Notes to Accounts of Nesco Ltd.
Mar 31, 2023
a) Terms / Rights Attached to Equity Shares
The Company has only one class referred to as equity shares having a par value of '' 2/- per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. Payment of dividend is also made in foreign currency to shareholders outside India.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company. The distribution will be in proportion to the number of equity shares held by the shareholders.
b) Proposed Dividend
The Board of Directors at its meeting held on 24 May 2023 have recommended a payment of dividend of '' 4.50 (Rupees Four and Fifty Paise) per equity share of face value '' 2 each for the financial year ended 31 March 2023 amounting to ''3,170.70 lakhs and subject to approval at the ensuing AGM of the Company and hence is not recognized as a liability.
Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments and mutual funds that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.
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). The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3 Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities included in level 3
Financial instrument measured at amortised cost
The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the company did not anticipate that the carrying amounts would be significantly different from the values that would be received or settled.
The Company''s financial liabilities comprises mainly of trade payables and other payables. The company''s financial assets comprise mainly of investments, cash and cash equivalents, other balances with banks, loans, trade receivables and other receivables.
The Company''s activities are exposed to Market risk, credit risk and liquidity risk. The Company has set up Risk Management Committee to minimize any adverse effects of the risk exposure on the financial performance of the Company.
Market risk comprises of three types of risk: Currency Risk, Interest rate Risk and Other Price Risk.
The Company has not entered into any forward contract during the year ended 31 March 2023 and 31 March 2022.The Company has not entered into any forward instrument for trades or speculation purpose.
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Since the Company has NIL interest bearing borrowings, the exposure to risk of changes in market interest rate is NIL. The Company has not used any interest rate derivatives.
Other Price risk is the risk that fair value of a financial instrument will fluctuate due to changes in market traded price. Other price risk arises from both financial assets such as investments in equity instruments and bonds.
The Company invests in units of mutual funds including Fixed Maturity Plans, various debt Funds and Equity funds, and hence exposed to Other Price risk. Company''s Treasury department. manages investments portfolio diversification in order to minimize risk and ongoing monitoring of market prices of investments.
Credit risk refers to the risk of default on its obligation by the counterparty resulting in financial loss. Trade receivables are typically unsecured and are derived from customers from four operations Nesco IT Park lease, Bombay Exhibition Centre (BEC) revenue, sale of Industrial Capital Goods and Nesco Foods.
The maximum exposure to credit risk on account of trade receivables, at the reporting date is ''2,262.23 lakhs and '' 1,862.90 lakhs as on 31 March 2023 and 31 March 2022 respectively
The Company minimizes credit risk relating to IT Park lease and BEC business as follows:
- The Company obtains security deposits from IT Park lessees and entitled to terminate lease agreement in case lessee makes defaults in payment of lease for a period of two consecutive months.
- BEC customers are required to pay advance and place refundable security deposit with the Company.
- Hospitality customers are required to pay advances to the Company.
Whereas, in case of trade receivables from Industrial Capital Goods division for sale of machineries, credit risk is managed through credit approvals, establishing credit limits, and continuously monitored by creditworthiness of customers to whom, credit terms are granted in normal course of business.
The Company takes into account available credit risk factors as Company''s historical experience for customers, customers'' standing for credit defaults in market.
The allowance for lifetime expected credit loss on customer balances as on 31 March 2023 and 31 March 2022 was '' 165.77 lakhs and '' 134.24 lakhs respectively.
Credit risk of financial assets other than Trade receivables:
⢠Investments in mutual fund schemes are marked to market on ongoing basis, which is major part of total Noncurrent and current investments.
⢠Long term loans and advances include deposits with local authorities, electricity Board, electricity companies etc.
⢠Cash and Cash equivalents are balances with Public and Private Banks.
⢠Other current assets include lease rentals receivables and deposits with more than 12 months maturities with Public and Private Banks and Earnest Money Deposits with Government customer.
Credit risk arising from investment in mutual funds, financial instruments and other balances with banks is limited and there is no collateral held against these because the counterparties are banks and recognized financial institutions with high credit ratings assigned by the international credit rating agencies.
The allowance for lifetime expected credit loss on current license and other fees receivables as on 31 March 2023 and 31 March 2022 was '' 218.31 lakhs and ''120.83 lakhs respectively.
The Company''s principal sources of liquidity are cash and cash equivalents, Balances and cash flows that are generated from business. The Company does not have any borrowings. The Company believes that their working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.
The Company manages the liquidity risk by maintaining adequate cash and cash equivalent '' 1189.15 lakhs and '' 376.63 lakhs as on 31 March 2023 and 31 March 2022 respectively.
For the purpose of the Company''s capital management, capital includes issued capital, and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value.
As of 31 March 2023, the Company has only one class of shares referred to as Equity Shares and has nil debt. Consequent to such capital structure, there are no externally imposed capital requirements. In order to maintain or achieve an optimal capital structure, the Company allocates its capital for distribution as dividend or re-investment into business based on its long-term financial plans.
1 Income tax demand disputed by the Company ''157.14 lakhs (previous year '' 286.24 lakhs).
2 Claims against the Company not acknowledged as debts '' 4,499.59 lakhs (previous year '' 3,256.67 lakhs).
3 Estimated value of contracts remaining to be executed on capital account and not provided for is '' 3,439.20 lakhs (previous year - '' 2,605.91 lakhs) against which an advance of ''128.06 lakhs (previous year - '' 55.06 lakhs) has been paid.
4 Domestic Bank Guarantees given by bank on Company''s behalf '' 756.98 lakhs (previous year - '' 694.89 lakhs) secured by lien of Mutual Fund (Fixed Maturity Plan) of value '' 1,093.77 lakhs (previous year '' 1,009.70 lakhs).
Note 38 - Disclosure as per Section 186 of the Companies Act, 2013
The details of loans, guarantees and investments under Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 are as follows:
a) Details of Investments made are given in Note 7.
b) There are no loans given to any related party during the year.
c) There are no guarantees issued by the Company in accordance with Section 186 of the Companies Act, 2013 read with rules issued thereunder
Note 39 - Corporate Social Responsibility expense (CSR):
1. Gross amount required to be spent by the Company during the year 2022-23 '' 438.23 lakhs (Previous year '' 496.88 lakhs) towards CSR activities prescribed under Schedule VII of the Companies Act, 2013.
7. Nature of CSR Activities undertaken by the company
The Companyâs CSR activities primarily include one or more of the items covered under Schedule VII of the Act with special focus on the following:
(i) Promoting preventive health care and sanitation and making available safe drinking water;
(ii) Promoting education, including special education and employment enhancing vocational skills especially among children, setting up Atal Tinkering Labs (ATL);
(iii) Contribution to incubators or research and development projects in the field of science, technology, engineering and medicine;
(iv) Extending support to Jumbo Covid Centre managed by MCGM at Nesco Premises.
Ind AS 116 âLeasesâ requires the lessor to recognize income from operating leases on a straight-line basis over the lease term which includes rent free period. Thus, contracted lease rental income including future escalation is straight lined over the lease term. This has resulted in derecognizing unearned lease income amounting to ''712.95 lakhs (previous year recognizing ''985.25 lakhs) for the year ended 31 March 2023.
The Company has entered into operating leases on its Investment Property located at Byculla and Goregaon IT Park premises:
There is no contingent rent receivable from lessees under the lease agreements.
