During the Financial year 2020-21, Company has cultured total 74.68 million nos of plants under tissue culture process (FY 2019-20: 76.20 million nos of plants). During the year, the Company sold 71.46 million nos of cultured plants (FY 2019-20:: 87.36 million of cultured plants).
Biological assets stated above are part of total current assets hypothecated on a first pari-passu charge basis to working capital consortium members led by State Bank of India
(i) Estimates and judgements:
Tissue culture plantations: Estimates and judgements in determining the fair value of tissue cultured plants relate to market prices, quality of plants, and mortality rates. The impact of discounting is not considered material as the transformation cycle is less than 6 months.
(ii) Fair value information:
The fair value measurements of Tissue culture plantations have been categorised as Level 3 fair values based on the inputs to the valuation techniques used. The following table shows the gain or losses recognised in relation to level 3 fair values.
i) Pursuant to resolution passed by the Board of Directors of the Company at the meeting held on March 24, 2016, the Company has allotted 14,100,000 Ordinary Equity Shares of ' 2/- each at a premium of ' 78/- each in conversion of 14,100,000 equity warrants of ' 80/- each to promoter group entity on preferential basis.
ii) Pursuant to resolution passed by the ESOP committee at the meeting held on September 03, 2016, the Company has allotted 29,46,075 equity shares ' 2/- each at a premium of ' 52.40/-.
iii) 3,62,00,000 Compulsorily Convertible Debentures (CCD) of ' 80 each issued on 11-March-2016 to Mandala Rose Co-Investment Ltd. Mauritius (Non Promoter entity) were converted into 3,62,00,000 Ordinary Equity shares of ' 2/- each at a premium of ' 2,648.56 on 16-Sep-2017.
i] Terms / rights, preferences and restrictions attached to ordinary equity shares:
"Each holder of Ordinary Equity Shares is entitled to one vote per share. They have right to receive dividend proposed by the Board of Directors and approved by the Shareholders in the Annual General Meeting, right to receive annual report and other quarterly/half yearly/annually reports/notices and right to get new shares proportionately in case of issuance of additional shares by the Company.
In the event of liquidation of the Company, the holders of Ordinary 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 Ordinary Equity Shares held by the Shareholders. The Company has a first and paramount lien upon all the Ordinary Equity Shares."
ii] Terms and conditions of differential voting rights (DVR):
"The DVR equity shareholders have the same rights as the Ordinary Equity Shares of the Company except voting rights. Every 10 DVR equity shares have one voting right on poll (on show of hands however, they carry 1 vote for every person voting). Any DVR holder holding less than 10 DVR equity shares holds fractional voting rights. The DVR equity shares have right to receive full dividend, to receive annual report, right to receive quarterly/half yearly/ annually reports/notices and other information/correspondence from time to time, to receive bonus and/or rights shares of the same class of shares as and when such an issue is made in respect of Ordinary Equity Shares and in the same ratio and terms.
In case of buy back or reduction of capital of Ordinary Equity Shares, the DVR equity shares have right subject to buyback or reduction on the same terms as Ordinary Equity Shares. Further, in case of issue of Ordinary Equity Shares or any other securities or assets to ordinary equity shares in case of amalgamation/demerger/ re-organisation/reconstruction, the DVR Equity Shares have right to receive DVR Equity Shares and any other securities/assets as issued to Ordinary Equity Shares. They have right to hold separate class meeting if their rights are affected in any manner adversely."
iii] ESOP:
Board of Directors have on 31st March 2020 approved the grant/transfer to the selected employees 18,96,429 Equity Shares purchased by the ESOP Trust 2018, under the amended JISL ESOPs Scheme, 2011 to such persons and at an exercise price of ' 35 each to be vested in 5 years in equal number as per grant list placed before the Board as recommended by ESOP Trust 2018, as well as the NRC, initialed by the Chairman/Secretary for identification) to be administered by the NRC /JISL Esop Trust 2018 as per the pre approved JISL ESOPs Scheme 2011.
a) ECB Loan of US$ 15 million of IFC (Loan Key Number 2007872)
The ECB Loan is secured by exclusive first Charge over entire movable plant, machinery and equipment, including all the spare parts and all other movable fixed assets such as furniture, fixtures, installations, vehicles, office equipment's, computers and all other fixed assets of the Company both present and future at both the plants of the Company at Chittoor, Andhra Pradesh and further secured by way of exclusive first ranking charge over the land and other immovable properties together with all building and structure thereon and all other plant and machinery at both the plants of the Company at Chittoor, Andhra Pradesh.
