amounting to R 6,000 lakhs and R 10,500 lakhs with rate of interest range of 6.05% to 6.6% p.a. and 4.0 % to 4.8 % p.a. (approx) respectively. The commercial papers are issued by the Company for meeting its working capital requirements.
ii. Information about the Company's exposure to interest rate and liquidity risks is included in Note 31.
*Provision for warranty
The Company gives warranties on certain products and undertake to repair or replace them, if they fail to perform satisfactorily during the free warranty period. Such provisions represents the amount of the expected cost of meeting the obligations of such rectification/ replacement. The timing of the outflow is expected to be within next year. The provision is based on estimates made from historical warranty data associated with similar products and services. The Company expect to incur the related expenditure within next year.
30. Employee benefit expenses A. 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 as at the end of each financial year based on which the Company contributes the ascertained liability to Life Insurance Corporation of India by whom the plan assets are maintained.
These plans typically expose the Company to actuarial risks such as: investment risk, inherent interest rate risk , longevity risk and salary 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 Rate Risk
The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.
Longevity Risk
The present value of the 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.
Salary Risk
Higher than expected increases in salary will increase the defined benefit obligation.
The present value of the defined benefit obligation, and the related current service cost, were measured using the projected unit credit method.
C. Defined contribution plans
The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards provident fund and employee state insurance scheme which are defined contribution plans. The Company has no obligations other than to make the specified contributions. The contributions are charged to the standalone statement of profit and loss as they accrue. The amount recognised as an expense towards contribution to provident and other funds for the year aggregated to K 263.88 lakhs (March 31, 2022: K 256.98 lakhs).
B) Fair value hierarchy
The fair value of financial instruments as referred to in note (A) above has been classified into three category depending on the inputs used in valuation technique. The hierarchy gives the highest priority to quoted price 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: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included in 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 asset or liability that are not based on observable market data (unobservable inputs).
Valuation process and technique used to determine fair value
The fair value of investments in mutual fund units is based on the net asset value (NAV) as stated by the issuers of these mutual fund units in the published statement as at the Balance Sheet date. The fair value of investment in quoted debentures and bonds is determined on the basis of quoted price as at Balance sheet date.
The valuation of portfolio management service and alternative investment fund is based on the underlying assets wherein investments have been made. The investments are made either in listed securities or fixed deposits, therefore the fair value is based on the quoted price of underlying investment in case of listed security and carrying amount in case of fixed deposit.
Transfers between Levels 1, Level 2 and Level 3
There has been no transfer between level 1, level 2 and level 3 for the years ended March 31, 2023 and March 31, 2022.
C) Financial Risk Management
The Company's activities expose it to market risk, liquidity risk and credit risk. This note explains the source of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.
The Company's Board of Directors has overall responsibility for the establishment and oversight of the company's risk management framework.
The Company has exposure to the following risks arising from financial instruments:- credit risk
- liquidity risk
- market risk".
The Company's risk management is carried out by a treasury department under the supervision of Chief Financial Officer of the Company. The treasury department identifies and evaluates financial risks. The board of directors provides written principles for overall risk management, as well as policies covering specific areas, such as interest rate risk, liquidity risk etc. The Audit Committee of the Company 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.
Expected credit losses for financial assets other than trade receivables and finance lease receivables
The Company maintains its cash and cash equivalents and bank deposits with reputed banks. The credit risk on these instruments is limited because the counterparties are bank with high credit ratings assigned by domestic credit rating agencies. Hence, the credit risk associated with cash and cash equivalent and bank deposits is relatively low.
Loan comprises loans given to employees, which would be adjusted against salary of the employees and hence credit risk associated with such amount is also relatively low.
The Company maintains its investment in bonds and debentures with reputed financial institutions and corporates. The credit risk on these instruments is limited because the counterparties are financial institutions and corporates with high credit ratings assigned by domestic credit rating agencies. Hence, the credit risk associated with these investments is relatively low. Investments in Mutual funds, Alternative Investment Fund, Shares, Portfolio Management Service and Partnership firm are measured at mark to market hence, the credit risk associated with these investments already considered in valuation as on reporting date.
Security deposits are given for operational activities of the Company and will be returned to the Company as per the contracts with respective vendors. The Company monitors the credit ratings of the counterparties on regular basis. These security deposits carry very minimal credit risk based on the financial position of parties and Company's historical experience of dealing with the parties.
Expected credit losses for trade receivables and finance lease receivable
Credit risks related to receivables is managed by each business unit subject to the Company's policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored. An impairment analysis is performed at each reporting date on trade receivables and finance lease receivable by using lifetime expected credit losses as per simplified approach wherein the weighted average loss rates are analysed from the historical trend of defaults relating to each business segment. Such provision matrix has been considered to recognize lifetime expected credit losses on trade receivables and finance lease receivable (other than those where defaults criteria are met). The Company evaluates the concentration of risk with respect to trade receivables and finance lease receivable as low, since its customers are from various industries, jurisdictions and operate in independent markets. These receivables are written off when there is no reasonable expectation of recovery.
