Note 1
The Company is under the process of getting the approvals from Stock Exchange, once it will be received the Company will account for accordingly with Securities Premium. During the FY 2024-25 the company got approval from stock exchange and the same has been adjusted accordingly.
c. Terms/rights attached to equity share Voting
Each holder of equity shares is entitled to one vote per share held.
Dividends
The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual general meeting except in the case where interim dividend is distributed.
Liquidation
In the event of liquidation of the Company, the holders of equity shares shall be entitled to receive all of the remaining assets of the Company after distribution of all preferential amounts, if any. Such distribution amounts will be in proportion to the number of equity shares held by the shareholders.
In the event of liquidation of the Company, the holders of equity shares shall be entitled to receive all of the remaining assets of the Company after distribution of all preferential amounts, if any. Such distribution amounts will be in proportion to the number of equity shares held by the shareholders.
h. No class of shares have been allotted as fully paid up pursuant to contract(s) without payment being received in cash or bought back during the period of 5 years immediately proceeding the balance sheet date.
i. The Board of Director has recommended a final dividend of ' 1/- per equity share (@10%) of face value of ' 10/- each for the financial year ended March 31, 2024 in their board meeting held on dated May 24, 2024. The said dividend has been declared & paid by the Company during the year 2024-25.
The Company’s exposure to currency risks, liquidity risks and interest rate risks are disclosed in Note Footnotes:-
For the year ended March 31, 2024 Secured loan (i) Term Loan
IndusInd Bank Ltd.
The Company has availed WCTL (Sanctioned Limit ' 12.60 Mn) from IndusInd Bank Ltd., which are secured against first and exclusive charge on the hypothecation of the entire movable fixed assets, first pari passu charge on hypothecation of all current assets (charge shared with HDFC Bank Ltd.) has been repaid during the year.
(ii) Vehicle Loan
Axis Bank Limited
Vehicle Loan obtained from Axis Bank Limited amounting to ' 17.00 millions which is secured against the respective vehicle and is repayable in 48 equal instalments commencing from October 10, 2019. Rate of interest is 9.15% p.a has been repaid during the year.
HDFC Bank Limited
Vehicle Loan obtained from HDFC Bank Limited amounting to ' 1.67 millions which is secured against respective vehicle and is repayable in 39 equal instalments commencing from April 07, 2021. Rate of interest is 7.45% p.a. and balance outstanding as at March 31, 2024 is outstanding ' 0.14 millions (March 31, 2023 is ' 0.69 millions), which is repayable in next 03 months.
Vehicle Loan obtained from HDFC Bank Limited amounting to ' 1.53 millions which is secured against respective vehicle and is repayable in 39 equal instalments commencing from April 07, 2021. Rate of interest is 7.45% p.a. and balance outstanding as at March 31, 2024 is ' 0.13 millions (March 31, 2023 is ' 0.63 millions), which is repayable in next 03 months.
HDFC Bank Ltd.
The company has also availed Cash Credit facility/LC limit (Sanctioned Limit ' 151.00 Mn) from HDFC Bank Ltd., Which is secured against pari passu charge on hypothecation of stock and debtors. Also, there is a collateral guarantee in form of industrial property situated at Noida owned by IKIO Solutions Pvt. Ltd. (A Related Party). Further, there are personal guarantees of Directors.
The loan carries a floating rate of interest of 8.35% per annum (Repo rate Spread).
Secured loan Cash Credit HDFC Bank Ltd.
(a.) The company has also availed Overdraft facility/LC limit (Sanctioned Limit ' 48.60 Mn) from HDFC Bank Ltd., Which is secured against pari passu charge on pledged of fixed deposits.
The loan carries a floating rate of interest of 8.40% per annum (Repo rate Spread).
(b.) The company has also availed overdraft facility (Sanctioned Limit ' 10.00 Mn) from HDFC Bank Ltd., which is on the basis of personal guarantee of ' 10 Mn from Managing Director (Mr. Hardeep Singh).
The loan carries a floating rate of interest of 9.47% per annum (Repo rate Spread).
Footnotes:-
For the year ended March 31, 2024 Secured loan
Cash Credit IndusInd Bank Ltd.
