Notes to Accounts of Astra Microwave Products Ltd.
Mar 31, 2023
a) Terms and rights attached to equity shares:
The company has one class of equity shares having a par value of Rs. 2 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.
The Company has not issued any share as fully paid up without payment being received in cash or as bonus shares nor any share has been bought back by the Company since its incorporation.
During the year ended March 31,2023, the company filed an application with the stock exchanges dated August 29, 2022 for reclassification of following promoters into public shareholders. The same has been approved by stock exchanges on January 31,2023.
Promoters: (i) Mrs. Prameelamma Ch (ii) Mrs. Prasanna Lakshmi B (iii) Malla Reddy B
Further, shares of Mr. Ramakrishna Reddy Putchalapally have been transmitted to Mrs. Prameelamma Ch on
April 22, 2022.
Term loan is taken from Axis Bank Limited for the purchase of property, plant and equipment. The loan sanctioned is Rs. 3,000.00 during the F.Y 2021-22, out of which Rs. 1,460.41 is drawn inF.Y 2021-22 and Rs. 1,497.70 is drawn in F.Y 2022-23 and is repayable in 8 quarterly instalments at the rate of Rs. 375.00 each quarter from the financial year 2022-23 to 2024-25 (i.e., from Septemberâ 2022 to Juneâ 2024). The current rate of interest is 9.45% p.a. This loan is secured by first exclusive charge on the equipment/machinery funded by this term loan and personal guarantee of promoter: Mr. Prakash Anand Chitrakar. The amount outstanding as at balance sheet date is Rs. 1,833.11 repayable in 5 quarterly installments (out of which Rs. 1,500.00 is included in borrowings (current)). Working capital demand loan from banks
Working capital demand loans availed from banks with a maximum maturity of 6 months.
The loan carries a floating rate of interest and present rate of interest ranges between 7.98% to 8.95% per annum.
Cash credit facility availed from banks
Cash credits availed from banks are repayable on demand.
The loan carries a floating rate of interest and present rate of interest ranges between 8.75% to 10.3% per annum
Nature of security for current borrrowings:
Prime security:
Pari Passu first charge on stocks and receivables and other chargeable current assets of the company (both present and future).
Collateral security:
Pari Passu first charge on entire unencumbered fixed assets of the company including equitable mortagage of properties in the name of the company.
Pari Passu second charge on the fixed assets of the company funded by other term lenders.
Personal guarantee:
Personal Guarantee of the promoter: Mr. Prakash Anand Chitrakar
Note 31 : Employee benefit Obligations
a) Leave obligations
The leave obligation covers the Company''s liability for sick and earned leave. Refer Note-15, for details of closing provision made in this regard and note 24 for charge in the current year.
b) Defined Contribution Plan
The Company has defined contribution plan namely Provident fund. Contributions are made to provident fund at the rate of 12% of eligible salary as per regulations. The contributions are made to registered provident fund administered by the Government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the year towards defined contribution plan for the financial year 2022-23 is Rs. 384.19 and for the financial year 202122 is Rs.326.26.
The company also contributes to Employees'' state insurance Scheme administered by Employees'' State Insurance Corporation. The expense recognised during the year towards defined contribution plan for the financial year 2022-23 is Rs. 19.56 and for the financial year 2021-22 is Rs. 19.35.
C) Defined Benefit Plans:
Gratuity
The Company operates a gratuity plan covering qualifying employees. The benefit payable is the amount calculated as per the Payment of Gratuity Act, 1972. The benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting. The Company makes annual contribution to the company gratuity scheme administered by the Life Insurance Corporation of India through its Gratuity Trust Fund.
The expected return on plan assets is determined considering several applicable factors such as the assessed risks of asset management and historical results of the return on plan assets and plan assets are managed by Life Insurance corporation of India. Assumed rate of return on assets is expected to vary from year-to-year reflecting the returns on matching Government bonds.
The estimate of future salary increases, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
The above sensitivity analysis are 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. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.
Salary inflation risk:
Higher than expected increases in salary will increase the defined benefit obligation.
Demographic risk:
This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.
The company operates in a single product segment. Additional disclosures required as per Ind AS 108, "Operating Segments" are included below: 1 2
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*** The company has received a penalty order in relation to interstat e transportation of goods. The company has preferred an appeal against the order and deposited Rs. 6.48 lakhs under protest. The case is pending before Additional Commissioner of Commercial Taxes (Zone) - 3, Bengaluru and the same has been disclosed as contingent liability.
Note 34: Events Occurring after the reporting period
Refer to Note 40 for the final dividend recommended by the directors which is subject to approvals of shareholders in the ensuing annual general meeting and Note 45 for the fund raising by way of issue of equity shares through qualified institutional placement (QIP).
Note 37: Financial Instruments Fair value
The management assessed the fair value of trade receivables, cash and cash equivalents, other bank balances, other financial assets, current borrowings, trade payables and other financial liabilities approximate their carrying amounts largely due to the short-term maturities or interest bearing nature of these instruments.
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
Set out below, is a comparison by class of the carrying amounts and fair value of the Companyâs financial instruments, other than those with carrying amounts that are reasonable approximations of fair values:
Level 1 - Level 1 hierarchy includes financial instruments measured using quoted prices.
Level 2 - 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 significant inputs required to fair value an instruments are observable, the instrument is included in Level 2.
Level 3 - If one or more of the significant inputs are not based on observable market data, the instruments is included in level 3.
Note 38: Financial risk management Risk management framework
The companyâs financial risk management is an integral part of how to plan and execute its business strategies. The company''s risk management policy is set by the Board. The company''s activities expose it to a variety of financial risks : credit risk, liquidity risk and market risk relating to foreign currency exchange rate and interest rate. The company''s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. A summary of the risks have been given below.
Credit risk
Credit risk is the risk arising from credit exposure to customers, cash and cash equivalents held with banks and current and non-current held-to maturity financial assets.
The company deals with Public sector enterprises, government undertakings (i.e. government customers) and also private parties (i.e. Non-government customers). Regarding credit exposure from customers, the company has a procedure in place aiming to minimise collection losses.
The carrying amount of trade receivables, deposits, cash and bank balances, bank deposits and interest receivable on deposits represents companyâs maximum exposure to the credit risk. No other financial asset carry a significant exposure with respect to the credit risk. Bank deposits and cash balances are placed with reputable banks with high credit ratings.
The credit quality of financial assets is satisfactory, taking into account the allowance for credit losses if any.
The company''s exposure to credit is influenced mainly by collection pattern of trade receivables, which is generally skewed.
An impairment analysis performed at each reporting date based on classification of the customers (Government customers and Non-Government customers). The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets.
The Company applies the simplified approach permitted by Ind AS 109 Financial Instruments. The receivables are grouped into two categories as mentioned above and assessed for impairment. The expected loss rate is assigned for each category based on historical collection pattern of sales, bucketing of receivables. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables.