There are no receivables which are in default as at year end and the management believes that these are collectible in full based on historical payment behavior. For weighted average loss rate disclosures, Refer Note 9.
Liquidity risk is the risk that the Company will encounter difficulty in meeting its obligations associated with financial liabilities. The investment philosophy of the Company is capital preservation and liquidity in preference to returns. The Company consistently generates sufficient cash flows from operations and has access to multiple sources of funding to meet the financial obligations and maintain adequate liquidity for use. The Company manages liquidity risk by maintaining adequate reserve, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
C.3) Market risk
Market risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk namely : currency risk and interest rate risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
Price risk
The Company invests in mutual funds, alternative investment fund, Shares, portfolio management service and partnership firm, which are susceptible to market price risk arising from uncertainties about future values of the investment securities. In order to manage its price risk arising from investments, the Company diversifies its portfolio in accordance with the limits set by the risk management policies.
Currency risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Exposure arises primarily due to exchange rate fluctuations between the functional currency and other currencies from the Company's operating, investing and financing activities. The Company undertakes transactions denominated in foreign currency (mainly US Dollar and Euro) which are subject to the risk of exchange rate fluctuations. Considering the low volume of foreign currency transactions, the Company's exposure to foreign currency risk is limited hence the Company does not use any derivative instruments to manage its exposure.
Sensitivity
A reasonably possible strengthening (weakening) of the US dollar against R at March 31 would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant.
C.4) interest Rate Risk
The Company's interest rate risk arises from debt borrowings. Borrowings issued at variable rates expose the Company to cash flow interest rate risk, whilst borrowings issued at fixed rates expose the Company to fair value interest rate risk. The risks are managed by monitoring an appropriate mix between fixed and floating rate borrowings.
Fair value sensitivity analysis of interest rate
The Company does not account for any fixed-rate financial assets or financial liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.
A reasonably possible change of 50 basis points (bps) in interest rates at the reporting date would have increased/ (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.
Capital Management
The primary objective of the Company's capital management is to safeguard the Company's ability to continue as a going concern, maintain a strong credit rating and a healthy capital ratio to support the business and to enhance shareholder value. The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and business strategies to maintain or adjust the capital structure, issue new shares or raise and repay debts. The Company's capital management objectives, policies or processes were unchanged during the year.
34 Contingent liabilities, commitments and other claims
(a) Claims against the company not acknowledged as debts
(i) Claims made by Tax Authorities
|
Name of the statute
|
Nature of the dues
|
As at March 31, 2023
|
As at March 31, 2022
|
period to which amount relates
|
Forum where dispute is pending
|
|
Income Tax Act, 1961
|
Disallowance of deduction claimed u/s 35(2AB), disallowance of Interest expenses u/s 36(1)(iii), disallowance u/s 14A and disallowance of expenses on adhoc basis.
|
730.44
|
683.10
|
Financial year 201415 to Financial year 2016-17 and 201920 to 2020-21
|
Commissioner of Income Tax (Appeals)
|
|
Income Tax Act, 1961
|
Error in demand on portal
|
119.34
|
119.34
|
Financial year 201213
|
Deputy Commissioner of Income Tax
|
|
Central Excise Act, 1994
|
Classification Dispute on parts
|
607.44
|
607.44
|
Financial year 200607 to Financial year 2009-10
|
Customs Excise and Service Tax Appellate Tribunal (CESTAT)
|
|
Central Excise Act, 1994
|
Demand of Excise duty on account of section 11D for exempt goods
|
829.60
|
829.60
|
Financial year 200809 to Financial year 2013-14
|
Customs Excise and Service Tax Appellate Tribunal (CESTAT)
|
|
Central Excise Act, 1994
|
Demand raised for utilization of Cenvat credit.
|
2.39
|
2.39
|
Financial year 2009-10
|
Commissioner
(Appeals)
|
|
Income Tax Act, 1961
|
PF expenditure for delayed payment to the PF authorities
|
18.90
|
-
|
Financial year 2020-21
|
Commissioner of Income Tax (Appeals)
|
|
Finance Act, 1994 (Service Tax)
|
Demand is related to the violation of the Export of Services rules 2005
|
8.11
|
8.11
|
Financial year 2010-11
|
Additional
Commissioner
|
|
West Bengal Value Added Tax Act, 2003
|
Rate dispute classification of products
|
1,262.31
|
1,262.31
|
Financial year 200607 to Financial year 2013-14
|
Additional Commissioner Review Board (West Bengal )
|
| |
|
3,578.53
|
3,512.29
|
|
|
| |
|
Particulars
|
As at
March 31, 2023
|
As at
March 31, 2022
|
|
(ii) Other matters including claims related to employees/ ex-employees, and customers etc.
|
825.62
|
941.71
|
Notes
(i) Pending resolution of the respective proceedings, it is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgements/decisions pending with various forums/authorities.
