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Marine Electricals (India) Ltd. Notes to Accounts
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You can view the entire text of Notes to accounts of the company for the latest year
Market Cap. (Rs.) 1196.64 Cr. P/BV 5.71 Book Value (Rs.) 15.80
52 Week High/Low (Rs.) 123/33 FV/ML 2/1 P/E(X) 70.41
Bookclosure 26/09/2023 EPS (Rs.) 1.28 Div Yield (%) 0.00
Year End :2023-03 

(i) Investment property comprise of a commercial building that is leased to third party. Subsequent renewal of license agreement are negotiated with the tenant and average renewal period ranges between three and five years.

(ii) Refer note 23 and 27 for information on investment property pledged as security by the Company.

(iii) (a) As at 31 March 2023, the fair value of the property is Rs. 2,917.04 lakhs (31 March 2022: Rs. 2,917.04

lakhs). This valuation is based on valuation performed by an accredited independent valuer in the previous year. The management believes that there is no significant fluctuation in the fair value of the property during the year ended 31 March 2023.

(b) The fair value of the Company's investment property has been arrived at using Composite rate method. Under Composite rate method, rate is arrived using comparable sales instance for similar property with same specification in the adjoining locality and further adjusted for depreciation on building component. The main inputs used are age of the building, life of the building, salvage value and composite rate.

* Consequent to the approval by the Audit Committee by Circular Resolution and by the General Purpose Committee (GPC) of the Board of Directors in their respective meetings held on 23 September 2022, the Company has increased its % holding in its Subsidiary, Narhari Engineering Works, a partnership firm, by way of further acquisition of 19% holding from the existing partners for a consideration of Rs 197.93 lakhs based on the valuation report by a registered valuer, resulting in total holding of 99% post acquisition. The reconstituted partnership deed is entered between the parties w.e.f. 30 September 2022.

(iii) The Company has neither raised loans during the year on the pledge of securities held in its subsidiaries (as defined under the act) nor has not taken any funds from any entity or persons on account of or to meet the obligations of its subsidiaries. The Company does not hold any investment in any associates or jointly controlled entity (as defined under the act) during the year ended 31 March 2023.

(iv) On 07 December 2022, Board of Directors of a subsidiary company, Evigo Charge Private Limited ("Evigo"), has considered and approved allotment of 10,00,000 Equity Shares of face value of Rs 10 each upon conversion of 10,000 0.001% Compulsorily Convertible Preference Shares (CCPS) of Rs 1,000 each held by the Company in Evigo. Post the allotment of shares pursuant to conversion of CCPS, the shareholding of the Company in Evigo has increased from 71.04% to 98.88%.

* Consequent to the approval by the Board of Directors in its meeting dated 22 August 2022 and subsequent approval by the Shareholders by Special Resolution in the Annual General Meeting dated 19 September 2022, the Board, on 30 September 2022 has allotted 1,00,00,000 Convertible Warrants carrying an entitlement to subscribe to an equivalent number of equity shares of face value of Rs 2 each at price of Rs 29.25 per warrant (including premium of Rs 27.25 per warrant), being price not lower than the minimum price calculated in accordance with the Regulations for Preferential Issue in Chapter V of SEBI (ICDR) Regulations, 2018 to the Promoters and NonPromoters allotees. Each warrant is convertible into one equity share within a period of 18 months from the date of allotment at the option of warrant holder. As per the terms of allotment, the Company has received subscription money equivalent to 25% of the issue price and the balance 75% shall be paid by the warrant holder at the time of allotment of equity shares pursuant to exercise of option.

During the year, 36,50,000 Convertible Warrants have been converted into equivalent number of equity shares by the Promoters. As per the terms of allotment, the balance 75% subscription money payable by the warrant holder at the time of allotment of equity shares pursuant to exercise of option have been received by the Company. These equity shares issued on conversion are reflected in Benpos report of the Company subsequent to year end. b) Rights, preference and restrictions attached to the equity shares:

The Company has single class of equity shares having a par value of Rs. 2 each. Each holder of equity shares is entitled to one vote per share.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the 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.