The above ECB loan has been fully repaid and satisfaction of charge is in process.
b) ECB Loan of US$ 15 million of IFC (Loan Key Number 2008534)
Exclusive first Charge over entire movable plant, machinery and equipment, including all the spare parts and all other movable fixed assets such as furniture, fixtures, installations, office equipments, computers and all other fixed assets of the Company both present and future at Company's facilities at Bhavnagar (Gujarat) and Hyderabad (Andhra Pradesh) and further secured by way of exclusive first ranking charge over the land and other immovable properties together with all building and structure thereon and all other plant and machinery at Company's facilities at Bhavnagar (Gujarat) and Hyderabad (Andhra Pradesh).
The above ECB loan has been fully repaid and satisfaction of charge is in process.
c) ECB Loan of US$ 15 million of IFC (Loan Key Number 2009182)
Exclusive first Charge over entire movable plant, machinery and equipment, including all the spare parts and all other movable fixed assets such as furniture, fixtures, installations, office equipments, computers and all other fixed assets of the Company both present and future at Company's facilities at Bambhori, Dist. Jalgaon, Maharashtra and further
secured by way of exclusive first ranking charge by deposit of title deeds of selected immovable properties of the Company situated at Village Bambhori, Dist. Jalgaon in State of Maharashtra together with all buildings, structures thereon and all plant and machinery attached to earth however excluding assets charged exclusively as mentioned in these notes.
The above ECB loan (Loan Key Number 2009182) is also personally guaranteed by three Directors including Vice Chairman and Managing Director of the Company in their personal capacity.
The above ECB loan has been fully repaid and satisfaction of charge is in process.
d) ECB Loan of US$ 15 million of IFC (Loan Key Number 2010019)
Exclusive first Charge over specific movable plant, machinery and equipment of the Company at Company's facilities at Plastic Park, Bambhori, Dist. Jalgaon, Maharashtra and further secured by way of exclusive first ranking charge by deposit of title deeds of selected immovable properties of the Company situated at Village Bambhori, Dist. Jalgaon in State of Maharashtra together with all buildings, structures thereon and all plant and machinery attached to earth however, excluding assets charged exclusively as mentioned in these notes.
The above ECB loan (Loan Key Number 2010019) is also personally guaranteed by three Directors including Vice Chairman and Managing Director of the Company in their personal capacity.
The above ECB loan has been fully repaid and satisfaction of charge is in process.
ii) a) Export Import Bank of India (EXIM): Term Loan: ' 598.14 (PY ' 596.64)
The loan together with interest, commitment charges, liquidated damages, costs expenses and all other monies payable to EXIM Bank is secured by a first charge on the whole of movable fixed assets of Company both present and future, including its movable plant and machinery, equipment, appliances, furniture, vehicles, machinery spares and stores and accessories whether or not installed and related movables in the course of transit or delivery whether now belonging or which may hereafter belong to the Company or which may be held by any person at any place within or outside India to the order or disposition of the Company and all documents of title including bills of lading, shipping documents, policies of insurance and other instruments and documents relating to such movables together with benefits of all rights thereto.
The loan is further secured by way of mortgage by deposit of title deeds of selected lands measuring 35.02 Hectares (86.53 Acres) situated at Takarkheda Shiver, Taluka Erandol, District Jalgaon in the state of Maharashtra together with all buildings, structures thereon and all plant and machinery attached to earth.
The loan is further secured by first charge ranking pari passu by way of equitable mortgage created in favour of security trustee i.e. IDBI Trusteeship Services Ltd., Mumbai on behalf of Exim Bank by deposits of title deeds of selected immovable properties of the Company situated at Village Bhambhori & Shirsoli, Dist. Jalgaon is state of Maharashtra together with all buildings, Structure thereon and all plant and machinery attached to earth however, excluding assets charged exclusively as mentioned in these notes.