The expected loss allowance is based on aforesaid factors. The company uses judgement in making these assumptions and selecting the inputs to the provision for expected credit loss calculation, based on the company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period. The company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding to meet obligations when due and to close out market positions. Companyâs treasury maintains flexibility in funding by maintaining availability under deposits in banks.
Management monitors cash and cash equivalents on the basis of expected cash flows.
The company monitors the level of expected cash inflows from financial assets together with expected cash outflows on trade payables and other financial liabilities. As at March 31, 2023, the expected cash flows from financial assets excluding restricted balances is INR 28,183.53 lakhs (As at March 31,2022: INR 20,248.93 lakhs).
Following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted.
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 comprises of currency risk, interest rate risk and price risk. Financial instruments affected by market risk include loans and borrowings and trade receivables and trade payables involving foreign currency exposure. The sensitivity analysis in the following sections relate to the position as at March 31,2023 and March 31,2022.
The analysis exclude the impact of movements in market variables on the carrying values of gratuity and other post- retirement obligations; provisions; and the non-financial assets and liabilities.
The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31,2023 and March 31,2022.
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the trade/ other payables and trade/other receivables. The risks primarily relate to fluctuations in US Dollar, CHF and EURO against the functional currency of the company. The companyâs exposure to foreign currency changes for all other currencies is not material. The company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks.
A reasonably possible strengthening / (weakening) of the USD or CHF or EURO, against INR would have affected the measurement of financial instruments denominated in foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecasts sales and purchases.
There are no companyâs investments which are subjected to price risk.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of change in market interest rates. As the company has certain debt obligations with floating interest rates, exposure to the risk of changes in market interest rates are dependent of changes in market interest rates. Management monitors the movement in interest rate and, wherever possible, reacts to material movements in such rates by restructuring its financing arrangement. As the company has no significant interest bearing assets, the income and operating cash flows are substantially independent of changes in market interest rates.
The Company''s objectives when managing capital are to
⢠Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders and
⢠Maintain an optimal capital structure to reduce the cost of capital.
As at March 31,2023, the company has only one class of equity shares. Consequent to the above capital structure there are no externally imposed capital requirements.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is debt divided by total capital. The Company includes within debt, interest bearing loans and borrowings.
a) Nature of lease
The company has one lease agreement as lessee for its office premises
b) Short term lease exemption
The lease is cancellable at option of both the parties by giving 3 months notice in advance. Accordingly, the company has identified the lease as a short term lease and opted the short term lease exemption.
c) Rent expense on account of short term leases
The rent expense on account of short term leases. (refer note no. 27)
d) Cash ouflow
The lease rent paid is INR 112.27 lakhs Note 42: Additional regulatory information required by Schedule III
(i) Title deeds of immovable properties not held in name of the company
The title deeds of all the immovable properties (other than properties where the company is the lessee and the lease agreements are duly executed in favour of the lessee), as disclosed in notes to the standalone financial statements, are held in the name of the company.
(ii) Details of benami property held
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.
(iii) Borrowing secured against current assets
The company has borrowings from banks on the basis of security of current assets. The quarterly returns or statements of current assets filed by the company with banks are not in agreement with the books of accounts as set out below.
(iv) Wilful defaulter
The company has not been declared as wilful defaulter by any bank or financial institution or government or any government authority.
(v) Relationship with struck off companies
The company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.
(vi) Registration of charges or satisfaction with Registrar of Companies
There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.
(vii) Compliance with number of layers of companies
The company has complied with the number of layers prescribed under the Companies Act, 2013, read with the Companies (Restriction on number of Layers) Rules, 2017.
(viii) Compliance with approved scheme(s) of arrangements
The company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.
(ix) Utilisation of borrowed funds and share premium
(A) The company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the group (Ultimate Beneficiaries) or
b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries
(B) The company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the group 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.
(x) Undisclosed income
There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.
(xi) Details of crypto currency or virtual currency
The company has not traded or invested in crypto currency or virtual currency during the current or previous year.
(xii) Valuation of PP&E, intangible asset and investment property
The company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.
(xiii) Utilisation of borrowings availed from banks and financial institutions
The borrowings obtained by the company from banks and financial institutions have been applied for the purposes for which such loans were was taken.
Description of numerator and denominator: a Current Ratio
Current Ratio is computed as a ratio of total current assets to total current liabilities b Debt - Equity Ratio
Debt - Equity Ratio is computed as a ratio of borrowings to total equity c Debt Service Coverage Ratio
Debt Service Coverage Ratio is computed as a ratio of earnings available for debt service to debt service
i) Earnings available for debt service is sum of profit after tax, finance cost and non cash expenditure
ii) Debt service is sum of finance cost and principal repayments d Return on Equity Ratio
Return on Equity Ratio is computed as a ratio of profit after tax to average of opening & closing total equity e Inventory Turnover Ratio
Inventory Turnover Ratio is computed as a ratio of revenue from sale of products to average of opening & closing inventory
f Trade Receivables Turnover Ratio
Trade Receivables Turnover Ratio is computed as a ratio of revenue from operations to closing trade receivables
g Trade Payables Turnover Ratio
Trade Payables Turnover Ratio is computed as a ratio of total purchases to closing trade payables h Net Capital Turnover Ratio
Net Capital Turnover Ratio is computed as a ratio of revenue from operations to closing working capital i Net Profit Ratio
Net Profit Ratio is computed as a ratio of profit after tax to revenue from operations j Return on Capital Employed
Return on Capital Employed is computed as a ratio of profit before interest & taxes to average of opening & closing capital employed
Capital employed consists of total equity, borrowings and deferred tax liability k Return on Investment
Return on Investment is computed as a ratio of EBIT to closing total assets
Note 45: The Company in its board meeting dated December 09, 2022 and through shareholders approval in postal ballot dated February 14, 2023 has approved to raise capital by way of private placement under qualified institutions placement (QIP) to eligible investors through an issuance of equity shares or other eligible securities for an amount not exceeding Rs. 400 crore. Subsequent to year end, the company has raised an amount of Rs. 225 crores at the issue price of Rs. 270 per equity share and allotted 83,33,333 fully paid equity shares of face value Rs. 2 each on May 05, 2023.
The company has received a favourable order against demand raised by Commissioner of Customs, Central Excise and Service Tax. However, the same has been disclosed as contingent liability as the department has preferred an appeal before Hon''ble High Court for the state of Telangana.
The company has received a penalty order for AY 2018-19 against a closed demand order relating to FY 202122. The company has preferred an appeal against the order and is pending before National Faceless Appeal Centre (NFAC) and the same has been disclosed as contingent liability.
Mar 31, 2022
c) Terms and rights attached to equity shares:
The company has one class of equity shares having a par value of INR 2 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.
The Company has not issued any share as fully paid up without payment being received in cash or as bonus shares nor any share has been bought back by the Company since its incorporation.
Nature and Purpose of reserves.
