A Oneindia Venture
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Notes to Accounts of Elin Electronics Ltd.
Mar 31, 2025
2.13 Provisions, contingent assets and contingent
liabilities
a) Provisions
Provisions are recognized when the
Company has a present obligation (legal
or constructive) as a result of a past
event, it is probable that an outflow of
resources embodying economic benefits
will be required to settle the obligation
and a reliable estimate can be made of
the amount of the obligation. The amount
recognized as a provision is the best
estimate of the consideration required to
settle the present obligation at the end
of the reporting period, considering the
risk and uncertainties surrounding the
obligation.
If the effect of the time value of money is
material, provisions are discounted using
a current pre-tax rate that reflects, when
appropriate, the risks specific to the liability.
When discounting is used, the increase in
the provision due to the passage of time is
recognized as a finance cost.
b) Warranties
Provisions for the expected liability of
warranty obligations under sale of goods
are recognised at the management''s best
estimate if the claims of the customers
under warranty are probable and the
amount can be reasonably estimated.
c) Contingent liabilities
Contingent liabilities are disclosed when
there is a possible obligation or present
obligations that may but probably will not,
require an outflow of resources embodying
economic benefits or the amount of
such obligation cannot be measured
reliably. When there is possible obligation
or a present obligation in respect of
which likelihood of outflow of resources
embodying economic benefits is remote,
no provision or disclosure is made.
These are reviewed at each financial
reporting date and adjusted to reflect the
current best estimates.
Contingent assets are not recognized
though are disclosed, where an inflow of
economic benefits is probable.
2.14 Leases
The Company assesses at contract inception
whether a contract is, or contains, a lease. That
is, if the contract conveys the right to control
the use of an identified asset for a period in
exchange for consideration.
a) Company as a lessee
The Company applies a single recognition
and measurement approach for all leases,
except for short- term leases and leases of
low-value assets. The Company recognizes
lease liabilities to make lease payments
and right-of-use assets representing the
right to use the underlying assets.
i) Right-of-use assets
The Company recognizes right-of-use
assets at the commencement date of
the lease (i.e., the date the underlying
asset is available for use). Right-of-
use assets are measured at cost,
less any accumulated depreciation
and impairment losses, and adjusted
for any re-measurement of lease
liabilities. The cost of right-of-use
assets includes the amount of lease
liabilities recognized, initial direct
costs incurred, and lease payments
made at or before the commencement
date less any lease incentives
received. Right-of-use assets are
depreciated over the shorter of the
lease term and the estimated useful
lives of the assets.
If ownership of the leased asset
transfers to the Company at the end
of the lease term or the cost reflects
the exercise of a purchase option,
depreciation is calculated using the
estimated useful life of the asset.
Right-of-use assets are tested for
impairment whenever there is any
indication that their carrying amounts
may not be recoverable. Impairment
loss, if any, is recognized in the
Standalone Statement of Profit and
loss.
ii) Lease liabilities
At the commencement date of the
lease, the Company recognizes lease
liabilities measured at the present
value of lease payments to be
made over the lease term. The lease
payments include fixed payments
(including in substance fixed
payments) less any lease incentives
receivable, variable lease payments
that depend on an index or a rate, and
amounts expected to be paid under
residual value guarantees. The lease
payments also include the exercise
price of a purchase option reasonably
certain to be exercised by the
Company and payments of penalties
for terminating the lease, if the lease
term reflects the Company exercising
the option to terminate. Variable
lease payments that do not depend
on an index or a rate are recognized
as expenses (unless they are incurred
to produce inventories) in the period
in which the event or condition that
triggers the payment occurs.
In calculating the present value of
lease payments, the Company uses
its incremental borrowing rate at the
lease commencement date because
the interest rate implicit in the lease
is not readily determinable. After the
commencement date, the amount of
lease liabilities is increased to reflect
the accretion of interest and reduced
for the lease payments made. In
addition, the carrying amount of lease
liabilities is re-measured if there is a
modification, a change in the lease
term, a change in the lease payments
(e.g., changes to future payments
resulting from a change in an index
or rate used to determine such
lease payments) or a change in the
assessment of an option to purchase
the underlying asset. The Company''s
lease liabilities are included in
financial liabilities
iii) Short term lease and leases of low
value assets
The Company applies the short-term
lease recognition exemption to its
short-term leases contracts including
lease of residential premises and
offices (i.e., those leases that have a
lease term of 12 months or less from
the commencement date and do not
contain a purchase option). It also
applies the lease of low-value assets
recognition exemption to leases of
office equipment that are considered
to be low value. Lease payments
on short-term leases and leases of
low-value assets are recognized as
expense on a straight-line basis over
the lease term.
iv) Single discount rate
The Company has applied the
available practical expedient with
respect to single discount rate
wherein single discount rate is used
for portfolio of leases with reasonably
similar characteristics.
b) Company as a lessor
Leases in which the Company does not
transfer substantially all the risks and
rewards incidental to ownership of an
asset are classified as operating leases.
Rental income arising is accounted for on
a straight-line basis over the lease terms.
Initial direct costs incurred in negotiating
and arranging an operating lease are added
to the carrying amount of the leased asset
and recognised over the lease term on the
same basis as rental income. Contingent
rents are recognised as revenue in the
period in which they are earned.
2.15 Financial instruments
A financial instrument is any contract that
gives rise to a financial asset of one entity
and a financial liability or equity instrument of
another entity. Trade receivables issued are
initially recognised when they are originated.
All other financial assets and financial liabilities
are initially recognised when the Company
becomes a party to the contractual provisions
of the instrument.
a) Financial assets
Initial recognition and measurement
A financial asset (except trade receivable
and contract asset) is recognised initially
at fair value plus or minus s transaction
cost that are directly attributable to the
acquisition or issue of financial assets
(other than financial assets at fair value
through profit and loss). Transaction costs
directly attributable to the acquisition of
financial assets or financial liabilities at fair
value through profit or loss (âFVTPL'') are
recognised immediately in the Standalone
Statement of Profit and Loss.
Classification_and_subsequent
measurement
On initial recognition, a financial asset is
classified as measured at
- amortised cost;
- FVOCI - equity investment; or
- FVTPL
Financial assets are not reclassified
subsequent to their initial recognition,
except if and in the period the Company
changes its business model for managing
financial assets.
A financial asset is measured at amortised
cost if it meets both of the following
conditions and is not designated as at
FVTPL:
- the asset is held within a business
model whose objective is to hold
assets to collect contractual cash
flows; and
- the contractual terms of the financial
asset give rise on specified dates to
cash flows that are solely payments of
principal and interest on the principal
amount outstanding.
All equity investments in scope of Ind AS
109 are measured at fair value. Equity
instruments which are held for trading
classified as at FVTPL. For all other equity
instruments, the Company may make an
irrevocable election to present subsequent
changes in the fair value in other
comprehensive income (designated as
FVOCI - equity investment). The Company
makes such election on an instrument-
by-instrument basis. The classification
is made on initial recognition and is
irrevocable.
