(B) Details of security
(a) Term loan from Landesbank Baden-Wurttenberg (LBBW) of 115,464.10 lakhs (31 March 2022: 118,638.79 lakhs) is
secured by exclusive charge on:
i) Main press line of MDF plant at Chittoor, Andhra Pradesh along with other movable fixed assets financed by Landesbank Baden-Wurttenberg
ii) Exclusive charge over main press line of MDF plant at Pantnagar (Uttarakhand)
iii) Fixed deposit of 13,347.93 lakhs (31 March 2022: 13,200 lakhs) in the form of Debt Service Reserve Account (DSRA) pledged in favour of LBBW Bank (LBBW Bank's stipulation is to maintain DSRA in INR equivalent to EUR 35,90,747.68)
(b) Other term loan of 12,300.00 lakhs (31 March 2022: 12,950.00 lakhs) is secured by:
(i) First pari passu charge on immovable fixed assets of the Company located at manufacturing units in Pantnagar (Uttarakhand) and Chittoor (Andhra Pradesh).
(ii) First pari passu charge on all movable fixed assets of the Company except assets exclusively charged to other lender(s) (including the main press line of MDF plant at Pantnagar and the main press line of MDF plant at Chittor (Andhra Pradesh) along with any other movable fixed assets exclusively charged to Landesbank Baden-Wurttenberg).
(iii) Second pari passu charge on all current assets of the Company.
(c) Working capital loans of K Nil (31 March 2022: 15,251.05 lakhs) are secured by:
(i) First pari passu charge on all current assets of the Company.
(ii) Second pari passu charge on immovable fixed assets of the Company located at manufacturing units in Pantnagar (Uttarakhand) and Chittoor (Andhra Pradesh).
(iii) Second pari passu charge on all movable fixed assets of the Company except assets exclusively charged to other lender(s) (including the main press line of MDF plant at Pantnagar and the main press line of MDF plant at Chittor (Andhra Pradesh) along with any other movable fixed assets exclusively charged to Landesbank Baden-Wurttenberg).
(d) Foreign currency loan - buyers credit - capital goods of J1,486.46 lakhs (31 March 2022: 11,112.44 lakhs) is secured by SBLC issued by banks, is further secured by way of hypothecation of fixed assets purchased against the said SBLC.
(e) Foreign currency loan - buyers credit of J Nil (31 March 2022: 1843.55 lakhs) is secured by SBLC issued by banks, which is further secured by the same security as working capital loans (as mentioned in para “c” above), as this facility is a sublimit of working capital loans.
(a) Defined contribution plan: Employee benefits in the form of provident fund is considered as defined contribution plan and the contributions to Employees’ Provident Fund Organisation established under The Employees' Provident Fund and Miscellaneous Provisions Act 1952 is charged to the Statement of Profit and Loss of the year when the contributions to the respective funds are due.
(b) Defined benefit plan: Retirement benefits in the form of gratuity is considered as defined benefit obligations and is provided for on the basis of third party actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet. Every Employee who has completed five years or more of service is entitled to gratuity on terms not less favourable than the provisions of The Payment of Gratuity Act, 1972.
a) Write back of liability no longer required: The Hon'ble Supreme Court of India vide its Order dated 22 April 2020 upheld the Special Leave Petition filed by the Union of India & Others in Civil Appeal Nos.2256-2263 of 2020 arising out of S.L.P. (C) Nos. 28194-28201/2010 in respect of availing of area based exemption under Central Excise in respect of manufacturing unit of Greenply Industries Limited (Greenply) at Tizit, Nagaland. Greenply may have to refund maximum principal amount upto 12,709.36 lakhs in respect of excess refund received from the Excise Department for the period from 1 April 2008 to 30 June 2017. However, as per Clause No. 4.3.6 of the Composite Scheme of Arrangement between Greenply and the Company duly approved by the Hon’ble National Company Law Tribunal, Guwahati Bench on 28 June 2019, the above principal amount of 12,709.36 lakhs along with interest, if any, shall be shared by Greenply and the Company. The Company had considered the possible outflow of 11,083.74 lakhs i.e. 40% of 12,709.36 lakhs as liability, based on the legal opinion and facts of present circumstances. However, as per the said Composite Scheme of Arrangement, the liability could only have been materialised upto 31 March 2022, post which the Company was not required to pay the same. Since there has been no demand for payment of said liability, and the time has also elapsed, the Company has reversed the said liability of 11,083.74 lakhs.
b) Loss on transfer of plant and machinery: The Electricity switching station & transmission infrastructure at the plant at Chittor, Andhra Pradesh, has been transferred by way of Gift in favour of M/s Transmission Corporation of Andhra Pradesh Limited. The Company has written off the said asset from its books of accounts on 6 July 2022 and the carrying value on that date amounting to 1473.68 lakhs was debited to the Statement of Profit and Loss.
