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Notes to Accounts of Sundaram Finance Ltd.
Mar 31, 2025
i) In accordance with the scheme of reduction of Equity Share Capital approved by the National Company Law Tribunal (NCLT) vide their order dated 14th November 2024, Sundaram Fund Services Limited (SFSL), a wholly owned subsidiary of the Company, reduced its paid up Equity Share Capital from ''45 Crores (4,50,03,000 Equity Shares of ''10/- each) to ''1.50 Crores (i.e. 15,03,000 Equity Shares of ''10/- each).
ii) Represent Quoted Investments.
iii) Represents investments in the growth option of the open-ended schemes of Sundaram Mutual Fund in compliance with the seed capital requirements as stipulated by SEBI (Mutual Funds) Regulations, 1996, as amended from time to time. The same cannot be redeemed unless the scheme is wound up.
iv) Represents sponsor investments, in compliance with SEBI (Alternative Investment Funds) Regulations, 2012 and the same cannot be redeemed unless the Fund is wound up.
v) In accordance with the Reserve Bank of India directives, the company has created a floating charge on the statutory liquid assets comprising investment in Government Securities of face value ''767.45 Crores (amortised cost - ''780.30 Crores).
a) The term loan from banks are secured by hypothecation of specific assets covered by a charge on hypothecation loan receivable / Lease Agreements.
b) Term loans were deployed for the purpose for which they were obtained.
c) Working capital demand loans and cash credit are secured by a charge on hypothecation loan receivable/lease agreement , ranking pari passu ,excluding assets which are specifically charged to others.
d) Funds raised on short term basis have not been utilised for long term purposes.
e) The Company has not defaulted in the repayment of dues to its lenders.
f) Quarterly Returns or Statements of current assets filed by the Company with Banks or Financial Institutions are in agreement with the Books of Accounts.
g) The Company has not been declared as wilful defaulter by any Bank or Financial Institution or other lender or government or any government authority
Description of nature and purpose of other equity:
a) Capital Reserve: Represents reserve created on account of amalgamations and arrangements
b) Share Options Outstanding Account: Represents reserve on grant of option to employees of the company / group company under Employee Stock option Scheme.
c) Statutory reserve: Represents reserve created as per Section 45-IC of the Reserve Bank of India Act, 1934.
d) General reserve: Represents amount appropriated from retained earnings.
e) OCI Reserve : Equity/ Preference : represents the cumulative gains / losses arising on the fair valuation of equity / preference instruments measured at fair value through Other Comprehensive Income.
f) OCI Reserve : Cash flow hedge : Effective portion of cash flow hedges represents the cumulative effective portion of gains or losses arising on changes in fair value of hedging instruments entered into for cash flow hedges
Other NotesNote 35: Exceptional item:
During the previous year, the Company transferred 79,73,529 equity shares of ''5/- each held in Sundaram Finance Holdings Limited (SFHL), representing 3.59% stake, resulting in a profit of ''133.85 crores. SFHL has ceased to be a subsidiary of the company. These investments have been recognised at Fair Value through Other Comprehensive Income as per IND AS 109.
The Companyâs capital management strategy is to ensure that it has sufficient capital for business operations, strategic investment, and regulatory requirements, to provide reasonable return to the shareholders. Equity share capital and other equity are considered for Capital management.
The company monitors its Capital Adequacy ratio as stipulated by RBI for NBFC-Investment and credit company - Deposit taking. The Capital adequacy ratio as of March 31, 2025 is 20.42% (March 31, 2024 - 20.50%) as against the regulatory requirement of 15%.
Note 37: Financial instruments - Fair value measurements
Risk is an inherent and integral part of the financial services business, and the company has been judiciously managing this through an efficient risk mitigation system, with a view to achieve the Company''s stated objectives of Growth with Quality and Profitability. The risks primarily include credit risk, liquidity risk and market risk.
The policies and procedures laid down by the company for the purpose of risk identification, measurement and management, compare well with contemporary best practices followed by industry peers. The Risk Management Committee and Asset Liability Management Committee, functioning under the supervision of the Audit Committee, have enunciated detailed policies for assessment of various types of risks, and fixed tolerance limits as appropriate.
Credit risk is the risk of financial loss to the Company if a customer fails to meet his contractual obligations and arises principally from the company''s loan receivables.
The company has in place a robust credit policy which clearly defines the credit filters and the terms of acceptance of proposals for financing different categories of borrowers and asset classes. The credit appraisal process, inter alia, includes filters for stratification of customers, compliance with know your customer (KYC) norms, field investigation, credit bureau verification, exposure ceilings, asset risk, segment, and geography risks. The risk metrics also address loan to value, loan tenure, based on the useful life of the asset, end-use of the asset and credit enhancements, as appropriate.
The Companyâs exposure is primarily to retail customers, thereby making for a well-diversified risk portfolio. The time-tested monitoring and recovery mechanism ensures timely recovery of instalments and where required, necessary action for resolution of delinquent accounts is initiated, including legal proceedings. Finally, physical presence and in-depth knowledge of the markets in which the Company operates enables early identification of emerging risks thereby facilitating prompt remedial action.
Credit risk management practices
(i) Policy on write off: Loans are written off when the value of underlying security/other collateral is not sufficient to cover the loan exposure or where the underlying security / customer are not traceable. In such cases, the company takes legal recourse for recovery of shortfall of dues, if any.
(ii) Narrative description of collateral: The underlying assets, which are financed, are the primary collateral held. These are typically commercial vehicles, cars, construction equipment, farm equipment etc. Additional collateral, by way of credit enhancement, is obtained based on the managementâs credit evaluation of the customer.
d. Debt Securities:
All debt investments are allocated to stage 1 under initial recognition. If the rating assigned to the security at the time of investment is downgraded by two notches and / or where there is a delay in interest servicing by more than 30 days, this would result in stage 2 classification. Further downgrade of rating and/or delay in interest servicing by more than 90 days/default of payment of principal would result in stage 3 classification.
For investment in debt instruments, one-year transition matrix provided by the rating agencies is used as the PD. Loss given default (LGD) parameters assume a recovery rate of 65%, 75% and 50% for unsecured senior, unsecured subordinated and secured debt securities respectively.
Liquidity risk relates to our potential inability to meet all payment obligations when they fall due or only being able to meet them at excessive costs. The objective of the liquidity risk management framework is to ensure that the Company can fulfil its payment obligations at all times and can manage liquidity and funding risks within its risk appetite. The Asset Liability Management Committee regularly monitors the liquidity position and the duration of assets/liabilities and ensures that liquidity is strictly managed as per the policy.
Following are the contractual maturities of financial liabilities / financial assets at the reporting date. The amounts are gross, undiscounted and include estimated interest payments / receipts but exclude the impact of netting agreements.
Market risk is the risk of loss arising from potential adverse changes in the value of the firmâs assets and liabilities from fluctuation in market variables like liquidity, interest rate and foreign exchange (Currency risk).
Interest rate risk
The major lending of the Company is in the form of Hypothecation loans at fixed rates. The loans are financed by various fixed / floating rate borrowings. While the Loan assets are generally recovered over the tenure of the underlying contract equally, the liabilities are repayable over the tenure or on maturity. Hence, the interest rate and liquidity risk due to mismatches in the duration of assets and liabilities are inherent and inevitable. The Company has a policy for entering into derivative transactions as required to manage such risks.
Fair value sensitivity analysis for fixed rate instruments
The Company''s fixed rate instruments are carried at amortised cost and are not measured for interest rate risk, as neither the carrying amount nor the future cash flows will fluctuate because of changes in market interest rates.
a. Interest rate sensitivity
To measure this risk, the Company adopts duration gap analysis which is measured for assets and liabilities maturing in next 12 months as well as for the overall assets and liabilities. Also, for Interest rate risk management, the Duration Gap model is used on assets and liabilities maturing in the next 12 months, to assess the change in Net Interest Income (NII) for a 1% increase in interest rate. The change in NII for 1% change in interest rate as on 31.03.2025 is (16.82) Cr.
b. Currency Risk
The Company does not have any outstanding foreign currency assets/liabilities and hence not exposed to currency risk.
II) Defined benefit plans
Defined benefit plan exposes the Company to a number of risks, the most significant of which are detailed below:
Investment risk: This may arise from volatility in Asset value due to market fluctuations and impairment of assets due to credit losses. The defined benefit plans may hold equity type assets, which may carry volatility and associated risk.
Interest risk: A decrease in bond yields will increase plan liabilities, although this is expected to be partially offset by an increase in the value of the planâs investment in debt instruments.
Salary cost Inflation risk: The present value of some of the defined benefit plan obligations are calculated with reference to the future salaries of plan participants. Increase in salary due to adverse Inflationary pressures might lead to higher liabilities.
Longevity risk: The present value of defined benefit plan obligation is calculated by reference to the best estimate of the mortality of plan participants. Increase or decrease in such rate will affect the plan liability.
Asset Liability Mismatching or Market Risk: The entire Plan Assets are invested in insurer managed funds with Life Insurance Corporation of India (LIC), the composition of each major category of plan assets, the percentage or amount for each category to the fair value of plan assets & the description of the Asset-Liability matching strategies used by the plan are not available.
C. Provident Fund
The provident fund contributions to trust are managed through trust investments in addition to contribution of a portion of its provident fund liability relating to Employees Pension Scheme to Employee Provident Fund Organisation.
The fund has relatively balanced mix of investments in order to manage the risks. The investment strategy is designed based on the interest rate scenario, liquidity needs of the Plans and Pattern of the investments as prescribed under the statute.
The trustees regularly monitor the funding and investment, there are systems in place to ensure that the performance of the portfolio is regularly reviewed and investments do not pose significant risk of impairment.
43.08 Utilisation of Borrowed funds and Share Premium (Diversion of Funds):
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 (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend to or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend to or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
43.09 Undisclosed income
There is no surrender or disclosure of income separately on account of search or survey under Income tax since all transactions are recorded in the books.
43.10 Crypto Currency or Virtual Currency
Company has neither traded nor invested in Crypto currency or virtual currency during the year.
43.13 The Board of Directors have recommended a final dividend of ''21/-per share (210%) for the year ended 31st March 2025 in May 2025. This together with interim dividend of ''14 per share (140%) paid would aggregate to a total dividend of ''35/- per share (350%).
44.03.03 Qualitative disclosures on Risk Exposure in Derivatives i) Qualitative disclosures
The Company has a Board approved policy for entering into derivative transactions. Derivative transaction comprises Forward Rate Agreements, Interest Rate Swaps, Coupon only swaps, Currency and Interest rate swap and Forward Exchange contracts. The Company undertakes such transactions for hedging balance sheet assets and liabilities. The Asset Liability Management Committee and Risk Management Committee periodically monitors and reviews the risks involved.
There are 39 fraud cases reported to RBI as of 31s1 March 2025, involving an amount of ''24.12 Cr., including 12 cases reported during the financial year 2024-25 involving ''4.08 Cr. The company has fully provided for / written off the amount and has proceeded legally to recover the dues from the respective parties.
Note 48: Disclosure on Liquidity Coverage Ratio (LCR):
As part of the Liquidity Risk Management Framework for NBFCs, RBI has mandated maintenance of Liquidity Coverage Ratio (LCR) effective 1st Dec 2020. The Company is required to maintain adequate unencumbered High Quality Liquid Asset (HQLA) to meet its liquidity needs for a 30 calendar-day time horizon under a significantly severe liquidity stress scenario. The objective of the LCR is to promote the short-term resilience of the liquidity risk profile. Presently, the Company is required to maintain a minimum LCR of 100%, effective December 1, 2024.
The LCR is calculated by dividing the companyâs stock of HQLA by its total net cash outflows over a 30-day stress period. âHigh Quality Liquid Assets (HQLA)â means liquid assets that can be readily sold or immediately converted into cash at little or no loss of value or used as collateral to obtain funds in a range of stress scenarios. Total Net cash outflows is defined as total expected cash outflows minus total expected cash inflows in the specified stress scenario for the subsequent 30 calendar days. The main drivers of LCR are adequate HQLAs and lower net cash outflow.
Major source of borrowing for the Company are Non-Convertible Debentures, Term loans from Banks, Commercial paper and Public deposits. Details of funding concentration from Significant counter party are given above under public disclosure.
The company has maintained LCR well above the regulatory requirement for all the quarters. The average LCR for the quarter ended 31st March 2025 is 152.7% (for the quarter ended 31st March 2024 - 176.8%), as against the regulatory requirement of 100% (85% for the corresponding period last year).
Institutional set-up for liquidity risk management:
Board has setup the Asset Liability Management Committee (ALCO) and Risk Management Committee to manage various risks of the Company. ALCO meets on a regular basis and is responsible for ensuring adherence to the risk tolerance/limits set by the Board including the Liquidity risk of the Company. The performance of the ALCO is reviewed by Audit Committee / Board.
The Company has formulated a policy on Liquidity Risk Management Framework. Accordingly, the Company,
⢠Performs stress testing on a quarterly basis which enables the Company to estimate the liquidity requirements as well as adequacy and cost of the liquidity buffer under stressed conditions.
⢠Has also formulated a contingency funding plan as a part of the outcome of stress testing results.
⢠Monitors liquidity risk based on âStockâ approach to liquidity by way of pre-defined internal limits for various critical ratios pertaining to liquidity risk.
The Company has diversified source of funding to ensure that there is no significant source, the withdrawal of which could trigger liquidity problems.
The Company monitors cumulative mismatches across all time buckets by establishing internal prudential limits. The Company maintains adequate liquidity buffer of readily marketable assets, to protect itself against any liquidity risk at the same time is mindful of the cost associated with it.
Notes
1. As per the circular issued by RBI on Liquidity Risk Management Framework for Non-Banking Financial Companies and Core Investment Companies dated 04th November 2019, âSignificant counterpartyâ is defined as a single counterparty or group of connected or affiliated counterparties accounting in aggregate for more than 1% of the total liabilities and "Significant instrument/product" is defined as a single instrument/product of group of similar instruments/products which in aggregate amount to more than 1% of the total liabilities.
2. Total Liabilities represent ''Total Liabilities and Equity'' as per Balance sheet less Equity.
3. Public funds are as defined in Master Direction - Reserve Bank of India (Non-Banking Financial Company- Scale Based Regulation) Directions, 2023.
4. Other Short-term liabilities represent all Short-term borrowings other than CPs.
Mar 31, 2024
Measurement of Fair Value Fair Value Hierarchy
"The fair value of investment property has been determined by the registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued.
The fair value measurement for all of the investment property has been categorised as a Level 3 fair value based on the inputs to the valuation technique used.
Investment property comprises a number of commercial properties that are leased to third parties. No contingent rents are charged.
The primary objective of the Companyâs Capital Management is to maximise shareholders value. The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. The Companyâs policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence to sustain future development of the business. For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves.
Note 25 : Financial instruments - Fair values and risk management A. Accounting Classification and Fair Values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:
Level 1 hierarchy - Includes Financial Instruments measured using quoted prices in the active market.
Level 2 hierarchy - The Fair value of Financial Instruments that are not traded in an active market, is determined using valuation techniques which maximize the use of observable market data.
Level 3 hierarchy - Inputs are not based on observable market data. 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. An adjustment to a Level 2 input that is significant to the entire measurement results in a fair value measurement categorised within Level 3 of the fair value hierarchy if the adjustment uses significant unobservable inputs.
Financial instruments fair valued under Level 3 hierarchy are measured using Market multiples method.
The carrying amount of trade receivables, cash and cash equivalents , trade payables and other financial liabilities are considered to be the fair value due to short term nature.
There are no transfers between level 1 and level 2 during the year.
The Company has exposure to the following risks arising from financial instruments:
⢠Liquidity risk ;
⢠Credit risk ; and
⢠Market risk
The Companyâs 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 Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
(a) 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. The Companyâs 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 Companyâs reputation.
The Company regularly monitors the rolling forecasts and the actual cash flows to service the financial liabilities on a day-to-day basis through cash generation from business and by having adequate banking facilities.
The following table shows the maturity analysis of the Companyâs financial liabilities based on contractually agreed undiscounted cash flows along with its carrying value as at the Balance sheet date.
(b) 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 loans and advances.
(i) Trade Receivables:
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Concentration of credit risk with respect to trade receivables are limited as the customers are reviewed, assessed and monitored regularly on a monthly basis with pre-determined credit limits assessed based on their payment capacity. Our historical experience of collecting receivables demonstrates that credit risk is low.
The Company has exposure in Cash and cash equivalents,employee loans and investment carried at amortised cost. The Companyâs maximum exposure to credit risk as at 31st March, 2024 is the carrying value of each class of financial assets as on that date.
(iii) Cash and Cash Equivalents
The Company held cash and cash equivalents of INR 16337.66 lakhs as on March 31, 2024 (March 31, 2023 : INR 57.72 lakhs). The cash and cash equivalents are held in hand and with bank. (Refer Note 1).
Market risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices in case of equity investments and Net Asset Value (NAV) in case of mutual fund investments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Company is having certain investments in unlisted companies where the valuation takes place based on certain market multiples of similar companies after duly adjusted for discounts to the same if any.
Risk is an inherent and integral part of the business of investments and business process outsourcing. The Company aims to achieve an appropriate balance between risk and returns by establishing an efficient risk mitigation system. In order to mitigate risks, the Company has instituted a risk management framework, wherein, the Audit Committee under the supervision of the Board is tasked with regular assessment and laying down of policies for management of risks.In respect of certain investments, the Company has established systems to conduct due diligence of proposals received and to ensure that investments are in line with the overall objectives of the Company.
Note 27: Revenue Recognition Sale of Services:
The Company derives revenue from providing support services to our captive clients, which primarily include providing back office administration, data management, contact centre management and training. The Company recognizes revenue when the significant terms of the arrangement are enforceable, services are being delivered and the collectability is reasonably assured. The Company recognizes revenue on an accrual basis when services are performed.
When the terms of the agreement specify service level parameters that must be met, the Company monitors such service level parameters and determine if there are any service credits or penalties that needs to be accounted for. The Company''s revenue is significantly only from group companies, hence it is believed that there is no significant credit risk.
The Company invoices its clients depending on the terms of the arrangement, which include billing based on a per employee basis, a per transaction basis, a fixed price basis, an outcome-based basis or other pricing arrangements including cost-plus arrangements.
The Company''s revenue is exclusive of taxes and includes reimbursements of communication costs, incentives, etc as defined in the terms of agreement.
There are no other revenue under Contract with Customers other than those which are accounted in Profit and Loss Account as revenue which comprises of Service income and Learning income. Refer Note 27.a for the details of income earned from contracts with customers.
The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Refer Note 27.a for the Trade Receivable balances.
Revenue from sale of services and the trade receivable for the year ended March 31, 2024 and March 31, 2023 is as follows:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied when calculating the defined benefit liability recognised in the balance sheet.
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets under perform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. The Company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.
Changes in bond yield: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plansâ bond holdings.
Inflation risks: In the pension plans, the pensions in payment are not linked to inflation, so this is a less material risk. Life expectancy: The pension plan obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plan liabilities. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy.
There have been no transactions involving ordinary shares or potential ordinary shares between reporting date and date of completing financial statements which would require restatement of EPS.
The Board of Directors has recommended a final dividend of '' 2.05 per share (41%). In addition, the Board of Directors has declared a second interim Dividend of ''3.65 per share (73%), which, together with the interim Dividend of '' 2 per share (40%) paid during the year will make a total Dividend of '' 7.70 per share (154%) for the FY 2023-24.
30c: Contingent Liabilities and Commitments
(i) Estimated amount of investment to be made in JM Financial yield enhancer (Distressed Opportunity ) Fund I - Series I for Capital Commitment - ''31.39 Lakhs.
30g: Other Regulatory Disclosure as required under Schedule III of Companies Act,2013
(a) The Company does not have any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(b) The Company is not declared as a willful defaulter by any bank or financial Institution or other lender.
(c) The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
(d) The company does not have any charges or satisfaction to be registered with ROC beyond stipulated statutory period.
(e) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(f) The company has not granted any loans or advances in nature of loans to promotors, directors, KMPs and the related parties (as defined under the Companies Act, 2013) either severally or jointly with any other persons. Hence disclosure under clause (v) of Schedule III of The Companies Act 2013, is not applicable.
(g) 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 intermediary shall directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (Ultimate Beneficiaries) except as disclosed.
The Company has not received any fund from any party(s) or entity(ies) including foreign entities (Funding Party) 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 by or on behalf of the Company (""Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(h) There are no scheme of arrangements approved. Hence disclosure under clause (xv) of Schedule III of The Companies Act 2013, is not applicable.
(i) There are no transactions in the nature of undisclosed income or income surrendered which needs to be accounted in the books of accounts during the year in the tax assessments under the Income Tax Act, 1961.