If the Company decides to classify an
equity instrument as at FVOCI, then all
fair value changes on the instrument,
excluding dividends, are recognized in the
other comprehensive income (âOCI''). There
is no recycling of the amounts from OCI
to the Standalone Statement of Profit and
Loss, even on sale of investment. However,
the Company may transfer the cumulative
gain or loss within equity.
Equity instruments included within the
FVTPL category are measured at fair
value with all changes recognized in the
Standalone Statement of Profit and Loss.
All financial assets not classified as
measured at amortised cost or FVOCI as
described above are measured at FVTPL.
For purposes of subsequent measurement,
financial assets are classified in following
categories:
Financial assets at amortised cost
These assets are subsequently measured
at amortised cost using the effective
interest method. The amortised cost is
reduced by impairment losses. Interest
income, foreign exchange gains and losses
and impairment are recognised in profit or
loss. Any gain or loss on derecognition is
recognised in the Standalone Statement of
Profit and Loss.
Financial assets at FVTPL
These assets are subsequently measured
at fair value. Net gains and losses, including
any interest income, are recognised in the
Standalone Statement of Profit and Loss.
Equity investments at FVOCI
These assets are subsequently measured
at fair value. Other net gains and losses are
recognised in OCI and are not reclassified
to profit or loss.
Expected credit loss (ECL) is the difference
between all contractual cash flows that are
due to the Company in accordance with
the contract and all the cash flows that
the entity expects to receive (i.e., all cash
shortfalls), discounted at the original EIR.
In accordance with Ind AS 109, the
Company applies expected credit loss (ECL)
model for measurement and recognition of
impairment loss on the following financial
assets and credit risk exposure:
(a) Financial assets that are measured
at amortized cost e.g., deposits, trade
receivables and bank balance.
(b) Financial assets that are measured as
at FVTOCI
(c) Lease receivables under Ind AS 116
(d) Trade receivables or any contractual
right to receive cash or another
financial asset that result from
transactions that are within the scope
of Ind AS 115
The Company follows âsimplified approach''
for recognition of impairment loss
allowance on Trade receivables.
The application of simplified approach
does not require the Company to track
changes in credit risk. Rather, it recognizes
impairment loss allowance based on
lifetime ECLs at each reporting date, right
from its initial recognition.
For recognition of impairment loss on other
financial assets and risk exposure, the
Company determines that whether there
has been a significant increase in the credit
risk since initial recognition. If credit risk
has not increased significantly, 12-month
ECL is used to provide for impairment
loss. However, if credit risk has increased
significantly, lifetime ECL is used. If, in a
subsequent period, credit quality of the
instrument improves such that there is no
longer a significant increase in credit risk
since initial recognition, then the entity
reverts to recognizing impairment loss
allowance based on 12-month ECL.
Lifetime ECL are the expected credit losses
resulting from all possible default events
over the expected life of a financial asset.
The 12-month ECL is a portion of the
lifetime ECL which results from default
events that are possible within 12 months
after the reporting date.
ECL impairment loss allowance (or reversal)
recognized during the period is recognized
as income/ expense in the Standalone
Statement of Profit and loss. ECL for
financial assets measured as at amortized
cost and contractual revenue receivables
is presented as an allowance, i.e., as an
integral part of the measurement of those
assets in the Standalone statement of
assets and Liabilities. The allowance
reduces the net carrying amount. Until the
asset meets write-off criteria, the Company
does not reduce impairment allowance
from the gross carrying amount.
The Company does not have any
purchased or originated credit impaired
(POCI) financial assets, i.e., financial assets
which are credit impaired on purchase/
origination.
Derecognition of financial assets
The Company derecognizes a financial
asset when the contractual rights to the
cash flows from the financial asset expire,
or it transfers the rights to receive the
contractual cash flows in a transaction
in which substantially all of the risks and
rewards of ownership of the financial asset
are transferred or in which the Company
neither transfers nor retains substantially
all of the risks and rewards of ownership
and does not retain control of the financial
asset.
If the Company enters into transactions
whereby it transfers assets recognized
on its Standalone statement of assets
and liabilities but retains either all or
substantially all of the risks and rewards
of the transferred assets, the transferred
assets are not derecognized.
b) Financial liabilities
Initial recognition and measurement
All financial liabilities are recognised
initially at fair value and, in the case of
loans and borrowings and payables, net of
directly attributable transaction costs.
Subsequent measurement
The measurement of financial liabilities
depends on their classification, as
described below:
(i) Financial liabilities at fair value
through profit or loss
The Company has not designated any
financial liabilities at FVTPL
(ii) Financial liabilities at amortized cost
After initial recognition, Loans,
borrowings, trade payables and other
financial liabilities are subsequently
measured at amortized cost using
the EIR method. Interest expense
is recognized in the Standalone
Statement of Profit and loss. Any
gain or loss on derecognition is
also recognized in the Standalone
Statement of Profit and loss.
Derecognition of financial liabilities
A financial liability is derecognized when the
obligation under the liability is discharged
or cancelled or expires. When an existing
financial liability is replaced by another
from the same lender on substantially
different terms, or the terms of an existing
liability are substantially modified, such
an exchange or modification is treated as
the derecognition of the original liability
and the recognition of a new liability.
The difference in the respective carrying
amounts is recognized in the Standalone
Statement of Profit and loss.
c) Reclassification of financial assets and lia¬
bilities
The Company determines classification
of financial assets and liabilities on initial
recognition. After initial recognition, no
reclassification is made for financial assets
which are equity instruments and financial
liabilities. For financial assets which are
debt instruments, a reclassification is made
only if there is a change in the business
model for managing those assets.
d) Offsetting of financial instruments
Financial assets and financial liabilities
are offset, and the net amount is reported
in the Standalone statement of assets
and liabilities if there is a currently
enforceable contractual legal right to
offset the recognized amounts and there
is an intention to settle on a net basis, to
realize the assets and settle the liabilities
simultaneously.
2.16 Fair value measurement
The Company measures financial instruments
at fair value at each reporting period.
Fair value is the price that would be received to
sell an asset or paid to transfer a liability in an
orderly transaction between market participants
at the measurement date. The fair value
measurement is based on the presumption that
the transaction to sell the asset or transfer the
liability takes place either:
⢠In the principal market for the asset or
liability, or
⢠In the absence of a principal market, in
the most advantageous market for the
asset or liability, the principal or the most
advantageous market must be accessible
by the Company.
The principal or the most advantageous market
must be accessible by the Company.
The fair value of an asset or a liability is
measured using the assumptions that market
participants would use when pricing the asset
or liability, assuming that market participants
act in their economic best interest.
A fair value measurement of a non-financial
asset takes into account a market participant''s
ability to generate economic benefits by using
the asset in its highest and best use or by selling
it to another market participant that would use
the asset in its highest and best use.