Securities premium reserves:
Securities premium reserves is used to record the premium on issue of shares. The reserve is utilised in accordance with the provision of the Companies Act, 2013.
General reserve:
General reserve is used for strengthening the financial position and meeting future contingencies and losses.
Prime Security:
Pari Passu first charge on stocks and receivables and other chargeable current assets of the Company. Collateral Security:
Pari Passu first charge on entire unencumbered Fixed Assets of the company.
Pari Passu second charge on the fixed assets of the company funded by other term lenders.
Personal Guarantee:
Personal Guarantee of the following promoters: Mr. P. A. Chitrakar.
Terms of repayment:
i) Working capital Loans taken from Banks are repayable within a period of 90 days to 180 days from the date of taking the loan.
ii) Cash credits from banks are repayable on demand
iii) Interest rates are normally reset on an yearly basis. Present rate of interest ranges between 7.15% to 9.75%.
Term loan Nature of security:
a. Term loan from Axis Bank is secured by First exclusive charge on the equipment/machinery funded by this term loan and personal guarantee of following promoters: Mr. P.A. Chitrakar and Mr. B. Malla Reddy Terms of repayment:
i) Term loan from Axis bank is repayable in 8 quarterly instalments starting after 12 months from the date of first disbursement (date of first drawdown was october 10, 2021) along with an interest as mutually agreed with the bank payable on a monthly basis.
ii) Interest rates are normally reset on an yearly basis. Present rate of interest is 8.45%
Note 31 : Employee benefit Obligations
a) Leave obligations
The leave obligation covers the Company''s liability for sick and earned leave. Refer Note-13 and 24, for details of provision made in this regard.
b) Defined Contribution Plan
The Company has defined contribution plan namely Provident fund. Contributions are made to provident fund at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the Government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor ''any constructive obligation. The expense recognised during the year towards defined such plan for the financial year 2021-22 is Rs. 326.26 lakhs and for the financial year 2020-21 is Rs.290.32 lakhs.
C) Defined Benefit Plans:
Gratuity
The Company operates a gratuity plan covering qualifying employees. The benefit payable is the greater of the amount calculated as per the Payment of Gratuity Act, 1972 or the Company scheme applicable to the employee. The benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting. The Company makes annual contribution to the company gratuity scheme administered by the Life Insurance Corporation of India through its Gratuity Trust Fund.
The expected rate of return on plan assets is based on the average long term rate of return expected on investments of the fund during the estimated term of obligation.
The estimate of future salary increases, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
The above sensitivity analysis are 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. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
viii. Risk exposure
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Interest rate risk:
The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.
Salary inflation risk:
Higher than expected increases in salary will increase the defined benefit obligation.
Demographic risk:
This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.
*The company has received a favorable order against demand raised by Commissioner of Customs, Central Excise and Service Tax. However, the same has been disclosed as contingent liability as the department has preferred an appeal before Hon''ble High Court, Telangana and Andhra Pradesh.
**The company has received a penalty order for AY 2018-19 against a demand order which is closed in the current financial year. The company has preferred a appeal against the order and is pending before Commissioner of Income-Tax (Appeals) and the same has been disclosed as contingent liability.
Note 34: Events Occurring after the reporting period
Refer to Note 40 for the final dividend recommended by the directors which is subject to approvals of shareholders in the ensuing annual general meeting.
Note 37: Financial Instruments Fair value
The management assessed the fair value of trade receivables, cash and cash equivalents, other bank balances, other financial assets, short term borrowings, trade payables and other financial liabilities approximate their carrying amounts largely due to the short-term maturities or interest bearing nature of these instruments. The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The Company has determined fair value of Non current financial assets using discounted cash flow of future projected cash flow.. Set out below, is a comparison by class of the carrying amounts and fair value of the Companyâs financial instruments, other than those with carrying amounts that are reasonable approximations of fair values:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). Note 38: Financial risk management Risk management framework
The Companyâs financial risk management is an integral part of how to plan and execute its business strategies. The Company''s management risk policy is set by the Board. The Company''s activities expose it to a variety of financial risks : credit risk, liquidity risk and market risk relating to foreign currency exchange rate and interest rate. The Company''s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. A summary of the risks have been given below.
Credit risk
Credit risk is the risk arising from credit exposure to customers, cash and cash equivalents held with banks and current and non-current held-to maturity financial assets.
The Company primarily deals with Public Sector Enterprises and Government undertakings. Regarding credit exposure from customers, the Company has a procedure in place aiming to minimise collection losses.
The carrying amount of trade receivables, advances, deposits, cash and bank balances, bank deposits and interest receivable on deposits represents companyâs maximum exposure to the credit risk. No other financial asset carry a significant exposure with respect to the credit risk. Bank deposits and cash balances are placed with reputable banks with high credit ratings.
The credit quality of financial assets is satisfactory, taking into account the allowance for credit losses if any. The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer However, management also considers the factors that may influence the credit risk of its customer base, including default risk associate with the industry and country in which customers operate.
An impairment analysis is performed at each reporting date on an individual basis for major receivables. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company also holds deposits as security from certain customers to mitigate credit risk. a. Trade Receivables
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk associated with the industry and country in which customers operate and are derived from revenue earned from customers primarily located in India. Company has a process in place to monitor outstanding receivables on a monthly basis.
Significant estimates and judgements
Provision for expected credit loss on Trade receivables
The allowance for doubtful debts are based on assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the provision for expected credit loss calculation, based on the Company''s past history, existing market conditions as well as forward looking estimtes at the end of each reporting period. The company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
Prudent liquidity risk management implies maintaining sufficient cash and the availabilityof funding to meet obligations when due and to close out market positions. Companyâs treasury maintains flexibility in funding by maintaining availability under deposits in banks.
Management monitors cash and cash equivalents on the basis of expected cash flows.
The Company monitors the level of expected cash inflows from financial assets together with expected cash outflows on trade payables and other financial liabilities. As at March 31, 2022, the expected cash flows from financial assets excluding restricted balances is INR 20,248.93 lakhs (As at March 31,2021: INR 26,793.56 lakhs).
Following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted.
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. Financial instruments affected by market risk include loans and borrowings and trade receivables. The sensitivity analyses in the following sections relate to the position as at March 31,2022 and March 31, 2021. The analysis exclude the impact of movements in market variables on the carrying values of gratuity and other post- retirement obligations; provisions; and the non-financial assets and liabilities. The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31,2022 and March 31,2021."
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the trade/ other payables and trade/other receivables. The risks primarily relate to fluctuations in US Dollar, CHF and EURO against the functional currency of the Company. The Companyâs exposure to foreign currency changes for all other currencies is not material. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks.
The Company''s foreign currency payables and receivables are as follows
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of change in market interest rates. As the Company has certain debt obligations with floating interest rates, exposure to the risk of changes in market interest rates are dependent of changes in market interest rates. Management monitors the movement in interest rate and, wherever possible, reacts to material movements in such rates by restructuring its financing arrangement.
