Click it and Unblock the Notifications
Notes to Accounts of MIRC Electronics Ltd.
Mar 31, 2025
(b) Terms and rights attached to Equity Shares
The Company has only one class of equity shares having par value of Re.1 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, if any on the equity shares is recommended by the Board and approved by the shareholders at the 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.
(c) The Company has not issued any equity shares as bonus or for consideration other than cash and has not bought back any shares during the period of five years immediately preceding 31st March, 2025.
(d) ''The Board of Directors in their meeting held on 2nd September, 2024 approved raising of funds through issuance and allotment of equity shares having face value of Re. 1/- (Rupee One Only) ("Equity Shares") up to an aggregate amount of up to '' 50,00,00,000/-(Rupees Fifty Crores Only) on right issue basis ("Rights Issue"). The Company had applied to BSE Limited and National Stock Exchange of India Limited for In-principal approval for Rights Issue on 14th January, 2025 and received their approval on 18th February, 2025 and 7th March, 2025 respectively.
Nature and purpose of Reserves
Capital Reserve : The amount is largely on account of forfeiture of money received against share warrants and reduction in share capital.
Capital Redemption Reserve : The capital redemption reserve was created for buyback / redemption of shares.
Securities Premium Account : Securities Premium Reserve is used to record the premium on issue of shares and is utilised in accordance with the provisions of the Companies Act, 2013.
General Reserve : The general reserves comprises of transfer of profits from retained earnings for appropriation purposes. The reserves can be distributed / utilised by the Company in accordance with the provision of Companies Act, 2013.
Share option outstanding account : Share option outstanding account is used to recognise the value of equity-settled share-based payments provided to employees as per IND AS 102 ''Share Based Payments'', including key management personnel, as part of their remuneration
Since the Company has been incurring losses in recent past periods in addition to the carried forward losses, the Company has not recognized Deferred Tax Asset as it is not probable that sufficient future taxable profit will be available against which unused tax losses can be utilised.
Deferred tax assets are recognised only to the extent it is probable that either future taxable profits or reversal of deferred tax liabilities will be available, against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.
The Company also has tax losses and unabsorbed depreciation of ''14,035.43 lakhs on which deferred tax asset is not recognised. Out of these losses, ''7,208.91 lakhs does not have any expiry and '' 6,826.52 lakhs will expire over a period of 8 years.
Cash Credit Facility and WCDL from banks is secured by pari passu charge in favour of the bankers by mortgage / hypothecation of Company''s immovable and movable properties at Wada, Onida House and Roorkee and immovable properties at Vasai and Chiplun. Loan from NBFC is secured by Registered mortgage of Mahal Industrial Estate property of Company.
Unsecured loans taken from Mr.Kaval Mirchandani of ''200 lakhs is for the period 6th October, 2023 to 5th October, 2025. Unsecured loans taken from Mr.Vijay Mansukhani of ''150 lakhs is for the period 21st March, 2024 to 20th March, 2026. Unsecured loans taken from Mr.Gulu Mirchandani of ''100 lakhs is for the period period 21st March, 2024 to 20th March, 2026 and ''366 lacs is for the period 27th March, 2024 to 26th March, 2026. All the loans are taken at an interest of 8% per annum. There is no interest payable as per waiver letter received for all the respective parties for the current year..
In respect of the non-current borrowings, the Company has to comply with certain debt covenants as per the terms of issue of one of the term loans. As at the end of the reporting year, the Company has not met the debt covenants as required by the sanctioned letter. Hence the Company has classified an amount of ''1,223 lakhs ( 31st March, 2024 - ''1,639.34 lakhs) of non-current borrowings as a part of current borrowings as at 31st March 2025.
Trade payables includes acceptances which represents amount payable to banks on due date as per usance period of letter of credit (LC''s) issued to material vendors under non fund based working capital facility approved by banks for the Company. The arrangements are interest bearing with a maturity ranging from 0 to 90 days. All other trade payables are non interest bearing and are normally settled on 30 days terms. For liquidity risk related to trade payables refer note 43.
The Company recognises provision for warranties in respect of the products that it sells. These are reviewed at each balance sheet date and adjusted to reflect the current estimates. A provision is recognised for expected warranty claims on products sold during the year, based on past experience of the level of repairs. It is expected that most of these costs will be incurred in the next financial year. Assumptions used to calculate the provision for warranties are based on current sales levels and past trend of the warranty expenses.
The Company had an investment in Adonis Electronics Pvt. Ltd. (AEPL) Comprising of 2650, 0.01% Cumulative Redeemable Preference shares of ''10 each. AEPL has received an order from the National Company Law Tribunal, Mumbai (NCLT) dated 1st February,2024 to reduce its Preference share capital of ''0.26 lacs (Comprising of 2650 units of ''10 each) to ''Nil by paying the Company ''10.50 lakhs againsts settlement of the Preference Shares held by the Company shown as impairment provision of investements in the previous year 2023-24.
|
38 Contingent Liabilities and Commitments |
||
|
31st March 2025 |
31st March 2024 |
|
|
Contingent Liabilities |
'' in lakhs |
'' in lakhs |
|
a) Guarantees given by Bank against which ''541.40 lakhs (31st March, 2024''242.90 lakhs) has been deposited as margin money. |
2,435.04 |
1,551.69 |
|
b) Income tax demands in respect of which appeals have been filed |
66.32 |
159.09 |
|
c) Excise Duty, Service Tax, VAT and Custom Duty in respect of which appeals have been filed |
4,698.26 |
6,127.98 |
|
d) Claims made against the Company not acknowledged as debts Commitments |
820.56 |
838.07 |
|
Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) |
11.48 |
3.58 |
In relation to above contingent liabilities, the Company has been advised by its legal counsel that it is possible, but not probable, that the action will succeed and accordingly no provision for liability has been recognised in the financial statements.
Future cash flows in respect of above matters are determinable only on receipt of judgements/decisions pending at various forums/ authorities.
39 Employee Benefitsa) Defined contribution plans
The Company has recognised an expense of ''216.96 lakhs (31st March, 2024 : ''222.80 lakhs) towards defined contribution plans, in respect of Provident Fund.
b) Defined benefit plans Gratuity
The Company has a defined benefit gratuity plan. The gratuity plan is primarily governed by the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of five years are eligible for gratuity. The level of benefits provided depends on the member''s length of service and salary at the retirement date. Company has covered its gratuity liability by a Group Gratuity Policy named ''Employee Group Gratuity Assurance Scheme'' issued by LIC of India. Under the plan, employee at retirement is eligible for benefit which will be equal to 15 days'' salary for each completed year of service.
Composition of the plan assets is as follows:
Plan asset is maintained with Life Insurance Corporation of India. In the absence of detailed information regarding plan assets which is funded with Insurance Companies, the composition of each major category of plan assets, the percentage or amount for each category to the fair value of plan assets has not been disclosed.
The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
The sensitivity analysis presented above may not be representative of the actual change in the Defined Benefit Obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. Furthermore, in presenting the above sensitivity analysis, the present value of the Defined Benefit Obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the Defined Benefit Obligation as recognised in the balance sheet. There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
The weighted average duration of the projected benefit obligation is approximately 7 years (31st March, 2024 : 7 years). The expected contribution to be made by the Company during the financial year 2025-26 is ''143.77 lakhs (31st, March, 2024 : '' 143.50 lakhs).
Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.
Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance Company and a default will wipe out all the assets. Although probability of this is very low as insurance companies have to follow Para 139 (c) Characteristics of defined benefit plans.
Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk
The Company uses the following hierarchy for determining and/or disclosing the fair value of financial instruments by valuation techniques:
Level 1: Fair value measurement are those derived from quoted prices (unadjusted) in active markets for identical assets and liabilities.
Level 2: Fair value measurements are those derived from inputs other than quoted prices that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
Level 3: Fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs)
There were no transfers between Level 1 and Level 2 during the year.
Terms and conditions of transactions with related parties
The transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31st March, 2025, the Company has not recorded any impairment of receivables relating to amounts owed by related parties. 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.
There is no loan outstanding with any related party.
42. Corporate Social Responsibility
The statutory provisions of Section 135(5) of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 with respect to spending in CSR activities are not applicable to the Company for the year ended 31st March, 2025.
43. Financial risk management objectives and policies
The Company''s principal financial liabilities comprises of loans and borrowings, trade and other payables, and lease liabilities. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables and cash and cash equivalents that are derived directly from its operations.
The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company is exposed to market risk, credit risk and liquidity risk.
The Company''s senior management oversees the management of these risks. The senior professionals working to manage the financial risks and the appropriate financial risk governance framework for the Company are accountable to the Board of Directors and Audit Committee. This process provides assurance to Company''s senior management that the Company''s financial risk-taking activities are governed by appropriate policies and procedures and that financial risk are identified, measured and managed in accordance with Company policies and Company risk objective.
The Board of Directors reviews and agrees policies for managing each of these risks which are summarized as below:
(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 prices comprises two types of risk: currency rate risk and interest rate risk. Financial instruments affected by market risks include loans and borrowings, deposits and foreign currency receivables and payables. The sensitivity analysis in the following sections relate to the position as at 31st March, 2025 and 31st March, 2024. The analysis exclude the impact of movements in market variables on the carrying values of gratuity and other post-retirement obligations; provisions; and the non-financial assets and liabilities.
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 Companies operating activities that is buying of Raw Material and Finished Goods from international buyers. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies. The Company manages its foreign currency risk by hedging transactions that are expected to occur within a maximum 12 month period for hedges of purchases. The Company hedges its exposure to fluctuations on the translation into INR of its imports operations. This foreign currency risk is hedged by using foreign currency forward contracts.
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''s borrowings are from commercial banks to meet the working capital requirements for operation of the business. The banks generally charge the card rate to the Company based on annual appraisal by internal and external ratings. There is no major fluctuation on those interest rates charged by the bank during the period under audit.
If the interest rates had been 50 basic points higher or lower and all the other variables were held constant, the effect of interest expense for the respective financial years and consequent effect on company''s profit in that financial year would have been as below
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities including foreign exchange transactions. The Company generally deals with parties which has worthiness based on Company''s internal assessment.
â - -- -- â --------- â--â - ----------I â â--
Refer Note 9 for credit risk and other information in respect of trade receivables. Other receivables as stated above are due from the parties under normal course of the business and the Company has made provision as per ECL model. The Company has not acquired any credit impaired asset. There was no modification in any financial assets.
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. The Company''s objective is to at all times maintain optimum levels of liquidity to meet its cash and liquidity requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. Processes and policies related to such risks are overseen by senior management. Management monitors the Company''s liquidity position through rolling forecasts on the basis of expected cash flows. The Company assessed the concentration of risk with respect to its debt and concluded it to be low.
The table below summarizes the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments.
The Company considers entire business under one segment i.e. Consumer Durable products. Further, there is no separately identifiable geographical segment and hence no reporting is made for segment. During the year, revenue from four customers (31st March, 2024: three) is more than 25% of total revenue. Revenue from one customer of the Company represents ''7909.73 lakhs for the year ended 31st March, 2025 which is 10.59% of the total revenue.
The Company''s exposure to customers is diversified and 17 number of customers contribute more than 65 % of oustanding receivables
45 Details of dues to Micro, Small and Medium enterprises as defined under the Micro Small and Medium enterprises development (MSMED) Act, 2006
Dues to Micro and Small enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.
Amounts unpaid to Micro and Small enterprises vendors on account of retention money have not been considered for the purpose of interest calculation.
46 The MIRC Electronics Employee Stock Option Plan 2023 ("ESOP 2023") of 83,76,520 (3.63%) Equity Shares (ESOP Pool) has been approved by the Board of Directors on 2nd November, 2023 and by the Shareholders of the Company pursuant to the special resolution passed through postal ballot on 17th January, 2024. The Company has received In-principal approval for ESOP 2023 from BSE Limited and National Stock Exchange of India Limited on 12th April, 2024. After receipt of necessary approvals, the Compensation Committee of the Board of Directors in their meeting held on 16th April, 2024, had approved to grant 38,00,846 (1.65%) Options to 23 employees of the Company.
The Company has evaluated subsequent events from the balance sheet date upto 20th May 2025, the date at which the financial statements were available to be issued, and determined that there are no material items to disclose other than those disclosed above.
49 Other Statutory Information
a) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
b) The Company has balance with the below-mentioned companies struck off under section 248 of Companies Act, 2013:
c) The Company do not have any charges or satisfaction which are yet to be registered with ROC beyond the statutory period,
d) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
e) 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:
i) 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
ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
f) 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:
i) 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
ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
g) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
h) The Company has not been declared wilful defaulter by any bank or financial institution or other lendor.
i) The Company has not entered into any scheme of arrangements as approved by the competent authority in terms of section 230 to 237 of the Companies Act, 2013.
j) The Company does not have any subsidiary, associate or joint ventures and hence compliance under clause (87) of section 2 of the Act read with Companies (Restriction on number of layers) Rules, 2017 is not applicable.
k) The Company has been sanctioned working capital limits in excess of rupees five crores in aggregate from banks during the year on the basis of security of current assets of the Company. The quarterly returns/statements filed by the Company with such banks are in agreement with the unaudited books of accounts of the Company.
l) There are no long term contracts including derivative contracts for which there were any material foreseeable losses other than disclosed.
As per proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the companies incorporated in India w.e.f. April 1,2023. The Company used accounting softwares for maintaining their books of account and payroll software which have a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software.