The Company uses valuation techniques that
are appropriate in the circumstances and for
which sufficient data are available to measure
fair value, maximizing the use of relevant
observable inputs and minimizing the use of
unobservable inputs.
All assets and liabilities for which fair value
is measured or disclosed in the Standalone
Financial Statements are categorized within the
fair value hierarchy, described as follows, based
on the lowest level input that is significant to the
fair value measurement as a whole:
⢠Level 1: quoted (unadjusted) market prices
in active markets for identical assets or
liabilities
⢠Level 2: inputs other than quoted prices
included in Level 1 that are observable
for the asset or liability, either directly (i.e.
as prices) or indirectly (i.e. derived from
prices).
⢠Level 3: inputs for the asset or liability that
are not based on observable market data
(unobservable inputs).
For assets and liabilities that are recognized
in the Standalone Financial Statements on
a recurring basis, the Company determines
whether transfers have occurred between levels
in the hierarchy by re-assessing categorization
(based on the lowest level input that is significant
to the fair value measurement as a whole) at the
end of each reporting period.
External valuers are involved for valuation of
significant assets and liabilities, if any. At each
reporting date, the Company analyses the
movements in the values of assets and liabilities
which are required to be remeasured or re¬
assessed as per the Company''s accounting
policies.
For the purpose of fair value disclosures, the
Company has determined classes of assets
and liabilities on the basis of the nature,
characteristics and risks of the asset or
liability and the level of the fair value hierarchy
as explained above. This note summaries
accounting policy for the fair value. Other fair
value related disclosures are given in note 44.
2.17 GST Credit
The GST credit available on purchase of raw
materials, other eligible inputs and capital
goods is adjusted against taxes payable. The
unadjusted GST credit is shown under the head
"Other Current Assets".
2.18 Earnings per share
Basic earnings/(loss) per share are calculated
by dividing the net profit/(loss) for the year
attributable to equity shareholders by the
weighted average number of equity shares
outstanding during the year. The weighted
average number of equity shares outstanding
during the period is adjusted for events of
bonus issue and share split. For the purpose of
calculating diluted earnings/ (loss) per share,
the net profit or loss for the period attributable to
equity shareholders and the weighted average
number of shares outstanding during the
year are adjusted for the effects of all dilutive
potential equity shares. The dilutive potential
equity shares are adjusted for the proceeds
receivable had the equity shares been actually
issued at fair value (i.e. the average market
value of the outstanding equity shares). Dilutive
potential equity shares are deemed converted
as of the beginning of the period, unless issued
at a later date. Dilutive potential equity shares
are determined independently for each period
presented. The number of equity shares and
potential dilutive equity shares are adjusted
retrospectively for all periods presented for any
share splits and bonus shares issues including
for changes effected prior to the approval of the
Standalone Financial statements by the Board
of Directors.
2.19 Segment reporting
Operating segments are reported in a manner
consistent with the internal reporting provided
to the chief operating decision maker. The board
of directors of the Company has been identified
as being the chief operating decision maker by
the Management of the Company.
The business of the Company falls within a single
line of business i.e. electronics manufacturing
services. All other activities of the Company
revolve around its main business. Hence, no
separate reportable primary segment.
2.20 Government grants
Grants from the government are recognized
at their fair value where there is a reasonable
assurance that the grant will be received and
the Company will comply with all stipulated
conditions. Government grants relating to
income are deferred and recognized in the profit
or loss over the period necessary to match
them with the costs that they are intended
to compensate and presented within other
operating income. Grants related to assets are
reduced from the carrying amount of the asset.
Such grants are recognized in the Standalone
Statement of Profit and Loss over the useful
life of the related depreciable asset by way of
reduced depreciation charge.
2.21 Standalone Statement of Cash Flows
The Standalone statements of cash flows is made
using the indirect method, whereby profit before
tax is adjusted for the effects of transactions of
non-cash nature, any deferral accruals of past
or future cash receipts or payments and item of
income or expense associated with investing or
financing of cash flows. The cash flows from
operating, financing and investing activities of
the Company are segregated.
2.22 Significant accounting estimates and judgments
The estimates used in the preparation of the
Standalone Financial Statements of each period/
year presented are continuously evaluated by the
Company and are based on historical experience
and various other assumptions and factors
(including expectations of future events), that
the Company believes to be reasonable under
the existing circumstances. The said estimates
are based on the facts and events, that existed
as at the reporting date, or that occurred after
that date but provide additional evidence about
conditions existing as at the reporting date.
Although the Company regularly assesses these
estimates, actual results could differ materially
from these estimates - even if the assumptions
underlying such estimates were reasonable
when made, if these results differ from historical
experience or other assumptions do not turn
out to be substantially accurate. The changes
in estimates are recognized in the Standalone
Financial Statements in the period in which they
become known.
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. Actual
results could differ from these estimates.
Significant judgements
⢠Allowances for uncollected trade
receivables
Trade receivables do not carry interest
and are stated at their nominal values as
reduced by appropriate allowances for
estimated irrecoverable amount are based
on ageing of the receivable balances
and historical experiences. Individual
trade receivables are written off when
management deems not be collectible.
⢠Contingencies
In the normal course of business, contingent
liabilities may arise from litigation and
other claims against the Company.
There are certain obligations which
managements have concluded based on all
available facts and circumstances are not
probable of payment or difficult to quantify
reliably and such obligations are treated
as contingent liabilities and disclosed in
notes Although there can be no assurance
of the final outcome of legal proceedings
in which the Company is involved. it is not
expected that such contingencies will have
material effect on its financial position of
probability.
⢠Impairment of other financial assets
The impairment provision for financial
assets are based on assumptions about
risk of default and expected loss rates. The
Company uses judgement in making these
assumptions and selecting the inputs to
the impairment calculation., based on the
Company''s past history, existing market
conditions as well as forward looking
estimates at the end of each reporting
period.
⢠Taxes
Uncertainties exist with respect to the
interpretation of complex tax regulations,
changes in tax laws, and the amount
and timing of future taxable income.
Given the nature of business differences
arising between the actual results and
the assumptions made, or future changes
to such assumptions, could necessitate
future adjustments to tax income and
expense already recorded. The Company
establishes current tax payable, based on
reasonable estimates. The amount of such
current tax payable is based on various
factors, such as experience of previous
tax audits and differing interpretations
of tax regulations by the taxable entity
and the responsible tax authority. Such
differences of interpretation may arise on
a wide variety of issues depending on the
conditions prevailing in the domicile of the
Company.
⢠Recoverability of deferred taxes
In assessing the recoverability of deferred
tax assets, management considers
whether it is probable that taxable profit
will be available against which the losses
can be utilized. The ultimate realization
of deferred tax assets is dependent upon
the generation of future taxable income
during the periods in which the temporary
differences become deductible.
