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Notes to Accounts of Sika Interplant Systems Ltd.

Mar 31, 2023

with the other quarter, the company has not utilised any of its available overdraft facility/cash credit. Hence, no submission relating to the securities were given to the BanldFinancial Institutions.

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.

The Company has not been declared as a wilful defaulter by any lender who has powers to declare a company as a wilful defaulter at any time during the financial year or after the end of reporting period but before the date when financial statements are approved.

The Company has utilised all its borrowed fund for the purpose for which it was obtained.

2	Current Liabilities expected to be paid within twelve months and after twelve months from the reporting date:
	Particulars	NOTE	As at 31-03-2023			As at 31-03-2022
			Within Twelve months	After Twelve months	Total	Within Twelve months	After Twelve months	Total
	Current Liabilities (a)Financial Liabilities i.Borrowings	17				12.24		12.24

ii.Trade payables	18	845.14	-	845.14	701.83	-	701.83
(b)Other current Liabilities	19	539.99	-	539.99	680.61	-	680.61
(c)Provisions	20	59.44	-	59.44	21.22	-	21.22
(d)Current Tax Liabilities(Net)	21	-	-		38.32		38.32
Total		1,444.58	-	1,444.58	1,454.21	-	1,454.21

NOTE - 42- Operating Segment Information

The Companyâs operations predominantly consist of manufacturing/trading of Aerospace and Defence equipments and other sales does not contribute to 10% or more of the Companyâs total sales. Hence there are no reportable segments under Ind AS-108 âSegment Reportingâ.

The Executive chairman and Managing directors of the company has been identified as The Chief Operating Decision Maker (CODM). The Chief Operating Decision Maker also monitors the operating results as one single segment for the purpose of making decisions about resource allocation and performance assessment and hence, there are no additional disclosures to be provided other than those already provided in the financial statements.

b) Defined Benefit Plans

The employee''s Gratuity Fund Scheme is a defined benefit plan wherein a separate trust is formed which is managed by Life Insurance Corporation of India. The present value of obligation is determined based on actuarial valuation, 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 obligation for Compensated absences is recognised in the same manner as Gratuity.

The discount rate is based on the prevailing market yields of Government of India securities as the Balance Sheet date for the estimated term of the obligations. The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other

relevant factors._

The Company has covered its gratuity liability by a Group Gratuity Policy named ''Employee Group Gratuity Assurance Scheme'' issued by LIC of India. Under the plan the eligible employees are entitled to Gratuity under a defined benefit plan._

FINANCIAL RISK MANAGEMENT

The Companyâs principal financial liabilities comprise of borrowings, trade and other payables. The main purpose of these financial liabilities is to manage finances for the Companyâs operations. The Company''s principal financial asset includes loan, trade and other receivables, and cash and short-term deposits that arise directly from its operations.

MARKET RISK 1 MANAGEMENT

Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in interest rates, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks, 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. In order to optimize the Companyâs position with regard to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of the fixed rate and floating rate financial instruments in its total portfolio.

ii. Liquidity Risk Management:

Liquidity risk refers to the risk of financial distress or extraordinary high financing costs arising due to shortage of liquid funds in a situation where business conditions unexpectedly deteriorate and requiring financing. The Company requires funds both for short term operational needs as well as for long term capital expenditure growth project. The Company generates sufficient cash flow for operations, which together with the available cash and cash equivalents and short-term investments provide liquidity in the short-term and long-term. The Company has established an appropriate liquidity risk management framework for the management of the Companyâs short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and by matching the matching the maturity profiles of financial assets and liabilities.

NOTE - 45 - Other disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures":

This section gives an overview of the significance of financial instruments for the Company and provides additional information on balance sheet items that contain financial instruments.

The details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised in respect of each class of financial asset, financial liability and equity instrument are disclosed in Significant accounting policies of the Company.

Financial assets and a) liabilities

The following tables presents the carrying value and fair value of each category of financial assets and liabilities as at March 31, 2023 and March 31, 2022

Previous year figures have been re-arranged and re-grouped wherever necessary.

