Buyback of Shares, Bonus Shares and Shares issued for Consideration other than cash
1. Pursuant to approval granted by the shareholders of the Company on June 26, 2022 through Postal ballot for issue of Bonus Shares, The Allotment Committee of Board of Directors at their meeting held on July 14, 2022 approved allotment of 2,92,35,000 Equity Shares having face value of D 2/- each as fully paid-up Bonus Equity Shares, in the ratio of 2:1 i.e. 2 (Two) Equity Shares having face value of D 2/- each for every 1 (One) equity share having face value of D 2/- each held by the shareholders of the Company as on July 12, 2022 being the record date.
2. Pursuant to approval granted by the Board of Directors and after obtaining all the relevant approvals on September 01, 2022, The Company has allotted 11,04,724 fully paid-up equity shares of the Company having face value of ' 2 each, at a price of ' 1,542.43 each on a preferential basis to Millars Concrete Technologies Private Limited on September 29, 2022 for consideration other than cash for the transfer of 1,24,84,846 ordinary shares of GMM International S.a.r.l to the Company.
3. The Company has not bought back any shares in the past five years. e Shares reserved for issue under options and contracts:
Refer Note 37 for details of shares to be issued under employee stock option Scheme (ESOP 2021)
Nature and Purpose of Reserves:
Capital Reserve:
Capital Reserve represents excess/short of net assets acquired in business combination. It is not available for the distribution to shareholders as dividend.
Cash Subsidy Reserve:
Cash Subsidy Reserve represents subsidies received from state government. It is not available for distribution as dividend to shareholders.
Securities Premium:
Securities Premium represents Security Premium received at the time of issuance of Equity Shares. Such amount is available for utilisation in accordance with the provisions of the Companies Act, 2013.
General reserve:
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. There is no policy of regular transfer. Items included under General Reserve shall not be reclassified back into the Statement of Profit & Loss.
Share options outstanding reserve:
This reserve relates to share options granted by the Company to its employee stock option scheme. Further information about share-based payments to employees is set out in Note 37.
1 A Rupee Term Loan amounting to D 24.35 Crore (Previous Year 2021-22: D 35.18 Crore) is secured by charge over immovable property and movable property located at Hyderabad. The loan carries interest rate at 9.25 % (Previous Year 2021-22: 6.75%) per annum. The Loan is repayable in 17 quarterly instalments.
2 A Rupee Term Loan amounting to D 39.47 Crore (Previous Year 2021-22: D 51.40 Crore) is secured by charge over movable and immovable property located at Vatva (Ahmedabad) Gujarat. The loan carries interest rate at 9.30% (Previous Year 2021-22: 6.55%) per annum. The Loan is repayable in 14 quarterly instalments. The charge on above securities with respect to mortgage is in process of registration with MCA.
3 A Rupee Term Loan amounting to D 37.99 Crore (Previous Year 2021-22: NIL) is secured by Primary - Pari passu first charge on entire current assets of the Company, present and future and Collateral - Pari passu first charge on the entire fixed assets of Company's Karamsad factory. The charge on immovable property is in process of registration with MCA. The loan carries interest rate at 8.20% per annum. The Loan is repayable in 20 quarterly instalments.
4 A Rupee Term Loan amounting to ' 75.00 Crore (Previous Year 2021-22: NIL) is secured by Hypothecation of inventories, book debts and all other current assets under first pari passu charge i.e. entire current assets (Current asset shall be hypothecated for all 3 units : Vatva, Karamsad, Hyderabad), Movable Fixed Assets - First Pari Passu charge on the entire movable Fixed Assets of Company's Karamsad factory and Hyderabad factory. The charge on immovable property is in process of registration with MCA. The loan carries interest rate at 8.73% per annum. The Loan is repayable in 48 monthly instalments.
5 A Rupee Term Loan amounting to D 60.00 Crore (Previous Year 2021-22: NIL) is secured by First pari passu charge on current and movable Fixed assets of Company's Karamsad factory and First Pari Passu charge on movable Fixed Assets located at Vatva (Ahmedabad) Gujarat. This loan is also secured by charge over immovable property located at Karamsad and Vatva. The charge on immovable property is in process of registration with MCA. The loan carries interest rate at 8.37% per annum. The Loan is repayable in 17 monthly instalments.
6 External Commercial Borrowing (ECB) amounting to D 39.78 Crore (Previous Year 2021-22: D 41.29 Crore) is secured by pari passu charge on the Company's Karamsad factory, 1st charge by way of hypothecation on the Company's inventories (stores & spares not relating to the Plant and Machinery), Bills Receivable, Book Debts and all other movables including machineries, equipment's, spares etc. The loan carries interest rate of 3/6 month Libor plus 245 basis point. Repayments have started from July 2021 and will continue until January 2025. The charge on above securities is in process of registration with MCA.
7 Instalments falling due within a year in respect of all the above Loans aggregating D 60.19 Crore (Previous Year 2021-22: D 27.25 Crore) have been grouped under "Current Maturities of Long term borrowings".