The Company has availed cash credit facility (Sanctioned Limit ' 96.50 Mn) from IndusInd Bank Ltd., which are secured against first and exclusive charge on the hypothecation of the entire movable fixed assets, first pari passu charge on hypothecation of all current assets (charge shared with HDFC Bank Ltd.), the limit has been paid and closed during the year.
2. Corporate Social Responsibility expenses
As per section 135 of the Companies Act, 2013, a Company, meeting the applicability threshold, needs to spend at least 2% of average net profit for the immediately preceding three financial year on Corporate Social Responsibility (‘CSR’) activities. The area for CSR activities are eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation, environment sustainability, disaster relief and rural development projects. A CSR committee has been formed by the group as per the Act.
40 LEASES
The Company is a lessee under operating lease of two premises. The Company has executed noncancellable operating leases for a period of 2 and 3 years respectively.
Disclosure of low value and short-term lease
The Company is a lessee under operating lease of two premises. The Company has executed short-term operating leases for a period of 11 Months renewable as per mutual agreement.
The aggregate lease rental of ' 2.48 million (March 2024: ' 2.88 million) on such leases has been charged to the Statement of Profit and Loss.
43 EMPLOYEES STOCK OPTION SCHEME
The Board has, in its meeting held on September 14, 2022, authorised and given its in principle approval to constitute the ILL Employee Stock Option Scheme 2022, the constitution of the ILL Employee Stock Option Scheme 2022 has been further approved by the shareholders of the Company on September 16, 2022. The ILL Employee Stock Option Scheme 2022 has been formally adopted and approved by the Board and the shareholders of the Company in their respective meetings held on September 14, 2022 & September 16, 2022.
Pursuant to SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, the ILL Employee Stock Option Scheme 2022 ESOP Scheme has been ratified by the Shareholders of the Company in the 8th Annual General Meeting held on August 20, 2024.
Further, Based on the Recommendation of Nomination & Remuneration (NRC) Committee members, the Board has approved the Grant of 8,70,000 Stock Options to the Eligible employees of the Company and its subsidiaries Company on January 08, 2025.
42 SEGMENT REPORTINGA. Basis for Segmentation
An operating segment is a component that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the other components, and for which discrete financial information is available.
The board of directors have been identified as the Chief Operating Decision Maker (‘CODM’), since they are responsible for all major decision w.r.t. the preparation and execution of business plan, preparation of budget, planning, expansion, alliance, joint venture, merger and acquisition, and expansion of any facility.
The Company’s board reviews the results of each segment on a quarterly basis. The company’s board of directors uses Profit before tax (‘PBT’) to assess the performance of the operating segments. Accordingly, there is only one reportable segment for the Company which is "Sale of Product” , hence, no specific disclosures have been made.
Entity wide disclosuresB. Information about reportable segments
The Company deals in one business segment namely Manufacturing of LED Lighting therefore, product wise revenue disclosures are not applicable to the Company.
i) Information about geographical areas
Company operates primarily under a single geographic location i.e. India and accordingly, there are no separate reportable geographical segments.
C. Revenue from Major customer.
(C) Fair Value methodology and Assumptions - ILL Employees Stock Option Scheme, 2022
Fair value: The Company has adopted ‘fair value method’ using the Black-Scholes options pricing model for accounting employee share based compensation cost. Under the fair value method, fair value of options are expensed on straight-line basis over the vesting period as employee share based compensation cost.
In IKIO Technologies limited, Revenue generated from one customer which is more than 10% amounting to ' 1,905.81 Million (March 31, 2024'2,174.04 Million) of the total revenue of the company.
Stock Market Price: As the parent company is listed on a Stock Exchange thus, the historical share price for the relevant period is readily available. The fair value of the underlying stock based on the latest available closing MarketPrice on stock exchange has been considered for valuing the grant.
Expected Volatility: Volatility is a measure of the amount by which a price has fluctuated or is expected to fluctuate during the period. The measure of volatility as used in the Black Scholes option-pricing model is the annualised standard deviation of the continuously compounded rates of return on the stock over a period of time. The period to be considered for volatility has to be adequate to represent a consistent trend in the price movements. It is also important that movement due to abnormal events get evened out. The expected volatility for the options issued by the company has been determined after observing the Company’s historical volatility is 25.64%.