Nuie 39: capital management
The Company''s objectives when managing capital are to
⢠Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders and
⢠Maintain an optimal capital structure to reduce the cost of capital.
As at March 31,2022, the Company has only one class of equity shares. Consequent to the above capital structure there are no externally imposed capital requirements.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is debt divided by total capital. The Company includes within debt, interest bearing loans and borrowings.
a) Nature of lease
The company has one lease agreement as lessee for its office premises
b) Short term lease exemption
The lease is cancellabel at option of both the parties by giving 3 months notice in advance. Accordingly, the company has identified the lease as a short term lease and opted the short term lease exemption.
c) Rent expense on account of short term leases
The rent expense on account of short term leases. (refer note no. 26)
d) Cash ouflow
The lease rent paid is INR 77.34 lakhs Note 42: Additional regulatory information required by Schedule III
(i) Title deeds of immovable properties not held in name of the company
The title deeds of all the immovable properties (other than properties where the company is the lessee and the lease agreements are duly executed in favour of the lessee), as disclosed in notes to the financial statements, are held in the name of the company.
(ii) Details of benami property held
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.
(iii) Borrowing secured against current assets
The company has borrowings from banks and financial institutions on the basis of security of current assets. The quarterly returns or statements of current assets filed by the company with banks and financial institutions are not in agreement with the books of accounts as set out below.
(iv) Wilful defaulter
The company have not been declared as wilful defaulter by any bank or financial institution or government or any government authority.
(v) Relationship with struck off companies
The company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.
(vi) Registration of charges or satisfaction with Registrar of Companies
There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.
(vii) Compliance with number of layers of companies
The company has complied with the number of layers prescribed under the Companies Act, 2013
(viii) Compliance with approved scheme(s) of arrangements
The company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.
(ix) Utilisation of borrowed funds and share premium
(A) The company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the group (Ultimate Beneficiaries) or
b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries
(B) The company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the group 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.
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(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
(x) Undisclosed income
There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.
(xi) Details of crypto currency or virtual currency
The company has not traded or invested in crypto currency or virtual currency during the current or previous year.
(xii) Valuation of PP&E, intangible asset and investment property.
The company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year
(xiii) Utilisation of borrowings availed from banks and financial institutions
Description of numerator and denominator: a Current Ratio
Current Ratio is computed as a ratio of total current assets to total current liabilities b Debt - Equity Ratio
Debt - Equity Ratio is computed as a ratio of borrowings to total equity c Debt Service Coverage Ratio
Debt Service Coverage Ratio is computed as a ratio of earnings available for debt service to debt service
i) Earnings available for debt service is sum of profit after tax, finance cost and non cash expenditure
ii) Debt service is sum of finance cost and principal repayments d Return on Equity Ratio
Return on Equity Ratio is computed as a ratio of profit after tax to average of opening & closing total equity e Inventory Turnover Ratio
Inventory Turnover Ratio is computed as a ratio of revenue from sale of products to average of opening & closing inventory
f Trade Receivables Turnover Ratio
Trade Receivables Turnover Ratio is computed as a ratio of revenue from operations to closing trade receivables
g Trade Payables Turnover Ratio
Trade Payables Turnover Ratio is computed as a ratio of total purchases to closing trade payables
h Net Capital Turnover Ratio
Net Capital Turnover Ratio is computed as a ratio of revenue from operations to average of opening & closing working capital
i Net Profit Ratio
Net Profit Ratio is computed as a ratio of profit after tax to revenue from operations j Return on Capital Employed
Return on Capital Employed is computed as a ratio of profit before interest & taxes to average of opening & closing capital employed
Capital employed consists of total equity, borrowings and deferred tax liability k Return on Investment For equity
Return on Investment is computed as a ratio of EBIT to closing total assets
Note 45: Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/disclosures.
Mar 31, 2018
Background
Astra Microwave Products Limited was incorporated in 1991 and it got listed under NSE and BSE in the year 1994. The company is engaged in the business of design, development and manufacture of sub-systems for Radio Frequency and microwave systems used in defense, space, meteorology and telecommunication.
Terms and rights attached to equity shares:
The company has one class of equity shares having a par value of Rs. 2 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.
The Company has not issued any share as fully paid up without payment being received in cash or as bonus shares nor any share has been bought back by the Company since its incorporation.
Nature and purpose of reserves Securities premium reserves:
Securities premium reserves is used to record the premium on issue of shares. The reserve is utilised in accordance with the provision of the Act.
Debenture redemption reserve:
The company is required to create a debenture redemption reserve out of the profits which is available for payment of dividend for the purpose of redemption of debentures.
General reserve:
General reserve is used for strengthening the financial position and meeting future contingencies and losses.
Refer note 17 for current maturities of non-current borrowings.
Nature of security:
Debentures:
The 10.58% non-convertible, redeemable debentures are secured by First Pari Passu charge over movable property/Fixed Assets of the Company both present and future other than those Assets that are exclusively charged and any other security as mutually agreed between NCD holder and the Issuer.
Term Loans
a. Term loan from HDFC Bank is secured by First exclusive charge on the Fixed Assets funded by this term loan. Second pari passu charge on entire unencumbered fixed assets of the company along with term lenders. Pari Passu second charge on the current assets of the company along with other term lenders and personal guarantee of the Managing Director and Chief Operating Officer.
b. Term loan from AXIS Bank is secured by First exclusive charge on the Fixed Assets funded by this term loan. Pari Passu first charge on entire unencumbered fixed assets of the company along with term lenders and working capital lenders except assets financed by other term lenders including equitable mortgage of 5 properties. Second pari passu on the entire current assets of the company and pari passu second charge on the fixed assets of the company funded by other Term lenders & working capital lenders and Personal Guarantee of the Managing Director and Chief Operating Officer.
c. Aggregate amount of loans Guaranteed by Managing Director and Chief Operating Officer is Rs. 237,676,590.
Terms of repayment:
i) Term loan from Axis bank is repayable in 16 quarterly instalments starting after 9 months from the date of first disbursement (date of first drawdown was October 31, 2014) along with an interest as mutually agreed with the bank payable on a monthly basis. Interest rates are normally reset on an yearly basis. Present rate of interest is in the range of 9.55% to 10.40%.
ii) Term loan from HDFC bank is repayable in 12 quarterly instalments starting after one year from the date of first disbursement (date of first drawdown was June 5, 2012) along with an interest as mutually agreed with the bank payable on a monthly basis. Interest rates are normally reset on an yearly basis. Present rate of interest is in the range of 9.00% to 9.20%.
iii) Non-cumulative debentures are redeemable 50% in April 2018 and balance 50% in October 2018. Interest is payable on a yearly basis at 10.58%.
Nature of security:
Prime Security:
Pari Passu first charge on stocks and receivables and other chargeable current assets of the Company along with other working capital lenders
Collateral Security:
Pari Passu first charge on entire unencumbered Fixed Assets of the company (other than those financed by term lenders) along with other working capital lenders, including equitable mortgage of companyâs properties offered as collateral security and Pari Passu second charge on the fixed assets of the company funded by other term lenders.
