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Notes to Accounts of De Nora India Ltd.
Mar 31, 2025
2.10 Provisions and contingent liabilities
Provisions are recognized when there is a present obligation 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 there is a reliable estimate of
the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the
present obligation at the Balance sheet date.
The Company offers assurance-type warranties for its coating / recoating service for a period of eight years in the
case of coating/ recoating services and on certain electro chloriators and supplies for a period of one year in which
period amounts are recoverable from the customers based on pre-defined terms. Estimated costs from warranty
terms standard to the deliverable are recognised when revenue is recorded for the related deliverable. The Company
estimates its warranty costs standard to the deliverable based on historical warranty claim experience and applies
this estimate to the revenue stream for deliverables under warranty.
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.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which
will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within
the control of the Company or a present obligation that arises from past events where it is either not probable that an
outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.
2.11 Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and cash on hand, which are subject to an
insignificant risk of changes in value.
For the purposes of the cash flow statement, cash and cash equivalents include cash on hand and cash in banks.
2.12 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.
(a) Financial assets
(i) Initial recognition and measurement
At initial recognition, financial asset is measured at its fair value plus, in the case of a financial asset not
at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the
financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed
in profit or loss.
(ii) Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in following categories:
a) at amortized cost; or
b) at fair value through other comprehensive income; or
c) at fair value through profit or loss.
The classification depends on the entityâs business model for managing the financial assets and the
contractual terms of the cash flows.
Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows
represent solely payments of principal and interest are measured at amortized cost. Interest income from
these financial assets is included in finance income using the effective interest rate method (EIR).
Fair value through other comprehensive income (FVOCI): Assets that are held for collection of contractual
cash flows and for selling the financial assets, where the assetsâ cash flows represent solely payments of
principal and interest, are measured at fair value through other comprehensive income (FVOCI). Movements
in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses,
interest revenue and foreign exchange gains and losses which are recognized in Statement of Profit and
Loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI
is reclassified from equity to Statement of Profit and Loss and recognized in other gains/ (losses). Interest
income from these financial assets is included in other income using the effective interest rate method.
Fair value through profit or loss (FVTPL): Assets that do not meet the criteria for amortized cost or FVOCI
are measured at fair value through profit or loss. Fair value income from these financial assets has included
in other income.
Equity instruments: All equity investments in scope of Ind AS 109 are measured at fair value. Equity
instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the
Company may make an irrevocable election to present in other comprehensive income subsequent
changes in the fair value. 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 FVTOCI, then all fair value changes on the
instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI
to P&L, 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 profit and loss.
(iii) Impairment of financial assets
For trade receivables only, the Company applies the simplified approach required by IndAS 109, which
requires expected lifetime losses to be recognised from initial recognition of the receivables.
For recognition of impairment loss on financial assets (trade receivable) 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, 15-quarters ECL is used to provide for impairment loss. However,
if credit risk has increased significantly, lifetime ECL is used. If in subsequent years, 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 15 quarters ECL.
Life time ECLs are the expected credit losses resulting from all possible default events over the expected
life of a financial instrument. The 15 quarters ECL is a portion of the lifetime ECL which results from default
events that are possible within 15 quarters after the year end.
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 shortfalls), discounted at the
original EIR. When estimating the cash flows, an entity is required to consider all contractual terms of the
financial instrument (including prepayment, extension etc.) over the expected life of the financial instrument.
However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then
the entity is required to use the remaining contractual term of the financial instrument.
In general, it is presumed that credit risk has significantly increased since initial recognition if the payment
is more than 90 days past due.
ECL impairment loss allowance (or reversal) recognized during the year is recognized as income/expense
in the statement of profit and loss. In balance sheet ECL for financial assets measured at amortized cost is
presented as an allowance, i.e. as an integral part of the measurement of those assets in the balance sheet.
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.
(iv) Derecognition of financial assets
A financial asset is derecognized only when
a) the rights to receive cash flows from the financial asset is transferred or
b) retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual
obligation to pay the cash flows to one or more recipients.
Where the financial asset is transferred then in that case financial asset is derecognized only if substantially
all risks and rewards of ownership of the financial asset is transferred. Where the entity has not transferred
substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognized.
(b) Financial liabilities
(i) Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or
loss and at amortized cost, as appropriate.
All financial liabilities are recognized initially at fair value net of directly attributable transaction costs.
(ii) Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair value through profit or loss. Separated embedded
derivatives are also classified as held for trading unless they are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognized in the Statement of Profit and Loss.
(iii) Derecognition
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 Statement of Profit and Loss as finance
costs.
(c) Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a
legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or
realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on
future events and must be enforceable in the normal course of business and in the event of default, insolvency
or bankruptcy of the Company or the counterparty.
2.13 Employee Benefits
(a) Short-term obligations
Liabilities for salaries and wages, including non-monetary benefits that are expected to be settled wholly within
12 months after the end of the year in which the employees render the related service are recognized in respect
of employeesâ services up to the end of the year and are measured at the amounts expected to be paid when the
liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
(b) Other long-term employee benefit obligations
(i) Defined contribution plan
Provident Fund: Contribution towards provident fund is made to the regulatory authorities, where the
Company has no further obligations. Such benefits are classified as Defined Contribution Schemes as
the Company does not carry any further obligations, apart from the contributions made on a monthly basis
which are charged to the Statement of Profit and Loss.
Employee''s State Insurance Scheme: Contribution towards employees'' state insurance scheme is made
to the regulatory authorities, where the Company has no further obligations. Such benefits are classified
as Defined Contribution Schemes as the Company does not carry any further obligations, apart from the
contributions made on a monthly basis which are charged to the Statement of Profit and Loss.
(ii) Defined benefit plans
Gratuity: The Company provides for gratuity, a defined benefit plan (the "Gratuity Plan") covering eligible
employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity Plan provides a lump sum
payment to vested employees at retirement, death, incapacitation or termination of employment, of an
amount based on the respective employee''s salary. The Company''s liability is actuarially determined (using
the Projected Unit Credit method) at the end of each year. Actuarial losses/gains are recognized in the
other comprehensive income in the year in which they arise.
(iii) Other long term employee benefit obligations
All employee benefits (other than post-employment benefits and termination benefits) which do not fall
due wholly within twelve months after the end of the period in which the employees render the related
services are determined based on actuarial valuation or discounted present value method carried out at
each balance sheet date. The expected cost of accumulating compensated absences is determined by
actuarial valuation performed by an independent actuary as at every year end using projected unit credit
method on the additional amount expected to be paid / availed as a result of the unused entitlement that
has accumulated at the balance sheet date. Expense on non-accumulating compensated absences is
recognised in the period in which the absences occur. The Company presents the entire leave as a current
liability in the balance sheet, since it does not have an unconditional right to defer its settlement for 12
months after the reporting date.
2.14 Earnings Per Share
Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders
by the weighted average number of equity shares outstanding during the year. Earnings considered in ascertaining
the Company''s earnings per share is the net profit or loss for the year after deducting preference dividends and any
attributable tax thereto for the year. The weighted average number of equity shares outstanding during the year and
for all the years presented is adjusted for events, such as bonus shares, other than the conversion of potential equity
shares, that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity
shareholders and the weighted average number of shares outstanding during the year is adjusted for the effects of all
dilutive potential equity shares.
3 Significant accounting judgments, estimates and assumptions
In the preparation of the financial statements, the Company makes judgements, estimates and assumptions about
the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other factors that are considered to be relevant.
Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised prospectively.
Information about assumptions, judgements and estimation uncertainties that have a significant risk of resulting in a
material adjustment in the year ending March 31,2024 are as below :
3.1 Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the year end 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. The Company based its assumptions and estimates on parameters available
when the financial statements were prepared. Existing circumstances and assumptions about future developments,
however, may change due to market changes or circumstances arising that are beyond the control of the Company.
Such changes are reflected in the assumptions when they occur.
(a) Useful lives of property, plant and equipment and intangible assets
As described in the Material accounting policies, the Company reviews the estimated useful lives of property,
plant and equipment and intangible assets at the end of each reporting period. Useful lives of intangible assets
is determined on the basis of estimated benefits to be derived from use of such intangible assets. These
reassessments may result in change in the depreciation /amortisation expense in future periods.
(b) Actuarial Valuation
The determination of Companyâs liability towards defined benefit obligation to employees is made through
independent actuarial valuation including determination of amounts to be recognised in the Statement of
Profit and Loss and in Other Comprehensive Income. Such valuation depend upon assumptions determined
after taking into account discount rate, salary growth rate, expected rate of return, mortality and attrition rate.
Information about such valuation is provided in notes to the financial statements.
(c) Expected credit loss on trade receivable
The impairment provisions for trade receivables are based on assumptions about risk of default and expected loss
rates. The Company uses judgements in making these assumptions and selecting the inputs to the impairment
calculation, based on Company''s past history, existing market conditions as well as forward looking estimates at
the end of each reporting period.
(d) Warranty expenses
The Company offers assurance-type warranties for its coating / recoating service for a period of eight years in
the case of coating/ recoating services and on certain electro chloriators and supplies for a period of one year
in which period amounts are recoverable from the customers based on pre-defined terms. Estimated costs from
warranty terms standard to the deliverable are recognised when revenue is recorded for the related deliverable.
The Company estimates its warranty costs standard to the deliverable based on historical warranty claim
experience and applies this estimate to the revenue stream for deliverables under warranty.
4 New and amended standards adopted by the Company
The Ministry of Corporate Affairs vide notification dated 9 September 2024 and 28 September 2024 notified the
Companies (Indian Accounting Standards) Second Amendment Rules, 2024 and Companies (Indian Accounting
Standards) Third Amendment Rules, 2024, respectively, which amended/ notified certain accounting standards (see
below), and are effective for annual reporting periods beginning on or after 1 April 2024:
⢠Insurance contracts - Ind AS 117; and
⢠Lease Liability in Sale and Leaseback - Amendments to Ind AS 116
These amendments did not have any material impact on the amounts recognised in prior periods and are not expected
to significantly affect the current or future periods.
(D) Terms and conditions of transactions with related parties
The transactions with related parties are made on terms equivalent to those that prevail in armâs length transactions.
Outstanding balances at the year-end are unsecured and interest free except for borrowings and settlement occurs
in cash. There have been no guarantees provided or received for any related party receivables or payables. For the
year ended March 31,2025, the Company has not recorded any impairment of receivables relating to amounts owed
by related parties (March 31,2024 - Nil).
The Companyâs international / domestic transfer pricing certification is carried out by an independent firm of Chartered
Accountants. The Company has established a system of maintenance of documents and information as required by
the transfer pricing legislation u/s. 92-92F of the Income Tax Act, 1961. Up to 31 March, 2024, the last date for which
the transfer pricing certification was carried out, there were no adjustments made to the transactions entered into with
âassociated enterprisesâ as defined in section 92A of the Income Tax Act, 1961. The Management believes that the
international transactions and specified domestic transactions entered into with âassociated enterprisesâ during the
financial year are at armâs length price and that there will be no impact on the amount of tax expense or the provision
of tax on the application of the transfer pricing legislation to such transactions.