The feature of recording audit trail (edit log) facility was not enabled at the database level to log any direct data changes for the accounting software used for maintaining the books of accounts.
Audit trail has been preserved by the Company as per the statutory requirements for record retention in accordance with the requirements of Rule 11 (g) of the Co.(Audit and Auditors) Rules, 2014.
51 Note on Social Security code
The Code on Social Security, 2020 (''Code'') relating to employees benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The draft rules have been released by The Ministry of Labour and Employment on November 13, 2020. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.
52 Capital Management and Gearing ratio
For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximize the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. From time to time, the Company reviews its policy related to dividend payment to shareholders, return capital to shareholders or fresh issue of shares. The Company monitors capital using gearing ratio, which is net debt divided by total capital plus net debt. The Company''s policy is to keep the gearing ratio below 30%. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents as detailed in the notes below.
The Company''s capital management is intended to create value for shareholders by facilitating the meeting of its long-term and short-term goals. Its Capital structure consists of net debt (borrowings as detailed in notes below) and total equity.
(i) Debt is defined as long-term borrowings (including current maturities), short-term borrowings (excluding contingent considerations) and interest accrued.
(ii) Equity is defined as equity share capital and other equity including reserves and surplus.
53 As per the E-waste Management Rules 2022, as amended, the Company had an obligation to complete the Extended Producer Responsibility (EPR) targets by online purchase of EPR certificates at rates notified by the Central Pollution Control Board (CPCB). The Company has completed the e-waste compliance obligation based on CPCB EPR portal and at the rates agreed between the Company and its certified PRO vendors basis contractual agreements. The Company has booked expenses of ''319 lakhs for the year ended 31st March, 2025. The Company along with others in the Industry have made representations to the authorities for reconsideration of the rates for purchase of EPR certificates. The matter is sub judice. The expense recognised by the company at contracted rates is lower by ''1,181 lakhs when compared with rates notified by the CPCB.
54 During the year, the Company entered into a contract with the Government of Uttar Pradesh (UP) for the execution of "Design installation and maintenance of ICT labs" the scope includes supply, installation, testing and commissioning of complete set of Hardware, Software, Equipment, Installation, capacity building, service support and three years onsite comprehensive warranty and insurance at multiple schools located in various regions of Uttar Pradesh ("UP") in accordance with the terms of tender. The contract qualifies as a project for which revenue needs to be booked over a period of time under Ind AS 115 - Revenue from Contracts with Customers, with performance obligations satisfied over time. Accordingly, the Company has recognized revenue based on the Percentage of Completion Method (POCM), measured using the input method, which best represents the transfer of control to the customer over time.
55 Other non operating income for the current year includes cash discount of ''14.64 lakhs (previous year ''Nil), dividend from Mutual funds ''10.84 lakhs (previous year ''9.75 lakhs), reimbursement of expenses ''399.87 (previous year ''Nil), and liabilty written back on account of PPE settlement ''Nil (previous year ''153.67 lakhs).
56 In accordance with the Accounting Standard on Impairment of Assets, (Ind AS - 38), the management has made assessment of assets in use and considering the business prospects related thereto, no provision is considered necessary on account of impairment of assets.
57 Compliance with Section 128 of the Companies Act, 2013 on maintenance of books of accounts in electronic mode.
As per the Companies (Accounts) Rules, 2014 (as amended), relating to maintenance of electronic books of account and other relevant books and papers, the Company is required to maintain the books of account which are accessible in India at all times and their backup is to be kept on servers located in India on a daily basis. In compliance with these requirements, the books of accounts and other relevant books and records of the Company maintained in electronic mode are accessible in India at all times. The backup of the books of account and other books and papers maintained in electronic mode are taken daily and kept in servers physically located in India.
58 The accompanying notes are an integral part of the financial statements.
Mar 31, 2024
(b) Terms and rights attached to Equity Shares
The Company has only one class of equity shares having par value of Re.1 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, if any on the equity shares is recommended by the Board and approved by the shareholders at the 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.
(c) The Company has not issued any equity shares as bonus or for consideration other than cash and has not bought back any shares during the period of five years immediately preceding 31st March, 2024.
Nature and purpose of Reserves
Capital Reserve : The amount is largely on account of forfeiture of money received against share warrants and reduction in share capital.
Capital Redemption Reserve : The capital redemption reserve was created for buyback / redemption of shares.
Securities Premium Account : Securities Premium Reserve is used to record the premium on issue of shares and is utilised in accordance with the provisions of the Companies Act, 2013.
General Reserve : The general reserves comprises of transfer of profits from retained earnings for appropriation purposes. The reserves can be distributed / utilised by the Company in accordance with the provision of Companies Act, 2013.
Since the Company has been incurring losses in recent past periods in addition to the carried forward losses, the Company has not recognized Deferred Tax Asset as it is not probable that sufficient future taxable profit will be available against which unused tax losses can be utilised.
Deferred tax assets are recognised only to the extent it is probable that either future taxable profits or reversal of deferred tax liabilities will be available, against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.
The Company also has tax losses and unabsorbed depreciation of ''11,598.71 lakhs on which deferred tax asset is not recognised. Out of these losses, '' 6,015.42 lakhs does not have any expiry and '' 5,583.28 lakhs will expire over a period of next 8 years.
Cash Credit Facility, from banks is secured by pari passu charge in favour of the bankers by mortgage / hypothecation of Company''s immovable and movable properties at Wada, Onida House and Roorkee and immovable properties at Vasai and Chiplun. Loan from NBFC is secured by Registered mortgage of Mahal Industrial Estate property of Company.
In respect of the non-current borrowings, the Company has to comply with certain debt covenants as per the terms of issue of one of the term loans. As at the end of the reporting year, the Company has not met the debt covenants as required by the sanctioned letter. Hence the Company has classified an amount of ''1,639.34 lakhs ( 31st March, 2023 - ''1,964.60 lakhs) of non-current borrowings as a part of current borrowings as at 31st March 2024.
Trade payables includes acceptances which represents amount payable to banks on due date as per usance period of letter of credit (LC''s) issued to material vendors under non fund based working capital facility approved by banks for the Company. The arrangements are interest bearing with a maturity ranging from 0 to 90 days. All other trade payables are non interest bearing and are normally settled on 30 days terms. For liquidity risk related to trade payables refer note 42.
The Company recognises provision for warranties in respect of the products that it sells. These are reviewed at each balance sheet date and adjusted to reflect the current estimates. A provision is recognised for expected warranty claims on products sold during the year, based on past experience of the level of repairs. It is expected that most of these costs will be incurred in the next financial year. Assumptions used to calculate the provision for warranties are based on current sales levels and past trend of the warranty expenses.
The Company had an investment in Adonis Electronics Pvt. Ltd. (AEPL) Comprising of 2650, 0.01% Cumulative Redeemable Preference shares of ''10 each. AEPL has received an order from the National Company Law Tribunal, Mumbai (NCLT) dated 1st February,2024 to reduce its Preference share capital of ''0.26 lacs (Comprising of 2650 units of ''10 each) to ''Nil by paying the Company ''10.50 lakhs againsts settlement of the Preference Shares held by the Company.
|
37 - Contingent Liabilities and Commitments |
||
|
31st March 2024 '' in lakhs |
31st March 2023 '' in lakhs |
|
|
Contingent Liabilities |
||
|
a) Guarantees given by Bank against which ''242.90 lakhs (31st March, 2023''126.49 lakhs) has been deposited as margin money. |
1,551.69 |
387.49 |
|
b) Income tax demands in respect of which appeals have been filed |
159.09 |
159.09 |
|
c) Excise Duty, Service Tax, VAT and Custom Duty in respect of which appeals have been filed |
6,127.98 |
6,627.78 |
|
d) Claims made against the Company not acknowledged as debts |
838.07 |
854.61 |
|
Commitments |
||
|
Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) |
3.58 |
- |
In relation to above contingent liabilities, the Company has been advised by its legal counsel that it is possible, but not probable, that the action will succeed and accordingly no provision for liability has been recognised in the financial statements.
Future cash flows in respect of above matters are determinable only on receipt of judgements/decisions pending at various forums/ authorities.
Further to the above, GST audit for the period FY 2017-2018 to FY 2021-2022 was completed and deposition letter for an amount of ''1,720 lakhs (including interest of ''697 lakhs) on various grounds was raised by the GST authorities on the Company. The Company has paid pre-deposit for an amount of ''173 lakhs in this regard.
The Company received notices for the FY 2017-18 and FY 2018-19 for various grounds amounting to ''1,243 lakhs (including interest of ''546 lakhs) also submitted the responses against the same. The Company have received closure orders for FY 2017-18 and FY 2018-19 and have no outstanding demand against the same.
Further the company has filed Application for Appeal for refund against the order for FY 2017-18 for Pre-deposit made amounting to ''39.72 lakhs. The Company is also in the process for filing Application for Appeal for refund of Pre-Deposit made amounting to ''64.79 lakhs for FY 2018-19.
The Notices for FY 2019-20 to FY 2021-22 are awaited amounting to '' 477 lakhs, the company shall file its responses once notices are received against the same and are hoping to get favourable order basis the Order received for FY 2017-18 and FY 2018-19.
a) Defined contribution plans
The Company has recognised an expense of ''222.81 lakhs (31st March, 2023 : ''217.79 lakhs) towards defined contribution plans, in respect of Provident Fund.
b) Defined benefit plans Gratuity
The Company has a defined benefit gratuity plan. The gratuity plan is primarily governed by the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of five years are eligible for gratuity. The level of benefits provided depends on the member''s length of service and salary at the retirement date. Company has covered its gratuity liability by a Group Gratuity Policy named ''Employee Group Gratuity Assurance Scheme'' issued by LIC of India. Under the plan, employee at retirement is eligible for benefit which will be equal to 15 days'' salary for each completed year of service.
Composition of the plan assets is as follows:
Plan asset is maintained with Life Insurance Corporation of India. In the absence of detailed information regarding plan assets which is funded with Insurance Companies, the composition of each major category of plan assets, the percentage or amount for each category to the fair value of plan assets has not been disclosed.
The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
The sensitivity analysis presented above may not be representative of the actual change in the Defined Benefit Obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. Furthermore, in presenting the above sensitivity analysis, the present value of the Defined Benefit Obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the Defined Benefit Obligation as recognised in the balance sheet. There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
The weighted average duration of the projected benefit obligation is approximately 6 years (31st March, 2023 : 6 years). The expected contribution to be made by the Company during the financial year 2024-25 is ''143.50 lakhs (31st, March, 2023 : '' 140.32 lakhs).
Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.
Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance Company and a default will wipe out all the assets. Although probability of this is very low as insurance companies have to follow Para 139 (c) Characteristics of defined benefit plans.
Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk
The Company uses the following hierarchy for determining and/or disclosing the fair value of financial instruments by valuation techniques:
Level 1: Fair value measurement are those derived from quoted prices (unadjusted) in active markets for identical assets and liabilities.
Level 2: Fair value measurements are those derived from inputs other than quoted prices that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
Level 3: Fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs)
There were no transfers between Level 1 and Level 2 during the year.
Terms and conditions of transactions with related parties
The transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31st March, 2024, the Company has not recorded any impairment of receivables relating to amounts owed by related parties. 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.
There is no loan outstanding with any related party.
41. Corporate Social Responsibility
The statutory provisions of Section 135(5) of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 with respect to spending in CSR activities are not applicable to the Company for the year ended 31st March, 2024.
42. Financial risk management objectives and policies
The Company''s principal financial liabilities comprises of loans and borrowings, trade and other payables, and lease liabilities. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables and cash and cash equivalents that are derived directly from its operations.
The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company is exposed to market risk, credit risk and liquidity risk.
The Company''s senior management oversees the management of these risks. The senior professionals working to manage the financial risks and the appropriate financial risk governance framework for the Company are accountable to the Board of Directors and Audit Committee. This process provides assurance to Company''s senior management that the Company''s financial risk-taking activities are governed by appropriate policies and procedures and that financial risk are identified, measured and managed in accordance with Company policies and Company risk objective.
The Board of Directors reviews and agrees policies for managing each of these risks which are summarized as below:
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 prices comprises two types of risk: currency rate risk and interest rate risk. Financial instruments affected by market risks include loans and borrowings, deposits and foreign currency receivables and payables. The sensitivity analysis in the following sections relate to the position as at 31st March, 2024 and 31st March, 2023. The analysis exclude the impact of movements in market variables on the carrying values of gratuity and other post-retirement obligations; provisions; and the non-financial assets and liabilities.
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 Companies operating activities that is buying of Raw Material and Finished Goods from international buyers. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies. The Company manages its foreign currency risk by hedging transactions that are expected to occur within a maximum 12 month period for hedges of purchases. The Company hedges its exposure to fluctuations on the translation into INR of its imports operations. This foreign currency risk is hedged by using foreign currency forward contracts.
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''s borrowings are from commercial banks to meet the working capital requirements for operation of the business. The banks generally charge the card rate to the Company based on annual appraisal by internal and external ratings. There is no major fluctuation on those interest rates charged by the bank during the period under audit.
If the interest rates had been 50 basic points higher or lower and all the other variables were held constant, the effect of interest expense for the respective financial years and consequent effect on company''s profit in that financial year would have been as below
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities including foreign exchange transactions. The Company generally deals with parties which has worthiness based on Company''s internal assessment.