Mar 31, 2018

(a) No shares are reserved for issue under options or contracts/commitments for the sale of shares/ dis-investment.

(b) There are no calls unpaid by directors or officers of the company.

Note 1

The information required to be disclosed under the Micro, Small, Medium enterprises DevelopmentAct, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. There are no over dues to parties on account of principal amount and / or interest and accordingly no additional disclosures have been made.

Note 2

Capital Reserve and Securities Premium have arisen pursuant to a scheme of merger approved by the Honourable High Court ofKarnataka.

Note 3 - The disclosure as per Indian Accounting Standard 19 âEmployee Benefitsâare given below

a. Defined Contribution Plans

Contribution to Defined Contribution Plans, recognised as expense forthe year as under:

b. Defined Benefit Plans

The employeeâs Gratuity Fund Scheme is a defined benefit plan wherein a separate trust is formed which is managed by Life Insurance Corporation of India. The present value of obligation is determined based on actuarial valuation, 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 obligation for Compensated absences is recognised in the same manner as Gratuity.

Note 4- A lease hold land is allotted by KIADB to the company and the company has also been incurring capital expenses in the same regard. The company has made an application forfurther renewal which is pending approval.

Note 5- Litigation

The Company is subject to legal proceedings and claims which have arisen in respect of the rights in and/or title to two immovable properties of the Company and such legal proceedings are pending and being litigated appropriately.

The Management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect on the Companyâs results of operation orfinancial position.

Note 6- The previous yearâs figure have been regrouped/ recast/ restated wherever necessary to confirm to the current presentation.

Reconciliations

a) Investments

Investments in equity instruments and Investment in Mutual funds are carried at fair value as compared to carried at cost under IGAAP.

b) Provisions

Adjustments reflect dividend (including corporate dividend tax), declared and approved post reporting period.

c) Deffered Tax

Deffered Tax on Gain on valuation of Investments to fair value.

d) Other Equity

-Adjustment to retained earnings with respect to recognising increase in the value of Investment as Income -Adjustment with respect to proposed dividend and Corporate Dividend Tax, in accordance with IndAS 10.

- Recognition of Deffered Tax Liabiltiy on the gain from valuation of Investment at Market Value.

Reconciliations

a) Investments

Investments in equity instruments and Investment in Mutual funds are carried at fair value as compared to carried at cost under IGAAP.

b) Provisions

Adjustments reflect dividend (including corporate dividend tax), declared and approved post reporting period.

c) Deffered Tax

Deffered Tax on Gain on valuation of Investments to fair value.

d) Other Equity

-Adjustment to retained earnings with respect to recognising increase in the value of Investment as Income -Adjustmentwith respect to proposed dividend and Corporate Dividend Tax, in accordance with IndAS 10.

-Recognition of Deffered Tax Liabiltiy on the gain from valuation of Investment at Market Value.

Note 7 - Fair Value Hierarchy

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).

The fair value heirarchy of assets and liabilities measured as fair value as of 31-Mar-18 is as follows:

Note 8 - Capital Management

The Companyâs capital management objectives are:

Note 8(i) - Dividend Dividend on equity shares

Final dividend for the year ended March 31, 2017 of Rs. 33,92,140/-(i.e. Re.0.80 share) (previous year-for year ended March 31, 2016 Rs. 33,92,140/-(i.e. Re.0.80 share))

Dividend distribution tax for the dividend declared on March 31, 2017 is Rs. 6,90,560 (previous year-for the year ended March 31, 2016 Rs. 6,74,260/-)

Dividends not recognised at the end of the reporting period

The Board of Directors at its meeting held on 30th May, 2018 have recommended payment of final dividend of Rs.0.80 per share of face value of Rs. 10 each forthe yearended March 31, 2018. The same amounts to Rs. 33,92,140 and Dividend Distribution Tax on the same is Rs. 6,97,261/-.