38 Fair values of financial assets and financial liabilities
A. Accounting classification and fair values
Note 39 shows the carrying amounts and fair values of financial assets and financial liabilities, including their
levels in the fair value hierarchy. It does not include fair value information for financial assets and financial
liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.
B. Measurement of fair value
The fair values of the financial assets and liabilities are 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:
1. Fair value of cash, bank balances, short-term deposits, trade and other short-term receivables, trade
payables, short term borrowings and other financial liabilities approximate their carrying amounts largely
due to short-term maturities of these Financial instruments.
2. The fair value of non-current financial assets comprising of security term deposits at amortised cost using
Effective Interest Rate (EIR) are not significantly different from the carrying amount.
3. Financial assets that are neither past due nor impaired include cash and cash equivalents, investment in
equity shares and mutual funds, security deposits, term deposits, and other financial assets.
39 Fair value hierarchy
The following is the hierarchy for determining and disclosing the fair value of financial instruments by valuation
technique:
Level 1 : The fair value of financial instruments traded in active markets (such as equity securities) is based on quoted
market prices at the end of the reporting period. The mutual funds are valued using the closing NAV. The quoted market
price used for financial assets held by the group is the current bid price. These instruments are included in level 1.
40 Financial risk management objectives and policies
The Company is exposed to various financial risks. These risks are categorized into market risk, credit risk and liquidity
risk. The Companyâs risk management is coordinated by the Board of Directors and focuses on securing long term and
short term cash flows. The Company does not engage in trading of financial assets for speculative purposes.
(A) Market risk
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 and commodity risk. Financial instruments affected by market risk include
borrowings and derivative financial instruments.
(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 does not have exposure to the risk of changes
in market interest rates as the Company does not have any debt obligations outstanding as at March 31,
2025 and March 31, 2024.
(ii) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign
exchange rates relates primarily to the Companyâs operating activities (when revenue or expense is
denominated in a different currency from the Companyâs functional currency). The risk is measured through
monitoring the net exposure to various foreign currencies and the same is minimized to the extent possible.
The Company is mainly exposed to the price risk due to its investment in mutual funds and equity shares.
The price risk arises due to uncertainties about the future market values of these investments.
As at March 31,2025, the investments in mutual funds amounts to Rs. 5164.21 Lakhs (March 31,2024: Rs.
5423.94 Lakhs). These are exposed to price risk.
The Company has laid policies and guidelines which it adheres to in order to minimize price risk arising from
investments in Debt mutual funds.
1% increase in prices would have led to approximately an additional Rs. 51.64 lakhs gain in the Statement
of Profit and Loss (2023-24: Rs.54.23 lakhs gain). 1% decrease in prices would have led to approximately
an additional Rs. 51.64 lakhs loss in the Statement of Profit and Loss (2023-24: Rs.54.23 lakhs loss).
(B) Credit risk
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. Credit risk arises principally from the Companyâs receivables from statutory
deposits with regulatory agencies and also arises from cash held with banks and financial institutions. The
maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing
counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the
counterparties, taking into account their financial position, past experience and other factors.
Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the
creditworthiness of customers to which the Company grants credit terms in the normal course of business. The
Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred
losses in respect of trade and other receivables and investments.
However, the credit risk arising on cash and cash equivalents is limited as the Company invest in deposits with
banks and financial institution with good credit ratings and strong repayment capacity. Investment in securities
primarily include investment in liquid mutual funds and equity shares.
Trade receivables
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer.
The demographics of the customer, including the default risk of the industry and country in which the customer
operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals,
establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company
grants credit terms in the normal course of business.
Expected credit loss assessment
The Company allocates each exposure to a credit risk grade based on a variety of data that is determined to be
predictive of the risk of loss (e.g. timeliness of payments, available press information etc.) and applying experienced
credit judgement. The company follows simplified approach for recognition of impairment loss allowance on Trade
receivables, in respect of receivable from related parties and receivables from specified customers, the company
does not use expected credit loss model to assess the impairment loss as there is no credit risk involved and no
past history of default from related parties and those specified customers.
Cash and cash equivalent
As at the year end, the Company held cash and cash equivalents Rs 804.65 Lakhs (March 31, 2024 - Rs.
523.91 Lakhs). Credit risk from cash and cash equivalent is managed by the Companyâs finance department in
accordance with Companyâs Policy.
Other bank balances
Other bank balances are held with banks with good credit rating.
Investments
The Company limits its exposure to credit risk by generally investing in liquid mutual funds and securities of
counterparties that have a good credit rating. The Company does not expect any losses from non-performance
by these counter-parties.
Other financial assets
Other financial assets are neither past due nor has any indicators which indicates impairment triggers.
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.
The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an on-going basis
to meet operational needs. Any short term surplus cash generated, over and above the amount required for
working capital management and other operational requirements, is retained as cash and cash equivalents (to
the extent required) and any excess is invested in interest bearing term deposits and liquid mutual funds with
appropriate maturities to optimize the cash returns on investments while ensuring sufficient liquidity to meet its
liabilities.
Maturities of financial liabilities
The following table shows the maturity analysis of the Companyâs financial liabilities based on contractually
agreed undiscounted cash flows along with its carrying value as at the Balance Sheet date.
The table below summarizes the maturity profile of the Companyâs financial liabilities:
41 Capital management
For the purpose of the Companyâs capital management, capital includes issued equity capital, share premium and all
other equity reserves attributable to the equity holders. The primary objective of the Companyâs capital management
is to maximize the shareholder value and to ensure the Companyâs ability to continue as a going concern. The
Company is debt free company and accordingly computation of gearing ratio is not applicable to the company.
42 Provisions
Warranties/ recoating
The Company offers assurance-type warranties for its coating / recoating service for a period of eight years in the
case of coating/ recoating services and on certain electro chloriators and supplies for a period of one year in which
period amounts are recoverable from the customers based on pre-defined terms. Estimated costs from warranty
terms standard to the deliverable are recognised when revenue is recorded for the related deliverable. The Company
estimates its warranty costs standard to the deliverable based on historical warranty claim experience and applies
this estimate to the revenue stream for deliverables under warranty.
The warranty accrual is reviewed periodically to verify that it properly reflects the remaining obligation based on the
anticipated expenditures over the remaining period. Adjustments are made when the actual warranty claim experience
differs from estimates.
Factors that could impact the estimated claim information include the Companyâs productivity, costs of materials,
power and labour and the actual recoveries on support contracts.
During the year ended March 31, 2025, the Company has recognized provisions of INR 1439.81 lakhs relating
to warranty. These provisions are determined based on reported, anticipated warranty claims and other pertinent
factors.
46 The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
47 Undisclosed income
The Company does not have any undisclosed income which is not recorded in the books of account that has been
surrendered or disclosed as income during the year (and previous 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).
48 Details of Benami Property held
The Company does not have any Benami property, where any proceeding has been initiated or pending against the
company for holding any Benami property.
49 Utilisation of Borrowed funds and share premium:
(i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including
foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(ii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding
Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
50 The Company has not been declared wilful defaulter by any bank or financial institution or government or any
government authority.
51 Relationship with Struck off Companies under section 248 of the Companies Act, 2013 or section 560 of Companies
Act, 1956,
The Company does not have any transactions with companies struck off under section 248 of the Companies Act,
2013 or section 560 of Companies Act, 1956.
52 Registration of charges or satisfaction with Registrar of Companies
The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory
period.
53 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.
54 The company has not entered into any scheme of arrangement which has an accounting impact on current or previous
financial year.
55 The Company has not revalued its Property, plant and equipment or intangible assets or both during the current year
or previous year.
56 The Title deeds of all the immovable properties other than properties where the company is the lessee and lease
arrangements are duly executed in favour of the lessee are held in the name of the company.
As per our report of even date
For Price Waterhouse Chartered Accountants LLP For and on behalf of the Board of Directors
Firm Registration No.: 012754N/N500016 De Nora India Limited
CIN: L31200GA1993PLC001335
Vivian Pillai Vinay Chopra Purushottam Mantri
Partner Managing Director Director
Membership No: 127791 DIN : 06543610 DIN : 06785989
Deepak Nagvekar Shrikant Pai
Chief Financial Officer Company Secretary
ICSI Membership No: 40001
Place : Kundaim, Goa Place : Kundaim, Goa
Date : April 29, 2025 Date : April 29, 2025
Mar 31, 2024
(c) Rights, preferences and restrictions attached to shares
The Company has only one class of equity shares having a par value of Rs 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The Board of Directors at its meeting held on April 30, 2024 has recommended a final dividend of INR 2/- per equity share of INR 10/- each (previous year INR 2/- per equity share of INR 10/- each) subject to the approval of the shareholders at the ensuing Annual General Meeting.
In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
(g) No class of shares have been issued as bonus shares or for consideration other than cash by the Company during the period of five years immediately preceding the current year end.
(h) No class of shares have been bought back by the Company during the period of five years immediately preceding the current year end.
*Under the erstwhile Companies Act, 1956, a general reserve was created through an annual transfer of net profit at a specified percentage in accordance with applicable regulations. Consequent to the introduction of the Companies Act, 2013, the requirement to mandatory transfer a specified percentage of net profit to general reserve has been withdrawn.
(D) Terms and conditions of transactions with related parties
The transactions with related parties are made on terms equivalent to those that prevail in armâs length transactions. Outstanding balances at the year-end are unsecured and interest free except for borrowings and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31, 2024, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31,2023 - Nil).
The Companyâs international / domestic transfer pricing certification is carried out by an independent firm of Chartered Accountants. The Company has established a system of maintenance of documents and information as required by the transfer pricing legislation u/s. 92-92F of the Income Tax Act, 1961. Up to 31 March, 2023, the last date for which the transfer pricing certification was carried out, there were no adjustments made to the transactions entered into with âassociated enterprisesâ as defined in section 92A of the Income Tax Act, 1961. The Management believes that the international transactions and specified domestic transactions entered into with âassociated enterprisesâ during the financial year are at armâs length price and that there will be no impact on the amount of tax expense or the provision of tax on the application of the transfer pricing legislation to such transactions.
The Company up to the June 2023 quarter and in earlier years, had two reporting segments, namely Electrode Technologies and Water Technologies. From last few quarters the Water Technologies business has been declining and is not significant compared to the Electrode Technologies business and also to the operations of the Company. Considering that the Water Technologies business is not significant, the chief operating decision maker (CODM) has decided to look at the company performance at single unit level from current year onwards. Accordingly, the CODM has identified Electrode Technologies as its only reportable segment in accordance with the requirements of Ind AS 108- Operating Segments and no segment information has been provided.
Below is information from entity wide disclosure required in accordance with Ind AS 108 - Operating Segments: Geographical information
39 Fair values of financial assets and financial liabilities
A. Accounting classification and fair values
Note 40 shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.
The fair values of the financial assets and liabilities are 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:
1. Fair value of cash, bank balances, short-term deposits, trade and other short-term receivables, trade payables, short term borrowings and other financial liabilities approximate their carrying amounts largely due to short-term maturities of these Financial instruments.
2. The fair value of non-current financial assets comprising of security term deposits at amortised cost using Effective Interest Rate (EIR) are not significantly different from the carrying amount.
3. Financial assets that are neither past due nor impaired include cash and cash equivalents, investment in equity shares and mutual funds, security deposits, term deposits, and other financial assets.
