7.1 New contents have been developed & capitalised as it meets the criteria of Ind AS 38 'Intangible Assets'. Also the Company has developed and capitalised technology platforms to support other products available for teachers and students in accordance with Ind AS 38.
Impairment test for costs of contents and technology platform, capitalised or booked as under development (considered as a part of single CGU which is the combination of publication and digital business i.e. sale of educational and general books along with the use of digital content and platform), has been carried out by the management and considering the overall profitablity of the publication business, no provision for impairment is considered necessary. The value in use of the future projections is higher than the carrying value of the contents and technology platform.
As at year end, certain contents and technology platform modules are under development and hence cost incurred upto year end is grouped as intangible assets under development in note 8.
7.2 Disclosures on impairment test:-
a) Impairment loss recognised/(reversal) in the Statement of Profit & Loss and in the other comprehensive income is ' Nil (31st March, 2023: ' Nil).
b) Assumptions used to determine the recoverable amount of content/technology platform, are prepared based on market estimates and management judgements (i.e. Growth rate, EBIT, discount rate etc.)
c) The management has carried out sensitivity analysis of discount rate and growth rate considered to arrive at value in use and accordingly there is no provision for impairment required.
9.2 Financial guarantees are issued in favour of the banks against loan taken by subsidiary. The amount of guarantee is ' 4,000 Lakhs (Previous Year ' 4,000 Lakhs). Fair value of such guarantee amount is included to investment disclosed above amounting to ' 255 Lakhs (Previous year: ' 195 Lakhs) related to Indiannica Learning Private Limited. (Refer footnote (ii) of note 58).
9.3 Impairment test for investments and loan to Navneet Futuretech Limited & Indiannica Learning Private Limited:
The Company has made long-term investments into these subsidiaries. These companies have incurred continuous losses in earlier years and some marginal profit in previous year in Indainnica Learning Private Limited. Considering the same, detail impairment test has been carried out by the Management. Disclosure in regards to impairment tests carried in regards to these subsidiaries are as under:
a) Impairment test for investment into 'Indiannica Learning Private Limited'
During the year, the impairment test carried out by the management including the business outlook, basis of estimates, valuation technique (fair value report obtained from registered valuer), appropriateness & reasonableness
of assumptions, actual performance as against budget and various other parameters with the management of the subsidiary company, and based on which, the Company has made/reversed provision of impairment loss of ' Nil (Previous year reversed of ' 1,878 Lakhs).
In the previous year, company had reversed the impairment provision of ' 1,878 Lakhs based on business outlook, basis of estimates, valuation technique, appropriateness & reasonableness of assumptions, actual performance as against budget and various other parameters with the management of the subsidiary company .
This impairment write back/loss is shown in the statement of profit and loss under 'Exceptional items'.
b) Impairment test for investment in 'Navneet Futuretech Limited'
Valuation of equity share investment into this subsidiary Company has been carried out by the management (also fair value report obtained from registered valuer). The Company based on the said valuation report and future business prospects has provided for an impairement loss of ' 4,875 Lakhs , which is primarily on account of demerger and fair value changes in investments made by the said wholly owned subsidiary.
Further, in the previous year based on the Valuation of equity share investment into this subsidiary Company, the Company has reversed the provision of impairment loss made in earlier years of ' 526 Lakhs.
This impairment provision/write back is shown in the statement of profit and loss under 'Exceptional items'.
c) Key assumptions used for value in use calculations:
The valuation of the subsidairies has been carried out by registered valuers. Based on the business model of the subsidairy, different valuation methods which in their opinion are most ideal has been used by them.
In current year as well as in previous year with respect to Indiannica Learning Private Limited the valuation is done based on DCF model and with respect to Navneet Futuretech Limited valuation is done based on revenue multiple after considering the fair value of the investmnet made by the subsidiary.
i) Discount rate (wherever relevant)
Discount rates represent the current market assessment of the risks specific to each CGU, taking into consideration the time value of money and individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate calculation of each CGU is derived from its Weighted Average Cost of Capital (WACC). The WACC takes into account both debt and equity. The cost of equity is derived from the expected return on investment by the Company's investors. The cost of debt is based on the interest-bearing borrowings of the Company. Adjustments to the discount rate are made to factor in the specific amount and timing of the future tax flows in order to reflect a pre-tax discount rate.
ii) Growth rate estimate
Growth rate is based on the estimates of growth in business expected by the Management of the Company after taking into account external/industry growth, customer feedback etc.
iii) Revenue multiple
The revenue multiple is based on market comparables given in valuation report by registered valuer. Management of the Company has performed sensitivity analysis on the above key assumptions to determine value in use.