Refer Note 9 for credit risk and other information in respect of trade receivables. Other receivables as stated above are due from the parties under normal course of the business and the Company has made provision as per ECL model. The Company has not acquired any credit impaired asset. There was no modification in any financial assets.
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. The Company''s objective is to at all times maintain optimum levels of liquidity to meet its cash and liquidity requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. Processes and policies related to such risks are overseen by senior management. Management monitors the Company''s liquidity position through rolling forecasts on the basis of expected cash flows. The Company assessed the concentration of risk with respect to its debt and concluded it to be low.
The table below summarizes the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments.
The Company considers entire business under one segment i.e. Consumer Durable products. Further, there is no separately identifiable geographical segment and hence no reporting is made for segment. During the year, revenue from three customers (31st March, 2023: two) is more than 25% of total revenue. Revenue from one customer of the Company represents '' 21599.58 lacs for the year ended 31st March, 2024 which is 22.35% of the total revenue.
The Company''s exposure to customers is diversified and 12 number of customers contribute more than 77 % of oustanding receivables
44 Details of dues to Micro, Small and Medium enterprises as defined under the Micro Small and Medium enterprises development (MSMED) Act, 2006
Dues to Micro and Small enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.
Amounts unpaid to Micro and Small enterprises vendors on account of retention money have not been considered for the purpose of interest calculation.
45 The Employee Stock Option Plan 2023 ("ESOP 2023") of 83,76,520 (3.63%) Equity Shares (ESOP Pool) was approved by the Board of Directors on 2nd November, 2023 and by the Shareholders of the Company pursuant to the special resolution passed through postal ballot on 17th January, 2024. The Company received In-principal approval for ESOP 2023 from BSE Limited and National Stock Exchange of India Limited on 12th April, 2024. After receipt of necessary approvals, the Compensation Committee of the Board of Directors in their meeting held on 16th April, 2024, approved to grant 38,00,846 (1.65%) Options to 23 employees of the Company.
The Company has evaluated subsequent events from the balance sheet date upto 14th May 2024, the date at which the financial statements were available to be issued, and determined that there are no material items to disclose other than those disclosed above.
48 Other Statutory Information
a) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
c) The Company do not have any charges or satisfaction which are yet to be registered with ROC beyond the statutory period,
d) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
e) 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:
i) 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
ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
f) 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:
i) 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
ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
g) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
h) The Company has not been declared wilful defaulter by any bank or financial institution or other lendor.
i) The Company has not entered into any scheme of arrangements as approved by the competent authority in terms of section 230 to 237 of the Companies Act, 2013.
j) The Company does not have any subsidiary, associate or joint ventures and hence compliance under clause (87) of section 2 of the Act read with Companies (Restriction on number of layers) Rules, 2017 is not applicable.
k) The Company has been sanctioned working capital limits in excess of rupees five crores in aggregate from banks during the year on the basis of security of current assets of the Company. The quarterly returns/statements filed by the Company with such banks are in agreement with the unaudited books of accounts of the Company.
As per proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the companies incorporated in India w.e.f. April 1,2023. The Company used accounting softwares for maintaining their books of account which have a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software, except for the payroll accounting software which does not have the feature of recording audit trail (edit log) facility.
The feature of recording audit trail (edit log) facility was not enabled at the database level to log any direct data changes for the accounting software used for maintaining the books of accounts.
50 Note on Social Security code
The Code on Social Security, 2020 (''Code'') relating to employees benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The draft rules have been released by The Ministry of Labour and Employment on November 13, 2020. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.
51 Capital Management and Gearing ratio
For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximize the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. From time to time, the Company reviews its policy related to dividend payment to shareholders, return capital to shareholders or fresh issue of shares. The Company monitors capital using gearing ratio, which is net debt divided by total capital plus net debt. The Company''s policy is to keep the gearing ratio below 30%. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents as detailed in the notes below.
The Company''s capital management is intended to create value for shareholders by facilitating the meeting of its long-term and short-term goals. Its Capital structure consists of net debt (borrowings as detailed in notes below) and total equity.
(i) Debt is defined as long-term borrowings (including current maturities), short-term borrowings (excluding contingent considerations) and interest accrued.
(ii) Equity is defined as equity share capital and other equity including reserves and surplus.
52 Previous years'' figures have been regrouped / reclassified wherever necessary, to conform to current year''s classification.
Mar 31, 2023
g Provisions
A provision is recognized when the Company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
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 recognised as a finance cost.
Where the company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. the expense relating to any provision is presented in the statement of profit and loss net of any reimbursement.
Warranty provisions
Provisions for warranty-related costs are recognized when the product is sold or service provided. Provision is based on historical experience. the initial estimate of such warranty-related costs is revised annually.
h Foreign Currency Transactions and Translation
these financial statements are presented in indian rupees, which is the functional currency of the company. initial Recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
Conversion
At the end of each reporting period, Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. non-monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.
Exchange differences on monetary items are recognised in profit or loss in the period in which they arise except for exchange differences on transactions entered into in order to hedge certain foreign currency risks.
i Revenue from contract with customer
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured, regardless of when the payment is being made. revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. The transaction price of goods and services rendered is net of variable consideration on account of various discounts and schemes offered by the company as a part of the contract.
Sale of Goods
revenue from the sale of goods is recognised when the control of the goods have passed to the buyer, usually on delivery of the goods. revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. the transaction price of goods and services rendered is net of variable consideration on account of various discounts and schemes offered by the company as a part of the contract.
Trade receivables
A receivable represents the company''s right to an amount of consideration that is unconditional (i.e. , only the passage of time is required before payment of the consideration is due). refer to accounting policies of financial assets in section (n) Financial instruments - initial recognition and subsequent measurement.
interest
interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the company and the amount of income can be measured reliably.
interest income is accrued on a time basis by reference to the principal outstanding and at the effective interest applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.
Dividends
revenue is recognised when the company''s right to receive the payment is established. j Retirement and other employee benefits
retirement benefit in the form of provident fund is a defined contribution scheme. the company has no obligation, other than the contribution payable to the provident fund. the company recognizes contribution payable to the provident fund scheme as an expense, when an employee renders the related service. if the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. if the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.
the company operates a defined benefit gratuity plan, which requires contributions to be made to a separately administered fund.
For defined benefit retirement plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur. remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit or loss. Past service cost is recognised in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. The retirement benefit obligation recognised in the balance sheet represents the actual deficit or surplus in the company''s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.
Short-term and other long-term employee benefits
A liability is recognised for benefits accruing to employees in respect of annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.
Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.
liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Group in respect of services provided by employees upto the reporting date.
k Taxes
Current income tax
current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. the tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date where the company operates and generates taxable income.
current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). current tax items are recognised in correlation to the underlying transaction either in oci or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. the company shall reflect the effect of uncertainty for each uncertain tax treatment by using either most likely method or expected value method, depending on which method predicts better resolution of the treatment.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.
the carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). deferred tax items are recognised in correlation to the underlying transaction either in oci or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
l Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. Borrowing costs include exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing cost includes interest and amortization of ancillary costs incurred in connection with the arrangement of borrowings. The borrowing costs are expensed in the period in which they occur.
m inventories
inventories comprise all costs of purchase, conversion and other costs incurred in bringing the inventories to their present location and condition.
Raw materials, components, stores and spares are valued at lower of cost and net realizable value. However, raw materials held for production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. cost of raw materials, components and stores and spares is determined on a weighted average basis.
obsolete and slow moving items are valued at cost or estimated net realisable value, whichever is lower.
Work-in-progress and finished goods are valued at lower of cost and net realizable value. cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. cost is determined on a weighted average basis.
traded goods are valued at lower of cost and net realizable value. cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. cost is determined on weighted average basis.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.
Goods in transit is measured at cost to date as at Balance sheet date. n 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.
Financial Assets
initial recognition and measurement
With the exception of trade receivables that do not contain a significant financing component, company initially measures all financial assets at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. trade receivables that do not contain a significant financing component are measured at transaction price as disclosed in section (i) revenue from contract with customers. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the company commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in following categories:
⢠Financial assets at amortised cost
⢠Financial assets including derivatives at fair value through profit or loss (FVTPL)
⢠Financial assets at fair value through other comprehensive income (FVTOG)
Financial assets at amortised cost
A ''financial asset'' is measured at the amortised cost if both the following conditions are met:
a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
b) contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (sPPi)on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised 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 amortisation is included in finance income in the profit or loss. the losses arising from impairment are recognised in the profit or loss. this category generally applies to trade and other receivables, loans and other financial assets.
Financial Assets at FVTOCi
A ''financial asset'' is classified as at the FVTOQ if both of the following criteria are met:
a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and
b) The asset''s contractual cash flows represent SPPi.
Financial asset included within the FVTOCi category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCi). However, the Company recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the P&L. On derecognition of the asset, cumulative gain or loss previously recognised in OCi is reclassified from the equity to P&L. interest earned whilst holding FVTOCi debt instrument is reported as interest income using the EiR method.
Financial asset at FVTPL
FVTPL is a residual category for financial asset. Any financial asset, which does not meet the criteria for categorization as at amortized cost or as FVTOCi, is classified as at FVTPL.
in addition, the Company may elect to designate a financial asset, which otherwise meets amortized cost or FVTOCi criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ''accounting mismatch''). The Company has not designated any debt instrument as at FVTPL.
Financial asset included within the FVTPL category are measured at fair value with all changes recognized in the P&L.
The Company does not hold any equity investments.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognised (i.e. removed from the Company''s Balance Sheet) when:
- The rights to receive cash flows from the asset have expired, or
- The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ''pass-through'' arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
â - -- -- â --------- â--â - -- -- -------f â--
When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the company continues to recognise the transferred asset to the extent of the company''s continuing involvement. in that case, the company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the company has retained.
continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the company could be required to repay.
on derecognition of a financial asset in its entirety, the differences between the carrying amounts measured at the date of derecognition and the consideration received is recognised in the statement of profit and loss.
impairment of financial assets
in accordance with ind As 109, the company applies expected credit loss (Ed) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:
a) Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits, trade receivables and bank balance.
b) trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of ind As115.
the company follows ''simplified approach'' for recognition of impairment loss allowance on trade receivables.
the application of simplified approach does not require the company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime Ed at each reporting date, right from its initial recognition.
For recognition of impairment loss on other financial assets and risk exposure, the company determines that whether there has been a significant increase in the credit risk since initial recognition. if credit risk has not increased significantly, twelve month Ed is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime Ed is used. if, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on twelve month Ed.
Lifetime Ed are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The twelve month Ed is a portion of the lifetime Ed which results from default events that are possible within twelve months after the reporting date.
Ed 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. net of all cash 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, call and similar options) 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.
- cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
As a practical expedient, the company uses a provision matrix to determine impairment loss allowance on its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward looking estimates are analysed.
ECL impairment loss allowance (or reversal) recognised during the year is recorded in the statement of profit and loss. The amount is reflected under the head ''other expenses / income'' in the statement of profit and loss.
the Company does not have any purchased or originated credit - impaired financial assets, i.e.. Financial assets which are credit impaired on purchase / origination.
Financial liabilities
initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The Company''s financial liabilities trade and other payables, loans and borrowings including bank overdrafts and derivative financial instruments.
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. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by ind AS 109. 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 recognised in the profit or loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in ind AS109 are satisfied. The Company does not have any financial liabilities which are held for trading. Nor it has designated any financial liability as FVTPL.
Loans and borrowings
This is the category most relevant to the Company. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EiR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EiR amortisation process.
Amortised 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 amortisation is included as finance costs in the statement of profit and loss.
This category generally applies to borrowings, trade payables and other financial liabilities.
Derecognition
A financial liability is derecognised 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 recognised in the statement of profit or loss.
¦ « . . ... .... ... â. ., â --â¢
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
o Earnings per Share
Basic earnings per share is computed by dividing the net profit attributable to equity shareholders for the year, by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in rights issue, share split, and reverse share split (consolidation of 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 period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
p Current versus non-current classification: the company presents assets and liabilities in the balance sheet based on current and non-current classification.
An asset is treated as current when it is
- Expected to be realised or intended to be sold or consumed in normal operating cycle
- Held primarily for the purpose of trading
- Expected to be realised within twelve months after the reporting period, or
- cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current. a liability is current when:
- it is expected to be settled in normal operating cycle
- it is held primarily for the purpose of trading,
- it is due to be settled within twelve months after the reporting period or
- there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. the company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
the operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. the company has identified twelve months as its operating cycle.
q contingent Liability
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. the company does not recognize a contingent liability but discloses its existence in the financial statements.
r Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the company''s cash management.
