Rights, preferences and restrictions attached to shares
The Company has only one class of equity shares having a face value of ' 10/- per share with one vote per each share. The Company declares and pay dividends in Indian Rupees. The dividends proposed by the Board of Directors is subject to the approval of the shareholders in the ensuring Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining asset of the compnay, after distribution of all preferential amounts. The distribition will be in proportion to the number of equity shares held by the shareholders.
Preferential Allotment of Equity Shares
During the year ended March 31,2024, the Company has raised additional capital aggregating to ' 1,452.63 Lakhs (net of expenses of ' 6.87 Lakhs) by way of preferential allotment of equity shares. The Company has issued 6,00,000 shares at a price of ' 243.25/- per share whereby equity share capital has increased by ' 60.00 Lakhs and securities premium account is increased by ' 1,392.63 Lakhs (net of expenses of ' 6.87 Lakhs).
Convertible Share Warrants
During the year ended March 31,2024, the Company also issued and allotted 15,00,000 fully convertible share warrants of ' 10/- each with a premium of ' 233.25/- to promoters and received 25% towards warrants subscription i.e. ' 912.19 Lakhs. These warrants are outstanding for conversion as on date of balance sheet.
1 The Loans referred at (a to f) above are Primary secured by hypothecation of entire current assets, present and future on pari-passu basis with other working capital lenders and First charge by way of equitable mortgage of properties standing in the name of the company and Second charge on Fixed Assets of the company raking pari-passu with other lenders in the working capital consortium.
2 The Loans referred at (g) above are secured by 1st pari-passu charge by hypothecation of land & Buildings at Toopran, Part -B, Industrial park, and guaranted by Managing Director and other two promoter directors.
3 The Loans referred at (h & i) above are secured by 1st pari-passu charge by hypothecation of land & Buildings at Toopran, Part -A, Industrial park, & 1st parripassu charge by hypothecation of plant & machinery created our of the finance and guaranted by Managing Director and other two promoter directors.
4 Hire Purchase Loans above are secured by hypothecation of the respective asset and guaranted by one of the Directors of the Company and repayable in monthly installments.
5 Loan From Axis Finance Ltd are secured by hypothecation land of promoters at Medchel.
6 Working capital limits from consortium banks are secured by way of :
Primary : Pari-passu first charge by way of hyphothecation of stocks of raw material, semi finished goods, finished goods, stores and spares, book debts and all movable and other current assets of the company.
Collateral : (i) Pari-passu first charge by way of Equitable Mortage of land & buildings at B-36, 25&27, Plot No 41 at Balanagar, Land & Buildings at Bonthapally and Medchel except the relating to the specific term loans.
Pari-passu second charge by way of Equitable Mortage of fixed assets of the Company.
| 34. EXCEPTIONAL ITEMS :
Exceptional item of NIL for the year ended March 31,2024 ( March 31,2023 - '159.14 Lakhs ) is on account of insurance claim received with respect to damaged machinery in transit.
| 37. FAIR VALUE MEASUREMENT:
The Company measures financial instruments at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for such asset or liability, or in the absence of a principal market, in the most advantageous market which is accessible to the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
a. Level 1 - Quoted (unadjusted market prices) in active markets for identical assets or liabilities.
b. Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurements is directly or indirectly observable.
c. Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
| 39. RETIREMENT BENEFIT OBLIGATIONS:
The liability on account of Gratuity for this financial year is calculated as mentioned below. Based on the actuarial valuation, provision for the same is made in the books of accounts of ' 467.75 Lakhs. The Company is in the process of obtaining planned assets by way of Gratuity insured policy as per Ind AS 19.
4. An amount of ' 16.03 Lakhs towards sale of goods and ' 317.38 Lakhs towards advance for purchase of asset is pending settlement with MLR Auto Ltd and the same are likely to be settled on or before August 2024.| 41. SEGMENT INFORMATION:
The primary reporting of the Company has been performed on the basis of business segment. The Company is organized into two business segments i.e. Machines Division and Component Division. Segments have been identified and reported based on the nature of the products, risks and returns, the organization structure and the internal financial reporting system.
The expenses that are not directly attributable to the business segments are shown as unallocated corporate costs.
Segment assets include all operating assets used by a segment and consist principally of debtors, inventories, advances and fixed assets, net of allowances.
Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities.
(Amounts in brackets represent previous year figures)
Secondary segment reporting is performed on the basis of geographical location of customers. The operations of the Company are largely confined in India, with export contributing to approximately 6.24% of its annual net sales. The management views the Indian market and export market as distinct geographical segments.
| 42. FINANCIAL RISK MANAGEMENT
The Company’s activities expose it to market risk, credit risk and liquidity risk. Company’s overall risk management focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the financial performance.
I. Market Risk
Market risk is the risk of loss of the future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, commodity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and borrowings.
a. Foreign Currency Risk - Foreign Currency Risk is the risk of impact related to fair value or future cash flows of an exposure in foreign currency, which fluctuate due to change in foreign currency rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to impact of raw materials and spare parts, capital expenditure and export of Machines. The Company does not enter into any derivative instruments for trading or speculative purposes and the impact foreign currency risk is negligible.
b. 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 exposure to the risk of changes in market rates relates primarily to the Company’s short term borrowing. The Company constantly monitors the credit markets and rebalances its financing strategies to achieve an optimal maturity profile and financing cost. Since all the borrowings are on floating rate and constantly monitored, no significant risk of change in interest rate.
II. Credit Risk
Credit risk arises when a customer or counterparty does 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/investing activities, including deposits with banks. The Company has a prudent and conservative process for managing its credit risk arising in the course of its business activities. The Company is receiving payments regularly from its customers and hence the Company has no significant credit risk.
III. Liquidity Risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet obligations on time or at reasonable price. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of credit facilities to meet obligations when due. The Company’s treasury team is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company’s liquidity position through rolling forecasts based on expected cash flows.
| 44. CORPORATE SOCIAL RESPONSIBILITY
As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. A CSR committee has been formed by the Company as per the Act. The funds were primarily allocated to a corpus and utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013:
| 46. ADDITIONAL DISCLOSURES AS PER SCHEDULE III OF THE COMPANIES ACT, 2013:
i) The Company do not have any Benami property and neither any proceedings have been initiated or is pending against the Company for holding any Benami property.
ii) The Company do not have any transactions with companies struck off.
iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
iv) The Company has not been declared a willful defaulter by any bank or financial institution or any other lender during the current period.
v) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds), other than in the ordinary course of business by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
vi) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year
vii) The Company has not made 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).
viii) The Company has complied with number of layers prescribed under clause (87) of Section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017
Previous Year’s figures have been regrouped wherever necessary to correspond with the current year’s figures. Except 47.
when otherwise stated, the figures are presented in Rupees in Lakhs.