The Company has decided to adopt the New Tax Regime u/s 115BAA under the Income Tax Act 1961 from FY 2023-24 (AY 2024-25). Consequently, deferred tax credit including write off of MAT of 13,395.93 lakhs has been recognised in statement of profit and loss during the year ended March 31,2023 on account of re-measurement of net deferred tax liabilities reducing by 13,663.35 lakhs on account of reduction in prospective income tax rate to 25.168% from 34.944%, and write-off of the balance of Minimum Alternate Tax (MAT) by 1267.42 lakhs. The said impact is reflected in the statement of profit and loss for the quarter and year ended March 31, 2023. During the current quarter, the company has also reversed deferred tax asset recognised on 'Land' of 1722.29 lakhs on account of change in assumptions as per the provisions of Ind-AS 12 'Income Taxes'.
c) Provision against impairment of investment: The Board of Directors, through resolution by circulation on 29 November 2022, approved the winding up of the Company’s wholly owned subsidiary (WOS) namely, Greenpanel Singapore Pte. Ltd. subject to the rules and regulations of Singapore. The Board also approved write off the investment in the WOS to the extent of impairment of the asset due to accumulated losses of the WOS. As such, the company has accounted for impairment of the investment in the WOS to the extent of 13,038.77 lakhs.
Claim against the Company not acknowledged as debt:
Cash outflows for the above are determinable only on receipt of judgments pending at various forums/ authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial position.
38. LEASES Company as a lessee
The Company has lease contracts for offices and factory land. The Company’s obligations under these leases are secured by the lessor’s title to the leased assets. The Company is restricted from assigning and subleasing the leased assets. The Company also has certain leases of offices with lease terms of 12 months or less. The Company applies the ‘short-term lease’ recognition exemptions for these leases.
As the future liability for gratuity and compensated encashment is provided on an actuarial basis for the Company as a whole, the amount pertaining to each key management personnel is not separately ascertainable and, therefore, not included above. Based on the recommendation of the Nomination and Remuneration Committee, all decisions relating to the remuneration of the KMPs are taken by the Board of Directors of the Company, in accordance with shareholders’ approval, wherever necessary.
g) Terms and conditions of transactions with related parties
Purchase from related parties are made in the ordinary course of business and on terms equivalent to those that prevail in arm’s length transactions with other vendors. Outstanding balances at the year-end are unsecured and will be settled in cash and cash equivalents.
The Company has not recorded any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken in each financial year after examining the financial position of the related parties and the market in which the related party operates.
41. FAIR VALUE MEASUREMENT
The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in forced or liquidation sale.
The Company has established the following fair value hierarchy that categories the value into 3 levels. The inputs to valuation techniques used to measure fair value of financial instruments are:
Level 1: The hierarchy uses quoted prices in active markets for identical assets or liabilities. The fair value of all bonds which are traded in the stock exchanges is valued using the closing price or dealer quotations as at the reporting date.
Level 2: The fair value of financial instruments that are not traded in an active market (for example traded bonds, over the counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on company 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 management assessed that trade receivables, cash and cash equivalent, other bank balances, trade payable, cash credits, borrowings and other financial assets and liabilities approximate their carrying amounts largely due to the short term maturities of these instruments.
The following methods and assumptions were used to estimate the fair values:
(a) The fair value of the quoted investments are based on market price at the respective reporting date.
(b) The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield curves based on report obtained from banking partners.
(c) The fair value of forward foreign exchange contracts is calculated as the present value determined using forward exchange rates and interest rate curve of the respective currencies based on report obtained from banking partners.
42. FINANCIAL RISK MANAGEMENT
The Company has exposure to the following risks arising from financial instruments:
(i) Credit risk
(ii) Liquidity risk
(iii) Market risk
Risk management framework
The Company's principal financial liabilities, other than derivatives, comprises of borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company operations. The Company's principal financial assets, other than derivatives include trade and other receivables, investments and cash and cash equivalents that derive directly from its operations.
The Company’s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Company’s primary risk management focus is to minimise potential adverse effects of market risk on its financial performance. The Company uses derivative financial instruments to mitigate foreign exchange related risk exposures. Foreign currency options contract are entered to hedge certain foreign currency risk exposures and interest rate swaps to hedge variable interest rate exposures. The Company's exposure to credit risk is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers. The Company’s risk management assessment and policies and processes are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company’s activities.