1.1 Significant accounting judgements, estimates and assumptions
The preparation of financial statements in conformity with IND As requires management to make judgments, estimates and assumptions, that affect the application of accounting policies and the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of these financial statements and the reported amounts of revenues and expenses for the years presented. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed at each balance sheet date. Revisions to accounting estimates are recognised in the period in which the estimate is revised and future periods affected.
in particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements are included in following notes :
i) useful lives of property, plant and equipment - the company reviews the useful lives of property, plant and equipment at the end of each reporting period. the useful life of property plant and equipment is determined by the company based on past experience and internal technical evaluation.
ii) provision for product warranty : the company recognises provision for warranties in respect of the products that it sells. these are reviewed at each balance sheet date and adjusted to reflect the current estimates. A provision is recognised for expected warranty claims on products sold during the year, based on past experience of the level of repairs. it is expected that most of these costs will be incurred in the next financial year. Assumptions used to calculate the provision for warranties are based on current sales levels and past trend of the warranty expenses.
iii) Estimation of defined benefit obligation : A liability in respect of defined benefit plans is recognised in the balance sheet, and is measured as the present value of the defined benefit obligation at the reporting date less the fair value of the plan''s assets. the present value of the defined benefit obligation is based on expected future payments which arise from the fund at the reporting date, calculated annually by independent actuaries. consideration is given to expected future salary levels, experience of employee departures and periods of service.
iv) provision against obsolete and slow-moving inventories
the company reviews the condition of its inventories and makes provision against obsolete and slow-moving inventory items which are identified as no longer suitable for sale or use. company estimates the net realisable value which is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale for such inventories. the company carries out an inventory review at each balance sheet date and makes provision against obsolete and slow-moving items. the company reassesses the estimation on each balance sheet date.
v) impairment of financial assets
the company assesses impairment based on expected credit losses (Ed) model on trade receivables. the company uses a provision matrix to determine impairment loss allowance on the portfolio of trade receivables. the provision matrix is based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forwardlooking estimates are analysed.
43. FINANCIAL RiSK MANAGEMENT OBJECTiVES AND POLiCiES
The Company''s principal financial liabilities comprises of loans and borrowings, trade and other payables, and lease liabilities. The main purpose of these financial liabilities is to finance the company''s operations. the company''s principal financial assets include loans, trade and other receivables and cash and cash equivalents that are derived directly from its operations.
the company''s financial risk management is an integral part of how to plan and execute its business strategies. the company is exposed to market risk, credit risk and liquidity risk.
the company''s senior management oversees the management of these risks. the senior professionals working to manage the financial risks and the appropriate financial risk governance framework for the company are accountable to the Board of Directors and Audit committee. this process provides assurance to company''s senior management that the company''s financial risk-taking activities are governed by appropriate policies and procedures and that financial risk are identified, measured and managed in accordance with company policies and company risk objective.
the Board of directors reviews and agrees policies for managing each of these risks which are summarized as below:
(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 prices comprises two types of risk: currency rate risk and interest rate risk. Financial instruments affected by market risks include loans and borrowings, deposits and foreign currency receivables and payables. the sensitivity analysis in the following sections relate to the position as at 31st March, 2023 and 31st March, 2022. the analysis exclude the impact of movements in market variables on the carrying values of gratuity and other post-retirement obligations; provisions; and the non-financial assets and liabilities.
(i) 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 companies operating activities that is buying of Raw Material and Finished Goods from international buyers. the company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies. the company manages its foreign currency risk by hedging transactions that are expected to occur within a maximum 12 month period for hedges of purchases. the company hedges its exposure to fluctuations on the translation into INR of its imports operations. this foreign currency risk is hedged by using foreign currency forward contracts.
h) The Company has not been declared wilful defaulter by any bank or financial institution or other lendor.
i) the company has not entered into any scheme of arrangements as approved by the competent authority in terms of section 230 to 237 of the companies Act, 2013.
j) the company does not have any subsidiary, associate or joint ventures and hence compliance under clause (87) of section 2 of the Act read with companies (Restriction on number of layers) Rules, 2017 is not applicable.
k) the company has been sanctioned working capital limits in excess of rupees five crores in aggregate from banks during the year on the basis of security of current assets of the company. the quarterly returns/statements filed by the company with such banks are in agreement with the unaudited books of accounts of the company.
49 Previous years'' figures have been regrouped / reclassified wherever necessary, to conform to current year''s classification.
As per our report of even date For and on behalf of the Board of Directors of
For S R B C & CO LLP MiRC Electronics Limited
chartered Accountants
icAl Firm registration Number 324982E/E300003
per Firoz Pradhan G.L. Mirchandani V.J.Mansukhani
Partner chairman and Managing director Managing director
Membership No.109360 Din : 00026664 Din : 01041809
prasad oak Kaval Mirchandani
Head - corporate Affairs, Legal and Whole-time director company secretary Din : 01179978
shirish suvagia
Whole-time director and chief Financial officer Din :10095690
Place : Mumbai Place : Haridwar Place : Mumbai
Date : 26th May, 2023 Date : 26th May, 2023 Date : 26th May, 2023
Mar 31, 2018
1. Corporate information
MIRC Electronics Limited ("the Company") is a listed entity incorporated in India. The address of registered office and principal place of business is Onida House, G-1, MIDC, Mahakali Caves Road, Andheri (East), Mumbai - 400093. The Company is principally engaged in manufacturing and trading of electronic items.
The Ordinary (Equity) shares of the company are listed on the National Stock Exchange ("NSE") and the Bombay Stock Exchange ("BSE").
The Company has only one class of equity shares having par value of Rs. 1 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, if any on the equity shares is recommended by the Board and approved by the shareholders at the 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.
In the current year the Company has allotted 1,92,00,000 Equity Shares and 1,92,00,000 Convertible Share Warrants (Convertible into 1 Equity Share each) at a issue price of Rs.37.53 per equity share (including a premium of Rs.36.53 per equity share) to the non-promoters on preferential basis. Consequent to the issue of equity shares, the paid up equity share capital of the Company has increased from Rs.2,119.39 lacs to Rs.2,311.39 lacs. The Company has received an amount of Rs.1,801.44 lacs being 25% of the value of warrants as per provisions of SEBI (ICDR) Regulations, 2009.
The company has not issued any equity shares as bonus or for consideration other than cash and has not bought back any shares during the period of five years immediately preceding 31st March, 2018.
NOTE 16 - OTHER EQUITY Nature and purpose of Reserves
Capital Reserve : The amount is largely on account of reduction in share capital.
Capital Redemption Reserve : The capital redemption reserve was created for buyback/redemption of shares.
Securities Premium Account : Securities Premium Reserve is used to record the premium on issue of shares and is utilised in accordance with the provisions of the Companies Act, 2013.
General Reserve : The general reserves comprises of transfer of profits from retained earnings for appropriation purposes. The reserves can be distributed/utilised by the Company in accordance with the Companies Act, 2013.
Since the Company has been incurring losses in recent past period in addition to the carried forward losses, the company has not recognized Deferred Tax Asset as it is probable that sufficient future taxable profit will be not be available against which unused tax losses can be utilised.
Deferred tax assets are recognised only to the extent it is probable that either future taxable profits or reversal of deferred tax liabilities will be available, against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.
The Company has impact of expenditure charged to the statement of Profit and loss but allowed for tax purposes on payment basis of Rs.181.62 lacs on which the deferred tax asset is not recognised. Further, the Company also has tax losses and unabsorbed depreciation of Rs.17,217.45 lacs on which deferred tax asset is not recognised. Out of these losses, Rs.5,044.12 lacs does not have any expiry and Rs.12,173.33 lacs will expire by the year 2026.
Security and rate of interest
Cash Credit Facility, Loan from bank and Buyers credit from banks is secured by pari passu charge in favour of the bankers by mortgage/ hypothecation of Company''s immovable and movable properties at Wada and Onida House and immovable properties at Vasai. The interest on cash credit ranges from 12.00% to 16.00% , loan from banks is at 4.5% 6 month Libor and the interest on Buyers credit is libor plus spread.
2 The Board of Directors of the Company on 13th February, 2016 had approved a scheme of amalgamation between the Company and its wholly owned subsidiary Akasaka Electronics Limited ("the transferor Company") with effect from 1st April, 2015 (the appointed date). Akasaka Electronics Limited was a wholly owned subsidiary of MIRC Electronics Limited and was engaged in the business of manufacture of printed circuit boards. The Company had filed a petition in the High Court / NCLT for amalgamating the business of the subsidiary company w.e.f. 1 April 2015 to gain synergies of operations and to take benefits of economies in cost. NCLT vide its order dated 23rd March 2017 had issued an order approving the scheme of amalgamation between the subsidiary and the Company.
All assets aggregating Rs.1,807.63 lacs and liabilities aggregating Rs.771 lacs of the subsidiary have been taken over at book values. Capital Reserve Rs.207.55 lacs, Capital Redemption reserve Rs.99.23 lacs and Surplus in the statement of profit and loss account of Rs. (85.90) lacs of the subsidiary have been taken over at book values. Excess of investment over the share capital of the transferor Company, amounting to Rs.1,810.05 lacs has been adjusted in General Reserves of the Company.
For IND AS, the transition date for the company is 1st April 2016 and accordingly the impact of merger for IND AS financials has been given in the transition accounting.
3 Exceptional items -
The compensation has been paid as follows:-
The company has recognised total expenses of Rs.2,373.11 lacs for the year ended 31st March 2017 as exceptional items on account of the following reasons:
a) During September 2016, the Company had entered into a settlement agreement dated 13th September 2016 with workers of Wada factory to shift the worker''s to other locations as per the business requirements of the Company or pay compensation to workers who are willing to voluntarily retire from the services of the Company. The above agreement has been entered considering reduction in operations of the Company over the years. Out of total workers at Wada factory 166 workers had agreed to voluntarily retire from the services of the Company and accordingly the Company has recognized an expense of Rs.963.28 lacs in the Statement of Profit and Loss.
b) During the year, 2,648 preference shares have been allotted to the Company w.e.f. 1st December, 2016 against outstanding receivable of Rs.2,648 lacs as per the scheme of the arrangement filed by one of the party and approved by NCLT vide its order dated 24th August, 2017.
The Company has recognised preference shares and de-recognised outstanding receivables as on 1st December, 2016 in accordance with the terms of the approved scheme and recognised a loss of Rs.1,507 lacs in the Statement of Profit and Loss, arising on account of fair valuation of preference shares vis-a-vis carrying value of outstanding receivables.
c) Profit (net) on sale of land and building of Rs.97.17 lacs.
4 During the financial year 2015-16, the Company had allotted 1 (One) Warrant to Bennett Coleman & Co. Ltd. ( BCCL ) exercisable for equity shares aggregating to Rs.2,275.00 lacs. The company had received an amount of Rs.568.75 lacs being 25% of the value of Warrant from BCCL and had been disclosed as "Money received against share warrants" below Reserves and Surplus, with such warrant carrying an option / entitlement to the warrant holder to subscribe to equity shares of the face value of Re. 1/- each for cash at a minimum price of Rs.14.66/- each (including premium of Rs.13.66/- each) per share, as arrived in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as on the Relevant Date i.e. 27th May, 2015 or such higher price per share equal to the average of the weekly high and low of the closing prices of the equity share of the company as quoted on the National Stock Exchange of India Ltd. during the 26 (twenty six) weeks preceding the last date of 17th (seventeenth) month from the date of allotment of warrant i.e. 10th July, 2015 after making adjustment for any bonus issue / split / consolidation.
During the financial year 2016-17, the Company received balance 75% allotment money amounting Rs.1,706.25 lacs against exercise of warrants by BCCL. The Company has issued 1,55,18,417 equity shares of face value of Rs.1 per equity share to BCCL @ Rs.14.66 (including securities premium of Rs.13.66 per equity share).
As of March 31, 2017 the share capital has been increased by Rs.155.19 lacs and securities premium account by Rs. 2,119.82 lacs respectively.
In the current year the Company has allotted 1,92,00,000 Equity Shares and 1,92,00,000 Convertible Share Warrants (Convertible into 1 Equity Share each) at an issue price of Rs.37.53 per equity share (including a premium of Rs.36.53 per equity share) to the non-promoters on preferential basis in accordance with the provision of chapter VII of SEBI ICDR regulations. Consequent to the issue of equity shares, the paid up equity share capital of the Company has increased from Rs.2,119.39 lacs to Rs.2,311.39 lacs and securities premium account has increased from Rs.4,734.88 lacs to Rs.11,748.64 lacs as on 31st March, 2018. The Company has received an amount of ''1,801.44 lacs being 25% of the value of warrants as per provisions of SEBI (ICDR) Regulations, 2009 and remaining balance shall be paid before exchange of warrants for equity shares.. If the option to acquire equity shares is not excercised within 18 months from the date of issue of warrants, the amount paid shall be forfeited by the Company.
5 The Company at its extraordinary general meeting dated 29th March, 2017 have approved an Employee Stock option Scheme 2017. However the scheme is not yet offered to employees as on date and hence no effect is considered in the financial statements for the year ended 31st March, 2018.
6 There was a fire accident in February, 2012 at Roorkee Plant of the Company. The Company had made a claim of Rs.4,995.50 lacs in respect of loss and damages covered by the insurance policy. Against the total claim, on account payment of Rs.1,632.45 lacs had been realised from the Insurance company in the financial year 2013-14. Based on the communication received from surveyors appointed by the Insurance company, management had reassessed the recoverability of claim and consequently a further loss of Rs.623 lacs was charged to the statement of Profit and Loss during the year ended 31st March, 2015. During the year ended 31st March, 2016, the Company received an amount of Rs.2,474.70 lacs from the Insurance Company as full and final settlement against insurance claim receivable. For the balance amount of Rs.265.35 lacs the Company had gone for arbitration along with interest and other claims. In the current year the company has received the outstanding amount of Rs.265.35 lacs along with interest of Rs.153.91 lacs which is disclosed as interest received under other income.