Nature and purpose of reserves:

Securities premium: Securities premium is used to record the premium on issue of shares. The reserve is utilized in accordance with the provision of the Companies Act, 2013.

General reserve: General reserve is created from time to time by way of transfer of profits from retained earnings for appropriation purposes. General reserve is created by a transfer of one component of equity to another.

Retained earnings: Retained earnings represents surplus / accumulated earnings of the Company and are available for distribution to shareholders. Further, it also includes the impact of remeasurements of the defined benefit obligations, net of tax.

Other component of equity: Other component of equity represents fair value of financial guarantee.

Money received against share warrants: Represents subscription money received by the Company as per the terms of allotment equivalent to 25% of the issue price of share warrants.

(a) Indian rupee vehicle loans from ICICI Bank Limited carrying value of Rs 1.16 lakhs as at 31 March 2023 (31 March 2022: Rs 2.73 lakhs) secured against hypothecation of vehicles is repayable in 60 monthly installments. The loans carry interest ranging from 9.00% p.a. to 9.75% p.a. (31 March 2022: 9.00% p.a. to 9.75% p.a.).

(b) Indian rupee vehicle loan from Axis Bank Limited carrying value of Rs Nil as at 31 March 2023 (31 March 2022: Rs 2.52 lakhs) secured against hypothecation of the vehicle is repayable in 36 monthly installments. The loan carries an interest of NA (31 March 2022: 8.76% p.a.).

(c) Indian rupee term loan from Kotak Mahindra Bank Limited carrying value of Rs 298.56 lakhs as at 31 March 2023 (31 March 2022: Rs 633.08 lakhs) is primarily secured by equitable mortgage of industrial property at plot no. 54, 57, 55 and 56, Verna Industrial Estate, Phase IV, Salcete, Goa. The loan is repayable in 60 monthly installments. The loan carries an interest of K-MCLR 6M Spread of 1.15% p.a. (31 March 2022: K-MCLR 6M Spread of 1.15% p.a.). The loan is backed by personal guarantee of Mr. Venkatesh Uchil and Mr. Vinay Uchil and corporate guarantee of KDU Enterprises Private Limited, the Holding Company.

(d) Indian rupee term loan from Kotak Mahindra Bank Limited under Guaranteed Emergency Credit Line (GECL) under ECLGS scheme carrying value of Rs 108.79 lakhs as at 31 March 2023 (31 March 2022: Rs 178.51 lakhs) is secured by equitable mortgage of industrial property at plot no. 54, 57, 55 and 56, Verna Industrial Estate, Phase IV, Salcete, Goa. The loan is repayable in 48 monthly installments including moratorium of 12 months. The loan carries an interest of 8.00% p.a. (31 March 2022: 8.00% p.a.). The loan is backed by personal guarantee of Mr. Venkatesh Uchil and Mr. Vinay Uchil and corporate guarantee of KDU Enterprises Private Limited, the Holding Company.

(e) Indian rupee term loan from State Bank of India carrying value of Rs Nil as at 31 March 2023 (31 March 2022: Rs 39.34 lakhs) is primarily secured by hypothecation charge over inventory, book debts and other movable current assets, present & future at Mumbai and both the Goa plants. The loan is collaterally secured by:

(i) Commercial Building bearing Survey Number: A2, B1, B2, Ground Floor, situated at Unit No. A-2, B-1, B-2, Ground Floor, Udyog Sadan No. 3, Industrial Computer & Software Premises Co-op. Society Ltd., Near Seepz Bus Stop, Central Road, Seepz, Andheri East, Mumbai, 400093;

(ii) P & M at (a) B-1, Udyog Sadan- 3 Andheri and (b) 5-17/18 Goa;