Note 9 - Financial Risk Management

The Companyâs activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Companyâs risk management assessment and policies and processes are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Companyâs activities.

(i) Creditrisk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers, loans and investments. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of counterparty to which the Company grants credit terms in the normal course of business

Investments

The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors or specific country risks.

Trade receivables

The Company has used Expected Credit Loss (ECL) model for assessing the impairment loss. For the purpose, the Company uses a provision matrix to compute the expected credit loss amount. The provision matrix takes into account external and internal riskfactorsand historical data of credit losses from various customers.

(ii) Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Companyâs reputation.

The Company has unutilised working capital overdraft from banks of Rs.107 lakhs as on March 31,2018 and Rs. 187 lakhs as on March 31,2017. The table below provides details regarding the contractual maturities of significant financial liabilities:

Notes to the Financial Statements for the year ended 31^st March2018

Note 10.1

FIRST TIME ADOPTION OFIND AS

1. The financial statements have been prepared in accordance with Indian Accounting Standards [âInd ASâ] notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended by the Companies (Indian Accounting Standards) (Amendment) Rules, 2016.

2. Upto the year ended 31st March, 2017, the Company prepared its financial statements in accordance with the requirements of previous GAAP prescribed under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies [Accounts] Rules, 2014. These are the Companyâs first Ind AS financial statements. The date of transition to Ind AS is 1st April, 2016. Reconciliation and description of the effect of the transition have been summarized in Note No.44.

3. The transition to Ind AS has resulted in changes in the presentation of the financial statements, disclosures in the notes thereto and accounting policies and principles. The accounting policies set out below have been applied in preparing the financial statements for the year ended 31st March 2018 and the comparative information.

Mar 31, 2016

Note 1 - The information required to be disclosed under the Micro, Small, Medium enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. There are no over dues to parties on account of principal amount and / or interest and accordingly no additional disclosures have been made.

Note 2 - Capital Reserve and Securities Premium have arose pursuant to a scheme of merger approved by the Honourable High Court of Karnataka.

Note-3- As per Accounting Standard 15 "Employee Benefits", the disclosure as defined in the Accounting Standard with regard to Note No 25 are given below

b) Defined Benefit Plans

The employee''s Gratuity Fund Scheme is a defined benefit plan wherein a separate trust is formed which is managed by Life Insurance Corporation of India. The present value of obligation is determined based on actuarial valuation, which recognizes 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 obligation for Compensated absences is recognized in the same manner as Gratuity.

Note 4- Litigation

The Management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect on the Company''s results of operation or financial position.

Note 5- The previous year''s figure have been regrouped/ recast / restated wherever necessary to confirm to the current presentation.

Mar 31, 2015

Figures as Figures as particu|ars at the at the end of end of current previous Reporting Reporting Period Period

1. CONTINGENT LIABILITY AND COMMITMENTS

* Bank Guarantee 7,974,918 10,788,534

* Capital Commitments to the extent not provided in the books 1,163,480 -

TOTAL 9,138,398 10,788,534

2. The information required to be disclosed under the Micro, Small, Medium enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. There are no over dues to parties on account of principal amount and / or interest and accordingly no additional disclosures have been made.

3. Capital Reserve and Securities Premium have arose pursuant to a scheme of merger approved by the Honorable High Court of Karnataka.

Related Party Information

Relationship

a. Where significant influence exists(Subsidiaries)

1. M/s. Sikka N Sikka Engineers Pvt Ltd

2. M/s. Emsac Engineering Pvt Ltd

3. M/s. Sika Tourism Pvt Ltd

4. M/s. Sterling Technologies Pte Ltd

5. M/s. Ultraweld Engineers Pvt Ltd

6. M/s. Gourmet Estates Pvt Ltd

b. Key Management Personnel

1. Mr. Rajeev Sikka

2. Mr. Kunal Sikka

c. Relatives of Key Management Personnel

1. Mrs. Krishna Sikka

2. Mrs. Anuradha Sikka

4. As per Accounting Standard 15 "Employment Benefits", the disclosures as defined in the Accounting Standard with regard to Note no.25 are given below:

5. Defined Benefit Plan

The employee's gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation, 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 obligation for Compensated Absences is recognised in the same manner as gratuity.