9.4 In previous year 'Navneet Tech Ventures Private Limited' ('NTVPL), a wholly owned subsidiary of the Company, had fully redeemed 2,47,80,003 0% Fully Optionally Convertible Debentures ('FOCDs') (amounting to ' 2,478 Lakhs) at face value of ' 10 each upto 31st March, 2023.
9.5 Refer note 67 for information on principal place of business and the Company's ownership interest in the above Subsidiaries and Associate Companies.
9.6 The Company holds 93% of voting rights and equivalent share in profit/loss with respect to the investment made in 'Navneet Learning LLP' (subsidiary entity) in accordance with LLP agreement and the underlying value of the assets against this investment is significantly higher as compared to investments made.
9.7 During the current year ended 31st March, 2024 the Company by the way of rights issue has invested in its wholly owned subsidiary 'Indiannica Learning Private Limited' ('ILPL) amounting ' 2,000 Lakhs (i.e. 2,00,00,000 equity shares of ' 10 each, fully paid up).
9.8 During the current year, the Company has purchased 2,17,553 Compulsory Convertible Debentures ('CCD') of its wholly owned subsidiary 'Navneet Futuretech Limited' ('NFL!) (formerly known as 'Esense Learning Limited') of ' 10 each from the erstwhile debenture holder amounting to ' 22 Lakhs.
9.9 During the current year, the Company by the way of right issue has invested in 'Navneet Futuretech Limited' amounting 1,600 Lakhs (i.e. 1,60,00,000 equity shares of ' 10 each, fully paid up).
9.10 During the earlier years, the Company had invested ' 4,900 Lakhs in Optionally Convertible Preference Shares ('OCPS') of Rs 10 each aggregating to ' 4,900 Lakhs in its subsidiary company 'Indiannica Learning Private Limited' at face value. The OCPSs carries 0% coupon rate. The Subsidiary Company has an option to convert OCPS into same number of Equity shares of the Company of ' 10 each (being face value of the shares) at any time after allotment date but before end of 20 years. In case OCPS are not converted by the Subsidiary Company, they shall be redeemed at par in full not later than 20 years from the date of allotment.
9.11 As per Ind AS 109 'Financial Instruments', at initial recognition, the Company had chosen to designate investment in Career Point Limited as 'Fair Value through Profit and Loss'. Career Point Limited shares are listed on National Stock Exchange and Bombay Stock Exchange.
9.12 In the earlier years, as per pledge arrangement entered into with the party against amount recoverable of ' 127 Lakhs (Previous year '158 Lakhs) (disclosed under 'Other Non Current Assets' as advance from suppliers in note 14), pledge is invoked by the Company and accordingly shares of 'Shrenik Limited' reflecting in demat account but not reflecting in investment schedule. Further, mark to market gain on such shares is also not accounted as the Company does not have contractual right to recover amount in excess to recoverable amount. Considering the time period for which the matter is pending and slow recovery process from sale of securities, as a matter of abundant caution provision of ' 158 Lakhs has been made during the previous year. Subsequently, in the current year, the Company managed to sell securities amounting to ' 31 Lakhs, resulting in the reversal of the previously made provision to that extent.
10.1 The above amount includes ' 1,459 Lakhs (Previous year : ' 1,459 Lakhs) from one party against which Company has filed a legal case with Honourable High Court of Mumbai. As per the interim order, the Company possesses the property deed of an immovable property for recovery of the due, which is adequate to cover loan amount. The Company expects the matter to be favourably settled in its favour. Considering the interim order of the Hon'ble high court of Mumbai and the possession of the deed of the property, loan against the said property is considered secured. The underlying value of the assets is significantly greater than the carrying value of the loan. Considering the same no provision is required to be made.
12.1 Deferred tax liabilities are the amounts of income taxes payable in future periods in respect of taxable temporary differences.
Deferred tax assets are the amounts of income taxes recoverable in future periods in respect of: (a) deductible temporary differences; (b) the carry forward of unused tax losses; and (c) the carry forward of unused tax credits (Refer note 55 for reconciliation between the provision of income tax of the Company and amounts computed by applying the Indian statutory income tax rate to profit before taxes).
12.2 The Company applied Deferred Tax related to Assets and Liabilities arising from single transaction (Amendments to Ind AS 12) from 1st April, 2023. Following the amendments, the Company has recognised a separate Deferred tax asset in relation to its lease liabilities and Deferred tax liability in relation to right of use assets.
16.1 Trade receivables are subject to first charge to secure bank loan.
16.2 Trade receivables are generally due between 30 to 90 days. The Company's term includes charging of interest for delayed payment beyond agreed credit days. However, the Company charges interest after considering the historical trend, business prospects, reason for delay, market conditions etc.
16.3 Credit risk is managed at the operational segment level (i.e. publication and stationery). The credit limit and credit period are fixed for each customer after evaluating the financial position, past performance, business opportunities, credit references etc. The credit limit and the credit period are reviewed regularly at periodical intervals.