Operating lease commitments - Company as lessee
The Company has entered into operating leases for office premises, godowns and residential accommodation, with lease terms between 11 months to six years. The company has the option, under some of its leases, to lease the assets for additional terms between 11 months to three years. The Company has paid ''625.16 lacs (31st March 2017 ''685.51 lacs) during the year towards minimum lease payment
In relation to above contingent liabilities, the Company has been advised by its legal counsel that it is possible, but not probable, that the action will succeed and accordingly no provision for liability has been recognised in the financial statements.
Future cash flows in respect of above matters are determinable only on receipt of judgements/decisions pending at various forums/ authorities.
7 Employee Benefits :
a) Defined contribution plans
The Company has recognised an expense of Rs.223.84 Lacs ( previous year Rs.248.56 Lacs) towards defined contribution plans, in respect of Provident Fund.
b) Defined benefit plans Gratuity
The Company has a defined benefit gratuity plan. The gratuity plan is primarily governed by the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of five years are eligible for gratuity. The level of benefits provided depends on the member''s length of service and salary at the retirement date. Company has covered its gratuity liability by a Group Gratuity Policy named ''Employee Group Gratuity Assurance Scheme'' issued by LIC of India. Under the plan, employee at retirement is eligible for benefit which will be equal to 15 days'' salary for each completed year of service.
The above sensitivity analysis are based on a change and assumption while holding all other assumptions constant. In practice this is unlikely to occur and changes in some of the assumptions may be co-related. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet. The methods and types of assumption used in preparing the sensitivity analysis did not change compared to prior period.
The weighted average duration of the projected benefit obligation is approximately 3 years (31st March, 2017 - 4 years). The contribution expected to be made by the Company during the financial year 2018-19 is Rs.231.71 lacs.
Risk exposure:
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset volatility:
The plan liabilities are calculated using a discount rate set with reference to government bond yield. If plan assets underperform this yield, it will result in deficit. These are subject to interest rate risk. To offset the risk, the plan assets have been deployed in high grade insurer managed funds.
Inflation rate risk:
Higher than expected increase in salary and medical cost will increase the defined benefit obligation.
Demographic risk:
This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligations is not straight forward and depends upon the combination of salary increase, discount rate and vesting criterion.
8 First time adoption of Ind AS - Mandatory exceptions and optional exemption
The Company has adopted Ind AS with effect from 1st April, 2017 with comparatives being restated. Accordingly the impact of transition has been provided in the Opening Reserves as at 1st April 2016. The figures for the previous period have been restated, regrouped and reclassified wherever required to comply with the requirement of Ind AS and Schedule III.
Exemptions from retrospective application
Fair value as deemed cost exemption
The Company has elected to measure items of property, plant and equipment and intangible assets at its carrying value at the date of transition.
Refer reconciliation of equity as per previous GAAP to Ind AS (Refer Note 41).
Note b
Long term borrowing difference of Rs.49.74 lacs is due to netting off of upfront fees paid on borrowing.
Note c
The increase is on account of merger of Akasaka Electronics Limited balances as of 1st April 2016.
Note d
The increase of Rs.23.97 lacs is due to merger of Akasaka Electronics Limited and Rs.77.42 lacs being financial liabilities reclassified from Other current liability. These increases are compensated by reclass of warranty provision of Rs. 88.62 lacs from trade payable to warranty provision.
Note e
The increase of Rs.167.67 lacs is on account of merger of Akasaka Electronics Limited. There is a reduction of Rs.77.42 lacs being reclass of financial liabilities from other current liabilities to trade payable. Further, the reduction of Rs.75.86 lacs is due to net impact of mark to market accounting of forward contracts outstanding as at 1st April 2016. Under Indian GAAP the forward contract accounting was done as per AS-11.
Note f
The reduction of Rs.88.62 lacs is due to reclass of warranty provision from trade payable to provisions.
Note g
The increase is on account of merger of Akasaka Electronics Limited.
Note h
The reduction is due to cancellation of investment on merger of Akasaka Electronics Limited.
Note i
The increase of Rs.80.20 lacs is on merger of Akasaka Electronics Limited. The reduction of Rs.52.50 lacs is upfront fees which is adjusted against borrowing, Rs.56.20 lacs being margin money balance is reclassified from loans and advances to other bank balances and Rs.405.24 lacs is on account of impact of the discounting of security deposit.
Note j
The increase is on account of merger of Akasaka Electronics Limited.
Note k
The increase is of Rs.37.72 lacs is due to merger of Akasaka Electronics Limited. The reduction of Rs.510.89 lacs is due to discounting of trade receivable from Adonis Electronics Ltd. and Rs.316.70 lacs is due to ECL provision made.
Note l
The increase is of Rs.297.61 lacs is due to merger of Akasaka Electronics Limited. and Rs.56.20 lacs is due to reclass of margin money from other non current asset.
Note m
The increase of Rs.951.03 lacs is due to merger of Akasaka Electronics Limited. The reduction of Rs. 61.60 lacs is due to mark to market accounting of forward contracts. Under Indian GAAP the Company accounted the same as per AS-11.
Refer reconciliation of equity as per previous GAAP to Ind AS (Refer Note 41).
Note b
The reduction is due to recovery of provision during the year.
Note c
The reduction is due to reclass of warranty provision from trade payable to short term provision.
Note d
The increase is on account of reclass of financial liabilities from other current liabilities.
Note e
The reduction is due to reclass of Rs.2,162.96 lacs from other current liabilities to finance liabilities. The further reduction is on account of mark to market accounting as per Ind-AS amounting to Rs.59.73 lacs.
Note f
The increase is due to reclass of warranty provision from trade payable to short term provision.
Note g
The increase is due to investment in preference shares accounted at fair value as per scheme approved by NCLT (Refer note 35)
Note h
The reduction of Rs.227.83 lacs on account of reclass of discounted portion of deposit and reclass of Rs.10.55 lacs prepaid expenses from loans and advances to non current asset. The reduction of Rs.1,626.62 lacs on account of reclass of advance paid to vendor from loans to other non current asset. The reduction of Rs.1,741.44 lacs is on account of recognition of investment in lieu of security deposit and advances paid to Adonis Electronics Limited as per scheme approved by NCLT.
Note i
The increase of Rs.208.64 lacs is on account of reclass of discounted portion of deposit and Rs.10.55 lacs of prepaid expenses from loans and advances to other non current asset. The increase of Rs.1,626.62 lacs on account of reclass of advance paid to vendor from loans to other non current asset. The reduction of Rs.837.95 lacs is on account of recognition of investment in lieu of receivable from Adonis Electronics Limited as per scheme approved by NCLT.
Note j
The reduction is mainly on account of ECL accounting done as per Ind-AS.
Note k
The reduction is due to reclass from short term advances to other current asset.
Note l
The increase is on account of reclass of 1,540.33 lacs from short term advances to other current asset The reduction is due to reclass of Rs. 52.50 lacs from other current asset to borrowing being upfront fees paid. The balance reduction of '' 31.38 lacs is on account of mark to market accounting done as per Ind-AS.
The reduction of Rs.17.16 lacs is on account of amortisation of deferred rent expenses.
Note b
The reduction of Rs.898.97 lacs is on account of fair value loss on investments in Adonis Electronics Ltd.
Note c
The increase of Rs.14.29 lacs is on account of mark to market adjustment accounted on forward contract.
Note d
The reduction of Rs.2.96 lacs is on account of amortisation of upfront fees paid on borrowing.
Note e
The reduction of Rs.316.70 lacs is on account of ECL provision .
Note f
The increase / decrease is on account of impact taken as per notes "a" to "e" above and impact disclosed in Reconciliation of Statement of Profit and Loss for the year ended 31st March 2017 from Indian GAAP to Ind-AS.
The increase is on account of interest income of Rs.132.69 lacs accounted on the security deposit discounted as per Ind-AS and Rs.9.21 lacs accounted as interest income on investment carried at amortised cost.
Note b
The reduction is on account of amount accounted in OCI.
Note c
The reduction of Rs.140.22 lacs being forex gain on buyers credit and foreign currency borrowing reclassified from forex account to finance cost and Rs.160.77 lacs being forex loss on creditors reclassified from finance cost to forex account. Further the reduction of Rs.2.95 lacs comprises of Rs.14.07 lacs on account of mark to market adjustment accounted on forward contract and the increase of Rs.11.12 lacs is on account of amortisation of upfront fees paid on borrowing.
Note d
The reduction of Rs.1,318.23 lacs is due to reclass of expenses against revenue consisting of Rs.1,417.22 lacs being finance cost relating to revenue, Rs.202 lacs being foreign tour expenses and Rs.300.99 lacs being forex on foreign currency borrowing reclassed from forex account to finance cost. The increase of Rs. 97.47 lacs is on account of Rs.134.71 lacs accounted as rent expenses by amortising the deferred rent expenses and reduction of Rs. 37.24 lacs reversal of ECL provision .
Note e
The High sea sales and purchases of mobiles amounting to Rs. 261.29 lacs is netted off. The revenue is increased due to gross up of excise duty of Rs. 3,812.21 lacs and reduced due to netting of expenses pertaining to finance cost related to revenue Rs.1,417.22 lacs and foreign tour expenses of Rs. 202 lacs .
Fair Value hierarchy
The company uses the following hierarchy for determining and/or disclosing the fair value of financial instruments by valuation techniques:
Level 1: Fair value measurement are those derived from quoted prices (unadjusted) in active markets for identical assets and liabilities.
Level 2: Fair value measurements are those derived from inputs other than quoted prices that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
Level 3: Fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs)
There were no transfers between Level 1 and Level 2 during the year.
Fair Valuation Techiques and Inputs used
Level 2 - Derivative financial instruments are valued based on quoted prices for similar assets and liabilities in active markets or inputs that are directly or indirectly observable in the marketplace.
Level 3 - The fair value of unquoted equity shares is determined using income approach (discounted cash flow).
Capital Management and Gearing ratio
For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximize the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. From time to time, the Company reviews its policy related to dividend payment to shareholders, return capital to shareholders or fresh issue of shares. The Company monitors capital using gearing ratio, which is net debt divided by total capital plus net debt. The Company''s policy is to keep the gearing ratio between 50% to 60%. The gearing ratio for current year is on lower side due to repayment of borrowings out of fresh capital issued during the year. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents as detailed in the notes below.
The Company''s capital management is intended to create value for shareholders by facilitating the meeting of its long-term and short-term goals. Its Capital structure consists of net debt (borrowings as detailed in notes below) and total equity.
(i) Debt is defined as long-term borrowings (including current maturities) and short-term borrowings (excluding derivative and contingent considerations).
(ii) Equity is defined as Equity share capital and other equity including reserves and surplus.
In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period. No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2018 and 31 March 2017.
9. Research and development expenses consist of employee expenses and other expenses of Rs. 276.17 Lacs (previous year Rs. 258.87 Lacs), and Rs.65.96 Lacs (previous year Rs. 68.64 Lacs) respectively. Depreciation on Research and Development assets is Rs. 22.37 Lacs (previous year Rs. 22.07 Lacs) shown under Property ,Plant and Equipment''s.
Terms and conditions of transactions with related parties
The transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2018, the Company has not recorded any impairment of receivables relating to amounts owed by related parties . 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.
Loans to Related party
The loan outstanding as on 1st April, 2016 to Adino Telecom Limited is unsecured and repayable on demand, The loan was repaid by Adino Telecom Limited in the financial year 2016-17. Interest was charged at 15%
10. The Company has incurred a net loss in its immediately three preceding financial years. Thus in accordance with Section 135 (5) of the Companies Act, 2013, the Company is not required to provide / spend any amount under Corporate Social Responsibility.
11. Financial risk management objectives and policies
The Company''s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables and cash and cash equivalents that are derived directly from its operations.
The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company is exposed to market risk, credit risk and liquidity risk.
The Company''s senior management oversees the management of these risks. The senior professionals working to manage the financial risks and the appropriate financial risk governance framework for the Company are accountable to the Board of Directors and Audit Committee. This process provides assurance to Company''s senior management that the Company''s financial risk-taking activities are governed by appropriate policies and procedures and that financial risk are identified, measured and managed in accordance with Company policies and Company risk objective.
The Board of Directors reviews and agrees policies for managing each of these risks which are summarized as below:
(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 prices comprises two types of risk: currency rate risk and interest rate risk. Financial instruments affected by market risks include loans and borrowings, deposits and foreign currency receivables and payables. The sensitivity analysis in the following sections relate to the position as at 31st March, 2018 and 31st March, 2017. The analysis exclude the impact of movements in market variables on; the carrying values of gratuity and other post-retirement obligations; provisions; and the non-financial assets and liabilities.
(i) 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 Companies operating activities that is buying of Raw Material and Finished Goods from international buyers. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies. The Company manages its foreign currency risk by hedging transactions that are expected to occur within a maximum 12 month period for hedges of purchases . The Company hedges its exposure to fluctuations on the translation into INR of its imports operations.This foreign currency risk Is hedged by using foreign currency forward contracts.
1. /- Gain / Loss
2. The impact of depreciation / appreciation on foreign currency other than USD on profit before tax of the Company is not material.
Derivative financial instruments
The Company holds derivative financial instruments such as foreign currency forward contracts to mitigate the risk of changes in exchange rate on foreign currency exposure. The counterparty for these contracts is generally a Bank. These derivative financial instruments are valued based on quoted prices for similar asset and liabilities in active markets or inputs that is directly or indirectly observable in the marketplace. The following table gives details in respect of outstanding foreign exchange forward and option contracts.
(ii) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial Instrument will fluctuate because of changes in market interest rates.