The discount rate is based on the prevailing market yields of government of India securities as the Balance Sheet date for the estimated term of the obligations. The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

Experience adjustment figures are not included as same has not been provided by the Actuary.

The Company has covered its gratuity liability by a Group Gratuity Policy named 'Employee Group Gratuity Assurance Scheme' issued by LIC of India. Under the plan the eligible employees are entitled to Gratuity under a defined benefit plan.

6. A lease hold land is allotted by KIADB to the company and the company has also been incurring capital expenses in the same regard. The company has made an application for further renewal which is pending for approval.

7. Litigation

The Company is subject to legal proceeding and claims which have arisen in respect of the rights in and / or title to two immovable properties of the Company and such legal proceedings are pending and being litigated appropriately.

The Management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect on the Company's results of operation or financial position

8. Previous year's figures have been regrouped / recast / restated, wherever necessary, to make them comparable with those of the current year.

Mar 31, 2014

Figures as at the Figures as at the Particulars end of current end of previous Reporting Period Reporting Period

1. CONTINGENT LIABILITY AND COMMITMENTS

- Bank Guarantee 10,788,534 49,822,786

TOTAL 10,788,534 49,822,786

2. The information required to be disclosed under the Micro, Small, Medium enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. There are no over dues to parties on account of principal amount and / or interest and accordingly no additional disclosures have been made.

3. Capital Reserve and Securities Premium have arose pursuant to a scheme of merger approved by the Honorable High Court of Karnataka.

4. Expenditure in Foreign Currency in respect of

Related Party Information Relationship

a. Where significant influence exists(Subsidiaries)

1. M/s. Sikka N Sikka Engineers Pvt Ltd

2. M/s. Emsac Engineering Pvt Ltd

3. M/s. Sika Tourism Pvt Ltd

b. Key Management Personnel

1. Mr. Rajeev Sikka

2. Mr. Kunal Sikka

c. Relatives of Key Management Personnel

1. Mrs. Krishna Sikka

2. Mrs. Anuradha Sikka

Defined Benefit Plan

The employee''s gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation, 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 obligation for Compensated Absences is recognised in the same manner as gratuity

The discount rate is based on the prevailing market yields of government of India securities as the Balance Sheet date for the estimated term of the obligations. The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

Experience adjustment figures are not included as same has not been provided by the Actuary.

The Company has covered its gratuity liability by a Group Gratuity Policy named ''Employee Group Gratuity Assurance Scheme'' issued by LIC of India. Under the plan the eligible employees are entitled to Gratuity under a defined benefit plan.

5. Previous year''s figures have been regrouped / recast / restated, wherever necessary, to make them comparable with those of the current year.

Mar 31, 2013

1. The information required to be disclosed under the Micro, Small, Medium enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. There are no over dues to parties on account of principal amount and / or interest and accordingly no additional disclosures have been made.

2. Capital Reserve and Securities Premium are as per the scheme of merger approved by the Honorable High Court of Karnataka.

3. Impairment of Assets

In accordance with Accounting Standard - 28 issued by the Institute of Chartered Accounts of India, management has made an assessment and found that there is no impairment in the valueoffixed assets.

4. Balances in loans, advances, deposits given and loans received, Sundry Debtors, Creditors and Unpaid Dividend are subject to confirmation and reconciliation.

5. Previous year''s figures have been regrouped / recast / restated, wherever necessary, to make them comparable with those of the current year.

Mar 31, 2012

1. The information required to be disclosed under the Micro, Small, Medium enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. There are no over dues to parties on account of principal amount and / or interest and accordingly no additional disclosures have been made.

2. Capital Reserve and Securities Premium are as per the scheme of merger approved by the Honorable High Court of Karnataka.