30h: Gain on derecognition of financial instrument
During the year,the Company received ''17,566.78 lakhs on account of redemption of Non convertible redeemable preference
shares of TVS Holdings Limited,which was earlier classified in OCI as Items that will be reclassified to P&L.
30i: Adoption of Financial Statements
The Board has adopted the financial statements at its meeting held on 21st May 2024.
Mar 31, 2024
Measurement of Fair Value Fair Value Hierarchy
"The fair value of investment property has been determined by the registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued.
The fair value measurement for all of the investment property has been categorised as a Level 3 fair value based on the inputs to the valuation technique used.
Investment property comprises a number of commercial properties that are leased to third parties. No contingent rents are charged.
The primary objective of the Companyâs Capital Management is to maximise shareholders value. The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. The Companyâs policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence to sustain future development of the business. For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves.
Note 25 : Financial instruments - Fair values and risk management A. Accounting Classification and Fair Values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:
Level 1 hierarchy - Includes Financial Instruments measured using quoted prices in the active market.
Level 2 hierarchy - The Fair value of Financial Instruments that are not traded in an active market, is determined using valuation techniques which maximize the use of observable market data.
Level 3 hierarchy - Inputs are not based on observable market data. 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. An adjustment to a Level 2 input that is significant to the entire measurement results in a fair value measurement categorised within Level 3 of the fair value hierarchy if the adjustment uses significant unobservable inputs.
Financial instruments fair valued under Level 3 hierarchy are measured using Market multiples method.
The carrying amount of trade receivables, cash and cash equivalents , trade payables and other financial liabilities are considered to be the fair value due to short term nature.
There are no transfers between level 1 and level 2 during the year.
The Company has exposure to the following risks arising from financial instruments:
⢠Liquidity risk ;
⢠Credit risk ; and
⢠Market risk
The Companyâs 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 Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
(a) 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. The Companyâs 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 Companyâs reputation.
The Company regularly monitors the rolling forecasts and the actual cash flows to service the financial liabilities on a day-to-day basis through cash generation from business and by having adequate banking facilities.
The following table shows the maturity analysis of the Companyâs financial liabilities based on contractually agreed undiscounted cash flows along with its carrying value as at the Balance sheet date.
(b) 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 loans and advances.
(i) Trade Receivables:
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Concentration of credit risk with respect to trade receivables are limited as the customers are reviewed, assessed and monitored regularly on a monthly basis with pre-determined credit limits assessed based on their payment capacity. Our historical experience of collecting receivables demonstrates that credit risk is low.
The Company has exposure in Cash and cash equivalents,employee loans and investment carried at amortised cost. The Companyâs maximum exposure to credit risk as at 31st March, 2024 is the carrying value of each class of financial assets as on that date.
(iii) Cash and Cash Equivalents
The Company held cash and cash equivalents of INR 16337.66 lakhs as on March 31, 2024 (March 31, 2023 : INR 57.72 lakhs). The cash and cash equivalents are held in hand and with bank. (Refer Note 1).
Market risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices in case of equity investments and Net Asset Value (NAV) in case of mutual fund investments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Company is having certain investments in unlisted companies where the valuation takes place based on certain market multiples of similar companies after duly adjusted for discounts to the same if any.
Risk is an inherent and integral part of the business of investments and business process outsourcing. The Company aims to achieve an appropriate balance between risk and returns by establishing an efficient risk mitigation system. In order to mitigate risks, the Company has instituted a risk management framework, wherein, the Audit Committee under the supervision of the Board is tasked with regular assessment and laying down of policies for management of risks.In respect of certain investments, the Company has established systems to conduct due diligence of proposals received and to ensure that investments are in line with the overall objectives of the Company.
Note 27: Revenue Recognition Sale of Services:
The Company derives revenue from providing support services to our captive clients, which primarily include providing back office administration, data management, contact centre management and training. The Company recognizes revenue when the significant terms of the arrangement are enforceable, services are being delivered and the collectability is reasonably assured. The Company recognizes revenue on an accrual basis when services are performed.
When the terms of the agreement specify service level parameters that must be met, the Company monitors such service level parameters and determine if there are any service credits or penalties that needs to be accounted for. The Company''s revenue is significantly only from group companies, hence it is believed that there is no significant credit risk.
The Company invoices its clients depending on the terms of the arrangement, which include billing based on a per employee basis, a per transaction basis, a fixed price basis, an outcome-based basis or other pricing arrangements including cost-plus arrangements.
The Company''s revenue is exclusive of taxes and includes reimbursements of communication costs, incentives, etc as defined in the terms of agreement.
There are no other revenue under Contract with Customers other than those which are accounted in Profit and Loss Account as revenue which comprises of Service income and Learning income. Refer Note 27.a for the details of income earned from contracts with customers.
The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Refer Note 27.a for the Trade Receivable balances.
Revenue from sale of services and the trade receivable for the year ended March 31, 2024 and March 31, 2023 is as follows:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied when calculating the defined benefit liability recognised in the balance sheet.
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets under perform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. The Company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.
Changes in bond yield: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plansâ bond holdings.
Inflation risks: In the pension plans, the pensions in payment are not linked to inflation, so this is a less material risk. Life expectancy: The pension plan obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plan liabilities. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy.
There have been no transactions involving ordinary shares or potential ordinary shares between reporting date and date of completing financial statements which would require restatement of EPS.
The Board of Directors has recommended a final dividend of '' 2.05 per share (41%). In addition, the Board of Directors has declared a second interim Dividend of ''3.65 per share (73%), which, together with the interim Dividend of '' 2 per share (40%) paid during the year will make a total Dividend of '' 7.70 per share (154%) for the FY 2023-24.
30c: Contingent Liabilities and Commitments
(i) Estimated amount of investment to be made in JM Financial yield enhancer (Distressed Opportunity ) Fund I - Series I for Capital Commitment - ''31.39 Lakhs.
30g: Other Regulatory Disclosure as required under Schedule III of Companies Act,2013
(a) The Company does not have any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(b) The Company is not declared as a willful defaulter by any bank or financial Institution or other lender.
(c) The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
(d) The company does not have any charges or satisfaction to be registered with ROC beyond stipulated statutory period.
(e) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(f) The company has not granted any loans or advances in nature of loans to promotors, directors, KMPs and the related parties (as defined under the Companies Act, 2013) either severally or jointly with any other persons. Hence disclosure under clause (v) of Schedule III of The Companies Act 2013, is not applicable.
(g) 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 intermediary shall directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (Ultimate Beneficiaries) except as disclosed.
The Company has not received any fund from any party(s) or entity(ies) including foreign entities (Funding Party) 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 by or on behalf of the Company (""Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(h) There are no scheme of arrangements approved. Hence disclosure under clause (xv) of Schedule III of The Companies Act 2013, is not applicable.
(i) There are no transactions in the nature of undisclosed income or income surrendered which needs to be accounted in the books of accounts during the year in the tax assessments under the Income Tax Act, 1961.
30h: Gain on derecognition of financial instrument
During the year,the Company received ''17,566.78 lakhs on account of redemption of Non convertible redeemable preference
shares of TVS Holdings Limited,which was earlier classified in OCI as Items that will be reclassified to P&L.
30i: Adoption of Financial Statements
The Board has adopted the financial statements at its meeting held on 21st May 2024.
Mar 31, 2024
Measurement of Fair Value Fair Value Hierarchy
"The fair value of investment property has been determined by the registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued.
The fair value measurement for all of the investment property has been categorised as a Level 3 fair value based on the inputs to the valuation technique used.
Investment property comprises a number of commercial properties that are leased to third parties. No contingent rents are charged.
The primary objective of the Companyâs Capital Management is to maximise shareholders value. The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. The Companyâs policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence to sustain future development of the business. For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves.
Note 25 : Financial instruments - Fair values and risk management A. Accounting Classification and Fair Values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:
Level 1 hierarchy - Includes Financial Instruments measured using quoted prices in the active market.
Level 2 hierarchy - The Fair value of Financial Instruments that are not traded in an active market, is determined using valuation techniques which maximize the use of observable market data.
Level 3 hierarchy - Inputs are not based on observable market data. 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. An adjustment to a Level 2 input that is significant to the entire measurement results in a fair value measurement categorised within Level 3 of the fair value hierarchy if the adjustment uses significant unobservable inputs.
Financial instruments fair valued under Level 3 hierarchy are measured using Market multiples method.
The carrying amount of trade receivables, cash and cash equivalents , trade payables and other financial liabilities are considered to be the fair value due to short term nature.
There are no transfers between level 1 and level 2 during the year.
The Company has exposure to the following risks arising from financial instruments:
⢠Liquidity risk ;
⢠Credit risk ; and
⢠Market risk
The Companyâs 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 Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
(a) 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. The Companyâs 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 Companyâs reputation.
The Company regularly monitors the rolling forecasts and the actual cash flows to service the financial liabilities on a day-to-day basis through cash generation from business and by having adequate banking facilities.
The following table shows the maturity analysis of the Companyâs financial liabilities based on contractually agreed undiscounted cash flows along with its carrying value as at the Balance sheet date.
(b) 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 loans and advances.
(i) Trade Receivables:
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Concentration of credit risk with respect to trade receivables are limited as the customers are reviewed, assessed and monitored regularly on a monthly basis with pre-determined credit limits assessed based on their payment capacity. Our historical experience of collecting receivables demonstrates that credit risk is low.
The Company has exposure in Cash and cash equivalents,employee loans and investment carried at amortised cost. The Companyâs maximum exposure to credit risk as at 31st March, 2024 is the carrying value of each class of financial assets as on that date.
(iii) Cash and Cash Equivalents
The Company held cash and cash equivalents of INR 16337.66 lakhs as on March 31, 2024 (March 31, 2023 : INR 57.72 lakhs). The cash and cash equivalents are held in hand and with bank. (Refer Note 1).
Market risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices in case of equity investments and Net Asset Value (NAV) in case of mutual fund investments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Company is having certain investments in unlisted companies where the valuation takes place based on certain market multiples of similar companies after duly adjusted for discounts to the same if any.
Risk is an inherent and integral part of the business of investments and business process outsourcing. The Company aims to achieve an appropriate balance between risk and returns by establishing an efficient risk mitigation system. In order to mitigate risks, the Company has instituted a risk management framework, wherein, the Audit Committee under the supervision of the Board is tasked with regular assessment and laying down of policies for management of risks.In respect of certain investments, the Company has established systems to conduct due diligence of proposals received and to ensure that investments are in line with the overall objectives of the Company.
Note 27: Revenue Recognition Sale of Services:
The Company derives revenue from providing support services to our captive clients, which primarily include providing back office administration, data management, contact centre management and training. The Company recognizes revenue when the significant terms of the arrangement are enforceable, services are being delivered and the collectability is reasonably assured. The Company recognizes revenue on an accrual basis when services are performed.
When the terms of the agreement specify service level parameters that must be met, the Company monitors such service level parameters and determine if there are any service credits or penalties that needs to be accounted for. The Company''s revenue is significantly only from group companies, hence it is believed that there is no significant credit risk.
The Company invoices its clients depending on the terms of the arrangement, which include billing based on a per employee basis, a per transaction basis, a fixed price basis, an outcome-based basis or other pricing arrangements including cost-plus arrangements.
The Company''s revenue is exclusive of taxes and includes reimbursements of communication costs, incentives, etc as defined in the terms of agreement.
There are no other revenue under Contract with Customers other than those which are accounted in Profit and Loss Account as revenue which comprises of Service income and Learning income. Refer Note 27.a for the details of income earned from contracts with customers.
The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Refer Note 27.a for the Trade Receivable balances.
Revenue from sale of services and the trade receivable for the year ended March 31, 2024 and March 31, 2023 is as follows:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied when calculating the defined benefit liability recognised in the balance sheet.
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets under perform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. The Company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.
Changes in bond yield: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plansâ bond holdings.
Inflation risks: In the pension plans, the pensions in payment are not linked to inflation, so this is a less material risk. Life expectancy: The pension plan obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plan liabilities. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy.
There have been no transactions involving ordinary shares or potential ordinary shares between reporting date and date of completing financial statements which would require restatement of EPS.
The Board of Directors has recommended a final dividend of '' 2.05 per share (41%). In addition, the Board of Directors has declared a second interim Dividend of ''3.65 per share (73%), which, together with the interim Dividend of '' 2 per share (40%) paid during the year will make a total Dividend of '' 7.70 per share (154%) for the FY 2023-24.
30c: Contingent Liabilities and Commitments
(i) Estimated amount of investment to be made in JM Financial yield enhancer (Distressed Opportunity ) Fund I - Series I for Capital Commitment - ''31.39 Lakhs.
30g: Other Regulatory Disclosure as required under Schedule III of Companies Act,2013
(a) The Company does not have any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(b) The Company is not declared as a willful defaulter by any bank or financial Institution or other lender.
(c) The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
(d) The company does not have any charges or satisfaction to be registered with ROC beyond stipulated statutory period.
(e) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(f) The company has not granted any loans or advances in nature of loans to promotors, directors, KMPs and the related parties (as defined under the Companies Act, 2013) either severally or jointly with any other persons. Hence disclosure under clause (v) of Schedule III of The Companies Act 2013, is not applicable.
(g) 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 intermediary shall directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (Ultimate Beneficiaries) except as disclosed.
The Company has not received any fund from any party(s) or entity(ies) including foreign entities (Funding Party) 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 by or on behalf of the Company (""Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(h) There are no scheme of arrangements approved. Hence disclosure under clause (xv) of Schedule III of The Companies Act 2013, is not applicable.
(i) There are no transactions in the nature of undisclosed income or income surrendered which needs to be accounted in the books of accounts during the year in the tax assessments under the Income Tax Act, 1961.
30h: Gain on derecognition of financial instrument
During the year,the Company received ''17,566.78 lakhs on account of redemption of Non convertible redeemable preference
shares of TVS Holdings Limited,which was earlier classified in OCI as Items that will be reclassified to P&L.
30i: Adoption of Financial Statements
The Board has adopted the financial statements at its meeting held on 21st May 2024.
Mar 31, 2024
Measurement of Fair Value Fair Value Hierarchy
"The fair value of investment property has been determined by the registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued.
The fair value measurement for all of the investment property has been categorised as a Level 3 fair value based on the inputs to the valuation technique used.
Investment property comprises a number of commercial properties that are leased to third parties. No contingent rents are charged.
The primary objective of the Companyâs Capital Management is to maximise shareholders value. The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. The Companyâs policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence to sustain future development of the business. For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves.
Note 25 : Financial instruments - Fair values and risk management A. Accounting Classification and Fair Values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:
Level 1 hierarchy - Includes Financial Instruments measured using quoted prices in the active market.
Level 2 hierarchy - The Fair value of Financial Instruments that are not traded in an active market, is determined using valuation techniques which maximize the use of observable market data.
Level 3 hierarchy - Inputs are not based on observable market data. 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. An adjustment to a Level 2 input that is significant to the entire measurement results in a fair value measurement categorised within Level 3 of the fair value hierarchy if the adjustment uses significant unobservable inputs.
Financial instruments fair valued under Level 3 hierarchy are measured using Market multiples method.
The carrying amount of trade receivables, cash and cash equivalents , trade payables and other financial liabilities are considered to be the fair value due to short term nature.
There are no transfers between level 1 and level 2 during the year.
The Company has exposure to the following risks arising from financial instruments:
⢠Liquidity risk ;
⢠Credit risk ; and
⢠Market risk
The Companyâs 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 Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
(a) 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. The Companyâs 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 Companyâs reputation.
The Company regularly monitors the rolling forecasts and the actual cash flows to service the financial liabilities on a day-to-day basis through cash generation from business and by having adequate banking facilities.
The following table shows the maturity analysis of the Companyâs financial liabilities based on contractually agreed undiscounted cash flows along with its carrying value as at the Balance sheet date.
(b) 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 loans and advances.
(i) Trade Receivables:
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Concentration of credit risk with respect to trade receivables are limited as the customers are reviewed, assessed and monitored regularly on a monthly basis with pre-determined credit limits assessed based on their payment capacity. Our historical experience of collecting receivables demonstrates that credit risk is low.
The Company has exposure in Cash and cash equivalents,employee loans and investment carried at amortised cost. The Companyâs maximum exposure to credit risk as at 31st March, 2024 is the carrying value of each class of financial assets as on that date.
(iii) Cash and Cash Equivalents
The Company held cash and cash equivalents of INR 16337.66 lakhs as on March 31, 2024 (March 31, 2023 : INR 57.72 lakhs). The cash and cash equivalents are held in hand and with bank. (Refer Note 1).
Market risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices in case of equity investments and Net Asset Value (NAV) in case of mutual fund investments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Company is having certain investments in unlisted companies where the valuation takes place based on certain market multiples of similar companies after duly adjusted for discounts to the same if any.
Risk is an inherent and integral part of the business of investments and business process outsourcing. The Company aims to achieve an appropriate balance between risk and returns by establishing an efficient risk mitigation system. In order to mitigate risks, the Company has instituted a risk management framework, wherein, the Audit Committee under the supervision of the Board is tasked with regular assessment and laying down of policies for management of risks.In respect of certain investments, the Company has established systems to conduct due diligence of proposals received and to ensure that investments are in line with the overall objectives of the Company.
Note 27: Revenue Recognition Sale of Services:
The Company derives revenue from providing support services to our captive clients, which primarily include providing back office administration, data management, contact centre management and training. The Company recognizes revenue when the significant terms of the arrangement are enforceable, services are being delivered and the collectability is reasonably assured. The Company recognizes revenue on an accrual basis when services are performed.
When the terms of the agreement specify service level parameters that must be met, the Company monitors such service level parameters and determine if there are any service credits or penalties that needs to be accounted for. The Company''s revenue is significantly only from group companies, hence it is believed that there is no significant credit risk.
The Company invoices its clients depending on the terms of the arrangement, which include billing based on a per employee basis, a per transaction basis, a fixed price basis, an outcome-based basis or other pricing arrangements including cost-plus arrangements.
The Company''s revenue is exclusive of taxes and includes reimbursements of communication costs, incentives, etc as defined in the terms of agreement.
There are no other revenue under Contract with Customers other than those which are accounted in Profit and Loss Account as revenue which comprises of Service income and Learning income. Refer Note 27.a for the details of income earned from contracts with customers.
The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Refer Note 27.a for the Trade Receivable balances.
Revenue from sale of services and the trade receivable for the year ended March 31, 2024 and March 31, 2023 is as follows:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied when calculating the defined benefit liability recognised in the balance sheet.
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets under perform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. The Company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.
Changes in bond yield: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plansâ bond holdings.
Inflation risks: In the pension plans, the pensions in payment are not linked to inflation, so this is a less material risk. Life expectancy: The pension plan obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plan liabilities. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy.
There have been no transactions involving ordinary shares or potential ordinary shares between reporting date and date of completing financial statements which would require restatement of EPS.
The Board of Directors has recommended a final dividend of '' 2.05 per share (41%). In addition, the Board of Directors has declared a second interim Dividend of ''3.65 per share (73%), which, together with the interim Dividend of '' 2 per share (40%) paid during the year will make a total Dividend of '' 7.70 per share (154%) for the FY 2023-24.
30c: Contingent Liabilities and Commitments
(i) Estimated amount of investment to be made in JM Financial yield enhancer (Distressed Opportunity ) Fund I - Series I for Capital Commitment - ''31.39 Lakhs.
30g: Other Regulatory Disclosure as required under Schedule III of Companies Act,2013
(a) The Company does not have any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(b) The Company is not declared as a willful defaulter by any bank or financial Institution or other lender.
(c) The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
(d) The company does not have any charges or satisfaction to be registered with ROC beyond stipulated statutory period.
(e) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(f) The company has not granted any loans or advances in nature of loans to promotors, directors, KMPs and the related parties (as defined under the Companies Act, 2013) either severally or jointly with any other persons. Hence disclosure under clause (v) of Schedule III of The Companies Act 2013, is not applicable.
(g) 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 intermediary shall directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (Ultimate Beneficiaries) except as disclosed.
The Company has not received any fund from any party(s) or entity(ies) including foreign entities (Funding Party) 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 by or on behalf of the Company (""Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(h) There are no scheme of arrangements approved. Hence disclosure under clause (xv) of Schedule III of The Companies Act 2013, is not applicable.
(i) There are no transactions in the nature of undisclosed income or income surrendered which needs to be accounted in the books of accounts during the year in the tax assessments under the Income Tax Act, 1961.
30h: Gain on derecognition of financial instrument
During the year,the Company received ''17,566.78 lakhs on account of redemption of Non convertible redeemable preference
shares of TVS Holdings Limited,which was earlier classified in OCI as Items that will be reclassified to P&L.
30i: Adoption of Financial Statements
The Board has adopted the financial statements at its meeting held on 21st May 2024.