Lease income recognized during the year in Statement of profit and loss is '' 29,502.70 lakhs (previous year '' 26,415.15 lakhs) Company as Lessee:
The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The Company has taken factory land at Karamsad, Gujarat under non-cancellable Operating Lease. These lease rentals are payable by the Company on a monthly basis. Company recognizes this lease as right of use assets and lease liability.
The Company recognises the lease payments associated with these leases as an expense over the lease term. There is no contingent rent payable to lessors under the lease agreements.
Note 43 - Employee Benefits:1. Post-employment benefits:
a. Defined Contribution plan
Provident Fund and Employee State Insurance Scheme
Defined contribution plans are Provident Fund Scheme and Employee State Insurance Scheme. The Company contributes to the Government administered provident funds on behalf of its employees.
b. Defined Benefit plan Gratuity scheme
The Company operates a defined benefit gratuity plan for employees. The liability for the Defined Benefit Plan is provided on the basis of a valuation, using the Projected Unit Credit Method, as at the Balance Sheet date, carried out by an independent actuary. The Company creates adequate provision in its books every year based on actuarial valuation. These benefit plans expose the Company to actuarial risks, such as longevity risk, interest rate risk and investment risk.
The sensitivity analysis has been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant. There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
2. Long Term Employee Benefits:
The liability towards compensated absences (annual leave) as on 31 March 2023, based on actual valuation carried out by using the project accrued benefit method amount to '' 29.24 lakhs (previous year '' 6.22 lakhs) has been recognized on the Statement of Profit and Loss.
The Board of Directors at its meeting held on 24 May 2023 have recommended a payment of dividend of '' 4.50 (Rupees Four and Fifty Paise Only) per equity share of face value '' 2 each for the financial year ended 31 March 2023 amounting to '' 3,170.70 lakhs and subject to approval at the ensuing AGM of the Company and hence is not recognized as a liability.
The Company has following business segments, which are its reportable segments. Operating segment disclosures are consistent with the information provided to and reviewed by the management.
Note 49 - Additional Regulatory Information required by Schedule III to the Companies Act, 2013.
(i) The Company does not have any benami property held in its name. No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
(ii) The Company has not been declared wilful defaulter by any bank or financial institution or other lender or government or any government authority.
(iii) The Company has complied with the requirement with respect to number of layers as prescribed under section 2(87) of the Companies Act, 2013 read with the Companies (Restriction on number of layers) Rules, 2017.
(iv) Utilisation of borrowed funds and share premium
I 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
II 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
(v) There is no income surrendered or disclosed as income during the year in tax assessments under the Income Tax Act, 1961 (such as search or survey), that has not been recorded in the books of account.
(vi) The Company has not traded or invested in crypto currency or virtual currency during the year.
(vii) 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.
(viii) During the year, the company had no transactions with struck off companies.
Note 50 - Previous yearâs figures have been regrouped / reclassified wherever necessary.
Note 51 - The financial statements are approved for issue by the Audit Committee and thereafter by the Board of Directors at its meeting held on 24 May 2023.
Mar 31, 2022
b) Terms / Rights Attached to Equity Shares
The Company has only one class referred to as equity shares having a par value of ? 2/- per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. Payment of dividend is also made in foreign currency to shareholders outside India.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company. The distribution will be in proportion to the number of equity shares held by the shareholders.
c) Proposed Dividend
The Board of Directors at its meeting held on 25 May 2022 have recommended a payment of dividend of ? 3.00 (Rupees Three) per equity share of face value ? 2 each for the financial year ended 31 March 2022 amounting to ? 2,113.80 lakhs and subject to approval at the ensuing AGM of the Company and hence is not recognized as a liability.
Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments and mutual funds that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.
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). The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3 Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities included in level 3
Financial instrument measured at amortised cost
The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the company did not anticipate that the carrying amounts would be significantly different from the values that would be received or settled.
The Companyâs financial liabilities comprises mainly of trade payables and other payables. The companyâs financial assets comprise mainly of investments, cash and cash equivalents, other balances with banks, loans, trade receivables and other receivables.
The Companyâs activities are exposed to Market risk, credit risk and liquidity risk. The Company has set up Risk Management Committee to minimize any adverse effects of the risk exposure on the financial performance of the Company.
The Board has been monitoring the risks that the Company is exposed to due to outbreak of COVID 19 closely. The Board has taken all necessary actions to mitigate the risks identified basis the information and situation present.
Market risk comprises of three types of risk: Currency Risk, Interest rate Risk and Other Price Risk.
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Since the Company has NIL interest bearing borrowings, the exposure to risk of changes in market interest rate is NIL. The Company has not used any interest rate derivatives.
Other Price risk is the risk that fair value of a financial instrument will fluctuate due to changes in market traded price. Other price risk arises from both financial assets such as investments in equity instruments and bonds.
The Company invests in units of mutual funds including Fixed Maturity Plans, various debt Funds and Equity funds, and hence exposed to Other Price risk. Companyâs Treasury dept. manages investments portfolio diversification in order to minimize risk and ongoing monitoring of market prices of investments.
Credit risk refers to the risk of default on its obligation by the counterparty resulting in financial loss. Trade receivables are typically unsecured and are derived from customers from four operations Nesco IT Park lease, Bombay Exhibition Centre (BEC) revenue, sale of Industrial Capital Goods and Nesco Foods.
The maximum exposure to credit risk on account of trade receivables, at the reporting date is t 1,862.90 lakhs and t 2,959.69 lakhs as on 31 March 2022 and 31 March 2021 respectively
The Company minimizes credit risk relating to IT Park lease and BEC business as follows:
- The Company obtains security deposits from IT Park lessees and entitled to terminate lease agreement in case lessee makes defaults in payment of lease for a period of two consecutive months.
- BEC customers are required to pay advance and place refundable security deposit with the Company.
- Hospitality customers are required to pay advances to the Company.
Whereas, in case of trade receivables from Industrial Capital Goods division for sale of machineries, credit risk is managed through credit approvals, establishing credit limits, and continuously monitored creditworthiness of customers to whom, credit terms are granted in normal course of business.
The Company takes into account available credit risk factors as Companyâs historical experience for customers, customersâ standing for credit defaults in market.
Credit risk of financial assets other than Trade receivables:
⢠Investments in mutual fund schemes are marked to market on ongoing basis, which is major part of total Noncurrent and current investments.
⢠Long term loans and advances include deposits with local authorities, electricity Board, electricity companies etc.
⢠Cash and Cash equivalents are balances with Public and Private Banks.
⢠Other current assets include lease rentals receivables and deposits with more than 12 months maturities with Public and Private Banks and Earnest Money Deposits with Govt. customer.
Credit risk arising from investment in mutual funds, financial instruments and other balances with banks is limited and there is no collateral held against these because the counterparties are banks and recognized financial institutions with high credit ratings assigned by the international credit rating agencies.
The Companyâs principal sources of liquidity are cash and cash equivalents, Balances and cash flows that are generated from business. The Company does not have any borrowings. The Company believes that their working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.
The Company manages the liquidity risk by maintaining adequate cash and cash equivalent t 376.63 lakhs and t 323.41 lakhs as on 31 March 2022 and 31 March 2021 respectively
4. Risk due to Outbreak of COVID 19 Pandemic
The outbreak of COVID 19 pandemic globally and in India has severely impacted businesses and economies. The disruption to regular business operations continues due to the measures taken to curb the impact of the pandemic from time to time, since start of it. The Company has considered external and internal information in assessing the impact of COVID 19 on various elements of its financial statements, including recoverability of its assets as at the Balance Sheet date.