(iii) Factory Land & Buildings bearing Survey Number: 30, situated at Plot No. 17 & 18, bearing Survey No. 30, Verna Industrial Estate, Phase I, Village Nagoa, District Salcete, South Goa, Village Nagoa, District Salcete, Goa, 403722;

(iv) Residential Building bearing Survey Number : 502A and 502B, situated at 502/A and 502/B, Fifth Floor, Heritage, Hiranandani gardens, CTS Nos. 20(pt), 21(pt), 22(pt) and 30(pt), Powai, Mumbai, 400 076;

(v) Commercial Building bearing Survey Number: D-1 & B-3, situated at Unit No. D-1 & B-3, Ground Floor, Udyog Sadan No. 3, Industrial Computer & Software Premises Co-op. Society Ltd., Near Seepz Bus Stop, Central Road, Seepz, Andheri East, Mumbai, 400093;

The loan is repayable in 24 monthly installments including moratorium of 6 months. The loan carries an interest of 1 year MCLR with annual reset (31 March 2022: 1 year MCLR with annual reset). The loan is backed by personal guarantee of Mr. Venkatesh Uchil and Mr. Vinay Uchil and corporate guarantee of KDU Enterprises Private Limited, the Holding Company and Philins Industrial Corporation.

(f) Indian rupee term loan from The Karur Vysya Bank Limited carrying value of Rs 1,372.97 lakhs as at 31 March 2023 (31 March 2022: Rs Nil) is primarily secured by mortgage of commercial land and building situated at ground 2 upper floors, road no.9, MIDC Marol, Plot No. 16, Village Mulgaon, Andheri East, Mumbai - 400093. The loan is repayable in 120 monthly installments. The loan carries an interest of 3 months MCL rate of the bank (31 March 2022: NA). The loan is backed by personal guarantee of Mr. Venkatesh Uchil and Mr. Vinay Uchil and corporate guarantee of KDU Enterprises Private Limited, the Holding Company.

(g) Indian rupee term loan from Kotak Mahindra Bank Limited carrying value of Rs 629.33 lakhs as at 31 March 2023 (31 March 2022: Rs Nil) is primarily secured by equitable mortgage of industrial property at plot no. 54, 57, 55 and 56, Verna Industrial Estate, Phase IV, Salcete, Goa. The loan is repayable in 60 monthly installments. The loan carries an interest of Repo Rate Spread of 3.25% p.a. (31 March 2022 : NA). The loan is backed by personal guarantee of Mr. Venkatesh Uchil and Mr. Vinay Uchil and corporate guarantee of KDU Enterprises Private Limited, the Holding Company.

(h) Indian rupee vehicle loan from Kotak Mahindra Prime Limited carrying value of Rs 13.61 lakhs as at 31 March 2023 (31 March 2022: Rs 17.38 lakhs) secured against hypothecation of vehicle is repayable in 60 monthly installments. The loan carries an interest of 7.72% p.a. (31 March 2022: 7.72% p.a.)

(i) Indian rupee vehicle loan from Kotak Mahindra Prime Limited carrying value of Rs 5.77 lakhs as at 31 March 2023 (31 March 2022: Rs Nil) secured against hypothecation of vehicle is repayable in 36 monthly installments. The loan carries an interest ranging from 8.50% p.a to 9.00% p.a (31 March 2022: NA)

(a) Cash credit facility from Axis Bank Limited outstanding of Rs 256.45 lakhs as at 31 March 2023 (31 March 2022: Rs 43.97 lakhs) carrying interest of Repo 4.25% (31 March 2022: Repo 5.25%) is repayable on demand. These are secured by hypothecation of entire current assets including stock, raw material, semi-finished goods, consumable stores, receivables, bills, deposits etc. and moveable fixed assets both present and future of the Company in pari passu with other banks. The facility is collaterally secured by exclusive charge on industrial property situated at Plot No. C1, B-71 and C1, B-72, GIDC Industrial Estate, Surat Hazira Road, Ichchpore, Bhatpore, Opp. GAIL Colony, Surat - 394510 and exclusive charge on land and building at Plot No. N-51,52, 59 & 60, Phase IV, Verna Industrial Estate, Salcete, Goa owned by the Company.