The Company has defaulted in the repayment of EXIM Bank loan. The amount of total overdue outstanding as at March 31,2021 is ' 300.00 towards principal and ' 123.10 towards interest (Previous year ' Nil)
b) Export Import Bank of India (EXIM): Term Loan: ' 1,988.52 (PY ' 1,985.33)
Under Production Equipment Finance Programme
The loan together with interest, commitment charges, liquidated damages, costs expenses and all other monies payable to Exim Bank is secured by first charge on the whole of movable fixed assets of Company both present and future, including its movable plant and machinery, equipment, appliances, furniture, vehicles, machinery spares, and stores and accessories whether or not installed and related movables in the course of transit or delivery whether now belonging or which may hereafter belong to the Company or which may be held by any person at any place within or outside India to the order of disposition of the company and all documents of title including bills of lading, shipping documents, policies of insurance and other instruments and documents relating to such movables together with benefits of all right thereto.
The loan is further secured by way of mortgage by deposit of title deeds of selected lands measuring 35.02 Hectares (86.53 Acers) situated at Takarkheda Shivar, Taluka Erandol, District Jalgaon in the state of Maharashtra together with all building, structures thereon and all plant and machinery attached to earth.
The loan is further secured by first charge ranking pari passu by way of equitable mortgage created in favour of security trustee i.e. IDBI Trusteeship Services Ltd., Mumbai on behalf of Exim Bank by deposits of title deeds of selected immovable properties of the Company situated at Village Bhambhori & Shirsoli, Dist. Jalgaon is state of Maharashtra together with all buildings, Structure thereon and all plant and machinery attached to earth however, excluding assets charged exclusively as mentioned in these notes.
The Company has defaulted in the repayment of EXIM Bank loan. The amount of total overdue outstanding as at March 31, 2021 is ' 545.45 towards principal and ' 402.66 towards interest (Previous year ' 281.82 towards principal and ' 154.43 towards interest)
(iii) Canara Bank: Term Loan: ' 518.54 (PY ' 516.07)
The loan together with interest, commitment charges, liquidated damages, costs expenses and all other monies payable to Canara Bank is secured by a first charge on the whole of movable assets of Company both present and future, including its movable plant and machinery, equipment's, appliances, furniture, vehicles, machinery spares and stores and accessories whether or not installed and related movables in the course of transit or delivery whether now belonging or which may hereafter belong to the Company or which may be held by any person at any place within or outside India to the order or disposition of the Company and all documents of title including bills of lading, shipping documents, policies of insurance and other instruments and documents relating to such movables together with benefits of all rights thereto.
The loan is further secured by First charge ranking Pari-Passu by way of equitable mortgage by deposit of title deeds of selected immovable properties of the Company situated at Village Bambhori & Shirsoli, Dist. Jalgaon in State of Maharashtra together with all buildings, structures thereon and all plant and machinery attached to earth however, excluding the assets charged exclusively as mentioned in these notes.
The above term loan is also personally guaranteed by three Directors including Vice Chairman and Managing Director of the Company in their personal capacity.
The Company has defaulted in the repayment of Canara Bank loan. The amount of total overdue outstanding as at March 31,2021 is ' 223.50 towards principal and ' 91.63 towards interest (Previous year ' 73.50 towards principal and ' 28.44 towards interest)
(iv) ECB Loan - International Finance Corporation (IFC): ' 2,578.43 (PY ' 2,574.07) (Loan Key Number 2007872)
The ECB Loan is secured by first ranking Mortgage in favour of International Finance Corporation (IFC) on specific movable and immovable assets of the Company acceptable to IFC.
The Company has completed the process of Security Creation in favour of IFC.
The charge ranks subservient to the charge created in favour of International Finance Corporation (Loan Key Number 2007872) to secure its loan of ' 2600 million over entire movable plant, machinery and equipment, including all the spare parts and all other movable fixed assets such as furniture, fixtures, installations, vehicles, office equipment, computers and all other fixed assets of the Company both present and future at the plants of the Company at Bhavnagar (Gujarat), Hyderabad (Andhra Pradesh) and Jalgaon (Maharashtra) and further secured by way of subservient charge over the land and other immovable properties together with all building and structure thereon and all other plant and machinery at the plants of the Company at Bhavnagar (Gujarat), Hyderabad (Andhra Pradesh) and specific immovable and movable properties at Jalgaon (Maharashtra).
The above ECB loan (Loan Key Number 2007872) is also personally guaranteed by three Directors, including, Vice Chairman and Managing Director of the Company in their personal capacity.