For the purpose of the Companyâs capital management, capital includes issued capital, and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value.
As of 31 March 2022, the Company has only one class of shares referred to as Equity Shares and has nil debt. Consequent to such capital structure, there are no externally imposed capital requirements. In order to maintain or achieve an optimal capital structure, the Company allocates its capital for distribution as dividend or re-investment into business based on its long-term financial plans.
1 Income tax demand disputed by the Company t 286.24 lakhs (previous year t 139 lakhs)
2 Claims against the Company not acknowledged as debts t 3,256.67 lakhs (previous year t 2,053.65 lakhs)
3 Estimated value of contracts remaining to be executed on capital account and not provided for is t 2,605.91 lakhs (previous year t 2,623.35 lakhs) against which an advance of t 55.06 lakhs (previous year t 903.66 lakhs) has been paid
4 Bank Guarantees given by Indian Bank on Companyâs behalf t 694.89 lakhs (previous year t 721.95 lakhs) secured by lien on Mutual Fund (Fixed Maturity Plan) of value t 1,009.70 lakhs ( previous year t 1,224.72 lakhs).
The details of loans, guarantees and investments under Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 are as follows:
a) Details of Investments made are given in Note 7.
b) There are no loans given to any related party during the year.
c) There are no guarantees issued by the Company in accordance with Section 186 of the Companies Act, 2013 read with rules issued thereunder
Note 39 - Corporate Social Responsibility expense (CSR):
1. Gross amount required to be spent by the Company during the year 2021-22 t496.88 lakhs (Previous year t 537.37 lakhs) towards CSR activities prescribed under Schedule VII of the Companies Act, 2013.
7. Nature of CSR Activities undertaken by the company
The Companyâs CSR activities primarily include one or more of the items covered under Schedule VII of the Act with special focus on the following:
(i) Promoting preventive health care and sanitation and making available safe drinking water;
(ii) Promoting education, including special education and employment enhancing vocational skills especially among children, setting up Atal Tinkering Labs (ATL);
(iii) Contribution to incubators or research and development projects in the field of science, technology, engineering and medicine;
(iv) Extending support to Jumbo Covid Centre managed by MCGM at Nesco Premises.
Pursuant to Ind AS 116 - Leases, following information is disclosed:
Company as Lessor:
Ind AS 116 âLeasesâ requires the lessor to recognize income from operating leases on a straight-line basis over the lease term which includes rent free period. Thus, contracted lease rental income including future escalation is straight lined over the lease term. This has resulted in recognizing unearned lease income amounting to t 985.25 lakhs for the year ended 31 March 2022.
The Company has entered into operating leases on its Investment Property located at Byculla and Goregaon IT Park premises:
The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The Company has taken factory land at Karamsad, Gujarat under non-cancellable Operating Lease. These lease rentals are payable by the Company on a monthly basis. Company recognizes this lease as right of use assets and lease liability.
The Company recognises the lease payments associated with these leases as an expense over the lease term. There is no contingent rent payable to lessors under the lease agreements.
Note 43 - Employee Benefits:1. Post-employment benefits:
a. Defined Contribution plan
Provident Fund and Employee State Insurance Scheme
Defined contribution plans are Provident Fund Scheme and Employee State Insurance Scheme. The Company contributes to the Government administered provident funds on behalf of its employees.
b. Defined Benefit plan Gratuity scheme
The Company operates a defined benefit gratuity plan for employees. The liability for the Defined Benefit Plan is provided on the basis of a valuation, using the Projected Unit Credit Method, as at the Balance Sheet date, carried out by an independent actuary. The Company creates adequate provision in its books every year based on actuarial valuation. These benefit plans expose the Company to actuarial risks, such as longevity risk, interest rate risk and investment risk.
The sensitivity analysis has been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant. There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
2. Long Term Employee Benefits:
The liability towards compensated absences (annual leave) as on 31 March 2022, based on actual valuation carried out by using the project accrued benefit method amount to t 6.22 lakhs (previous year t 47.73 lakhs) has been recognized on the Statement of Profit and Loss.
The Board of Directors at its meeting held on 25 May 2022 have recommended a payment of dividend of t 3.00 (Rupees Three) per equity share of face value t 2 each for the financial year ended 31 March 2022 amounting to t 2,113.80 lakhs and subject to approval at the ensuing AGM of the Company and hence is not recognized as a liability.
* These provisions represent estimates made mainly for probable claims arising out of litigations / disputes pending with authorities under various statues. The probability and the timing of the outflow with regard to these matters depend on the final outcome of the litigations/ disputes. Hence, the Company is not able to reasonably ascertain the timing of the outflow.
# Provision for warranty represents cost associated with providing post-sales support services which are accrued at the time of recognition of revenues and are expected to be utilized over a period of two years.
Note 49 - Additional Regulatory Information required by Schedule III to the Companies Act, 2013.
(i) The Company does not have any benami property held in its name. No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
(ii) The Company has not been declared wilful defaulter by any bank or financial institution or other lender or government or any government authority.
(iii) The Company has complied with the requirement with respect to number of layers as prescribed under section 2(87) of the Companies Act, 2013 read with the Companies (Restriction on number of layers) Rules, 2017.
(iv) Utilisation of borrowed funds and share premium
I 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
II 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
(v) There is no income surrendered or disclosed as income during the year in tax assessments under the Income Tax Act, 1961 (such as search or survey), that has not been recorded in the books of account.
(vi) The Company has not traded or invested in crypto currency or virtual currency during the year.
(vii) 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.
(viii) During the year, the company had no transactions with struck off companies.
Note 50 - Previous yearâs figures have been regrouped / reclassified wherever necessary.
Note 51 - The financial statements are approved for issue by the Audit Committee and thereafter by the Board of Directors at its meeting held on 25 May 2022.
Mar 31, 2018
Accounting Policies
Background
Nesco Limited (âNescoâ or âthe Companyâ) was incorporated on 15 April 1946, under the Indian Companies Act VII of 1913. The Company is domiciled in India having registered office at Nesco Center, Western Express Highway, Goregaon (East), Mumbai 400063 and listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
The Company is mainly engaged in the following.
i) Licencing premises in IT park buildings and providing rental services.
ii) Licencing other premises for exhibitions and providing services to the organisers.
iii) Manufacturing of machines and capital equipment.
iv) Hospitality and catering services
Note 1 - Basis of Preparation of Financial Statements:
a) Compliance with Ind AS
These financial statements have been prepared in compliance with Indian Accounting Standards (Ind-AS) notified under Section 133 of the Companies Act 2013 (The Act) ,read together with the Companies (Indian Accounting Standards) Rules, 2015 (as amended).
These financial statements have been prepared and presented under the historical cost convention, on the accrual basis of the accounting except for certain financial assets and financial liabilities that are measured at fair values at the end of each reporting period, as stated in the accounting policies set out below. The accounting policies have been applied consistently over all the periods presented in these financial statements.
b) Current / Non-Current Classification
Any asset or liability is classified as current if it satisfies any of the following conditions:-
i) The asset / liability is expected to be realised / settled in the Companyâs normal operating cycle;
ii) The asset is intended for sale or consumption;
iii) The asset/liability is held primarily for the purpose of trading;
iv) The asset/liability is expected to be realised / settled within twelve months after the reporting period;
v) The asset is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the repotting cycle;
vi) In the case of a liability, the Company does not have an unconditional right to defer settlement of a liability for at least twelve months after the reporting cycle;
All other assets and liabilities are classified as non-current.