16.4 As per Memorandum of Understanding with one of the party, a sum of ' 286 Lakhs (Previous year: ' 286 Lakhs) is secured by pledge of immovable property. Considering the time period for which the matter is pending, the Company has made provision of ' 70 Lakhs in previous financial year.
16.5 The Company follows simplified approach & the trade receivables do not contain significant financing component and accordingly the Company does not separately track changes in credit risk of trade receivables as the impairment amount represents "lifetime" expected credit loss. Accordingly, the disclosure as required by Schedule III, Division II as regards (a) Trade Receivables which have significant increase in credit risk & (b) Trade Receivables which are credit impaired is not required. In addition to the pool assessment, the Company carried out individual assessment in respect of certain parties where the possibility of default in collection of trade receivable was high.
18.1 There is no amount due to Investor Education & Protection Fund as on 31st March, 2024.
18.2 Bank deposit includes interest accrued but not due amounting to ' 1 Lakhs (Previous year: ' 13 Lakhs) and deposit of ' 11 Lakhs is under lien for tender deposit given to a customer and education department.
18.3 Other bank balance contains, fixed deposit of ' 17 Lakhs (Previous year: ' 16 Lakhs) is under lien with bank against bank guarantee given by Bank to the customer on behalf of the Company. Further, fixed deposit of ' 2 Lakhs (Previous year: ' 2 Lakhs) is under lien with bank against overdraft facility provided by the bank.
Further, fixed deposit of ' 50 Lakhs (Previous year: ' Nil Lakhs) is under lien with Insurance agency Avalon Risk Management Insurance Agency,LLC against bank guarantee given by the same to Customs department.
Balance other bank balances represent restricted deposits (along-with accrued interest thereon) under lien placed with sales tax authorities.
20.1 Gratuity recoverable from Employee's Gratuity Fund maintained with Life Insurance Corporation represents gratuity amount paid to employees directly during the year on behalf such fund.
20.2 Refund receivable from government authority includes GST refunds receivables from government authorities which are expected to be realised within 12 months. Accordingly, the same is grouped as current financial assets. Out of which, subsequent to year end, the Company has received refund of ' 776 Lakhs (Previous year: ' 1,499 Lakhs)
20.3 As the Company is rightfully entitled to receive export incentives, the same is classified as financial asset in accordance with ITFG clarification issued by the Institute of Chartered Accountants of India.
22.2 Terms/Rights Attached to Equity Shares
The Company has only one class of equity shares having a par face value of ' 2/- per share. Each holder of equity shares is entitled to one vote per share and all rank pari passu. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amount. The distribution will be in proportion to the equity shares held by the shareholders.
27.1 Secured working capital demand loan includes interest accrued but not due amounting to ' 18 Lakhs (Previous year: ' 20 Lakhs). Interest rate for secured rupee loan is ranging from 6.50% to 8%.
27.2 As at year ended 31st March, 2024, outstanding Commercial papers (unsecured) amounts to ' Nil Lakhs (Previous year: ' 5,000 Lakhs). Commercial papers amounting to '5,000 Lakhs (Previous Year ' 3,500 Lakhs) were issued and fully repaid during year having carrying interest rate 7.45% (Previous Year 4.40%) . These Commercial papers were listed on the National Stock Exchange.
27.3 During the year, the Company has been sanctioned working capital limits from banks on the basis of security of current assets; for which the quarterly returns or statements has been filed by the Company with such banks which are in agreement with the books of accounts of the Company.
27.4 The Company has not advanced any funds or loaned or invested by the Company to or in any other person(s) or entities, including foreign entities ("Intermediaries"), with the understanding that the intermediary shall whether directly or indirectly lend or invest in other persons or entities identified in any manner by or on behalf of the Company (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of ultimate beneficiaries.
The Company has not received any funds from any person(s) or entities including foreign entities ("Funding Parties") with the understanding that such Company shall whether, 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 provide guarantee, security or the like on behalf of the Ultimate beneficiaries.
31.1 The movement represents the provision created for the year arising out of the actuarial valuation after considering the actual settlements made during the year.
31.2 In case of accumulated compensated absences outstanding as at year-end, the employees have already earned the right to avail the leave and they are normally entitled to avail the leave at any time during the year. As the employees has an unconditional right to avail the leave, the same are classified as 'current provisions' as per the guidance note on Schedule III Division II of the Companies Act, 2013 issued by the Institute of Chartered Accountants of India.
33.1 Provision for Refund Liability:
The above amount is net of provision made for refund liability amounting to ' 560 Lakhs (Previous year ' 462 Lakhs).
Also refer Note 52 (a) and Note 31.
33.2 Disclosures of Ind AS 115:
(a) For material accounting policies of revenue recognition, refer note 2.2 (k).