The following is the hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
⢠Level 1 : The fair value of financial instruments traded in active markets (such as equity securities) is based on quoted market prices at the end of the reporting period. The mutual funds are valued using the closing NAV. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.
⢠Level 2 : The fair value Of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
⢠Level 3 : 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.
41 Financial risk management objectives and policies
The Company is exposed to various financial risks. These risks are categorized into market risk, credit risk and liquidity risk. The Companyâs risk management is coordinated by the Board of Directors and focuses on securing long term and short term cash flows. The Company does not engage in trading of financial assets for speculative purposes.
(A) Market risk
âMarket 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 and commodity risk. Financial instruments affected by market risk include borrowings and derivative financial instruments.
(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 does not have exposure to the risk of changes in market interest rates as the Company does not have any debt obligations outstanding as at balance sheet date.
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities (when revenue or expense is denominated in a different currency from the Companyâs functional currency). The risk is measured through monitoring the net exposure to various foreign currencies and the same is minimized to the extent possible.
(b) Foreign currency sensitivity analysis
The following table demonstrates the sensitivity to a reasonably possible change in the US dollar and EURO exchange rate (or any other material currency), with all other variables held constant, of the Companyâs profit before tax (due to changes in the fair value of monetary assets and liabilities). The Companyâs exposure to foreign currency changes for all other currencies is not material. The sensitivity analysis includes only net outstanding foreign currency denominated monetary items and adjusts their translation at the period end for 1% change in foreign currency rates.
The Company is mainly exposed to the price risk due to its investment in mutual funds and equity shares. The price risk arises due to uncertainties about the future market values of these investments.
As at March 31, 2024, the investments in mutual funds amounts to Rs. 5,423.94 Lakhs (March 31,2023: Rs. 4,149.39 Lakhs). These are exposed to price risk.
The Company has laid policies and guidelines which it adheres to in order to minimize price risk arising from investments in Debt mutual funds.
1% increase in prices would have led to approximately an additional Rs. 54.23 lakhs gain in the Statement of Profit and Loss (2022-23: Rs.41.49 lakhs gain). 1% decrease in prices would have led to approximately an additional Rs. 54.23 lakhs loss in the Statement of Profit and Loss (2022-23: Rs.41.49 lakhs loss).
(B) Credit risk
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. Credit risk arises principally from the Companyâs receivables from statutory deposits with regulatory agencies and also arises from cash held with banks and financial institutions. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.
Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments.
However, the credit risk arising on cash and cash equivalents is limited as the Company invest in deposits with banks and financial institution with good credit ratings and strong repayment capacity. Investment in securities primarily include investment in liquid mutual funds and equity shares.
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.
Expected credit loss assessment
âThe Company allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of loss (e.g. timeliness of payments, available press information etc.) and applying experienced credit judgement. The company follows simplified approach for recognition of impairment loss allowance on Trade receivables, in respect of receivable from related parties the company does not use expected credit loss model to assess the impairment loss as there is no credit risk involved and no past history of default from related parties.
â Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the macroeconomic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue.
As at the year end, the Company held cash and cash equivalents Rs 523.91 Lakhs [March 31, 2023 - Rs. 384.70 Lakhs]. Credit risk from cash and cash equivalent is managed by the Companyâs finance department in accordance with Companyâs Policy.
Other bank balances are held with banks with good credit rating.
The Company limits its exposure to credit risk by generally investing in liquid mutual funds and securities of counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counter-parties.
Other financial assets are neither past due nor has any indicators which indicates impairment triggers.
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.
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.
The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an on-going basis to meet operational needs. Any short term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits and liquid mutual funds with appropriate maturities to optimize the cash returns on investments while ensuring sufficient liquidity to meet its liabilities.
Maturities of financial liabilities
The following table shows the maturity analysis of the Companyâs financial liabilities based on contractually agreed undiscounted cash flows along with its carrying value as at the Balance Sheet date.
For the purpose of the Companyâs capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Companyâs capital management is to maximize the shareholder value and to ensure the Companyâs ability to continue as a going concern. The Company is debt free company and accordingly computation of gearing ratio is not applicable to the company.
Warranties/ recoating
The Company offers assurance-type warranties for one of the critical parts of certain electro chlorinators and for some of its coating / recoating services and supplies for an initial period of two years followed by support contracts for a period of four years in the case of electro chlorinators and for a period of six years in the case of coating, eight years in case of recoating services during which period amounts are recoverable from the customers based on pre-defined terms. Estimated costs from warranty terms standard to the deliverable are recognised when revenue is recorded for the related deliverable. The Company estimates its warranty costs standard to the deliverable based on historical warranty claim experience and applies this estimate to the revenue stream for deliverables under warranty.
The warranty accrual is reviewed periodically to verify that it properly reflects the remaining obligation based on the anticipated expenditures over the remaining period. Adjustments are made when the actual warranty claim experience differs from estimates.
Factors that could impact the estimated claim information include the Companyâs productivity, costs of materials, power and labour and the actual recoveries on support contracts.
|
44 |
Contingencies and Commitments |
||
|
Contingent liabilities Bank Guarantees Commitments Estimated net amount of contracts remaining to be executed on capital account, not provided for |
As at March 31, 2024 |
As at March 31, 2023 |
|
|
550.21 |
96.86 |
||
|
154.83 |
30.38 |
||
46 Corporate Social Responsibility
As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are Listed in Table D below. A CSR committee has been formed by the company as per the Act. The funds are utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013.
47 The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
48 Undisclosed income
The Company does not have any undisclosed income which is not recorded in the books of account that has been surrendered or disclosed as income during the year (and previous 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).
49 Details of Benami Property held
The Company does not have any Benami property, where any proceeding has been initiated or pending against the company for holding any Benami property.
50 Utilisation of Borrowed funds and share premium:
(i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(ii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
51 The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
52 Relationship with Struck off Companies under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956,
The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
53 Registration of charges or satisfaction with Registrar of Companies
The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
54 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.
55 The company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.
56 The Company has not revalued its Property, plant and equipment or intangible assets or both during the current year or previous year.
57. The Title deeds of all the immovable properties other than properties where the company is the lessee and lease arrangements are duly executed in favour of the lessee are held in the name of the company.
Mar 31, 2023
2.11 Provisions and contingent liabilities
Provisions are recognized when there is a present obligation 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 there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance sheet date.
Provision for warranty is recognized when the underlying products or services are sold. The provision is based on technical evaluation, historical warranty data and a weighing of all possible outcomes by their associated probabilities.
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.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.
2.12 Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks, cash on hand and short-term deposits net of bank overdraft with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purposes of the cash flow statement, cash and cash equivalents include cash on hand, cash in banks and short-term deposits net of bank overdraft.
2.13 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.
(a) Financial assets
(i) Initial recognition and measurement
At initial recognition, financial asset is measured at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
(ii) Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in following categories:
a) at amortized cost; or
b) at fair value through other comprehensive income; or
c) at fair value through profit or loss.
The classification depends on the entity''s business model for managing the financial assets and the contractual terms of the cash flows.
Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. Interest income from these financial assets is included in finance income using the effective interest rate method (EIR).
Fair value through other comprehensive income (FVOCI): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets'' cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income (FVOCI). Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in Statement of Profit and Loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to Statement of Profit and Loss and recognized in other gains/ (losses). Interest income from these financial assets is included in other income using the effective interest rate method.
Fair value through profit or loss (FVTPL): Assets that do not meet the criteria for amortized cost or FVOCI are measured at fair value through profit or loss. Interest income from these financial assets is included in other income.
Equity instruments: All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognised by an acquirer in a business combination to which Ind AS103 applies are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. 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 FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, 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 profit and loss.
(iii) Impairment of financial assets
In accordance with Ind AS 109, Financial Instruments, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on financial assets that are measured at amortized cost and FVOCI.
For recognition of impairment loss on 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, 15-quarters ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If in subsequent years, 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 15 quarters ECL.
Life time ECLs are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 15 quarters ECL is a portion of the lifetime ECL which results from default events that are possible within 15 quarters after the year end.
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 shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required to consider all contractual terms of the financial instrument (including prepayment, extension etc.) over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual term of the financial instrument.
In general, it is presumed that credit risk has significantly increased since initial recognition if the payment is more than 90 days past due.
ECL impairment loss allowance (or reversal) recognized during the year is recognized as income/expense in the statement of profit and loss. In balance sheet ECL for financial assets measured at amortized cost is presented as an allowance, i.e. as an integral part of the measurement of those assets in the balance sheet. 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.
(iv) Derecognition of financial assets
A financial asset is derecognized only when
a) the rights to receive cash flows from the financial asset is transferred or
b) retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.
Where the financial asset is transferred then in that case financial asset is derecognized only if substantially all risks and rewards of ownership of the financial asset is transferred. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognized.
(b) Financial liabilities
(i) Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss and at amortized cost, as appropriate.
All financial liabilities are recognized initially at fair value and, in the case of borrowings and payables, net of directly attributable transaction costs.
(ii) Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognized in the Statement of Profit and Loss.
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in Statement of Profit and Loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the Statement of Profit and Loss.
(iii) Derecognition
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 Statement of Profit and Loss as finance costs.
(c) Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.
2.14 Employee Benefits
(a) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the year in which the employees render the related service are recognized in respect of employees'' services up to the end of the year and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
(b) Other long-term employee benefit obligations
(i) Defined contribution plan
Provident Fund: Contribution towards provident fund is made to the regulatory authorities, where the Company has no further obligations. Such benefits are classified as Defined Contribution Schemes as the Company does not carry any further obligations, apart from the contributions made on a monthly basis which are charged to the Statement of Profit and Loss.
Employee''s State Insurance Scheme: Contribution towards employees'' state insurance scheme is made to the regulatory authorities, where the Company has no further obligations. Such benefits are classified as Defined Contribution Schemes as the Company does not carry any further obligations, apart from the contributions made on a monthly basis which are charged to the Statement of Profit and Loss.
(ii) Defined benefit plans
Gratuity: The Company provides for gratuity, a defined benefit plan (the "Gratuity Plan") covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary. The Company''s liability is actuarially determined (using the Projected Unit Credit method) at the end of each year. Actuarial losses/gains are recognized in the other comprehensive income in the year in which they arise.
(iii) Other long term employee benefit obligations
All employee benefits (other than post-employment benefits and termination benefits) which do not fall due wholly within twelve months after the end of the period in which the employees render the related services are determined based on actuarial valuation or discounted present value method carried out at each balance sheet date. The expected cost of accumulating compensated absences is determined by actuarial valuation performed by an independent actuary as at every year end using projected unit credit method on the additional amount expected to be paid / availed as a result of the unused entitlement that has accumulated at the balance sheet date. Expense on non-accumulating compensated absences is recognised in the period in which the absences occur. The Company presents the entire leave as a current liability in the balance sheet, since it does not have an unconditional right to defer its settlement for 12 months after the reporting date.
2.15 Earnings Per Share
Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Earnings considered in ascertaining the Company''s earnings per share is the net profit or loss for the year after deducting preference dividends and any attributable tax thereto for the year. The weighted average number of equity shares outstanding during the year and for all the years presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares, that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year is adjusted for the effects of all dilutive potential equity shares.
