Terms and rights attached to equity shares
The Company has one class of equity shares having a par value of Rs.10 per share. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all pref erential amounts, in proportion to their shareholding.
Nature and purpose of other reserves
Securities premium reserve
Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Act.
Equity component - Fair value adjustment on loans
The fair value adjustment on loans from group companies at inception is recorded in Other equity in accordance with provisions of Ind AS 109.
1. The above amounts disclosed above are borrowings after IND AS fair value adjustments and includes accrued interest of Rs.59.14 Lakhs
2. Borrowings are classified as Non-Current (Long-term debt) as specified in Ind AS Schedule III as borrowing having a period of more than twelve months at the time of origination. The portion of non-current borrowings, which is due for payments within twelve months of the reporting date is classified under “current borrowings” while the balance amount is classified under non-current borrowings
The loan carries a fixed interest of 6.90% per annum and is repayable after 4 years from the date of withdrawal.
During the current year, repayment date for External Commercial Borrowings taken from Sharp Corporation, Japan, has been extended to 31 December 2024.
The loan has been fair valued at the benchmark market rate of interest prevailing at the time the loan was availed taking into account the market participants perspective.
A corporate guarantee has been provided by the holding company, Sharp Corporation, Japan for this loan.
The loan previously carried an interest rate of 8.00 % per annum and was repayable after 1 year. After the rollover during the year, the interest rate was revised to 9.40 % per annum and is repayable in 1 year.
A corporate guarantee has been provided by the holding company, Sharp Corporation, Japan for this loan.
The loan previously carried an interest rate of 8.00 % per annum and was repayable after 1 year. After the rollover during the year, the interest rate was revised to 9.40 % per annum and is repayable in 1 year.
The loan carries an interest of 9.10% per annum and is repayable after 3 years from the date of each withdrawal.
The loan has been fair valued at the benchmark market rate of interest prevailing at the time the loan was availed taking into account the market participants perspective.
A corporate guarantee has been provided by the holding company, Sharp Corporation, Japan for this loan.
The loan previously carried an interest rate of 8.70 % per annum and was repayable after 1 year. After the rollover during the year, the interest rate was revised to 9.55 % per annum and is repayable in 1 year.
The above loan carries an interest of 9.75% per annum and is repayable after 3 years from the date of each withdrawal.
The loan has been fair valued at the benchmark market rate of interest prevailing at the time the loan was availed taking into account the market participants perspective.
A corporate guarantee has been provided by the holding company, Sharp Corporation, Japan for this loan.
The loan has been fair valued at the benchmark market rate of interest prevailing at the time the loan was availed taking into account the market participants perspective.
A corporate guarantee has been provided by the holding company, Sharp Corporation, Japan for this loan.
The loan previously carried an interest rate of 8.70 % per annum and was repayable after 1 year. After the rollover during the year, the interest rate was revised to 9.55 % per annum and is repayable in 1 year.
The above loan carries an interest of 9.00% per annum, repayable after 1 year from the date of each withdrawal and has been fair valued at the benchmark market rate of interest prevailing at the time the loan was availed taking into account the market participants perspective.
During the year, the above loan has been further extended for a period of one year.
A corporate guarantee has been provided by the holding company, Sharp Corporation, Japan for this loan.
The loan previously carried an interest rate of 8.70 % per annum and was repayable after 1 year. After the rollover during the year, the interest rate was revised to 9.55 % per annum and is repayable in 1 year.
The above loan carries an interest of 8.40% per annum, repayable after 1 year from the date of each withdrawal and has been fair valued at the benchmark market rate of interest prevailing at the time the loan was availed taking into account the market participants perspective.
A corporate guarantee has been provided by the holding company, Sharp Corporation, Japan for this loan.
A corporate guarantee has been provided by the holding company, Sharp Corporation, Japan for this loan.
The loan previously carried an interest rate of 8.70 % per annum and was repayable after 1 year. After the rollover during the year, the interest rate was revised to 9.55 % per annum and is repayable in 1 year.
The above loan carries an interest of 8.00% per annum, repayable after 1 year from the date of each withdrawal and has been fair valued at the benchmark market rate of interest prevailing at the time the loan was availed taking into account the market participants perspective.
A corporate guarantee has been provided by the holding company, Sharp Corporation, Japan for this loan.
The loan previously carried an interest rate of 8.00 % per annum and was repayable after 1 year. After the rollover during the year, the interest rate was revised to 9.40 % per annum and is repayable in 1 year.
