2.6 The Company does not have any Capital work in progress, whose completion is overdue or exceeded its cost compared to its original plan.
2.7 Building includes cost of shares in Co-operative society of H 750 (March 31, 2023 H 750).
2.8 In accordance with the Indian Accounting Standards -36 on "Impairment of Assets", the management during the year carried out an exercise of identifying the assets that may have been impaired in respect of each cash generating unit in accordance with the said Ind AS. On the basis of the review carried out by the management , there was no impairment loss on Property, Plant and Equipment during the year ended March 31, 2024.
3.4 The Fair Values of the properties are H 2,898.00 Lakhs (March 31, 2023: H 2,730.00 Lakhs). This valuation is based on the valuations performed by an Registered Valuer. The main inputs used are the rental growth rates and a study of the micro market in discussion with industry experts or local brokers. The fair value measurement for the investment property has been categorized as a level 3 fair value based on the inputs to the valuation techniques used.
3.5 The Company has no restrictions on the realisability of its investment properties and no contractual obligations to purchase, construct or develop investment properties for repairs, maintenance and enhancement.
16.5 Rights of Equity Shareholders
The Company has only one class of equity shares having a face value of H 10/- per share. Each shareholder is eligible for one vote per share held. In the event of liquidation of the Company, the equity shareholders will be entitled to receive any of 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.
16.6 There are no shares reserved for issue under options and contracts/commitments
16.7 Dividend paid and proposed of H NIL (March 31, 2023 : H NIL)
Note 17.1 Nature And Purpose Of Reserves
Capital Reserves
The Capital Reserve was created pursuant to the scheme of amalgamation of Mechvac India Limited and Concept Shapers & Electronics Private Limited. It shall be utilised in accordance with the provisions of the Companies Act, 2013.
Securities Premium
Securities Premium was created when shares were issued at premium. It shall be utilised in accordance with the provisions of the Companies Act, 2013.
Revaluation Reserve
Revaluation Reserve was created for revaluation of Land and Building. It shall be utilised in accordance with the provisions of the Companies Act, 2013.
General Reserve
The General Reserve shall be utilised in accordance with the provisions of the Companies Act, 2013.
Retained Earnings
Retained Earnings represent the accumulated Profits / (losses) made by the company over the years.
Other Comprehensive Income
Other Comprehensive Income (OCI) represents the amount recognised in other equity consequent to remeasurement of Defined Benefit Plan.
22.1 The working capital loans from banks includes:
(i) H 1,385.15 lakhs (March 31, 2023: H NIL) secured by way of hypothecation of stocks & book-debts and further secured by collateral mortgage of 1) Plot no. 108 A, survey no. 261, IDA, Cherlapally, Dist. Ranga reddy, Hyderabad-500062. 2) Plot no. D112, TTC Industrial Area, MIDC, Shiravane, Nerul, Navi Mumbai 400076, 3) Penthouse No. 11, 13th & 14th floors, A Wing, Maruti Paradise, Sector No. 15 at CBD Belapur, Navi Mumbai - 400614 owned by Mr Munjal Shah and 4) Plot no. M-6, MIDC, Additional Ambernath Industrial Area, Ambernath-421506, Maharashtra, India. The above loan carries interest rate @ ROI @ PLR i.e 9.75% p.a
(ii) H 1782.86 lakhs (March 31, 2023: H NIL ) secured by Pari Passu Charge on all existing and future current assets and movable fixed assets and Collateral mortgage of 1) Plot no. 108 A, survey no. 261, IDA, Cherlapally, Dist. Ranga reddy, Hyderabad-500062. 2) Plot no. D112, TTC Industrial Area, MIDC, Shiravane, Nerul, Navi Mumbai 400076, 3) Penthouse No. 11, 13th & 14th floors, A Wing, Maruti Paradise, Sector No. 15 at CBD Belapur, Navi Mumbai - 400614 owned by Mr Munjal Shah and 4) Plot no. M-6, MIDC, Additional Ambernath Industrial Area, Ambernath-421506, Maharashtra, India. The above loans carries interest rate @ 3m MCLR 2.4% p.a
(iii) H 188.27 lakhs (March 31, 2023: H NIL ) secured by Pari Passu Charge on all existing and future current assets and movable fixed assets and Collateral Security of 1) Plot no. 108 A, survey no. 261, IDA, Cherlapally, Dist. Ranga reddy, Hyderabad-500062. 2) Plot no. D112, TTC Industrial Area, MIDC, Shiravane, Nerul, Navi Mumbai 400076 and 3) Plot no. M-6, MIDC, Additional Ambernath Industrial Area, Ambernath-421506, Maharashtra, India The above loan carries interest rate @ Repo Rate Plus spread 2.65 %
22.2 The Working Capital Rupee loans referred to above are guaranteed by Managing Director of the company.
27.6 Transaction price allocated to the remaining performance obligations
The aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied) as of March 31, 2024 amounts to H 1,988.12 Lakhs (March 31,2023 : Nil).