The above ECB loans are further secured by way of exclusive charge by way of Registered Mortgage on the following immovable properties of the Company:
1) Gat No. 220, total admeasuring H.1.58 R. situated at Bambhori (Pr. Ch.), Tal. Dharangaon, Dist. Jalgaon:
2) Gat No. 118/1, total admeasuring H.0.99 R. situated at Eklagna, Tal. Dharangaon, Dist. Jalgaon:
3) Gat No. 119/1, total admeasuring H.1.42 R. situated at Eklagna, Tal. Dharangaon, Dist. Jalgaon:
4) Gat No. 122, total admeasuring H.1.76 R. situated at Eklagna Tal. Dharangaon, Dist. Jalgaon:
5) Gat No. 139/11, total admeasuring H.3.06 R. situated at Shirsoli PB. Tal. & Dist. Jalgaon:
6) Gat No. 139/12, total admeasuring H.3.08 R. situated at Shirsoli P.B. Tal. & Dist. Jalgaon:
Together with all existing and future buildings, erections, structures, godowns and construction of every kind and description and together with all the trees, fences, hedges, ditches, ways, sewers, drains, waters, watercourses, liberties, privileges, easements and appurtenances whatsoever to the said land, hereditaments and premises or any of them or any part thereof whether presently in existence or in the future belonging to or in any way appurtenant thereto or usually held, occupied or enjoyed therewith or expected to belong or be appurtenant thereto or usually held, occupied or enjoyed therewith or expected to belong or be appurtenant thereto and all the estate, right, title, interest property, claims and demands whatsoever of the Company in, to and upon the same, which description shall include all property of the above description whether presently in existence or constructed or acquired hereafter.
The Company has defaulted in the repayment of IFC loan. The amount of total overdue outstanding as at March 31,
2021 is ' 600.00 towards principle and ' 602.30 towards interest ( Previous year ' 200.00 million towards principle and ' 145.70 million towards interest)
(v) ECB Loan - Senior Lenders of US$ 89 million: CY US$ 21.33 million ' 1,558.75 (PY US$ 21.33 million equivalent to ' 1,573.06)
a) International Finance Corporation (IFC) of US$ 24.00 million: CY US$ 2.45 million ' 179.55 (PY US$ 2.45 million equivalent to ' 180.53) (Loan Key No 201210122).
b) Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden N.V (FMO): US$ 20.00 million: CY US$ 5.52 million ' 405.02 (PY US$ 5.52 million equivalent to ' 408.88) (Loan Key No 201212201 & 201212212).
c) Societe De Promotion Et De Participation Pour La Cooperation Economique (Proparco): US$ 20.00 million: CY US$ 6.75 million ' 489.95 (PY US$ 6.75 million equivalent to ' 495.17 (Loan Key No 201212202 & 201212213)
d) Deutsche Investitions-Und Entwicklungsgesellschaft mbH (DEG): US$ 25.00 million: CY US$ 6.60 million ' 484.22 (PY US$ 6.60 million equivalent to ' 488.48) (Loan Key No 201212200 & 201212214).
The charge ranks subservient to the charge created in favour of International Finance Corporation to secure its loan of US$ 60 million (Loan Key Nos. 2007872, 2008534, 2009182 and 2010019 all repaid fully) over entire movable plant, machinery and equipment, including all the spare parts and all other movable fixed assets such as furniture, fixtures, installations, vehicles, office equipment, computers and all other fixed assets of the Company both present and future at the plants of the Company at Bhavnagar (Gujarat), Hyderabad (Andhra Pradesh) and Jalgaon (Maharashtra) and further secured by way of subservient charge over the land and other immovable properties together with all building and structure thereon and all other plant and machinery at the plants of the Company at Bhavnagar (Gujarat), Hyderabad (Andhra Pradesh) and specific immovable and movable properties at Jalgaon (Maharashtra).
The above ECB loan (Loan Key Number 201210122) is also personally guaranteed by three Directors, including, Vice Chairman and Managing Director of the Company in their personal capacity.