(ii) The amount indicated as contingent liability or claim against the company, reflects only the basic value. Any interest, penalty or legal cost is not considered.
(iii) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial position. The Company does not expect any reimbursements in respect of the above contingent liabilities.
|
(b) Commitments
|
|
Particulars
|
As at
|
As at
|
|
March 31, 2023
|
March 31, 2022
|
|
Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)
|
2,586.72
|
637.77
|
|
Lease commitments (Refer Note 37)
|
85.30
|
120.82
|
Qualified institutional Placement (QiP)
During the year ended March 31, 2022, the Company had completed the Qualified Institutional Placement ("QIP") under Chapter VI of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, pursuant to which 5,600,000 equity shares having a face value of R 2 each were issued and allotted, at an issue price of R 242 per equity share (including a securities premium of R 240 per equity share), aggregating to R 13,552 lakhs.
The proceeds of such Qualified Institutional Placement amounts to R 13,173.87 lakhs (net of issue related expenses amounting R 378.13 lakhs which had been adjusted against securities premium). As per the placement document, QIP proceeds were to be utilised for funding the long term growth of its existing businesses; organic or inorganic growth, making strategic acquisitions; financing other long term capital, working capital, and general corporate requirements; pre-payment and / or repayment of loans. As on March 31, 2023 utilisation out of such net amount is given below and there is no deviation in use of proceeds from the objects stated in the placement document for the QIP.
The Company does not face a significant liquidity risk with regard to its lease liabilities as the current /non current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.
Rental expenses recorded for short-term leases during the year ended March 31, 2023 is R 64.65 Lakhs (March 31, 2022: R 56.79 lakhs).
Leases as Lessor Finance lease
During the year ended March 31, 2023, the Company entered into agreements with customers ("the lessee") for lease of products. The lease term has been considered as the entire tenure of the agreement. The lessee has an option to purchase the assets at expiry of the agreement.
A finance lease receivable at an amount equal to the net investment in the lease represented by discounted value of recovery fee and is recorded in the balance sheet with a corresponding credit to statement of profit and loss as revenue from sale of products. The undiscounted value of such lease receivable, though, credited as revenue, but will be billed and collected from customer over the period of lease term. Interest income on such finance lease receivable is recognized over the life of the lease.
Operating lease
The Company leases out its products and investment property. The Company has classified these leases as operating leases, because they do not transfer substantially all of the risks and rewards incidental to the ownership of the assets. Rental income recognised by the Company during the year ended 31 March 2023 was R 1,145.76 lakhs (March 31, 2022: R 1,415.52 lakhs). These lease terms are on work order basis and are in short term in nature.
Segment information
The Company has presented segment information in the consolidated financial statements. Accordingly, in terms of paragraph 4 of Ind AS 108 'Operating Segments', no disclosures related to segments are presented in these standalone financial statements.
Revenue from operations
a) Disaggregation of revenue from contracts with customers
In the following table, revenue from contracts with customers is disaggregated by major products and timing of revenue recognition. The Company has performed a disaggregated analysis of revenues considering the nature, amount, timing and uncertainty. The table also includes a reconciliation of the disaggregated revenue with the Company's reportable segments. Invoices raised for credit sales are usually payable within 30 days.
Additional regulatory information pursuant to the requirement in Division ii of Schedule iii to the Companies Act 2013
(i) 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) 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.
iii) 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.
(iv) The Company has complied with the number of layers prescribed under the Companies Act, 2013.
(v) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year..
(vi) The Company has not 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).
(vii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(viii) 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.
(ix) The Company does not have any charges or satisfaction of charges which is yet to be registered with Registrar of Companies beyond the statutory period.
(x) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
(xi) The Company has not granted any loans to the promoters, directors, Key Managerial Person's and the related parties (as
defined under Companies Act, 2013), either severally or jointly with any other person which are repayable on demand or without specifying any terms or period of repayments as at March 31, 2023 (as at March 31, 2022: Nil).
(xii) The Group (as per the provisions of the Core Investment Companies (Reserve Bank) Directions, 2016) does not have Core Investment Company (CIC).
For the year ended March 31, 2023 the quarterly returns or statements of current assets filed by the Company with banks are not in agreement with the books of accounts.
In the current year, management has identified certain prior period errors in classification of property, plant and equipment, right-of-use assets, investments, other current financial assets, other tax assets (Current and non-current), loans, other current assets, borrowings, trade payables, other current financial liabilities, other expenses and impairment losses on financial assets in the audited financial statements for the year ended March 31, 2022. These errors have been corrected by restating each of the affected financial statements line items as at March 31, 2022 and as at April 1, 2021 in accordance with Ind AS 8 "Accounting Policies, Changes in Accounting Estimates and Errors". The following table summarises the impacts of the correction of error on the standalone financial statements:
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