Mar 31, 2024
Measurement of Fair Value Fair Value Hierarchy
"The fair value of investment property has been determined by the registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued.
The fair value measurement for all of the investment property has been categorised as a Level 3 fair value based on the inputs to the valuation technique used.
Investment property comprises a number of commercial properties that are leased to third parties. No contingent rents are charged.
The primary objective of the Companyâs Capital Management is to maximise shareholders value. The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. The Companyâs policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence to sustain future development of the business. For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves.
Note 25 : Financial instruments - Fair values and risk management A. Accounting Classification and Fair Values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:
Level 1 hierarchy - Includes Financial Instruments measured using quoted prices in the active market.
Level 2 hierarchy - The Fair value of Financial Instruments that are not traded in an active market, is determined using valuation techniques which maximize the use of observable market data.
Level 3 hierarchy - Inputs are not based on observable market data. 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. An adjustment to a Level 2 input that is significant to the entire measurement results in a fair value measurement categorised within Level 3 of the fair value hierarchy if the adjustment uses significant unobservable inputs.
Financial instruments fair valued under Level 3 hierarchy are measured using Market multiples method.
The carrying amount of trade receivables, cash and cash equivalents , trade payables and other financial liabilities are considered to be the fair value due to short term nature.
There are no transfers between level 1 and level 2 during the year.
The Company has exposure to the following risks arising from financial instruments:
⢠Liquidity risk ;
⢠Credit risk ; and
⢠Market risk
The Companyâs 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 Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
(a) 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. The Companyâs 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 Companyâs reputation.
The Company regularly monitors the rolling forecasts and the actual cash flows to service the financial liabilities on a day-to-day basis through cash generation from business and by having adequate banking facilities.
The following table shows the maturity analysis of the Companyâs financial liabilities based on contractually agreed undiscounted cash flows along with its carrying value as at the Balance sheet date.
(b) 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 loans and advances.
(i) Trade Receivables:
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Concentration of credit risk with respect to trade receivables are limited as the customers are reviewed, assessed and monitored regularly on a monthly basis with pre-determined credit limits assessed based on their payment capacity. Our historical experience of collecting receivables demonstrates that credit risk is low.
The Company has exposure in Cash and cash equivalents,employee loans and investment carried at amortised cost. The Companyâs maximum exposure to credit risk as at 31st March, 2024 is the carrying value of each class of financial assets as on that date.
(iii) Cash and Cash Equivalents
The Company held cash and cash equivalents of INR 16337.66 lakhs as on March 31, 2024 (March 31, 2023 : INR 57.72 lakhs). The cash and cash equivalents are held in hand and with bank. (Refer Note 1).
Market risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices in case of equity investments and Net Asset Value (NAV) in case of mutual fund investments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Company is having certain investments in unlisted companies where the valuation takes place based on certain market multiples of similar companies after duly adjusted for discounts to the same if any.
Risk is an inherent and integral part of the business of investments and business process outsourcing. The Company aims to achieve an appropriate balance between risk and returns by establishing an efficient risk mitigation system. In order to mitigate risks, the Company has instituted a risk management framework, wherein, the Audit Committee under the supervision of the Board is tasked with regular assessment and laying down of policies for management of risks.In respect of certain investments, the Company has established systems to conduct due diligence of proposals received and to ensure that investments are in line with the overall objectives of the Company.
Note 27: Revenue Recognition Sale of Services:
The Company derives revenue from providing support services to our captive clients, which primarily include providing back office administration, data management, contact centre management and training. The Company recognizes revenue when the significant terms of the arrangement are enforceable, services are being delivered and the collectability is reasonably assured. The Company recognizes revenue on an accrual basis when services are performed.
When the terms of the agreement specify service level parameters that must be met, the Company monitors such service level parameters and determine if there are any service credits or penalties that needs to be accounted for. The Company''s revenue is significantly only from group companies, hence it is believed that there is no significant credit risk.
The Company invoices its clients depending on the terms of the arrangement, which include billing based on a per employee basis, a per transaction basis, a fixed price basis, an outcome-based basis or other pricing arrangements including cost-plus arrangements.
The Company''s revenue is exclusive of taxes and includes reimbursements of communication costs, incentives, etc as defined in the terms of agreement.
There are no other revenue under Contract with Customers other than those which are accounted in Profit and Loss Account as revenue which comprises of Service income and Learning income. Refer Note 27.a for the details of income earned from contracts with customers.
The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Refer Note 27.a for the Trade Receivable balances.
Revenue from sale of services and the trade receivable for the year ended March 31, 2024 and March 31, 2023 is as follows:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied when calculating the defined benefit liability recognised in the balance sheet.
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets under perform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. The Company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.
Changes in bond yield: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plansâ bond holdings.
Inflation risks: In the pension plans, the pensions in payment are not linked to inflation, so this is a less material risk. Life expectancy: The pension plan obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plan liabilities. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy.
There have been no transactions involving ordinary shares or potential ordinary shares between reporting date and date of completing financial statements which would require restatement of EPS.
The Board of Directors has recommended a final dividend of '' 2.05 per share (41%). In addition, the Board of Directors has declared a second interim Dividend of ''3.65 per share (73%), which, together with the interim Dividend of '' 2 per share (40%) paid during the year will make a total Dividend of '' 7.70 per share (154%) for the FY 2023-24.
30c: Contingent Liabilities and Commitments
(i) Estimated amount of investment to be made in JM Financial yield enhancer (Distressed Opportunity ) Fund I - Series I for Capital Commitment - ''31.39 Lakhs.
30g: Other Regulatory Disclosure as required under Schedule III of Companies Act,2013
(a) The Company does not have any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(b) The Company is not declared as a willful defaulter by any bank or financial Institution or other lender.
(c) The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
(d) The company does not have any charges or satisfaction to be registered with ROC beyond stipulated statutory period.
(e) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(f) The company has not granted any loans or advances in nature of loans to promotors, directors, KMPs and the related parties (as defined under the Companies Act, 2013) either severally or jointly with any other persons. Hence disclosure under clause (v) of Schedule III of The Companies Act 2013, is not applicable.
(g) 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 intermediary shall directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (Ultimate Beneficiaries) except as disclosed.
The Company has not received any fund from any party(s) or entity(ies) including foreign entities (Funding Party) 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 by or on behalf of the Company (""Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(h) There are no scheme of arrangements approved. Hence disclosure under clause (xv) of Schedule III of The Companies Act 2013, is not applicable.
(i) There are no transactions in the nature of undisclosed income or income surrendered which needs to be accounted in the books of accounts during the year in the tax assessments under the Income Tax Act, 1961.
30h: Gain on derecognition of financial instrument
During the year,the Company received ''17,566.78 lakhs on account of redemption of Non convertible redeemable preference
shares of TVS Holdings Limited,which was earlier classified in OCI as Items that will be reclassified to P&L.
30i: Adoption of Financial Statements
The Board has adopted the financial statements at its meeting held on 21st May 2024.
Mar 31, 2024
Measurement of Fair Value Fair Value Hierarchy
"The fair value of investment property has been determined by the registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued.
The fair value measurement for all of the investment property has been categorised as a Level 3 fair value based on the inputs to the valuation technique used.
Investment property comprises a number of commercial properties that are leased to third parties. No contingent rents are charged.
The primary objective of the Companyâs Capital Management is to maximise shareholders value. The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. The Companyâs policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence to sustain future development of the business. For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves.
Note 25 : Financial instruments - Fair values and risk management A. Accounting Classification and Fair Values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:
Level 1 hierarchy - Includes Financial Instruments measured using quoted prices in the active market.
Level 2 hierarchy - The Fair value of Financial Instruments that are not traded in an active market, is determined using valuation techniques which maximize the use of observable market data.
Level 3 hierarchy - Inputs are not based on observable market data. 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. An adjustment to a Level 2 input that is significant to the entire measurement results in a fair value measurement categorised within Level 3 of the fair value hierarchy if the adjustment uses significant unobservable inputs.
Financial instruments fair valued under Level 3 hierarchy are measured using Market multiples method.
The carrying amount of trade receivables, cash and cash equivalents , trade payables and other financial liabilities are considered to be the fair value due to short term nature.
There are no transfers between level 1 and level 2 during the year.
The Company has exposure to the following risks arising from financial instruments:
⢠Liquidity risk ;
⢠Credit risk ; and
⢠Market risk
The Companyâs 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 Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
(a) 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. The Companyâs 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 Companyâs reputation.
The Company regularly monitors the rolling forecasts and the actual cash flows to service the financial liabilities on a day-to-day basis through cash generation from business and by having adequate banking facilities.
The following table shows the maturity analysis of the Companyâs financial liabilities based on contractually agreed undiscounted cash flows along with its carrying value as at the Balance sheet date.
(b) 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 loans and advances.
(i) Trade Receivables:
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Concentration of credit risk with respect to trade receivables are limited as the customers are reviewed, assessed and monitored regularly on a monthly basis with pre-determined credit limits assessed based on their payment capacity. Our historical experience of collecting receivables demonstrates that credit risk is low.
The Company has exposure in Cash and cash equivalents,employee loans and investment carried at amortised cost. The Companyâs maximum exposure to credit risk as at 31st March, 2024 is the carrying value of each class of financial assets as on that date.
(iii) Cash and Cash Equivalents
The Company held cash and cash equivalents of INR 16337.66 lakhs as on March 31, 2024 (March 31, 2023 : INR 57.72 lakhs). The cash and cash equivalents are held in hand and with bank. (Refer Note 1).
Market risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices in case of equity investments and Net Asset Value (NAV) in case of mutual fund investments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Company is having certain investments in unlisted companies where the valuation takes place based on certain market multiples of similar companies after duly adjusted for discounts to the same if any.
Risk is an inherent and integral part of the business of investments and business process outsourcing. The Company aims to achieve an appropriate balance between risk and returns by establishing an efficient risk mitigation system. In order to mitigate risks, the Company has instituted a risk management framework, wherein, the Audit Committee under the supervision of the Board is tasked with regular assessment and laying down of policies for management of risks.In respect of certain investments, the Company has established systems to conduct due diligence of proposals received and to ensure that investments are in line with the overall objectives of the Company.
Note 27: Revenue Recognition Sale of Services:
The Company derives revenue from providing support services to our captive clients, which primarily include providing back office administration, data management, contact centre management and training. The Company recognizes revenue when the significant terms of the arrangement are enforceable, services are being delivered and the collectability is reasonably assured. The Company recognizes revenue on an accrual basis when services are performed.
When the terms of the agreement specify service level parameters that must be met, the Company monitors such service level parameters and determine if there are any service credits or penalties that needs to be accounted for. The Company''s revenue is significantly only from group companies, hence it is believed that there is no significant credit risk.
The Company invoices its clients depending on the terms of the arrangement, which include billing based on a per employee basis, a per transaction basis, a fixed price basis, an outcome-based basis or other pricing arrangements including cost-plus arrangements.
The Company''s revenue is exclusive of taxes and includes reimbursements of communication costs, incentives, etc as defined in the terms of agreement.
There are no other revenue under Contract with Customers other than those which are accounted in Profit and Loss Account as revenue which comprises of Service income and Learning income. Refer Note 27.a for the details of income earned from contracts with customers.
The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Refer Note 27.a for the Trade Receivable balances.
Revenue from sale of services and the trade receivable for the year ended March 31, 2024 and March 31, 2023 is as follows:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied when calculating the defined benefit liability recognised in the balance sheet.
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets under perform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. The Company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.
Changes in bond yield: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plansâ bond holdings.
Inflation risks: In the pension plans, the pensions in payment are not linked to inflation, so this is a less material risk. Life expectancy: The pension plan obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plan liabilities. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy.
There have been no transactions involving ordinary shares or potential ordinary shares between reporting date and date of completing financial statements which would require restatement of EPS.
The Board of Directors has recommended a final dividend of '' 2.05 per share (41%). In addition, the Board of Directors has declared a second interim Dividend of ''3.65 per share (73%), which, together with the interim Dividend of '' 2 per share (40%) paid during the year will make a total Dividend of '' 7.70 per share (154%) for the FY 2023-24.
30c: Contingent Liabilities and Commitments
(i) Estimated amount of investment to be made in JM Financial yield enhancer (Distressed Opportunity ) Fund I - Series I for Capital Commitment - ''31.39 Lakhs.
30g: Other Regulatory Disclosure as required under Schedule III of Companies Act,2013
(a) The Company does not have any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(b) The Company is not declared as a willful defaulter by any bank or financial Institution or other lender.
(c) The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
(d) The company does not have any charges or satisfaction to be registered with ROC beyond stipulated statutory period.
(e) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(f) The company has not granted any loans or advances in nature of loans to promotors, directors, KMPs and the related parties (as defined under the Companies Act, 2013) either severally or jointly with any other persons. Hence disclosure under clause (v) of Schedule III of The Companies Act 2013, is not applicable.
(g) 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 intermediary shall directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (Ultimate Beneficiaries) except as disclosed.
The Company has not received any fund from any party(s) or entity(ies) including foreign entities (Funding Party) 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 by or on behalf of the Company (""Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(h) There are no scheme of arrangements approved. Hence disclosure under clause (xv) of Schedule III of The Companies Act 2013, is not applicable.
(i) There are no transactions in the nature of undisclosed income or income surrendered which needs to be accounted in the books of accounts during the year in the tax assessments under the Income Tax Act, 1961.
30h: Gain on derecognition of financial instrument
During the year,the Company received ''17,566.78 lakhs on account of redemption of Non convertible redeemable preference
shares of TVS Holdings Limited,which was earlier classified in OCI as Items that will be reclassified to P&L.
30i: Adoption of Financial Statements
The Board has adopted the financial statements at its meeting held on 21st May 2024.
Mar 31, 2024
Measurement of Fair Value Fair Value Hierarchy
"The fair value of investment property has been determined by the registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued.
The fair value measurement for all of the investment property has been categorised as a Level 3 fair value based on the inputs to the valuation technique used.
Investment property comprises a number of commercial properties that are leased to third parties. No contingent rents are charged.
The primary objective of the Companyâs Capital Management is to maximise shareholders value. The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. The Companyâs policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence to sustain future development of the business. For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves.
Note 25 : Financial instruments - Fair values and risk management A. Accounting Classification and Fair Values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:
Level 1 hierarchy - Includes Financial Instruments measured using quoted prices in the active market.
Level 2 hierarchy - The Fair value of Financial Instruments that are not traded in an active market, is determined using valuation techniques which maximize the use of observable market data.
Level 3 hierarchy - Inputs are not based on observable market data. 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. An adjustment to a Level 2 input that is significant to the entire measurement results in a fair value measurement categorised within Level 3 of the fair value hierarchy if the adjustment uses significant unobservable inputs.
Financial instruments fair valued under Level 3 hierarchy are measured using Market multiples method.
The carrying amount of trade receivables, cash and cash equivalents , trade payables and other financial liabilities are considered to be the fair value due to short term nature.
There are no transfers between level 1 and level 2 during the year.
The Company has exposure to the following risks arising from financial instruments:
⢠Liquidity risk ;
⢠Credit risk ; and
⢠Market risk
The Companyâs 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 Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
(a) 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. The Companyâs 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 Companyâs reputation.
The Company regularly monitors the rolling forecasts and the actual cash flows to service the financial liabilities on a day-to-day basis through cash generation from business and by having adequate banking facilities.
The following table shows the maturity analysis of the Companyâs financial liabilities based on contractually agreed undiscounted cash flows along with its carrying value as at the Balance sheet date.
(b) 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 loans and advances.
(i) Trade Receivables:
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Concentration of credit risk with respect to trade receivables are limited as the customers are reviewed, assessed and monitored regularly on a monthly basis with pre-determined credit limits assessed based on their payment capacity. Our historical experience of collecting receivables demonstrates that credit risk is low.
The Company has exposure in Cash and cash equivalents,employee loans and investment carried at amortised cost. The Companyâs maximum exposure to credit risk as at 31st March, 2024 is the carrying value of each class of financial assets as on that date.
(iii) Cash and Cash Equivalents
The Company held cash and cash equivalents of INR 16337.66 lakhs as on March 31, 2024 (March 31, 2023 : INR 57.72 lakhs). The cash and cash equivalents are held in hand and with bank. (Refer Note 1).
Market risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices in case of equity investments and Net Asset Value (NAV) in case of mutual fund investments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Company is having certain investments in unlisted companies where the valuation takes place based on certain market multiples of similar companies after duly adjusted for discounts to the same if any.
Risk is an inherent and integral part of the business of investments and business process outsourcing. The Company aims to achieve an appropriate balance between risk and returns by establishing an efficient risk mitigation system. In order to mitigate risks, the Company has instituted a risk management framework, wherein, the Audit Committee under the supervision of the Board is tasked with regular assessment and laying down of policies for management of risks.In respect of certain investments, the Company has established systems to conduct due diligence of proposals received and to ensure that investments are in line with the overall objectives of the Company.
Note 27: Revenue Recognition Sale of Services:
The Company derives revenue from providing support services to our captive clients, which primarily include providing back office administration, data management, contact centre management and training. The Company recognizes revenue when the significant terms of the arrangement are enforceable, services are being delivered and the collectability is reasonably assured. The Company recognizes revenue on an accrual basis when services are performed.
When the terms of the agreement specify service level parameters that must be met, the Company monitors such service level parameters and determine if there are any service credits or penalties that needs to be accounted for. The Company''s revenue is significantly only from group companies, hence it is believed that there is no significant credit risk.
The Company invoices its clients depending on the terms of the arrangement, which include billing based on a per employee basis, a per transaction basis, a fixed price basis, an outcome-based basis or other pricing arrangements including cost-plus arrangements.
The Company''s revenue is exclusive of taxes and includes reimbursements of communication costs, incentives, etc as defined in the terms of agreement.
There are no other revenue under Contract with Customers other than those which are accounted in Profit and Loss Account as revenue which comprises of Service income and Learning income. Refer Note 27.a for the details of income earned from contracts with customers.
The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Refer Note 27.a for the Trade Receivable balances.
Revenue from sale of services and the trade receivable for the year ended March 31, 2024 and March 31, 2023 is as follows:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied when calculating the defined benefit liability recognised in the balance sheet.
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets under perform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. The Company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.
Changes in bond yield: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plansâ bond holdings.
Inflation risks: In the pension plans, the pensions in payment are not linked to inflation, so this is a less material risk. Life expectancy: The pension plan obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plan liabilities. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy.
There have been no transactions involving ordinary shares or potential ordinary shares between reporting date and date of completing financial statements which would require restatement of EPS.
The Board of Directors has recommended a final dividend of '' 2.05 per share (41%). In addition, the Board of Directors has declared a second interim Dividend of ''3.65 per share (73%), which, together with the interim Dividend of '' 2 per share (40%) paid during the year will make a total Dividend of '' 7.70 per share (154%) for the FY 2023-24.
30c: Contingent Liabilities and Commitments
(i) Estimated amount of investment to be made in JM Financial yield enhancer (Distressed Opportunity ) Fund I - Series I for Capital Commitment - ''31.39 Lakhs.
30g: Other Regulatory Disclosure as required under Schedule III of Companies Act,2013
(a) The Company does not have any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(b) The Company is not declared as a willful defaulter by any bank or financial Institution or other lender.
(c) The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
(d) The company does not have any charges or satisfaction to be registered with ROC beyond stipulated statutory period.
(e) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(f) The company has not granted any loans or advances in nature of loans to promotors, directors, KMPs and the related parties (as defined under the Companies Act, 2013) either severally or jointly with any other persons. Hence disclosure under clause (v) of Schedule III of The Companies Act 2013, is not applicable.
(g) 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 intermediary shall directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (Ultimate Beneficiaries) except as disclosed.
The Company has not received any fund from any party(s) or entity(ies) including foreign entities (Funding Party) 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 by or on behalf of the Company (""Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(h) There are no scheme of arrangements approved. Hence disclosure under clause (xv) of Schedule III of The Companies Act 2013, is not applicable.
(i) There are no transactions in the nature of undisclosed income or income surrendered which needs to be accounted in the books of accounts during the year in the tax assessments under the Income Tax Act, 1961.
30h: Gain on derecognition of financial instrument
During the year,the Company received ''17,566.78 lakhs on account of redemption of Non convertible redeemable preference
shares of TVS Holdings Limited,which was earlier classified in OCI as Items that will be reclassified to P&L.
30i: Adoption of Financial Statements
The Board has adopted the financial statements at its meeting held on 21st May 2024.
Mar 31, 2024
Measurement of Fair Value Fair Value Hierarchy
"The fair value of investment property has been determined by the registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued.
The fair value measurement for all of the investment property has been categorised as a Level 3 fair value based on the inputs to the valuation technique used.
Investment property comprises a number of commercial properties that are leased to third parties. No contingent rents are charged.