The Company''s borrowings are commercial banks to meet the working capital requirements for operation of the business. The banks generally charge the card rate to the Company based on Annual appraisal by internal and external ratings. There is no major fluctuation on those interest rates charged by the bank during the period under audit.
(b ) Credit risk management
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a fianancial loss. The Company is exposed to credit risk from its operating activities (primarly trade receivables) and from its financing activities including foreign exchange transactions. The company generally deals with parties which has worthiness based on companys internal assessment.
Liquidity risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. The Company''s objective is to at all times maintain optimum levels of liquidity to meet its cash and liquidity requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. Processes and policies related to such risks are overseen by senior management. Management monitors the Company''s liquidity position through rolling forecasts on the basis of expected cash flows. The Company assessed the concentration of risk with respect to its debt and concluded it to be low.
The table below summarizes the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments.
12 a) Standards issued but not yet effective
The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company''s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective. The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2017 and Companies (Indian Accounting Standards) Amendment Rules, 2018 amending the following standards:
Ind AS 115 - Revenue from Contracts with Customers
In March 2018, the Ministry of Corporate Affairs had notified Ind AS 115 (Revenue from Contracts with Customers) which would be applicable to the Company for accounting periods beginning on or after 1st April 2018. This Standard establishes the principles that an entity shall apply to report useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer. The Company is evaluating the requirements of the standard and its impact on its financial statements.
Amendments to Ind AS 12 - Recognition of Deferred Tax Assets for Unrealised Losses
The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount. These amendments are effective for annual periods beginning on or after 1st April, 2018. These amendments are not expected to have any material impact on the Company.
Dividend distribution to equity shareholders of the Company
The Company recognises a liability to make dividend distributions to its equity holders when the distribution is authorised and the distribution is no longer at its discretion. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity. In case of Interim Dividend, the liability is recognised on its declaration by the Board of Directors.
b) Changes in accounting policies and disclosures New and amended standards and interpretations
The Company applied for the first time certain amendments to the standards, which are effective for annual periods beginning on or after 1st April, 2017. The nature and the impact of each amendment is described below:
Amendments to Ind AS 7 Statement of Cash Flows: Disclosure Initiative
The amendments require entities to provide disclosure of changes in their liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes (such as foreign exchange gains or losses). The Company has provided the information for the current period.
13 The Company considers entire business under one segment i.e. Consumer Durable products. Further, there is no separately identifiable geographical segment and hence no reporting is made for segment.
14 There are no Micro and Small Enterprises, to whom the Company owes dues. This information as required to be disclosed under the Micro Small and Medium Enterprises Development Act, 2006, has been determined to the extent such parties have been identified on the basis of information available with the Company.
15 Significiant events after the reporting period
There were no significiant adjusting events that occurred subsequent to the reporting period other than the events disclosed in the relevant notes.
Mar 31, 2017
1 During September 2016, the Company had entered into a settlement agreement dated 13th September 2016 with workers of Wada factory to shift the worker''s to other locations as per the business requirements of the Company or pay compensation to workers who are willing to voluntarily retire from the services of the Company. The above agreement has been entered considering reduction in operations of the Company over the years. Out of total workers at Wada factory 166 workers had agreed to voluntarily retire from the services of the Company and accordingly the Company has recognized an expense of Rs, 963.28 lacs in the Statement of Profit and Loss and classified it as an exceptional item.
The compensation has been paid as follows:-
a) 50% of the eligible compensation has been paid within 7 days from the date of receipt of signed resignation letter;
b) Balance 50% would be paid in 12 equated monthly installment starting from January 2017. As on 31st March 2017 an amount of Rs, 361.23 lacs is payable for the period April17 to December 2017 and disclosed under other current liabilities - Employee benefit payable.
2) During the previous year, the Company had allotted 1 (One) Warrant to Bennett Coleman & Co. Ltd. ( BCCL ) exercisable for equity shares aggregating to Rs, 2,275.00 lacs. The company had received an amount of Rs, 568.75 lacs being 25% of the value of Warrant from BCCL and had been disclosed as Money received against share warrants below Reserves and Surplus, with such warrant carrying an option / entitlement to the warrant holder to subscribe to equity shares of the face value of Re. 1/- each for cash at a minimum price of Rs, 14.66/- each (including premium of Rs, 13.66/- each) per share, as arrived in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as on the Relevant Date i.e. 27th May, 2015 or such higher price per share equal to the average of the weekly high and low of the closing prices of the equity share of the company as quoted on the National Stock Exchange of India Ltd. during the 26 (twenty six) weeks preceding the last date of 17th (seventeenth) month from the date of allotment of warrant i.e. 10th July, 2015 after making adjustment for any bonus issue / split / consolidation.
During the current year, the Company has received balance 75% allotment money amounting Rs, 1706.25 lacs against exercise of warrants by BCCL. The Company has issued 1,55,18,417 equity shares of face value of Rs, 1 per equity share to BCCL @ Rs, 14.66 (including securities premium of Rs, 13.66 per equity share).
As of March 31, 2017 the share capital of the Company has been increased by Rs, 155.19 lacs and securities premium account by Rs, 2119.82 lacs.
3) The Company at its extraordinary general meeting dated 29th March, 2017 have approved an Employee Stock option Scheme 2017. However the scheme is not yet offered to employees as on date and hence no effect is considered in the financial statements for the year ended 31st March, 2017.
4) There was a fire accident in February, 2012 at Roorkee Plant of the Company. The Company had made a claim of Rs, 4995.50 lacs in respect of loss and damages covered by the insurance policy. Against the total claim, on account payment of Rs, 1632.45 lacs had been realized from the Insurance company in the financial year 2013-14. Based on the communication received from surveyors appointed by the Insurance company, management had reassessed the recoverability of claim and consequently a further loss of Rs, 623 lacs was charged to the statement of Profit and Loss during the year ended 31st March, 2015. During the year ended 31st March, 2016, the Company received an amount of Rs, 2474.70 lacs from the Insurance Company as full and final settlement against insurance claim receivable. For the balance amount of Rs, 265.35 lacs the Company has gone for arbitration along with interest and other claims. The said amount of claim is included under Insurance claims receivable ( Refer Note 16).
In relation to above contingent liabilities, the Company has been advised by its legal counsel that it is possible, but not probable, that the action will succeed and accordingly no provision for liability has been recognized in the financial statements.
5) Employee Benefits :
a) Defined contribution plans
The Company has recognized an expense of Rs, 248.56 Lacs ( previous year Rs, 223.14 Lacs) towards defined contribution plans, in respect of Provident Fund.
b) Defined benefit plans Gratuity
Company has covered its gratuity liability by a Group Gratuity Policy named ''Employee Group Gratuity Assurance Scheme'' issued by LIC of India. Under the plan, employee at retirement is eligible for benefit which will be equal to 15 days'' salary for each completed year of service. In other words, the policy is a defined benefit plan. Accordingly, the aforesaid insurance policy is the plan asset.
6) Foreign Currency exposure :
The Company enters into forward exchange contracts to hedge foreign exchange exposure of the company. The Company does not enters into any forward contract which is intended for trading or speculative purposes.
7) Research and development expenses consist of employee expenses and other expenses of Rs, 258.87 Lacs (previous year Rs, 286.11 Lacs), and Rs, 68.64 Lacs (previous year Rs, 80.35 Lacs) respectively. Depreciation on Research and Development assets is Rs, 22.07 Lacs (previous year Rs, 24.51 Lacs) shown under Fixed Assets.
8) There are no Micro and Small Enterprises, to whom the Company owes dues. This information as required to be disclosed under the Micro Small and Medium Enterprises Development Act, 2006, has been determined to the extent such parties have been identified on the basis of information available with the Company.
9) Related party Disclosure :
Related parties as defined under clause -3 of Accounting Standard ( AS - 18 ) " Related Party Disclosures " have been identified on the basis of representation made by key management personnel and information available with the Company.
Names of related parties with whom transactions have taken place & description of relationship :
1. Subsidiary Akasaka Electronics Ltd. ( Refer Note 26)
2. Key Management Personnel Mr. G.L. Mirchandani - Chairman & Managing Director
Mr. V.J. Mansukhani - Managing Director
Mr. Kaval Mirchandani - Executive Director
(wef. 26th May, 2016)
Mr. S. K. Dhoot - Whole - time Director
Mr. G. Sundar - Chief Executive Officer
Mr. Aashay S. Khandwala - Head Corporate Affairs, Legal and Company Secretary
(Joined wef. 26th March, 2014 - Resigned wef. 15th April, 2015) Mr. Lalit Chendvankar - Head Corporate Affairs, Legal and Company Secretary
(Joined wef. 13th August, 2015)
Mr. Muthu Elango - Chief Financial Officer
( Joined wef 8th November, 2014 - Resigned wef. 13th August, 2015) Mr. Subrat Nayak - Head of Finance (Joined wef. 14th March, 2016)
- Chief Financial Officer (wef. 22nd April, 2016)
3. Relatives of Key Management Mrs. Gita Mirchandani (Wife of Mr.G.L. Mirchandani)
Personnel Mrs. Marissa Mansukhani (Wife of Mr.V.J.Mansukhani)
Mr. Sasha Mirchandani (Son of Mr.G.L. Mirchandani)
Mr. Akshay Mansukhani (Son of Mr.V.J. Mansukhani)
Ms. Ayesha Mansukhani (Daughter of Mr.V.J. Mansukhani)
G. L. Mirchandani (H.U.F.)
V. J. Mansukhani (H.U.F.)
4. Enterprise over which any Iwai Electronics Pvt. Ltd.
person described in 2 & 3 is Adino Telecom Ltd. having significiant influence
Gulita Wealth Advisors Pvt. Ltd.
Adino Electronics Ltd.
Algorhythm Tech Pvt. Ltd.
Gulita Securities Ltd.
Mar 31, 2016
(b) Rights, Preferences and Restrictions Attached to Equity Shares
The company has only one class of equity shares having par value of Re.1 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, if any on the equity shares is recommended by the Board and approved by the shareholders at the 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.
(c) Pursuant to rights issue of equity shares, the Company has allotted 5, 44, 82,524 equity shares of '' 1 each at a premium of '' 5 per share on 22nd October, 2014
(d) Details of Shareholders holding more than 5 % shares in the company:
Effective April 1, 2014, the Company had provided depreciation on straight line (SL) basis, based on the useful life of tangible assets as specified in Schedule II to the Companies Act, 2013. Accordingly, the carrying amount, net of residual value, as on that date had been depreciated over the revised remaining useful life of the assets. As a result, the charge for depreciation is higher by'' 158.84 lacs for the year ended 31st March 2015.
Further carrying amount of'' 674.57 lacs (deferred tax'' 218.86 lacs, net of deferred tax'' 455.71 lacs) in respect of assets whose useful life was already exhausted as on April 01,2014 had been adjusted to opening balance of surplus in the statement of profit and loss in the previous financial year.
# Excise duty on sales amounting to '' 4,437.54 lacs [previous year '' 5,344.15 lacs] has been reduced from sales in the Statement of Profit and Loss and excise duty on increase / (decrease) in stock amounting to ''112.85 lacs [previous year '' 61.72 lacs ] has been considered as (income) / expense in note 25 of financial statements.
1) There was a fire accident in February, 2012 at Roorkee Plant of the Company. The Company had made a claim of ''4995.50 lacs in respect of loss and damages covered by the insurance policy.
-Against the total claim, on account payment of '' 1632.45 lacs had been realized from the Insurance company in the previous year.
Based on the communication received from surveyors appointed by the Insurance Company, management had reassessed the recoverability of claim and consequently a further loss of '' 623.00 lacs were charged to the statement of Profit and Loss during the previous year ended 31st March, 2015. During the current year, the Company has received an amount of ''2474.70 lacs from the Insurance Company as full and final settlement against insurance claim receivable of ''2740.05 lacs (included under other current asset - Refer note 16). The Company has gone for arbitration for the balance amount along with interest and other claims.
2) Employee Benefits:
a) Defined contribution plans
The Company has recognized an expense of ''223.14 Lacs ( previous year '' 221.41 Lacs) towards defined contribution plans, in respect of Provident Fund.
b) Defined benefit plans Gratuity
Company has covered its gratuity liability by a Group Gratuity Policy named ''Employee Group Gratuity Assurance Scheme'' issued by LIC of India. Under the plan, employee at retirement is eligible for benefit which will be equal to 15 days'' salary for each completed year of service. In other words, the policy is a defined benefit plan. Accordingly, the aforesaid insurance policy is the plan asset.
* Of the Total Provision, the Company expects to pay an amount of Rs, 137.72 lacs to the fund in the year 2016-17
* All the assets are categorized as Insurer Managed Funds
3) The Company during the previous year allotted 5, 44, 82,524 equity shares at a premium of Rs 5 per share. Consequently, the paid up share capital increased from Rs,1,417.52 lacs to Rs, 1,962.34 lacs and Securities Premium increased by Rs, 2,621.96 lacs (net of rights Issue expenses) in previous year.
Pursuant to stipulation imposed by the financial institutions the promoters provided an unsecured loan of Rs, 3,200.00 lacs to the Company in FY 2013-14. The Company during the previous year issued equity shares of Rs, 2,646.05 lacs against the unsecured loan and refunded the balance amount to the promoters.
4) The Company considers entire business under one segment i.e. Consumer Durable products. Further, there is no separately identifiable geographical segment and hence no reporting is made for segment.