The above loan carries an interest of 8.00% per annum, repayable after 1 year from the date of each withdrawal and has been fair valued at the benchmark market rate of interest prevailing at the time the loan was availed taking into account the market participants perspective.
A corporate guarantee has been provided by the holding company, Sharp Corporation, Japan for this loan.
A corporate guarantee has been provided by the holding company, Sharp Corporation, Japan for this loan.
The loan previously carried an interest rate of 8.00 % per annum and was repayable after 1 year. After the rollover during the year, the interest rate was revised to 9.40 % per annum and is repayable in 1 year.
The above loan carries an interest of 8.70% per annum, repayable after 1 year from the date of each withdrawal and has been fair valued at the benchmark market rate of interest prevailing at the time the loan was availed taking into account the market participants perspective.
A corporate guarantee has been provided by the holding company, Sharp Corporation, Japan for this loan.
The loan previously carried an interest rate of 8.70 % per annum and was repayable after 1 year. After the rollover during the year, the interest rate was revised to 9.55 % per annum and is repayable in 1 year.
The above loan carries an interest of 9.40% per annum, repayable after 1 year from the date of each withdrawal and has been fair valued at the benchmark market rate of interest prevailing at the time the loan was availed taking into account the market participants perspective.
A corporate guarantee has been provided by the holding company, Sharp Corporation, Japan for this loan.
A corporate guarantee has been provided by the holding company, Sharp Corporation, Japan for this loan.
The above loan carries an interest of 9.55% per annum, repayable after 1 year from the date of each withdrawal and has been fair valued at the benchmark market rate of interest prevailing at the time the loan was availed taking into account the market participants perspective.
A corporate guarantee has been provided by the holding company, Sharp Corporation, Japan for this loan.
The above loan carries an interest of 9.55% per annum, repayable after 1 year from the date of each withdrawal and has been fair valued at the benchmark market rate of interest prevailing at the time the loan was availed taking into account the market participants perspective.
A corporate guarantee has been provided by the holding company, Sharp Corporation, Japan for this loan.
(i) The Company had imported refrigerators during the financial year ended 31 March 2009 by paying nil duty on such imports under the free trade agreement with Thailand. The custom authorities have challenged the classification under which the refrigerators were imported under concessional rate of duty. The dispute is pending with the CESTAT authorities. The Company has deposited Rs. 54.04 Lakhs under protest against this demand with the customs authorities which has been fully provided for. During the year ended 31 March 2019, the company has received an order stating the appeal of the Company has been dismissed. The outstanding provision amounting to Rs. 20.80 Lakhs as on 31 March 2024 represents interest on the demand upto the date of payment.
“ The Company had executed Memorandum of Settlement dated 1st August 2014 between the Company and Kalyani Sharp Employees Union u/s 2 (p) read with section 18 (1) of the Industrial Disputes Act, 1947 and under Rule 62 of the Industrial Disputes (Bombay) Rules, 1957. Said settlement was effective from 1.09.2012 up to 31.03.2016. Further as per clause 53 of said settlement, the settlement shall further continue to remain in force and biding thereafter, unless and until amended or superseded by any other subsequent settlement as per the provisions of the Industrial Disputes Act, 1947. Accordingly, the company continues to pay the salaries and various allowances to the employees as per the terms of said Memorandum of Settlement”.
Defined Contribution Plan
The Company has certain defined contribution plans i.e., contribution to provident and pension fund, contribution to superannuation fund and employee deposit linked insurance scheme. Contributions are made to provident fund for employees at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the Government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the period towards defined contribution plan is as follows:
A Provision for compensated absences
Provision for compensated absences cover the Company's liability for earned leave which are classified as other long-term benefits. The entire amount of provision is presented as current since the Company does not have an unconditional right to defer settlement for any of these obligations. However, based on past experience, the Company does not expect all the employees to avail the full amount of accrued leave or require payment for such leave within the next 12 months.
B Gratuity
The Company has accrued gratuity on the basis of actual liability using gross undiscounted basis. The liability is net of the amounts contributed to an Insurer, along-with interest accrued thereon, specifically to fund these liabilities.
*The Company on a conservative basis, has accrued gratuity on the basis of actual liability using gross undiscounted basis. Taking into consideration this aspect, as on March 31, 2024 the company had excess of plan assets over obligations amounting to Rs. 14.95 lakhs as against Rs. 43.25 lakhs as per the actuarial valuation. (Planned liability accrued on March 31,2023 was Rs. 1.21 lakhs as against assets of Rs. 33.81 lakhs as per actuarial valuation.