The primary objective of the Companyâs Capital Management is to maximise shareholders value. The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. The Companyâs policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence to sustain future development of the business. For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves.
Note 25 : Financial instruments - Fair values and risk management A. Accounting Classification and Fair Values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:
Level 1 hierarchy - Includes Financial Instruments measured using quoted prices in the active market.
Level 2 hierarchy - The Fair value of Financial Instruments that are not traded in an active market, is determined using valuation techniques which maximize the use of observable market data.
Level 3 hierarchy - Inputs are not based on observable market data. 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. An adjustment to a Level 2 input that is significant to the entire measurement results in a fair value measurement categorised within Level 3 of the fair value hierarchy if the adjustment uses significant unobservable inputs.
Financial instruments fair valued under Level 3 hierarchy are measured using Market multiples method.
The carrying amount of trade receivables, cash and cash equivalents , trade payables and other financial liabilities are considered to be the fair value due to short term nature.
There are no transfers between level 1 and level 2 during the year.
The Company has exposure to the following risks arising from financial instruments:
⢠Liquidity risk ;
⢠Credit risk ; and
⢠Market risk
The Companyâs 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 Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
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. The Companyâs 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 Companyâs reputation.
The Company regularly monitors the rolling forecasts and the actual cash flows to service the financial liabilities on a day-to-day basis through cash generation from business and by having adequate banking facilities.
The following table shows the maturity analysis of the Companyâs financial liabilities based on contractually agreed undiscounted cash flows along with its carrying value as at the Balance sheet date.
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 loans and advances.
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Concentration of credit risk with respect to trade receivables are limited as the customers are reviewed, assessed and monitored regularly on a monthly basis with pre-determined credit limits assessed based on their payment capacity. Our historical experience of collecting receivables demonstrates that credit risk is low.
The Company has exposure in Cash and cash equivalents,employee loans and investment carried at amortised cost. The Companyâs maximum exposure to credit risk as at 31st March, 2024 is the carrying value of each class of financial assets as on that date.
(iii) Cash and Cash Equivalents
The Company held cash and cash equivalents of INR 16337.66 lakhs as on March 31, 2024 (March 31, 2023 : INR 57.72 lakhs). The cash and cash equivalents are held in hand and with bank. (Refer Note 1).
Market risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices in case of equity investments and Net Asset Value (NAV) in case of mutual fund investments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Company is having certain investments in unlisted companies where the valuation takes place based on certain market multiples of similar companies after duly adjusted for discounts to the same if any.
Risk is an inherent and integral part of the business of investments and business process outsourcing. The Company aims to achieve an appropriate balance between risk and returns by establishing an efficient risk mitigation system. In order to mitigate risks, the Company has instituted a risk management framework, wherein, the Audit Committee under the supervision of the Board is tasked with regular assessment and laying down of policies for management of risks.In respect of certain investments, the Company has established systems to conduct due diligence of proposals received and to ensure that investments are in line with the overall objectives of the Company.
Note 27: Revenue Recognition Sale of Services:
The Company derives revenue from providing support services to our captive clients, which primarily include providing back office administration, data management, contact centre management and training. The Company recognizes revenue when the significant terms of the arrangement are enforceable, services are being delivered and the collectability is reasonably assured. The Company recognizes revenue on an accrual basis when services are performed.
When the terms of the agreement specify service level parameters that must be met, the Company monitors such service level parameters and determine if there are any service credits or penalties that needs to be accounted for. The Company''s revenue is significantly only from group companies, hence it is believed that there is no significant credit risk.
The Company invoices its clients depending on the terms of the arrangement, which include billing based on a per employee basis, a per transaction basis, a fixed price basis, an outcome-based basis or other pricing arrangements including cost-plus arrangements.
The Company''s revenue is exclusive of taxes and includes reimbursements of communication costs, incentives, etc as defined in the terms of agreement.
There are no other revenue under Contract with Customers other than those which are accounted in Profit and Loss Account as revenue which comprises of Service income and Learning income. Refer Note 27.a for the details of income earned from contracts with customers.
The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Refer Note 27.a for the Trade Receivable balances.
Note 29 : Employee Benefits: Defined Contribution Plan
The Company makes contributions to a gratuity fund administered by trustees and managed by LIC of India. During the year, the Company has recognized the following amounts in the Profit and Loss Statement, which are included in Employee Benefits:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied when calculating the defined benefit liability recognised in the balance sheet.
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets under perform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. The Company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.
Changes in bond yield: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plansâ bond holdings.
Inflation risks: In the pension plans, the pensions in payment are not linked to inflation, so this is a less material risk. Life expectancy: The pension plan obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plan liabilities. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy.
Basic and Diluted Earnings Per Share
The calculations of profit attributable to equity shareholders and weighted average number of equity shares outstanding for purposes of basic earnings per share calculation are as follows:
There have been no transactions involving ordinary shares or potential ordinary shares between reporting date and date of completing financial statements which would require restatement of EPS.
The Board of Directors has recommended a final dividend of '' 2.05 per share (41%). In addition, the Board of Directors has declared a second interim Dividend of ''3.65 per share (73%), which, together with the interim Dividend of '' 2 per share (40%) paid during the year will make a total Dividend of '' 7.70 per share (154%) for the FY 2023-24.
30c: Contingent Liabilities and Commitments
(i) Estimated amount of investment to be made in JM Financial yield enhancer (Distressed Opportunity ) Fund I - Series I for Capital Commitment - ''31.39 Lakhs.
30g: Other Regulatory Disclosure as required under Schedule III of Companies Act,2013
(a) The Company does not have any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(b) The Company is not declared as a willful defaulter by any bank or financial Institution or other lender.
(c) The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
(d) The company does not have any charges or satisfaction to be registered with ROC beyond stipulated statutory period.
(e) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(f) The company has not granted any loans or advances in nature of loans to promotors, directors, KMPs and the related parties (as defined under the Companies Act, 2013) either severally or jointly with any other persons. Hence disclosure under clause (v) of Schedule III of The Companies Act 2013, is not applicable.
(g) 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 intermediary shall directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (Ultimate Beneficiaries) except as disclosed.
The Company has not received any fund from any party(s) or entity(ies) including foreign entities (Funding Party) 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 by or on behalf of the Company (""Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(h) There are no scheme of arrangements approved. Hence disclosure under clause (xv) of Schedule III of The Companies Act 2013, is not applicable.
(i) There are no transactions in the nature of undisclosed income or income surrendered which needs to be accounted in the books of accounts during the year in the tax assessments under the Income Tax Act, 1961.
30h: Gain on derecognition of financial instrument
During the year,the Company received ''17,566.78 lakhs on account of redemption of Non convertible redeemable preference
shares of TVS Holdings Limited,which was earlier classified in OCI as Items that will be reclassified to P&L.
30i: Adoption of Financial Statements
The Board has adopted the financial statements at its meeting held on 21st May 2024.
Mar 31, 2024
Measurement of Fair Value Fair Value Hierarchy
"The fair value of investment property has been determined by the registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued.
The fair value measurement for all of the investment property has been categorised as a Level 3 fair value based on the inputs to the valuation technique used.
Investment property comprises a number of commercial properties that are leased to third parties. No contingent rents are charged.
The primary objective of the Companyâs Capital Management is to maximise shareholders value. The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. The Companyâs policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence to sustain future development of the business. For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves.
Note 25 : Financial instruments - Fair values and risk management A. Accounting Classification and Fair Values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:
Level 1 hierarchy - Includes Financial Instruments measured using quoted prices in the active market.
Level 2 hierarchy - The Fair value of Financial Instruments that are not traded in an active market, is determined using valuation techniques which maximize the use of observable market data.
Level 3 hierarchy - Inputs are not based on observable market data. 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. An adjustment to a Level 2 input that is significant to the entire measurement results in a fair value measurement categorised within Level 3 of the fair value hierarchy if the adjustment uses significant unobservable inputs.
Financial instruments fair valued under Level 3 hierarchy are measured using Market multiples method.
The carrying amount of trade receivables, cash and cash equivalents , trade payables and other financial liabilities are considered to be the fair value due to short term nature.
There are no transfers between level 1 and level 2 during the year.
The Company has exposure to the following risks arising from financial instruments:
⢠Liquidity risk ;
⢠Credit risk ; and
⢠Market risk
The Companyâs 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 Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
(a) 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. The Companyâs 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 Companyâs reputation.
The Company regularly monitors the rolling forecasts and the actual cash flows to service the financial liabilities on a day-to-day basis through cash generation from business and by having adequate banking facilities.
The following table shows the maturity analysis of the Companyâs financial liabilities based on contractually agreed undiscounted cash flows along with its carrying value as at the Balance sheet date.
(b) 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 loans and advances.
(i) Trade Receivables:
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Concentration of credit risk with respect to trade receivables are limited as the customers are reviewed, assessed and monitored regularly on a monthly basis with pre-determined credit limits assessed based on their payment capacity. Our historical experience of collecting receivables demonstrates that credit risk is low.
The Company has exposure in Cash and cash equivalents,employee loans and investment carried at amortised cost. The Companyâs maximum exposure to credit risk as at 31st March, 2024 is the carrying value of each class of financial assets as on that date.
(iii) Cash and Cash Equivalents
The Company held cash and cash equivalents of INR 16337.66 lakhs as on March 31, 2024 (March 31, 2023 : INR 57.72 lakhs). The cash and cash equivalents are held in hand and with bank. (Refer Note 1).
Market risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices in case of equity investments and Net Asset Value (NAV) in case of mutual fund investments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Company is having certain investments in unlisted companies where the valuation takes place based on certain market multiples of similar companies after duly adjusted for discounts to the same if any.
Risk is an inherent and integral part of the business of investments and business process outsourcing. The Company aims to achieve an appropriate balance between risk and returns by establishing an efficient risk mitigation system. In order to mitigate risks, the Company has instituted a risk management framework, wherein, the Audit Committee under the supervision of the Board is tasked with regular assessment and laying down of policies for management of risks.In respect of certain investments, the Company has established systems to conduct due diligence of proposals received and to ensure that investments are in line with the overall objectives of the Company.
Note 27: Revenue Recognition Sale of Services:
The Company derives revenue from providing support services to our captive clients, which primarily include providing back office administration, data management, contact centre management and training. The Company recognizes revenue when the significant terms of the arrangement are enforceable, services are being delivered and the collectability is reasonably assured. The Company recognizes revenue on an accrual basis when services are performed.
When the terms of the agreement specify service level parameters that must be met, the Company monitors such service level parameters and determine if there are any service credits or penalties that needs to be accounted for. The Company''s revenue is significantly only from group companies, hence it is believed that there is no significant credit risk.
The Company invoices its clients depending on the terms of the arrangement, which include billing based on a per employee basis, a per transaction basis, a fixed price basis, an outcome-based basis or other pricing arrangements including cost-plus arrangements.
The Company''s revenue is exclusive of taxes and includes reimbursements of communication costs, incentives, etc as defined in the terms of agreement.
There are no other revenue under Contract with Customers other than those which are accounted in Profit and Loss Account as revenue which comprises of Service income and Learning income. Refer Note 27.a for the details of income earned from contracts with customers.
The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Refer Note 27.a for the Trade Receivable balances.
Revenue from sale of services and the trade receivable for the year ended March 31, 2024 and March 31, 2023 is as follows:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied when calculating the defined benefit liability recognised in the balance sheet.
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets under perform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. The Company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.
Changes in bond yield: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plansâ bond holdings.
Inflation risks: In the pension plans, the pensions in payment are not linked to inflation, so this is a less material risk. Life expectancy: The pension plan obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plan liabilities. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy.
There have been no transactions involving ordinary shares or potential ordinary shares between reporting date and date of completing financial statements which would require restatement of EPS.
The Board of Directors has recommended a final dividend of '' 2.05 per share (41%). In addition, the Board of Directors has declared a second interim Dividend of ''3.65 per share (73%), which, together with the interim Dividend of '' 2 per share (40%) paid during the year will make a total Dividend of '' 7.70 per share (154%) for the FY 2023-24.
30c: Contingent Liabilities and Commitments
(i) Estimated amount of investment to be made in JM Financial yield enhancer (Distressed Opportunity ) Fund I - Series I for Capital Commitment - ''31.39 Lakhs.
30g: Other Regulatory Disclosure as required under Schedule III of Companies Act,2013
(a) The Company does not have any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(b) The Company is not declared as a willful defaulter by any bank or financial Institution or other lender.
(c) The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
(d) The company does not have any charges or satisfaction to be registered with ROC beyond stipulated statutory period.
(e) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(f) The company has not granted any loans or advances in nature of loans to promotors, directors, KMPs and the related parties (as defined under the Companies Act, 2013) either severally or jointly with any other persons. Hence disclosure under clause (v) of Schedule III of The Companies Act 2013, is not applicable.
(g) 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 intermediary shall directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (Ultimate Beneficiaries) except as disclosed.
The Company has not received any fund from any party(s) or entity(ies) including foreign entities (Funding Party) 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 by or on behalf of the Company (""Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(h) There are no scheme of arrangements approved. Hence disclosure under clause (xv) of Schedule III of The Companies Act 2013, is not applicable.
(i) There are no transactions in the nature of undisclosed income or income surrendered which needs to be accounted in the books of accounts during the year in the tax assessments under the Income Tax Act, 1961.
30h: Gain on derecognition of financial instrument
During the year,the Company received ''17,566.78 lakhs on account of redemption of Non convertible redeemable preference
shares of TVS Holdings Limited,which was earlier classified in OCI as Items that will be reclassified to P&L.
30i: Adoption of Financial Statements
The Board has adopted the financial statements at its meeting held on 21st May 2024.
Mar 31, 2024
Measurement of Fair Value Fair Value Hierarchy
"The fair value of investment property has been determined by the registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued.
The fair value measurement for all of the investment property has been categorised as a Level 3 fair value based on the inputs to the valuation technique used.
Investment property comprises a number of commercial properties that are leased to third parties. No contingent rents are charged.
The primary objective of the Companyâs Capital Management is to maximise shareholders value. The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. The Companyâs policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence to sustain future development of the business. For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves.
Note 25 : Financial instruments - Fair values and risk management A. Accounting Classification and Fair Values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:
Level 1 hierarchy - Includes Financial Instruments measured using quoted prices in the active market.
Level 2 hierarchy - The Fair value of Financial Instruments that are not traded in an active market, is determined using valuation techniques which maximize the use of observable market data.
Level 3 hierarchy - Inputs are not based on observable market data. 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. An adjustment to a Level 2 input that is significant to the entire measurement results in a fair value measurement categorised within Level 3 of the fair value hierarchy if the adjustment uses significant unobservable inputs.
Financial instruments fair valued under Level 3 hierarchy are measured using Market multiples method.
The carrying amount of trade receivables, cash and cash equivalents , trade payables and other financial liabilities are considered to be the fair value due to short term nature.
There are no transfers between level 1 and level 2 during the year.
The Company has exposure to the following risks arising from financial instruments:
⢠Liquidity risk ;
⢠Credit risk ; and
⢠Market risk
The Companyâs 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 Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
(a) 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. The Companyâs 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 Companyâs reputation.
The Company regularly monitors the rolling forecasts and the actual cash flows to service the financial liabilities on a day-to-day basis through cash generation from business and by having adequate banking facilities.
The following table shows the maturity analysis of the Companyâs financial liabilities based on contractually agreed undiscounted cash flows along with its carrying value as at the Balance sheet date.
(b) 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 loans and advances.
(i) Trade Receivables:
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Concentration of credit risk with respect to trade receivables are limited as the customers are reviewed, assessed and monitored regularly on a monthly basis with pre-determined credit limits assessed based on their payment capacity. Our historical experience of collecting receivables demonstrates that credit risk is low.
The Company has exposure in Cash and cash equivalents,employee loans and investment carried at amortised cost. The Companyâs maximum exposure to credit risk as at 31st March, 2024 is the carrying value of each class of financial assets as on that date.
(iii) Cash and Cash Equivalents
The Company held cash and cash equivalents of INR 16337.66 lakhs as on March 31, 2024 (March 31, 2023 : INR 57.72 lakhs). The cash and cash equivalents are held in hand and with bank. (Refer Note 1).
Market risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices in case of equity investments and Net Asset Value (NAV) in case of mutual fund investments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Company is having certain investments in unlisted companies where the valuation takes place based on certain market multiples of similar companies after duly adjusted for discounts to the same if any.
Risk is an inherent and integral part of the business of investments and business process outsourcing. The Company aims to achieve an appropriate balance between risk and returns by establishing an efficient risk mitigation system. In order to mitigate risks, the Company has instituted a risk management framework, wherein, the Audit Committee under the supervision of the Board is tasked with regular assessment and laying down of policies for management of risks.In respect of certain investments, the Company has established systems to conduct due diligence of proposals received and to ensure that investments are in line with the overall objectives of the Company.
Note 27: Revenue Recognition Sale of Services:
The Company derives revenue from providing support services to our captive clients, which primarily include providing back office administration, data management, contact centre management and training. The Company recognizes revenue when the significant terms of the arrangement are enforceable, services are being delivered and the collectability is reasonably assured. The Company recognizes revenue on an accrual basis when services are performed.
When the terms of the agreement specify service level parameters that must be met, the Company monitors such service level parameters and determine if there are any service credits or penalties that needs to be accounted for. The Company''s revenue is significantly only from group companies, hence it is believed that there is no significant credit risk.
The Company invoices its clients depending on the terms of the arrangement, which include billing based on a per employee basis, a per transaction basis, a fixed price basis, an outcome-based basis or other pricing arrangements including cost-plus arrangements.
The Company''s revenue is exclusive of taxes and includes reimbursements of communication costs, incentives, etc as defined in the terms of agreement.
There are no other revenue under Contract with Customers other than those which are accounted in Profit and Loss Account as revenue which comprises of Service income and Learning income. Refer Note 27.a for the details of income earned from contracts with customers.
The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Refer Note 27.a for the Trade Receivable balances.
Revenue from sale of services and the trade receivable for the year ended March 31, 2024 and March 31, 2023 is as follows:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied when calculating the defined benefit liability recognised in the balance sheet.
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets under perform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. The Company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.
Changes in bond yield: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plansâ bond holdings.
Inflation risks: In the pension plans, the pensions in payment are not linked to inflation, so this is a less material risk. Life expectancy: The pension plan obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plan liabilities. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy.
There have been no transactions involving ordinary shares or potential ordinary shares between reporting date and date of completing financial statements which would require restatement of EPS.
The Board of Directors has recommended a final dividend of '' 2.05 per share (41%). In addition, the Board of Directors has declared a second interim Dividend of ''3.65 per share (73%), which, together with the interim Dividend of '' 2 per share (40%) paid during the year will make a total Dividend of '' 7.70 per share (154%) for the FY 2023-24.
30c: Contingent Liabilities and Commitments
(i) Estimated amount of investment to be made in JM Financial yield enhancer (Distressed Opportunity ) Fund I - Series I for Capital Commitment - ''31.39 Lakhs.
30g: Other Regulatory Disclosure as required under Schedule III of Companies Act,2013
(a) The Company does not have any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(b) The Company is not declared as a willful defaulter by any bank or financial Institution or other lender.
(c) The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
(d) The company does not have any charges or satisfaction to be registered with ROC beyond stipulated statutory period.
(e) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(f) The company has not granted any loans or advances in nature of loans to promotors, directors, KMPs and the related parties (as defined under the Companies Act, 2013) either severally or jointly with any other persons. Hence disclosure under clause (v) of Schedule III of The Companies Act 2013, is not applicable.
(g) 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 intermediary shall directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (Ultimate Beneficiaries) except as disclosed.
The Company has not received any fund from any party(s) or entity(ies) including foreign entities (Funding Party) 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 by or on behalf of the Company (""Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(h) There are no scheme of arrangements approved. Hence disclosure under clause (xv) of Schedule III of The Companies Act 2013, is not applicable.
(i) There are no transactions in the nature of undisclosed income or income surrendered which needs to be accounted in the books of accounts during the year in the tax assessments under the Income Tax Act, 1961.
30h: Gain on derecognition of financial instrument
During the year,the Company received ''17,566.78 lakhs on account of redemption of Non convertible redeemable preference
shares of TVS Holdings Limited,which was earlier classified in OCI as Items that will be reclassified to P&L.
30i: Adoption of Financial Statements
The Board has adopted the financial statements at its meeting held on 21st May 2024.
Mar 31, 2023
Provisions and Contingent Liabilities
Provisions are recognized when the Company, as a result of a past event, has a present obligation and it is probable that the
Company will be required to settle the obligation for which a reliable estimate can be made.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the
end of the reporting period, considering the risks and uncertainties surrounding the obligation. When a provision is measured
using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when
the effect of the time value of money is material). When discounting is used, the increase in the provision due to the passage
of time is recognised as a finance cost.
