(ii) Rights, preferences & restrictions attached to die above ten classes of shares
(a) Preference share holders are entitled to receive a dividend at the rate of 0.001% per annum on each preference share held by such holder, if declared by the Board of Directors. In the event the Company declares a dividend on the Equity Shares at a rate which is higher than the rate mentioned herein, the holders of Preference Shares shall be entitled to receive, in priority to the holders of Equity Shares, a dividend at a rate per preference share as would equal the product of (i) the higher dividend rate payable on each equity share and (ii) the number of equity shares issuable upon conversion of such preference share. All dividends to such shareholders shall be non-cumulative.
(b) On the occurrence of a liquidation event, the preference share holders shall be entitled to receive out of the proceeds or assets of the Company available for distribution to its shareholders, on a pari passu basis and prior and in preference to any distribution of proceeds of such liquidation event to the holders of equity shares by reason of their ownership thereof, an amount per share equal to the sum of the applicable original issue price, plus declared but unpaid dividends thereon.
c) Preference shares will be converted to such number of equity shares, at the conversion ratio then in effect:
• In the event the preference share holder requires Company to convert all or a part of such preference shares held by such holder,
• upon the earlier of (i) the closing of an IPO, or (ii) the date, or the occurrence of an event, specified by vote or written consent or agreement of the requisite number of investors.
• upon the date that is twenty (20) years after the date on which such series of Preference Shares were first issued by the Company.
(d) Holdens of preference shares shall enjoy such voting rights available to the extent permissible under law, cany voting rights as if the preference shares have been fully converted into equity shares. Each preference share shall entitle the holder to the number of votes equal to the number of whole or fractional equity shares into which such preference share could then be converted. If applicable law does not permit any holder of preference shares to exercise voting rights on all or any matters submitted to the vote of the Shareholders of the Company (including the holders of equity shares) (the “Non-Voting Preference Shares”), then until the conversion of all such Non-Voting Preference Shares into equity shares, each shareholder shall vote in accordance with the instructions of the holders of such Non-Voting Preference Shares at a general meeting of the shareholders or provide proxies without instructions to the holders of the Non-Voting Preference Shares for the purposes of a general meeting of the shareholders, in respect of such number of equity shares held by each of them such that a relevant percentage of the equity shares of the Company are voted in the manner required by the holders of the Non-Voting Preference Shares.
_3.431_0.131
Nature and purpose of other reserve
(i) Securities Premium
Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of the Companies Act, 2013.
(ii) Retained earnings
Retained earnings are the accumulated profits earned by the Company till date, less transfer to general reserves, dividend and other distributions made to the shareholders.
(iii) Stock Options Outstanding Reserve
The fair value of the equity-settled share basal payment transactions with employees is recognised in statement of profit and loss with corresponding credit to stock options outstanding reserve. The amount of cost recognised is transferred to security premium on exercise of the related stock options.
Notes:
(a) Pursuant to board and shareholder’s approval, the Company has issued to 18,088 bonus share during the year of INR 10 per share to certain class of shareholders in ratio of their respective holdings.
(b) During the previous year, the Company announced ESOP Cash Settlement program whereby a participant could opt for cash settlement of vested options. The cash payment made to settle the fully vested options of INR 121 million is debited to reserves in accordance with Ind AS 102.
Terms and repayment:
Secured term loans from banks and others cany interest rate ranging from 9.25% p.a to 14.00% p.a These loans are repayable in monthly installments as per the terms of the respective loan agreements. Tenure of these loans are ranging from 2 to 5 years.
The Company has availed short term credit facilities in the form of working capital demand loans to meet the working capital requirements of the Company and these facilities cany an floating interest from 7.5% p.ato 11.20% p.a These are repayable on demand.
Term of security:
Term loans & Working capital loans from banks:
Pari passu charge on current assets both present and future, Cash margin of 25% by way lien on fixed deposits, Pari passu charge on brand and trade mark/IPR/Intangibles of the technology stock/product suite if any.
Term loans from Others
First pari passu charge on movable property, plant and equipment of the Company including intangibles, Cash margin @20% of principal outstanding amount, Second charge over the present and future current assets of the Company.
Non-convertible debentures
First Pari-passu charge on existing and future property, plant and equipment, Cash and cash equivalents & all intellectual property rights, Second pari-passu charge on existing and future Current assets of the company.
Additional disclosures:
1. The Company has borrowings from banks or financial institutions on the basis of security of current assets and the statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts.
2. The Company has utilised the borrowings for the purpose for which it was taken.
3. Charges or satisfaction of charges are registered with ROC within the statutory period, there are no charges or satisfaction yet to be registered with ROC beyond the statutory period as at 31 March 2024.
