(i) Rights attached to equity shares:
TheCompanyhasonlyone class of equityshares havinga par value of ?.5 each (PreviousYear?.5each). Each holder of equityshares is entitled to onevote per share. In the event of liquidation, the equity shareholders are entitled to receive the remaining assets of the Company after paymentsto secured and unsecured creditors, in proportion to their shareholding.
B. Nature and purpose of reserves
(a) Capital Redemption Reserve: The Company has recognised Capital Redemption Reserve on buyback of equity shares from its General Reserve. The Capital Redemption Reserve can be utilised for issue of bonus shares
(b) General Reserve: The Company has transferred a portion of the net profit before declaring dividend to general reserve.
(c) Retained Earnings: Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.
(d) Debt Instruments through Other Comprehensive Income: The fair value change of the debt instruments measured at fair value through other comprehensive income is recognised in Debt instrumentsthroughOther Comprehensive Income.Upon derecognition, the cumulativefair valuechanges on the said instruments are reclassified to the Statement of Profit and Loss.
(e) Equity Instruments through Other Comprehensive Income: This represents the cumulative gains and losses arising on fair valuation of equity instruments measured at fair value through other comprehensive income and subsequently not reclassified to the Statement of Profit and Loss.
(f) Re-measurements of Net Defined Benefit Plans: Differences between the interest income on plan assets and the return actually achieved,and any changes in the liabilitiesoverthe year due to changes in actuarial assumptionsor experienceadjustmentswithinthe plans, are recognised subsequently not reclassified to the Statement of Profit and Loss.
Operating Segments: - The chief operational decision maker (CODM) has identified 2 operating segments viz., Composite products and Investments. Identification of Segments:
The chief operational decision maker monitors the operating resultsof its Business Segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistentlywith profit or loss in the financial statements.
Segment revenue and results
The expenses and incomes which are not directly attributable to any business segment are shown as un-allocable expenditure (net of unallocated income). Segment assets and liabilities
Segment assets include all operating assets used by the operating segment and mainly consist of propertyplant and equipment, trade receivables, cash and cash equivalents, Investmentsand inventories. Segment liabilities primarily include trade payables and other liabilities. Common assets and liabilities which cannot be allocated to any of the segments are shown as a part of un-allocable assets / liabilities.
Geographical Information
The Company has all the manufacturing facilities which are located in india only hance there is no grographical segment applicable.
(a) Defined contribution plan
The Company has certain defined contribution plans. Contributions are made to providentfund in India for employees at the rate of 12 % of basic salary and other allowances as per regulations. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expenses recognised during the period towards defined contribution plan is ?.157.50 lakhs (March 31, 2022 ?. 140.63 lakhs).
(b) Defined benefit plan
In accordance with the Payment of Gratuity Act, 1972, the Company provides for gratuity for employees who are in continuous services for a period of 5 years are eligible for gratuity. The amount of gratuity payable on termination/retirement is employees last drawn salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity is a funded plan and the Company make contributions to recognised funds in India.
The se ns itivity analysis above have been determined based on reasonably possible changes of the respective ass u mptions occurring at the end of the reporting period and may not be representativeof the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the same method used to calculate the liability recognised in the balance sheet has been applied. The m e t h o d s and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous p e r i o d .
Risk exposure:
Through its defined benefit plans, Company is exposed to a number of risks, the most significant of which are detailed below:
Investment risk: The present value of the defined benefit plan liability is calculated using discount rate determined by reference to market yields at the end of reporting period on government bond yields.
Interest risk:- A decrease in the bond interest will increase in plan liability; however, this will be partially offset by an increase in the return on the plan's debt investments.
Longevity risk: The present value of the defined benefit plan liability is calculated by reference to best estimate of the mortality of plan participants both during and at the end of employment. An increase in the life expectancy of the plan participants will increase the plan liability.
Salary risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants.As such an increase in salary of the plan participants will increase the plan liability.
The Code on Social Security :
The Code on Social Security, 2020 (‘Code') relating to employee benefits during employment and post-employment benefits has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code and recognise the same when the Code becomes
43 Financial instruments
The details of significant accounting policies, including criteria for recognition, the basis of measurement and the basis on which income and expenditure are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 40 and 41.
Financial assets and liabilities
The accounting classification of each category of financial instruments, and their carrying amounts are set out as below:
c. Fair value hierarchy
The Company uses the following hirerarchy for determining and/or disclosing the fair value of financial instruments by valuation techniques: The categories used are as follows:
• Level 1: quoted prices for identical instruments in active market.
• Level 2: i n pu ts o ther than quoted pri ces i n cl u ded within Level 1 th a t a re o bse rvab l e fo r the asset o r l i a b i l i ty, either directly or indirectly.
• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The Manag e m e n t a ssessed that fair value of cash and cash equivalents, trade receivables, investmentsin term deposits, loans, other financial assets (except derivative financial instruments),trade payables, and otherfinancial liabilities (except derivative financial instruments) is considered to be equal to the carrying amountof these items due to their short-term nature.
There were no significant changes in classification and no significant movements between the fair value hierarchy classifications of financial assets and financial liabilities during the period.
Financial risk management objective and policies .
The Company's financial risk management is an integral part of how to plan and execute its business strategies. The Company's financial risk management policy is set by the Managing Board. The risk management policies aims to mitigate the following risk arising from the financial instruments: (a) Market risk; (b) Liquidity risk and (c) Credit risk. .