2.16 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
The Company operates in two reportable segments i.e. "Electrode Technologies" and "Water Technologies".
2.17 Rounding off amounts
All amounts disclosed in financial statements and notes have been rounded off to the nearest lakhs as per requirement of Schedule III of the Act, unless otherwise stated.
3 Significant accounting judgments, estimates and assumptions
In the preparation of the financial statements, the Company makes judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.
Information about assumptions, judgements and estimation uncertainties that have a significant risk of resulting in a material adjustment in the year ending March 31,2023 are as below :
3.1 Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the year end 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. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
(a) Useful lives of property, plant and equipment and intangible assets
As described in the significant accounting policies, the Company reviews the estimated useful lives of property, plant and equipment and intangible assets at the end of each reporting period. Useful lives of intangible assets is determined on the basis of estimated benefits to be derived from use of such intangible assets. These reassessments may result in change in the depreciation /amortisation expense in future periods.
(b) Impairment of non financial assets
In assessing impairment, management estimates the recoverable amount of each asset or cash-generating units based on expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates to assumptions about future operating results and the determination of a suitable discount rate.
(c) Actuarial Valuation
The determination of Company''s liability towards defined benefit obligation to employees is made through independent actuarial valuation including determination of amounts to be recognised in the Statement of Profit and Loss and in Other Comprehensive Income. Such valuation depend upon assumptions determined after taking into account discount rate, salary growth rate, expected rate of return, mortality and attrition rate. Information about such valuation is provided in notes to the financial statements.
(d) Revenue Recognition
The Company derives significant revenue from recoating / repairs of electrolytic products. Such revenue is recognised in accordance with the terms of the contracts when identified performance obligation is completed. The terms of the contracts are varied which affects the identification of performance obligation, allocation of transaction price to the performance obligation and timing of revenue recognition. The company exercises the significant judgment In assessing the performance obligation and timing of revenue recognition.
4.1 The Ministry of Corporate Affairs ("MCA") has notified Companies (Indian Accounting Standard) Amendment Rules, 2023 dated March 31,2023 to amend certain Ind ASs which are effective from 01 April 2023:
Below is a summary of such amendments:
(i) Disclosure of Accounting Policies - Amendment to Ind AS 1 Presentation of financial statements
The MCA issued amendments to Ind AS 1, providing guidance to help entities meet the accounting policy disclosure requirements. The amendments aim to make accounting policy disclosures more informative by replacing the requirement to disclose ''significant accounting policies'' with ''material accounting policy information''. The amendments also provide guidance under what circumstance, the accounting policy information is likely to be considered material and therefore requiring disclosure.
The amendments are effective for annual reporting periods beginning on or after 01 April 2023. The Company is currently revisiting their accounting policy information disclosures to ensure consistency with the amended requirements.
(ii) Definition of Accounting Estimates - Amendments to Ind AS 8 Accounting policies, changes in accounting estimates and errors
The amendment to Ind AS 8, which added the definition of accounting estimates, clarifies that the effects of a change in an input or measurement technique are changes in accounting estimates, unless resulting from the correction of prior period errors. These amendments clarify how entities make the distinction between changes in accounting estimate, changes in accounting policy and prior period errors. The distinction is important, because changes in accounting estimates are applied prospectively to future transactions and other future events, but changes in accounting policies are generally applied retrospectively to past transactions and other past events as well as the current period.
The amendments are effective for annual reporting periods beginning on or after 01 April 2023. The amendments are not expected to have a material impact on the Company''s financial statements.
(iii) Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendments to Ind AS 12 Income taxes
The amendment to Ind AS 12, requires entities to recognise deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary differences. They will typically apply to transactions such as leases of lessees and decommissioning obligations and will require the recognition of additional deferred tax assets and liabilities.
The amendment should be applied to transactions that occur on or after the beginning of the earliest comparative period presented. In addition, entities should recognise deferred tax assets (to the extent that it is probable that they can be utilised) and deferred tax liabilities at the beginning of the earliest comparative period for all deductible and taxable temporary differences associated with:
⢠right-of-use assets and lease liabilities, and
⢠decommissioning, restoration and similar liabilities, and the corresponding amounts recognised as part of the cost of the related assets.
The cumulative effect of recognising these adjustments is recognised in retained earnings, or another component of equity, as appropriate. Ind AS 12 did not previously address how to account for the tax effects of on-balance sheet leases and similar transactions and various approaches were considered acceptable. Some entities may have already accounted for such transactions consistent with the new requirements. These entities will not be affected by the amendments.
The Company is currently assessing the impact of the amendments.
(iv) The other amendments to Ind AS notified by these rules are primarily in the nature of clarifications.
4.2 Standards that became effective during the year
The Ministry of Corporate Affairs has notified Companies (Indian Accounting Standard) Amendment Rules 2022 dated March 23, 2022 with certain amendments, effective from 01 April 2022, did not have any material impact on the financial statements.
37 Related Party Disclosures
(A) Names of related parties and description of relationship as identified and certified by the Company: Ultimate Holding Company Industrie De Nora S.p.A Holding Company Oronzio De Nora International B.V.
Key Management Personnel (KMP)
Mr. Satish Dhume Chairman & Independent Director
Mr. Vinay Chopra Managing Director
Mr. Robert Scannell Non-Executive Director
Mr. Purushottam S. Mantri Non-Executive & Independent Director
Ms. Supriya Banerji Non-Executive & Independent Director
Mr. Francesco L''Abbate Non-Executive Director
Mr. Shrikant Pai Company Secretary
Mr. Deepak Nagvekar Chief Financial Officer
The Company''s international / domestic transfer pricing certification is carried out by an independent firm of Chartered Accountants. The Company has established a system of maintenance of documents and information as required by the transfer pricing legislation u/s. 92-92F of the Income Tax Act, 1961. Up to 31 March, 2022, the last date for which the transfer pricing certification was carried out, there were no adjustments made to the transactions entered into with ''associated enterprises'' as defined in section 92A of the Income Tax Act, 1961. The Management believes that the international transactions and specified domestic transactions entered into with ''associated enterprises'' during the financial year are at arm''s length price and that there will be no impact on the amount of tax expense or the provision of tax on the application of the transfer pricing legislation to such transactions..
38 Segment Reporting
A. Basis for segmentation :
Operating segments are identified as those components of the Company:-
(a) that engage in business activities to earn revenues and incur expenses (including transactions with any of the Company''s other components;
(b) whose operating results are regularly reviewed by the Board of Directors to make decisions about resource allocation and performance assessment; and
(c) for which discrete financial information is available.
The Company has two reportable segments as described under ''Segment Composition'' below. The nature of products and services offered by these businesses are different and are managed separately given the different sets of technology and competency requirementss
B. Reportable segments :
An operating segment is classified as reportable segment if reported revenue (including inter-segment revenue) or absolute amount of result or assets exceed 10% or more of the combined total of all the operating segments.
C. Segment profit :
Performance of a segment is measured based on segment profit (before interest and tax), as included in the internal management reports that are reviewed by the Company''s Board of Directors
D. Segment composition :
As per the criteria specified under Ind AS 108 - Operating Segments, the Company has identified ''Electrode Technologies'' and ''Water Technologies'' as its Operating Segments.
B. Measurement of fair value
The fair values of the financial assets and liabilities are 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:
1. Fair value of cash, bank balances, short-term deposits, trade and other short-term receivables, trade payables, short term borrowings and other financial liabilities approximate their carrying amounts largely due to short-term maturities of these Financial instruments.
2. The fair value of non-current financial assets comprising of security term deposits at amortised cost using Effective Interest Rate (EIR) are not significantly different from the carrying amount.
3. Financial assets that are neither past due nor impaired include cash and cash equivalents, security deposits, term deposits, and other financial assets.
40 Fair value hierarchy
The following is the hierarchy for determining and disclosing the fair value of financial instruments by valuation
technique:
⢠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 following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis:
The Company is exposed to various financial risks. These risks are categorized into market risk, credit risk and liquidity risk. The Company''s risk management is coordinated by the Board of Directors and focuses on securing long term and short term cash flows. The Company does not engage in trading of financial assets for speculative purposes.
(A) Market risk
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 and commodity risk. Financial instruments affected by market risk include borrowings and derivative financial instruments.
(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 does not have exposure to the risk of changes in market interest rates as the Company does not have long-term debt obligations outstanding as at balance sheet date and short term debt obligations are with fixed interest rates.
(ii) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument 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 the Company''s operating activities (when revenue or expense is denominated in a different currency from the Company''s functional currency). The risk is measured through monitoring the net exposure to various foreign currencies and the same is minimized to the extent possible.
(iii) Price risk
The Company is mainly exposed to the price risk due to its investment in mutual funds and equity shares. The price risk arises due to uncertainties about the future market values of these investments..
As at March 31, 2023, the investments in mutual funds amounts to Rs. 4,149.39 Lakhs (March 31, 2022: Rs. 2,315.51 Lakhs). These are exposed to price risk.
The Company has laid policies and guidelines which it adheres to in order to minimize price risk arising from investments in equity mutual funds.
1% increase in prices would have led to approximately an additional Rs. 41.49 lakhs gain in the Statement of Profit and Loss (2021-22: Rs.23.15 lakhs gain). 1% decrease in prices would have led to an equal but opposite effect.
(B) Credit risk
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. Credit risk arises principally from the Company''s receivables from deposits with landlords and other statutory deposits with regulatory agencies and also arises from cash held with banks and financial institutions. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.
Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments.
However, the credit risk arising on cash and cash equivalents is limited as the Company invest in deposits with banks and financial institution with credit ratings and strong repayment capacity. Investment in securities primarily include investment in liquid mutual funds units and equity shares.
Trade receivables
The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer
Cash and cash equivalent
As at the year end, the Company held cash and cash equivalents Rs. 384.70 Lakhs [March 31, 2022 - Rs. 1,389.79 Lakhs]. The cash and cash equivalents are held with banks with good credit rating.
Other bank balances
Other bank balances are held with banks with good credit rating.
Investments
The Company limits its exposure to credit risk by generally investing in liquid mutual funds and securities of counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counter-parties.
Other financial assets
Other financial assets are neither past due nor impaired.
(C) 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.
For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximize the shareholder value and to ensure the Company''s ability to continue as a going concern.
The management and the Board of Directors monitors the return on capital as well as the level of dividends to shareholders. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. The Company monitors gearing ratio i.e. total debt in proportion to its overall financing structure, i.e. equity and debt. Total debt comprises of non-current and current borrowings. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.
43 Provisions
Warranties/ recoating
The Company offers warranties for one of the critical parts of certain electro chlorinators and for some of its coating / recoating services and supplies for an initial period of two years followed by support contracts for a period of four years in the case of electro chlorinators and for a period of six years in the case of coating, eight years in case of recoating services during which period amounts are recoverable from the customers based on pre-defined
terms. Estimated costs from warranty terms standard to the deliverable are recognised when revenue is recorded for the related deliverable. The Company estimates its warranty costs standard to the deliverable based on historical warranty claim experience and applies this estimate to the revenue stream for deliverables under warranty. Future costs for warranties applicable to revenue recognised in the current period are charged to the revenue account.