Personal Guarantee:
Personal Guarantee of the Managing Director and Chief Operating officer Terms of repayment:
i) Working capital Loans taken from Banks are repayable within a period of 90 days to 180 days from the date of taking the loan.
ii) Interest rates are normally reset on an yearly basis. Present rate of interest is in the range of 8.00% to 9.40%.
iii) Working capital demand loans(bank over draft) are repayable on demand and the interest rate for these loans are in the range of 9.10% to 10.70%.
Note 1 : Fair values
The management assessed that trade receivables, cash and cash equivalents, other bank balances, other financial assets, short term borrowings, trade payables and other financial liabilities approximate their carrying amounts largely due to the short-term maturities or interest bearing nature of these instruments. The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
Set out below, is a comparison by class of the carrying amounts and fair value of the Companyâs financial instruments, other than those with carrying amounts that are reasonable approximations of fair values:
Note 2 : Financial risk management
The Company is exposed to market risk (fluctuations in foreign currency exchange rates, price and interest rate), liquidity risk and credit risk, which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.
A) Market risk
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 comprises of currency risk, interest rate risk and price risk. Financial instruments affected by market risk include loans and borrowings and trade receivables. The sensitivity analyses in the following sections relate to the position as at March 31, 2018 and March 31, 2017.
The analysis exclude the impact of movements in market variables on the carrying values of gratuity and other post- retirement obligations; provisions; and the non-financial assets and liabilities.
The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at 31 March 2018 and 31 March 2017.
i) Foreign Currency exchange rate risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the trade/ other payables and trade/other receivables. The risks primarily relate to fluctuations in US Dollar and EURO against the functional currencies of the Company. The Companyâs exposure to foreign currency changes for all other currencies is not material. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. The Company has not entered into derivative instruments during the year.
The following tables demonstrate the sensitivity to a reasonably possible change in USD and EURO exchange rates, with all other variables held constant. The impact on the Companyâs profit before tax is due to changes in the fair value of monetary assets and liabilities.
The movement in the pre-tax effect is a result of a change in the fair value of monetary assets and liabilities denominated in US dollars and EURO, where the functional currency of the entity is a currency other than US dollars and EURO.
ii) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of change in market interest rates. The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs long-term debt obligations with floating interest rates. As the Company has certain debt obligations with floating interest rates, exposure to the risk of changes in market interest rates are dependent of changes in market interest rates. Management monitors the movement in interest rate and, wherever possible, reacts to material movements in such rates by restructuring its financing arrangement.
Interest rate sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Companyâs profit before tax is affected through the impact on floating rate borrowings, as follows:
The assumed increase/decrease in interest rate for sensitivity analysis is based on the currently observable market environment
iii) Price risk
The Company invests its surplus funds primarily for short tenor in debt mutual funds measured at fair value through profit or loss. The following table demonstrate the sensitivity to a reasonably possible change in the price of the investments before tax:
The assumed increase/decrease for sensitivity analysis is based on the currently observable market environment
B) Credit risk
Credit risk is the risk arising from credit exposure to customers, cash and cash equivalents held with banks and current and non-current held-to maturity financial assets.
The Company primarily deals with Public Sector Enterprises and Government undertakings. Regarding credit exposure from customers, the Company has a procedure in place aiming to minimise collection losses. Credit Control team assesses the credit quality of the customers, their financial position, past experience in payments and other relevant factors. Cash and other collaterals are obtained from customers when considered necessary under the circumstances.
The carrying amount of trade receivables, advances, deposits, cash and bank balances, bank deposits and interest receivable on deposits represents companyâs maximum exposure to the credit risk. No other financial asset carry a significant exposure with respect to the credit risk. Bank deposits and cash balances are placed with reputable banks and deposits are with reputable government, public bodies and others.
The credit quality of financial assets is satisfactory, taking into account the allowance for credit losses.
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including default risk associate with the industry and country in which customers operate. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment.
An impairment analysis is performed at each reporting date on an individual basis for major receivables. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company also holds deposits as security from certain customers to mitigate credit risk.
i. Credit risk on cash and cash equivalents is limited as the Company generally invest in deposits with banks with high credit ratings assigned by external agencies.
ii. Credit risk on trade receivables is evaluated as follows:
C) Liquidity Risk
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding to meet obligations when due and to close out market positions. Companyâs treasury maintains flexibility in funding by maintaining availability under deposits in banks.
Management monitors cash and cash equivalents on the basis of expected cash flows. This is generally carried out at local level accordance with practice and limits set by the company.
(i) Financing arrangements
The company has access to the following undrawn borrowing facilities at the end of the reporting period:
Note 3 : Capital management
A. Capital management and Gearing Ratio
For the purpose of the capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the capital management is to maximise the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is debt divided by total capital. The Company includes within debt, interest bearing loans and borrowings.
In order to achieve this overall objective, the Company, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings.
No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2018 and 31 March 2017.
* The company has received a favorable order against demand raised by Commissioner of Customs, Central Excise and Service Tax. However, the same has been disclosed as contingent liability as the department has preferred an appeal before Honâble High Court, Telangana and Andhra Pradesh.
Note 4: Events Occurring after the reporting period :
Refer to Note 31 for the final dividend recommended by the directors which is subject to approvals of shareholders in the ensuing annual general meeting.
Note 5: Employee benefit Obligations
a) Leave obligations
The leave obligation covers the Companyâs liability for sick and earned leave. Refer Note-13, for details of provision made in this regard.
b) Defined contribution
The Company has defined contribution plan namely Provident fund. Contributions are made to provident fund at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the Government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the year towards defined such plan is as follows:
c) Defined benefit plan - Gratuity
The company provides gratuity for employees in India as per The Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement / termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and company makes contributions to Life Insurance Corporation of India(LIC). The amounts recognised in the balance sheet and the movement in the net defined benefit obligation over the years are as follows:
The amounts recognised in the balance sheet and the movement in the net defined benefit obligation over the year are as follows;
e) Significant estimates and sensitivity Analysis
The significant estimate for the defined benefit obligations is as below. The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:
The above sensitivity analysis are 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. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
f) Risk exposure
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Interest rate risk:
The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.
Salary inflation risk:
Higher than expected increases in salary will increase the defined benefit obligation.
Demographic risk:
This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.
Note 6: Segment information
The company operates in a single product segment. Additional disclosures required as per Ind AS 108, âOperating Segmentsâ are included below:
Note 7: First-time adoption of Ind AS Transition to Ind AS
These are the Companyâs first financial statements prepared in accordance with Ind AS.
The accounting policies set out in Note 1 have been applied in preparing the financial statements for the year ended March 31, 2018, the comparative information presented in these financial statements for the year ended March 31, 2017 and in the preparation of an opening Ind AS balance sheet at April 1, 2016 (date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation on how the transition from previous GAAP to Ind AS has effected the Companyâs financial position, financial performance and cash flows is set out in the following tables and notes.