Financial risk factors .
The Company's principal financial liabilities comprise borrowings, deposits from dealers and trade and other payables. The purpose of these financial liabilities is to finance the Company's operations and to provide to support its operations. The Company's principal financial assets include investments, loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations.The Company is exposed to the following risk arising from the financial instruments: (a) Market risk; (b) Liquidity risk and (c) Credit risk (d) COVID 19.
(a) Liquidity risk
The risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. Liquidity risk management implies maintain sufficient cash including availability of funding through an adequate amount of committed credit facilities to meet the obligations as and when due.
The Company manages its liquidity risk by ensuring as far as possible that it will have sufficient liquidity to meet its short tem and long term liabilities as and when due. Anticipated future cash flows,undrawan committed credit facilities are expected to be sufficient to meet the liquidity requirements of the Company.
(b) 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 comprises three types of risk: interest rate risk, currency risk and price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk includes investment, deposits, foreign currency receivables and payables. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. The Company's treasury team manages the Market risk, which evaluates and exercises independent control over the entire process of market risk management.
(i) Foreign currency risk
Foreign currency risk can only arise on financial instruments that are denominated in a currency other than the functional currency in which they are measured. The Company's functional and presentation currency is INR. The Company does have transactions in currency other than functional currency i.e. in US Dollar (USD) for purchase of raw material from overseas supplier. However, those are not very significant considering the nature and size of the operations of the Company .
(ii) Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. The Company's Long term borrowings have fixed rate of interest and carried at amortized costs and short term borrowings have variable rate of interest. The Company also has significant investments in Bonds i.e. Government securities; Debentures; Preference shares and Debt funds. These investments are subject to the Market risk - Interest rate risk.
Exposure to Interest rate risk - Financial assets - Investments in Government Bonds, Bonds, Debentures, Debt funds and Preference Shares
Market price risk for government bonds, debentures, Preference shares and other bonds is movement in the interest rate and impact thereof on the yield. The Company's major part of investments is in Bonds/Debentures, which exposes Company to a price risk and consequently impact on the profitability and value of instruments
Investments in Equity Instruments and Equity mutual funds (including investment through Private Equity funds)
The Company's quoted equity instruments are subject to the market price risk arising from the fluctuation in the market price of those instruments. This risk arises from instruments which are classified as Fair value through P&L or Fair value through OCI. The Company's investment in equity instruments mainly consists of Investments in certain of its group companies wherein the price fluctuations, based on the historical trends, are not very significant.
(c) Credit risk
Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assess financial reliability of counter party, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. The Company considers the probability of default upon initial recognition of assets and whether there has been a significant increase in credit risks on an on-going basis throughout each reporting period.
To assess whether there is a significant change increase in credit risk the Company compares the risks of default occurring on the assets as at the reporting date with the risk of default as at the date of initial recognition. It considers the reasonable and supportive forward looking information such as:
(i) Actual or expected significant adverse changes in business.
(ii) Actual or expected significant changes in the operating results of the counterparty.
(iii) Financial or economic conditions that are expected to cause a significant change to the counterparty's ability to meet its obligations
(iv) Significant increase in credit risk on other financial instruments of same counterparty
(i) Expected credit loss for trade receivables under simplified approach ( Refer Note 9 for ageing of Trade Receivable)
Commodity Risk
The Company is exposed to the risk of price fluctuation of raw materials proactively managed through forward booking, inventory management and proactive vendor development practices.
46 Capital Risk Management
(a) The Company's objectives when managing capital are to :
• safeguard their ability to continue as a going concern, so that they can continue to providereturns for shareholders and benefits for other stakeholders, and maintain an optimal capital structure to reduce the cost of capital.
The Company sets the amount of capital required on the basis of annual business and long-term operating plans which includes capital and other strategic investments. The Company's intention is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditors and market confidence and to sustain future development and growth of its business.
In addition to the above dividend, since year end the directors have recommended the payment of a final dividend of f 2.00 fully paid equity share (31st March, 2023 - f 2.00). This proposed dividend is subject to the approval of shareholders in the ensuing annual general meeting.
53 Other Disclosures
a) No proceeding has been initiated or pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988, as amended, and rules made thereunder in the current or previous financial years.
b) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
c) The Company has not traded or invested in Crypto currency or Virtual Currency during the current and previous financial year.
d) There were no transactions relating to previously unrecorded income that have been surrendered and disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 during the current and previous financial year.
e) The Company has not advanced or loaned to or invested in funds to any other person(s) or entity(is), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(I) directly or indirectly lend to 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.
f) The Company has not received any fund from any person(s) or entity(is), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(i) directly or indirectly lend to 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.
g) The Company has not been declared wilful defaulter by any bank orfinancial Institution or other lender in the current and previous financial year.
h) The Company does not have any subsidiary as defined in section 2(87) of the Companies Act, 2013 in the current and previous financial years.
I) The Company has not entered into any scheme of arrangment which has an accounting impact on current or previous financial years.
J) There are no loans or advances in the nature of loan granted to promotors, directors, KMP and / or their relatives in the current or previous financial years which are repayable on demand or without specifying any term or period for repayment.
55 Previous years' figures have been regrouped/reclassified where ever necessary to conform to current years' classification.
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