Contingent liabilities are disclosed when
a) there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of the Company (or)
b) there is a present obligation that arises from past events where it is either not probable that an outflow of resources will
be required to settle the obligation or a reliable estimate of the amount cannot be made.
2.20 Earnings Per Share
The basic earnings per share have been computed by dividing the net income attributable to equity shareholders by weighted
average number of shares outstanding during the year.
The diluted earnings per share have been computed using weighted average number of shares adjusted for effects of all
potentially dilutive equity shares.
2.21 CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of financial statements in accordance with Ind AS requires the use of estimates and assumptions for some
items, which might have an effect on their recognition and measurement in the balance sheet and statement of profit and loss.
The estimates and associated assumptions are based on historical experience and other factors that are relevant. The actual
results may differ from these estimates. The Companyâs management believes that the estimates used in preparation of the
financial statements are prudent and reasonable. Any revision to the accounting estimates is recognised prospectively in the
current and future periods.
Useful lives of Property Plant and Equipment / Intangible Assets
Property, Plant and Equipment / Intangible Assets are depreciated / amortised over their estimated useful lives, after taking
into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually
in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives
and residual values are based on the Companyâs historical experience with similar assets and take into account anticipated
technological changes. The depreciation/ amortisation for future periods is revised if there are significant changes from previous
estimates.
Impairment of Financial Assets
The impairment provisions for Financial Assets are based on assumptions about risk of default and expected cash loss rates.
The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on
Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Mar 31, 2023
Provisions and Contingent Liabilities
Provisions are recognized when the Company, as a result of a past event, has a present obligation and it is probable that the
Company will be required to settle the obligation for which a reliable estimate can be made.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the
end of the reporting period, considering the risks and uncertainties surrounding the obligation. When a provision is measured
using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when
the effect of the time value of money is material). When discounting is used, the increase in the provision due to the passage
of time is recognised as a finance cost.
Contingent liabilities are disclosed when
a) there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of the Company (or)
b) there is a present obligation that arises from past events where it is either not probable that an outflow of resources will
be required to settle the obligation or a reliable estimate of the amount cannot be made.
2.20 Earnings Per Share
The basic earnings per share have been computed by dividing the net income attributable to equity shareholders by weighted
average number of shares outstanding during the year.
The diluted earnings per share have been computed using weighted average number of shares adjusted for effects of all
potentially dilutive equity shares.
2.21 CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of financial statements in accordance with Ind AS requires the use of estimates and assumptions for some
items, which might have an effect on their recognition and measurement in the balance sheet and statement of profit and loss.
The estimates and associated assumptions are based on historical experience and other factors that are relevant. The actual
results may differ from these estimates. The Companyâs management believes that the estimates used in preparation of the
financial statements are prudent and reasonable. Any revision to the accounting estimates is recognised prospectively in the
current and future periods.
Useful lives of Property Plant and Equipment / Intangible Assets
Property, Plant and Equipment / Intangible Assets are depreciated / amortised over their estimated useful lives, after taking
into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually
in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives
and residual values are based on the Companyâs historical experience with similar assets and take into account anticipated
technological changes. The depreciation/ amortisation for future periods is revised if there are significant changes from previous
estimates.
Impairment of Financial Assets
The impairment provisions for Financial Assets are based on assumptions about risk of default and expected cash loss rates.
The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on
Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Mar 31, 2023
Provisions and Contingent Liabilities
Provisions are recognized when the Company, as a result of a past event, has a present obligation and it is probable that the
Company will be required to settle the obligation for which a reliable estimate can be made.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the
end of the reporting period, considering the risks and uncertainties surrounding the obligation. When a provision is measured
using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when
the effect of the time value of money is material). When discounting is used, the increase in the provision due to the passage
of time is recognised as a finance cost.
Contingent liabilities are disclosed when
a) there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of the Company (or)
b) there is a present obligation that arises from past events where it is either not probable that an outflow of resources will
be required to settle the obligation or a reliable estimate of the amount cannot be made.
2.20 Earnings Per Share
The basic earnings per share have been computed by dividing the net income attributable to equity shareholders by weighted
average number of shares outstanding during the year.
The diluted earnings per share have been computed using weighted average number of shares adjusted for effects of all
potentially dilutive equity shares.
2.21 CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of financial statements in accordance with Ind AS requires the use of estimates and assumptions for some
items, which might have an effect on their recognition and measurement in the balance sheet and statement of profit and loss.
The estimates and associated assumptions are based on historical experience and other factors that are relevant. The actual
results may differ from these estimates. The Companyâs management believes that the estimates used in preparation of the
financial statements are prudent and reasonable. Any revision to the accounting estimates is recognised prospectively in the
current and future periods.
Useful lives of Property Plant and Equipment / Intangible Assets
Property, Plant and Equipment / Intangible Assets are depreciated / amortised over their estimated useful lives, after taking
into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually
in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives
and residual values are based on the Companyâs historical experience with similar assets and take into account anticipated
technological changes. The depreciation/ amortisation for future periods is revised if there are significant changes from previous
estimates.
Impairment of Financial Assets
The impairment provisions for Financial Assets are based on assumptions about risk of default and expected cash loss rates.
The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on
Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Mar 31, 2023
Provisions and Contingent Liabilities
Provisions are recognized when the Company, as a result of a past event, has a present obligation and it is probable that the
Company will be required to settle the obligation for which a reliable estimate can be made.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the
end of the reporting period, considering the risks and uncertainties surrounding the obligation. When a provision is measured
using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when
the effect of the time value of money is material). When discounting is used, the increase in the provision due to the passage
of time is recognised as a finance cost.
Contingent liabilities are disclosed when
a) there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of the Company (or)
b) there is a present obligation that arises from past events where it is either not probable that an outflow of resources will
be required to settle the obligation or a reliable estimate of the amount cannot be made.
2.20 Earnings Per Share
The basic earnings per share have been computed by dividing the net income attributable to equity shareholders by weighted
average number of shares outstanding during the year.
The diluted earnings per share have been computed using weighted average number of shares adjusted for effects of all
potentially dilutive equity shares.
2.21 CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of financial statements in accordance with Ind AS requires the use of estimates and assumptions for some
items, which might have an effect on their recognition and measurement in the balance sheet and statement of profit and loss.
The estimates and associated assumptions are based on historical experience and other factors that are relevant. The actual
results may differ from these estimates. The Companyâs management believes that the estimates used in preparation of the
financial statements are prudent and reasonable. Any revision to the accounting estimates is recognised prospectively in the
current and future periods.
Useful lives of Property Plant and Equipment / Intangible Assets
Property, Plant and Equipment / Intangible Assets are depreciated / amortised over their estimated useful lives, after taking
into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually
in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives
and residual values are based on the Companyâs historical experience with similar assets and take into account anticipated
technological changes. The depreciation/ amortisation for future periods is revised if there are significant changes from previous
estimates.
Impairment of Financial Assets
The impairment provisions for Financial Assets are based on assumptions about risk of default and expected cash loss rates.
The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on
Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Mar 31, 2023
Provisions and Contingent Liabilities
Provisions are recognized when the Company, as a result of a past event, has a present obligation and it is probable that the
Company will be required to settle the obligation for which a reliable estimate can be made.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the
end of the reporting period, considering the risks and uncertainties surrounding the obligation. When a provision is measured
using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when
the effect of the time value of money is material). When discounting is used, the increase in the provision due to the passage
of time is recognised as a finance cost.
Contingent liabilities are disclosed when
a) there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of the Company (or)
b) there is a present obligation that arises from past events where it is either not probable that an outflow of resources will
be required to settle the obligation or a reliable estimate of the amount cannot be made.
2.20 Earnings Per Share
The basic earnings per share have been computed by dividing the net income attributable to equity shareholders by weighted
average number of shares outstanding during the year.
The diluted earnings per share have been computed using weighted average number of shares adjusted for effects of all
potentially dilutive equity shares.
2.21 CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of financial statements in accordance with Ind AS requires the use of estimates and assumptions for some
items, which might have an effect on their recognition and measurement in the balance sheet and statement of profit and loss.
The estimates and associated assumptions are based on historical experience and other factors that are relevant. The actual
results may differ from these estimates. The Companyâs management believes that the estimates used in preparation of the
financial statements are prudent and reasonable. Any revision to the accounting estimates is recognised prospectively in the
current and future periods.
Useful lives of Property Plant and Equipment / Intangible Assets
Property, Plant and Equipment / Intangible Assets are depreciated / amortised over their estimated useful lives, after taking
into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually
in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives
and residual values are based on the Companyâs historical experience with similar assets and take into account anticipated
technological changes. The depreciation/ amortisation for future periods is revised if there are significant changes from previous
estimates.
Impairment of Financial Assets
The impairment provisions for Financial Assets are based on assumptions about risk of default and expected cash loss rates.
The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on
Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Mar 31, 2023
Provisions and Contingent Liabilities
Provisions are recognized when the Company, as a result of a past event, has a present obligation and it is probable that the
Company will be required to settle the obligation for which a reliable estimate can be made.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the
end of the reporting period, considering the risks and uncertainties surrounding the obligation. When a provision is measured
using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when
the effect of the time value of money is material). When discounting is used, the increase in the provision due to the passage
of time is recognised as a finance cost.
Contingent liabilities are disclosed when
a) there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of the Company (or)
b) there is a present obligation that arises from past events where it is either not probable that an outflow of resources will
be required to settle the obligation or a reliable estimate of the amount cannot be made.
2.20 Earnings Per Share
The basic earnings per share have been computed by dividing the net income attributable to equity shareholders by weighted
average number of shares outstanding during the year.
The diluted earnings per share have been computed using weighted average number of shares adjusted for effects of all
potentially dilutive equity shares.
2.21 CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of financial statements in accordance with Ind AS requires the use of estimates and assumptions for some
items, which might have an effect on their recognition and measurement in the balance sheet and statement of profit and loss.
The estimates and associated assumptions are based on historical experience and other factors that are relevant. The actual
results may differ from these estimates. The Companyâs management believes that the estimates used in preparation of the
financial statements are prudent and reasonable. Any revision to the accounting estimates is recognised prospectively in the
current and future periods.
Useful lives of Property Plant and Equipment / Intangible Assets
Property, Plant and Equipment / Intangible Assets are depreciated / amortised over their estimated useful lives, after taking
into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually
in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives
and residual values are based on the Companyâs historical experience with similar assets and take into account anticipated
technological changes. The depreciation/ amortisation for future periods is revised if there are significant changes from previous
estimates.
Impairment of Financial Assets
The impairment provisions for Financial Assets are based on assumptions about risk of default and expected cash loss rates.
The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on
Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Mar 31, 2023
Provisions and Contingent Liabilities
Provisions are recognized when the Company, as a result of a past event, has a present obligation and it is probable that the
Company will be required to settle the obligation for which a reliable estimate can be made.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the
end of the reporting period, considering the risks and uncertainties surrounding the obligation. When a provision is measured
using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when
the effect of the time value of money is material). When discounting is used, the increase in the provision due to the passage
of time is recognised as a finance cost.
Contingent liabilities are disclosed when
a) there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of the Company (or)
b) there is a present obligation that arises from past events where it is either not probable that an outflow of resources will
be required to settle the obligation or a reliable estimate of the amount cannot be made.
2.20 Earnings Per Share
The basic earnings per share have been computed by dividing the net income attributable to equity shareholders by weighted
average number of shares outstanding during the year.
The diluted earnings per share have been computed using weighted average number of shares adjusted for effects of all
potentially dilutive equity shares.
2.21 CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of financial statements in accordance with Ind AS requires the use of estimates and assumptions for some
items, which might have an effect on their recognition and measurement in the balance sheet and statement of profit and loss.
The estimates and associated assumptions are based on historical experience and other factors that are relevant. The actual
results may differ from these estimates. The Companyâs management believes that the estimates used in preparation of the
financial statements are prudent and reasonable. Any revision to the accounting estimates is recognised prospectively in the
current and future periods.
Useful lives of Property Plant and Equipment / Intangible Assets
Property, Plant and Equipment / Intangible Assets are depreciated / amortised over their estimated useful lives, after taking
into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually
in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives
and residual values are based on the Companyâs historical experience with similar assets and take into account anticipated
technological changes. The depreciation/ amortisation for future periods is revised if there are significant changes from previous
estimates.
Impairment of Financial Assets
The impairment provisions for Financial Assets are based on assumptions about risk of default and expected cash loss rates.
The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on
Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Mar 31, 2023
Provisions and Contingent Liabilities
Provisions are recognized when the Company, as a result of a past event, has a present obligation and it is probable that the
Company will be required to settle the obligation for which a reliable estimate can be made.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the
end of the reporting period, considering the risks and uncertainties surrounding the obligation. When a provision is measured
using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when
the effect of the time value of money is material). When discounting is used, the increase in the provision due to the passage
of time is recognised as a finance cost.
Contingent liabilities are disclosed when
a) there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of the Company (or)
b) there is a present obligation that arises from past events where it is either not probable that an outflow of resources will
be required to settle the obligation or a reliable estimate of the amount cannot be made.
2.20 Earnings Per Share
The basic earnings per share have been computed by dividing the net income attributable to equity shareholders by weighted
average number of shares outstanding during the year.
The diluted earnings per share have been computed using weighted average number of shares adjusted for effects of all
potentially dilutive equity shares.
2.21 CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of financial statements in accordance with Ind AS requires the use of estimates and assumptions for some
items, which might have an effect on their recognition and measurement in the balance sheet and statement of profit and loss.
The estimates and associated assumptions are based on historical experience and other factors that are relevant. The actual
results may differ from these estimates. The Companyâs management believes that the estimates used in preparation of the
financial statements are prudent and reasonable. Any revision to the accounting estimates is recognised prospectively in the
current and future periods.
Useful lives of Property Plant and Equipment / Intangible Assets
Property, Plant and Equipment / Intangible Assets are depreciated / amortised over their estimated useful lives, after taking
into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually
in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives
and residual values are based on the Companyâs historical experience with similar assets and take into account anticipated
technological changes. The depreciation/ amortisation for future periods is revised if there are significant changes from previous
estimates.
Impairment of Financial Assets
The impairment provisions for Financial Assets are based on assumptions about risk of default and expected cash loss rates.
The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on
Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Mar 31, 2023
Provisions and Contingent Liabilities
Provisions are recognized when the Company, as a result of a past event, has a present obligation and it is probable that the
Company will be required to settle the obligation for which a reliable estimate can be made.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the
end of the reporting period, considering the risks and uncertainties surrounding the obligation. When a provision is measured
using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when
the effect of the time value of money is material). When discounting is used, the increase in the provision due to the passage
of time is recognised as a finance cost.
Contingent liabilities are disclosed when
a) there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of the Company (or)
b) there is a present obligation that arises from past events where it is either not probable that an outflow of resources will
be required to settle the obligation or a reliable estimate of the amount cannot be made.
2.20 Earnings Per Share
The basic earnings per share have been computed by dividing the net income attributable to equity shareholders by weighted
average number of shares outstanding during the year.
The diluted earnings per share have been computed using weighted average number of shares adjusted for effects of all
potentially dilutive equity shares.
2.21 CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of financial statements in accordance with Ind AS requires the use of estimates and assumptions for some
items, which might have an effect on their recognition and measurement in the balance sheet and statement of profit and loss.
The estimates and associated assumptions are based on historical experience and other factors that are relevant. The actual
results may differ from these estimates. The Companyâs management believes that the estimates used in preparation of the
financial statements are prudent and reasonable. Any revision to the accounting estimates is recognised prospectively in the
current and future periods.
Useful lives of Property Plant and Equipment / Intangible Assets
Property, Plant and Equipment / Intangible Assets are depreciated / amortised over their estimated useful lives, after taking
into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually
in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives
and residual values are based on the Companyâs historical experience with similar assets and take into account anticipated
technological changes. The depreciation/ amortisation for future periods is revised if there are significant changes from previous
estimates.
Impairment of Financial Assets
The impairment provisions for Financial Assets are based on assumptions about risk of default and expected cash loss rates.
The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on
Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Mar 31, 2023
Provisions and Contingent Liabilities
Provisions are recognized when the Company, as a result of a past event, has a present obligation and it is probable that the
Company will be required to settle the obligation for which a reliable estimate can be made.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the
end of the reporting period, considering the risks and uncertainties surrounding the obligation. When a provision is measured
using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when
the effect of the time value of money is material). When discounting is used, the increase in the provision due to the passage
of time is recognised as a finance cost.
Contingent liabilities are disclosed when
a) there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of the Company (or)
b) there is a present obligation that arises from past events where it is either not probable that an outflow of resources will
be required to settle the obligation or a reliable estimate of the amount cannot be made.
2.20 Earnings Per Share
The basic earnings per share have been computed by dividing the net income attributable to equity shareholders by weighted
average number of shares outstanding during the year.
The diluted earnings per share have been computed using weighted average number of shares adjusted for effects of all
potentially dilutive equity shares.
2.21 CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of financial statements in accordance with Ind AS requires the use of estimates and assumptions for some
items, which might have an effect on their recognition and measurement in the balance sheet and statement of profit and loss.
The estimates and associated assumptions are based on historical experience and other factors that are relevant. The actual
results may differ from these estimates. The Companyâs management believes that the estimates used in preparation of the
financial statements are prudent and reasonable. Any revision to the accounting estimates is recognised prospectively in the
current and future periods.
Useful lives of Property Plant and Equipment / Intangible Assets
Property, Plant and Equipment / Intangible Assets are depreciated / amortised over their estimated useful lives, after taking
into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually
in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives
and residual values are based on the Companyâs historical experience with similar assets and take into account anticipated
technological changes. The depreciation/ amortisation for future periods is revised if there are significant changes from previous
estimates.
Impairment of Financial Assets
The impairment provisions for Financial Assets are based on assumptions about risk of default and expected cash loss rates.
The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on
Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Mar 31, 2023
Provisions and Contingent Liabilities
Provisions are recognized when the Company, as a result of a past event, has a present obligation and it is probable that the
Company will be required to settle the obligation for which a reliable estimate can be made.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the
end of the reporting period, considering the risks and uncertainties surrounding the obligation. When a provision is measured
using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when
the effect of the time value of money is material). When discounting is used, the increase in the provision due to the passage
of time is recognised as a finance cost.
Contingent liabilities are disclosed when
a) there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of the Company (or)
b) there is a present obligation that arises from past events where it is either not probable that an outflow of resources will
be required to settle the obligation or a reliable estimate of the amount cannot be made.
2.20 Earnings Per Share
The basic earnings per share have been computed by dividing the net income attributable to equity shareholders by weighted
average number of shares outstanding during the year.
The diluted earnings per share have been computed using weighted average number of shares adjusted for effects of all
potentially dilutive equity shares.
2.21 CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of financial statements in accordance with Ind AS requires the use of estimates and assumptions for some
items, which might have an effect on their recognition and measurement in the balance sheet and statement of profit and loss.
The estimates and associated assumptions are based on historical experience and other factors that are relevant. The actual
results may differ from these estimates. The Companyâs management believes that the estimates used in preparation of the
financial statements are prudent and reasonable. Any revision to the accounting estimates is recognised prospectively in the
current and future periods.
Useful lives of Property Plant and Equipment / Intangible Assets
Property, Plant and Equipment / Intangible Assets are depreciated / amortised over their estimated useful lives, after taking
into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually
in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives
and residual values are based on the Companyâs historical experience with similar assets and take into account anticipated
technological changes. The depreciation/ amortisation for future periods is revised if there are significant changes from previous
estimates.
Impairment of Financial Assets
The impairment provisions for Financial Assets are based on assumptions about risk of default and expected cash loss rates.
The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on
Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Mar 31, 2023
Provisions and Contingent Liabilities
Provisions are recognized when the Company, as a result of a past event, has a present obligation and it is probable that the
Company will be required to settle the obligation for which a reliable estimate can be made.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the
end of the reporting period, considering the risks and uncertainties surrounding the obligation. When a provision is measured
using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when
the effect of the time value of money is material). When discounting is used, the increase in the provision due to the passage
of time is recognised as a finance cost.
Contingent liabilities are disclosed when
a) there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of the Company (or)
b) there is a present obligation that arises from past events where it is either not probable that an outflow of resources will
be required to settle the obligation or a reliable estimate of the amount cannot be made.
2.20 Earnings Per Share
The basic earnings per share have been computed by dividing the net income attributable to equity shareholders by weighted
average number of shares outstanding during the year.
The diluted earnings per share have been computed using weighted average number of shares adjusted for effects of all
potentially dilutive equity shares.
2.21 CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of financial statements in accordance with Ind AS requires the use of estimates and assumptions for some
items, which might have an effect on their recognition and measurement in the balance sheet and statement of profit and loss.