The warranty accrual is reviewed periodically to verify that it properly reflects the remaining obligation based on the anticipated expenditures over the balance of the obligation period. Adjustments are made when the actual warranty claim experience differs from estimates. Provisions include estimated costs of support maintenance contracts to the extent such estimated costs are expected to exceed the expected recovery during the obligation period. No assets are recognised in respect of the expected recovery on support contracts.
Factors that could impact the estimated claim information include the Company''s productivity, costs of materials, power and labour and the actual recoveries on support contracts.
48 The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
49 Undisclosed income
The Company does not have any undisclosed income which is not recorded in the books of account that has been surrendered or disclosed as income during the year (and previous 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.
50 Details of Benami Property held
The Company does not have any Benami property, where any proceeding has been initiated or pending against the company for holding any Benami property.
51 Utilisation of Borrowed funds and share premium:
(i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiarie.
(ii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
52 The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
53 Relationship with Struck off Companies under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956,
The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
54 Registration of charges or satisfaction with Registrar of Companies
The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
55 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.
56 The company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.
57 Previous year figures have been regrouped/ reclassified to confirm to the presentation as per Ind AS as required by Schedule III of the Act.
As per our report of even date
For MSKA & Associates For and on behalf of the Board of Directors
Chartered Accountants De Nora India Limited
Firm Registration No.:105047W CIN: L31200GA1993PLC001335
Anup Mundhra Vinay Chopra Purushottam S. Mantri
Partner Managing Director Director
Membership No: 061083 DIN : 06543610 DIN : 06785989
Deepak Nagvekar Shrikant Pai
Chief Financial Officer Company Secretary
ICSI Membership No: 40001
Place : Kundaim, Goa Place : Kundaim, Goa
Date : May 04, 2023 Date : May 04, 2023
Mar 31, 2018
1 Company overview
De Nora India Limited (âthe Companyâ or "De Nora") was incorporated in June 1989 as Titanor Components Limited (''Titanor'') and commenced business in November 1989. The Company''s name was changed to De Nora India Limited on 27 June 2007. The Company has been incorporated under the provisions of India Companies Act and its equity shares are listed on National Stock Exchange (NSE) in India. The Company has its manufacturing facilities at Kundaim, Goa which is also its principal place of business and is involved in the business of manufacturing and servicing of Electrolytic products.
Terms / rights, preferences and restrictions attached to equity shares:
The Company has only one class of equity shares having a par value of Rs 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
2 (c) Nature and Purpose of Reserves:
a) Securities premium reserve
Securities premium account comprises of the premium on issue of shares. The reserve is utilised in accordance with the specific provision of the Companies Act, 2013.
b) General reserve
The General reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the General reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the General reserve will not be reclassified subsequently to the statement of profit and loss.
c) Capital redemption reserve
Capital redemption reserve up to the nominal value of shares is created out of distributable profit for buyback of shares as per Section 69 of the Companies Act 2013.
3 Financial Risk Management
The Company has exposure to the following risks arising from financial instruments:
- Credit risk;
- Market risk; and
- Liquidity risk
The Company''s Board of Directors has overall responsibility for the establishment and oversight of the Companyâs risk management framework. The Board of Directors along with the top Management are 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 monitored & reviewed periodically to reflect changes in market conditions and the Company''s activities. The Company, through its training, standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations. The key risks and mitigating actions are placed before Management of the Company who then evaluates and takes the necessary corrective action.
[A] Credit risk
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, cash and cash equivalents and deposits with banks, investment in securities and other financial instruments measured at amortized cost.
The carrying amounts of financial assets represents maximum credit risk exposure.
Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments.
However, the credit risk arising on cash and cash equivalents is limited as the Company invest in deposits with banks and financial institution with credit ratings and strong repayment capacity. Investment in securities primarily include investment in liquid mutual funds units and equity shares.
Trade receivables
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.
Expected credit loss assessment
The Company allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of loss (e.g. timeliness of payments, available press information etc.) and applying experienced credit judgement.
Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the macroeconomic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue.
Cash and cash equivalent
As at the year end, the Company held cash and cash equivalents of Rs. 82.62 lakhs (31 March 2017 - Rs. 260.21 lakhs , 1 April 2016 - Rs. 124.36 lakhs ). The cash and cash equivalents are held with banks with good credit rating.
Other bank balances
Other bank balances are held with banks with good credit rating.
Investments
The Company limits its exposure to credit risk by generally investing in liquid mutual funds and securities of counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counter-parties.
Other financial assets
Other financial assets are neither past due nor impaired.
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation.
The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an on-going basis to meet operational needs. Any short term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits and liquid mutual funds with appropriate maturities to optimize the cash returns on investments while ensuring sufficient liquidity to meet its liabilities
[C] Market risk
Market risk is the risk that changes in market prices - such as foreign exchange rates and equity prices - will affect the Companyâs income or the value of its holdings of financial instruments. The Company is exposed to market risk primarily related to foreign exchange rate risk. Thus, our exposure to market risk is a function of revenue generating and operating activities in foreign currency. The objective of market risk management is to avoid excessive exposure in our foreign currency revenues and costs.
(i) Foreign currency risk
The Company is subject to the risk that changes in foreign currency values impact the Companyâs exports revenue and imports of raw material. The risk exposure is with respect to various currencies viz. USD, GBP and EURO. The risk is measured through monitoring the net exposure to various foreign currencies and the same is minimized to the extent possible.
(ii) Price risk
The Company is mainly exposed to the price risk due to its investment in mutual funds and equity shares. The price risk arises due to uncertainties about the future market values of these investments.
At 31 March 2018, the investments in mutual funds amounts to Rs. 2,013.25 lakhs (31 March 2017: Rs. 2,027.63 lakhs and 1 April 2016: Rs. 1,921.80 lakhs ). These are exposed to price risk.
The Company has laid policies and guidelines which it adheres to in order to minimize price risk arising from investments in equity mutual funds.
1% increase in prices would have led to approximately an additional Rs. 20.13 lakhs gain in the Statement of Profit and Loss (2015-16: Rs. 20.28 lakhs gain). 1% decrease in prices would have led to an equal but opposite effect.
4 Fair Value Measurements
Accounting classification and fair values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities if the carrying amount is a reasonable approximation of fair value.
(B) FAIR VALUE HEIRARCHY
Fair value is the amount for which an asset could be exchanged, or a liability settled between knowledgeable willing parties in an armâs length transaction. The Company has made certain judgements and estimates in determining the fair values of the financial instruments that are (a) recognized and measured at fair value and (b) measured at amortized cost and for which fair values are disclosed in the financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified the financial instruments into three levels prescribed under the accounting standard. An explanation of each level is as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. This includes mutual funds and listed equity instruments that have quoted price. The mutual funds are valued using the closing NAV.
Level 2: Level 2 hierarchy includes financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates.
Level 3: If one or more of the significant inputs is not based on the observable market data, the instrument is included in Level 3 hierarchy.
(C) VALUATION TECHNIQUES
Specific valuation techniques used to value financial instruments include
- the use of quoted market prices for mutual funds
- the use of quoted market prices for equity instruments
There are no items in the financial instruments, which required level 3 valuation.
5. Capital Management
Equity share capital and other equity are considered for the purpose of Companyâs capital management.
The Company manages its capital so as to safeguard its ability to continue as a going concern. The capital structure of the Company is based on Managementâs judgement of its strategic and day-to-day needs with a focus on total equity so as to maintain investor, creditors and market confidence.
The Management and the Board of Directors monitor the return on capital as well as the level of dividends to shareholders. The Company may take appropriate steps in order to maintain, or if necessary adjust, its capital structure.
6. Segment Information
A. Basis for segmentation
The Company operates only in one segment namely manufacturing and servicing of Electrolytic products. The products being sold under this segment are of similar nature. The Company''s Chief Operating Decision Maker (CODM) reviews the internal management reports prepared based on an aggregation of financial information for the Company on a periodic basis.
7 Employee Benefit Obligations
(a) Defined Contribution plans
The Company offers its employees defined contribution plan in the form of provident fund, family pension fund and superannuation fund. Provident fund and family pension fund cover substantially all regular employees while the superannuation fund covers certain executives. The Company makes specified monthly contributions towards employees provident fund to government administrative provident fund scheme which is a defined contribution plan. Contributions are paid during the period into separate funds under certain approved securities. While both the employees and the Company pay predetermined contributions into the provident fund, contributions into the family pension fund and the superannuation fund are made only by the Company. The contributions are normally based on a certain proportion of the employeeâs salary. The Company does not have any obligation beyond the amounts already contributed.
(b) Defined Benefit plans
Gratuity: The Company provides for gratuity, a defined benefit plan (the âGratuity Planâ) covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employeeâs salary and the tenure of employment. The Companyâs liability is actuarially determined (using the Projected Unit Credit method) at the end of each year. The fair value of the plan assets of the trust administered by the Company, is deducted from the gross obligation.
Notes:
1. Discount rate: The discount rate is based on the prevailing market yields of Indian government securities for the estimated term of the obligations.
2. Salary escalation rate: The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.
3. Assumptions regarding future mortality experience are set in accordance with the statistics published by the Life Insurance Corporation of India.
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice it is unlikely to occur, and changes in some of the assumptions may be correlated. The methods and types of assumption used in preparing the sensitivity analysis did not change compared to previous period.
Terms and conditions of transactions with related parties:
The sales to and purchases from related parties are made on terms equivalent to those that prevail in armâs length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. For the year ended 31 March 2018, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2017 - Rs. Nil, 01.04.2016 - Rs. 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.
8 Provisions
Warranties/ recoating
The Company offers warranties for one of the critical parts of certain electro chlorinators and for some of its coating / recoating services for an initial period of two years followed by support contracts for a period of four years in the case of electro chlorinators and for a period of six years in the case of coating, eight years in case of recoating services during which period amounts are recoverable from the customers based on pre-defined terms. Estimated costs from warranty terms standard to the deliverable are recognised when revenue is recorded for the related deliverable. The Company estimates its warranty costs standard to the deliverable based on historical warranty claim experience and applies this estimate to the revenue stream for deliverables under warranty. Future costs for warranties applicable to revenue recognised in the current period are charged to the revenue account.
The warranty accrual is reviewed periodically to verify that it properly reflects the remaining obligation based on the anticipated expenditures over the balance of the obligation period. Adjustments are made when the actual warranty claim experience differs from estimates. Provisions include estimated costs of support maintenance contracts to the extent such estimated costs are expected to exceed the expected recovery during the obligation period. No assets are recognised in respect of the expected recovery on support contracts.
9 First time adoption of Ind AS Transition to Ind AS:
For the purposes of reporting as set out in Note 1, the Company has transitioned its basis of accounting from accounting standards specified in the Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act IGAAP (hereinafter referred to as "IGAAP") to accounting standards notified as per Companies (Indian Accounting Standards) Rules, 2014 as amended (hereinafter referred to as "Ind AS"). The accounting policies set out in note 1 have been applied in preparing the financial statements for the year ended 31 March 2018, the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS balance sheet at 1 April 2016 (the âtransition dateâ).
In preparing the opening Ind AS balance sheet, the amounts reported in financial statements prepared in accordance with previous GAAP have been adjusted for the transition to Ind AS. An explanation of how the transition from previous GAAP to Ind AS has affected the financial performance, cash flows and financial position is set out in the following tables and the notes that accompany the tables. On transition, we did not revise estimates made under previous GAAP were not required except where required by Ind AS.