For the purpose of current/non-current classification of assets and liabilities, the Company has ascertained its normal operating cycle as twelve months. This is based on the nature of services and the time between the acquisition of assets or inventories for processing their realisation in cash and cash equivalents.
c) Functional and Presentation Currency
The Financial Statements are presented in Indian rupees which is the functional currency for the Company. Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss. Foreign exchange gains and losses are presented in the statement of profit and loss on a net basis.
d) Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the requirement of schedule III, unless otherwise stated.
e) Use of Estimates
The preparation of Financial Statements in accordance with Ind - AS requires use of estimates and assumptions for some items, which might have an effect on their recognition and measurement in the Balance Sheet and Statement of Profit and Loss. The actual amounts realised may differ from these estimates. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the management becomes aware of changes in circumstances surrounding the estimates. Differences between the actual results and estimates are recognised in the period in which the results are known / materialised and, if material, their effects are disclosed in the notes to the Financial Statements.
Note 2- Key accounting estimates and judgements:
The preparation of the Companyâs financial statements requires the management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
This note provides an overview of the areas that involved a higher degree of judgement or complexity and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statements.
Critical accounting estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below:
a) Income taxes:
The Companyâs tax jurisdiction is India. Significant judgements are involved in estimating budgeted profits for the purpose of paying advance tax, determining the provision for income taxes, including amount expected to be paid/ recovered for uncertain tax positions
b) Property, Plant and Equipment:
Property, Plant and Equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an assetâs expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Companyâs assets are determined by the management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technical or commercial obsolescence arising from changes or improvements in production or from a change in market demand of the product or service output of the asset.
c) Defined Benefit Obligation:
The costs of providing other post-employment benefits are charged to the Statement of Profit and Loss in accordance with Ind AS 19 âEmployee benefitsâ over the period during which benefit is derived from the employeesâ services. The costs are assessed on the basis of assumptions selected by the management. These assumptions include salary escalation rate, discount rates, expected rate of return on assets and mortality rates.
d) Fair value measurement of Financial Instruments:
When the fair values of financials assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques, including the discounted cash flow model, which involve various judgements and assumptions.
b) Terms / Rights Atttached to Equity Shares The Company has only one class of equity shares having a par value of Rs.2/- per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees.Payment of dividend is made in foreign currency to shareholders outside India.
The Board of Directors at its meeting held on 16 May 2018 have recommended a payment of dividend of Rs.2.30/- per equity share of the face value of Rs.2 each for the financial year ended 31 March 2018 subject to the approval of shareholders at the Annual General Meeting. If approved, the dividend would result in cash outflow of Rs.1953.69 lakhs inclusive of dividend tax of Rs.333.11 lakhs
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company. The distribution will be in proportion to the number of equity shares held by the shareholders.
Fair value hierarchy
Level 1 Quoted price (unadjusted) in active markets for identical assets or liabilities. Hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments and mutual funds that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.
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). The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3 Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities included in level 3
Financial Risk Factors:
The Companyâs financial liabilities comprises mainly of trade payables and other payables. The companyâs financial assets comprise mainly of investments, cash and cash equivalents, other balances with banks, loans, trade receivables and other receivables
The Companyâs activities are exposed to Market risk, credit risk and liquidity risk. The Company has set up Risk Management Committee in order to minimize any adverse effects of the risk exposure on the financial performance of the Company.
Market Risk:
Market risk comprises of three types of risk: Currency Risk, Interest rate Risk and Other Price Risk.
Foreign currency risk is the risk that the fair value of future cash flows of an exposure will fluctuate due to changes in foreign currency exchange rates. The carrying amounts of the Companyâs foreign currency denominated monetary items are nil as on 31 March 2018 and 31 March 2017 respectively. The Company has not entered into any forward exchange contracts during the years ended on 31 March 2018 and 31 March 2017.
Interest Rate Risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Since the Company has NIL interest bearing borrowings, the exposure to risk of changes in market interest rate is NIL.The Company has not used any interest rate derivatives Other Price risk is the risk that fair value or future cash flows of financial instrument will fluctuate due to change in market prices.
The Company invests in units of mutual funds including Fixed Maturity Plans, various debt Funds and Equity funds, and hence exposed to Other Price risk. Companyâs Treasury dept. manages investments portfolio diversification in order to minimise risk and ongoing monitoring of market prices of investments.
Credit Risk:
Credit risk refers to the risk of default on its obligation by the counterparty resulting in financial loss. Trade receivables are typically unsecured and are derived from customers from four operations Nesco IT Park lease, Bombay Exhibition Centre (BEC) revenue, sale of Industrial Capital Goods and Nesco Foods.
The maximum exposure to credit risk on account of trade receivables, at the reporting date is Rs.1,344.85 lakhs and Rs.1,111.76 lakhs as on 31 March 2018 and 31 March 2017 respectively.
The Company minimises credit risk relating to IT Park lease and BEC business as follows:
-The Company obtains security deposits from IT Park lessees and entitled to terminate lease agreement in case lessee makes defaults in payment of lease for a period of two consecutive months.
-BEC customers are required to pay advance and place refundable security deposit with the Company.
Whereas, in case of trade receivables from Industrial Capital Goods division for sale of machineries, credit risk is managed through credit approvals, establishing credit limits and continuously monitored by creditworthiness of customers to whom, credit terms are granted in normal course of business.
The Company takes into account available credit risk factors as Companyâs historical experience for customers, customersâ standing for credit defaults in market.
The allowance for lifetime expected credit loss on customer balances as on 31 March 2018 and 31 March 2017 was Rs.18.16 lakhs and Nil respectively.
Credit risk of financial assets other than Trade receivables:
- Investments in mutual fund schemes are marked to market on ongoing basis, which is major part of total Non-current and current investments.
- Long term loans and advances include deposits with local authorities, electricity Board, electricity companies etc.
- Cash and Cash equivalents are balances with Public and Private Banks.
- Other current assets include deposits with more than 12 months maturities with Public and Private Banks and Earnest Money deposits with Govt. customer.
Liquidity Risk:
The Companyâs principal sources of liquidity are cash and cash equivalents, Balances and cash flows that are generated from business. The Company does not have any borrowings. The Company believes that their working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.
The Company manages the liquidity risk by maintaining adequate cash and cash equivalent Rs.530.73 lakhs and Rs.363.58 lakhs as on 31 March 2018 and 31 March 2017 respectively.
The table below provides details regarding the contractual maturities of significant financial liabilities as on 31 March 2018
Note 3. Contingent Liabilities and Commitments
a. Income-tax demand disputed by the Company Rs.213.23 lakhs (previous year Rs.213.23 lakhs)
b. Claims against the Company not acknowledged as debts Rs.1,462.97 lakhs (previous year Rs.363.88 lakhs).
c. Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs.27,106.90 lakhs (previous year - Rs.28,661.67 lakhs) against which an advance of Rs.4,067.97 lakhs (previous year - Rs.4,987.52 lakhs) has been paid.
d. Indian Bank Guarantees given by bank on Companyâs behalf Rs.451.51 lakhs (Previous year - Rs.639.99 lakhs). Foreign Bank Guarantees given by bank on Companyâs behalf US $2,400 (Previous year - US $2,387).
