ii) Rights, preferences and restrictions Equity shares
The Company has only one class of Equity Shares having par value of H2 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend, if any proposed by the Board of Directors is subject to the approval
of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
Preference shares
The Company has only one class of Preference shares having par value of H10 per share. These shares carry a right to cumulative dividend of 8% p.a. The shares are redeemable at any time within 20 years from the date of issue at the option of the Company by giving a 48 hour prior written notice to the holders at the specified redemption price.
iii) Information regarding aggregate number of equity shares issued during the five years immediately preceding the date of Balance Sheet:
The Company has not issued shares for consideration other than cash and has not bought back any shares during the past five years.
9,500 equity shares have been issued under Employee Stock Option Plan (March, 31 2022: 123,800) for which exercise price has been received in cash (refer note 22)
No equity shares have been forfeited.
(a) Capital reserve
Capital reserve was created pursuant to the composite scheme of arrangement (amalgamation of WestPoint Leisureparks Private Limited, Triple A Foods Private Limited and demerger of Westlife Development Limited) under section 391 to 394 of the Companies Act, 1956 sanctioned by the Hon'ble High Court of Bombay.
The excess amount of the book value of investment under the composite scheme of arrangement over its cost of investment is treated as capital reserve.
(b) Securities premium reserve
Securities premium reserve is used to record the premium received on issue of shares by the Company. The reserve can be utilised in accordance with the provision of Section 52(2) of Companies Act, 2013.
(c) General reserve
The general reserve is a free reserve which is used from time to time to transfer profits from / to retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to statement of profit and loss.
(d) Employee stock options outstanding
The Company has established equity-settled share-based payment plans for certain categories of employees of subsidiary Company. Refer to Note 22 for further details on these plans.
(e) Retained earnings
Retained earnings represent the profits that the Company has earned till date, less any transfers to general reserve. Retained Earnings is a free reserve.
(f) Share application money pending allotment
Share application money pending allotment represents application money received on account of Employee Stock Option Scheme. As at March 31, 2022, the Company had received H100 each per share towards allotment of 1000 equity share at exercise price of H100 each and was shown under share application money pending allotment. The Company had made the allotment on April 12, 2022.
Carrying amounts of cash and cash equivalents, investments, loans, other receivables, trade payables and borrowings (other than debt securities) as at March 31, 2023 and March 31, 2022 approximate the fair value.
b Fair value hierarchy
This section explains the judgement and estimates made in determining the fair values of the financial instruments that are
a) recognised and measured at fair value.
b) measured at amortised cost and for which fair values are disclosed in the standalone financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into three levels prescribed under the Indian accounting standard. An explanation of each level is mentioned below :
Level 1 - Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.
Level 2 - The fair value of financial instruments that are not traded in an active market (for example, over-the counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific
estimates. If alt 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. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3. Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.
Risk management framework
In the course of its business, the Company is exposed to a number of financial risks: credit risk, liquidity risk and market risk . This note presents the Company's objectives, policies and processes for managing its financial risk and capital. The key risks and mitigating actions are also placed before the Board of Directors of the Company. The Company's risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities.
The Company manages the risk through the finance department that ensures that the Company's financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company's policies and risk objectives. The activities are designed to:
- protect the Company's financial results and position from financial risks
- maintain market risks within acceptable parameters, while optimising returns; and
- protect the Company's financial investments, while maximising returns."
The Company's Audit Committee oversees how management monitors compliance with the Company's risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.
i. Credit risk
The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors.
The gross carrying amount of financial assets, net of any impairment losses recognised represents the maximum credit exposure. A financial asset is 'credit-impaired' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred such as a breach of contract."
In respect of its investments the Company aims to minimize its financial credit risk through the application of risk management policies. The Company has Loan of H55.05 million at March 31, 2023 (March 31, 2022 - H55.05 millions) and other receivables of Nil as at March 31, 2023 (March 31, 2022 - H5.39 millions) (Refer Note 20). There are no significant amounts due by more than 180 days and not provided for. Management believes that other receivables and loans being amounts receivable from its wholly owned subsidiary and controlled trust are fully collectible based on their ability to generate independent cash flows. These amounts can be called for by the Company at short notice.
Credit risk on cash and cash equivalent (including bank balances) is limited as the Company generally transacts with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies.
ii. Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities. 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.
Exposure to liquidity risk
The table below analyses the Company's financial liabilities into relevant maturity analysis based on their contractual maturities for all derivative and non derivative financial liabilities.
iii. Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices, which will affect the Company's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
i) Currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company does not have any currency exposure and all its assets and liabilities as also commitments are denominated in Indian rupees (functional currency). The currencies in which the transactions are denominated is Indian Rupees.
ii) Interest rate risk is the risk that the that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company's interest risk arises from borrowings (Other than debt securities) with variable rates.
iii) Other price risk is the risk that that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The Company's investment in mutual funds is exposed to pricing risk. Other financial instruments held by the company does not possess any risk associated with trading. An increase of 5 percent in Net Assets Value (NAV) of mutual funds would decrease the loss before tax by approximately H5.99 million (March 31, 2022 - H5.67 million ). A similar percentage decrease would have resulted equivalent opposite impact.