4. The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
(i) In terms of borrowing and shareholder’s agreements, certain lenders / shareholders have ‘Right To Subscribe’ (RTS) to the Company’s equity shares of face value of INR 1 each. During the year, certain shareholders having 18,088 RTS have shared their consent to the Company for exercising their rights. Furthermore, shareholders have indicated their consent to the board for the issuance of bonus Compulsorily Convertible Preference Shares (CCPS) in lieu of equity shares, subject to the decision of both the Board and Shareholder. Pursuant to board and shareholder's approval, the Company has issued to 18,088 bonus CCPS to certain class of shareholder's in ratio of their respective holdings. Consequently, the settlement of RTS liability of INR 797 million by issue of bonus shares has been adjusted with the Securities Premium account. As at 31 March 2024, the Company has 1,811 RTS and the fair value of liability towards those RTS is INR 44 million.
(ii) Stock option liability (cash settled): Eligible employees and consultants are entitled to receive cash on account of appreciation in stock prices of the Company, subject to fulfilment of certain vesting conditions.
The fair value of the above liabilities as at the year end are determined by using Black-Scholes Model.
(a) In response to a show cause notice ("SCN") dated 29 March 2023 from IFCI Limited on behalf of the Ministry of Heavy Industries ("MHT) in relation to certain matters under the FAME II and Phased Manufacturing Program (“PMP”) guidelines, the Company vide its undertaking dated 23 May 2023, without prejudice agreed to voluntarily refund the price of the "Off board chargers" to all customers who purchased an off board charger as an accessory prior to 12 April 2023. Further, the Company has also voluntarily agreed to pay differential incentive amount claimed based on installed capacity against usable capacity.
The Company has recorded an expense of INR 1,578 Million towards refund of "Off board chargers related liability" and INR 168 Million towards adjustment of incentive for differential battery capacity (including interest). As on balance sheet date, the Company has refunded an amount of INR 1,467 million to the customers for liability towards "Off-board chargers" as of 31 March 2024. Against the outstanding liability of INR 111 million (excluding cheque issued but not presented of INR 23 million), a deposit is maintained in a bank account managed by IFCI Limited, which will be refunded back to the Company on actual payment of charger refund to customers and on submission of relevant documents of such refund. Further, the Company has paid an amount of INR 168 Million to MHI towards adjustment of incentive for differential usable battery capacity.
The Company does its impairment evaluation on an annual basis and based on such evaluation as at 31 March 2024, the estimated recoverable amount of the Cash Generating Unit (CGU) exceeded its carrying amount. For the purpose of impairment testing, tangible assets, intangible assets (Product Design & Development) and intangible assets under development are allocated to the CGU which benefits from the intangible asset. For this, the Company as a whole is considered as CGU.
The recoverable amount of the above CGU has been determined based on ‘value in use’ model, where in the value of cash generating unit is determined as a sum of the net present value of the projected post tax cash flows for a period of 5 years and terminal value. The terminal value of cash generating unit is arrived at by extrapolating cash flows of latest forecasted year to perpetuity using a constant long-term growth rate.
Determination of value in use involves significant estimates and assumptions that affect the reporting CGU’s expected future cash flows. The Company has performed sensitivity analysis for all key assumptions and concluded that it is unlikely to cause the carrying amount of the CGU exceed its estimated recoverable amount. The key assumptions used for the calculations were as follows:
Note - 33 OPERATING SEGMENTS_
The Company primarily operates in the automotive segment. The automotive segment includes all activities related to development, design, manufacture, assembly and sale of vehicles, as well as sale of related parts and accessories. The board of directors of the Company, which has been identified as being the chief operating decision maker (CODM), evaluates the Company’s performance, allocate resources based on the analysis of the various performance indicator of the Company as a single unit.
Therefore, based on the guiding principles given in Ind AS 108 on ‘Operating Segments’, the Company’s business activity fall within a single operating segment, namely automotive segment.
A. Contribution to provident fund (Defined contribution):
The Company make contributions to provident fund which is a defined contribution plan and the Company has no obligation other than to make the specified contributions. During the year, the Company has charged 1NR 115 million (31 March 2023 : INR 89 million) to the statement of profit and loss towards defined contribution plans.
B. Gratuity (Defined benefit plan):
The Company provides for gratuity for employees in India as per the Gratuity Act. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement / termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The Gratuity plan of the Company is unfunded.
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice this is unlikely to occur, and changes in some of the assumptions may be correlated. 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 assumptions used in preparing the sensitivity analyses did not change compared to previous year.
The management assessed that carrying value of cash and cash equivalent, trade receivables, trade payables, other financial assets, other financial liability, lease liabilities and borrowings approximates their fair value largely due to short-term maturities of these instruments.
iii) Fair value hierarchy
The section explains the judgement and estimates made in determining the fair value of the financial instruments that are:
a) recognised and measured at fair value.
b) measured at amortised cost and for which fair values are disclosed in the financial statement.