Exemptions and Exceptions availed
Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.
A. Ind AS optional exemptions (i) Deemed cost
Ind AS 101 permits a first time adopter to elect to continue with the carrying value for all of its Property, Plant
& Equipment as recognised in the Financial Statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition.
ii) Impairment of financial assets
The Company has applied the exception related to impairment of financial assets given in Ind AS 101. It has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial assets were initially recognised and compared that to the credit risk as at 01 April 2016.
iii) Investment in subsidiaries and associate
Ind AS 101 permits to carry the investments in subsidiary or associate at cost. Accordingly, the Company has opted to carry the investment in subsidiaries and Associate at cost as at the date of transition.
B. Ind AS mandatory exceptions
i) Estimates
An entityâs estimates in accordance with Ind ASs at the date of transition to Ind As shall be consistent with the estimates made for the same date in accordance with previous GAAP(after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.
Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following item in accordance with Ind AS at the date of transition as these were not required under previous GAAP:
- Investment in equity instruments carried at Fair value through Profit and Loss.
- Impairment of financial asset based on expected credit loss model.
ii) Classification and measurement of Financial Assets
Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
iii) Government loans
The Company has elected to use the previous GAAP carrying amount of the Interest free Sales Tax Deferment Loan from Telangana Government existing at the date of transition to Ind AS as the carrying amount of the loan in the opening Ind AS Balance Sheet.
C. Notes to first-time adoption on significant adjustments made on transition to Ind-AS:
1) Deferred tax
Previous GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS12 requires entities to account for deferred taxes using the Balance Sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the Balance Sheet and its tax base. It requires recognition of tax consequences of differences between the carrying amounts of assets and liabilities and their tax base.
Under previous GAAP, minimum alternate tax entitlements were classified under other non-current assets. Under Ind AS, it is classified as unused tax credits under deferred tax.
2) Fair valuation of investments
Under the previous GAAP, Investments in equity instruments and mutual funds were classified as long term investments or current investments based on the intended holding period and realisability. Longterm investments were carried at cost less provisions for other than temporary decline in the value of such investments. Current investments are carried forward at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments (other than equity instruments designated at FVOCI) have been recognised in retained earnings as the date of transition and subsequently in the profit or loss.
3) Expenses directly attributable to revenue
Under the previous GAAP, late delivery charges and certain expenses which are directly attributable to sales were recoginsed as part of other expenses which has been adjusted against the revenue from sale of goods under Ind AS during the year ended 31 March 2017 . There is no impact on the total equity and profit.
4) Excise duty
Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented on the face of the statement of profit and loss as part of expenses. This change has resulted in an increase in total revenue and total expenses for the year. There is no impact on the total equity and profit.
5) Remeasurements of post-employment benefit obligations
Under Ind AS, remeasurements i.e. Actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. There is no impact on the total equity.
6) Proposed Dividend
Under the previous GAAP, dividends proposed by the Board of Directors after the balance sheet date but before the approval of the financial statements were considered as adjusting event. Accordingly, provision for proposed dividend and corporate dividend tax was recognised as liability. Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend and corporate dividend tax included under provisions for April 01, 2016 has been reversed with corresponding adjustments to retained earnings. Consequently the total equity increased by an equivalent amount.
7) Retained earnings
Retained earnings as at April 1, 2016 has been adjusted consequent to the above Ind AS transition adjustments on the date of transition.
8) Other comprehensive income
Under Ind AS, all items of income and expense recognized in a period should be included in the profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit or loss as âother comprehensive incomeâ includes remeasurements of defined benefit plans. The concept of âother comprehensive incomeâ did not exist under previous GAAP.
9) Fair valuation of forward contracts
Under previous GAAP, the premium or discount arising at the inception of a forward exchange contact should be amortised as expense or income over the life of the contract. Any profit or loss arising on cancellation or renewal of such a forward exchange contract should be recognised as income or expense for the period.
Under previous Ind AS 109, such forward contracts have to be carried at fair value through profit and loss. There are no forward contracts outstanding as at the year ended March 31, 2017.
10) Trade receivable
As per Ind AS 109, the company is required to apply expected credit loss model for recognising the allowance for doubtful debts. Accordingly, the company has created the model for computation of allowance for doubtful debts and provided the same.
11) Borrowings
Ind As 109 requires transaction cost incurred towards originating of borrowing to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method. Under previous GAAP, these transaction costs were charged to profit or loss as and when incurred.
12) Previous year GAAP figures have been regrouped/reclassified wherever necessary to conform to Ind AS presentation requirements for the purpose of this note.
D. Reconciliation between previous GAAP and Ind AS ( as at 31 March 2017 and 1 April 2016)
Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. Reconciliation of total equity as at 31 March 2017 and 1 April 2016
Mar 31, 2017
Disclosure pursuant to Note no. 6(A)(e) of Part I of Schedule III to the Companies Act, 2013
The rights, preferences and restrictions attaching to each class of shares including restrictions on the distribution of dividends and the repayment of capital;
a) The Company has only one class of shares referred to as equity shares having a par value of Rs.2/-. Each holder of equity shares is entitled to one vote per share
b) The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
c) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.
1. CSR Expenditure: During the year the company has incurred Rs.1,51,35,689/- (Previous year Rs.1,34,85,237/-) as CSR Expenditure under Corporate Social Responsibility Policy of the Company as approved by the Board of Directors of the Company, the details of the same are included in the Board''s Report.
2. Segment Reporting: The Company operates in the same segment of manufacture and sale of Microwave Products which are subject to similar risks and returns.
3. During the year provision for income tax has been provided as per the provisions of Section 115JB of the Income Tax Act.
4. MAT Credit entitlement: Minimum Alternative Tax paid as per the provisions of the Section 115JB of the Income Tax Act, Which can be carried forward U/s. 115JAA to be set off against the income tax payable in the specified period was considered as an asset and recognized in the financial statements as per Guidance Note on "Accounting for credit available in respect of Minimum Alternative Tax under the Income Tax Act, 1961" issued by the ICAI.
5. The previous year''s figures have been reworked / regrouped / rearranged / reclassified where ever necessary.
6. Balances under sundry debtors, sundry creditors, deposits, loans and advances payable / receivable are subject to confirmation and reconciliation.
7. The figures have been rounded off to the nearest rupee.
Mar 31, 2016
Qualified Institutional Placement :
The Company has issued 47,86,450 equity shares in the current period
under the Qualified Institutional Placement (QIP) issue. The face value
of these shares are Rs.2/- each and these were issued at a premium of
Rs.133.80 per share.