This note presents information about the Company’s exposure to each of the above risks, the Company’s objectives, policies and processes for measuring and managing risk, and the Company’s management of capital.
(ii) Liquidity risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. 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 finance team is responsible for liquidity, finding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company's liquidity position through rolling forecasts on the basis of expected cash flows.
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 due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation.
(i) Credit risk
Credit risk is the risk of financial loss of the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company receivables from customers and loans. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing/investing activities, including deposits with bank, foreign exchange transactions and financial guarantees. The Company has no significant concentration of credit risk with any counterparty. The carrying amount of financial assets represent the maximum credit risk exposure.
Trade receivable
The management has established a credit policy under which each new customer is analysed individually for creditworthiness before the Company's standard payment and delivery terms and conditions are offered. The Company's review includes external ratings, if they are available, financial statements, credit agency information, industry information and in some cases bank references.
(iii) Market risk
Market risk is the risk of loss of future earnings, fair value or future cash flows that may result from a change in the price of a financial instrument . The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that effect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and borrowings. The Company uses derivatives to manage market risks. All such transactions are carried out within the guidelines set by the management.
(a) Currency risk
Foreign currency risk is the risk impact related to fair value or future cash flows of an exposure in foreign currency, which fluctuate due to changes in foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates relates primarily to the foreign currency borrowings, import of raw materials and spare parts, capital expenditure, exports of finished goods. The Company evaluates exchange rate exposure arising from foreign currency transactions. The Company follows established risk management policies and standard operating procedures. It uses derivative instruments like foreign currency swaps and forwards to hedge exposure to foreign currency risk.
(b) Interest rate risk
I nterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company exposure to the risk of changes in market interest rates related primarily to the Company's short term borrowing with floating interest rates. For all long term borrowings with floating rates, the risk of variation in the interest rates in mitigated through interest rate swaps. The Company constantly monitors the credit markets and rebalances its financing strategies to achieve an optimal maturity profile and financing cost.
43. CAPITAL MANAGEMENT
The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The management monitors the return on capital, as well as the level of dividends to equity shareholders.
The Company’s objective when managing capital are to: (a) to maximise shareholders value and provide benefits to other stakeholders and (b) maintain an optimal capital structure to reduce the cost of capital.
For the purpose of the Company’s capital management, capital includes issued equity share capital and other equity reserves attributable to the equity holders.
In addition, the Company has financial covenants relating to the banking facilities that it has taken from all the lenders like interest service coverage ratio, Debt to EBITDA, current ratio etc. which is maintained by the Company.
44. SEGMENTS INFORMATION
In accordance with Ind AS 108 “Operating Segments”, segment information has been given in the consolidated financial statements of the Company, and therefore, no separate disclosure on segment information is given in these standalone financial statements.
45. TAXATION
The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing regulations under Sections 92-92F of the Income-Tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company continuously updates its documents for the international transactions entered into with the associated enterprises during the financial year. The management is of the opinion that its international transactions are at arm’s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense for the year and that of provision for taxation.
48. DISTRIBUTION MADE AND PROPOSED DIVIDEND (IND AS 1)
Proposed dividends on equity shares are subject to approval at the annual general meeting and are not recognised as a liability as at 31 March 2023. Since no dividend has been proposed in the current and previous year, financial figures with respect to the same has not been given.
The Company has paid an interim dividend of 11.50 per equity share i.e. 150% on face value of 11 per share for the financial year 2022-23 during the year on 12,26,27,395 equity shares (previous year 11.50 per equity share).
Working Capital Lenders represent State Bank of India, HDFC Bank Limited, Axis Bank Limited, RBL Bank Limited, Indusind Bank Limited Note for Discrepancies:
The difference in Inventory is due to the cost of inventories included in financial statements on account of sales not considered, for the risk and rewards not transferred in view of compliance of Ind AS 115.
The difference in trade receivables is due to (i) the amount excluded from financial statements on account of sales not considered for the risk and rewards not transferred in view of compliance of Ind AS 115 and (ii) exclusion of debtors whose ageing is more than 90 days from invoice date and related party balances from stock statement.
The Discrepancy in trade payables is due to the Service and the Corporate Creditors not being part of disclosure in bank reporting. Creditors reported in stock statement is only to the extent of inventory purchased, along with net of advances.
50. OTHER STATUTORY INFORMATION
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
(ii) The Company does not have any transactions with companies struck off.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period,
(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
(vii) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
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