The above ECB loans are further secured by way of exclusive charge by way of Registered Mortgage on the following immovable properties of the Company:
1) Gat No. 220, total admeasuring H.1.58 R. situated at Bambhori (Pr. Ch.), Tal. Dharangaon, Dist. Jalgaon:
2) Gat No. 118/1, total admeasuring H.0.99 R. situated at Eklagna, Tal. Dharangaon, Dist. Jalgaon:
3) Gat No. 119/1, total admeasuring H.1.42 R. situated at Eklagna, Tal. Dharangaon, Dist. Jalgaon:
4) Gat No. 122, total admeasuring H.1.76 R. situated at Eklagna Tal. Dharangaon, Dist. Jalgaon:
5) Gat No. 139/11, total admeasuring H.3.06 R. situated at Shirsoli P.B. Tal. & Dist. Jalgaon:
6) Gat No. 139/12, total admeasuring H.3.08 R. situated at Shirsoli P.B. Tal. & Dist. Jalgaon:
Together with all existing and future buildings, erections, structures, godowns and construction of every kind and description and together with all the trees, fences, hedges, ditches, ways, sewers, drains, waters, watercourses, liberties, privileges, easements and appurtenances whatsoever to the said land, hereditaments and premises or any of them or any part thereof whether presently in existence or in the future belonging to or in any way appurtenant thereto or usually held, occupied or enjoyed therewith or expected to belong or be appurtenant thereto or usually held, occupied or enjoyed therewith or expected to belong or be appurtenant thereto and all the estate, right, title, interest property, claims and demands whatsoever of the Company in, to and upon the same, which description shall include all property of the above description whether presently in existence or constructed or acquired hereafter.
The Company has defaulted in the repayment of IFC loan ('External Commercial Borrowings'). The amount of total overdue outstanding as at March 31,2021 is ' 1,418.00 towards principal and ' 196.69 towards interest (Previous year ' 479.21 towards principal and ' 51.93 million towards interest)
(vi) ECB Loan - UBS Switzerland AG of Euro 3.09 million: CY: ' 166.96 (PY ' 160.51)
The above ECB Loan is secured by way of first and exclusive charge on Extrusion Line or the production of HDPE Pipes in diameter range upto 2,500 mm including efficient air cooling (EAC) with standard accessories, (Movable Assets), along with all right, title, interest, benefits, claims and demands, both present and future, whatsoever, of JISL, in, to, under or in respect of, the Movable Assets, and to secure for the repayment of the Loan and payment of other monies including all interest at the agreed rates, costs, charges, expenses and all other monies due to UBS.
The Company has defaulted in the repayment of UBS loan. The amount of total overdue outstanding as at March 31, 2021 is Eur 1.96'41.17 million towards principle and ' 3.14 million towards interest (Previous year ' Nil)
(vii) Vehicle Loan: CY ' 12.50 (PY ' 22.70)
The loan is secured by exclusive charge on specific vehicles to specified lenders.
The Company has defaulted in the repayment of vehicle loan. The amount of total overdue outstanding as at March 31,2021 is ' 1.99 towards principal and ' 0.28 towards interest (Previous year ' Nil)
(viii) Working Capital Loans: (including WCTL, Cash Credit, Export Packing Credit, FCTL & FCNRB, Bill discounting): CY ' 25,383.00 (PY ' 23,431.29)
Consortium of Banks (In Alphabetical order) led by State Bank of India, Commercial Branch, Fort, Mumbai and D N Road Branch, Mumbai and sub limit with State Bank of India, Dana Bazar Branch, Jalgaon, Andhra Bank, Mumbai, Bank of Baroda, Mumbai, Bank of Bahrain and Kuwait, Mumbai, Canara Bank, Jalgaon, Export Import Bank of India, Mumbai, IDBI Bank Ltd, Jalgaon & Pune, Indian Bank, Mumbai, Oriental Bank of Commerce Mumbai, Punjab National Bank, Mumbai, Co-operative Centrale Raiffesen Boerenleen Bank, Mumbai, Standard Chartered Bank, Mumbai, Syndicate Bank, Mumbai, The South Indian Bank Ltd, Mumbai, Union Bank of India, Mumbai and Yes Bank Ltd, Mumbai.