(b) Contracts with customer and significant judgement in applying the standard
i) The Company's operations relates to publication of knowledge based information in educational and general books form and manufacturing of paper and other stationery items. It caters to the educational need of Indian as well as Global market. The Company applies the guidance provided in Ind AS 115 'Revenue from contracts with customer' for determining the timing of recognition of revenue.
ii) For details of revenue recognised from contracts with customers, refer note 33 above.
iii) There are no contract assets arising from the Company's contract with customers.
(c) Disaggregation of revenue
i) For disaggregation of revenue, refer break-up given in note 33 above and note 59 (B).
ii) Refer note 59 (A) (iii) for details regarding customer concentration that represents 10% or more of the Company's total revenue during the year ended 31st March, 2024 and 31st March, 2023.
(d) Performance obligation
i) For timing of satisfaction of its performance obligations, refer note 2.2(k) of material accounting policies of the Company.
ii) Unsatisfied (or partially satisfied) performance obligations are due to unexpired contract period in cases of contract where exclusive license is granted to translate, print, publish and sale the translated book in defined territory. The aggregate value of transaction price allocated to unsatisfied (or partially satisfied) performance obligations is ' 921 Lakhs (Previous year: ' 492 Lakhs) out of which 53% (Previous year: 43%) is expected to be recognised as revenue in the next year and the balance thereafter.
43| EXCEPTIONAL ITEMS
Exceptional items represents:
For the year ended 31st March, 2024,
a) ' 3,023 Lakhs towards profit on sale of property.
b) ' 4,875 Lakhs towards diminution in value of investment of wholly owned subsidiary i.e. NFL, which is primarily on account of demerger and fair value changes in investments made by the said wholly owned subsidiary. (Refer note 9.3)
For the year ended 31st March, 2023,
a) ' 633 Lakhs towards profit on sale of property.
b) ' 2,404 Lakhs towards reversal of provision made for impairment of investment in wholly owned subsidiaries based on valuation reports obtained from registered valuer. (Refer note 9.3)
4^ CONTINGENT LIABILITIES
(a) Tax matters:
i) A) For disputed Income tax matters '661 Lakhs and (Previous year ' 561 Lakhs) against which amount provided in books is '548 Lakhs (Previous year '549 Lakhs) and amount paid under protest is '484 Lakhs (Previous year ' 484 Lakhs) (Refer below note).
Income tax demands mainly include the appeals filed by the Company before various departmental appellate authorities/High Courts against the disallowances made by income tax authorities of certain deductions/ expenses claimed. Pending final decisions, the Company has deposited amounts under protest with Income Tax Authorities.
B) Contingent liabilities taken over at the time of arrangement (Refer note 60)
Assessing Officers of the Income tax department had made certain disallowances for AY 2012-13 to AY 201415 and reduced the losses claimed by the Company by ' 358 Lakhs. The Company has filed appeals before CIT (Appeals)/ITAT against these orders.
The ITAT has given substantial reliefs of ' 94 Lakhs as against disallowance of '120 Lakhs for AY 2012-13 and of ' 35 Lakhs as against disallowance of ' 51 Lakhs for AY 2014-15. Management is hopeful of getting relief in AY 2013-14 also as nature of disallowance is similar.
Further, department has levied penalty of ' 8 Lakhs and ' 16 Lakhs u/s 271(1)(c) of the Income Tax Act, 1961 for assessment year 2012-13 and 2014-15 respectively. The Company has filed appeals before CIT (Appeals) against both the penalty orders. The Company has made payment under protest of ' 2 Lakhs against penalty order for AY 2012-13 and penalty of AY 2014-15 has been adjusted by CPC against refund of AY 2020-21 without consent of company and hence the Company has appealed against the same.
Further Assessing Officer has made disallowances of ' 298 Lakhs for AY 2021-22 and raised a demand of ' 57 Lakhs without adjusting current year losses. The Company has filed appeals before CIT (Appeals) against hese orders.
Considering nature of disallowance and certain favourable judicial decisions with respect to levy of penalty, the management of the Company is hopeful of getting favourable orders at the higher forum.
ii) For disputed sales tax matters ' 2,258 Lakhs (Previous Year ' 2,279 Lakhs) against which amount paid under protest is ' 95 Lakhs (Previous Year: ' 99 Lakhs). (Refer below note)
Sales Tax demands have been mainly raised on account of dispute on rate of certain products, non submission of statutory declarations etc. Pending final decisions, the Company has deposited amounts under protest with Sales Tax Department. Also refer note 42.1.
iii) For disputed GST matters ' 740 Lakhs (Previous Year ' 388 Lakh) against which amount paid under protest is ' 302 Lakhs (Previous year: ' 167 Lakhs) (Refer below note)
During financial year 2022-23 officers from State GST Department conducted Investigation for the period from 1st July, 2017 to 31st March, 2022.The State GST Officers raised certain issues against which Company made payment of ' 300 Lakhs under protest without accepting liability in respect of said issues. Further, Company paid additional amount of ' 2 Lakhs at the time of filing Appeal for FY 2017-18.