3. Impairment of Assets

In accordance with Accounting Standard - 28 issued by the Institute of Chartered Accounts of India, management has made an assessment and found that there is no impairment in the value of fixed assets.

Related Party Information Relationship

a. Where significant influence exists(Affiliates)

1. M/s. Sikka N Sikka Engineers Pvt Ltd

2. M/s. Emsac Engineering Pvt Ltd

3. M/s. Ultraweld Engineers Pvt Ltd

b. Key Management Personnel

1. Mr. Rajeev Sikka

2. Mr. Sanjeev Sikka (upto 31.5.2011)

c. Relatives of Directors

1. Mrs. Krishna Sikka

2. Mrs. Anuradha Sikka

3. Mrs. Anita Sikka (upto 31.5.2011)

4. Balances in loans, advances, deposits given and loans received, Sundry Debtors, Creditors and Unpaid Dividend are subject to confirmation and reconciliation.

5.Previous year's figures have been recast / restated, wherever necessary, to make them comparable with those of the current year.

Mar 31, 2010

1. Contingent Liabilities not provided for in the books of Accounts

In respect of Bank Guarantees:Rs.93,45,018/-(Previous Year :Rs.1,08,31,400/-)

2. a) Term loan of Rs 510 lakhs has been sanctioned by Canara Bank for factory expansion at Bommasandra against which Rs 101.52 Lakhs utilized upto 31.3.2010. The same is secured on equitable mortgage of land of M/s Sikka and Sikka Engineers Pvt Ltd, a 100% Subsidiary of the company. In addition to above M/s Sikka and Sikka Engineers Pvt Ltd have given corporate guarantee. Loan payable within one year is Rs.70,80,000/-.

b)The Secured loan represents the liability towards purchase of motorcars under a financing arrangement with Citi Bank and is secured by hypothecation of the said vehicle and personal guarantee of Directors. Balance as at March 31, 2010 includes Rs.87,271/- .Payable within one year is Rs.87,271/- (Previous year Rs. 10,33,897/-).

3. Capital commitments to the extent not provided for in the books of accounts in respect of projects undertaken by the Company is estimated at Rs.1,49,58,868/- based on definite agreements entered.

4. The cash in the current accounts of scheduled banks includes a dividend bank account with a balance of Rs.4,05,937/- and the same represents unclaimed dividend. (Previous Year Rs.3,08,173).

5. a) The information required to be disclosed under the Micro, Small, Medium enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. There are no over dues to parties on account of principal amount and / or interest and accordingly no additional disclosures have been made.

b) According to the information available with the Company, as at March 31, 2010 there are no outstanding dues to Small Scale Undertakings. (Previous Year : Rs.NIL).

6. Figures of Previous year have been regrouped / rearranged wherever necessary.

7. Advances includes, a loan of Rs 20,03,483/- given to Sika UK Ltd, a Subsidiary company in which company holds 55%. In view of the losses incurred by subsidiary, entire net worth has been eroded and hence advance is doubtful of recovery and not provided for. However management is of the opinion that the amount is fully recoverable as this represents development of products and the Company has ongoing operations.

Related Party Information

Relationships

a. Where significant influence exists(Affiliates)

1. M/s.Sikka N Sikka Engineers Pvt Ltd

2. M/s.Emsac Engineering Pvt Ltd

3. Sika UK Ltd

4. M/s.Gourmet Estates Pvt Ltd

5. M/s.Moneyplant Estates Pvt Ltd

6. M/s.Ultraweld Engineers Pvt Ltd

7. M/s.Softspace Network Pvt Ltd

8. M/s.Softspace Computing Pvt Ltd

b. Key Management Personnel

1. Mr.Rajeev Sikka

2. Mr.Sanjeev Sikka

c. Ralatives of Directors

1. Mrs.Anuradha Sikka

2. Mrs.Anita Sikka

3. Mr.S.B.Sikka

4. Mrs.Krishna Sikka

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