C. Reconciliation of Statement of Cash Flows
There were no material differences between the Statement of Cash Flows presented under Ind AS and under IGAAP.
Notes to the reconciliation:
1 Fair valuation of investments in mutual funds
Under previous GAAP, investments in mutual funds were measured at lower of cost or market price as of each reporting date.
Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments (other than equity instruments designated at FVOCI) have been recognised in the retained earnings at the date of transition and subsequently in profit or loss for the year ended 31 March 2017.
2 Fair valuation of investments in equity instruments
Under previous GAAP, investments in equity shares were measured at cost less provision for other than temporary decline in the value of such investments.
Under Ind AS, these investments are required to be measured at fair value. Fair value changes with respect to investments in equity instruments have been recognized in FVOCI - Equity investments reserve.
3 Proposed dividend
Under Indian GAAP, proposed dividends are recognized as a liability in the period to which they relate, irrespective of when they are declared. Under Ind-AS, a proposed dividend is recognised as a liability in the period in which it is declared by the Company (usually when approved by shareholders in a general meeting) or paid.
In the case of the Company, the declaration of dividend occurs after period end. Therefore, the liability recorded for this dividend and tax thereon, has been derecognised against retained earnings.
4 Remeasurements of post-employment benefit obligations
Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognized in Other Comprehensive Income (OCI) instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year.
5 Rectification of Employee Benefit Provision
It represents adjustment in respect of capped sick leave benefits as per Company policy which were considered as uncapped by the actuary in prior years.
6 Deferred tax adjustments :
Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP.
Mar 31, 2016
1 Segment information
The Companyâs primary (business) segment is singular viz. âElectrolytic Productsâ. Further, the Company caters mainly to the needs of the domestic market. The export turnover is not significant in proportion to the total turnover. As such, there are no reportable geographic segments either. Therefore, segment information required by Accounting Standard 17 (AS-17) notified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014, is not furnished.
2 Disclosure relating to provisions
Warranties/ recoating
The Company offers warranties for one of the critical parts of certain electro chlorinators and for some of its coating / recoating services for an initial period of two years followed for a period of four years in the case of electro chlorinators and for a period of six years in the case of coating, eight years in case of recoating services during which period amounts are recoverable from the customers based on pre-defined terms. Estimated costs from warranty terms standard to the deliverable are recognized when revenue is recorded for the related deliverable. The Company estimates its warranty costs standard to the deliverable based on historical warranty claim experience and applies this estimate to the revenue stream for deliverables under warranty. Future costs for warranties applicable to revenue recognized in the current period are charged to the revenue account.
The warranty accrual is reviewed periodically to verify that it properly reflects the remaining obligation based on the anticipated expenditures over the balance of the obligation period. Adjustments are made when the actual warranty claim experience differs from estimates. Provisions include estimated costs of support maintenance contracts to the extent such estimated costs are expected to exceed the expected recovery during the obligation period. No assets are recognized in respect of the expected recovery on support contracts.
Factors that could impact the estimated claim information include the Companyâs productivity, costs of materials, power and labour, and the actual recoveries on support contracts.
3 Employee benefits
a) Defined Contribution Plans
The Company offers its employees defined contribution plan in the form of provident fund, family pension fund and superannuation fund. Provident fund and family pension fund cover substantially all regular employees while the superannuation fund covers certain executives. The Company makes specified monthly contributions towards employees provident fund to government administrative provident fund scheme which is a defined contribution plan. Contributions are paid during the period into separate funds under certain approved securities. While both the employees and the Company pay predetermined contributions into the provident fund, contributions into the family pension fund and the superannuation fund are made only by the Company. The contributions are normally based on a certain proportion of the employeeâs salary. The Company does not have any obligation beyond the amounts already contributed.
b) Defined-Benefit Plans
The Company offers its employees defined-benefit plans in the form of a gratuity scheme. Benefits under the defined benefit plan is typically based on years of service and the employeeâs compensation (generally immediately before retirement). The gratuity scheme covers substantially all regular employees. The Company contributes funds to Life Insurance Corporation of India, which is irrevocable. Commitments are actuarially determined at year-end. The actuarial valuation is done based on âProjected Unit Creditâ method. Gains and losses of changed actuarial assumptions are charged to the statement of profit and loss.
i. Reconciliation of opening and closing balance of obligation
4 Taxation
a) The tax year for the Company being the year ending 31 March 2016, the ultimate tax liability will be determined on the basis of the results for the period 1 April 2015 to 31 March 2016.
b) The Company''s international transactions with associated enterprises are at arm''s length as per the independent accountant''s report for the year ended 31 March 2015. The Company is in the process of updating the documentation for the international transactions entered into with the associated enterprises during the period subsequent to 31 March 2016. Management believes that the Company''s international transactions with associated enterprises post 31 March 2015 continue to be at arm''s length and that the transfer pricing legislation will not have any impact on the financial statements particularly on the amount of the tax expense for the year and the amount of the provision for taxation at the year end.
5 Corporate Social Responsibility (CSR) expenditure
The Company has set up a Corporate Social Responsibility (CSR) Committee as per Section 135 and Schedule
VII of the Companies Act, 2013 (âthe Actâ) read with the Companies (Corporate Social Responsibility Policy) Rules, 2014. The Company is in the process of identifying the Projects for CSR spending. The efforts are being undertaken to implement the same in the financial year 2016-17.
a) Gross amount required to be spent by the Company for the fifteen months ended 31 March 2016 Rs. 21,46,994/-
b) Amount spent during the year Rs 704,439/-
6 Dues to micro, small and medium enterprises:
Under the Micro Small and Medium Enterprises Development Act, 2006, (MSMED) which came into force from October 2, 2006, certain disclosures are required to be made relating to Micro Small and Medium enterprises. On the basis of the information and records available with the Management, the following disclosures are made for the amounts due to the Micro Small and Medium enterprises, who have registered with the competent authorities:
7 Prior year comparatives
Previous yearâs figures have been regrouped/ reclassified as under, to confirm current yearâs classification. Figures for the 31 December 2014 were audited by a firm of chartered accountants other than B S R & Associates LLP.
Dec 31, 2014
1 Background
De Nora India Limited (''the Company'' or ''De Nora'') was incorporated in
June 1989 as Titanor Components Limited (Titanor'') and commenced
business in November 1989. The Company''s name was changed from Titanor
to De Nora on 27 June 2007. The Company has its manufacturing
facilities at Kundaim, Goa and is involved in the business of
manufacturing and servicing of Electrolytic products.
a. Rights, preferences and restrictions attached to equity shares
The Company has only one class of equity shares having a par value of
Rs 10 per share. Each holder of equity shares is entitled to one vote
per share. The Company declares and pays dividends in Indian rupees.
The dividend proposed by the Board of Directors is subject to the
approval of the shareholders in the ensuing Annual General Meeting.
During the year ended 31 December 2014, the amount of per share
dividend recognized as distribution to equity shareholders was Rs 1.5
per share (previous year: Rs 4 per share). The dividend appropriation
for the year ended December 2014 amounted to Rs 7,962,951 (previous
year: Rs 21,234,536) plus corporate dividend tax of Rs 1,353,304
(previous year: Rs 3,609,871)
In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the Company,
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
shareholders.
b. Aggregate number of bonus shares issued, shares issued for
consideration other than cash and shares bought back during the period
of five years immediately preceding the reporting date Pursuant to the
Shareholders'' approval for buyback of equity shares under section 77A
of the Companies Act, 1956, the Company has bought back 135,451 during
the year ended 31 December 2012, through open market transactions for
an aggregate amount of Rs 13,432,195. The said shares have been
subsequently extinguished. Capital redemption reserve has been created
by transfer of Rs 1,354,510 during the year ended 31 December 2012.
from General Reserve being the nominal value of shares bought back in
terms of section 77AA of the Companies Act, 1956.
31 December, 2014 31 December, 2013
2 Contingent liabilities
Claims in respect of:
Excise matters 1,467,590 1,467,590
3 Segment information
The Company''s primary (business) segment is singular viz. "Electrolytic
Products". Further, the Company caters mainly to the needs of the
domestic market. The export turnover is not significant in proportion
to the total turnover. As such, there are no reportable geographic
segments either. Therefore, segment information required by Accounting
Standard No. 17 (AS-17) notified under the Companies (Accounting
Standards) Rules, 2006, is not furnished.
4 Disclosure relating to provisions
Warranties/ recoating
The Company offers warranties for one of the critical parts of certain
electrochlorinators and for some of its coating / recoating services
for an initial period of two years followed by support contracts for a
period of four years in the case of electrochlorinators and for a
period of six years in the case of coating, eight years incase of
recoating services during which period amounts are recoverable from the
customers based on pre-defined terms. Estimated costs from warranty
terms standard to the deliverable are recognised when revenue is
recorded for the related deliverable. The Company estimates its
warranty costs standard to the deliverable based on historical warranty
claim experience and applies this estimate to the revenue stream for
deliverables under warranty. Future costs for warranties applicable to
revenue recognised in the current period are charged to the revenue
account.
The warranty accrual is reviewed periodically to verify that it
properly reflects the remaining obligation based on the anticipated
expenditures over the balance of the obligation period. Adjustments are
made when the actual warranty claim experience differs from estimates.
Provisions include estimated costs of support maintenance contracts to
the extent such estimated costs are expected to exceed the expected
recovery during the obligation period. No assets are recognised in
respect of the expected recovery on support contracts.
Factors that could impact the estimated claim information include the
Company''s productivity, costs of materials, power and labour, and the
actual recoveries on support contracts.
The movement in the provision for warranties/ recoating are summarised
as under :
5 Employee benefits
a) Defined-Contribution Plans
The Company offers its employees defined contribution plan in the form
of provident fund, family pension fund and superannuation fund.
Provident fund and family pension fund cover substantially all regular
employees while the superannuation fund covers certain executives. The
company makes specified monthly contributions towards employees
provident fund to government administrative provident fund scheme which
is a defined contribution plan. Contributions of superannuation fund
are made to LIC. While both the employees and the Company pay
predetermined contributions into the provident fund, contributions into
the family pension fund and the superannuation fund are made only by
the Company. The contributions are normally based on a certain
proportion of the employee''s salary. The comapny does not have any
obligation beyond the amounts already contributed.
b) Defined-Benefit Plans
The Company offers its employees defined-benefit plans in the form of a
gratuity scheme. Benefits under the defined benefit plan is typically
based on years of service and the employee''s compensation (generally
immediately before retirement). The gratuity scheme covers
substantially all regular employees. The Company contributes funds to
Life Insurance Corporation of India, which is irrevocable. Commitments
are actuarially determined at year-end. The actuarial valuation is done
based on "Projected Unit Credit" method. Gains and losses of changed
actuarial assumptions are charged to the statement of profit and loss.
6 Taxation
a) The tax year for the Company being the year ending 31 March 2015,
the ultimate tax liability will be determined on the basis of the
results for the period 1 April 2014 to 31 March 2015.
b) The Company''s international transactions with associated enterprises
are at arm''s length as per the independent accountant''s report for the
year ended 31 March 2014. The Company is in the process of updating the
documentation for the international transactions entered into with the
associated enterprises during the period subsequent to 31 March 2014.