The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
The overall expected rate of return on assets is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligation.
Funding Arrangment & Policy
The money contributed by the Company to the fund to finance the liabilities of the plan has to be invested. The trustees of the plan have outsourced the investment management of the fund to an insurance company. The insurance company in turn manages these funds as per the mandate provided to them by the trustees and the asset allocation which is within the permissible limits prescribed in the insurance regulations. Due to the restrictions in the type of investment that can be held by the fund, it is not possible to explicitly follow an asset-liability matching strategy to manage risk actively. There is no compulsion on the part of the Company to fully pre fund the liability of the Plan. The Company’s philosophy is to fund the benefits based on its own liquidity and tax position as well as level of under funding of the plan.
The expected contribution payable to the plan next year is NIL.
i) Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of inputs used in determining fair value, the Company has classified its financial instruments into three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. However, the Company does not have any financial instruments that are measured using Level 1 inputs.
Level 2: The fair value of derivatives is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level
3.
ii) Fair value of financials assets and liabilities measured at amortised cost
The carrying amounts of all financial assets and liabilities except for borrowings are a reasonable approximation of their fair values. The fair value of borrowings are based on discounted cash flows using a current borrowing rate. They are classified as Level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.
27 Financial risk management
The Company’s activities exposes it to market risk, liquidity risk and credit risk. The operative management of the treasury activities of the Company is responsible for managing the financial risk position and maintaining adequate liquidity. The financial risks are reviewed and monitored on a regular basis.
(A) Credit risk
Credit risk mainly arises from cash and cash equivalents, deposits with banks as well as security deposits.
The maximum exposure arising from these financial assets is their carrying value as disclosed in the balance sheet.
(i) Credit risk management
For banks and financial institutions, only high rated banks are accepted and hence, these are subject to low credit risk with risk of default being negligible. Hence, no provision has been created for expected credit loss for credit risk arising from these financial assets. Further, the Company has sales on one-off basis, which are made solely to its related parties. As such, it does not bear any credit risk with respect to receivables, if any.
For security deposits also, generally the Company is subject to low credit risk with risk of default being negligible. However, considering the nature of balances the Company evaluates the balances and recognises a loss allowance, if any, on a specific identification
(B) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. The Company obtains necessary funds mainly through loans from its parent company i.e. Sharp Corporation, Japan and fellow subsidiaries. The management monitors rolling forecasts of the Company's liquidity position on the basis of expected cash flows.
(i) Maturities of financial liabilities
The tables below analyse the Company's financial liabilities into relevant maturity group based on their contractual maturities.
The amounts disclosed in the tables above are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
(C) Market risk
(i) Foreign currency risk and exposure
The Company operates internationally context where transactions are conducted in currencies different from the Indian Rupees (INR). This exposes the Company to risks arising from exchange rates fluctuations. For this purpose, the Company has an exchange rate risk management policy which aims to neutralise the possible negative effects of the changes in exchange rates on Company cash-flows. The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to Japanese Yen. However, due to minimal operations, the gross exposure is not very significant.
(ii) Interest rate risk exposure:
The Company has availed fixed - rate borrowings and hence is not exposed to any interest rate risk.
28 Capital Management Risk management
The Company’s objectives when managing capital are to:
- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and
- Maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may return capital to shareholders, issue new shares or sell assets to reduce debt.
Refer Note 33 on Going Concern.
30 Contingencies
(i) The Company has evaluated the impact of the recent Supreme Court Judgment in case of "Vivekananda Vidyamandir And Others Vs The Regional Provident Fund Commissioner (II) West Bengal" and the related circular (Circular No. C-I/1(33)2019/Vivekananda Vidya Mandir/284) dated March 20, 2019 issued by the Employees’ Provident Fund Organisation in relation to non-exclusion of certain allowances from the definition of "basic wages" of the relevant employees for the purposes of determining contribution to provident fund under the Employees' Provident Funds & Miscellaneous Provisions Act, 1952. In the assessment of the management, the aforesaid matter is not likely to have a significant impact and accordingly, no provision has been made in these financial statements.
(ii) The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the Company towards Provident Fund and Gratuity. The draft rules for the Code on Social Security, 2020 have been released by the Ministry of Labour and Employment on November 13, 2020. The Company is in the process of assessing the additional impact on Provident Fund contributions and on Gratuity liability contributions and will complete their evaluation and give appropriate impact in the financial statements in the period in which the rules are notified and become effective.