27.7 The management of company expects that above unsatisfied performance obligation will be fully recognised as revenue during the next reporting year.
The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. In presenting the above sensitivity analysis, the present value of defined benefit obligation has been calculated using the Projected Unit Credit method at the end of reporting period, which is the same as that applied in calculating the defined obligation liability recognized in the balance sheet.
30.4 Risk exposures
These plans typically expose the company to actuarial risks as Salary Risk, Discount Rate, Employee Turnover rate/Withdrawal rate and Mortality / Disability.
Salary Risk
Salary escalation & attrition rate are considered as advised by the company; they appear to be in line with the industry practice considering promotion and demand & supply of the employees.
Discount rate
In case the yield on the government bonds drops in the future period then it may result in increase in the liability.
Employee Turnover rate/Withdrawal rate
If the actual withdrawal rate in the future turns out to be more or less than expected then it may result in increase in the liability. Mortality / Disability
Maturity Analysis of Benefit Payments is undiscounted cash flows considering future salary, attrition & death in respective year for members as mentioned above.
Details of Asset-Liability Matching Strategy:-
Gratuity benefits liabilities of the company are Funded. There are no minimum funding requirements for a Gratuity benefits plan in India and there is no compulsion on the part of the Company to fully or partially pre-fund the liabilities under the Plan. The trustees of the plan have outsourced the investment management of the fund to insurance companies which are regulated by IRDA. Due to the restrictions in the type of investments that can be held by the fund, it may not be possible to explicitly follow an asset-liability matching strategy to manage risk actively in a conventional fund.
30.5 The average duration of the defined benefit plan obligation at the end of the reporting period is 9.00 years (March 31, 2023 : 9.00 years).
Note: 36 Related Party Disclosures :
In accordance with the requirements of Ind AS 24, on related party disclosures, name of the related party, related party relationship, transactions and outstanding balances including commitments where control exists and with whom transactions have taken place during reported year, are as detailed below:
List of Related Parties :
I Subsidiaries
i Paras Aerospace Private Limited
ii Paras Green UAV Private Limited (Formerly Known as Paras Green Optics Private Limited)
iii Paras Anti- Drone Technologies Private Limited
iv OPEL Technologies PTE Ltd
v Ayatti Innovative Private Limited
Note: 37 Expenditure related to Corporate Social Responsibility (CSR) as per Section 135 of the Companies Act, 2013 read with Schedule VII.
a. CSR amount required to be spent as per Section 135 of the Companies Act, 2013 read with Schedule VII thereof by the Company during the year is H 66.49 lakhs (March 31, 2023 : H53.37 Lakhs)
b. Expenditure incurred related to Corporate Social Responsibility is H 69.00 Lakhs (March 31, 2023: H61.25 Lakhs)
c. Amount shortfall H NIL (March 31, 2023: HNIL)
37.1 During the year ended the company has contributed above amount and received certificates / management confirmation stating that unspent amount of H51.15 lakh will be utilised within 6 months towards objects.
Note : 38 Fair Values
38.1 Financial Instruments by category:
Set out below is a comparison by class of the carrying amounts and fair value of the Company’s financial assets and liabilities that are recognised in the Standalone Financial Statements.