8 Working Capital Loans amounting to D 54.55 Crore (Previous Year 2021-22: NIL) repayable within one year bearing Interest rate ranging from 7.86% to 8.67%.
9 The Company has been sanctioned working capital from banks. Out of total D 54.55 crore working capital loans, D 29.55 crore are secured by current assets of the Company and fixed assets (movable and immovable) at Company's plants at Karamsad and Hyderabad. The charge on immovable property is in process of registration with MCA. The Company in this regard has been duly submitting with all such banks from whom such facilities are taken, the quarterly statements comprising details of said current assets viz. raw material, stores and spares, finished goods, book debts and reduced by relevant trade payables. The said quarterly statements are in agreement with the unaudited books of account of the Company of the respective quarters and there are no material discrepancies.
10 The Company is in the process of creating a new security offering structure for all lenders whereby the Company has appointed a Security Trustee who will create charge in favour of all lenders along with the related documentation and other compliance activities, post which all borrowings of the Company will be secured. As per the said security offering structure of the Company, all term loan lenders will have a first pari passu charge on the fixed assets (movable & immovable) of the Company and second pari passu charge on the current assets of the Company whereas all secured working capital lenders will have a first pari passu charge on the current assets of the Company and second pari passu charge on the fixed assets (movable and immovable) of the Company.
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Note : 34 Contingent Liabilities and Commitments
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(Rs. in Crore)
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Particulars
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As at 31.03.2023
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As at 31.03.2022
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A) Contingent Liabilities not provided for:
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i) Disputed demands relating to Indirect Taxes.
- Company has preferred appeal against orders for payment under reverse charge mechanism in respect to Service Tax matter.
- Company has filed appeal against assessment order in respect of Sales Tax matter.
Management has assessed that no liability is likely to devolve on the Company and hence no provision has made in the books of account.
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0.70
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0.70
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ii) Matter decided in favour of the Company where the income tax department has preferred appeals.
- Commissioner Income Tax (CIT) (Appeal) has passed order and deleted the additions made by The Assessing Officer. Department has filed appeal before Income Tax Appellate Tribunal (ITAT) Ahmedabad for which ITAT has set aside the issue before the Assessing Officer for fresh adjudication with respect to disallowance of warranty provision for AY 2007-08 and 2008-09.
- The Company has received order from ITAT Ahmedabad for which ITAT has set aside the issue to CIT (Appeal) in respect of upward adjustment in Arms Length Price for AY 2010-11, 2011-12 and 2012-13.
Management has assessed that no liability is likely to devolve on the Company and hence no provision has made in the books of account.
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5.03
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5.27
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iii) Disputed demands relating to tax against which the Company has preferred appeals.
- Company has preferred appeal before CIT (Appeal) against the disallowance of education expenditure under Section 143 (3) for AY 2013-14.
- Company has preferred appeal before CIT (Appeal) with respect to disallowance of commission paid to non-resident due to non deduction of Tax deducted at source for AY 2017-18.
Management has assessed that no liability is likely to devolve on the Company and hence no provision has made in the books of account.
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0.16
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0.24
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Note: Against the above, the Company has paid ' 0.35 Crore. The expected outflow will be determined at the time of final outcome in respect of concerned matter.
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Guarantees
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The Company has issued various guarantees for performance, deposits, advances etc. The management basis past history and events has considered the probability for outflow of the same to be remote and accordingly no amount has been disclosed here in contingent liability.
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B) Commitments
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Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance)
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2.78
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19.35
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Compensated absences and earned leaves
The Company's current policy permits eligible employees to accumulate compensated absences up to a prescribed limit and receive cash in lieu thereof in accordance with the terms of the policy.
Defined Benefit Plans
The Company operates a defined benefit plan in form of gratuity plan covering eligible employees, which provide a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employees salary and the tenure of employment.
These plans typically expose the Company to actuarial risks such as investment risk, interest rate risk, longevity risk and salary risk.
Investment risk
The present value of the defined benefit plan liability (denominated in Indian Rupee) is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities and other debt instruments.
Interest risk
A decrease in the bond interest rate will increase the 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 the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan's 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 the salary of the plan participants will increase the plan liability.
In respect of the Defined Benefit Obligation Plan and Compensated absences and earned leaves, the most recent actuarial valuation of the present value of the defined benefit obligation was carried out as at March 31, 2023. The present value of the defined benefit obligation, the related current service cost and past service cost, were measured using the projected unit credit method.
Equity settled share option plan
The Company has instituted Employee Stock Option Scheme (ESOP 2021) to designated employees of the Company and its subsidiaries. In accordance with the terms of the plan, as approved by shareholders through Postal Ballot on 2nd December 2021, designated employees with the Company may be granted options to purchase equity shares.
Each employee share option converts into one equity share of the Company on exercise. Payment of the Exercise Price shall be made by a crossed cheque, or a demand draft drawn in favour of the Company or in such other manner as the Committee may decide from time to time. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time during the set exercise period. The Options not exercised within the Exercise Period shall lapse and the Employee shall have no right over such lapsed or cancelled Options. Options stands cancelled if the employee leaves the Company before the options vest.