Risk-free rate of return: This is based on the yields on government bonds of term equivalent to the expected life of the option as on the date of grant. The risk free rate of return taken 6.51%.
Exercise Price: As per clause 7.2 of ILL Employees Stock Option Scheme, 2022, The exercise price shall in no event be a price that is less then the face value of the share(s.) that will be issued or acquired pursuant to the exercise of an option.
Weighted average remaining contractual life: Time to Maturity/Expected Life of Options is the period for which the company expects the Options to be alive. The minimum life of a stock option is the minimum period before which the Options cannot be exercised and the maximum life is the period after which the Options cannot be exercised. The expected life of the option has been taken based on the inputs on expected exercise year provided by the parent company
44 EMPLOYEE BENEFITS
The Company contributes to the following post-employment defined benefit plans in India.
1. Defined contribution plans:
The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards provident fund, administered and managed by the government of India. The Company has no obligations other than to make the specified contributions. The contributions are charged to the statement of profit and loss as they accrue.
2. Defined benefit plan:
Gratuity
The Company operates a post-employment defined benefit plan for Gratuity. This plan entitles an employee to receive half month’s salary for each year of completed service at the time of retirement/exit. The gratuity liability is entirely funded.
The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognise each period of service as giving rise to additional employee benefit entitlement and measures each unit separately to build up the final obligation.
The most recent actuarial valuation of present value of the defined benefit obligation for gratuity were carried out as at March 31, 2025. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.
a) Economic Assumptions
The principal assumptions are the discount rate and salary growth rate. The discount rate is based upon the market yields available on government bonds at the accounting date with a term that matches that of liabilities. Salary increase rate takes into account of inflation, seniority, promotion and other relevant factors on long-term basis. Valuation assumptions are as follows which have been selected by the company.
Although the analysis does not take account of the full distribution of cash flows expected under the plan,
it does provide an approximation of the sensitivity of the assumptions shown.
Sensitivities due to mortality is not material and hence impact of change not calculated.
Sensitivities as to rate of inflation, rate of increase of pensions in payment, rate of increase of pensions
before retirement and life expectancy are not applicable being a lump sum benefit on retirement.
Description of Risk Exposures:
Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such
company is exposed to various risks as follows:
i. Salary Increases- More than expected increase in the future salary levels may results in increase in the liabilities.
ii. Discount Rate: In case of yield on the government bonds drops in the future period then it may result in increase in liability.
iii. Withdrawals - if the actual withdrawal rate is turn out to be more or less than expected then it may result in increase in the liabilities.
iv. Mortality - if the actual mortality rate in the future turns out to be more or less than expected then it may result increase in the liabilities.
Terms and conditions of transactions with the related parties
i. The terms and conditions of the transactions with key management personnel were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-key management personnel related entities on an arm’s length basis.
ii. All outstanding balances with these related parties are priced on an arm’s length basis and are to be settled in cash. None of the balances are secured.
iii. Provision for incremental gratuity liability and leave encashment for the current year in respect of key management personnels has not been considered above, since the provision is based on a actuarial basis for the Company as a whole.
Level 1: It includes financial instruments measured using quoted prices.
Level 2: The fair value of financial instruments that are not traded in an active market 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. The fair value of financial assets and liabilities included in Level 3 is determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions and dealer quotes of similar instruments.
The Company's borrowings have been contracted at floating rates of interest. Accordingly, the carrying value of such borrowings (including interest accrued but not due) which approximates fair value.
The carrying amounts of trade receivables, trade payables, cash and cash equivalents and other financial assets and liabilities, approximates the fair values, due to their short-term nature. Fair value of non-current financial assets which includes bank deposits (due for maturity after twelve months from the reporting date) and security deposits is similar to the carrying value as there is no significant differences between carrying value and fair value.
The fair value for security deposits were calculated based on discounted cash flows using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit risk.