17 Capital Management
The Company's objective for capital management is to maximise shareholder value, safeguard business continuity and support the growth of the Company. The Company determines the capital requirement based on annual operating plans and long-term and other strategic investment plans. The funding requirements are met through loans and operating cash flows generated. The Company is not subject to any externally imposed capital requirements.
Pursuant to search and seizure conducted in 2018, the income-tax authorities issued an Order in May 2021 and July 2021 under Section 153A of the Income-Tax Act, 1961 directing the Company to file revised returns for 7 years under block assessment. Block assessment for the period A.Y 201314 to A.Y. 2019-20 was completed during the year and the tax authorities had raised a demand amounting to H11.61 Million. There were apparent errors in determining the tax demand of H11.61 Million for which the Company had filed rectification applications in May 2021 and July 2021. The rectification orders were passed in February 2022 and the revised tax demand amounting to H0.83 million has been raised on the Company. The Company had also filed an appeal in October 2021 before the Commissioner of Income Tax (Appeals) against the tax demand of H11.61 Million. The hearing is yet to be concluded and the Company believes the case is not tenable.
22 Employee Stock Option Scheme
a) The Company provides share based payment scheme (the 'Scheme') which covers certain eligible employees of the Company and its subsidiary company. According to the Scheme, the employees selected by the Nomination and Remuneration Committee from time to time would be entitled to options, subject to satisfaction of the prescribed vesting conditions. Westlife ESOS Trust (the 'Trust') has been established to facilitate the scheme.
ESOS Scheme 2021
The shareholders of the Company at its meeting held on September 16, 2021 by way of special resolution, formulated the "The Westlife Development Limited Employees Stock Option Scheme 2021" (referred to as 'the Company's 2021 ESOS Scheme'). ESOP is the primary arrangement under which shared plan service incentive are provided to certain employees of it's subsidiary."
For options exercised during the year, the weighted average share price at the exercise date was H466.44 per share (March 31, 2022: H510.63 per share).
The weighted average remaining contractual life for the stock options outstanding as at March 31, 2023 is 6.88 years (March 31, 2022: 3.54 years). The range of exercise prices for options outstanding at the end of the year was H2/- to H698.50/- (March 31, 2022: H100/- to H300/-) *During the year, the Company has recovered H Nil million (inclusive of taxes) (March 31, 2022 H4.08 million (inclusive of taxes)) from its subsidiary towards compensation cost pertaining to the share based payment. However, Employee Stock Compensation Expense includes the effect of the following transaction:
During the year ended 31st March 2023, Westlife Foodworld Limited (Formerly Known As Westlife Development Limited) ('the Company') vide Board resolution dated 18 May 2022, approved the transition of stock options held by certain employees of its subsidiary company i.e. Hardcastle Restaurants Private Limited from "The Westlife Development Limited Employees Stock Option Scheme 2013" (referred to as 'the Company's 2013 ESOS Scheme') to ""The Westlife Development Limited Employee Stock Option (Trust) Scheme 2021" ('referred to as the Company's 2021 ESOS Scheme').
Pursuant to the transition, stock options granted earlier by the Company under the Company's 2013 ESOS Scheme were cancelled on obtaining consent from respective option holders who were paid H480 lakhs as cash payout in lieu of cancellation. Consequently, net effect on cancellation of options of H247 lakhs after adjusting balance in 'Employees Stock Option Outstanding Reserve' of H233 lakhs was charged to the profit and loss of the subsidiary company. Further, as per the transition, in lieu of cancellation of options the option holders were also granted new stock options under Company's 2021 ESOS Scheme in accordance with the terms as set out in the said scheme.
23 Segment reporting
There is no separate reportable segment as per Ind AS 108 on 'Operating Segments' in respect of the Company.
The Company operates in single segment only. There are no operations outside India and hence there is no external revenue or assets which require disclosure.
There is no revenue from external customers during the year ended March 31, 2023 (March 31, 2022: Nil)
24 No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Company or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries. The Company has not received any fund from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Funding Party or provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.
b) Disclosure Of Transactions With Struck Off Companies
The Company did not have any material transactions with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956 during the financial year.
c) No transactions to report against the following disclosure requirements as notified by MCA pursuant to amended Schedule III:
(1) Crypto Currency or Virtual Currency
(2) Benami Property held under Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder
(3) Registration of charges or satisfaction with Registrar of Companies
(4) Transaction 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"
d) Analytical ratios
The Company is termed as an Unregistered Core Investment Company (CIC) as per Reserve Bank of India Guidelines dated 13 August 2020 and is not exposed to any regulatory imposed capital requirements. Thus, the following analytical ratios are not applicable to the Company:
1. Capital to risk-weighted assets ratio (CRAR)
2. Tier I CRAR
3. Tier II CRAR
4. Liquidity Coverage Ratio
26 The Company has defined process to take daily back-up of books of account maintained electronically and maintain the logs of the back-up of such books of account for cyclic period of 7 days only. However, management is taking steps to configure systems to ensure that logs of daily back up for books of account is maintained on a daily basis so long as they are required to be maintained under applicable statute.
27 Subsequent events
The Company has evaluated subsequent events from the balance sheet date through May 09, 2023, the date at which the financial statements were available to be issued, and determined that there are no items to report.
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