Note 4. Disclosure under the MSMED Act 2006 are provided as under for the year 2017-18, to the extent the Company has received intimation from the âSuppliersâ regarding their status under the Act
Note 5. Corporate Social Responsibility expense:
A) Gross amount required to be spent by the Company during the year 2017-18 - Rs.409.48 lakhs (Previous year Rs.313.53 lakhs) towards CSR activities prescribed under Schedule VII of the Companies Act, 2013.
B) Amounts spent during the year on:
Note 6 Leases:
Pursuant to Ind AS 17 - Leases following information is disclosed:
Company as Lessor:
The Company has entered into operating leases on its Property, Plant and Equipment located at Byculla and Goregaon IT Park premises:
Future minimum rentals receivable under these non-cancellable operating leases are, as follows:
Company as Lessee:
The company has taken factory land at Karamsad, Gujarat and its corporate office at Mahalakshmi, Mumbai under non-cancellable Operating Lease The lease rentals are payables by the Company monthly. There is no contingent rent payable to lessors under the lease agreements.
With effect from 15 September 2017, face value of the Companyâs equity share has been subdivided from Rs.10 each to Rs.2 each fully paid up. In compliance with Ind AS 33- Earnings Per Share (EPS), the Company has given effect to the said subdivision of shares in computing the earnings per share for comparative periods.
Note 7. Related party disclosures
(a) List of related parties and relationships
Subsidiary Nesco Hospitality Private Limited
Entities in which KMPs have significant influence Patel Consultancy Pvt Ltd
J V Patel Investment and Trading Co.Pvt.Ltd.
Engineering Global Pte Limited
Chandler and Price India Private Limited
K S Patel Finance & Investment Company Pvt Ltd
Key Management Personnel Mr. Sumant J. Patel - Chairman
Mr. Krishna S. Patel - Managing Director
Mr. Dipesh R. Singhania - Chief Financial Officer
Ms. Jinal J. Shah - Company Secretary and Compliance Officer
Non - Executive Directors Mr. Mahendra K. Chauhan
Mr. Jai S. Diwanji
Mr. K. S. Srinivasa Murty
Mr. Manu M. Parpia
Relative of Key Management Personnel Mrs. Sudha S. Patel - Director
The following tables set out the status of gratuity plans and amounts recognized in the Companyâs financial statements as at 31 March 2018 and 31 March 2017.
The Applicable Statutory tax rate for financial year ended 31 March 2018 and 31 March 2017 is 34.608%.
- Income considered under other head of income, mainly comprises of IT Park rental income considered under âIncome from House propertyâ as per the provisions of Income Tax Act, 1961.
- Income not considered for tax purpose mainly consists of other income on account of fair valuation of Investments in Mutual funds and dividend income from Investments in mutual funds.
The credits relating to temporary differences during the year ended 31 March 2018 and 31 March 2017 are primarily on account of - Other income due to fair valuation of investments on mutual funds.
Note 8. Proposed Dividend:- The Board of Directors at its meeting held on 16 May 2018, have recommended a payment of dividend of Rs.2.30 (Rupees two and paise thirty) Per Equity Share of face value of Rs.2 Each for the financial year ended 31 March 2018. The same amounts to Rs.1,953.69 lakhs inclusive of Dividend Distribution Tax of Rs.333.11 lakhs.
The above is subject to approval at the ensuing AGM of the Company and hence is not recognized as a liability
Mar 31, 2017
Ind AS conversion
Background
Nesco Limited ("Nesco" or "the Company") was incorporated on April 15, 1946, under the Indian Companies Act VII of 1913. The Company is domiciled in India having registered office at Nesco Complex, Western Express Highway, Goregaon (East), Mumbai 400063 and listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
The Company is mainly engaged in the following.
1. Licensing premises in IT park building and providing related services.
2. Licensing premises in its exhibition and convention incubation centre and providing related services to the clients.
3. Manufacturing of machines and capital equipment.
4.- Basis of Preparation of Financial Statements:
5. Compliance with Ind AS
These financial statements have been prepared in compliance with Indian Accounting Standards (Ind-AS) notified under section 133 of the Companies Act 2013 (the Act), read together with The Companies (Indian Accounting Standards) Rules, 2015]
For all periods up to and including the year ended 31 March 2016, the Company has prepared its Financial Statements in accordance with Accounting Standards notified under the Section 133 of the Companies Act, 2013, read together with Rule 7 of the Companies (Accounts) Rules, 2014 (Previous GAAP). Detailed explanation of how the transition from Previous GAAP to Ind-AS has affected the Company''s Balance Sheet, financial performance and cash flows is given under Note 31.
These financial statements have been prepared and presented under the historical cost convention, on the accrual basis of the accounting except for certain financial assets and financial liabilities that are measured at fair values at the end of each reporting period, as stated in the accounting policies set out below. The accounting policies have been applied consistently over all the periods presented in these financial statements.
6. Current / Non-Current Classification
Any asset or liability is classified as current if it satisfies any of the following conditions:-
7. The asset / liability is expected to be realized / settled in the Company''s normal operating cycle;
8. The asset is intended for sale or consumption;
9. The asset/liability is held primarily for the purpose of trading;
10. The asset/liability is expected to be realized / settled within twelve months after the reporting period;
11. The asset is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the repotting cycle;
12. In the case of a liability, the Company does not have an unconditional right to defer settlement of a liability for at least twelve months after the reporting cycle;
All other assets and liabilities are classified as non-current.
For the purpose of current/non-current classification of assets and liabilities, the Company has ascertained its normal operating cycle as twelve months. This is based on the nature of services and the time between the acquisition of assets or inventories for processing their realization in cash and cash equivalents.
13. Functional and Presentation Currency
The Financial Statements are presented in Indian rupees which is the functional currency for the Company. Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss. Foreign exchange gains and losses are presented in the statement of profit and loss on a net basis.
14. Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the requirement of schedule III, unless otherwise stated.
15. Use of Estimates
The preparation of Financial Statements in accordance with Ind AS requires use of estimates and assumptions for some items, which might have an effect on their recognition and measurement in the Balance Sheet and Statement of Profit and Loss. The actual amounts realized may differ from these estimates. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the management becomes aware of changes in circumstances surrounding the estimates. Differences between the actual results and estimates are recognized in the period in which the results are known / materialized and, if material, their effects are disclosed in the notes to the Financial Statements.
16:-First-time adoption of Ind AS:
The Company had prepared its financial statements up to the year ended 31 March 2016, in accordance with the Accounting Standards notified under Section 133 of Companies Act, 2013, read together with Rule 7 of the Companies (Accounts) Rules, 2014 (''Previous GAAP'').
The Standalone financial statements of the Company for the year ended 31 March 2017 have been prepared in accordance with Ind AS. For the purpose of transition to Ind AS, the Company has followed the guidance prescribed in Ind AS 101 - ''First time adoption of Indian Accounting Standard'', with 01 April 2015 as transition date and IGAAP as previous GAAP.
The transition to Ind As has resulted in changes in the presentation of the Financial Statements, disclosures in notes thereto, accounting policies and principles. The accounting policies set out in Note 2 have been applied in preparing the standalone financial statements for the year 31 March 2017 and the comparative information. Exemptions on first time adoption of Ind AS availed in accordance with Ind AS 101 and an explanation of how the transition from previous GAAP to Ind AS has affected the Company''s Balance Sheet, Statement of Profit and Loss are given below.
17- Exemptions availed on first time adoption of Ind AS 101:
Ind AS 101 allows first time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has accordingly applied following exemptions:
- The Company has elected to continue with the previous GAAP carrying value of its property, plant and equipment recognized as of 01 April 2015 measured as per previous GAAP and use that carrying value as its deemed cost as at the date of transition.