The estimates and associated assumptions are based on historical experience and other factors that are relevant. The actual
results may differ from these estimates. The Companyâs management believes that the estimates used in preparation of the
financial statements are prudent and reasonable. Any revision to the accounting estimates is recognised prospectively in the
current and future periods.
Useful lives of Property Plant and Equipment / Intangible Assets
Property, Plant and Equipment / Intangible Assets are depreciated / amortised over their estimated useful lives, after taking
into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually
in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives
and residual values are based on the Companyâs historical experience with similar assets and take into account anticipated
technological changes. The depreciation/ amortisation for future periods is revised if there are significant changes from previous
estimates.
Impairment of Financial Assets
The impairment provisions for Financial Assets are based on assumptions about risk of default and expected cash loss rates.
The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on
Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Mar 31, 2023
Provisions and Contingent Liabilities
Provisions are recognized when the Company, as a result of a past event, has a present obligation and it is probable that the
Company will be required to settle the obligation for which a reliable estimate can be made.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the
end of the reporting period, considering the risks and uncertainties surrounding the obligation. When a provision is measured
using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when
the effect of the time value of money is material). When discounting is used, the increase in the provision due to the passage
of time is recognised as a finance cost.
Contingent liabilities are disclosed when
a) there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of the Company (or)
b) there is a present obligation that arises from past events where it is either not probable that an outflow of resources will
be required to settle the obligation or a reliable estimate of the amount cannot be made.
2.20 Earnings Per Share
The basic earnings per share have been computed by dividing the net income attributable to equity shareholders by weighted
average number of shares outstanding during the year.
The diluted earnings per share have been computed using weighted average number of shares adjusted for effects of all
potentially dilutive equity shares.
2.21 CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of financial statements in accordance with Ind AS requires the use of estimates and assumptions for some
items, which might have an effect on their recognition and measurement in the balance sheet and statement of profit and loss.
The estimates and associated assumptions are based on historical experience and other factors that are relevant. The actual
results may differ from these estimates. The Companyâs management believes that the estimates used in preparation of the
financial statements are prudent and reasonable. Any revision to the accounting estimates is recognised prospectively in the
current and future periods.
Useful lives of Property Plant and Equipment / Intangible Assets
Property, Plant and Equipment / Intangible Assets are depreciated / amortised over their estimated useful lives, after taking
into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually
in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives
and residual values are based on the Companyâs historical experience with similar assets and take into account anticipated
technological changes. The depreciation/ amortisation for future periods is revised if there are significant changes from previous
estimates.
Impairment of Financial Assets
The impairment provisions for Financial Assets are based on assumptions about risk of default and expected cash loss rates.
The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on
Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Mar 31, 2022
Contingent liabilities
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more future uncertain events not wholly within the control of the Company (or)
There is a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.
The basic earnings per share has been computed by dividing the net income attributable to equity shareholders by weighted average number of shares outstanding during the year / period.
The diluted earnings per share have been computed using weighted average number of shares adjusted for effects of all potentially dilutive equity shares.
Critical accounting judgments and key sources of estimation uncertainty
The preparation of financial statements in accordance with Ind AS requires use of estimates and assumptions for some items, which might have an effect on their recognition and measurement in the balance sheet and statement of profit and loss. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. The actual results may differ from these estimates. The Companyâs management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Any revision to the accounting estimates is recognized prospectively in the current and future periods.
a) '' 299.91 crores (as on March 31, 2021''429.61 crores) provided as collateral for assets securitised.
b) In accordance with the Reserve Bank of India directives, the company has created a floating charge on the statutory liquid assets comprising bank deposits of '' 161.53 crores (as on March 31, 2021''96.50 crores) in favour of trustees representing the deposit holders of the Company.
c) Deposits given as margin for Bank Guarantee amounting to '' 1.82 crores (as on March 31, 2021 - Nil) has been provided for demand raised under TNVAT Act in respect of VAT on sale of repossessed vehicles.
d) Deposits given as margin for Bank Guarantee amounting to '' 0.27 crores. (as on March 31, 2021 - Nil) for Legal proceedings with respect to repossessed assets.
e) Bank deposit of'' 1.51 crores (as on March 31, 2021 - Nil) placed for obtaining Letter of Credit on behalf of our Customers.
1) The interest rate risk and exchange rate risk on the borrowings of the Company are managed using various derivative instruments which are entered from time to time. The risk management strategy and the use of derivatives are explained in Note 37 - Financial Risk Management Framework and Note 43.03 - Derivatives.
2) The Company has designated the Interest rate derivatives (IRS/FRA), which were entered to mitigate interest rate risk on its Subordinated Non Convertible Debentures and Rupee Term Loans, as hedging instruments.
i) During the year, the company subscribed to the rights issue of equity shares offered by Sundaram Asset Management Company Limited (SAMC) for 39,50,384 equity shares of '' 10/- each at a premium of ''116.57 per share, amounting to ''50 cr. SAMC using its own funds, the proceeds of the rights issue and availing a loan from the Company, acquired 100% equity shares in Principal Asset Management Private Ltd. and its affiliates.
ii) During the year, the company subscribed to the rights issue of equity shares offered by Sundaram Finance Holdings Limited (SFHL) to the extent of 1,95,26,605 equity shares (including 42,01,095 equity shares renounced by others) of ''5/- each at a premium of ''45/- per share, amounting to ''97.63 cr. Post rights issue, the company holds 23.49% of the equity shares in SFHL. SFHL utilised the proceeds of the rights issue to acquire additional stake of 7.70% in Brakes India Private Ltd. (BIPL), post which SFHL holds 14.37% of equity shares in BIPL.
iii) Represent Quoted Investments.
iv) Represents investments in the growth option of the open-ended schemes of Sundaram Mutual Fund in compliance with the seed capital requirements as stipulated by SEBI Mutual Funds (Amendment) Regulations, 2014 and cannot be redeemed unless the scheme is wound up.
v) Represents sponsor investments, in compliance with SEBI (Alternative Investment Funds) Regulations, 2012 and the same cannot be redeemed unless the Fund is wound up.
vi) In accordance with the Reserve Bank of India directives, the company has created a floating charge on the statutory liquid assets comprising investment in Government Securities of face value ''479.64 cr. (amortised cost - ''486.20 Crore).
The term loan from banks are secured by hypothecation of specific assets covered by a charge on hypothecation loan receivable / Hire purchase / Lease Agreements.
Term loans were deployed for the purpose for which they were obtained. In respect of a term loan of ''1,000 Cr. availed from a Bank during the last quarter of the financial year, the application of funds is in progress in accordance with terms of the sanction and the undeployed loan is held in the form of liquid investments.
Working capital demand loans and cash credit are secured by a charge on hypothecation loan receivable/hire purchase /lease agreement, ranking pari passu, excluding assets which are specifically charged to others.
Funds raised on short term basis have not been utilised for long term purposes.
Quarterly Returns or Statements of current assets filed by the Company with Banks or Financial Institutions are in agreement with the Books of Accounts.
The Company has not been declared as wilful defaulter by any Bank or Financial Institution or other lender or government or any government authority.
The Companyâs capital management strategy is to ensure that it has sufficient capital for business operations, strategic investment, and regulatory requirements and to provide reasonable return to the shareholders. Equity share capital and other equity are considered for Capital management.
Disaggregate revenue information: Since the requirement of application of Ind AS 115 on Companyâs revenue is insignificant, the company believes that disaggregation of data about the nature, amount, timing of our revenues is not required.
Remaining performance obligation
The remaining performance obligation disclosure provides aggregate amount of transaction price yet to be recognised at the end of reporting period and an explanation as to when the company expects to recognise these amounts in revenue.
The aggregate value of performance obligations that are completely or partially unsatisfied as at March 31, 2022 is Nil (2020-21''0.35 crores).
Risk is an inherent and integral part of the financial services business and the company has been judiciously managing this through an efficient risk mitigation system, with a view to achieve the Company''s stated objectives of Growth with Quality and Profitability. The risks primarily include credit risk, liquidity risk and market risk.
The policies and procedures laid down by the company for the purpose of risk identification, measurement and management, compare well with contemporary best practices followed by industry peers. The Risk Management Committee and Asset Liability Management Committee, functioning under the supervision of the Audit Committee, have enunciated detailed policies for assessment of various types of risks, and fixed tolerance limits as appropriate.
Credit risk is the risk of financial loss to the Company if a customer fails to meet his contractual obligations and arises principally from the company''s loan receivables.
The company has in place a robust credit policy which clearly defines the credit filters and the terms of acceptance of proposals for financing different categories of borrowers and asset classes.
The credit appraisal process, inter alia, includes filters for stratification of customers, compliance with know your customer (KYC) norms, Field investigation, Credit bureau verification, exposure ceilings, asset risk and segment and geography risks. The risk metrics also address Loan to Value, loan tenure, based on the useful life of the asset, end-use of the asset and credit enhancements, as appropriate.
The Companyâs exposure is primarily to retail customers, thereby making for a well-diversified risk portfolio. The time tested monitoring and recovery mechanism ensures timely recovery of instalments and where required, necessary action for resolution of delinquent accounts is initiated, including legal proceedings. Finally, physical presence and in-depth knowledge of the markets in which the Company operates enables early identification of emerging risks thereby facilitating prompt remedial action.
Impairment - Expected Credit Loss (ECL):
As per Ind AS 109, the Expected Credit Losses on financial instruments are classified under three stages.
Stage 1: Every financial asset is classified as stage 1, upon initial recognition. In addition, stage 1 contains all transactions with limited default risk.
Stage 2: Financial assets whose default risk has risen significantly since initial recognition and which are not classified as cases with limited default risk.
Stage 3: Financial assets that display objective evidence of impairment at the reporting date.
The accounting standard, Ind AS 109 does not specifically prescribe any methodology for computing ECL. However, entities are required to adopt sound and market acceptable methodologies which are in line with the size, complexity and risk-profile of the financial entity for computing the ECL. The Company uses three main components to measure ECL. These are, Exposure at Risk (EAR), Probability of Default (PD) and Loss Given Default (LGD). Exposure at Risk (EAR) is defined as the sum of Principal outstanding and interest accrued at the reporting date. PD is defined as the probability of borrowers defaulting on their obligations. LGD represents the economic loss, adjusted for cure rate, as a percentage of exposure at the time of default.
Accordingly, loan assets are categorised under three different stages, as under:
Stage 1: Where instalments are Current and 1-30 days overdue Stage 2: Where instalments are 31 days - 90 days overdue and Stage 3: Where instalments are overdue beyond 90 days
The company is required to provide 12-month expected credit loss (12-month ECL) for stage 1 assets and the life time expected credit loss (LECL) for stage 2 & stage 3 assets.
12-month ECL is the expected credit loss that results from default events that are possible within 12 months after the reporting date. LECL represents the expected credit loss from default events over the expected life of a financial asset.
As prescribed under para 5.5 in Ind AS 109, 12-months PD is required to be computed for financial instruments which are in stage 1, and life time PD for those in stage 2 & 3. 12 months PD is the likelihood of the borrower defaulting in the 12 months following the reporting date while life time PD is the likelihood of the borrower defaulting during the residual tenor.
The PD model has been developed for all the major asset classes using a statistical and iterative approach. The design and construction of
the model involves identification of various credit parameters and variables that have a strong and direct correlation to propensity of default. The PD model reflects to the probability of default, taking into consideration the inherent credit quality of the borrower and the residual tenor of each contract. It relies not only historical information and the current economic environment, but also considers forward-looking information such as the forecasts on the macroeconomic outlook, including emerging risks. The PD for stage 3 contracts is considered at 100%.
Where a customer has one contract in stage 3 and one or more contracts in stage 1 / stage 2, the PD for all the contracts is considered at 100%.
LGD
LGD represents the economic loss, adjusted for cure rate, as a percentage of exposure at the time of default. Economic loss is the estimated shortfall in realisation of dues, in the event of default. Contracts that have turned delinquent do not necessarily involve ultimate losses, since many of them are resolved through corrective actions. The cure rate is the probability of a ânon performingâ (i.e. defaulted) contract reverting to a âperformingâ (i.e. non-default) status in a year.
Following tables provide an overview of the gross carrying amount and credit loss allowance broken down into stages:
Credit risk management practices
(i) Policy on write off: Loans are written off when the value of underlying security/other collateral is not sufficient to cover the loan exposure or where the underlying security / customer are not traceable. In such cases, the company takes legal recourse for recovery of shortfall of dues, if any.
(ii) Narrative description of collateral: The underlying assets, which are financed, are the primary collateral held. These are typically commercial vehicles, cars, construction equipment, farm equipment, etc. Additional collateral, by way of credit enhancement, is obtained based on the managementâs credit evaluation of the customer.
d. Debt Securities:
All debt investments are allocated to stage 1 under initial recognition. If the rating assigned to the security at the time of investment is downgraded by two notches and / or where there is a delay in interest servicing by more than 30 days, this would result in stage 2 classification. Further downgrade of rating and/or delay in interest servicing by more than 90 days/default of payment of principal would result in stage 3 classifications.
For investment in debt instruments, one-year transition matrix provided by the rating agencies is used as the PD. Loss given default (LGD) parameters assume a recovery rate of 65%, 75% and 50% for unsecured senior, unsecured subordinated and secured debt securities respectively.
37.2 Liquidity Risk
Liquidity risk relates to our potential inability to meet all payment obligations when they fall due or only being able to meet them at excessive costs. The objective of the liquidity risk management framework is to ensure that the Company can fulfil its payment obligations at all times and can manage liquidity and funding risks within its risk appetite. The Asset Liability Committee regularly monitors the liquidity position and the duration of assets/liabilities and ensures that liquidity is strictly managed as per the policy.
Following are the contractual maturities of financial liabilities / financial assets at the reporting date. The amounts are gross and undiscounted and include estimated interest payments / receipts and exclude the impact of netting agreements.
37.3 Market Risk
Market risk is the risk of loss arising from potential adverse changes in the value of the firmâs assets and liabilities from fluctuation in market variables like liquidity, interest rate and foreign exchange (Currency risk).
Interest rate risk
The Company''s exposure to changes in interest rates relates to the Company''s outstanding floating rate liabilities. Most of the Company''s outstanding liability in local currency is on fixed rate basis and hence not subject to interest rate risk. Whereas the foreign currency liability is linked to international rate benchmarks like LIBOR and hence subject to interest rate risk. The Company hedges these risks through derivative transactions.
Fair value sensitivity analysis for fixed rate instruments
The Company''s fixed rate instruments are carried at amortised cost and are not measured for interest rate risk, as neither the carrying amount nor the future cash flows will fluctuate because of changes in market interest rates.
Cash flow sensitivity analysis for variable rate instruments
A reasonably possible change of 100 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.
a. Interest rate sensitivity
The major lending of the Company is in the form of Hypothecation loans at fixed rates. The loans are financed by various fixed / floating Rate borrowings. While the assets financed are generally recovered over the tenure of the underlying contract equally, the liabilities are in general repayable on maturity. Hence, the interest rate risk and liquidity (mismatches in the duration of assets and liabilities) are inherent and inevitable.
To measure the above risk the Company adopts the duration gap analysis which is measured for assets and liabilities maturing in next 12 months as well as for the overall assets and liabilities. Also, for Interest rate risk management, the Duration Gap model is used on assets and liabilities maturing in the next 12 months, to assess the change in Net Interest Income (NII) for a 1% increase in interest rate. The change in NII for 1% change in interest rate as on 31.03.2022 is ''19.29 Cr.
b. Currency Risk
The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which borrowings are denominated and the respective functional currency, i.e. INR. The transactions of the Company are primarily denominated in INR. Currency risks arise from the foreign currency loans availed by the Company.
Sensitivity
Currency risks related to the amounts of foreign currency loans are fully hedged using derivatives that mature on the same dates as the loans are due for repayment.
Defined benefit plans
Defined benefit plan exposes the Company to a number of risks, the most significant of which are detailed below:
Investment risk: This may arise from volatility in Asset value due to market fluctuations and impairment of assets due to credit losses. The defined benefit plans may hold equity type assets, which may carry volatility and associated risk.
Interest risk: A decrease in bond yields will increase plan liabilities, although this is expected to be partially offset by an increase in the value of the planâs investment in debt instruments.
Salary cost Inflation risk: The present value of some of the defined benefit plan obligations are calculated with reference to the future salaries of plan participants. Increase in salary due to adverse Inflationary pressures might lead to higher liabilities.
Longevity risk: The present value of defined benefit plan obligation is calculated by reference to the best estimate of the mortality of plan participants. Increase or decrease in such rate will affect the plan liability.
A. Gratuity (Funded)
Expected contribution to the plan for the next year is ''6 crores.
B. Leave encashment & Compensated absences (unfunded)
The company earmarks liability towards leave benefit and provides for payments to vested employees. The benefits under the plan are in the form of a payment to employees as per the leave policy of the company.
C. Post Retirement employees medical scheme (unfunded):
The company earmarks liability towards unfunded post-retirement medical benefit and provides for payments to vested employees. The benefits under the plan are in the form of a medical benefit paid to employees post their employment within the company.
In the absence of detailed information regarding plan assets which is funded with Insurance Companies, the composition of each major category of plan assets, the percentage or amount for each category to the fair value of plan assets & the description of the Asset-Liability matching strategies used by the plan has not been disclosed.
D. Provident Fund
The provident fund contributions to trust are managed through trust investments in addition to contribution of a portion of its provident fund liability relating to Employees Pension Scheme to Employee Provident Fund Organisation.
The fund has relatively balanced mix of investments in order to manage the risks. The investment strategy is designed based on the interest rate scenario, liquidity needs of the Plans and Pattern of the investments as prescribed under the statue.
The trustees regularly monitor the funding and investment, there are systems in place to ensure that health of the portfolio is regularly reviewed and investments do not pose significant risk of impairment.
Group share based payments:
The company as a part of ESOP scheme has issued share options to employees of various group Companies. The company does not get reimbursed for the cost of such group share options and such costs are treated as investment in the group companies.
Operating lease as lessee- ina as 110 - Leases
COVID-19 - Related Rent Concessions: Ministry of Corporate Affairs (MCA) has issued an amendment to Ind AS 116 - Leases (notified on 24th July 2020 and further extended vide notification dated 18th June 2021) The amendment provide lessees with an exemption from assessing whether a COVID-19 related rent concession is a lease modification. The amendments allowed the expedient to be applied to COVID-19 related rent concessions to payments originally due on or before June 30, 2022 and also require disclosure of the amount recognized in profit or loss to reflect changes in lease payments that arise from COVID-19 related rent concessions.
Accordingly, the Company has applied practical expedient to all its rent concessions and the amount in profit and loss for the reporting period that reflect the change in lease payments arising from rent concession is ''0.17 crores.
42.01 Tax u/s 115BAA of the Income Tax Act
The Company has opted for reduced rate of Income tax pursuant to the aforesaid section.
42.02 Segment Information
The Company has opted for reduced rate of Income tax pursuant to the aforesaid section.
* Education, Art & Culture, Culture & Heritage, preservation and rejuvenation of National heritage and heritage crafts of India, Environment, Disaster Relief, Health, Park Maintenance, Protection / Restoration of Buildings and sites of historical importance, Protection of Ecology, Rural Development, Social Welfare, Sports, Animal Welfare.
Tax disputes in respect of Income Tax, Service Tax, VAT demands and are pending before various appellate forums/authorities and the cash flows would be determined only upon the receipt of decisions. The Company is of the opinion that the demands are not sustainable and expects to succeed in its appeal.
The contested tax demands have been ascertained on the basis of relief allowed by the appellate authorities, on similar issues in earlier assessment years.
42.05 Pending Litigations
The pending litigations as on March 31, 2022 have been compiled by the company . The current position of the litigation has been evaluated and the effect thereof has been appropriately disclosed in the financial statements.
42.10 Utilisation of Borrowed funds and Share Premium (Diversion of Funds):
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 (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend to or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend to or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
42.11 Undisclosed income
There is no surrender or disclosure of income separately on account of search or survey under Income tax since all transactions are recorded in the books.
42.12 Crypto Currency or Virtual Currency
The Company has neither traded nor invested in Crypto currency or virtual currency during the year.
Based on the current assessment of the long-term contracts in the ordinary course of business, the Company has made adequate provision for losses where required. The derivative contracts have been entered into for hedging the foreign currency liability and interest liability. Derivative contracts being in the nature of hedge contracts, the Company does not anticipate any material losses from the same.
The Board of Directors have recommended a final dividend of ''10/- per share (100%) for the year ended March 31, 2022 in May 2022. This together with interim dividend of ''10/- per share (100%) paid would aggregate to a total dividend of ''20/-per share (200 %).
i) Qualitative disclosures
The Company has a Board approved policy for entering into derivative transactions. Derivative transaction comprises Forward Rate Agreements, Interest Rate Swaps, Coupon only swaps, Currency and Interest rate swap and Forward Exchange contracts. The Company undertakes such transactions for hedging balance sheet assets and liabilities. The Asset Liability Management Committee and Risk Management Committee periodically monitors and reviews the risks involved.