The working capital loans are secured by a first pari-passu charge created in favour of Security Trustee i.e. IDBI Trusteeship Services Ltd, Mumbai on behalf of (consortium members) on whole of Company's present and future stocks of raw material, finished goods, stocks in process, stores and spares and other raw materials, stored whether raw or in process of manufacture and all articles manufactured there from brought into store or be in or around the Company's godown or factory premises at Jalgaon or elsewhere, including goods in transit or delivery and the Company's present and future book debts, outstanding monies, receivable, claims, bills, contracts, engagements, securities, investments, rights and assets of the Company.
The Working Capital Facilities as above are further secured by a second charge (First Charge in case of FCTL and FCNRB) ranking Pari-Passu by way of equitable mortgage created in favour of Security Trustee i.e. IDBI Trusteeship Services Ltd, Mumbai on behalf of consortium members by deposits of title deeds of selected immovable properties of the Company situated at Village Bambhori & Shirsoli, Dist. Jalgaon in State of Maharashtra together with all buildings, structures thereon and all plant and machinery attached to earth however, excluding assets charged exclusively as mentioned in these notes. The whole of the movable properties of the Company (other than Current Assets) including its movable plant and machinery, machinery spares, tools and accessories and other movables, both present and future save and except the moveable assets which are exclusively charged to the other lenders. The working capital loans are also secured by personal guarantee by the Vice Chairman and Managing Director and three other Directors of the Company in their personal capacity.
As the Company has defaulted in repayment of its short term dues towards lenders, the account has been classified as NPA since September 2019, however restructuring under RBI circular of 7th June 2019 is under finalisation and will be in the implementation phase soon.
23(b) Details of Corporate social responsibility expenditure
As per Section 135 of the Companies Act, 2013, a company meeting the applicable threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are in accordance to the CSR Policy of the Company which includes Rural Development Project, eradicating hunger, poverty and malnutrition, healthcare and sanitation, animal welfare, etc. A CSR committee has been formed by the Company as per the Act.
a) During the year, the company has incurred ' 63.98 (previous year '14.57) on account of Corporate Social Responsibility (CSR) included under Other Expenses.
b) Gross Amount required to be spent by the company during the year is ' 24.45.
c) Amount of ' 24.45 approved by the board to be spent during the year.
Section 115BAA of the Income Tax Act, 1981 gives the corporate assessee an option to apply a lower tax rate with effect from April 1, 2019 subject to certain conditions specified therein. The Company has assessed the impact of the same and believes that it will continue to remain in the existing tax structure for the foreseeable future based on its forecasted profits. Accordingly, no effect in this regard has been considered-in measurement of tax expenses for the purpose of these financial statements. Management, however, will continue to review its profitability forecast at regular intervals and make necessary adjustments to tax expenses when there is reasonable certainty to avail the lower rate of tax.
26) EMPLOYEE BENEFIT OBLIGATIONS
26(a) Defined Contribution plans
Provident Fund: Contribution towards provident fund for employees is made to the regulatory authorities, where the Company has no further obligations. Such benefits are classified as Defined Contribution Schemes as the Company does not carry any further obligations, apart from the contributions made on a monthly basis. Contribution to Defined contribution plan recognised as expense for the year as under:
a) Employers contribution to Provident fund CY ' 70.87 (PY ' 75.54) deposited with concerned authority.
b) Employers contribution to Pension scheme CY ' 69.62 (PY ' 75.97) deposited with concerned authority.
c) Employers contribution to Superannuation fund CY ' 53.01 (PY ' 100.51) managed by a Trust.
d) Employers contribution to ESIC CY ' 21.53 (PY ' 27.30)
e) Employers contribution to State Labour welfare fund CY ' 0.35 (PY ' 0.31)
The net of provision for unfunded leave encashment liability up to March 2021 is ' 93.47 (upto March 20'113.91)
26(b) Defined Benefit plans
Gratuity: The Company provides for gratuity, a defined benefit plan (the "Gratuity Plan”) covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment. The Company's liability is actuarially determined (using the Projected Unit Credit method) at the end of each year. The fair value of the plan assets of the trust administered by the Company, is deducted from the gross obligation.
Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan's liability.
Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.
Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.
SEGMENT 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 financial statements.
EARNING PER SHARE
Basic and diluted earnings/(loss) per share is calculated by dividing the profit/(loss) attributable to equity holders of the Company by the weighted average of equity shares outstanding during the year.