Valuation processes
The Management performs the valuations of financial assets and liabilities required for financial reporting purposes on a periodic basis, including level 3 fair values.
b) Financial risk management
The Company has exposure to the following risks arising from financial instruments:
• Credit risk
• Liquidity risk
• Market risk
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 Board of Directors have authorised senior management to establish the processes and ensure control over risks through the mechanism of properly defined framework in line with the businesses of the company.
The Company's risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risks limits and controls, to monitor risks and adherence to limits. Risk management policies are reviewed regularly to reflect changes in market conditions and the Company's activities.
The Company has policies covering specific areas, such as interest rate risk, foreign currency risk, other price risk, credit risk, liquidity risk, and the use of derivative and non-derivative financial instruments. Compliance with policies and exposure limits is reviewed on a continuous basis.
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i. Credit risk.
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The maximum exposure to credit risks is represented by the total carrying amount of these financial assets
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in the balance sheet
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As at
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As at
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March 31, 2025
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March 31, 2024
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Trade Receivables
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175.42
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217.01
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Investments
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2,106.01
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1,271.80
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Cash and cash equivalents
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6.42
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87.51
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Bank balances other than cash and cash equivalents
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964.26
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1,757.05
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other- Security deposit
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3.09
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2.47
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Loans
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906.29
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741.09
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Others
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143.12
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108.92
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Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers, loans given and investments made.
The Company’s credit risk is primarily to the amount due from customer and investments. The Company maintains a defined credit policy and monitors the exposures to these credit risks on an ongoing basis. Credit risk on cash and cash equivalents is limited as the Company generally invests in deposits with scheduled commercial banks with high credit ratings assigned by domestic credit rating agencies.
The maximum exposure to the credit risk at the reporting date is primarily from trade receivables. Trade receivables are unsecured and are derived from revenue earned from customers primarily located in India. The Company does monitor the economic environment in which it operates. The Company manages its Credit risk through credit approvals, establishing credit limits and continuously monitoring credit worthiness of customers to which the Company grants credit terms in the normal course of business.
On adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss or gain. The Company establishes an allowance for impairment that represents its expected credit losses in respect of trade receivable. The management uses a simplified approach (i.e. based on lifetime ECL) for the purpose of impairment loss allowance.
ii. Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are fallen due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.
The Company believes that its liquidity position, including total cash (including bank deposits under lien and excluding interest accrued but not due) of ' 970.68 millions as at March 31, 2025 (March 31, 2024 ' 1,844.56 millions) and the anticipated future internally generated funds from operations will enable it to meet its future known obligations in the ordinary course of business.
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 policy is to regularly monitor its liquidity requirements to ensure that it maintains sufficient reserves of cash and funding from group companies to meet its liquidity requirements in the short and long-term.
The Company’s liquidity management process as monitored by management, includes the following:
- Day to day funding, managed by monitoring future cash flows to ensure that requirements can be met.
- Maintaining rolling forecasts of the Company’s liquidity position on the basis of expected cash flows. Exposure to liquidity risk
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and includes interest accrued but not due on borrowings.
Currency risk
Currency risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is exposed to the effects of fluctuation in the prevailing foreign currency exchange rates on its financial position and cash flows to the extent of earnings and expenses in foreign currencies. Exposure arises primarily due to exchange rate fluctuations between the functional currency and other currencies from the Company’s operating, investing and financing activities.
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 with variable rates, which expose the Company to cash flow interest rate risk.
Exposure to interest rate risk
The Company’s interest rate risk arises majorly from the term loans from banks carrying floating rate of interest. These obligations exposes the Company to cash flow interest rate risk. The exposure of the Company’s borrowing to interest rate changes as reported to the management at the end of the reporting period are as follows:
iii. Market Risk
Market risk is the risk that the 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, the Company mainly has exposure to two type of market risk namely: currency risk and interest rate risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
Cash flow sensitivity analysis for variable-rate instruments
A reasonably possible change of 50 basis points (bps) in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.
49 CAPITAL MANAGEMENT
For the purpose of the Company’s capital management, capital includes issued equity share capital and all other equity reserves attributable to the equity holders of the Company.