Deferred tax assets are recognized for
unused tax losses to the extent that it is
probable that taxable profit will be available
against which the losses can be utilized.
Significant management judgement is
required to determine the amount of
deferred tax assets that can be recognized,
based upon the likely timing and the level of
future taxable profits together with future
tax planning strategies.
⢠Impairment of non-financial assets
Impairment exists when the carrying value
of an asset or cash generating unit exceeds
its recoverable amount, which is the higher
of its fair value less costs of disposal and
its value in use. The fair value less costs of
disposal calculation is based on available
data from binding sales transactions,
conducted at arm''s length, for similar
assets or observable market prices less
incremental costs for disposing of the
asset. The value in use calculation is based
on a Discounted Cash Flow (âDCF'') model.
Significant estimates
⢠Defined benefit plans
The costs of post-retirement benefit
obligation are determined using actuarial
valuations. An actuarial valuation involves
making various assumptions that may
differ from actual developments in the
future. These include the determination of
the discount rate; future salary increases
and mortality rates. Due to the complexities
involved in the valuation and its long-term
nature, a defined benefit obligation is highly
sensitive to changes in these assumptions.
All assumptions are reviewed at each
reporting date.
⢠Useful lives of property, plant and
equipment and intangible assets
The Company reviews the estimated useful
lives of property, plant and equipment
and intangible assets at the end of
each reporting period. At the end of the
current reporting period, the management
determined that the useful lives of property,
plant and equipment and intangible
assets at which they are currently being
depreciated represent the correct estimate
of the lives and need no change.
⢠Leases - Estimating the incremental
borrowing rate
The Company cannot readily determine the
interest rate implicit in the lease, therefore,
it uses its incremental borrowing rate
(âIBR'') to measure lease liabilities. The IBR
is the rate of interest that the Company
would have to pay to borrow over a similar
term, and with a similar security, the funds
necessary to obtain an asset of a similar
value to the right-of-use asset in a similar
economic environment.
⢠Determining the lease term of contracts
with renewal and termination options -
Company as lessee
The Company determines the lease term
as the non-cancellable term of the lease,
together with any periods covered by an
option to extend the lease if it is reasonably
certain to be exercised, or any periods
covered by an option to terminate the
lease, if it is reasonably certain not to be
exercised.
The Company has lease contracts
that include extension and termination
options. The Company applies judgement
in evaluating whether it is reasonably
certain whether or not to exercise the
option to renew or terminate the lease.
That is, it considers all relevant factors
that create an economic incentive for it to
exercise either the renewal or termination.
After the commencement date, the
Company reassesses the lease term if
there is a significant event or change in
circumstances that is within its control
and affects its ability to exercise or not to
exercise the option to renew or to terminate
(e.g., construction of significant leasehold
improvements or significant customization
to the leased asset).
⢠Fair value measurement of financial
instruments
When the fair values of financial assets
and financial liabilities recorded in the
Standalone statement of assets and
liabilities cannot be measured based on
quoted prices in active markets, their
fair value is measured using valuation
techniques. The inputs to these models
are taken from observable markets where
possible, but where this is not feasible,
a degree of judgement is required in
establishing fair values. Judgements
include considerations of inputs such
as liquidity risk, credit risk and volatility.
Changes in assumptions about these
factors could affect the reported fair value
of financial instruments.
⢠Warranties
At each balance sheet date, basis the
management judgment, changes in facts
and legal aspects, the Company assesses
the requirement of provisions against
the outstanding warranties. However, the
actual future outcome may be different
from management''s estimates. Product
warranty liability and warranty expenses
are recorded if the claims of the customers
under warranty are probable and the
amount can be reasonably estimated.
2.23 Exceptional Items
Exceptional items refer to items of income or
expense within the statement of profit and loss
from ordinary activities, which are non-recurring
and are of such size, nature or incidence that their
separate disclosure is considered necessary to
explain the performance of the Company.
Mar 31, 2024
(iii) Terms/right attached to equity shares
The Company has one class of shares having a face value of '' 5/- per equity share. The Company declares and pay dividends in indian rupees. The dividend proposed by the board of directors is subject to the approvals of the shareholders in ensuing Annual General Meeting. Each holders of equity shares is entitled to one vote per equity share held in the Company. On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.
(iv) Shares Split & Bonus Issue
Aggregate number of equity shares issued as bonus, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date. Pursuant to a resolution passed by our Board on 6th September, 2021 and a resolution of shareholders dated, 30th September, 2021, each equity share of face value of '' 10 each has been split into two equity shares of face
value of '' 5 each. Accordingly, the issued, subscribed and paid up capital of the Company was subdivided from 68,06,700 equity shares of face value of '' 10 each to 1,36,13,400 equity shares of face value of '' 5 each. The Board of Directors pursuant to a resolution dated 6th September, 2021 and the shareholders special resolution dated 30th September, 2021 have approved the issuance of two bonus equity shares of face value '' 5 each for every one existing fully paid up equity share of face value '' 5 each and accordingly 2,72,26,800 bonus equity shares were issued and allotted in accordance with the Section 63 of the Companies Act, 2013."
a. Securities premium is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.
b. General reserve is the free reserve created out of the retained earnings of the Company. The reserve can be utilised in accordance with the provision of the Companies Act, 2013.
c. Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings include re-measurement loss / (gain) on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss.
a) Term Loans is secured by way of first pari passu charge over entire movable Property Plant and Equipment of the Company and immovable Property Plant and Equipment of the Company by equitable mortgage of properties situated at Ghaziabad and Goa. These are further secured by second pari passu charge on entire current assets of the Company and personal guarantee of the four Directors of the Company. This facility has been closed during F.Y. 2023-24.
a. Working Capital loan of Company is secured by exclusive first pari passu charge on entire stock of Raw material, Work-in-Progress, Finished Goods, Consumable Stores, Book Debts and other current assets of the Company, both present and future. These loans are further secured by second pari passu charge over the entire movable Property Plant and Equipment of the Company, other and immovable Property Plant and Equipment of the Company by equitable mortgage of properties situated at Ghaziabad and Goa and personal guarantee of the four Directors of the Company.
b. The Company has availed working capital loan from HDFC Bank, CITI Bank and ICICI bank is repayable on demand bearing a floating interest rate on HDFC Loan 3 Month Tbill 1.76% (Effective Rate 8.79%), Interest rate on ICICI Bank Loan 3M MCLR Spread @0.05% (Effective Rate 8.70%) and Fixed interest rate on CITI Bank loan @ 8.85%.
c. For details regarding repayment terms, interest rate and nature of security on current maturities of non current borrowings (Note 21 (a) and (b)).
d. The Company has satisfied all the covenants prescribed in terms of borrowings.
e. The Company has not defaulted on any loans payable.
*Revenue from sale of goods is recognized on transfer of control of goods to the buyer. Revenue is measured at the price charged to the customer and are recorded net of returns (if any), trade discounts, rebates, other pricing allowances to trade/consumer, when it is probable that the associated economic benefits will flow to the Company. Accumulated experience is used to estimate the accruals and provisions for discounts and rebates.