5) Foreign Currency exposure:
The Company enters into forward exchange contracts to hedge foreign exchange exposure of the company. The Company does not enter into any forward contract which is intended for trading or speculative purposes.
The details of Forward exchange contracts outstanding as on the balance sheet date are as follows :
6) Research and development expenses consist of personnel expenses of RS,286.11 Lacs (previous year Rs,325.16 Lacs) and other expenses of RS, 80.35 Lacs (previous year rs, 97.39 Lacs). Depreciation on Research and Development assets is RS, 24.51 Lacs (previous year Rs, 32.45 Lacs) shown under Fixed Assets.
7) There are no Micro and Small Enterprises, to whom the Company owes dues. This information as required to be disclosed under the Micro Small and Medium Enterprises Development Act, 2006, has been determined to the extent such parties have been identified on the basis of information available with the Company.
8) Related party Disclosure:
Related parties as defined under clause -3 of Accounting Standard ( AS - 18 ) " Related Party Disclosures " have been identified on the basis of representation made by key management personnel and information available with the company.
Names of related parties with whom transactions have taken place & description of relationship:
Note:
i) Figures in brackets are of previous year
9) Provision for Warranty:
Warranty costs are provided based on technical estimate of the costs required to be incurred for repairs, replacement, material cost and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over contractual warranty period.
10) Exceptional items for the current year ended 31st March, 2016 includes profit on sale of land and building at Noida of ''466.93 lacs (Previous year profit on sale of Noida and Thane property of ''944.93 lacs.) and profit on sale of other miscellaneous assets of RS,2.77 lacs (Previous year loss on sale of other miscellaneous asset of ''0.06 lacs). An amount of ''825 lacs was receivable on account of sale of land and building at Noida during the previous year which is disclosed under Loans and advances - refer note no.11. The said amount is received during the year.
11) During the year, the Company has allotted 1 (One) Warrant to Bennett Coleman & Co. Ltd. (BCCL ) exercisable for equity shares aggregating to rs, 2,275.00 lacs. The company has received an amount of RS,568.75 lacs being 25% of the value of Warrant from BCCL and has been disclosed as "Money received against share warrants" below Reserves and Surplus, with such warrant carrying an option / entitlement to the warrant holder to subscribe to equity shares of the face value of Re. 1/- each for cash at a minimum price of RS, 14.66/- each (including premium of Rs, 13.66/- each) per share, as arrived in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as on the Relevant Date i.e. 27th May, 2015 or such higher price per share equal to the average of the weekly high and low of the closing prices of the equity share of the company as quoted on the National Stock Exchange of India Ltd. during the 26 (twenty six) weeks preceding the last date of 17th (seventeenth) month from the date of allotment of warrant i.e. 10th July, 2015 after making adjustment for any bonus issue / split / consolidation.
- The Company has incurred a net loss in its three immediately preceding financial years. Thus in accordance with Section 135 (5) of the Companies Act, 2013, the Company is not required to provide / spend any amount under its Corporate Social Responsibility policy.
- The Board of Directors of the Company has approved a scheme of amalgamation between the Company and its wholly owned subsidiary Akasaka Electronics Limited with effect from 1st April, 2015. The scheme is subject to approval of the High Court and hence no effect of the same is given in the financial statement.
- Figures for the previous year have been regrouped where necessary to conform to current year''s classification.
Mar 31, 2015
Basis of Preparation
The financial statements of the company have been prepared in
accordance with the generally accepted accounting principles in India
(Indian GAAP). The company has prepared these financial statements to
comply in all material respects with the accounting standards notified
under section 133 of the Companies Act, 2013, read together with
paragraph 7 of the Companies (Accounts) Rules 2014. The financial
statements have been prepared on an accrual basis and under the
historical cost convention. The accounting policies adopted in the
preparation of financial statements are consistent with those of
previous year.
1. SHARE CAPITAL
(a) Rights, Preferences and Restrictions Attached to Equity Shares
The company has only one class of equity shares having par value of Rs.
1 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, if any on the equity shares is recommended by the Board and
approved by the shareholders at the 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.
(b) Aggregate number and class of shares allotted as fully paid up
pursuant to contract(s) without payment being received in cash.
In FY 2009-10 : 7,48,96,669 Equity Shares were alloted and 7,48,96,575
Equity Shares were cancelled as per the Scheme of Amalgamation of
Guviso Holdings Private Limited with the Company.
(c) Pursuant to rights issue of equity shares, the Company has allotted
5,44,82,524 equity shares of Rs. 1 each at a premium of Rs. 5 per
share on 22nd October, 2014
2) There was a fire accident in February 2012 at Roorkee Plant of the
Company. The Company had made a claim of Rs. 4995.50 lacs in respect
of loss and damages covered by the insurance policy. Against the total
claim, on account payment of Rs. 1632.45 lacs has been realised from
the Insurance company . During the year, based on the communication
received from surveyors appointed by the Insurance company, management
has reassessed the recoverability of claim and consequently a further
loss of Rs. 623 lacs has been charged to statement of Profit and Loss.
3) Contingent Liabilities and Commitments :
31st March 31st March
2015 2014
Rs.in lacs Rs.in lacs
Contingent Liabilities
a) Guarantees given to Bank against which 760.93 715.01
Rs. Nil (previous year Rs. Nil) has been
deposited as margin money
b) Guarantees given to bank on behalf of
subsidiary company
- Akasaka Electronics Limited 1,669.00 1,732.00
c) Income tax demands in respect of which
appeals have been filed 323.42 -
d) Excise Duty, Service Tax and Custom Duty
in respect of which appeals have 2,496.25 2,563.62
been filed
e) Claims made against the Company not
acknowledged as debts 11,007.64 10,624.53
Commitments
Estimated amount of contracts remaining to be
executed on capital account not provided - 2.46
for (net of advances)
In respect of the above contingent liabilities, the future cash
outflows are determinable only on receipt of judgements pending at
various forums / authorities.
4) Employee Benefits :
a) Defined contribution plans
The Company has recognised an expense of Rs. 221.41 lacs ( previous
year Rs. 254.56 lacs) towards defined contribution plans, in respect of
Provident Fund during the year and in respect of Provident Fund and
Superannuation Fund until previous year.
b) Defined benefit plans Gratuity
Company has covered its gratuity liability by a Group Gratuity Policy
named 'Employee Group Gratuity Assurance Scheme' issued by LIC of
India. Under the plan, employee at retirement is eligible for benefit
which will be equal to 15 days' salary for each completed year of
service. In other words, the policy is a defined benefit plan.
Accordingly, the aforesaid insurance policy is the plan asset.
c) The expected rate of return on plan assets which is 7.95% relates to
the benchmark rate available on Government Securities (G. sec.) for the
tenure of 10 years i.e the expected term of obligation. The rate is
taken as per the deal rate as on 31st March, 2015 as suggested under AS
15 (Revised 2005)
d) The estimates of future salary increases, considered in acturial
valuation, take in to account inflation, seniority, promotion and other
relevant factors, such as supply and demand in the employment market.
5) The Company has during the year allotted 5,44,82,524 equity shares
at a premium of Rs. 5 per share. Consequently, the paid up share
capital has increased from Rs. 1417.52 lacs to Rs. 1962.34 lacs and
Securities Premium has increased by Rs. 2,621.96 lacs (net of rights
Issue expenses).
Pursuant to stipulation imposed by the financial institutions the
promoters in the previous year provided an unsecured loan of Rs. 3,200
lacs to the Company. The Company during the current year has issued
equity shares of Rs. 2,646.05 lacs against the unsecured loan and has
refunded the balance amount to the promoters.
6) The Company considers entire business under one segment i.e.
Consumer Durable products. Further, there is no seperately identifable
geographical segment and hence no reporting is made for segment.
7) Research and development expenses consist of personnel expenses and
other expenses of Rs. 325.16 lacs ( previous year Rs. 399.82 lacs ),
and Rs. 97.39 lacs ( previous year Rs. 131.90 lacs ) respectively.
Depreciation on Research and Development assets is Rs. 32.45 lacs (
previous year Rs. 31.62 lacs ) shown under Fixed Assets.
8) There are no Micro and Small Enterprises, to whom the Company owes
dues. This information as required to be disclosed under the Micro
Small and Medium Enterprises Development Act, 2006, has been determined
to the extent such parties have been identified on the basis of
information available with the Company.
9) Related party Disclosure :
Related parties as defined under clause -3 of Accounting Standard ( AS
- 18 ) " Related Party Disclosures " have been identified on the basis
of representation made by key management personnel and information
available with the company.
Names of related parties with whom transactions have taken place and
description of relationship :
1. Subsidiary
Akasaka Electronics Ltd.
2. Key Management Personnel
Mr. G.L. Mirchandani - Chairman & Managing Director
Mr. V.J. Mansukhani - Managing Director
Mr. S. K. Dhoot - Whole - time Director
Mr. G. Sundar - Chief Executive Officer
Mr. Aashay S. Khandwala - Head Corporate Affairs, Legal and Company
Secretary (Joined wef. 26th March, 2014)
Mr. Anoopkumar Pillai - Head Corporate Affairs, Legal and Company
Secretary (Resigned wef. 19th November, 2013)
Mr. Muthu Elango - Chief Financial Officer (Joined wef.
7th November, 2014)
Mr. Predeep Gupta - Chief Financial Officer (Resigned wef. 7th
November, 2014)
3. Relatives of Key Management Personnel
Mrs. Gita Mirchandani ( Wife of Mr. G.L. Mirchandani)
Mrs. Marissa Mansukhani (Wife of Mr. VJ.Mansukhani)
Mr. Kaval Mirchandani ( Son of Mr. G.L. Mirchandani)
Mr. Sasha Mirchandani ( Son of Mr. G.L. Mirchandani)
Mr. Akshay Mansukhani (Son of Mr. V.J. Mansukhani)
Ms. Ayesha Mansukhani (Daughter of Mr. V.J. Mansukhani)
G.L. Mirchandani (H.U.F.)
V.J. Mansukhani (H.U.F.)
4. Enterprise over which any person described in 2 & 3 is having
significiant influence
Iwai Electronics Pvt. Ltd.
Adino Telecom Ltd.
Gulita Wealth Advisors Pvt. Ltd.
Adino Electronics Ltd.
IIFL Investment Adviser & Trustee Services Ltd. ( Formerly IIFL Trustee
Services Ltd.)
Gulita Securities Ltd.
10) Provision for Warranty :
Warranty costs are provided based on technical estimate of the costs
required to be incurred for repairs, replacement, material cost and
past experience in repect of warranty costs. It is expected that this
expenditure will be incurred over contractual warranty period.
11) Other income for the current year ended 31st March, 2015 includes
profit on sale of land and building at Noida and Thane property of Rs.
944.87 lacs. Further an amount of Rs. 825 lacs is receivable on account
of sale of land and building at Noida.
12) The Board of Directors of the Company at its meeting held on 24th
April, 2015 have considered and approved issuance of 3,25,00,000
warrants (exercisable into equity shares) on preferential basis to
persons other than promoters and promoter group at a price determined
as per SEBI (Issue of Capital and Disclosure Requirements) Regulations
2009, as amended and the same is subject to approval of the
shareholders.
13) The Company has incurred a net loss in its three immediately
preceding financial years. Thus in accordance with Section 135 (5) of
the Companies Act, 2013, the Company is not required to provide / spend
any amount under its Corporate Social Responsibility policy.
14) The figures of previous year were audited by a firm of Chartered
accountants other than S R B C & CO LLP. Figures for the previous year
have been regrouped where necessary to conform to current year's
classification.
Mar 31, 2013
1.1 Rights, Preferences and Restrictions attached to Equity Shares
The Company has one class of equity shares having a par value of Re. 1
per share. Each shareholder is entitled to one vote per equity share.
The shareholders are entitled to dividend declared on proportionate
basis. On liquidation of the Company, the equity shareholders are
eligible to receive remaining assets of the Company after distribution
of all preferential amounts in proportion to their shareholding.
1.2 Aggregate number and class of shares allotted as fully paid up
pursuant to contract(s) without payment being received in cash.
In FY 2009-10 : 7,48,96,669 Equity Shares were alloted and 7,48,96,575
Equity Shares were cancelled as per the Scheme of Amalgamation of
Guviso Holdings Pvt. Ltd. with the Company.
NOTE 2 - DEFFERED TAX LIABILITY
The Company has recognized Deferred Tax in accordance with the
requirements of (Accounting Standard) AS-22 on "Accounting for Taxes on
Income" as notifed under the Companies (Accounting Standards) Rules,
2006. The breakup of Net Deferred Tax Liabilty (DTL) is as follows :
3) a. Exceptional item of previous year represents expected loss of Rs.
501.22 lacs on account of major fre on 8th February, 2012 at one of the
Company''s factory located at Roorkee Uttarkhand
b. In respect of the said fre incident the Company has made claim from
insurance company and the amount (net of provision) of Rs. 4995.50 lacs
for the loss made in the earlier year is carried as Insurance claim
receivable under other current assets in the Balance Sheet. An adhoc
amount of Rs. 1500 lacs has been received subsequent to the Balance Sheet
date against the said receivables and the Management is confdent of
balance recovery.
4) The Company has a normal operating cycle of less than twelve
months, hence a period of twelve months has been considered for
bifurcation of Assets and Liabilities into Current and Non-Current as
required by Revised Schedule VI of the Companies Act, 1956 for
preparation of the fnancial statements.