The facility is backed by personal guarantee of Mr. Venkatesh Uchil and Mr. Vinay Uchil and corporate guarantee of KDU Enterprises Private Limited, the Holding Company.

(b) Cash credit facility from State Bank of India outstanding of Rs 2,034.10 lakhs as at 31 March 2023 (31 March 2022: Rs 1,410.27 lakhs) carrying interest of 2.00% above 6M MCLR (31 March 2022: 2.75% above 6M MCLR) is repayable on demand. These are secured by 1st pari passu hypothecation charge over inventory, book debts and other movable current assets, present & future at Mumbai and Goa plants. The facility is collaterally secured by:

i) Equitable / Registered Mortgage of Unit No B-1, Ground Floor, Industrial Computer and Software Premises Co-Op. Soc. Ltd., Udyog Sadan-3, Plot no-F-4 5 6, MIDC, Andheri (E), Mumbai owned by the Company;

ii) Equitable Mortgage on factory premises at S-17/18, Verna Industrial Estate, Phase-1, Verna Electronic City, Salcete, Goa owned by the Company;

iii) Hypothecation of all Plant & Machinery, present and future at Mumbai and Goa plants;

iv) Equitable / Registered Mortgage on Unit No A-2, Ground Floor, Industrial Computer and Software Premises Co-Op. Soc. Ltd., Udyog Sadan No.3, Central Road, Near Seepz Bus Depot, Andheri (E), Mumbai owned by M/s Philins Industrial Corporation;

v) Equitable / Registered Mortgage of Unit No B-2, D-1, B-3 Ground Floor, Industrial Computer and Software Premises Co-Op. Soc. Ltd., Udyog Sadan No.3, Central Road, Near Seepz Bus Depot, Andheri (E), Mumbai owned by KDU Enterprises Private Limited;

vi) Equitable / Registered Mortgage on 502/A and 502/B, Fifth Floor, Heritage, Hiranandani Gardens, CTS Nos. 20(pt), 21(pt), 22(pt) and 30(pt), Powai, Mumbai - 400076 owned by Mr. Venkatesh Uchil.

The facility is backed by personal guarantee of Mr. Venkatesh Uchil and Mr. Vinay Uchil and corporate guarantee of KDU Enterprises Private Limited, the Holding Company and Philins Industrial Corporation.

(c) Cash credit facility from Indusind Bank outstanding of Rs 677.21 lakhs as at 31 March 2023 (31 March 2022: Rs 447.13 lakhs) carrying interest of floating rate of 6M MCLR 0.75% p.a. (31 March 2022: 6M CD rate 5.31%) is repayable on demand. These are secured by first pari-passu charge on entire current assets of the Company. The facility is collaterally secured against fixed deposit of Rs. 1,620 lakh.

The facility is backed by personal guarantee of Mr. Venkatesh Uchil and Mr. Vinay Uchil and corporate guarantee of KDU Enterprises Private Limited, the Holding Company.

(d) The quarterly returns/ statements read with subsequent revisions, if any, filed by the Company with the banks are in agreement with the books of accounts.

Trade receivables and contract balances:

(i) The Company classifies the right to consideration in exchange for deliverables as either a receivable or as contract asset.

(ii) A receivable is a right to consideration that is unconditional upon passage of time.

(iii) The contract assets primarily relate to the Company’s right to consideration for work completed but not billed at the reporting date. The contract assets are transferred to receivables when the right become unconditional. Contract assets are presented in note 20.

(iv) The contract liabilities primarily relate to the advance consideration received from customers. Contract liabilities are presented in note 30.

(v) Trade receivables are presented net off loss allowance in note 15.