Appraisal process for determining the eligibility of the Employees will be based on designation, criticality, high potential, performance linked parameters such as work performance and such other criteria as may be determined by the Committee at its sole discretion, from time to time.
The Company has recognised expenses of D 0.99 Crore and D 0.17 Crore related to equity-settled share-based payment transactions in 2022-23 and 2021-22 respectively on a net basis after considering recharge of D 1.83 Crore and D 0.32 Crore respectively from subsidiary companies for the grant of shares to the employees of subsidiary companies.
*Adjusted for Issue of Bonus shares. Refer Note 18d(1).
Note : 39.3 Financial risk management objectives
The entity's corporate treasury function provides services to the business, coordinates access to domestic and international financial market, monitors and manages the financial risks relating to the operations of the entity through internal risk reports which analyse exposures by degree and magnitude of the risk. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.
39.3.1 Market Risk management
Market risk refers to the possibility that changes in the market rates may have impact on the Company's profits or the value of its holding of financial instruments. The Company is exposed to market risks on account of foreign exchange rates, interest rates and underlying investment prices.
The entity's activities expose it primarily to the financial risks of changes in foreign currency exchange rates and investment prices.
(a) Foreign currency exchange rate risk:
The Company's foreign currency risk arises from its foreign operations, investments in foreign subsidiaries, foreign currency transactions. The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company.
Since a major part of the Company's revenue and its costs are in Indian Rupees , any movement in currency rates would not have major impact on the Company's performance. Consequently, the overall objective of the foreign currency risk management is to minimize the short term currency impact on its revenue and cash-flow in order to improve the predictability of the financial performance.
The impact of increase/decrease of 50 basis points in interest rates would result in increase/decrease of D 1.29 Crore (D 0.64 Crore) in the Company's net profit before tax for the year ended March 31, 2023 and March 31, 2022 respectively.
(c ) Other price risk
The Entity is exposed to price risks arising from its investments which are held for strategic as well as trading purposes.
The sensitivity analysis have been determined based on the exposure to price risks for Investments in equity shares of other companies and mutual funds at the end of the reporting period.
If prices had been 5% higher/lower:
Profit before tax for the year ended March 31, 2023 would increase/decrease by D 0.00# Crore (for the year ended March 31, 2022 by D 0.01 Crore) as a result of the change in fair value of investments.
# Amount less then D 50,000 .
39.3.2 Credit risk management
Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Financial instruments that are subject to concentrations of credit risk materially consists of trade receivables.
All trade receivables are subject to credit risk exposure. The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country, in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through established policies, controls relating to credit approvals and procedures for continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company does not have significant concentration of credit risk related to trade receivables except the details given below for the customers contribute to more than 5% of total outstanding accounts receivable as at any reporting period end.
101 ra __
With respect to the Company's financial instruments (as given above), a 5% increase / decrease in relation to foreign currency rate on the underlying would have resulted in increase / decrease of D 0.04 Crore and D 0.85 Crore in the Company's profit before tax for the year ended March 31, 2023 and March 31, 2022 respectively.
(b) Interest rate risk
Interest rate risk refers to the possibility that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rate. The Company's policy is to maintain a balance of fixed and floating interest rate borrowings and the proportion of fixed and floating rate debt is determined by current market interest rates. The borrowings of the Company are principally denominated in Indian Rupees and US dollars with mix of fixed and floating rates of interest. These exposures are reviewed by appropriate levels of management at regular interval.
The Company has outstanding borrowings of D 331.14 Crore and D 127.87 Crore at the end of March 31, 2023 and March 31, 2022 respectively. As at March 31, 2023, none of the Company's Borrowings are at fixed rate of interest (March 31, 2022 : 27.51%).
Exposure to credit risk:
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk is D 349.95 Crore and '193.43 Crore as at March 31, 2023 and March 31, 2022 respectively, being the total of the carrying amount of balances with banks, bank deposits, trade receivables, other financial assets and investments excluding investments in subsidiary companies, and these financial assets are of good credit quality including those that are past due.
39.3.3 Liquidity risk management:
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the management of the Company's short, medium and longterm funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.
Note 45 The Company publishes Standalone financial statements along with the Consolidated financial statements. In accordance with Ind AS 108, Operating Segments, the Company has disclosed the segment information in the audited consolidated financial statements for year ended March 31, 2023.
Note 46 Proposed Dividend:
The Board of Directors, in their meeting held on May 25, 2023 have recommended a final dividend of ' 1 per share, subject to approval by shareholders of the Company.
Note 47 The financial statements for the year ended March 31, 2023 were approved for issue by the Board of Directors on May 25, 2023.
Note 48 No transactions to report against the following disclosure requirements as notified by MCA pursuant to amended Schedule III:
a) Crypto currency or virtual currency
b) Undisclosed income
c) Struck off Companies
d) Benami Property held under Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder
e) Relating to borrowed funds:
(i) Wilful defaulter
(ii) Utilization of borrowed funds
(iii) Discrepancy in utilization of borrowings
(iv) 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.
(v) 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 to or on behalf of the Ultimate beneficiaries.
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