32 Segment reporting
The Company was exclusively engaged in the business of 'consumer electronics' consisting of all types of Color Televisions, LED TVs and Air-conditioners which constitute one single segment. The Company is domiciled in India. Revenue from operations is within India. There is no revenue from operations during the FY 2023-2024 ( FY 2022-2023 - Rs.2.63 Lakhs).
33 Going concern assessment
During the year ended on March 31,2024 the Company incurred a net loss of Rs. 1,785.32 Lakhs. The accumulated losses of the Company as at March 31, 2024, are Rs. 14,729.05 Lakhs. There is no production of LED TVs from April, 2015 and of Air Conditioners since June, 2015 onwards in the absence of any orders. However, the Company continues to receive financial and operational support from Sharp Corporation, Japan, the majority shareholder and holding company and as at March 31, 2024, the Company has received support letter from Sharp Corporation, Japan for financial and operational support until March 31,2025. Based on this continued support from the holding company, and the fact that the Company has entered into (i) Basic Services Agreement between Sharp Corporation and Sharp India Limited dated 3rd June 2021; (ii) Service Agreement between Sharp Business Systems (India) Private Limited and Sharp India Limited dated 1st June 2021, the management is of the opinion that the Company will be able to continue as a going concern. Nevertheless, the recognition and measurement of assets (except freehold land) has been considered at lower of their carrying value or net realizable value and in the opinion of the management, no further adjustments would be required if going concern assumption is not considered as appropriate.
34 Additional regulatory information required by Schedule III
(i) Details of benami property held
No proceedings have been initiated on or are pending against the company under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
(ii) Borrowing secured against current assets
The Company has no borrowings from banks and financial institutions.
(iii) Wilful defaulter
The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
(iv) Relationship with struck off companies
The Company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.
(v) Compliance with number of layers of companies
The Company has complied with the number of layers prescribed under the Companies Act, 2013.
(vi) Compliance with approved scheme(s) of arrangements
The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.
(vii) Utilisation of borrowed funds and share premium
The Company has not advanced or loaned or invested funds to any other person or entity, including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries
The Company has not received any fund from any person or entity, including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
b. provide any guarantee, security or the like on behalf of the ultimate beneficiaries
(viii) Undisclosed income
There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.
(ix) Details of crypto currency or virtual currency
The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.
(x) Valuation of PP&E, intangible asset and investment property
(xi) Registration and Satisfaction of charges with Ministry of Corporate Affairs
There are no charges or satisfaction which are yet to be registered with the ROC beyond the statutory period except the charges in favour of Bank Of India amounting to Rs. 3,300 Lacs and in favour of State Bank of India amounting to Rs. 390 Lacs. Both these charges have remained unsatisfied in the record of ROC on account of delay in receipt of no dues certificates from respective banks though there are no outstanding to these banks on account of the above mentioned amounts.
36. There was a delay in submission of the financial results of the Company as per SEBI (LODR) Guidelines for quarter and half year ended September 30, 2023 due to delay in filing of the results for the quarter and financial year ended March 31, 2023 and quarter ended June 30, 2023. The letter stating reason for delay in submission of financial results was submitted to the stock exchange on November 13, 2023 as per Para B.11 of Chapter III of SEBI Master Circular SEBI / HO/CFD/PoD2/CIR/P/2023/120 dated July 11, 2023. The Company has paid / provided for the consequential fines. Due to non-compliance in respect of submission of financial results for two consecutive quarters i.e., March 2023 and June 2023, the scrip of the company was moved to “Z” Category from October 30, 2023, in terms of Para 7.4.5 read with 7.1.1 of the above referred Master Circular. Further, entire shareholding of promoters has been frozen w.e.f. August 3, 2023 and the shares of the Company have been suspended from trading from December 18, 2023 as per Para 6.6 & Para 7.4.5 read with 7.1.2 of the above referred Master Circular respectively.
Subsequently, the Company has submitted the financial results for the aforesaid quarters that were delayed earlier, and has also submitted an application for revocation of suspension of trading to the Bombay Stock Exchange. The Company has also paid/ provided for the necessary fees towards revocation application and processing. Further communication from the Bombay Stock Exchange in this regard is awaited.
37. Previous year figures have been Re-grouped / Re-arranged and reclassified as necessary.
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