Also refer note 14.
During the year Company received GST Order for 2017-18 wherein substantial relief granted and final demand is reduced to ' 20 Lakhs from ' 145 Lakhs as per the Intimation/Show Cause Notice (SCN) received earlier.Company has filed appeal against the Order for the said year. In case of remaining years, for 2018-19 Intimation as well as SCN received and has responded against it and subsequent to the year end the Company received GST Order wherein substantial relief granted and final demand is reduced and Company is in the process of filing appeal against the said order; further for 2019-20 to 2021-22 only Intimations are received till 31st March, 2024 and subsequent to the year end the Company has received show cause notices for the same. The Assessments for these years are still pending. The management does not expect any material liability with respect to Intimations/SCN received for the these years.
Note: Future cash outflows in respect of matters considered disputed are determinable only on receipt of judgments/ decisions pending at various forums/authorities. The management does not expect these claims to succeed and accordingly, no provision has been recognised in the financial statements.
(b) Against bond (mainly GST benefit):
Duty free imports for which export obligation is pending as at year end amounting to ' 48 Lakhs (Previous Year ' 67 Lakhs). In the event Company does not meet the respective obligation, GST would have to be paid for which input credit would be available.
(c) Other matters:
Kotak Mahindra Bank has given bank guarantee to two of the customers of the Company amounting to ' 15 Lakhs (Previous year: 15 Lakhs) against which the Company has provided bank deposit of same amount which is kept under lien by the Bank. Further, the Company has availed bank overdraft facility from ICICI Bank Limited against which the Company has provided bank deposit of ' 2 Lakhs (Previous year: 2 Lakhs) which is kept under lien by the Bank
~| CAPITAL COMMITMENTS AND OTHER COMMITMENTS
(a) Estimated amount of contracts remaining to be executed (net of advances) on capital account is ' 25 Lakhs (Previous year: ' 1,997 Lakhs).
(b) Company is committed to fund its wholly owned subsidiaries as and when required.
46| DISCLOSURE UNDER IND AS H6 ‘LEASES'
The Company has adopted Ind AS 116 'Leases' effective from 1st April, 2019. Also refer note 2.2(p) for accounting policy on leases.
a) As a Lessee
The Company's lease assets primarily consist of leases for office premises, warehouses, vehicles and computers. For lease arrangement with lease terms of 12 months or less, the Company has applied the 'short-term lease' recognition exemptions and for lease with lower underlying value asset, the Company has applied the 'low value asset' recognition exemption.
1. The right-of-use asset is depreciated using the straight-line method (SLM) from the commencement date over the lease term of right-of-use asset. For details of addition, depreciation and carrying amount of right of use asset, refer note 4.
2. Also refer note 62 for contractual maturities of lease liability (as per Ind AS 107).
3. For the purpose of calculation of lease liabilities, future lease payments are discounted at incremental borrowing rate for the lease term of 5 years. This lease term is arrived based on reasonable certainty of renewal of lease agreement.
b) As a Lessor
For assets given on cancellable lease, it's depreciation and carrying amount, refer note 6. Also, for rental income earned on that properties, refer note 6.1, which is recognised on a straight line basis over the term of the relevant lease for long term leases.
47| DERIVATIVE FINANCIAL INSTRUMENTS
The Company uses derivative financial instruments such as forwards and options, to hedge its risks associated with foreign exchange fluctuation. The counterparty for these contracts is generally a bank. These derivative financial instruments are valued based on quoted price for similar assets and liabilities in active markets or inputs that are directly or indirectly observable in the market place.
(e) Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument, including whether the hedging instrument is expected to offset changes in cash flows of hedged items.
If the hedge ratio for risk management purposes is no longer optimal but the risk management objective remains unchanged and the hedge continues to qualify for hedge accounting, the hedge relationship will be rebalanced by adjusting either the volume of the hedging instrument or the volume of the hedged item so that the hedge ratio aligns with the ratio used for risk management purposes.
The amount of gain/(loss) recognised in Statement of Profit and Loss on account of hedge ineffectiveness for cash flow hedges for the year ended 31st March, 2024 is ' NIL (Previous year : ' NIL).
(b) Defined benefit plan and long term employment benefits:
These plans typically expose the Company to actuarial risks such as: Investment, Interest rate, longevity and salary increase risk:
I. Investment/Interest risk: The Company is exposed to Investment/Interest risk if the return on the invested fund falls below the discount rate used to arrive at present value of the benefit. Since the scheme is unfunded in case of compensated absence, the Company is not exposed to Investment/Interest risk.