The performance obligation in contracts is considered as fulfilled in accordance with the terms agreed with the respective customers, which is mainly upon arrival at the customer.
Revenue from sale of goods is presented net of Goods and Services Tax (GST).
J DISCLOSURE WITH RESPECT TO IND AS 116 - LEASES Company as a leasee
The Company has lease contracts for serveral industrial lands. These lease arrangements ranges for a period between 48 years to 96 years and includes escalation clause. The Company also has leases for warehouse premises with lease terms of 12 months or less and leases of low value. The Company has applied the ''short term lease'' and ''lease of low-value-assets'' recognition exemption for these leases.
The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due. Such lease liabilities are related to Leasehold lands having maturity period of more than 5 year. The maturities analysis of lease liabilities is disclosed in Note 45. Lease liability has been discounted using the lessee''s incremental borrowing rate. There are no variable lease payments.
The effective interest rate for lease liabilities is 8% and 8.75%, with maturity between 2059 to 2111.
The table below provides details regarding amounts recognized in the Standalone Statement of Profit and Loss:
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service get a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service or part thereon in excess of 6 months. The Company makes contributions to the Elin Employees Company Gratuity Trust. The Trustees of Elin Employees Company Gratuity Trust are responsible for the overall governance of the plan and to act in accordance with the provisions of the trust deed and the relevant provisions prescribed under the law. The Company aims to keep annual contributions to the trust relatively stable at a level such that no significant gap arises between plan assets and liabilities.
The employees'' gratuity fund scheme is managed by Kotak Mahindra Life Insurance Limited, Bajaj Allianz Life Insurance Co. Ltd, Tata Aia Life Insurance Co Ltd and Reliance Nippon Life Insurance Co. Ltd. which is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.
The employees'' leave-encahment scheme is managed by HDFC Life Insurance Company Limited which is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method and is recognised on the basis of eligible leave balances of employees'' as on valuation date.
|
j COMMITMENTS AND CONTINGENCIES (a) Contingent Liabilities not provided for in respect of : |
||
|
Particulars |
As at 31st March, 2024 |
As at 31st March, 2023 |
|
(i) Unexpired Letters of Credit |
28.27 |
47.27 |
|
(ii) Guarantees given by banks on behalf of the Company (iii) Claims against the Company not acknowledged as debt |
79.42 |
48.76 |
|
Sales tax matters |
0.60 |
1.75 |
|
Goods and service tax matters |
2.59 |
1.68 |
|
''- Custom duty matters |
1.26 |
1.26 |
|
''- Employees related matters |
8.22 |
8.01 |
i) The Company''s pending litigations comprise of claims against the Company and proceedings pending with Government Authorities. The Company has reviewed all its pending litigations and proceedings and believes that they have sufficient and strong arguments on facts as well as on point of law and accordingly no provision has been considered in the financial statements. The Company does not expect the outcome of these proceedings to have a material impact on its financial position.
ii) The Company periodically reviews all its long term contracts to assess for any material foreseeable losses. Based on such review wherever applicable, The Company has made adequate provisions for these long term contracts in the books of account as required under any applicable law/accounting standard.
iii) The Company does not have outstanding term derivative contracts as at the end of respective years.
iv) There were no amounts which were required to be transferred to the investor Education and Protection fund by the Company at the end of respective years.
40 The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. Certain sections of the Code came into effect on 3rd May, 2023. However the final rules/interpretation have not yet been issued. Based on a preliminary assessment, the entity believes the impact of the change will not be significant.
41.1 Capital expenditure incurred on R&D is included in the Property Plant and Equipment and depreciation is provided on the same at respective applicable rates.
41.2 Revenue expenditure incurred on R&D has been shown under respective Expense head in the Statement of Profit and loss.
* Liability for post employment benefits, other long term benefits, termination benefits and certain short term benefits such as compensated absences and Gratuity is provided on an actuarial basis for the Company as a whole. Accordingly the amount for above pertaining to key management personnel is not ascertainable and, therefore, not included above.
The transactions for the year do not include reimbursement of IPO related expenses and its outstanding payable balances, incurred on behalf of related parties as selling shareholders in Offer for Sale. Refer note 51 of the financial statements for detailed note on IPO and expenses incurred by the Company and allocated to selling shareholders.
Terms and conditions of transactions with related parties :
- The transaction with related parties are made on terms equivalent to those that prevail in arm''s length transactions. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31st March, 2024, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31st March, 2023: '' Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
The Company is engaged in manufacturing of Electronics Manufacturing items. The Board of directors of Elin Electronics Limited takes decision in respect of allocation of resources and assesses the performance basis the reports/ information provided by functional heads and is thus considered to be Chief Operating Decision Maker. During the year under consideration, the Company operated in a single primery segment in manufacturing of Electronics Manufacturing Services.
The said treatment is in accordance with the guiding principles enacted in Indian Accounting Standard 108 Operating Segments (IND AS 108). Accordingly the Company has disclosed segment information for its secondary segment which is the geographical segment as below:
Accordingly the Company has disclosed segment information
The geographical information analyses the Company''s revenues by the Company''s country of domicile (i.e. India) and other countries. In presenting the geographical information, segment revenue has been based on the geographic location of customers. The following is the distribution of the Company''s consolidated revenues and receivables by geographical market, regardless of where the goods were produced:
*The revenue information above is based on the locations of the customers.
**Non-current assets for this purpose consist of property, plant and equipment, right-of-use assets, capital work-inprogress, capital advances and intangible assets.
c. Information about major customers (from external customers)
Revenue of approximately '' 3,542 Millions 42% (FY 2022-2023: '' 3,930 Millions 45%) are derived from 2 Nos. (FY 20222023: 2 Nos.) external customers which individually accounted for more than 10%.
j FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Company''s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables and lease liabilities. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include cash and cash equivalents, trade and other receivables that derive directly from its operations.
The Company''s business activities expose it to a variety of financial risks, namely liquidity risk, market risks and credit risk. The management has the overall responsibility for the establishment and oversight of the Company''s risk management framework. The Company has constituted a Risk Management Committee, which is responsible for developing and monitoring the Company''s risk management policies. The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes in to account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these Standalone financial statements is determined on such a basis that are within the scope of Ind AS 102, leasing transactions that are within the scope of Ind AS 116, and measurements that have some similarities to fair value but are not fair value, such as net realizable value in Ind AS 2 or value in use in Ind AS 36.
In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurements in its entirety, which are described as follows:
Level I: includes financial instruments measured using quoted prices. This includes mutual funds that have quoted price. The fair value of all equity instruments (including bonds) 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 II: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the counter derivatives) 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 III: 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, contingent consideration and indemnification asset included in level 3.