There are no amounts of interest paid during the year for payments made beyond the appointed day. Also, there is no amount of interest accrued and remaining unpaid as at period end for principal amount outstanding beyond the appointed day.

44.Employee benefits

(i) Defined contribution plans:

The Company makes contributions, determined as a specified percentage of employees salaries, in respect of qualifying employees towards provident fund, employees state insurance scheme and labour welfare scheme, which are defined contribution plans. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The contributions are charged to the statement of profit and loss as they accrue. The amount recognized as an expense towards contribution to provident and other funds for the year aggregated to Rs. 117.16 lakhs (31 March 2022: Rs 97.22 lakhs).

(ii) Defined benefit plans:

The Company operates an unfunded post-employment defined benefit plan that provides for gratuity benefit. The gratuity plan entitles an employee, who has rendered at least five years of continuous service, to receive gratuity at 15 days salary (salary last drawn) for each completed years of service at the time of retirement / exit.

The Company determines the gratuity liability based on the actuarial valuation using Projected Unit Credit Method by an Independent firm of Actuaries that is registered with The Institute of Actuaries of India.

The following table summarizes the position of obligation relating to gratuity plan:

The sensitivity is performed on the DBO at the respective valuation date by modifying one parameter whilst retaining other parameters constant. The sensitivity analysis presented above may not be representative of the actual change in the projected 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 projected 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 projected benefit obligation as recognised in the balance sheet.

Risk exposures:

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:

(A) Salary Increases: Actual salary increases will increase the plan’s liability. Increase in salary increase rate assumption in future valuations will also increase the liability.

(B) Discount Rate: Reduction in discount rate in subsequent valuations can increase the plan’s liability.

(C) Withdrawals: Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent valuations can impact plan’s liability.

(D) Mortality & disability: Actual deaths and disability cases proving lower or higher than assumed in the valuation can impact the liabilities.

(iii) Other long-term employee benefits:

Compensated absences

The compensated absences cover the company’s liability for earned leave.

The Company has recognised an amount of Rs.46.56 lakhs (31 March 2022: Rs. 27.77 lakhs) as an expense towards compensated absences and included in “Employee benefits expense” in the Statement of Profit and Loss. The Company has determined the liability for compensated absences based on the actuarial valuation using Projected Unit Credit Method.

Assets and liabilities used in the Company's business are not identified to any of the reportable segments as these are used interchangeably between segments. The Company believes that it is currently not practicable to provide segmental disclosure relating to total assets and liabilities since a meaningful segregation of the available data could be onerous.

Information about major customers

There are 2 (31 March 2022: 2) customers contributing in excess of 10% of the total revenue of the Company amounting to Rs 10,089.88 lakhs for the year ended 31 March 2023 (31 March 2022: Rs 10,665.29 lakhs).

There are no financial instruments that have been classified as Fair Value through Profit and Loss (FVTPL) and Fair Value through Other Comprehensive Income (FVTOCI).

a Fair values for these financial instruments have not been disclosed because their carrying amount are a reasonable approximation of their fair values.

Fair value hierarchy

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). Financial instruments - risk management

The Company has exposure to the following risks arising from financial instruments: credit risk (refer note (b) below); liquidity risk (refer note (c) below) and market risk (refer note (d) below):

(a) Risk management framework

The Company's board of directors has overall responsibility for the establishment and oversight of the Company's risk management framework. The Company's risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities.

The Company’s board oversees how management monitors compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

(b) Credit risk

Credit risk is the risk that a counter party fails to discharge its obligation to the Company. The maximum credit risk comprises the carrying amounts of the financial assets. The Company's exposure to credit risk arises mainly from cash and cash equivalents, other bank balances, trade receivables, loans and other financial assets. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls.

(ii) Credit risk exposure

Cash and cash equivalents and other bank balances

Credit risk related to cash and cash equivalents and other bank balances is managed by accepting highly rated banks and diversifying bank deposits and accounts in different banks. Management does not expect any losses from non-performance by these counterparties.