- The Company has elected to continue with the previous GAAP carrying value of its investment in Subsidiary as its deemed cost as at the date of transition.
- Designation of previously recognized financial instruments:
Under Ind AS 109 Financial Instruments, at initial recognition of financial asset, an entity may make an irrevocable election to present subsequent changes in fair value of investment in an equity instrument in other comprehensive income. Ind AS 101 allows such designation of previously recognized financial asset, as ''fair value through other comprehensive income'' on the basis of facts and circumstances that existed at the date of transition to Ind AS.
Accordingly, the Company has designated its investments in equity instruments at fair value through other comprehensive income on the basis of the facts and circumstances that existed at the date of transition to Ind AS.
18:- Reconciliations:
The following reconciliation provides the effect of transition to Ind AS from IGAAP in accordance with Ind AS 101 on First time Adoption of Indian Accounting Standards:
19. Balance sheet as at 01 April 2015 and 31 March 2016
20. Proft and Loss account for the year ended 31 March 2016
On the date of transition to Ind AS, the difference between the fair value of Non-current and Current investments as per Ind AS and their corresponding carrying as per financial statements prepared under previous GAAP, has resulted in net increase in carrying amount of Investments, which has been recognized in retained earnings (Equity). Deferred Tax liability has been recognized on fair value gain (net) on mutual funds valued through profit and loss (Refer note C.1 and E.1). Fair value gain on quoted equity instruments valued through OCI, classified under Noncurrent investments has been recognized in OCI, which has been recognized in retained earnings (Equity) (Refer note E.2).
As at 31 March 2016, the difference between the fair value of Non-current and Current investments as per Ind AS and their corresponding carrying as per financial statements prepared under previous GAAP, has resulted in increase in carrying amount of Investments. Fair value gain (net) on mutual funds valued through profit and loss has been recognized in the Statement of profit and loss under the head Other income. Deferred tax expense on such gain has been recognized in Statement of Profit and Loss (Refer note C.1 and E.1). Fair value loss on quoted equity instruments valued through OCI, classified under Non-current Investments has been recognized in OCI (Refer note E.2).
21. Interest Free Security deposits classified under Other Financial Liabilities (Non - Current) and Rentals received in advance classified under Other non-current liabilities:
The Company obtains interest free security deposits from its IT Park clients, which are repayable at the end of lease period. These leases are non-cancellable in nature. These security deposits were recognized at their contracted amount under previous GAAP. Ind AS requires such security deposits, being financial instruments, to be valued at an amortized cost. In view of this, following Ind AS adjustments have been carried out.
22. Deferred Tax Liabilities classified under Non-current Liabilities:
In the Financial statements prepared under previous GAAP, deferred tax was accounted as per the income statement approach which required creation of deferred tax asset / liability on timing differences between taxable profit and accounting profit. Under Ind AS, deferred tax is accounted as per Balance Sheet approach, which requires creation of deferred tax asset / liability on temporary differences between the carrying amount of Assets in Balance sheet and its corresponding tax base.
The application of Ind AS has resulted in recognition of deferred tax on new temporary difference, which was not required to be recognized under previous GAAP. In addition, transitional Ind AS adjustments have also led to temporary differences and creation of deferred tax thereon (Refer C.1. C.2, C.3 and C.4).
23. Accounting of Dividend:
Under Indian GAAP, proposed dividend including dividend distribution tax (DDT), are recognized as liability in the period to which they relate, irrespective of when they are declared. Under Ind AS, proposed dividend is recognized as liability in the period in which it is declared and approved. Accordingly, under Ind AS, final dividend of year 201415, amounting to Rs. 915.98 lakhs and Tax on dividend amounting to Rs. 155.67 lakhs, totaling to Rs. 1071.65 lakhs is accounted in year 2015-16, in which it is declared.
24. Re-measurement benefit of Defined Benefit Plans:
In financial statements prepared under previous GAAP, re-measurement benefit of defined Plans (Gratuity), arising primarily due to change in actuarial assumption was recognized as employee benefit expense in the Statement of Profit and Loss. Under Ind AS, such re-measurement benefits relating to defined benefit plans is recognized in OCI as per the requirements of Ind AS 19 - Employee Benefits. Consequently, the related tax effect of the same has also been recognized in OCI (Refer note C.4 and E.7).
25. Excise Duty:
Excise duty on account of sale of goods has been included in Revenue, being liability of manufacturer which forms part of cost of production, irrespective of whether goods are sold or not.
26: There are no major Ind AS adjustments in Cash flow statement
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments and mutual funds that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.
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).
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities included in level 3
The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as of 31 March 2017, 31 March 2016 and 31 March 2015
27. Financial Risk Management:
Financial Risk Factors:
The Company''s activities are exposed to Market risk, credit risk and liquidity risk. The Company has set up Risk Management Committee in order to minimise any adverse effects of the risk exposure on the financial performance of the Company.
Market Risk:
Market risk comprises of three types of risk: Currency Risk, Interest rate Risk and Other Price Risk. Other Price risk is the risk that fair value or future cash flows of financial instrument will fluctuate because of change in market prices.
The Company invests in units of mutual funds including Fixed Maturity Plans, various debt Funds and Equity funds, and hence exposed to Other Price risk. Company''s Treasury dept. manages investments portfolio diversification in order to minimize risk and ongoing monitoring of market prices of investments.
Credit Risk:
Credit risk refers to the risk of default on its obligation by the counterparty resulting in financial loss. Trade receivables are typically unsecured and are derived from customers from three operations NEsco IT Park lease, Bombay Exhibition Centre (BEC) revenue and sale of Industrial Capital Goods.
The maximum exposure to credit risk on account of trade receivables, at the reporting date is Rs.1,111.76 Lakhs and Rs.1,438.11 Lakhs as on 31 March 2017 and 31 March 2016 respectively.
The Company minimizes credit risk relating to IT Park lease and BEC business as follows:
- The Company obtains security deposits from IT Park lessees and entitled to terminate lease agreement in case lessee makes defaults in payment of lease for a period of two consecutive months.
- BEC customers are required to pay advance and place refundable security deposit with the Company.
Whereas, in case of trade receivables from Industrial Capital Goods division for sale of machineries, credit risk is managed through credit approvals, establishing credit limits and continuously monitored by creditworthiness of customers to whom, credit terms are granted in normal course of business.
Credit risk of financial assets other than Trade receivables:
- Investments in mutual fund schemes are marked to market on ongoing basis, which is major part of total Non-current and current investments.
- Long term loans and advances include deposits with local authorities, electricity Board, electricity companies etc.
- Cash and Cash equivalents are balances with Public and Private Banks.
- Other current assets include deposits with more than 12 months maturities with Public and Private Banks and Earnest Money deposits with Govt. customer.
Liquidity Risk:
The Company''s principal sources of liquidity are cash and cash equivalents, Balances and cash flows that are generated from business. The Company does not have any borrowings.
The Company had working capital of Rs.5,754.08 Lakhs and Rs.11,209.99 Lakhs, as on 31 March 2017 and 31 March 2016 respectively. The working capital includes cash and cash equivalents of Rs.363.58 Lakhs and Rs.471.67 Lakhs as on 31 March 2017 and 31 March 2016 respectively.
28. Contingent Liabilities and Commitments
29. Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs.. 28,661.67 Lakhs (previous year - Rs.21,964.94 Lakhs) against which an advance of Rs. 4,987.52 Lakhs (previous year -Rs. 4472.00 Lakhs) has been paid.