The Company''s management assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities 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 following methods and assumptions were used to estimate the fair values:
The finance department of the Company includes a team that performs the valuation of financial assets and liabilities required for financial reporting purposes. Changes in level 2 and 3 fair values are analysed at the end of each reporting period. There are no transfers between levels in the fair value hierarchy during the year.
In determining fair value measurement, the impact of potential climate-related matters, including legislation, which may affect the fair value measurement of assets and liabilities in the financial statements has been considered. These risks in respect of climate-related matters are included as key assumptions where they materially impact the measure of recoverable amount, These assumptions have been included in the cash-flow forecasts in assessing value-in-use amounts.
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Company uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period."
45.2 Management of Financial Risk
A. Liquidity risk
Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company''s approach to managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses. In doing this, management considers both normal and stressed conditions.
The Company has also entered into supply chain finance arrangement to smoothen the payment process of the suppliers. Although the payment terms are not significantly extended beyond the normal credit terms agreed upon with other suppliers, the arrangement helps in making the cashflows more predictable.
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instruments affected by market risk include loans and borrowings, deposits, FVTOCI & FVTPL investments. Market risk comprises three types of risks as follows:
i) 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 changes in market interest rates. The Company is exposed to interest rate risk because funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate.
The sensitivity analyses below have been determined based on the exposure to interest rates for floating rate liabilities, after the impact of hedge accounting, assuming the amount of the liability outstanding at the year-end was outstanding for the whole year.
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 Company''s exposure to the risk of changes in foreign exchange rates relates primarily to its operating activities (when certain purchases and trade payables are denominated in a foreign currency). The Company is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar, CNY and JPY. Foreign exchange risk arises from future commercial transactions, recognized assets and liabilities denominated in a currency that is not the Company''s functional currency
The Company undertakes transactions denominated in foreign currencies and consequently, exposes to exchange rate fluctuations. The Company does not enter into trade financial instruments including derivate financial instruments for hedging its foreign currency risk. The appropriateness of the risk policy is reviewed periodically with reference to the approved foreign currency risk management policy followed by the Company.
Commodity price risk arises from fluctuations in the prices of copper, plastic, and aluminum. The Company has a risk management framework aimed at prudently managing the risks associated with the volatility in commodity prices. The Company has transferred any change in commodity prices to the customer. Therefore, there is no significant impact from changes in commodity prices in profit & loss..
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and other financial instruments.
Customer credit risk is managed by each business unit subject to the Company established policy, procedures and control relating to customer credit risk management. To manage trade receivable, the Company periodically assesses the financial reliability of customers, taking into account the financial conditions, economic trends, analysis of historical bad debts and aging of such receivables. The utilization of credit limits is regularly monitored.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 45. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets. An impairment analysis is performed at each reporting date for all customers. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in note 13.
Financial instruments and cash deposits
Credit risk from balances with banks and financial institutions is managed by the management in accordance with the Company''s policy. Counterparty credit limits are reviewed by the management on an annual basis, and may be updated throughout the year. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.
None of the Company''s financial assets are either impaired or past due, and there were no indications that defaults in payment obligations would occur.
Capital includes issued equity capital and share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is 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. The capital structure of the Company is based on management''s judgement of its strategic and day-to-day needs with a focus on total equity so as to maintain investor and creditors confidence.
The Company monitors its capital using gearing ratio, which is net debt divided to total equity. Net debt includes, interest bearing loans and borrowings less cash and cash equivalents.
In order to achieve this overall objective, the Company''s capital management, 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. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.
No changes were made in the objectives, policies or processes for managing capital during the years ended 31st March, 2024 and 31st March, 2023.
Earning for Debt Service = Net Profit after taxes Non-cash operating expenses like depreciation and other amortizations Interest other adjustments like loss on sale of Fixed assets etc.
Net Profit after tax" means reported amount of "Profit / (loss) for the period" and it does not include items of other comprehensive income.
Working Capital implies Current Assets less Current Liabilities.
Capital employed refers to sum of tangible net-worth, total debts and deferred tax liability as at close of year.
Net credit purchases = Gross credit purchases - purchase return
Net Debt = Total borrowings including lease liabilities less cash and cash equvalant.
Explanation for variances exceeding 25%
Schedule III requires explanation where the change in the ratio is more than 25% as compared to the preceding year; hence explanation is given only for the said ratios.
a) Current ratio is increased due to pending IPO proceeds in Monitoring Account & Bank Deposits.
b) Debt equity ratio is reduced due to repayment of borrowings as part of utilization of IPO proceeds during the year.
c) Debt service coverage ratio is increased due to repayment of borrowings during the year.
d, i, j) Due to lower profitability, Return on equity, Net Profit and Return on capital employed ratio have declined. k) Return on Investment is increased due to investment in Mutual Fund and Fixed deposit made during the year resulting into higher return compared to last year.
i) The Company does not have any benami property, where any proceeding has been initiated or pending against the Company for holding any benami property.
ii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
iii) 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
iv) 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) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
vi) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.
vii) The Company is not declared wilful defaulter by and bank or financials institution or lender during the year.
viii) The Company does not have any other charges or satisfaction as on 31st March, 2024 which is yet to be registered with ROC beyond the statutory period.
ix) Quarterly returns/statements of current assets filed by the Company with banks are generally in agreement with the books of account.
*Note: The bank returns were prepared and filed before the completion of all financial statements closure activities which led to these differences between the final books of accounts and the bank returns which were based on provisional books of accounts.
x) The Company has used the borrowings from banks and financial institutions for the specific purpose for which it was obtained.
(xi) The title deeds of all the immovable properties, (other than immovable properties where the Company is the lessee and the lease agreements are duly executed in favor of the Company) disclosed in the financial statements included in property, plant and equipment and capital work-in progress are held in the name of the Company as at the balance sheet date.
xii) The Company does not have any transactions with companies which are struck off.
| INITIAL PUBLIC OFFERING (IPO)
The Company has completed Initial Public Offer (IPO) of 1,92,30,746 equity shares comprising a fresh issue of 70,85,020 equity shares and offer for sale by selling shareholders of 1,21,45,726 equity shares of face value of '' 5 each at premium of '' 242 per share aggregating to ''4,750.00 Million. Pursuant to the IPO, the equity shares of the Company are listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) with effect from 30th December, 2022.
As on 31st March, 2023, the Company had incurred '' 266.88 Million as IPO related expenses (incl. provision for certain invoices) and allocated such expenses between the Company '' 98.48 Million and selling shareholders '' 168.40 Million.
Such amounts were allocated based on agreement with selling shareholders and in proportion to the total proceeds from the IPO. The Company''s share of expenses of '' 84.37 Million (net of GST credit of '' 14.12 Million) has been adjusted to securities premium. Refer note 20 of the standalone financial statements.