Loans and other financial assets measured at amortized cost

Loans and other financial assets measured at amortized cost includes lease deposits, staff advances, interest accrued on loans/deposits, loans and other receivables. Credit risk related to these is managed by monitoring the recoverability of such amounts continuously, while at the same time internal control system in place ensures that amounts are within defined limits. The expected credit loss on these financial instruments is expected to be insignificant.

Trade receivables

Credit risk arise from possibility that customer may default on its obligation to make timely payments, resulting into financial loss. The maximum exposure to the credit risk is primarily from trade receivables. The expected credit loss allowance is based on the ageing of the days for which the receivables are due and the expected loss rates.

The Company is contesting the demands and the management, including its tax advisors, believe that its position will likely be upheld in the appellate process. No tax expense has been accrued in the standalone financial statements for the tax demand raised. The management believes that the ultimate outcome of this proceedings will not have a material adverse effect on the Company’s financial position and results of operations.

(ii) The Company has received a demand order dated 31.08.2020 from the office of The Commissioner of Customs raising a demand of Rs 120.62 lakhs on the Company u/s 28(8) of the Customs Act, 1962 read with section 5(1) of IGST Act, 2017 with regards to classification under incorrect CTH of copper busbar imported by the Company during the period from 13.08.2014 to 30.10.2018. The order also imposes a penalty of Rs 12 lakhs on the Company and interest u/s 28AA of the Customs Act, 1962. The amount disclosed above is exclusive of interest as the same is not currently quantifiable. The Company has filed an appeal against the said order on 23.10.2020. Based on the legal opinion obtained by the Company from an independent firm of advocates, the management believes that the ultimate outcome of the proceedings will not have an adverse effect on the Company's financial position.

(iii) The Company in the year 2017 was awarded a contract for setting up a 50 MW capacity solar power project (the "Project") in Tamilnadu. The Company subcontracted the EPC portion to a sub-contractor. The obligations of the sub-contractor for the project were not completely fulfilled by the sub-contractor leading to dispute and arbitration between the Company and the sub-contractor. Both the parties have filed Statement of Defence and Counterclaim against each other. The matter is pending before arbitrator for cross examination. Pending arbitration, the impact of the outcome of the proceedings on these financial statements of the Company is currently not ascertainable.

(iv) During the previous year, pursuant to inspection by GST Department, the Company paid Rs. 120.14 lakhs towards GST on bank guarantee invocation. The Company during the year filed application for refund of the said amount which was rejected by the Department vide its order dated 27 January 2023. The Company has filed an appeal against the rejection order with the appellate authorities on 06 March 2023. Pending final outcome, the Company continues to carry the amount paid as balance with government authorities. The management believes that the ultimate outcome of the proceedings will not have an adverse effect on the Company's financial position.

(v) The Supreme court of India had passed a judgement in the month of February 2019 relating to definition of wages under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. The Management is of the view that there are interpretative challenges on the application of the judgement. However, the Company is in the process of determining the possible impact and update its provision, if required. The Management does not expect any material impact of the same for financial year 2022-23 based on the present salary structure followed by the Company for its class of employees.

57 Subsequent events

There are no significant reportable subsequent events that have occurred after the reporting period till the date of this financial statements.

58 Additional regulatory information required by Schedule III

i) Details of benami property held:

The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

ii) Wilful defaulter:

The Company is not declared wilful defaulter by any bank or financial institution or other lender during the year.

iii) Relationship with struck off companies:

The Company does not have any transactions with companies struck off.

iv) Borrowing secured against current assets:

The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

v) Utilisation of borrowed funds and share premium:

A. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

B. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

vi) Compliance with number of layers of companies:

The Company has complied with the requirements of the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017.

vi) Valuation of Property, Plant and Equipment (including Right-of-use assets) and Intangible assets:

The Company has not revalued its property, plant and equipment (including Right-of-use assets) or intangible assets or both during the current or previous year.

viii) Compliance with approved Scheme of Arrangement:

The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

59 Details of crypto currency or virtual currency:

The Company has not traded or invested in Crypto currency or Virtual currency during the financial year.