Note 47: Disclosure on Liquidity Coverage Ratio (LCR):
As part of the Liquidity Risk Management Framework for NBFCs, RBI has mandated maintenance of Liquidity Coverage Ratio (LCR) effective 1st Dec 2020.The Company is required to maintain adequate unencumbered High Quality Liquid Asset (HQLA) to meet its liquidity needs for a 30 calendar-day time horizon under a significantly severe liquidity stress scenario. The objective of the LCR is to promote the short-term resilience of the liquidity risk profile. Presently, the Company is mandated to maintain minimum HQLA of 60% of the LCR, progressively reaching up to the required level of 100% by December 1, 2024.
The LCR is calculated by dividing the companyâs stock of HQLA by its total net cash outflows over a 30-day stress period. âHigh Quality Liquid Assets (HQLA)â means liquid assets that can be readily sold or immediately converted into cash at little or no loss of value or used as collateral to obtain funds in a range of stress scenarios. Total Net cash outflows is defined as total expected cash outflows minus total expected cash inflows in the specified stress scenario for the subsequent 30 calendar days. The main drivers of LCR are adequate HQLAs and lower net cash outflow.
Major source of borrowings for the Company are Non-Convertible Debentures, Term loans from Banks, Commercial paper and Public deposits. Details of funding concentration from Significant counter party are given above under Public disclosure.
The average LCR for the quarter ended March 31, 2022 is 128% which is well above the regulatory requirement of 60%.
(vi) Institutional setup for Liquidity Risk management
Board has setup the Asset Liability Management Committee (ALCO) and Risk Management Committee to manage various risks of the Company. ALCO meets on a regular basis and is responsible for ensuring adherence to the risk tolerance/limits set by the Board including the Liquidity risk of the Company. The performance of the ALCO is reviewed by Audit Committee / Board.
The Company has formulated a policy on Liquidity Risk Management Framework. Accordingly, the Company,
⢠Performs stress testing on a quarterly basis which enables the Company to estimate the liquidity requirements as well as adequacy and cost of the liquidity buffer under stressed conditions.
⢠Has also formulated a contingency funding plan as a part of the outcome of stress testing results.
⢠Monitors liquidity risk based on âStockâ approach to liquidity by way of pre-defined internal limits for various critical ratios pertaining to liquidity risk.
The Company has diversified source of funding to ensure that there is no significant source, the withdrawal of which could trigger liquidity problems.
The Company monitors cumulative mismatches across all time buckets by establishing internal prudential limits. The Company maintains adequate liquidity buffer of readily marketable assets, to protect itself against any liquidity risk at the same time is mindful of the cost associated with it.
Notes:
1. As per the circular issued by RBI on Liquidity Risk Management Framework for Non-Banking Financial Companies and Core Investment Companies dated 04th Nov 2019, âSignificant counterpartyâ is defined as a single counterparty or group of connected or affiliated counterparties accounting in aggregate for more than 1% of the total liabilities and "Significant instrument/product" is defined as a single instrument/product of group of similar instruments/products which in aggregate amount to more than 1% of the total liabilities.
2. Total Liabilities represent ''Total Liabilities and Equity'' as per Balance sheet less Equity.
3. Public funds are as defined in Master Direction - Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016.
4. Other Short term liabilities represent all Short-term borrowings other than CPs.
Mar 31, 2022
Measurement of Fair Value Fair Value Hierarchy
The fair value of investment property has been determined by the registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued.
The fair value measurement for all of the investment property has been categorised as a Level 3 fair value based on the inputs to the valuation technique used.
Investment property comprises a number of commercial properties that are leased to third parties. No contingent rents are charged.
* FVOCI - The Company has elected to recognise changes in the FV of certain equity instruments in the OCI. These changes are accumulated within FVOCI Reserve within equity. The Company transfers amounts from this reserve to retained earnings when the relevant equity instruments are derecognised.
# General Reserve - General Reserve is a part of retained earnings. This is available for distribution to shareholders as dividend and capitalisation.
The primary objective of the Companyâs Capital Management is to maximise shareholders value. The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. The Companyâs policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence to sustain future development of the business. For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable
or unobservable and consists of the following three levels:
Level 1 hierarchy - Includes Financial Instruments measured using quoted prices in the active market.
Level 2 hierarchy - The Fair value of Financial Instruments that are not traded in an active market, is determined using valuation techniques which maximize the use of observable market data.
Level 3 hierarchy - Inputs are not based on observable market data. 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. An adjustment to a Level 2 input that is significant to the entire measurement results in a fair value measurement categorised within Level 3 of the fair value hierarchy if the adjustment uses significant unobservable inputs.
Financial instruments fair valued under Level 3 hierarchy are measured using Market multiples method.
The carrying amount of trade receivables, cash and cash equivalents, trade payables and other financial liabilities are considered
to be the fair value due to short term nature.
There are no transfer between level 1 and Level 2 during the year.
The Company has exposure to the following risks arising from financial instruments:
⢠Credit risk;
⢠Liquidity risk ; and
⢠Market risk
The Companyâs 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 Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
(a) 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. The Companyâs 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 Companyâs reputation.
The Company regularly monitors the rolling forecasts and the actual cash flows to service the financial liabilities on a day-to-day basis through cash generation from business and by having adequate banking facilities.
(b) Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and loans and advances.
(i) Trade Receivables:
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Concentration of credit risk with respect to trade receivables are limited as the customers are reviewed, assessed and monitored regularly on a monthly basis with pre-determined credit limits assessed based on their payment capacity. Our historical experience of collecting receivables demonstrates that credit risk is low.
The Company has exposure in Cash and cash equivalents,employee loans and investment carried at amortised cost. The Companyâs maximum exposure to credit risk as at 31st March, 2022 is the carrying value of each class of financial assets as on that date.
Cash and Cash Equivalents
The Company held cash and cash equivalents of INR 55.79 lakhs as on March 31, 2022(March 31, 2021 : INR 55.65 lakhs). The cash and cash equivalents are held in hand and with bank. (Refer Note 1).
Market risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices in case of equity investments and Net Asset Value (NAV) in case of mutual fund investments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Company is having certain investments in unlisted companies where the valuation takes place based on certain market multiples of similar companies after duly adjusted for discounts to the same if any.
Risk is an inherent and integral part of the business of investments and business process outsourcing. The Company aims to achieve an appropriate balance between risk and returns by establishing an efficient risk mitigation system. In order to mitigate risks, the Company has instituted a risk management framework, wherein, the Audit Committee under the supervision of the Board is tasked with regular assessment and laying down of policies for management of risks.In respect of certain investments, the Company has established systems to conduct due diligence of proposals received and to ensure that investments are in line with the overall objectives of the Company.
Note 28: Revenue Recognition Sale of Services:
The Company derives revenue from providing support services to our captive clients, which primarily include providing back office administration, data management, contact centre management and training. The Company recognizes revenue when the significant terms of the arrangement are enforceable, services are being delivered and the collectability is reasonably assured. The Company recognizes revenue on an accrual basis when services are performed.
When the terms of the agreement specify service level parameters that must be met, the Company monitors such service level parameters and determine if there are any service credits or penalties that needs to be accounted for. The Company''s revenue is significantly only from group companies, hence it is believed that there is no significant credit risk.
The Company invoices its clients depending on the terms of the arrangement, which include billing based on a per employee basis, a per transaction basis, a fixed price basis, an outcome-based basis or other pricing arrangements including cost-plus arrangements.
The Company''s revenue is exclusive of taxes and includes reimbursements of communication costs, incentives, etc as defined in the terms of agreement.
There are no other revenue under Contract with Customers other than those which are accounted in Profit and Loss Account as revenue which comprises of Service income and Learning income. Refer Note 28.a for the details of income earned from contracts with customers.
The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Refer Note 28.a for the Trade Receivable balances.
Note 30 : Employee Benefits: Defined Contribution Plan
The Company makes contributions to a gratuity fund administered by trustees and managed by LIC of India. During the year, the Company has recognized the following amounts in the Profit and Loss Statement, which are included in Employee Benefits:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied when calculating the defined benefit liability recognised in the balance sheet.
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset Volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets under perform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. The Company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.
Changes in Bond Yield: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plansâ bond holdings.
Inflation risks: In the pension plans, the pensions in payment are not linked to inflation, so this is a less material risk.
Life expectancy: The pension plan obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plan liabilities. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy.
(v) The expected contribution to the plan for the next year amounts to ''32 lakhs
The Board of Directors has recommended a final dividend of ''1/- per share (20%). In addition, the Board of Directors has recommended a Special Dividend of ''0.75 per share (15%), which, together with the Special Dividend of ''1/- per share (20%) paid during the year will make a total Special Dividend of ''1.75 per share (35%).
31c: Contingent Liabilities and Commitments
(i) Estimated amount of investment to be made in JM Financial yield enhancer (Distressed Opportunity ) Fund I - Series I for Capital Commitment - ''31.39 Lakhs.
(ii) The Company has received demand notice for AY 2018-19 to make a payment of ''418.90 lakhs and an appeal has been filed against the Assessment Order with the Commissioner of Income-tax (Appeals).
31g: Other Regulatory Disclosure as required under Schedule III of Companies Act, 2013
(a) The Company does not have any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(b) The Company is not declared as a willful defaulter by any bank or financial Institution or other lender.
(c) The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
(d) The company does not have any charges or satisfaction to be registered with ROC beyond stipulated statutory period.
(e) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(f) The company has not granted any loans or advances in nature of loans to promotors, directors, KMPs and the related parties (as defined under the Companies Act, 2013) either severally or jointly with any other persons. Hence disclosure under clause (v) of Schedule III of The Companies Act 2013, is not applicable.
(g) There are no scheme of arrangements approved. Hence disclosure under clause (xv) of Schedule III of The Companies Act 2013, is not applicable.
(h) There are no transactions in the nature of undisclosed income or income surrendered which needs to be accounted in the books of accounts during the year in the tax assessments under the Income Tax Act, 1961.
During the year, the Company has allotted 7,10,00,000 equity shares of face value of ''5/- each (âRights Equity Sharesâ) at a premium of ''45/- per share aggregating up to ''35,500 lakhs through the fast track mode in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements), 2018, as amended, and various applicable circulars that have been issued by the Securities and Exchange Board of India (âSEBIâ) from time to time.
The above funds has been raised for the purpose of acquisition of shares in Brakes India Private Limited and the same has been utilised for the said purpose.
The total expenses on rights issue ''318.53 lakhs has been adjusted against securities Premium.
31i: Adoption of Financial Statements
The Board has adopted the financial statements at its meeting held on 24th May 2022.
Mar 31, 2022
Measurement of Fair Value Fair Value Hierarchy
The fair value of investment property has been determined by the registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued.
The fair value measurement for all of the investment property has been categorised as a Level 3 fair value based on the inputs to the valuation technique used.
Investment property comprises a number of commercial properties that are leased to third parties. No contingent rents are charged.
* FVOCI - The Company has elected to recognise changes in the FV of certain equity instruments in the OCI. These changes are accumulated within FVOCI Reserve within equity. The Company transfers amounts from this reserve to retained earnings when the relevant equity instruments are derecognised.
# General Reserve - General Reserve is a part of retained earnings. This is available for distribution to shareholders as dividend and capitalisation.
The primary objective of the Companyâs Capital Management is to maximise shareholders value. The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. The Companyâs policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence to sustain future development of the business. For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable
or unobservable and consists of the following three levels:
Level 1 hierarchy - Includes Financial Instruments measured using quoted prices in the active market.
Level 2 hierarchy - The Fair value of Financial Instruments that are not traded in an active market, is determined using valuation techniques which maximize the use of observable market data.
Level 3 hierarchy - Inputs are not based on observable market data. 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. An adjustment to a Level 2 input that is significant to the entire measurement results in a fair value measurement categorised within Level 3 of the fair value hierarchy if the adjustment uses significant unobservable inputs.
Financial instruments fair valued under Level 3 hierarchy are measured using Market multiples method.
The carrying amount of trade receivables, cash and cash equivalents, trade payables and other financial liabilities are considered
to be the fair value due to short term nature.
There are no transfer between level 1 and Level 2 during the year.
The Company has exposure to the following risks arising from financial instruments:
⢠Credit risk;
⢠Liquidity risk ; and
⢠Market risk
The Companyâs 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 Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
(a) 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. The Companyâs 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 Companyâs reputation.
The Company regularly monitors the rolling forecasts and the actual cash flows to service the financial liabilities on a day-to-day basis through cash generation from business and by having adequate banking facilities.
(b) Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and loans and advances.
(i) Trade Receivables:
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Concentration of credit risk with respect to trade receivables are limited as the customers are reviewed, assessed and monitored regularly on a monthly basis with pre-determined credit limits assessed based on their payment capacity. Our historical experience of collecting receivables demonstrates that credit risk is low.
The Company has exposure in Cash and cash equivalents,employee loans and investment carried at amortised cost. The Companyâs maximum exposure to credit risk as at 31st March, 2022 is the carrying value of each class of financial assets as on that date.
Cash and Cash Equivalents
The Company held cash and cash equivalents of INR 55.79 lakhs as on March 31, 2022(March 31, 2021 : INR 55.65 lakhs). The cash and cash equivalents are held in hand and with bank. (Refer Note 1).
Market risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices in case of equity investments and Net Asset Value (NAV) in case of mutual fund investments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Company is having certain investments in unlisted companies where the valuation takes place based on certain market multiples of similar companies after duly adjusted for discounts to the same if any.
Risk is an inherent and integral part of the business of investments and business process outsourcing. The Company aims to achieve an appropriate balance between risk and returns by establishing an efficient risk mitigation system. In order to mitigate risks, the Company has instituted a risk management framework, wherein, the Audit Committee under the supervision of the Board is tasked with regular assessment and laying down of policies for management of risks.In respect of certain investments, the Company has established systems to conduct due diligence of proposals received and to ensure that investments are in line with the overall objectives of the Company.
Note 28: Revenue Recognition Sale of Services:
The Company derives revenue from providing support services to our captive clients, which primarily include providing back office administration, data management, contact centre management and training. The Company recognizes revenue when the significant terms of the arrangement are enforceable, services are being delivered and the collectability is reasonably assured. The Company recognizes revenue on an accrual basis when services are performed.
When the terms of the agreement specify service level parameters that must be met, the Company monitors such service level parameters and determine if there are any service credits or penalties that needs to be accounted for. The Company''s revenue is significantly only from group companies, hence it is believed that there is no significant credit risk.
The Company invoices its clients depending on the terms of the arrangement, which include billing based on a per employee basis, a per transaction basis, a fixed price basis, an outcome-based basis or other pricing arrangements including cost-plus arrangements.
The Company''s revenue is exclusive of taxes and includes reimbursements of communication costs, incentives, etc as defined in the terms of agreement.
There are no other revenue under Contract with Customers other than those which are accounted in Profit and Loss Account as revenue which comprises of Service income and Learning income. Refer Note 28.a for the details of income earned from contracts with customers.
The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Refer Note 28.a for the Trade Receivable balances.
Note 30 : Employee Benefits: Defined Contribution Plan
The Company makes contributions to a gratuity fund administered by trustees and managed by LIC of India. During the year, the Company has recognized the following amounts in the Profit and Loss Statement, which are included in Employee Benefits:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied when calculating the defined benefit liability recognised in the balance sheet.
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset Volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets under perform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. The Company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.
Changes in Bond Yield: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plansâ bond holdings.
Inflation risks: In the pension plans, the pensions in payment are not linked to inflation, so this is a less material risk.
Life expectancy: The pension plan obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plan liabilities. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy.
(v) The expected contribution to the plan for the next year amounts to ''32 lakhs
The Board of Directors has recommended a final dividend of ''1/- per share (20%). In addition, the Board of Directors has recommended a Special Dividend of ''0.75 per share (15%), which, together with the Special Dividend of ''1/- per share (20%) paid during the year will make a total Special Dividend of ''1.75 per share (35%).
31c: Contingent Liabilities and Commitments
(i) Estimated amount of investment to be made in JM Financial yield enhancer (Distressed Opportunity ) Fund I - Series I for Capital Commitment - ''31.39 Lakhs.
(ii) The Company has received demand notice for AY 2018-19 to make a payment of ''418.90 lakhs and an appeal has been filed against the Assessment Order with the Commissioner of Income-tax (Appeals).
31g: Other Regulatory Disclosure as required under Schedule III of Companies Act, 2013
(a) The Company does not have any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(b) The Company is not declared as a willful defaulter by any bank or financial Institution or other lender.
(c) The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
(d) The company does not have any charges or satisfaction to be registered with ROC beyond stipulated statutory period.
(e) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(f) The company has not granted any loans or advances in nature of loans to promotors, directors, KMPs and the related parties (as defined under the Companies Act, 2013) either severally or jointly with any other persons. Hence disclosure under clause (v) of Schedule III of The Companies Act 2013, is not applicable.
(g) There are no scheme of arrangements approved. Hence disclosure under clause (xv) of Schedule III of The Companies Act 2013, is not applicable.
(h) There are no transactions in the nature of undisclosed income or income surrendered which needs to be accounted in the books of accounts during the year in the tax assessments under the Income Tax Act, 1961.
During the year, the Company has allotted 7,10,00,000 equity shares of face value of ''5/- each (âRights Equity Sharesâ) at a premium of ''45/- per share aggregating up to ''35,500 lakhs through the fast track mode in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements), 2018, as amended, and various applicable circulars that have been issued by the Securities and Exchange Board of India (âSEBIâ) from time to time.
The above funds has been raised for the purpose of acquisition of shares in Brakes India Private Limited and the same has been utilised for the said purpose.
The total expenses on rights issue ''318.53 lakhs has been adjusted against securities Premium.
31i: Adoption of Financial Statements
The Board has adopted the financial statements at its meeting held on 24th May 2022.
Mar 31, 2022
Measurement of Fair Value Fair Value Hierarchy
The fair value of investment property has been determined by the registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued.
The fair value measurement for all of the investment property has been categorised as a Level 3 fair value based on the inputs to the valuation technique used.
Investment property comprises a number of commercial properties that are leased to third parties. No contingent rents are charged.
* FVOCI - The Company has elected to recognise changes in the FV of certain equity instruments in the OCI. These changes are accumulated within FVOCI Reserve within equity. The Company transfers amounts from this reserve to retained earnings when the relevant equity instruments are derecognised.
# General Reserve - General Reserve is a part of retained earnings. This is available for distribution to shareholders as dividend and capitalisation.
The primary objective of the Companyâs Capital Management is to maximise shareholders value. The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. The Companyâs policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence to sustain future development of the business. For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable
or unobservable and consists of the following three levels:
Level 1 hierarchy - Includes Financial Instruments measured using quoted prices in the active market.
Level 2 hierarchy - The Fair value of Financial Instruments that are not traded in an active market, is determined using valuation techniques which maximize the use of observable market data.
Level 3 hierarchy - Inputs are not based on observable market data. 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. An adjustment to a Level 2 input that is significant to the entire measurement results in a fair value measurement categorised within Level 3 of the fair value hierarchy if the adjustment uses significant unobservable inputs.
Financial instruments fair valued under Level 3 hierarchy are measured using Market multiples method.
The carrying amount of trade receivables, cash and cash equivalents, trade payables and other financial liabilities are considered
to be the fair value due to short term nature.
There are no transfer between level 1 and Level 2 during the year.
The Company has exposure to the following risks arising from financial instruments:
⢠Credit risk;
⢠Liquidity risk ; and
⢠Market risk
The Companyâs 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 Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
(a) 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. The Companyâs 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 Companyâs reputation.
The Company regularly monitors the rolling forecasts and the actual cash flows to service the financial liabilities on a day-to-day basis through cash generation from business and by having adequate banking facilities.
(b) Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and loans and advances.
(i) Trade Receivables:
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Concentration of credit risk with respect to trade receivables are limited as the customers are reviewed, assessed and monitored regularly on a monthly basis with pre-determined credit limits assessed based on their payment capacity. Our historical experience of collecting receivables demonstrates that credit risk is low.
The Company has exposure in Cash and cash equivalents,employee loans and investment carried at amortised cost. The Companyâs maximum exposure to credit risk as at 31st March, 2022 is the carrying value of each class of financial assets as on that date.
Cash and Cash Equivalents
The Company held cash and cash equivalents of INR 55.79 lakhs as on March 31, 2022(March 31, 2021 : INR 55.65 lakhs). The cash and cash equivalents are held in hand and with bank. (Refer Note 1).
Market risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices in case of equity investments and Net Asset Value (NAV) in case of mutual fund investments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Company is having certain investments in unlisted companies where the valuation takes place based on certain market multiples of similar companies after duly adjusted for discounts to the same if any.