30. Claims against the Company contested at various courts amounting to Rs. 1,445.24 lakhs (previous year Rs. 1,631.48 lakhs) against which the Company has provided Rs. 1,081.36 lakhs (previous year Rs. 1,245.03 lakhs) as ascertained by management and as advised by advocates and counsels.
31. Income-tax demand disputed by the Company Rs. 213.26 lakhs (previous year Rs. 148.15 lakhs)
d. Counter guarantees given by the company to banks in respect of:
- Indian Bank Guarantees given by bank on Company''s behalf Rs. 639.99 Lakhs (Previous year - Rs. 545.57 Lakhs
- Foreign Bank Guarantees given by bank on Company''s behalf US $2,387 (Previous year - US $44,271)
35) The Company is in process of identifying enterprises covered under the Micro, Small and Medium Enterprises Development Act, 2006. Accordingly, the disclosure in respect of the amount payable to such micro, small and medium enterprises as on 31 March 2017 has not been given in the financial statements. However, in the opinion of the management, the impact of interest if any, that may be payable in accordance with the provisions of the act is not expected to be material.
32. Leases: Pursuant to Ind AS 17 - Leases following information is disclosed:
Company as Lessor:
The Company has entered into operating leases on its following Property, Plant and Equipment:
33. It has given its land located at Byculla (Mumbai) on long term lease, without transferring risks and rewards incidental to legal ownership. It is classified as operating lease as per para 10 of Ind AS 17.
34. It has given its premises at IT Park on operating leases. These leases have terms up-to 5 years. Some of the Lease arrangements have price escalation clauses.
Company as Lessee:
35. It has taken its factory land at Karamsad, Gujarat, under non-cancellable operating lease. Lease is for three years starting from 9 May 2015. Lease payments recognized as an expense in the year 2016-17 is Rs.20 Lakhs (Previous Year Rs.20 Lakhs).
36. It has taken its corporate office at Mahalaxmi, Mumbai, under non-cancellable operating lease. Lease is for three years starting from 1 January 2016 to 31 December 2018. Lease payments recognized as an expense in the year 2016-17 is Rs.18 Lakhs (Previous Year Rs.4.50 Lakhs).
Mar 31, 2016
1. Terms / Rights Attached to Equity Shares
The Company has only one class of equity shares having a par value of
Rs, 10/- per share. Each holder of equity share is entitled to one vote
per share. The Company declares and pays dividend in Indian Rupees. The
dividend proposed by the board of directors is subject to the approval
of shareholders in the ensuing annual general meeting.
The Board of Directors has declared an interim dividend of Rs, 8.50 per
equity share at its meeting held on 17.03.2016, Rs, 6.50 per equity
share was paid as final dividend for the previous year. The interim
dividend appropriation for the year ended 31.03.2016 amounts to Rs,
1,197.83 lakhs and corporate dividend tax of Rs, 243.85 lakhs (previous
year Rs, 915.98 lakhs and corporate dividend tax of Rs, 155.67 lakhs)
In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the Company. The
distribution will be in proportion to the number of equity shares held
by the shares holders.
2. The Company is in process of identifying enterprises covered under
the Micro, Small and Medium Enterprises Development Act, 2006.
Accordingly, the disclosure in respect of the amount payable to such
micro, small and medium enterprises as on 31st March, 2016 has not been
given in the financial statements. However, in the opinion of the
management, the impact of interest if any, that may be payable in
accordance with the provisions of the act is not expected to be
material.
3. Contingent Liabilities and Commitments
a. Estimated amount of contracts remaining to be executed on capital
account and not provided for is Rs, 21,264.94 Lakhs (previous year -
Rs, 170.11 lakhs) against which an advance of Rs, 4,472.00 lakhs
(previous year  Rs, 77.02 lakhs) has been paid.
b. Claims against the Company contested at various courts amounting to
Rs, 1,631.48 lakhs (previous year Rs, 1,631.48 lakhs) against which the
Company has provided Rs, 1,245.03 lakhs (previous year Rs, 1,224.12
lakhs) as ascertained by management and as advised by advocates and
counsels.
c. Income-tax demand disputed by the Company Rs, 148.15 lakhs
(previous year Rs, 93.34 lakhs)
d. Value Added Tax demand disputed by the Company Rs, 33.27 lakhs for
F.Y.2008-2009.
e. Counter guarantees given by the company to banks in respect of:
i. Indian Bank Guarantees given by bank on Company''s behalf Rs, 545.57
lakhs (previous year  Rs, 375.50 lakhs)
ii. Foreign Bank Guarantees given by bank on Company''s behalf US $
44,271.00 (previous year  US $3,400.00).
4. Company has contributed Rs, 260.34 lakhs (previous year Rs, 218.29
lakhs) towards CSR activities prescribed under Schedule VII of the
Companies Act, 2013.
5. Figures of the previous year have been re-arranged and re-grouped
wherever necessary to confirm to the classification adopted for the
current year.
Mar 31, 2013
1 Related party disclosures:
(a) List of related parties and relationships Associate
(i) NSE Housing and Investments Pvt. Ltd.
(ii) Chandler & Price (India) Pvt. Ltd.
(iii) JVP Industrial Training Institute
(iv) J V Patel Charitable Trust
(v) J V Patel & Co.
(vi) K S Patel Finance & Investments Pvt. Ltd.
Key management personnel (i) Mr. Sumant J. Patel
(ii) Mrs. Sudha S. Patel
(iii) Mr. Krishna S. Patel
2 The company is in process of identifying enterprises covered under
the Micro, Small and Medium Enterprises Development Act, 2006.
Accordingly, the disclosure in respect of the amount payable to such
micro, small and medium enterprises as on 31s1 March, 2013 has not been
given in the financial statements. However, in the opinion of the
management, the impact of interest if any, that may be payable in
accordance with the provisions of the act is not expected to be
material.
3 Contingent Liabilities and Commitments
- Estimated amount of contracts remaining to be executed on capital
account and not provided for Rs. 10,328,791/- (previous year - Rs.
147,131,198/-) againstwhich an advance of Rs. 7,200,352/- (Previous year
Rs. Nil) has been paid.
- Claims against the company contested at various courts amounting to
Rs. 1,631.48 lakhs (previous year Rs. 1,631.48 lakhs) against which the
company has provided Rs. 1,271.08 lakhs (previous year Rs. 1,271.08 lakhs)
as ascertained by management and as advised by advocates and counsels.
- Income-tax demand disputed by the company Rs. 152.82 lacs
- Counter guarantees given by the company to banks in respect of:
i. Indian Bank Guarantees given by bank on company''s behalf Rs.
38,766,338/- (Previous year Rs. 42,031,090/-)
ii. Foreign Bank Guarantees given by bank on company''s behalf US
$3,400.00 (Previous year US $3,400.00).
4 Income tax assessments are completed up to the assessment year
2010-2011. The company does not expect any additional liability for the
pending assessments.
5 Provision for income tax is made after considering exemptions and
deductions available under the Income Tax Act, 1961.
6 Sales tax assessments are completed for Maharashtra up to the
financial year 2004-2005, and for Gujarat up to the financial year
2009-2010. The company does not expect any additional liability for the
pending assessments.
7 Particulars in respect of Foreign currency transactions:
8 Figures of the previous year have been re-arranged and re-grouped
wherever necessary to confirm to the classification adopted for the
current year.