Disclosure pursuant to Note no. 6(A)(e) of Part I of Schedule III to
the Companies Act, 2013
The rights, preferences and restrictions attaching to each class of
shares including restrictions on the distribution of dividends and the
repayment of capital;
a) The Company has only one class of shares referred to as equity
shares having a par value of Rs.2/-. Each holder of equity shares is
entitled to one vote per share.
b) The Company declares and pays dividends in Indian rupees. The
dividend proposed by the Board of Directors is subject to the approval
of the shareholders in the ensuing Annual General Meeting.
c) In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive any of the remaining assets of the
Company, after distribution of all preferential amounts. However, no
such preferential amounts exist currently. The distribution will be in
proportion to the number of equity shares held by the shareholders.
1. CSR Expenditure: During the year the company has incurred
Rs.1,34,85,237/- (Previous year Rs.1,08,17,394/-) as CSR Expenditure
under Corporate Social Responsibility Policy of the Company as approved
by the Board of Directors of the Company, the details of the same are
included in the Board''s Report
2. Segment Reporting: The Company operates in the same segment of
manufacture and sale of Microwave Products which are subject to similar
risks and returns.
3. During the year provision for income tax has been provided as per
the provisions of Section 115JB of the Income Text Act.
4. MAT Credit entitlement: Minimum Alternative Tax paid as per the
provisions of the Section 115JB of the Income Tax Act, Which can be
carried forward U/s. 115JAA to be set off against the income tax
payable in the specified period was considered as an asset and
recognized in the financial statements as per Guidance Note on
"Accounting for credit available in respect of Minimum Alternative Tax
under the Income Tax Act, 1961" issued by the ICAI.
5. The previous year''s figures have been reworked / regrouped /
rearranged / reclassified wherever necessary.
6. Balances under sundry debtors, sundry creditors, deposits, loans
and advances payable / receivable are subject to confirmation and
reconciliation.
7. The figures have been rounded off to the nearest rupee
Mar 31, 2014
1. Disclosure pursuant to Note no. 6(A)(e) of Part I of Schedule VI to the
Companies Act, 1956
The rights, preferences and restrictions attaching to each class of
shares including restrictions on the distribution of dividends and the
repayment of capital;
a) The Company has only one class of shares referred to as equity
shares having a par value of Rs.2/-. Each holder of equity shares is
entitled to one vote per share
b) The Company declares and pays dividends in Indian rupees. The
dividend proposed by the Board of Directors is subject to the approval
of the shareholders in the ensuing Annual General Meeting.
c) In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive any of the remaining assets of the
Company, after distribution of all preferential amounts. However, no
such preferential amounts exist currently. The distribution will be in
proportion to the number of equity shares held by the shareholders.
2. CONTINGENT LIABILITIES
Year Ended Year Ended
Particulars
31-03-2014 31-03-2013
a) Letters of credit - -
b) Bank Guarantees:
1) Performance Guarantees 642,030,708 483,003,526
2) Advance payment
Guarantees 2,565,274,800 2,154,521,147
3) Guarantee in lieu of
EMD/Security Deposit 75,610,496 53,327,578
4) Guarantee for Materials 17,419,600 4,007,000
c) Liabilities disputed and
not provided for:
Excise Duty - Under Appeal 12,395,319 -
3. SEGMENT REPORTING:
As the Company''s business activities falls within single segment viz.,
Microwave Products the disclosure requirement of Accounting Standard 17
"Segment Reporting" issued by the Institute of Chartered Accountants of
India is not applicable.
4. Disclosure under Micro, Small and Medium Enterprises Development
Act, 2006:
There are no Micro, Small and Medium Enterprise, to whom the company
owes dues, which are outstanding for more than 45 days as at 31st
March, 2014. This information as required to be disclosed under the
Micro, Small Medium Enterprise Development Act, 2006 has been
determined to the extent such parties have been identified on the basis
of information available with the company.
5. The previous year''s figures have been reworked / regrouped /
rearranged / reclassified wherever necessary.
Amounts and other disclosures for the preceding year are included as an
integral part of the current year financial statements and are to be
read in relation to the amounts and other disclosures relating to the
current year.
6. Balances under sundry debtors, sundry creditors, deposits, loans
and advances payable / receivable are subject to confirmation and
reconciliation.
Mar 31, 2013
1.1 CONTINGENT LIABILITIES
Particulars Year Ended Year Ended
Particulars 31-03-2013 31-03-2012
Foreign letter of credit 6,675,900
Guarantees to Banks
1) Performance Guarantees 483,003,526 263,962,305
2) Advance payment Guarantees 2,154,521,147 770,886,716
3) Guarantee in lieu of EMD /
Security Deposit 53,327,578 40,176,400
4) Guarantee for Materials 4,007,000 4,087,000
1.2 SEGMENT REPORTING
As the Company''s business activities falls within single segment
viz., Microwave Products the disclosure requirement of Accounting
Standard 17 ''Segment Reporting'' issued by the Institute of
Chartered Accountants of India is not applicable.
1.3 Disclosure under Micro, Small and Medium Enterprises Development
Act, 2006:
There are no Micro, Small and Medium Enterprise, to whom the company
owes dues, which are outstanding for more than 45 days as at 31st
March, 2012. This information as required to be disclosed under the
Micro, Small Medium Enterprise Development Act, 2006 has been
determined to the extent such parties have been identified on the basis
of information available with the company.
1.4 The previous year''s figures have been reworked / regrouped /
rearranged / reclassifed, where ever necessary. Amounts and other
disclosures for the preceding year are included as an integral part of
the current year financial statements and are to be read in relation to
the amounts and other disclosures relating to the current year.
1.5 Balances under sundry debtors, sundry creditors, deposits, loans
and advances payable / receivable are subject to confirmation and
reconciliation.
Mar 31, 2012
The rights, preferences and restrictions attaching to each class of
shares including restrictions on the distribution of dividends and the
repayment of capital;
a) The Company has only one class of shares referred to as equity
shares having a par value of Rs.2/-. Each holder of equity shares is
entitled to one vote per share.
b) The Company declares and pays dividends in Indian rupees. The
dividend proposed by the Board of Directors is subject to the approval
of the shareholders in the ensuing Annual General Meeting.
c) In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive any of the remaining assets of the
Company, after distribution of all preferential amounts. However, no
such preferential amounts exist currently. The distribution will be in
proportion to the number of equity shares held by the shareholders.
1.2 CONTINGENT LIABILITIES
Particulars Year Ended Year Ended
31-03-2012 31-03-2011
Foreign letter of credit 66.76 91.89
Guarantees to Banks
1. Performance Guarantees 2639.62 1,692.01
2. Advance payment Guarantees 7708.87 8,489.46
3. Guarantee in lieu of EMD/Security
Deposit 401.76 461.41
4. Guarantee for Materials 40.87 2.00
5. Corporate Guarantee on behalf of
Subsidiary Company for loans taken
from banks NIL 471.00
1.2 SEGMENT REPORTING
As the Company's business activities falls within single segment
viz., Microwave Products the disclosure requirement of Accounting
Standard 17 "Segment Reporting" issued by the Institute of
Chartered Accountants of India is not applicable.