Management believes that the company''s international transactions with
associated enterprises post 31 March 2014 continue to be at arm''s
length and that the transfer pricing legislation will not have any
impact on the financial statements particularly on the amount of the
tax expense for the year and the amount of the provision for taxation
at the year end.
7 Previous year''s figures
Certain comparative figures have been reclassified to conform to the
presentation adopted in these financial statements as under.
Dec 31, 2013
1 Background
De Nora India Limited (''the Company'' or ''De Nora'') was incorporated in
June 1989 as Titanor Components Limited (Titanor'') and commenced
business in November 1989. The Company''s name was changed from Titanor
to De Nora on 27th June, 2007. The Company has its manufacturing
facilities at Kundaim, Goa and is involved in the business of
manufacturing and servicing of Electrolytic products.
2. Segment information
The Company''s primary (business) segment is singular viz. "Electrolytic
Products". Further, the Company caters mainly to the needs of the
domestic market. The export turnover is not significant in proportion to
the total turnover. As such, there are no reportable geographic
segments either. Therefore, segment information required by Accounting
Standard No. 17 (AS-17) notified under the Companies (Accounting
Standards) Rules, 2006, is not furnished.
3. Disclosure relating to provisions
Warranties/recoating
The Company offers warranties for one of the critical parts of certain
electro chlorinators and for some of its coating/ recoating services for
an initial period of two years followed by support contracts for a
period of four years in the case of electro chlorinators and for a
period of six years in the case of coating, eight years in case of
recoating services during which period amounts are recoverable from the
customers based on pre-defined terms. Estimated costs from warranty
terms standard to the deliverable are recognised when revenue is
recorded for the related deliverable. The Company estimates its
warranty costs standard to the deliverable based on historical warranty
claim experience and applies this estimate to the revenue stream for
deliverables under warranty. Future costs for warranties applicable to
revenue recognised in the current period are charged to the revenue
account.
The warranty accrual is reviewed periodically to verify that it
properly reflects the remaining obligation based on the anticipated
expenditures over the balance of the obligation period. Adjustments are
made when the actual warranty claim experience differs from estimates.
Provisions include estimated costs of support maintenance contracts to
the extent such estimated costs are expected to exceed the expected
recovery during the obligation period. No assets are recognised in
respect of the expected recovery on support contracts.
Factors that could impact the estimated claim information include the
Company''s productivity, costs of materials, power and labor, and the
actual recoveries on support contracts.
4. Employee benefits
a) Defend-Contribution Plans
The Company offers its employees defined contribution plan in the form
of provident fund, family pension fund and superannuation fund.
Provident fund and family pension fund cover substantially all regular
employees while the superannuation fund covers certain executives.
Contributions are paid during the year into separate funds under
certain fiduciary-type arrangements. While both the employees and the
Company pay predetermined contributions into the provident fund,
contributions into the family pension fund and the superannuation fund
are made only by the Company. The contributions are normally based on a
certain proportion of the employee''s salary. The Company does not have
any obligation beyond the amounts already contributed.
b) Defined -Benefit Plans
The Company offers its employees defined -benefit plans in the form of a
gratuity scheme. Benefits under the defined benefit plan is typically
based on years of service and the employee''s compensation (generally
immediately before retirement). The gratuity scheme covers
substantially all regular employees. The Company contributes funds to
Life Insurance Corporation of India, which is irrevocable. Commitments
are actuarially determined at year-end. The actuarial valuation is done
based on "Projected Unit Credit" method. Gains and losses of changed
actuarial assumptions are charged to the statement of profit and loss.
5. Taxation
a) The tax year for the Company being the year ending 31 March, 2014,
the ultimate tax liability will be determined on the basis of the
results for the period 1 April, 2013 to 31 March, 2014.
b) The Company''s international transactions with associated enterprises
are at arm''s length as per the independent accountant''s report for the
year ended 31 March, 2013. The Company is in the process of updating
the documentation for the international transactions entered into with
the associated enterprises during the period subsequent to 31 March,
2013. Management believes that the company''s international transactions
with associated enterprises post 31 March, 2013 continue to be at arm''s
length and that the transfer pricing legislation will not have any
impact on the financial statements particularly on the amount of the tax
expense for the year and the amount of the provision for taxation at
the year end.
Dec 31, 2012
1 Background
De Nora India Limited (''the Company'' or ''De Nora'') was incorporated in
June 1989 as Titanor Components Limited (''Titanor'') and commenced
business in November 1989. The Company''s name was changed from Titanor
to De Nora on 27th June, 2007. The Company has its manufacturing
facilities at Kundaim, Goa and is involved in the business of
manufacturing and servicing of Electrolytic products.
a. Rights, preferences and restrictions attached to equity shares
The Company has only one class of equity shares having a par value of
Rs. 10 per share. Each holder of equity shares is entitled to one vote
per share. The Company declares and pays dividends in Indian rupees.
The dividend proposed by the Board of Directors is subject to the
approval of the shareholders in the ensuing Annual General Meeting.
During the year ended 31 December, 2012, the amount of per share
dividend recognized as distribution to equity shareholders was Rs. 7
per share (previous year: Rs. 6 per share). The dividend appropriation
for the year ended December 2012 amounted to Rs. 37,160,438 (previous
year: Rs. 32,664,510) plus corporate dividend tax of Rs. 6,028,352
(previous year: Rs. 5,299,000)
In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the Company,
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
shareholders.
b. Aggregate number of bonus shares issued, shares issued for
consideration other than cash and shares bought back during the period
of five years immediately preceding the reporting date
Pursuant to the Shareholders'' approval for buyback of equity shares
under section 77A of the Companies Act, 1956, the Company has bought
back 135,451 equity shares (previous year: 111,049) through open market
transactions for an aggregate amount of Rs. 13,432,195 (previous year:
Rs. 9,447,490). The said shares have been subsequently extinguished.
Capital redemption reserve has been created by transfer of Rs.
1,354,510 (previous year: Rs. 1,110,490) from General Reserve being the
nominal value of shares bought back in terms of Section 77AA of the
Companies Act, 1956.
31 December, 2012 31 December, 2011
2. Contingent liabilities
Claims in respect of Excise matters 1,467,590 1,467,590
3. Segment information
The Company''s primary (business) segment is singular viz. "Electrolytic
Products". Further, the Company caters mainly to the needs of the
domestic market. The export turnover is not significant in proportion
to the total turnover. As such, there are no reportable geographic
segments either. Therefore, segment information required by Accounting
Standard No. 17 (AS-17) notified under the Companies (Accounting
Standards) Rules, 2006, in respect thereof is not furnished.
4. Disclosure relating to provisions Warranties/recoating
The Company offers warranties for one of the critical parts of certain
electrochlorinators and for some of its coating / recoating services
for an initial period of two years followed by support contracts for a
period of four years in the case of electrochlorinators and for a
period of six years in the case of coating, eight years in case of
recoating services during which period amounts are recoverable from the
customers based on pre-defined terms. Estimated costs from warranty
terms standard to the deliverable are recognised when revenue is
recorded for the related deliverable. The Company estimates its
warranty costs standard to the deliverable based on historical warranty
claim experience and applies this estimate to the revenue stream for
deliverables under warranty. Future costs for warranties applicable to
revenue recognised in the current period are charged to the revenue
account.
The warranty accrual is reviewed periodically to verify that it
properly reflects the remaining obligation based on the anticipated
expenditures over the balance of the obligation period. Adjustments are
made when the actual warranty claim experience differs from estimates.
Provisions include estimated costs of support maintenance contracts to
the extent such estimated costs are expected to exceed the expected
recovery during the obligation period. No assets are recognised in
respect of the expected recovery on support contracts.
Factors that could impact the estimated claim information include the
Company''s productivity, costs of materials, power and labour, and the
actual recoveries on support contracts.
5. Employee benefits
a) Defined-Contribution Plans
The Company offers its employees defined contribution plan in the form
of provident fund, family pension fund and superannuation fund.
Provident fund and family pension fund cover substantially all regular
employees while the superannuation fund covers certain executives.
Contributions are paid during the year into separate funds under
certain fiduciary-type arrangements. While both the employees and the
Company pay predetermined contributions into the provident fund,
contributions into the family pension fund and the superannuation fund
are made only by the Company. The contributions are normally based on a
certain proportion of the employee''s salary.
b) Defined-Benefit Plans
The Company offers its employees defined-benefit plans in the form of a
gratuity scheme. Benefits under the defined benefit plan is typically
based on years of service and the employee''s compensation (generally
immediately before retirement). The gratuity scheme covers
substantially all regular employees. The Company contributes funds to
Life Insurance Corporation of India, which is irrevocable. Commitments
are actuarially determined at year-end. The actuarial valuation is done
based on "Projected Unit Credit" method. Gains and losses of changed
actuarial assumptions are charged to the statement of profit and loss.
6. Transfer pricing
The Company''s international transactions with associated enterprises
are at arm''s length as per the independent accountant''s report for the
year ended 31 March, 2012. The Company is in the process of updating
the documentation for the international transactions entered into with
the associated enterprises during the period subsequent to 31 March,
2012. Management believes that the company''s international transactions
with associated enterprises post 31 March, 2012 continue to be at arm''s
length and that the transfer pricing legislation will not have any
impact on the financial statements particularly on the amount of the
tax expense for the year and the amount of the provision for taxation
at the year end.
7. Previous year''s figures
The financial statements for the year ended 31 December, 2011 had been
prepared as per the then applicable, pre-revised Schedule VI to the
Act. Consequent to the notification of Revised Schedule VI under the
Act the financial statements for the year ended 31 December, 2012 are
prepared as per Revised Schedule VI. Accordingly, the previous year
figures have also been reclassified to conform to this year''s
classification. The adoption of Revised Schedule VI for previous year
figures does not impact recognition and measurement principles followed
in preparation of financial statements.
Dec 31, 2011
1 Background
De Nora India Limited ('the Company' or 'De Nora') was
incorporated in June 1989 as Titanor Components Limited ('Titanor')
and commenced business in November 1989. The Company's name was
changed from Titanor to De Nora on 27th June 2007. The Company has its
manufacturing facilities at Kundaim, Goa and is involved in the
business of manufacturing and servicing of Electrolytic products.
2.1 Disclosure relating to provisions
Warranties/ recoating
The Company offers warranties for one of the critical parts of certain
electrochlorinators and for some of its coating / recoating services
for an initial period of two years followed by support contracts for a
period of four years in the case of electrochlorinators and for a
period of six years in the case of coating, eight years incase of
recoating services during which period amounts are recoverable from the
customers based on pre-defined terms. Estimated costs from warranty
terms standard to the deliverable are recognised when revenue is
recorded for the related deliverable. The Company estimates its
warranty costs standard to the deliverable based on historical warranty
claim experience and applies this estimate to the revenue stream for
deliverables under warranty. Future costs for warranties applicable to
revenue recognised in the current period are charged to the revenue
account.
The warranty accrual is reviewed periodically to verify that it
properly reflects the remaining obligation based on the anticipated
expenditures over the balance of the obligation period. Adjustments are
made when the actual warranty claim experience differs from estimates.