To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into three levels as mentioned under Indian accounting standards.
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities. This category consists of quoted equity share, quoted debt instruments and mutual fund investments. The fair values of investments in units of mutual fund are based on the Net Asset Value (NAV) as per the fund statement.
Level 2 - This level includes financial assets and liabilities, measured using 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 - This level indudes finandal assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data
There are certain financial assets and liabilities which are measured at fair value at the end of each reporting period. Following table gives information about how the fair values of these finandal assets and liabilities are determined:
Note - 38 FINANCIAL RISK MANAGEMENT FRAMEWORK
The Company's activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk. In order to manage the aforementioned risks, the Company operates a risk management policy and a program that performs close monitoring of and responding to each risk factors The Company is constantly evaluating micro and macro economic factors influencing the business including, economical, geo-political and other risks which may have a bearing on the business or operations. The Company is of the view that the impact of these risks would not have a material impact on the business in medium to long term business plans. The Company continuously monitor these risks and other developments to identify significant uncertainties.
A. CREDIT RISK
Credit risk arises when a counterparty defaults on its contractual obligations to pay resulting in financial loss to the Company. The Company has adopted a policy of dealing with creditworthy counterparties, as a means of mitigating the risk of financial loss from defaults. This information is supplied by independent rating agencies wherever available and if not available, the Company uses other publicly available financial information and its own trading records to rate its major customer. The Company's exposure and credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties.
Financial instruments that are subject to concentrations of credit risk, principally consist of balance with banks, investments in mutual funds, trade receivables and other financial assets. None of the financial instruments of the Company result in material concentrations of credit risks.
B. LIQUIDITY RISK
(i) Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the Company’s short-, medium- and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
(ii) Maturities of financial liabilities
The following tables detail the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The amount disclosed in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The contractual maturity is based on the earliest date on which the Company may be required to pay.
C. MARKET RISK
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk such as equity price risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. All such transactions are carried out within the guidelines set by the Board of Directors and Risk Management Committee.
There has been no significant changes to the Company's exposure to market risk or the methods in which they are managed or measured.
L Interest Rate Risk
Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s main interest rate risk arises from long term borrowings and short term borrowings with variable rates. The Company constantly monitors the credit markets and rebalances its financing strategies to achieve an optimal maturity profile and financing cost
2*1. Currency Risk
The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The Company's exposure to currency risk relates primarily to the Company's operating activities and borrowings when transactions are denominated in a different currency from the Company's functional currency.
Foreign currency sensitivity
The following table details the Company's sensitivity to a 1% increase and decrease in the INR against the relevant foreign currencies. ( ) / (-) 1% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management's assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year end for a 1% change in foreign currency rates. A positive number below indicates an increase in profit or equity where the INR strengthens ( ) / (-) 1% against the relevant currency. For a 1% weakening of the mpees against the relevant currency, there would be a comparable impact on the profit or equity, and the balances below would be positive or negative.
Note - 39 CAPITAL MANAGEMENT
The Company’s capital management objectives are:
- to ensure the Company’s ability to continue as a going concern
- to provide an adequate return to shareholders by pricing products and services commensuraldy with the level of risk.
- to augment requisite resources for future infrastructure requirements
For the purpose of debt to total equity ratio, debt considered is long-term, short-term borrowings and current and non-current lease liabilities. Total equity comprise of issued share capital, instrument entirely equity in nature and all other equity reserves.
The Company sets the amount of capital in proportion to its overall financing structure, i.e. equity and financial liabilities. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.
Note 44
As of balance sheet date, the Company has an aggregate sum of INR 1 million equivalent to USD 7,321 and EURO 450 (31 March 2023: INR Nil) payable to overseas Companies towards import of goods and services which are outstanding beyond the prescribed time limit for payment as per the extant Foreign Exchange Management Act (FEMA) regulations.
Note 45
According to the managanait's evaluation at events subsequent to the balance sheet date thae were no significant adjusting events that occurred other than those disclosed/given effect to, in these financial statements as of 31 March 2024.
Note 46 : Other statutory disclosures
A. The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other persons or entities, including foreign mtities (Intermediaries) with the understanding (whether recorded in writing or otherwise) 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
B. The Company has not received any fund from any persons or entities, 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,
Note 47
As at 31 March 2024 tha:e are no proceedings initiated or pmding against the Company for holding any bmami propaty under the Ben ami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
Note 48
The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
Note 49
The Company has not entoed into any scheme of arrangement which has an accounting impact on cumait or previous financial year.
Note 50
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
Note 51
Previous year's figures have been regrouped or reclassified wherever necessary to correspond to the current year’s grouping / classification and disclosure._
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