5) During the year net debit in respect of foreign exchange fuctuation
is Rs. 639.88 lacs (previous year debit of Rs. 576.28 lacs). Out of this
credit of Rs. 531.31 lacs (previous year debit of Rs. 102.33 lacs) is in
respect of raw material purchases, debit of Rs. 44.86 lacs (previous year
debit of Rs. 6.87 lacs) is in respect of export of goods (included in
miscellaneous expenses), and debit of Rs. 1126.33 lacs (previous year
debit of Rs. 467.08 lacs) is in respect of premium on forward contracts
included in fnance cost .
6) Contingent Liabilities and Commitments
(Rs.in Lacs)
PARTICULARS 31st March
2013 31st March 2012
Contingent Liabilities
a) Guarantees given to
Bank against which Rs.Nil
(previous 1453.35 1565.22
year Rs.Nil) has been
deposited as margin money
b) Guarantees given to bank
on behalf of Subsidiary company 2132.00 2132.00
Akasaka Electronics Ltd.
c) Income tax demands in
respect of which appeals
have been fled 188.45 77.69
d) Excise Duty, Service Tax
and Custom Duty in respect
of which 2708.80 31136.40
appeals have been fled
(Refer note below)
e) Claims made against the
Company not acknowledged as
debts 6661.85 3681.12
Commitments
Estimated amount of contracts
remaining to be executed
on capital 21.17 100.34
account not provided for
(net of advances)
Note : In the earlier year, the Company has received a demand of
Service Tax of Rs. 29777.33 lacs from the Commissioner of Central Excise.
As per the management, the demand is not tenable and the Company has
received favourable order from CESTAT for stay of the said demand.
7) Employee Defned Benefts :
a) Defned contribution plans
The Company has recognised an expense of Rs. 241.47 lacs (previous year Rs.
291.59 lacs) towards defned contribution plans, in respect of Provident
Fund and Superannuation Fund
b) Description of the Plan
Gratuity
Company has covered its gratuity liability by a Group Gratuity Policy
named ''Employee Group Gratuity Assurance Scheme'' issued by Life
Insurance Corporation of India. Under the plan, employee at retirement
is eligible for beneft which will be equal to 15 days salary for each
completed year of service. In other words, the policy is a defned
beneft plan. Accordingly, the aforesaid insurance policy is the plan
asset.
Leave encashment
The leave encashment beneft scheme is a defned beneft plan and is
wholly unfunded. Hence, there are no planned assets attributable to the
obligation.
8) In the earlier year, Mobile Communication Device was treated as a
separate segment and accordingly disclosure required under (AS) -17 on
"Segment Reporting" was made in the Consolidated Financial Statements.
Based on the composition of sales Mobile Communication Device is no
longer considered as a seperate reportable segment and hence the
Company is left with only one reportable segment ie. Consumer Durable
products. Further, there is no seperately identifable geographical
segment and hence no reporting is made for segment.
9) Research and Development expenses consist of personnel expenses and
other expenses of Rs. 437.90 lacs (previous year Rs. 571.99 lacs), and Rs.
119.41 lacs (previous year Rs. 295.23 lacs) respectively. Depreciation on
Research and Development assets is Rs. 33.79 lacs (previous year Rs. 39.53
lacs) shown under Fixed Assets.
10a) Balances of Trade Receivables, Loans and Advances and Deposits
are subject to confrmation and reconciliation.
b) There is no amount due and outstanding, as at 31st March, 2013 to be
credited to Investor Education and Protection Fund.
11) Previous year''s fgures have been rearranged and regrouped wherever
necessary.
Mar 31, 2012
1) There was a major fire on 8th February, 2012 at one of the Company's
factory located at Roorkee, Uttarakhand, affecting the entire
operations of the factory. Fixed assets of written down value of Rs
2936.63 and stock valuing Rs 1773.17, aggregating Rs 4709.80 were
destroyed in the fire. The assets were fully covered under the
insurance policy. The amount of Rs 4409.80 is expected to be recovered
from the insurance company and shown as insurance claim receivable. The
management is confident of recovering the same. The balance amount of Rs
300 along with the expenditure incurred of Rs 201.22 (including salaries
and wages of Rs 21.72) has been charged to the Profit and Loss Statement
and the aggregate amount of Rs 501.22 has been treated as an exceptional
item.
2) During the year net debit in respect of foreign exchange fluctuation
is Rs 576.28 (previous year credit of Rs 937.57). Out of this debit of Rs
102.33 (previous year credit of Rs 1189.59) is in respect of raw
material purchases, debit of Rs 6.87 (previous year debit of Rs 43.92) is
in respect of export of goods (included in miscellaneous expenses),
debit of Rs Nil (previous year debit of Rs 25.99 ) is in respect of
secured loans ( included in finance cost ) and debit of Rs 467.08 (
previous year Rs 182.11 ) is in respect of premium on forward contracts
included in finance cost .
Rs in lacs
3) Contingent Liabilities and Commitments
PARTICULARS 31st March,
2012 31st March,
2011
Contingent Liabilities
a) Guarantees given to Bank against which
Rs Nil (previous year Rs Nil) has 1565.22 585.51
been deposited as margin money
b) Guarantees given to bank on behalf of
subsidiary company - Akasaka Electronics
Limited 2132.00 1870.00
c) Income tax demands in respect of which
appeals have been filed 77.69 82.16
d) Excise and Custom Duty in respect of
which appeals have been filed 31136.40 595.44
e) Claims made against the Company not
acknowledged as debts 3681.12 5429.58
Commitments
Estimated amount of contracts remaining to be executed on capital
account not 100.34 199.54 provided for (net of advances)
4) Employee Defined Benefits
a) Defined contribution plans
The Company has recognised an expense of Rs291.59 ( previous year
Rs279.90 ) towards defined contribution plans, in respect of Provident
Fund and Superannuation Fund.
b) Description of the Plan Gratuity
Company has covered its gratuity liability by a Group Gratuity Policy
named 'Employee Group Gratuity Assurance Scheme' issued by LIC of
India. Under the plan, employee at retirement is eligible for benefit
which will be equal to 15 days salary for each completed year of
service. In other words, the policy is a defined benefit plan.
Accordingly, the aforesaid insurance policy is the plan asset.
Leave encashment
The leave encashment benefit scheme is a defined benefit plan and is
wholly unfunded. Hence, there are no planned assets attributable to the
obligation.
5) Segment information has been presented in the Consolidated Financial
Statements as permitted by Accounting Standards (AS) - 17 on Segment
Reporting as notified under the Companies (Accounting Standards) Rules,
2006.
6) Research and development expenses consist of personnel expenses and
other expenses of Rs 571.99 (previous year Rs 815.62), and Rs 295.23
(previous year Rs 273.13) respectively. Depreciation on Research and
Development assets is Rs 39.53 (previous year Rs 39.32) shown under Fixed
Assets.
7) a) Balances of Trade Payable, Trade Recievable, Loans and Advances
and Deposits are subject to confirmation and reconciliation.
b) There is no amount due and outstanding, as at 31st March, 2012 to be
credited to Investor Education and Protection Fund.
8) Previous year's figures have been rearranged and regrouped wherever
necessary.
Signatures to Note '1' to '28' forming part of the Balance Sheet and
Profit and Loss Statement
Mar 31, 2010
1. The Company enters into forward contract for hedgeing of foreign
currency transaction. The premium/ discount for such transactions are
pro-rated over the period of the contract. Such premium/ discount is
accounted under material consumption. The exchange gain or loss on
account of foreign exchange transactions settlement or on reinstatement
at the year end is credited/ debited to the Profit and Loss account.
During the year net credit in respect of foreign exchange fluctuation
gain is Rs.2903.71 (previous year debit of Rs.6053.51). Out of this
credit of Rs.3072.10 is in respect of raw material purchases, debit of
Rs.109.63 is in respect of export of goods (included in miscellaneous
expenses), debit of Rs.58.76 is in respect of secured loans (included
in financial expenses).
2. Contingent Liabilities
31st March, 2010 31st March, 2009
a) Guarantees given to
Bank against which Rs. Nil 213.98 340.34
(Previous Year Rs. Nil) has
been deposited as margin
money
b) Guarantees given to bank on
behalf of subsidiary
companies
- Akasaka Electronics Limited 1670.00 1870.00
c) Income tax demands in
respect of which appeals have 505.92 1142.73
been filed
d) Excise and Customs Duty in
respect of which appeals 798.22 771.65
have been filed
e) Claims made against the
Company not acknowledged 5487.45 2910.84
as debts
3. Estimated amount of contracts
remaining to be executed 322.44 1093.92
on capital account not provided
for (net of advances)
4. Employee benefits
a) Description of the Plan:
Gratuity Ã
Company has covered its gratuity liability by a Group Gratuity Policy
named ÃEmployee Group Gratuity Assurance Schemeà issued by Life
Insurance Corporation of India. Under the plan, employee at retirement
is eligible for benefit which will be equal to 15 days salary for each
completed year of service. In other words, the policy is a defined
benefit plan. Accordingly, the aforesaid insurance policy is the plan
asset.
Leave encashment Ã
The leave encashment benefit scheme is a defined benefit plan and is
wholly unfunded. Hence, there are no planned assets attributable to the
obligation.
5. Research and development expenses consist of personnel expenses and
other expenses of Rs.703.42 (previous year Rs.724.12) and Rs.261.77
(previous year Rs.331.92) respectively. Depreciation on Research and
Development assets is Rs.42.73 (previous year Rs.47.20) shown under
Fixed Assets.
6. a) Balances of Sundry Debtors, Creditors, Loans and Advances and
Deposits are subject to confirmation and reconciliation.
b) There are no Micro and Small Enterprises, to whom the Company owes
dues, which are outstanding for more than 45 days as at 31st March,
2010. This information as required to be disclosed under the Micro,
Small and Medium Enterprises Development Act, 2006, has been determined
to the extent such parties have been identified on the basis of
information available with the Company
c) There is no amount due and Outstanding, as at 31st March, 2010 to be
credited to Investor Education and Protection Fund.
7. The Company is mainly engaged in Consumer Durables business, which
as per Accounting Standard (AS-17) ÃSegment Reportingà is considered
the only reportable segment. There is no seperately identifiable
geographical segment.
8. a) Provision for Taxation comprises of current tax Rs. 426.03 and
deferred tax Rs. 1.95. The current tax includes wealth tax of Rs.1.02
and Fringe Benefit tax of earlier year short paid of Rs. 8.66.
9. Related Party Disclosures
Related parties as defined under Clause-3 of Accounting Standard (AS -
18) ÃRelated Party Disclosuresà have been identified on the basis of
representation made by key management personnel and information
available with the Company.
Names of related parties and description of relationship:
1. Holding Company Guviso Holdings Pvt. Ltd.
(amalgamated w.e.f. 15 July, 2008)
2. Subsidiary Akasaka Electronics Ltd._
3. Key Management Personnel
Mr. G.L. Mirchandani - Chairman and Managing Director of
Mirc Electronics Ltd.
Mr. V.J. Mansukhani - Managing Director of Mirc Electronics Ltd.
4. Relatives of Key Management Personnel
Mrs. Gita Mirchandani (Wife of Mr. G.L. Mirchandani)
Mrs. Marissa Mansukhani (Wife of Mr. V.J. Mansukhani)
Mr. Sasha Mirchandani (Son of Mr. G.L. Mirchandani)
Mr. Kaval Mirchandani (Son of Mr. G.L. Mirchandani)
Mr. Akshay Mansukhani (Son of Mr. V.J. Mansukhani)
Ms. Ayesha Mansukhani (Daughter of Mr. V.J. Mansukhani)
G.L. Mirchandani (H.U.F.)
V.J. Mansukhani (H.U.F.)
5. Enterprise over which any person described in 3 and 4 is able to
exercise significiant influence
Iwai Electronics Pvt. Ltd.
Adino Telecom Ltd.
Gulita Wealth Advisors Pvt. Ltd.
(erstwhile Bombay Container Terminals Pvt. Ltd.)
10. Previous yearÃs figures have been rearranged and regrouped
wherever necessary.
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article
More Information on MIRC Electronics Ltd.
-
MIRC Electronics Ltd. Tools
- Bulk Deals
- Block Deals
-
MIRC Electronics Ltd. Company Details
- Company Profile
- Company History
- Management Team
- Capital Structure
- Product Mix
- Banker/Auditor/Registrar
-
Company History
- Rights
- BSE Price History
- NSE Price History
-
MIRC Electronics Ltd. Key Financial Ratios
- Ratios
-
MIRC Electronics Ltd. Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
-
MIRC Electronics Ltd. Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
-
MIRC Electronics Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
-
MIRC Electronics Ltd. Corporate Announcements
- Book Closure
- Dividend
- Board Meetings
-
Stocks To Buy Today, Dec 19: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Friday -
Stocks To Buy Today, Dec 18: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Thursday -
Stocks To Buy Today, Dec 17: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Wednesday -
Stocks To Buy Today, Dec 16: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Tuesday -
India Stock Market Weekly Review: Nifty and Sensex Fall as Caution Spreads -
Stocks To Buy Today, Dec 15: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Monday
-
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
-
Block for 8 hours
-
Block for 12 hours
-
Block for 24 hours
-
Don't block
Sign in with Google- Male
- Female
- Others
- Under 18
- 18 to 25
- 26 to 35
- 36 to 45
- 45 to 55
- 55+