Previous year's figures are given in bracket
The Company, in its quest for rural development, has supported through investment in buildings, facility and infrastructure in an initiative by Bhavarlal & Kantabai Jain Multipurpose Foundation to establish a residential school called "Anubhuti School” based upon Indian ethos and values. The Company also derives benefit from this investment in the form of usage of these facilities; children of Company's associates get priority admission into the school, etc.
The Company with help of trust will make further efforts to get extra gains from this investment as part of its corporate social responsibility initiative commitments.
The transactions with Related Party are made in the normal course of business and on terms equivalent to those that prevail in arm's length transactions. Outstanding Balances at the year end are unsecured and settlement occurs in cash for the year ended 31st March, 2021, the Company has recorded the receivable relating to amount due from Related Parties. This assessment is undertaken each Financial Year through examining the Financial position of the Related Parties and the market in which the Related Party operates.
) FINANCIAL RISK MANAGEMENT
The Company's activities expose it to market risk, liquidity risk, and credit risk, which may have an adverse effect on its financial performance. In order to minimise the adverse effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts are entered to hedge certain foreign currency risk exposures and interest rate swap, principal only swap to hedge variable interest rate exposures. The sources of risk, which the entity is exposed to and how the entity manages these risks and their impact on financial statements is given below:
The board and the risk management committee provides principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instrument, etc.
[A] Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company's receivables from customers and investment securities. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments.
Trade and other receivables
"The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in normal course of business.. Credit terms are in line with industry trends.”
Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the macro economic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue. Further, management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behavior and extensive analysis of customer credit risk. Trade receivable as on March 31, 2021 includes ' 15,875.08 receivable from various Central and State Government Authorities towards projects work undertaken as also supply of materials, payments of which are not forthcoming
regularly and balance confirmation from such parties are awaited as on March 31, 2021. The Company is in process of completion of such projects and is constantly following up with for recovery. In past, the Company was able to realise substantial amounts and no write off was necessitated on account of non recovery. The Company is hopeful that entire dues would be realised in near future and hence, no specific provision for doubtful debts is considered necessary apart from provisioning made under expected credit loss in line with Ind AS 109 "Financial Instruments”.
# The above debtors includes Government receivables which does not carry any due date.
The movement in the allowance for impairment in respect of trade and other receivables during the year was as follows.
Cash and cash equivalents
"Credit Risk on cash and cash equivalent, deposits with the banks/financial institutions is generally low as the said deposits have been made with the banks/financial institutions who have been assigned high credit rating by international and domestic rating agencies. Investments of surplus funds are made only with approved Financial Institutions/ Counterparty."
Derivatives
The derivatives are entered into with credit worthy banks and financial institution counterparties. The credit worthiness of such banks and financial institutions is evaluated by the management on an ongoing basis and is considered to be good.
[B] Liquidity risk
Liquidity risk is the risk that the Company encounters difficulty in raising funds to meet commitments associated with financial instruments. Liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through committed credit facilities to meet the obligations when due.
As on Mar 31,2021 the Company has defaulted in payment to the Lenders and consequently enetered into Resolution Plan with them. The Company's liquidity position will improved post implementation of the Resolution Plant as envisaged in Note No 42.
Management monitors rolling forecasts of the Company's liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows. The Company manages its liquidity risk by by preparing month on month cash flow projections to monitor liquidity requirements. In addition, the Company projects cash flows and considering the level of liquid assets necessary to meet these, monitoring the balance sheet liquidity ratios against internal an external regulatory requirements and maintaining debt financing plans.
(i) Maturities of financial liabilities
The below table analyses the Company's financial liabilities into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are contractual undiscounted cash flows, balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
(i) Foreign currency risk
Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates and equity prices etc. The Company operations involve foreign exchange transactions including import, export as well as financing and investment transactions and is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to US$, EUR, GBP and CHF. Foreign currency risk arises from future commercial transactions and recognised in assets and liabilities denominated in foreign currency that is not Company's functional currency (i.e., INR). The risk is measured through a forecast of highly probable foreign currency cash flows. The objective of the hedges is to minimise the volatility of the INR cash flows of a high probable forecast transactions.
"Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates. In order to optimize the Company's position with regards to interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio. Accordingly, the Company endeavors to gradually reduce the exposure to variable interest rate borrowings. The Company's main interest rate risk arised from long-term borrowings with variable rates, which expose the group to cash flow interest rate risk. The Company's borrowings at variable rate were mainly denominated in INR, US$, and CHF.”