60 Undisclosed income:

The Company does not have not 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)

61 In the opinion of the board of directors, assets, loans and advances have a value on realization in the ordinary course of the business at least equal to the amounts at which they are stated and provision for all known liabilities have been made.

62 The Company did not have any long-term contracts including derivative contracts for which there were any foreseeable losses as at 31 March 2023.

63 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 Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on 13 November 2020, and has invited suggestions from stakeholders which are under active consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

64 The Company during financial year 2017-18 paid to a supplier in China an advance of USD 8,00,000 carried at Rs 584.48 lakhs as at 31 March 2023 (31 March 2022: USD 8,00,000 carried at Rs 584.48 lakhs), for procurement of solar PV modules. The Company has initiated arbitration proceedings against the supplier by appointing an independent arbitration professional. Pending recovery of the advance paid or procurement of material against the said advance, the Company believes that this advance is recoverable and it continues to carry the said advance as unsecured and considered good under "Other current assets".

65 During the year, the Company became successful bidder in the e-auction dated 08 April 2022 conducted by a liquidator of the sole liquidation estate / premise of a corporate debtor under section 61 of the Insolvency and Bankruptcy Code, 2016. The Company purchased the said liquidation estate / premise vide sale certificate dated 11 May 2022. The consideration paid by the Company amounted to Rs 1,160.00 lakhs and also incurred other expenditures amounting to Rs 177.80 lakhs as on 31 March 2023. The process of e-auction was challenged by another unsuccessful bidder in National Company Law Tribunal (NCLT). The entire e-auction process was set aside by NCLT vide its order dated 02 March 2023 as not in compliance with law. The Company has filed an appeal against the order of NCLT in National Company Law Appellate Tribunal (NCLAT) on 28 March 2023. Pending final outcome, the Company continues to carry total payments made towards the purchase of said liquidation estate / premise as capital advance.

66 Advance towards purchase of equity instruments

(a) The Board of Directors of the Company on 22 October 2021 approved the investment towards acquisition of 75% paid-up equity share capital of Xanatos Marine Ltd ("Xanatos"), a Canadian Company. During the previous year, the Company has entered into Share Purchase Agreement ("SPA") dated 23 February 2022 with a non-resident individual (the "Vendor") to purchase 75 class “A” Common Shares ("Vendor's Shares") held by the Vendor in Xanatos and representing 75% of all the issued and outstanding shares of Xanatos for a total consideration of USD 1,550,000 (at a fair value of USD 20,667 per share). The total consideration was to be paid by the Company to the Vendor in tranches. During the previous year, the Company has paid USD 950,000 (equivalent Rs 731.66 lakhs). The transfer of shares to the Company was subject to fulfilment of conditions precedent as per SPA and payment of entire consideration. During the current year, the Company paid balance consideration of USD 600,000 and the acquisition was completed on 04 January 2023 on payment of final tranche by the Company towards the acquisition. Total purchase consideration paid by the Company in tranches towards the acquisition amounted to USD 15,50,000 (Equivalent Rs 1,216.86 lakhs).

(b) During the previous year, the Company has entered into Memorandum Of Understanding ("MOU") dated 07 May 2021 with an individual and his HUF to purchase their entire shareholding held in a Private Limited company engaged in marine electronic products. As per the terms of MOU, during the previous year, the Company subject to valuation of shares has agreed to lend Rs 100.00 lakhs as advance. Pending final due diligence and share valuation, the Company has recognised an interest income of Rs 12.07 lakhs on the said advance for the year ended 31 March 2023 (31 March 2022: Rs 9.73 lakhs).

67 There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31 March 2023.

68 Previous year’s figures

Previous year’s figures have also been regrouped / recasted, wherever necessary, to conform to the current year’s presentation.


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