Mar 31, 2012
* Loans and advances to employees and related parties include amounts
due from Officers of the Company Rs10.74 (previous year Rs13.08) and due
from NSE Housing & Investment Pvt Ltd in which some of the Directors are
interested as Directors Rs 0.49 (previous year Rs0.49)
# Includes advance to sundry creditors of Rs 119.35 Lacs and advance
recoverable in cash or kind or value to be received of Rs322.43 Lacs
30. The company is in process of identifying enterprises covered under
the Micro, Small and Medium Enterprises Development Act, 2006.
Accordingly, the disclosure in respect of the amount payable to such
micro, small and medium enterprises as on 31st March, 2012 has not been
given in the financial statements. However, in the opinion of the
management, the impact of interest if any, that may be payable in
accordance with the provisions of the act is not expected to be
material.
1. Contingent Liabilities and Commitments
- Estimated amount of contracts remaining to be executed on capital
account and not provided for Rs 147,131,198/- (previous year - Rs
892,500,000/-) against which an advance of Rs Nil/- (Previous year- Rs
576,406,048/-) has been paid.
- Claims against the company contested at various courts amounting to
Rs 1,631.48 lacs (previous year Rs 1,764.19 lacs) against which the
company has made total provision of Rs 1,271.08 lacs (previous year Rs
1,271.08 lacs) as per management's estimation of expected liability as
advised by legal opinions.
- Contingent liabilities not provided for in respect of Counter
guarantees given by the company to banks in respect of:
i. Indian Bank Guarantees given by bank on company's behalf Rs
42,031,090/- (Previous year - Rs 40,155,309/-)
ii. Foreign Bank Guarantees given by bank on company's behalf US
$3,400.00 (Previous year - US $23,800.00)
iii. Foreign Letter of Credit given by bank on company's behalf US
$Nil (Previous year US $364,559.00)
2. The Revised Schedule VI has become effective from 01st April 2011.
In view of this figures of the previous year have been re-arranged and
re-grouped wherever necessary to confirm to the classification adopted
for the current year.
3. Significant accounting policies and practices adopted by the
Company are disclosed in the statement annexed to these financial
statements as Annexure 1.
Mar 31, 2011
1. Estimated amount of contracts remaining to be executed on capital
account and not provided for Rs.892,500,000/- (previous year Rs.
602,715,387/-) against which an advance of Rs. 576,406,048/- (previous
year Rs. 442,384,347/-) has been paid.
2. Contingent liabilities not provided for in respect of (a) counter
guarantees given by the company to banks in respect of Indian bank
guarantees given by them on companys behalf Rs. 40,155,309/- (previous
yearRs. 44,214,879/-) (b) Foreign bank guarantees given by bank on
companys behalf US $23,800.00 (previous year Rs. Nil) (c) Foreign Letter
of Credit given by bank on companys behalf US $364,559.00 (previous
year Rs. Nil) (d) Property tax in dispute Rs. Nil (previous year Rs.
51,350,675/-).
3. Income tax assessment is completed up to the assessment year
2008-2009. The company does not expect any additional liability for the
pending assessments.
4. Sales tax assessment is completed for Maharashtra up to the
financial year 2004-2005, and for Gujarat up to the financial year
2006-2007. The company does not expect any additional liability for the
pending assessments.
5. (a) According to the information and explanations given by the
management there are no dues to SSI units which are outstanding for
more than 30 days as on 31s1 March, 2011 including the interest if any,
thereon.
(b) The company is in process of identifying enterprises covered under
the Micro, Small and Medium Enterprises Development Act, 2006.
Accordingly, the disclosure in respect of the amount payable to such
micro, small and medium enterprises as on 31st March, 2011 has not been
given in the financial statements. However, in the opinion of the
management, the impact of interest if any, that may be payable in
accordance with the provisions of the act is not expected to be
material.
6. Provision for income tax is made after considering exemptions and
deductions available under the Income Tax Act, 1961, as advised by tax
consultants.
8. Pursuant to the Accounting Standard 22 Accounting for taxes on
income issued by the Institute of Chartered Accountants of India, which
is mandatory with effect from 1st April 2002, The deferred tax
asset/liability has been reassessed in view of the various appeals,
decisions and consequential effect on carry forward losses as well as
revision in tax rate applicable. Accordingly net liability as on
31.03.2011 is worked out to Rs. 8,582,095/- as computed below. Since the
company has a deferred tax liability balance of Rs. 9,719,329/- as on
31.03.2010 in the balance sheet, Rs. 1,137,234/- has been credited in the
profit & loss account.
9. Figures of the previous year have been re-arranged and re-grouped
wherever necessary to confirm to the classification adopted for the
current year.
10. Figures in brackets related to previous year.
Mar 31, 2010
1. Estimated amount of contracts remaining to be executed on capital
account and not provided for Rs. 602,715,387/- (previous year Rs.
889,045,770/-) against which an advance of Rs. 442,384,347/- (previous
year Rs. 175,045,770/-) has been paid.
2. Contingent liabilities not provided for in respect of (a) counter
guarantees given by the company to banks in respect of Indian bank
guarantees given by them on companys behalf Rs. 44,214,879/- (previous
year Rs. 27,562,157/-) (b) Foreign bank guarantees given by bank on
companys behalf Rs. Nil (previous year Rs. 337,544/- (US$ 6,625/-) (c)
Property tax in dispute Rs. 51,350,675/- (previous year Rs.
145,992,315/-).
3. Income tax assessment is completed up to the assessment year
2007-2008. The company does not expect any additional liability for the
pending assessments.
4. Sales tax assessment is completed for Maharashtra up to the
financial year 2004-2005, and for Gujarat up to the financial year
2006-2007. The company does not expect any additional liability for the
pending assessments.
5. (a) According to the information and explanations given by the
management there are no dues to SSI units which are outstanding for
more than 30 days as on 31a March, 2010 including the interest if any,
thereon.
(b) The company is in process of identifying enterprises covered under
the micro, small and medium enterprises development act, 2006.
Accordingly, the disclosure in respect of the amount payable to such
micro, small and medium enterprises as on 31s March, 2010 has not been
given in the financial statements. However, in the opinion of the
management, the impact of interest if any, that may be payable in
accordance with the provisions of the act is not expected to be
material.
6. Claims against the company contested at various courts amounting to
Rs. 1,764.19 lakhs (previous year Rs. 1,764.19 lakhs) against which the
company has made total provision of Rs. 1,271.08 lakhs (previous year
Rs. 1,271.08 lakhs) as per managements estimation of expected
liability as advised by legal opinions.
7. Provision for income tax is made after considering exemptions and
deductions available under the income tax act, 1961, as advised by tax
consultants.
9. Pursuant to the Accounting Standard 22 Accounting for taxes on
income issued by the Institute of Chartered Accountants of India, which
is mandatory with effect from 1st April 2002, The deferred tax
asset/liability has been reassessed in view of the various appeals,
decisions and consequential effect on carry forward losses as well as
revision in tax rate applicable. Accordingly net liability as on
31.03.2010 is worked out to Rs. 9,719,329/- as computed below. Since
the company has a deferred tax liability balance of Rs. 7,353,282/- as
on 31.03.2009 in the balance sheet, Rs. 2,366,047/- has been credited
in the profit & loss account.
10. Figures of the previous year have been re-arranged and re-grouped
wherever necessary to confirm to the classification adopted for the
current year.
11. Figures in brackets related to previous year.
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