II. Longevity Risk: The Company is not exposed to risk of the employees living longer as the benefit under the scheme ceases on the employee separating from the employer for any reason.
III. Risk of Salary Increase: The Company is exposed to higher liability if the future salaries rise more than assumption of salary escalation.
(i) Defined benefit plan and long term employment benefits: Gratuity (Defined benefit plan):
In respect of Gratuity, the Company makes annual contribution to the employee group gratuity scheme of the Life Insurance Corporation of India, funded defined benefits plan for qualified employees. However, gratuity for employees of the demerged undertaking (taken over by the Company from subsidiary 'Navneet Futuretech Limited) is unfunded. The scheme provided for lump sum payments to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service.
The Company has provided for gratuity based on the actuarial valuation done as per Project Unit Credit Method. The following table sets out for the status of gratuity plan:
Sensitivity analysis:
Sensitivity analysis 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 co-related. 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.
Final dividend on shares is recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company's Board of Directors. The Company declares and pays dividend in Indian rupees. (Also refer Statement of Changes in Equity). Also refer Dividend Distribution Policy of the Company given on the website in 'Corporate Governance Policies' section.
57| DISCLOSURE AS PER IND AS 10 EVENTS AFTER THE REPORTING PERIOD'
a) The directors have recommended payment of final dividend for 2023-24 of ' 2.60 per equity share (i.e. 130%) in its board of directors meeting held on 22nd May, 2024. This proposed dividend is subject to the approval of shareholders in the ensuing Annual General Meeting.
b) No other significant event has occurred subsequent to year end.
(ii) Financial Guarantee are issued in favour of banks against loans taken by subsidiary. The amount of guarantee is ' 4,000 Lakhs (Previous Year ' 4,000 Lakhs). Fair value of financial guarantee is accounted in accordance with Ind AS 109 (Refer note 9).
(iii) Transactions with related parties in the nature of sale of goods, rendering of services, purchase of goods, sale of assets, purchase of assets procurement of services are at arm's length price. The related party transactions and year end balances do not include expenses paid on behalf of related parties and its recovery.
(iv) Interest rate of 7.5% (Previous year: 8.5%) per annum has been charged to Indiannica Learning Private Limited.
~| OPERATING SEGMENT
The Company's operations relates to publication of knowledge based information in educational and general books form and manufacturing of paper and other stationery items. It caters to the educational need of Indian as well as Global market. The Company is organised into business units based on its products and services and has three reportable segments as follows
i) Publication
ii) Stationery
iii) Others comprises of revenue from generation of power by windmill, trading items etc.
The accounting principles and policies used in the preparation of the Standalone Financial Statements, as set out in the note on material accounting policies, are also consistently applied to record assets, liabilities, revenue and expenditure, in individual segments.
(i) Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the respective segment, however, revenue and expenses which can not be identified or allocated reasonably to a segment being related to the enterprise as a whole have been grouped as unallocable.
(ii) Segment assets and segment liabilities represent assets and liabilities of respective segments , however the assets and liabilities not identifiable or allocable on reasonable basis being related to enterprise as a whole have been grouped as unallocable.
(iii) In publication segment, concentration of revenues from one customer of the Company were 6% and 19% of total publication revenue for the year ended 31st March, 2024 and 31st March, 2023 respectively and in stationery segment, concentration of revenues from two customer of the Company was 24.12% and 12.73% for the year ended 31st March, 2024 and 24.64% and 10.40% from two customer of the Company for the year ended 31st March, 2023.
(iv) Sales between operating segments are carried out at arm's length basis and are eliminated at Company level consolidation.
Note: As per IND AS 108, 'Operating Segment', non-current assets considered above are other than financial instruments,
deferred tax assets, post-employment benefit assets etc.
60| SCHEME OF ARRANGEMENT
a) The Board of Directors at its meeting held on 31st August, 2023 approved the Composite Scheme of Arrangement ('Scheme'), for amalgamation of 'Genext Students Private Limited' ('GSPL) (step down subsidiary) with the Company and the demerger of Edtech business of 'Navneet Futuretech Limited' ('NFL!) (wholly owned subsidiary) into the Company. The Mumbai Bench of the National Company Law Tribunal ('NCLT'), through its order dated 6th May, 2024 has approved the scheme with the appointed date of the merger being 1st April, 2023. A copy of the order was filed with the Registrar of Companies, on 17th May, 2024 in accordance with the applicable provisions of the Companies Act 2013 and accordingly the Scheme became effective from 17th May, 2024, upon completion of necessary formalities.