Management assesses the Company’s capital requirements in order to maintain an efficient overall financing structure. 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.
To maintain or adjust the capital structure, the Company may return capital to shareholders, raise new debt or issue new shares.
The Company monitors capital on the basis of the debt to total equity, which is calculated as interestbearing debts divided by total equity (equity attributable to owners of the parent).
i. Debt Equity Ratio: - In current year there was significant decrease in borrowing as there was repayment & closer of borrowings.
ii. Debt Service Coverage Ratio:- The Ratio has been decreased due to repayment of borrowings in current year.
iii. Return on Equity Ratio:- In the current year net profit of the company has been decreased & in the year ended March 24 due to fresh issue due to which average equity has been increased.
iv. Net Capital Turnover Ratio:- The ratio has decreased due to decrease in revenue & increase in working capital.
v. Return on Investment:- Due to decrease in net profit & increase in average total assets during the year
52 DISCLOSURE REQUIREMENT FOR MAINTENANCE AND RETENTION OF AUDIT TRAIL
The Company has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the respective software, except for the instances mentioned below:
(a.) The feature of recording audit trail (edit log) facility was not enabled at the database level to log any direct data changes for the accounting software used for maintaining the books of account relating to payroll of the accounting software used for maintaining general ledger.
Further, during the the year ended March 31, 2025 and March 31, 2024 there were no instance of audit trail feature being tampered with.
Additionally, we have preserved audit trail as per the statutory requirements for the retention of record.
53 DETAILS WITH RESPECT TO THE BENAMI PROPERTIES:
No proceedings have been initiated or pending against the entity under the Benami Transactions (prohibition) Act, 1988 for the year ended March 31, 2025 and year ended March 31, 2024.
54 SCHEME OF AMALGAMATION OF FINE TECHNOLOGIES (INDIA) PRIVATE LIMITED WITH ROYALUX LIGHTING PRIVATE LIMITED
Pursuant to and in terms of the Scheme of Amalgamation by and among Fine Technologies (India) Private Limited (Subsidiary Company) as Transferor Company, Royalux Lighting Private Limited as Transferee Company (Step Down Subsidiary Company), under Sections 233 of the Companies Act, 2013, and other applicable provisions of the Act, read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 (“Scheme”), which was approved by the Regional Director (NR) vide its order dated March 18, 2024 which came into effect from April 01, 2023:
• As per the approved scheme, existing shareholders of Fine Technologies (India) Private Limited will receive 69 equity shares of Transferee Company for every 1 equity share held in Transferor Company as a purchase consideration.
• The Transferee Company issued and allotted, an aggregate of 16538265 fully paid-up equity shares of ' 10/- each, to the Company on April 20, 2024.
• Pursuant to the scheme, Royalux Lighting Private Limited becomes a Wholly Owned Subsidiary of the Company.
(b) During the year the company has invested in the subsidiaries of ' 827.55 million out of money raised through IPO (including share premium).
58 WILFUL DEFAULTER:
No bank or financial institution has declared the company as "Wilful defaulter".
59 RELATIONSHIP WITH STRUCK OFF COMPANIES:
No transaction has been made with the company struck off under section 248 of The Companies Act, 2013 or section 560 of Companies Act, 1956 during the year ended March 31, 2025 and year ended March 31, 2024.
60 REGISTRATION OF CHARGES OR SATISFACTION WITH REGISTRAR OF COMPANIES:
All applicable cases where registration of charges or satisfaction is required with Registrar of Companies have been done.
61 COMPLIANCE WITH NUMBER OF LAYERS OF COMPANIES:
Where the company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies Act (Restriction on number of Layers) Rules, 2017.
62 LOAN OR ADVANCES GRANTED TO THE PROMOTERS, DIRECTORS AND KMPS AND THE RELATED PARTIES:
Loan or advances in the nature of loans are granted to the promoters, directors, key managerial persons and the related parties (as defined under Companies Act, 2013), either severally or jointly with any other person that are:
63 Fig ures less than ' 5,000 are disclosed as 0.00.
64 Previous year’s figures have been regrouped/reclassified as per the current year presentation for the purpose of comparability.
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