38.2 Fair Valuation techniques used to determine Fair Value
The Company maintains procedures to value its financial assets or financial liabilities using the best and most relevant data available. The Fair Values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The following methods and assumptions were used to estimate the Fair Values:
i) Fair Value of Cash and Cash Equivalents, Other Bank Balances, Trade Receivable, Trade Payables, Current Loans, Current Borrowings, and other Current Financial Assets and Liabilities are approximate at their carrying amounts largely due to the shortterm maturities of these instruments.
ii) The fair values of non-current borrowings, Security Deposits and Margin money are approximate at their carrying amount due to interest bearing features of these instruments.
iii) The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
38.3 Fair Value Hierarchy
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation techniques:-
i) Level 1 :- Quoted prices / published Net Assets Value (unadjusted) in active markets for identical assets or liabilities. It includes fair value of financial instruments traded in active markets and are based on quoted market prices at the Balance Sheet date and financial instruments like mutual funds for which Net Assets Value is published by mutual fund operators at the Balance Sheet date.
ii) Level 2 :- Inputs other than quoted prices included within level 1, that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). It includes fair value of the financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on the Company specific estimates. If all significant inputs required to fair value an instrument are observable then instrument is included in level 2.
iii) Level 3 :- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
The following table provides hierarchy of the fair value measurement of Company’s asset and liabilities, grouped into Level 1 (Quoted prices in active markets), Level 2 (Significant observable inputs) and Level 3 (Significant unobservable inputs) as described below:
Note: 39 Financial Risk Management - Objective And Policies
The Company is exposed to market risk, credit risk, liquidity risk and competition and price risk. Risk management is carried out by the company under policies approved by the Board of Directors. This Risk management plan defines how risks associated with the Company will be identified, analysed and managed. It outlines how risk management activities will be performed, recorded and monitored by the Company. The basic objective of risk management plan is to implement an integrated risk management approach to ensure all significant areas of risks are identified, understood and effectively managed to promote a shared vision of risk management and encourage discussion on risks at all levels of the organization to provide a clear understanding of risk / benefit trade-offs, to deploy appropriate risk management methodologies and tools for use in identifying, assessing, managing and reporting on risks and to determine the appropriate balance between cost and control of risk and deploy appropriate resources to manage/optimize key risks. Activities are developed to provide feedback to management and other interested parties (e.g. Audit committee, Board etc.). The results of these activities ensure that risk management plan is effective in the long term.
39.1 Market Risk and Sensitivity:
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprise two types of risk: foreign currency rate risk and interest rate risk. Financial instruments affected by market risk include loans, borrowings, deposits and investments.
The sensitivity analysis relate to the position as at March 31, 2024 and March 31, 2023
(a) Foreign Currency Exchange Risk and Sensitivity
Foreign exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign currency exchange rates. The Company’s exposure to the risk of changes in foreign currency exchange rates relates primarily to the Company’s operating activities and its Investment. The Company transacts business primarily in USD and Euro. The Company has foreign currency trade payables and receivables and is therefore, exposed to foreign currency exchange risk. The Company regularly reviews and evaluates exchange rate exposure arising from foreign currency transactions.
The following table demonstrates the sensitivity in the USD, GBP and Euro to the Indian Rupee with all other variables held constant. The impact on the Company’s profit before tax (PBT) due to changes in the fair values of monetary assets and liabilities is given below:
(b) Interest Rate Risk and Sensitivity :-
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is having non current borrowings in the form of term loans and current borrowings in the form of working capital. There is a fixed rate of interest in case of vehicle loans and hence, there is no interest rate risk associated with these borrowings. The Company is exposed to interest rate risk associated with working capital facility due to floating rate of interest.
39.2 Credit Risk
Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities including deposits with banks and other financial instruments.
a) Trade Receivables:-
The Company measures the expected credit loss of trade receivables, which are subject to credit risk based on historical trend, industry practices and the business environment in which the entity operates and adjusted for forward looking information. Loss rates are based on actual credit loss experience and past trends.
The Company has used practical expedient by computing the expected credit loss allowance for trade receivables based on provision matrix. The provision matrix taken into account historical credit loss experience and adjusted for forward looking information. The expected credit loss allowance is based on ageing of the days the receivables are due.
b) Financial Instruments and Cash Deposits:-
The Company considers factors such as track record, size of the institution, market reputation and service standards to select the banks with which balances are maintained. Credit risk from balances with bank is managed by the Company's finance department. Investment of surplus funds are also managed by finance department. The Company does not maintain significant cash in hand. Excess balance of cash other than those required for its day to day operations is deposited into the bank.
For other financial instruments, the finance department assesses and manage credit risk based on internal assessment. Internal assessment is performed for each class of financial instrument with different characteristics.
39.3 Liquidity Risk :
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company’s objective is to at all times, maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company relies on short term borrowings and operating cash flows in the form of working capital to meet its need for fund. The Company does not breach any covenants wherever applicable on any of its borrowing facilities. The Company has access to a sufficient variety of sources of funding as per requirements.