b) The merger has been accounted under the 'pooling of interests' method in accordance with Appendix C of Ind AS 103 'Business Combinations' and impact has been considered from the beginning of the preceding year i.e. 1st April, 2022. Accordingly, the operations of the demerged division (software businnes of NFL) and merged business of GSPL for the period 1st April, 2022 till 31st March, 2023 was given effect by restating the financial statement of the Company for the previous year i.e. financial year ended 31st March, 2023. The restated financial statements of the Company has been approved by the Board of Directors of the Company at their meeting held on 22nd May, 2024.
c) Pursuant to the Scheme of Arrangement :
i) The Company has recorded all assets and liabilities of the demerged division of NFL and transferor Company GSPL at their respective book values thereof as appearing in the books of the NFL and GSPL as at 1st April, 2022 and also as appearing in the Consolidated Financial Statment . The balances of Assets and liabilities as stated above has been considered based on the audited financial statements of NFL and GSPL as at and for the year ended 31st March, 2022 which was approved by the Board of the directors at their meeting held on 13th May, 2022.
ii) The difference, between the book value of the assets over the liabilities of the demerged division of NFL and transferor company GSPL, after adjusting impact of capital reduction of Equity of NFL in retained earnings and elimination of inter-company adjustments has been recorded as amalgmation reserve in the books of the Company. Summary of relevant information has been provided below:
6l| FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
The management assessed that the fair values of financial asset and financial liabilities approximate their carrying
amounts.
The following methods and assumptions were used to estimate the fair values:
(a) Fair values of cash and cash equivalents, trade receivables, interest accrued on deposits with bank, bank deposits, trade payables and other financial liabilities, approximate their carrying amounts largely due to the short-term maturities of these instruments.
(b) The management has considered fair value of security deposits, loan from bank, loan from related party, equal to their carrying value as fair values based on the current market interest rates and other risk factors approximate to carrying value.
* There has been no transfer between level 1 and level 2 during the year ended 31st March, 2024 and 31st March, 2023. Level is NA, since valued at amortised cost.
Notes:
(i) For Details of income and gains related to financial instruments (Refer Note 34).
(ii) Investments in subsidiaries are valued at cost less impairment loss (if any) in accordance with Ind AS 27 'Separate Financial Statements', consequently the same is not disclosed in above table.
Financial/Bank guarantee:
(i) Financial Guarantees are issued in favour of banks against loans taken by subsidiary. The amount of guarantee is ' 4,000 Lakhs (Previous Year ' 4,000 Lakhs). Fair value of financial guarantee is accounted in accordance with Ind AS 109 (Refer note 9.2 and 27).
(ii) Bank Guarantee is given to electricity department (DNH Power Distribution Corporation Limited and Uttar Gujarat Vij Company Ltd) for electricity deposit of '91 Lakhs (Previous Year ' 116 Lakhs), Insurance agency (Avalon Risk Management Insurance Agency LLC) of ' 131 Lakhs (Previous Year- NIL) given to custom department for imports to be made and to supplier (Century Pulp And Paper) for securing supplies of materials of ' 60 Lakhs (Previous Year ' 60 Lakhs ).The Company does not anticipate any liability on these guarantees.
(iii) Kotak Mahindra Bank has given bank guarantee to two of the customers of the Company amounting to ' 17 Lakhs (Previous year: ' 15 Lakhs) against which the Company has provided bank deposit of same amount which is kept under lien by the Bank. Further, the Company has availed bank overdraft facility from ICICI Bank Limited against which the Company has provided bank deposit of ' 2 Lakhs (Previous year: ' 2 Lakhs) which is kept under lien by the Bank (Refer note 17.3).
62| FINANCIAL RISK MANAGEMENT
a) Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprise three types of risk: foreign currency risk, interest rate risk and other price risk. Financial instruments affected by market risk primarily include trade receivables, trade payables and cash and cash equivalents.
The sensitivity analysis in the following sections relate to the position for the periods presented. The sensitivity analysis has been prepared on the basis that the amount of net debt and the proportion of financial instruments in foreign currencies are all constant. The analysis exclude the impact of movements in market variables on the carrying values of gratuity obligation and provisions.
The sensitivity of the relevant profit and loss item is the effect of the assumed changes in respective market risks based on the financial assets and financial liabilities held at the periods presented.
d) Price risk
The Company is not exposed to any significant price risk.
e) Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities, primarily for trade receivables and deposits with banks and other financial assets.
Trade receivables
Customer credit risk is managed based on the Company's established policy, procedures and control relating to customer credit risk management. The Company evaluates the concentration of risk with respect to trade receivables as low. Out of total trade receivables balance as at 31st March, 2024, ' 4,132 Lakhs(Previous year ' 3,503 Lakhs) is due from a single customer being the Company's largest customer. There are no other customers who represent more than 10% of the balance of trade receivables. Outstanding customer receivables are regularly monitored by the management.