Subsequent to the listing of shares of Company, the IPO related expenses of '' 177.64 Million were recovered from the selling shareholders as per the original estimated expenses mentioned in the prospectus filed with RoC. With the finalization of revised issue expenses as mentioned above, sum of '' 9.24 Million is payable to selling shareholders at the end of the previous year and shown under current liabilities. Refer note 25 of the standalone financial statements.
52 The Company has used an accounting software SAP HANA Web Version - Public Cloud which is operated by a third-party software service provider, for maintaining its books of account. The Company is not maintaining the back-up of books of account in servers physically located in India on a daily basis from 1st April, 2023 to 31st March, 2024 in compliance to the Rule 3 of the Companies (Account) Rules, 2014 as backups are performed by the SAP at planned intervals mentioned in the SOC 1 Type 2 for the period 1st April, 2023 to 30th September, 2023.
53 The Company has used an accounting software SAP HANA Web Version - Public Cloud which is operated by a third-party software service provider, for maintaining its books of account. Audit trail feature is not covered in SOC 1 Type 2 report for the period 1st April, 2023 to 30th September, 2023 to determine whether audit trail feature of the said software was enabled and operated throughout the year for all relevant transactions recorded in the software or whether there were any instances of the audit trail feature being tampered with, in respect of an accounting software where the audit trail has been enabled.
Mar 31, 2023
1. The Company had received approval to get Capital Subsidies for additional investments in manufacturing plant at Plot No.C-142,143,144,144/1,144/2, Site No.1, BullandShahar Road, Ghaziabad, Uttar Pradesh, 201009 under Modified Special Incentive Package Scheme (MSIPS) notified vide M-SIPS Policy Gazette Notification No. 175 dated 27th July, 2012 and revised Notification dated 3rd August, 2015 as modified from time to time by the Ministry of Electronics and Information Technology, Department of Information Technology, vide Approval Letter No. 27(215)/2015-IPHW dt.22nd November, 2017. Also, the Company is in process of availing capital subsidy under Industrial Development Scheme 2017 of Department for Promotion of Industries & Internal Trade, Himachal Pradesh. Under the said schemes, the Company has submitted its claims before the respective authorities for sanctioning the claim. The effect of other claims has not been adjusted to the cost of respective assets, in the absence of reasonable assurance that the claim will be received in full, as submitted.
2. During the previous year, the Company had received first claim of? 11.32 Million vide Approval Letter No. 27(29)/2013-IPHWA dated 3rd July, 2014 and Application Sanction No W-37/6/2022-IPHW dated 17th March, 2022 which had been adjusted with the carrying value of respective Property Plant and Equipment.
3. Depreciation & Impairment includes impairment on certain property plant and equipments amounting to ? 10.44 Million (PY ? Nil)
4. Refer Note 21 and 23 for details of assets pledged.
13.2 There are no disputed balances of Trade Receivables as at 31st March, 2023 and 31st March, 2022.
13.3 In determining the allowance for trade receivables the Company has used practical expedients based on financial condition of the customers, ageing of the customer receivables & over-dues, availability of collaterals and historical experience of collections from customers. The concentration of risk with respect to trade receivables is reasonably low as most of the customers are large corporate organisations though there may be normal delays in collections.
(iii) Terms/right attached to Equity Shares
The Company has one class of shares having a face value of ? 5/- per equity share (Previous Year ended 31st March, 2022 is ? 5/- per equity share). All equity shares rank equally with regard to dividends and share in the Company''s residual assets. The equity shares are entitled to receive dividend as declared from time to time. Shareholders are entitled to one vote per equity share held in the Company. On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.
(iv) Shares Split & Bonus Issue
Pursuant to a resolution passed by our Board on 6th September, 2021 and a resolution of shareholders dated, 30th September, 2021, each equity share of face value of ? 10 each has been split into two equity shares of face value of ? 5 each. Accordingly, the issued, subscribed and paid up capital of the Company was subdivided from 70,95,700 equity shares of face value of ? 10 each to 1,41,91,400 equity shares of face value of ? 5 each. The Board of Directors pursuant to a resolution dated 6th September, 2021 and the shareholders special resolution dated 30th September, 2021 have approved the issuance of two bonus equity shares of face value ? 5 each for every one existing fully paid up equity share of face value ? 5 each and accordingly 2,83,82,800 bonus equity shares were issued and allotted in accordance with the Section 63 of the Companies Act, 2013.
a. Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provision of the Companies Act, 2013.
b. General reserve is the free reserve created out of the retained earnings of the Company. The reserve is utilised in accordance with the provision of the Companies Act, 2013.
a) Term Loans is secured by way of first pari passu charge over entire movable Property Plant and Equipment of the Company and immovable Property Plant and Equipment of the Company by equitable mortgage of properties situated at Ghaziabad and Goa. These are further secured by second pari passu charge on entire current assets of the Company and personal guarantee of the four Directors of the Company.
a. Working Capital loan of Company is secured by exclusive first pari passu charge on entire stock of Raw material, Work-in-Progress, Finished Goods, Consumable Stores, Book Debts and other current assets of the Company, both present and future. These loans are further secured by second pari passu charge over the entire movable Property Plant and Equipment of the Company, other and immovable Property Plant and Equipment of the Company by equitable mortgage of properties situated at Ghaziabad and Goa and personal guarantee of the four Directors of the Company.
b. Unsecured loan of Vendor Bill discounting as Electronic Vendor Financing Scheme was Repayable on due dates as agreed with the Vendors.
c. Quarterly returns/statements of cureent assets filed by the Company with banks are generally in agreement with the books of accounts.
The employees'' gratuity fund scheme is managed by Kotak Mahindra Life Insurance Limited, Bajaj Allianz Life Insurance Co. Limited and Birla Sun Life Insurance Co. Limited which is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation and the obligation for leave encashment is recognised in the same manner as gratuity.
|
39] COMMITMENTS AND CONTINGENCIES (a) Contingent Liabilities not provided for in respect of : |
||
|
Particulars |
As at 31st March, 2023 |
As at 31st March, 2022 |
|
(i) Unexpired Letters of Credit |
47.27 |
31.49 |
|
(ii) Guarantees given by banks on behalf of the Company |
48.76 |
12.40 |
|
(iii) Claims against the Company towards Sales tax, Provident fund, GST and others in dispute not acknowledged as debt |
12.71 |
13.49 |
i) The Company''s pending litigations comprise of claims against the Company and proceedings pending with Tax Authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, wherever required and disclosed the contingent liabilities, wherever applicable, in its Standalone financial Information. The Company does not expect the outcome of these proceedings to have a material impact on its financial position.
ii) The Company periodically reviews all its long term contracts to assess for any material foreseeable losses. Based on such review wherever applicable, The Company has made adequate provisions for these long term contracts in the books of account as required under any applicable law/accounting standard.
iii) The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified and the final rules/interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period when the Code becomes effective.
iv) The Company does not have outstanding term derivative contracts as at the end of respective years.
v) There were no amounts which were required to be transferred to the investor Education and Protection fund by the Company at the end of respective years.