1.3 Disclosure under Micro, Small and Medium Enterprises Development
Act, 2006:
There are no Micro, Small and Medium Enterprise, to whom the company
owes dues, which are outstanding for more than 45 days as at 31st
March, 2012. This information as required to be disclosed under the
Micro, Small Medium Enterprise Development Act, 2006 has been
determined to the extent such parties have been identified on the basis
of information available with the company.
1.4 The previous year's figures have been reworked / regrouped /
rearranged / reclassified, where ever necessary. Amounts and other
disclosures for the preceding year are included as an integral part of
the current year financial statements and are to be read in relation to
the amounts and other disclosures relating to the current year.
1.5 Balances under sundry debtors, sundry creditors, deposits, loans
and advances payable / receivable are subject to confirmation and
reconciliation.
Mar 31, 2010
1. Secured Loans
a. Working Capital Finance from Canara Bank is secured by Pari passu
first charge on Stocks and book debts (book debts not older than 120
days) and other chargeable current assets and Pari passu second charge
on Fixed Assets of the Company and Personal Guarantee of Promoter
Directors.
b. Working capital finance from HDFC Bank Limited is secured by Pari
passu first charge on stocks and book debts (book debts not older than
90 days) and other chargeable current assets and Pari passu second
charge on Fixed Assets of the Company and personal guarantee of
promoter Directors.
c. Working Capital finance from State Bank of India is secured by Pari
passu first charge on stocks and book debts (not older than 120 days)
and other chargeable current assets and: Pari passu second charge on
Fixed Assets of the Company and Personal Guarantee of Promoter
Directors.
d. Rupee Term Loan from State Bank of India is secured by first charge
on Fixed Assets of the Company and Pari passu second charge on all
chargeable current assets and Personal Guarantee of Promoter Directors.
e. Term loan from ICICI Bank under TDC Programme of USAID Reflows is
secured by an exclusive hypothecation of assets bought under this
programme
f. Hire purchase finance is secured by hypothecation of specified assets
acquired under Hire Purchase Agreement.
2. Research & Development Expenses
During the year the company has incurred revenue expenditure pertaining
to Research and Development of Rs.4,55,01,694/- (Rs.4,38,72,105/-).
Revenue expenditure is shown under respective heads of expenditure.
The Company has also incurred capital expenditure on Research and
Development of Rs.1,16,33,501/- (Rs.1,05,39,589/-). Capital expenditure
is shown in respective fixed assets.
3. Employee Stock Option Scheme
During the year 48,700 (1,45,050) shares of Rs.2/- each for cash and
48,700 (1,45,050) shares of Rs.2/- each by way of bonus shares by
capitalizing share premium were allotted as fully paid up shares to
employees under ESOP Scheme. As per the above stated accounting policy
during the year the company has charged Rs.33,01,860/- (Rs.98,34,390/-)
as employee compensation cost to the Profit and Loss Account.
4. Sales Tax Deferment
The sales tax deferment liability amounting to Rs.2,23,63,757/- shown
under unsecured loans due for repayment from the year 2011 onwards. The
Government of Andhra Pradesh has granted Sales Tax Deferment of
Rs.2,36,05,320/- for a period of 14 years from 05 November 1997 to 04
November 2011.
5. Share capital
Paid up share capital includes
a. 17,600 shares of Rs.10/- each were allotted as fully paidup for
consideration other than cash.
b. 3,03,325 shares of Rs.10/- each were allotted as fully paid up by way
of bonus shares by capitalizing reserves and surplus.
c. 150 shares of Rs.10/- each were allotted as fully paid up pursuant to
scheme of amalgamation without payment being received in cash.
d. 1,41,700 shares of Rs.10/- each were allotted as fully paidup for
cash to AMPL ESOP Trust under Employees Stock Option Scheme.
e. 18,00,000 shares of Rs.10/- each were allotted as fully paid up by
way of bonus shares by capitalizing share premium.
f. 2,65,56,225 shares of Rs.2/- each were allotted as fully paid up by
way of bonus shares by capitalizing share premium.
g. 5,15,450 shares of Rs.2/- each for cash and 5,15,450 shares of Rs.2/-
each by way of bonus shares by capitalizing share premium were allotted
as fully paid up shares to employees under ESOP Scheme.
6. Contingent Liabilities 31 March 2010 31 March 2009
in Rupees in Rupees
a Letter of Credit inland 0 0
b Foreign letter of credit 12,71,585 0
c Bank Guarantees - -
1 Performance Guarantees 15,39,21,583 17,22,80,524
2 Advance payment Guarantees 93,46,47,783 56,87,38,047
3 Guarantee in lieu of EMD/Security
Deposit 1,72,95,394 94,81,934
4 Guarantee for materials 4,86,500 31,97,797
5 Corporate Guarantee on behalf of
Subsidiary Companies 4,72,00,000 4,47,00,000
for loans taken from banks
7. Segment Reporting
As the companyÃs business activities falls within single segment viz.,
Microwave products the disclosure requirement of Accounting Standard 17
"Segment Reporting" issued by the Institute of Chartered Accountants of
India is not applicable.
8. Disclosure under Micro, Small and Medium Enterprises Development
Act, 2006
The Management is currently in the process of identifying enterprises
which have provided goods and services to the company and which qualify
under the definition of Micro, Medium and Small Enterprises under the
Micro, Small and Medium Enterprises Development Act, 2006. Accordingly
the disclosure in respect of the amount payable to such medium and
small enterprises as at 31-03-2010 has not been made in the financial
statements. However, in view 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.
9. Disclosure under Borrowing Costs
Borrowing cost capitalized during the period was Rs.99,29,081/-
(Rs.2,21,36,672/-)
10. Retirement benefit plans
a Defined Contribution Plan
The Company makes contributions towards Provident Fund to a defined
contribution retirement benefit plan for qualifying employees. The
provident fund plan is operated by the Regional Provident fund
Commissioner. Under the scheme the company is required to contribute a
specified percentage of payroll cost to the retirement benefit schemes
to fund the benefits.
The company recognized Rs.68,50,426/- ( previous year Rs.64,17,000/-)
for provident fund contributions in the profit and loss account. The
contributions payable to this plan by the company are at rates
specified in the rules of the scheme.
b Defined benefit plan
As per the Payment of Gratuity Act lump sum payment has to be made to
vested employees at retirement, death while in employment or on
termination of employment of an amount equivalent to 15 days salary
payable for each completed year of service or part there of in excess
of six months. Vesting occurs upon completion of five years of service.
11. Balances under sundry debtors, sundry creditors, deposits, loans and
advances payable/receivable are subject to confirmation and
reconciliation.
12. Certain items in the comparative figures have been reclassified to
conform to the current yearÃs classification.
13. The figures have been rounded off to the nearest rupee.
14. Prior period tax adjustments debited to profit and loss account
represents income tax paid relating to earlier years as per the Income
Tax Orders.
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