Provisions include estimated costs of support maintenance contracts to
the extent such estimated costs are expected to exceed the expected
recovery during the obligation period. No assets are recognised in
respect of the expected recovery on support contracts.
Factors that could impact the estimated claim information include the
Company's productivity, costs of materials, power and labour, and the
actual recoveries on support contracts.
2.2 Employee benefits
a) Defined-Contribution Plans
The Company offers its employees defined contribution plan in the form
of provident fund, family pension fund and superannuation fund.
Provident fund and family pension fund cover substantially all regular
employees while the superannuation fund covers certain executives.
Contributions are paid during the year into separate funds under
certain fiduciary-type arrangements. While both the employees and the
Company pay predetermined contributions into the provident fund,
contributions into the family pension fund and the superannuation fund
are made only by the Company. The contributions are normally based on a
certain proportion of the employee's salary.
b) Defined-Benefit Plans
The Company offers its employees defined-benefit plans in the form of a
gratuity scheme. Benefits under the defined benefit plan is typically
based on years of service and the employee's compensation (generally
immediately before retirement). The gratuity scheme covers
substantially all regular employees. The Company contributes funds to
Life Insurance Corporation of India, which is irrevocable. Commitments
are actuarially determined at year-end. The actuarial valuation is done
based on "Projected Unit Credit" method. Gains and losses of
changed actuarial assumptions are charged to the profit and loss
account.
@ Cathodic protection (anti corrosion) systems include diverse bought
out components which are affixed to the electrolytic products
manufactured by the Company. While the value corresponds to the
aggregate cost of such assemblies in inventory as at the year end, the
quantities reported relate to elements manufactured and held in
inventory as at the year end.
@ Cathodic protection (anti corrosion) systems include diverse bought
out components which are affixed to the electrolytic products
manufactured by the Company. While the value corresponds to the
aggregate amounts invoiced for such assemblies by the Company, the
quantities reported relate to the aggregate quantities of elements
manufactured and invoiced during the year.
2.3 Transfer pricing
The Company's international transactions with associated enterprises
are at arm's length as per the independent accountant's report for the
year ended 31 March 2011. The Company is in the process of updating the
documentation for the international transactions entered into with the
associated enterprises during the period subsequent to 31 March 2011.
Management believes that the company's international transactions with
associated enterprises post 31 March 2011 continue to be at arm's
length and that the transfer pricing legislation will not have any
impact on the financial statements particularly on the amount of the
tax expense for the year and the amount of the provision for taxation
at the year end.
Dec 31, 2010
1. Background
De Nora India Limited (the Company or De Nora) was incorporated in
June 1989 as Titanor Components Limited (Titanor) and commenced
business in November 1989. The Companys name was changed fromTitanorto
De Nora on 27th June 2007. The Company has its manufacturing facilities
at Kundaim, Goa and is involved in the business of manufacturing and
servicing of Electrolytic products.
Year ended Year ended
31st Dec, 2010 31st Dec, 2009
2.1 Contingent liabilities
Claims in respect of:
Excise matters 1,467,590 1,868,748
2.2 Disclosure relating to provisions
Warranties/ recoating
The Company offers warranties for one of the critical parts of certain
electrochlorinators and for some of its coating / recoating services
for an initial period of two years followed by support contracts for a
period of four years in the case of electrochlorinators and for a
period of six years in the case of coating, eight years incase of
recoating services during which period amounts are recoverable from the
customers based on pre-defined terms. Estimated costs from warranty
terms standard to the deliverable are recognised when revenue is
recorded for the related deliverable. The Company estimates its
warranty costs standard to the deliverable based on historical warranty
claim experience and applies this estimate to the revenue stream for
deliverables under warranty. Future costs for warranties applicable to
revenue recognised in the current period are charged to the revenue
account.
The warranty accrual is reviewed periodically to verify that it
properly refects the remaining obligation based on the anticipated
expenditures over the balance of the obligation period. Adjustments are
made when the actual warranty claim experience differs from estimates.
Provisions include estimated costs of support maintenance contracts to
the extent such estimated costs are expected to exceed the expected
recovery during the obligation period. No assets are recognised in
respect of the expected recovery on support contracts.
Factors that could impact the estimated claim information include the
Companys productivity, costs of materials, power and labour, and the
actual recoveries on support contracts.
2.3 Employee benefits
a) defined-Contribution Plans
The Company offers its employees defined contribution plan in the form
of provident fund, family pension fund and superannuation fund.
Provident fund and family pension fund cover substantially all regular
employees while the superannuation fund covers certain executives.
Contributions are paid during the year into separate funds under
certain fduciary-type arrangements. While both the employees and the
Company pay predetermined contributions into the provident fund,
contributions into the family pension fund and the superannuation fund
are made only by the Company. The contributions are normally based on a
certain proportion of the employees salary.
b) defined-benefit Plans
The Company offers its employees defined-benefit plans in the form of a
gratuity scheme. benefits under the defined benefit plan is typically
based on years of service and the employees compensation (generally
immediately before retirement). The gratuity scheme covers
substantially all regular employees. The Company contributes funds to
Life Insurance Corporation of India, which is irrevocable. Commitments
are actuarially determined at year-end. The actuarial valuation is
done based on "Projected Unit Credit" method. Gains and losses of
changed actuarial assumptions are charged to the Profit and loss
account.
2.4 Transfer pricing
The Companys international transactions with associated enterprises
are at arms length as per the independent accountants report for the
year ended 31 March, 2010. The Company is in the process of updating
the documentation for the international transactions entered into with
the associated enterprises during the period subsequent to 31 March,
2010. Management believes that the companys international transactions
with associated enterprises post 31 March, 2010 continue to be at arms
length and that the transfer pricing legislation will not have any
impact on the financial statements particularly on the amount of the tax
expense for the year and the amount of the provision for taxation at
the year end.
2.5 Prior year figures
Previous years figures have been regrouped / reclassified to confirm to
the current years presentation.
Dec 31, 2009
1 Background
De Nora India Limited (the Company or De Nora) was incorporated in
June 1989 as Titanor Components Limited (Titanor) and commenced
business in November 1989. The Companys name was changed from Titanor
to De Nora on 27th June 2007. The Company has its manufacturing
facilities at Kundaim, Goa and is involved in the business of
manufacturing and servicing of Electrolytic products.
2. Provisions and contingent liabilities
The Company creates a provision when there is present obligation as a
result of a past event that probably requires an outflow of resources
and a reliable estimate can be made of the amount of the obligation. A
disclosure for a contingent liability is made when there is a possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. When there is a possible obligation or
a present obligation in respect of which the likelihood of outflow of
resources is remote, no provision or disclosure is made.
3 Related party transactions
a) Parties where control exists
Name of related party Relationship
Oronzio De Nora International B.V. Holding Company (holds 51.29% of
the equity
share capital as at 31 December 2009)
Industrie De Nora S.p.A. Ultimate Holding Company (UHC)
b) Other related parties with whom transactions have taken place during
the year.
Relationship Name of related party
i. Entities under common control (EUCC) Uhdenora S.p.A.
Industrie De Nora S.p.A., Singapore Branch
De Nora Elettrodi (Suzhou) Ltd.
De Nora Tech Inc.
ii. Fellow Subsidiaries (FS) De Nora Deutschland GmbH
De Nora Do Brasil Ltda.
iii. Key Management personnel (KMP) S .C. Jain (Managing Director)
4. Disclosure relating to provisions.
Warranties/ recoating
The Company offers warranties for one of the critical parts of certain
electrochlorinators and for some of its coating / recoating services
for an initial period of two years followed by support contracts for a
period of four years in the case of electrochlorinators and for a
period of six years in the case of coating, eight years in case of
recoating services during which period amounts are recoverable from the
customers based on pre-defined terms. Estimated costs from warranty
terms standard to the deliverable are recognised when revenue is
recorded for the related deliverable. The Company estimates its
warranty costs standard to the deliverable based on historical warranty
claim experience and applies this estimate to the revenue stream for
deliverables under warranty. Future costs for warranties applicable to
revenue recognised in the current period are charged to the revenue
account.
The warranty accrual is reviewed periodically to verify that it
properly reflects the remaining obligation based on the anticipated
expenditures over the balance of the obligation period. Adjustments are
made when the actual warranty claim experience differs from estimates.
Provisions include estimated costs of support maintenance contracts to
the extent such estimated costs are expected to exceed the expected
recovery during the obligation period. No assets are recognised in
respect of the expected recovery on support contracts.
Factors that could impact the estimated claim information include the
Companys productivity, costs of materials, power and labour, and the
actual recoveries on support contracts.
5. Employee benefits
a) Defined-Contribution Plans.
The Company offers its employees defined contribution plan in the form
of provident fund, family pension fund and superannuation fund.
Provident fund and family pension fund cover substantially all regular
employees while the superannuation fund covers certain executives.
Contributions are paid during the year into separate funds under
certain fiduciary-type arrangements. While both the employees and the
Company pay predetermined contributions into the provident fund,
contributions into the family pension fund and the superannuation fund
are made by only the Company. The contributions are normally based on a
certain proportion of the employees salary.
b) Defined-Benefit Plans
The Company offers its employees defined-benefit plans in the form of a
gratuity scheme. Benefits under the defined benefit plan is typically
based on years of service and the employees compensation (generally
immediately before retirement). The gratuity scheme covers
substantially all regular employees. The Company contributes funds to
Life Insurance Corporation of India, which is irrevocable. Commitments
are actuarially determined at year-end. The actuarial valuation is done
based on "Projected Unit Credit" method. Gains and losses of changed
actuarial assumptions are charged to the profit and loss account.
6. Transfer pricing
The Companys international transactions with associated enterprises
are at arms length as per the independent accountants report for the
year ended 31 March 2009. The Company is in the process of updating the
documentation for the international transactions entered into with the
associated enterprises during the period subsequent to 31 March 2009.
Management believes that the companys international transactions with
associated enterprises post 31 March 2009 continue to be at arms
length and that the transfer pricing legislation will not have any
impact on the financial statements particularly on the amount of the
tax expense for the year and the amount of the provision for taxation
at the year end.
7. Prior year figures
Previous years figures have been regrouped / reclassified to conform
to the current years presentation.
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Stocks To Buy Today, Dec 12: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Friday -
Market Outlook 2026: Kotak Securities Sees Nifty 50 at 30,000; THESE 4 Sectors Lead Rally, Gold To Stay Strong -
Stocks To Buy Today, Dec 10: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Wednesday -
D-Street Bleeds For 2nd Day! Sensex Slumps 678 Pts; Nifty Cracks 25,800; Why Stock Market Is Falling Today? -
Stocks To Buy Today, Dec 9: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Tuesday -
Stocks To Buy Today, Dec 8: Top 4 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Monday -
Stock Market Alert! Major Pre-Open Session Change From Dec 8: Full Timings, Rules & All You Need To Know -
Bank Nifty Surges: RBI’s 25 bps Rate Cut Triggers Strong Upside in Major Banking Stocks -
Closing Bell: Sensex Ends 158 pts Higher, Nifty Climbs Above 26,000; Hero MotoCorp, HAL Up 2% Each -
Stocks To Buy Today, Dec 4: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Thursday
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