* As the future liability for gratuity and leave encashment is provided on an actuarial basis for the Company as a whole, the amount pertaining to the directors is not ascertainable and therefore, not included above.
The transactions for the year do not include reimbursement of IPO related expenses and its outstanding payable balances, incurred on behalf of related parties as selling shareholders in Offer for Sale. Refer note 51 of the financial statements for detailed note on IPO and expenses incurred by the Company and allocated to selling shareholders.
The Company publishes the Standalone financial statements of the Company along with the consolidated financial statements. In accordance with Ind AS 108, Operating Segments, the Company has disclosed the segment information in the consolidated financial statements.
45. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Company''s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables and lease liabilities. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include cash and cash equivalents, trade and other receivables that derive directly from its operations.
The Company''s business activities expose it to a variety of financial risks, namely liquidity risk, market risks and credit risk. The management has the overall responsibility for the establishment and oversight of the Company''s risk management framework. The Company has constituted a Risk Management Committee, which is responsible for developing and monitoring the Company''s risk management policies. The Company''s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities.
Fair valuation of financial assets and liabilities with short term maturities is considered as approximate to respective carrying amount due to the short term maturities of these instruments.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and are categorised into Level 1 , Level 2 and Level 3 inputs. There are no transfers between level 1, level 2 and level 3 during the years presented.
Significant estimates:
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Company uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period.
45.2 Management of Financial Risk Liquidity risk
Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company''s approach to managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses. In doing this, management considers both normal and stressed conditions.
The following table shows the maturity analysis of the Company''s financial liabilities based on contractually agreed undiscounted cash flows as at the year closing date.
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instruments affected by market risk include loans and borrowings, deposits, FVTOCI & FVTPL investments.
Interest rate risk is the risk that the fair value or future cash flow of a financial instrument will fluctuate because of change in market interest rates. The Company does not expose to the risk of changes in market interest rates as Company''s long and short term debt obligations are of fixed interest rate.
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 Company''s exposure to the risk of changes in foreign exchange rates relates primarily to its operating activities (when certain purchases and trade payables are denominated in a foreign currency).
The Company undertakes transactions denominated in foreign currencies and consequently, exposes to exchange rate fluctuations. The Company does not enter into trade financial instruments including derivate financial instruments for hedging its foreign currency risk. The appropriateness of the risk policy is reviewed periodically with reference to the approved foreign currency risk management policy followed by the Company.
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and other financial instruments.
Customer credit risk is managed by each business unit subject to the Company established policy, procedures and control relating to customer credit risk management. To manage trade receivable, The Company periodically assesses the financial reliability of customers, taking into account the financial conditions, economic trends, analysis of historical bad debts and aging of such receivables.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 45. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.
Financial instruments and cash deposits
Credit risk from balances with banks and financial institutions is managed by the management in accordance with the Company''s policy. Counterparty credit limits are reviewed by the management on an annual basis, and may be updated throughout the year. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.
None of the Company''s financial assets are either impaired or past due, and there were no indications that defaults in payment obligations would occur.
Capital includes issued equity capital and share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is 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. The capital structure of the Company is based on management''s judgment of its strategic and day-to-day needs with a focus on total equity so as to maintain investor and creditors confidence.
Earning for Debt Service = Net Profit after taxes Non-cash operating expenses like depreciation and other amortisations Interest other adjustments like loss on sale of Fixed assets etc.
"Net Profit after tax" means reported amount of "Profit / (loss) for the period" and it does not include items of other comprehensive income.
Working Capital implies Current Assets less Current Liabilities.
Capital employed refers to sum of tangible net-worth, total debts and deferred tax liability as at close of year. Explanation for variances exceeding 25%
a) Current ratio is increased due to pending IPO proceeds in Monitoring Account & Bank Deposits.
b) Debt equity ratio is reduced due to repayment of borrowings as part of utilisation of IPO proceeds during the year.
d, i, j) Due to lower profitability, Return on equity, Net Profit and Return on capital employed ratio have declined.
h) Net Capital turnover ratio is declined due to lower sales and higher current assets
k) Return on Investment is decreased due to sale of Mutual Fund investments during the year resulting into lesser return compared to last year.
49. OTHER STATUTORY INFORMATION
i) The Company does not have any benami property, where any proceeding has been initiated or pending against the Company for holding any benami property.
ii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
iii) 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
iv) 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) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
vi) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.
vii) The Company is not declared wilful defaulter by and bank or financials institution or lender during the year.
viii) The Company has certain charges which are either pending for registration of modification or satisfaction with the ROC, as the instrument for modification or satisfaction of charge is pending to be executed between the Company and lenders. Pending such execution of instrument, the Company does not have any other charges or satisfaction as on 31st March, 2023 which is yet to be registered with ROC beyond the statutory period.
ix) Quarterly returns/statements of current assets filed by the Company with banks are generally in agreement with the books of account.
x) The Company has used the borrowings from banks and financial institutions for the specific purpose for which it was obtained.
(xi) The title deeds of all the immovable properties, (other than immovable properties where the Company is the lessee and the lease agreements are duly executed in favour of the Company) disclosed in the financial statements included in property, plant and equipment and capital work-in progress are held in the name of the Company as at the balance sheet date.
xii) The Company does not have any transactions with companies which are struck off.
51. INITIAL PUBLIC OFFERING (IPO)
The Company has completed Initial Public Offer (IPO) of 1,92,30,746 equity shares comprising a fresh issue of 70,85,020 equity shares and offer for sale by selling shareholders of 1,21,45,726 equity shares of face value of ? 5 each at premium of ? 242 per share aggregating to ?4,750.00 Million. Pursuant to the IPO, the equity shares of the Company are listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) with effect from 30th December, 2022.
As on 31st March, 2023, the Company had incurred ? 266.88 Million as IPO related expenses (incl. provision for certain invoices) and allocated such expenses between the Company ? 98.48 Million and selling shareholders ? 168.40 Million. Such amounts were allocated based on agreement with selling shareholders and in proportion to the total proceeds from the IPO. The Company''s share of expenses of ? 84.37 Million (net of GST credit of ? 14.12 Million) has been adjusted to securities premium. Refer note 20 of the standalone financial statements.
Subsequent to the listing of shares of Company, the IPO related expenses of ? 177.64 Million were recovered from the selling shareholders as per the original estimated expenses mentioned in the prospectus filed with RoC. With the finalisation of revised issue expenses as mentioned above, sum of ? 9.24 Million is payable to selling shareholders at the end of the year and shown under current liabilities. Refer note 25 of the standalone financial statements.
On 30th May, 2023, the Board of Directors of the Company have proposed a dividend of ? 1 per share (20%) of face value of ? 5 each in respect of the year ended 31st March, 2023 subject to the approval of shareholders at the Annual General Meeting.
Figures for the previous years have been regrouped/rearranged wherever necessary to confirm current period classification / presentation.
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