39.4 Competition and Price Risk
The Company faces competition from local and foreign competitors. Nevertheless, it believes that it has competitive advantage in terms of high quality products and by continuously upgrading its expertise and range of products to meet the needs of its customers.
Note: 40 Capital Risk Management
For the purpose of Company's capital management, capital includes issued capital, all other equity reserves and net debts. The primary objective of the Company’s capital management is to maximise shareholders value. The Company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial covenants.
The Company monitors capital using gearing ratio, which is net debt divided by total capital (equity plus net debt). Net debt are non current debts plus current debts as reduced by cash and cash equivalents. Equity comprises all components including other comprehensive income.
A. Segment information as per Indian Accounting Standard - 108 - "Operating Segments" :
As per Indian Accounting Standard 108 'Operating Segments', the chief operating decision maker of the Company has identified following reportable segments of its business:
Considering the present product-centric nature of operations, the product categories in the order book and future business plans, during the year, the CODM has adopted a new enhanced approach towards monitoring and allocation of the resources to the business, accordingly during the year, the Company has identified two segments, namely "Optics and Optronic Systems" and "Defence Engineering” as against “Heavy Engineering”, “Defence & Space Optics” and “Defence Electronics” till March 31, 2023. The figures for the previous year have been regrouped to make them comparable with those of the current year.
Segment comprise of:
Optics & Optronic Systems:
- Optical Components and Sub-Systems like Space Optics/Gratings/Mirrors, Infra-Red Lenses for Night Vision Devices, Optomechanical Assemblies and Precision Diamond Turned components etc.
- Opto-Electronic Systems comprising of Submarine Periscope, hyperspectral camera etc.
- EO/IR Systems.
Defence Engineering:
- Defence Electronics compromising of Defence Automation & Control systems, Rugged Command & Control Consoles, Avionic suite etc.
- Heavy Engineering comprising of Flow Formed Rockets/ Missile Motor Tubes, Electromechanical assemblies, Remote Controlled Border Defence System and Turnkey projects.
- Electromagnetic Pulse Protection Solutions.
Unallocated
Consists of other income, expenses, assets and liabilities which cannot be directly identified to any of the above segments.
B. Segment Identification, Reportable Segments and definition of each segment :
a. Reportable Segments:
The chief operating decision maker monitors the operating results of its Business Segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on the internal reporting system and is measured consistently with profit or loss in the Standalone Financial Statements. Operating segment have been identified on the basis of the nature of products / services and have been identified as per the quantitative criteria specified in Ind AS.
b. Primary / Secondary Segment Reporting Format:
i. The risk-return profile of the company's business is determined predominantly by the nature of its products. Accordingly, the business segments constitute the Primary Segments for disclosure of segment information.
ii. Revenue disaggregation by geography (Refer Note No. 27.2)
iii. No Non-Current Assets of the Company is located outside India as on March 31, 2024 and March 31, 2023
IV Segment revenue, results, assets and liabilities:
Revenue and results have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and expenses which is related to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as “Unallocable”.
Segment assets and segment liabilities represent assets and liabilities in respective segments. Segment assets include all operating assets used by the operating segment and mainly includes property, plant and equipment, trade receivable, inventories and other receivables. Segment liabilities primarily include trade payables and other liabilities. Common assets and liabilities which cannot be allocated to any of the segments are shown as a part of unallocable assets and liabilities.
V Information about major customers:
Revenue from operations include H 10,586.37 Lakhs, (March 31, 2023 : H 10,805.45 Lakhs) from three customers (March 31, 2023: four customers) having more than 10% of the total revenue.
i) There are no balances outstanding on account of any transaction with companies strike off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
ii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
iii) The Company does not have any such transaction which is not recorded in the books of account surrendered or disclosed as income during the year in the tax assessments under the Income-tax act, 1961.
iv) No proceeding has been initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
v) The Company is not declared wilful defaulter by any bank or financial institution or other lender
vi) 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 (whether recorded in writing or otherwise) 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.
vii) The Company has not received any fund from any person(s) or entity(ies), including entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the (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.
viii) There is no charge or satisfaction which is yet to be registered with Registrar of Companies beyond the statutory period.
Note: 47 Previous Year's figures have been regrouped / rearranged wherever necessary, to make them comparable with those of current year.
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