An impairment analysis is performed at each reporting date on an individual basis for major customers.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company generally does not hold collateral as security except in one case refer note 16.4.
Deposits with banks and other financial assets
Credit risk from balances with banks and financial institutions is managed by the Company's treasury department in accordance with the Company's policy.
f) Liquidity risk
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company's objective is to, at all times maintain optimum level of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. The management has arranged for diversified funding sources and adopted a policy of managing assets with liquidity in mind and monitoring future cash flows and liquidity on a regular basis.
The Company is not exposed to significant liquidity risk based on past performance and current expectations. The Company believes that the cash and cash equivalents, cash generated from operations and available un-drawn credit facilities, will satisfy its working capital needs, capital expenditure, investment requirements, commitments and other liquidity requirements associated with its existing operations, through at least the next twelve months.
Note: Investments in subsidiaries are valued at cost less impairment loss (if any) in accordance with Ind AS 27 'Separate Financial Statements', consequently the same is not disclosed in maturity profile tabulated above.
The note below sets out details of the undrawn facilities that will be available for future operating facilities and to settle capital commitments of the Company.
~| CAPITAL MANAGEMENT
For the purpose of the Company's capital management, capital includes issued equity capital, and all other equity reserves attributable to the equity shareholders. The primary objective of the Company's capital management is to maximise the shareholder value.
The Company manages its capital structure and makes suitable adjustments in light of changes in economic conditions.
The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, loan obligation, trade and other payables and less cash and cash equivalents.
64.2 Aggregate outflow on account of direct taxes paid is ' 8,427 Lakhs (Previous year ' 6,728 Lakhs).
64.3 Net cash inflow from operating activity netted off with expenditure on Corporate Social Responsibility (CSR) expenditure of ' 425 Lakhs (Previous year ' 500 Lakhs) (Refer note 54).
65 Details of the sources of estimation uncertainty in related to significant accounting estimates and judgements:
i) Impairment of investment in subsidiaries
Refer note 2.3 (b) of material accounting policies and note 9.3 for significant accounting estimates and judgements used in performing impairment test on investment value of subsidiaries.
ii) Provision for employee benefits
Refer note 2.3 (e) of material accounting policies and note 48(b)(i) for significant accounting estimates and judgements used and it's financial impact of sensitivity of such assumptions.
66 During the previous year, one of the subsidiary Esense Learning Private Limited has changed its name from Esense Learning Private Limited to 'Esense Learning Limited' with effect from 27th April, 2022. Further, Esense Learning Limited has changed its name from Esense Learning Limited to 'Navneet Futuretech Limited' with effect from 17th May, 2022.
b) Goodwill was created in financial year 2021-22 on acquisition of subsidiary Genext Students Private Limited and appearing in the consolidated financial statements. Upon accounting as per pooling of interest method for merger of Genext Students Private Limited with Navneet Education Limited, the said goodwill is now part of the standalone financial statement.
c) Impairment test for goodwill
The goodwill is mainly on account of future benefits due to the technology platform, content, data base which is being used by the publication business for creating digital content/books with digital content. Considering the overall profitability of the publication business, no provision for impairment is considered necessary.
69| WILFUL DEFAULTER
As on 31st March, 2024 the Company has not been declared wilful defaulter by any bank/financial institution or other lender.
70| DETAILS OF CRYPTO CURRENCY OR VIRTUAL CURRENCY
The Company is not engaged in the business of trading or investing in crypto currency or virtual currency and hence no disclosure is required.
711 REGISTRATION OF CHARGES OR SATISFACTION WITH REGISTRAR OF COMPANIES (ROC)
The Company does not have any charges or satisfaction yet to be registered with the registrar of companies(ROC) beyond the statutory period as at 31st March, 2024.
~| COMPLIANCE WITH NUMBER OF LAYERS OF COMPANIES
The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.
73| BENAMI PROPERTY
No proceedings have been initiated or are pending against the Company as on 31st March, 2023 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.
No proceedings have been initiated or are pending against the Company as on 31st March, 2024 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder
76 Additional Information as required by para 7 of General Instructions for preparation of Statement of Profit and Loss (other than already disclosed above) are either NIL or Not Applicable.
77 The Company has used an accounting software for maintaining its books of account for the financial year ended 31st March, 2024 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 software.
78 Previous Year Figures have been regrouped/rearranged wherever necessary. This mainly pertaining to:
a) The Company has disclosed amount under protest in 'Other non current assets' (Refer note 14), earlier this was forming part of 'Other non current financias assets' (Refer note 11)
b) The Company has disclosed amount under 'Sales and marketing expenses' (refer note 41) seprately on the face of Profit and Loss statement which was earlier forming part of 'Other expense' (refer note 42). However due to this regrouping there is no impact on Profit and Loss of the Company.
79 Figures less than ' 50,000 have been denoted by #.
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