The Company's fixed rate borrowings are carried at amortised cost. The are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of change in market interest rates.
The Company manages its cash flow interest rate risk by using floating-to-fixed interest rate swaps. Under these swaps, the Company agrees with other parties to exchange, at specified intervals, the difference between fixed contract rates and floating rate interest amounts calculated by reference to the agreed notional principal amounts.
(b) Sensitivity
Profit or loss is sensitive to higher/ lower interest expense from borrowings as a result of changes in interest rates. A reasonably possible change of 50 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.
The Company is exposed to equity price risk, which arises from FVTPL equity securities. The Company has a very insignificant portion of amounts invested in unquoted equity instruments other than subsidiaries, joint venture and associates. The management monitors the proportion of equity instruments in its investment portfolio based on market indices.
38) CAPITAL MANAGEMENT
i) 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. Management monitors the return on capital as well as the level of dividends to ordinary shareholders. The board of directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position.
The Company monitors capital using a ratio of 'adjusted net debt' to 'adjusted equity'. For this purpose, adjusted net debt is defined as total liabilities, comprising interest-bearing loans and borrowings and obligations under finance leases, less cash and cash equivalents. Adjusted equity comprises all components of equity.
The Company monitors capital on the basis of the following gearing ratio:
Net debt (total borrowings net of cash and cash equivalents) divided by total 'equity' (as shown in the balance sheet, including non controlling interests).
39) FINANCIAL INSTRUMENTS
This section gives an overview of the significance of financial instruments for the Company and provides additional information on balance sheet items that contain financial instruments. The details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 2.13 & 2.15 to the financial statements.
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Level 1 to Level 3, as described below:
Quoted prices in an active market (Level 1): This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities. This category consists of investment in quoted equity shares.
Valuation techniques with observable inputs (Level 2): This level of hierarchy includes financial assets and liabilities, measured using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices). This level of hierarchy includes Company's over-the-counter (OTC) derivative contracts.
Valuation techniques with significant unobservable inputs (Level 3): This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). 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.
iii) Valuation process and technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
a) Quoted investments (Equity Shares)- Market Value
b) Unquoted Investments - As determined by the Management, there is no significant change in the value of Unquoted investment in equity shares valuing ' 0.56 (PY ' 0.56)
c) The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.
41) The outbreak of Coronavirus (COVID-19) pandemic globally and in India is causing significant disturbance and slowdown of economic activity. The Company's operations and revenue during the period were also impacted due to COVID-19.The Company has made assessment at the balance sheet date of the recoverability and carrying values of its assets and ability to pay its liabilities as they become due and effectiveness of internal financial controls at the balance sheet date, and has concluded that there are no material impact or adjustments required in the financial statements and does not anticipate any challenge in the Company's ability to continue as a going concern considering the restructuring plan as stated in Note 42. The impact of the pandemic may be different from that estimated as at the date of approval of these results and the management continues to closely monitor any material changes to future economic conditions.
42) During 2019-2020, the Company's lenders have signed an inter-creditor agreement as per RBI circular dated June 7, 2019, the Company has been engaged with the lenders on the resolution plan on a proactive basis. A formal resolution process involving lenders and professional advisors is on-going to approve the resolution plan. The proposed resolution plan has received requisite rating from the ICEs appointed by the lenders and we expect the activity to be completed in the near future subject to regulatory compliance and internal approvals of lenders. The financials and operations of the Company have been impacted on account of adverse liquidity conditions being faced by the Company since previous year till date. As on March 31,2021, the Company has principal outstanding inluding interest thereon overdues to the working capital and term loan lenders aggregating to ' 37,578.78 million which is part of resolution plan. As at March 31,2021, the networth of the Company (Standalone basis) stands at ' 39,125.30 million. Post implementation of the resolution plan, the Company's ability to pay debt obligations and to optimise operations will improve significantly.
43) The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on November 13, 2020, and has invited suggestions from stakeholders which are under active consideration by the Ministry. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period when the Code becomes effective.
44) Comparative previous year's figures have been reworked, regrouped and reclassified to the extent possible, wherever necessary to confirm to current year's classification and presentation.
45) The financial statements have been approved by the Board of Directors in their meeting held on June 30, 2021.
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