Risk is an inherent and integral part of the business of investments and business process outsourcing. The Company aims to achieve an appropriate balance between risk and returns by establishing an efficient risk mitigation system. In order to mitigate risks, the Company has instituted a risk management framework, wherein, the Audit Committee under the supervision of the Board is tasked with regular assessment and laying down of policies for management of risks.In respect of certain investments, the Company has established systems to conduct due diligence of proposals received and to ensure that investments are in line with the overall objectives of the Company.
Note 28: Revenue Recognition Sale of Services:
The Company derives revenue from providing support services to our captive clients, which primarily include providing back office administration, data management, contact centre management and training. The Company recognizes revenue when the significant terms of the arrangement are enforceable, services are being delivered and the collectability is reasonably assured. The Company recognizes revenue on an accrual basis when services are performed.
When the terms of the agreement specify service level parameters that must be met, the Company monitors such service level parameters and determine if there are any service credits or penalties that needs to be accounted for. The Company''s revenue is significantly only from group companies, hence it is believed that there is no significant credit risk.
The Company invoices its clients depending on the terms of the arrangement, which include billing based on a per employee basis, a per transaction basis, a fixed price basis, an outcome-based basis or other pricing arrangements including cost-plus arrangements.
The Company''s revenue is exclusive of taxes and includes reimbursements of communication costs, incentives, etc as defined in the terms of agreement.
There are no other revenue under Contract with Customers other than those which are accounted in Profit and Loss Account as revenue which comprises of Service income and Learning income. Refer Note 28.a for the details of income earned from contracts with customers.
The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Refer Note 28.a for the Trade Receivable balances.
Note 30 : Employee Benefits: Defined Contribution Plan
The Company makes contributions to a gratuity fund administered by trustees and managed by LIC of India. During the year, the Company has recognized the following amounts in the Profit and Loss Statement, which are included in Employee Benefits:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied when calculating the defined benefit liability recognised in the balance sheet.
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset Volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets under perform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. The Company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.
Changes in Bond Yield: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plansâ bond holdings.
Inflation risks: In the pension plans, the pensions in payment are not linked to inflation, so this is a less material risk.
Life expectancy: The pension plan obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plan liabilities. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy.
(v) The expected contribution to the plan for the next year amounts to ''32 lakhs
The Board of Directors has recommended a final dividend of ''1/- per share (20%). In addition, the Board of Directors has recommended a Special Dividend of ''0.75 per share (15%), which, together with the Special Dividend of ''1/- per share (20%) paid during the year will make a total Special Dividend of ''1.75 per share (35%).
31c: Contingent Liabilities and Commitments
(i) Estimated amount of investment to be made in JM Financial yield enhancer (Distressed Opportunity ) Fund I - Series I for Capital Commitment - ''31.39 Lakhs.
(ii) The Company has received demand notice for AY 2018-19 to make a payment of ''418.90 lakhs and an appeal has been filed against the Assessment Order with the Commissioner of Income-tax (Appeals).
31g: Other Regulatory Disclosure as required under Schedule III of Companies Act, 2013
(a) The Company does not have any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(b) The Company is not declared as a willful defaulter by any bank or financial Institution or other lender.
(c) The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
(d) The company does not have any charges or satisfaction to be registered with ROC beyond stipulated statutory period.
(e) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(f) The company has not granted any loans or advances in nature of loans to promotors, directors, KMPs and the related parties (as defined under the Companies Act, 2013) either severally or jointly with any other persons. Hence disclosure under clause (v) of Schedule III of The Companies Act 2013, is not applicable.
(g) There are no scheme of arrangements approved. Hence disclosure under clause (xv) of Schedule III of The Companies Act 2013, is not applicable.
(h) There are no transactions in the nature of undisclosed income or income surrendered which needs to be accounted in the books of accounts during the year in the tax assessments under the Income Tax Act, 1961.
During the year, the Company has allotted 7,10,00,000 equity shares of face value of ''5/- each (âRights Equity Sharesâ) at a premium of ''45/- per share aggregating up to ''35,500 lakhs through the fast track mode in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements), 2018, as amended, and various applicable circulars that have been issued by the Securities and Exchange Board of India (âSEBIâ) from time to time.
The above funds has been raised for the purpose of acquisition of shares in Brakes India Private Limited and the same has been utilised for the said purpose.
The total expenses on rights issue ''318.53 lakhs has been adjusted against securities Premium.
31i: Adoption of Financial Statements
The Board has adopted the financial statements at its meeting held on 24th May 2022.
Mar 31, 2022
Measurement of Fair Value Fair Value Hierarchy
The fair value of investment property has been determined by the registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued.
The fair value measurement for all of the investment property has been categorised as a Level 3 fair value based on the inputs to the valuation technique used.
Investment property comprises a number of commercial properties that are leased to third parties. No contingent rents are charged.
* FVOCI - The Company has elected to recognise changes in the FV of certain equity instruments in the OCI. These changes are accumulated within FVOCI Reserve within equity. The Company transfers amounts from this reserve to retained earnings when the relevant equity instruments are derecognised.
# General Reserve - General Reserve is a part of retained earnings. This is available for distribution to shareholders as dividend and capitalisation.
The primary objective of the Companyâs Capital Management is to maximise shareholders value. The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. The Companyâs policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence to sustain future development of the business. For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable
or unobservable and consists of the following three levels:
Level 1 hierarchy - Includes Financial Instruments measured using quoted prices in the active market.
Level 2 hierarchy - The Fair value of Financial Instruments that are not traded in an active market, is determined using valuation techniques which maximize the use of observable market data.
Level 3 hierarchy - Inputs are not based on observable market data. 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. An adjustment to a Level 2 input that is significant to the entire measurement results in a fair value measurement categorised within Level 3 of the fair value hierarchy if the adjustment uses significant unobservable inputs.
Financial instruments fair valued under Level 3 hierarchy are measured using Market multiples method.
The carrying amount of trade receivables, cash and cash equivalents, trade payables and other financial liabilities are considered
to be the fair value due to short term nature.
There are no transfer between level 1 and Level 2 during the year.
The Company has exposure to the following risks arising from financial instruments:
⢠Credit risk;
⢠Liquidity risk ; and
⢠Market risk
The Companyâs 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 Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
(a) 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. The Companyâs 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 Companyâs reputation.
The Company regularly monitors the rolling forecasts and the actual cash flows to service the financial liabilities on a day-to-day basis through cash generation from business and by having adequate banking facilities.
(b) Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and loans and advances.
(i) Trade Receivables:
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Concentration of credit risk with respect to trade receivables are limited as the customers are reviewed, assessed and monitored regularly on a monthly basis with pre-determined credit limits assessed based on their payment capacity. Our historical experience of collecting receivables demonstrates that credit risk is low.
The Company has exposure in Cash and cash equivalents,employee loans and investment carried at amortised cost. The Companyâs maximum exposure to credit risk as at 31st March, 2022 is the carrying value of each class of financial assets as on that date.
Cash and Cash Equivalents
The Company held cash and cash equivalents of INR 55.79 lakhs as on March 31, 2022(March 31, 2021 : INR 55.65 lakhs). The cash and cash equivalents are held in hand and with bank. (Refer Note 1).
Market risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices in case of equity investments and Net Asset Value (NAV) in case of mutual fund investments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Company is having certain investments in unlisted companies where the valuation takes place based on certain market multiples of similar companies after duly adjusted for discounts to the same if any.
Risk is an inherent and integral part of the business of investments and business process outsourcing. The Company aims to achieve an appropriate balance between risk and returns by establishing an efficient risk mitigation system. In order to mitigate risks, the Company has instituted a risk management framework, wherein, the Audit Committee under the supervision of the Board is tasked with regular assessment and laying down of policies for management of risks.In respect of certain investments, the Company has established systems to conduct due diligence of proposals received and to ensure that investments are in line with the overall objectives of the Company.
Note 28: Revenue Recognition Sale of Services:
The Company derives revenue from providing support services to our captive clients, which primarily include providing back office administration, data management, contact centre management and training. The Company recognizes revenue when the significant terms of the arrangement are enforceable, services are being delivered and the collectability is reasonably assured. The Company recognizes revenue on an accrual basis when services are performed.
When the terms of the agreement specify service level parameters that must be met, the Company monitors such service level parameters and determine if there are any service credits or penalties that needs to be accounted for. The Company''s revenue is significantly only from group companies, hence it is believed that there is no significant credit risk.
The Company invoices its clients depending on the terms of the arrangement, which include billing based on a per employee basis, a per transaction basis, a fixed price basis, an outcome-based basis or other pricing arrangements including cost-plus arrangements.
The Company''s revenue is exclusive of taxes and includes reimbursements of communication costs, incentives, etc as defined in the terms of agreement.
There are no other revenue under Contract with Customers other than those which are accounted in Profit and Loss Account as revenue which comprises of Service income and Learning income. Refer Note 28.a for the details of income earned from contracts with customers.
The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Refer Note 28.a for the Trade Receivable balances.
Note 30 : Employee Benefits: Defined Contribution Plan
The Company makes contributions to a gratuity fund administered by trustees and managed by LIC of India. During the year, the Company has recognized the following amounts in the Profit and Loss Statement, which are included in Employee Benefits:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied when calculating the defined benefit liability recognised in the balance sheet.
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset Volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets under perform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. The Company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.
Changes in Bond Yield: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plansâ bond holdings.
Inflation risks: In the pension plans, the pensions in payment are not linked to inflation, so this is a less material risk.
Life expectancy: The pension plan obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plan liabilities. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy.
(v) The expected contribution to the plan for the next year amounts to ''32 lakhs
The Board of Directors has recommended a final dividend of ''1/- per share (20%). In addition, the Board of Directors has recommended a Special Dividend of ''0.75 per share (15%), which, together with the Special Dividend of ''1/- per share (20%) paid during the year will make a total Special Dividend of ''1.75 per share (35%).
31c: Contingent Liabilities and Commitments
(i) Estimated amount of investment to be made in JM Financial yield enhancer (Distressed Opportunity ) Fund I - Series I for Capital Commitment - ''31.39 Lakhs.
(ii) The Company has received demand notice for AY 2018-19 to make a payment of ''418.90 lakhs and an appeal has been filed against the Assessment Order with the Commissioner of Income-tax (Appeals).
31g: Other Regulatory Disclosure as required under Schedule III of Companies Act, 2013
(a) The Company does not have any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(b) The Company is not declared as a willful defaulter by any bank or financial Institution or other lender.
(c) The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
(d) The company does not have any charges or satisfaction to be registered with ROC beyond stipulated statutory period.
(e) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(f) The company has not granted any loans or advances in nature of loans to promotors, directors, KMPs and the related parties (as defined under the Companies Act, 2013) either severally or jointly with any other persons. Hence disclosure under clause (v) of Schedule III of The Companies Act 2013, is not applicable.
(g) There are no scheme of arrangements approved. Hence disclosure under clause (xv) of Schedule III of The Companies Act 2013, is not applicable.
(h) There are no transactions in the nature of undisclosed income or income surrendered which needs to be accounted in the books of accounts during the year in the tax assessments under the Income Tax Act, 1961.
During the year, the Company has allotted 7,10,00,000 equity shares of face value of ''5/- each (âRights Equity Sharesâ) at a premium of ''45/- per share aggregating up to ''35,500 lakhs through the fast track mode in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements), 2018, as amended, and various applicable circulars that have been issued by the Securities and Exchange Board of India (âSEBIâ) from time to time.
The above funds has been raised for the purpose of acquisition of shares in Brakes India Private Limited and the same has been utilised for the said purpose.
The total expenses on rights issue ''318.53 lakhs has been adjusted against securities Premium.
31i: Adoption of Financial Statements
The Board has adopted the financial statements at its meeting held on 24th May 2022.
Mar 31, 2022
Measurement of Fair Value Fair Value Hierarchy
The fair value of investment property has been determined by the registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued.
The fair value measurement for all of the investment property has been categorised as a Level 3 fair value based on the inputs to the valuation technique used.
Investment property comprises a number of commercial properties that are leased to third parties. No contingent rents are charged.
* FVOCI - The Company has elected to recognise changes in the FV of certain equity instruments in the OCI. These changes are accumulated within FVOCI Reserve within equity. The Company transfers amounts from this reserve to retained earnings when the relevant equity instruments are derecognised.
# General Reserve - General Reserve is a part of retained earnings. This is available for distribution to shareholders as dividend and capitalisation.
The primary objective of the Companyâs Capital Management is to maximise shareholders value. The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. The Companyâs policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence to sustain future development of the business. For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable
or unobservable and consists of the following three levels:
Level 1 hierarchy - Includes Financial Instruments measured using quoted prices in the active market.
Level 2 hierarchy - The Fair value of Financial Instruments that are not traded in an active market, is determined using valuation techniques which maximize the use of observable market data.
Level 3 hierarchy - Inputs are not based on observable market data. 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. An adjustment to a Level 2 input that is significant to the entire measurement results in a fair value measurement categorised within Level 3 of the fair value hierarchy if the adjustment uses significant unobservable inputs.
Financial instruments fair valued under Level 3 hierarchy are measured using Market multiples method.
The carrying amount of trade receivables, cash and cash equivalents, trade payables and other financial liabilities are considered
to be the fair value due to short term nature.
There are no transfer between level 1 and Level 2 during the year.
The Company has exposure to the following risks arising from financial instruments:
⢠Credit risk;
⢠Liquidity risk ; and
⢠Market risk
The Companyâs 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 Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
(a) 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. The Companyâs 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 Companyâs reputation.
The Company regularly monitors the rolling forecasts and the actual cash flows to service the financial liabilities on a day-to-day basis through cash generation from business and by having adequate banking facilities.
(b) Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and loans and advances.
(i) Trade Receivables:
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Concentration of credit risk with respect to trade receivables are limited as the customers are reviewed, assessed and monitored regularly on a monthly basis with pre-determined credit limits assessed based on their payment capacity. Our historical experience of collecting receivables demonstrates that credit risk is low.
The Company has exposure in Cash and cash equivalents,employee loans and investment carried at amortised cost. The Companyâs maximum exposure to credit risk as at 31st March, 2022 is the carrying value of each class of financial assets as on that date.
Cash and Cash Equivalents
The Company held cash and cash equivalents of INR 55.79 lakhs as on March 31, 2022(March 31, 2021 : INR 55.65 lakhs). The cash and cash equivalents are held in hand and with bank. (Refer Note 1).
Market risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices in case of equity investments and Net Asset Value (NAV) in case of mutual fund investments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Company is having certain investments in unlisted companies where the valuation takes place based on certain market multiples of similar companies after duly adjusted for discounts to the same if any.
Risk is an inherent and integral part of the business of investments and business process outsourcing. The Company aims to achieve an appropriate balance between risk and returns by establishing an efficient risk mitigation system. In order to mitigate risks, the Company has instituted a risk management framework, wherein, the Audit Committee under the supervision of the Board is tasked with regular assessment and laying down of policies for management of risks.In respect of certain investments, the Company has established systems to conduct due diligence of proposals received and to ensure that investments are in line with the overall objectives of the Company.
Note 28: Revenue Recognition Sale of Services:
The Company derives revenue from providing support services to our captive clients, which primarily include providing back office administration, data management, contact centre management and training. The Company recognizes revenue when the significant terms of the arrangement are enforceable, services are being delivered and the collectability is reasonably assured. The Company recognizes revenue on an accrual basis when services are performed.
When the terms of the agreement specify service level parameters that must be met, the Company monitors such service level parameters and determine if there are any service credits or penalties that needs to be accounted for. The Company''s revenue is significantly only from group companies, hence it is believed that there is no significant credit risk.
The Company invoices its clients depending on the terms of the arrangement, which include billing based on a per employee basis, a per transaction basis, a fixed price basis, an outcome-based basis or other pricing arrangements including cost-plus arrangements.
The Company''s revenue is exclusive of taxes and includes reimbursements of communication costs, incentives, etc as defined in the terms of agreement.
There are no other revenue under Contract with Customers other than those which are accounted in Profit and Loss Account as revenue which comprises of Service income and Learning income. Refer Note 28.a for the details of income earned from contracts with customers.
The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Refer Note 28.a for the Trade Receivable balances.
Note 30 : Employee Benefits: Defined Contribution Plan
The Company makes contributions to a gratuity fund administered by trustees and managed by LIC of India. During the year, the Company has recognized the following amounts in the Profit and Loss Statement, which are included in Employee Benefits:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied when calculating the defined benefit liability recognised in the balance sheet.
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset Volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets under perform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. The Company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.
Changes in Bond Yield: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plansâ bond holdings.
Inflation risks: In the pension plans, the pensions in payment are not linked to inflation, so this is a less material risk.
Life expectancy: The pension plan obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plan liabilities. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy.
(v) The expected contribution to the plan for the next year amounts to ''32 lakhs
The Board of Directors has recommended a final dividend of ''1/- per share (20%). In addition, the Board of Directors has recommended a Special Dividend of ''0.75 per share (15%), which, together with the Special Dividend of ''1/- per share (20%) paid during the year will make a total Special Dividend of ''1.75 per share (35%).
31c: Contingent Liabilities and Commitments
(i) Estimated amount of investment to be made in JM Financial yield enhancer (Distressed Opportunity ) Fund I - Series I for Capital Commitment - ''31.39 Lakhs.
(ii) The Company has received demand notice for AY 2018-19 to make a payment of ''418.90 lakhs and an appeal has been filed against the Assessment Order with the Commissioner of Income-tax (Appeals).
31g: Other Regulatory Disclosure as required under Schedule III of Companies Act, 2013
(a) The Company does not have any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(b) The Company is not declared as a willful defaulter by any bank or financial Institution or other lender.
(c) The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
(d) The company does not have any charges or satisfaction to be registered with ROC beyond stipulated statutory period.
(e) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(f) The company has not granted any loans or advances in nature of loans to promotors, directors, KMPs and the related parties (as defined under the Companies Act, 2013) either severally or jointly with any other persons. Hence disclosure under clause (v) of Schedule III of The Companies Act 2013, is not applicable.
(g) There are no scheme of arrangements approved. Hence disclosure under clause (xv) of Schedule III of The Companies Act 2013, is not applicable.
(h) There are no transactions in the nature of undisclosed income or income surrendered which needs to be accounted in the books of accounts during the year in the tax assessments under the Income Tax Act, 1961.
During the year, the Company has allotted 7,10,00,000 equity shares of face value of ''5/- each (âRights Equity Sharesâ) at a premium of ''45/- per share aggregating up to ''35,500 lakhs through the fast track mode in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements), 2018, as amended, and various applicable circulars that have been issued by the Securities and Exchange Board of India (âSEBIâ) from time to time.
The above funds has been raised for the purpose of acquisition of shares in Brakes India Private Limited and the same has been utilised for the said purpose.
The total expenses on rights issue ''318.53 lakhs has been adjusted against securities Premium.
31i: Adoption of Financial Statements
The Board has adopted the financial statements at its meeting held on 24th May 2022.
Mar 31, 2022
Measurement of Fair Value Fair Value Hierarchy
The fair value of investment property has been determined by the registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued.
The fair value measurement for all of the investment property has been categorised as a Level 3 fair value based on the inputs to the valuation technique used.
Investment property comprises a number of commercial properties that are leased to third parties. No contingent rents are charged.
* FVOCI - The Company has elected to recognise changes in the FV of certain equity instruments in the OCI. These changes are accumulated within FVOCI Reserve within equity. The Company transfers amounts from this reserve to retained earnings when the relevant equity instruments are derecognised.
# General Reserve - General Reserve is a part of retained earnings. This is available for distribution to shareholders as dividend and capitalisation.
The primary objective of the Companyâs Capital Management is to maximise shareholders value. The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. The Companyâs policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence to sustain future development of the business. For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable
or unobservable and consists of the following three levels:
Level 1 hierarchy - Includes Financial Instruments measured using quoted prices in the active market.
Level 2 hierarchy - The Fair value of Financial Instruments that are not traded in an active market, is determined using valuation techniques which maximize the use of observable market data.
Level 3 hierarchy - Inputs are not based on observable market data. 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. An adjustment to a Level 2 input that is significant to the entire measurement results in a fair value measurement categorised within Level 3 of the fair value hierarchy if the adjustment uses significant unobservable inputs.
Financial instruments fair valued under Level 3 hierarchy are measured using Market multiples method.
The carrying amount of trade receivables, cash and cash equivalents, trade payables and other financial liabilities are considered
to be the fair value due to short term nature.
There are no transfer between level 1 and Level 2 during the year.
The Company has exposure to the following risks arising from financial instruments:
⢠Credit risk;
⢠Liquidity risk ; and
⢠Market risk
The Companyâs 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 Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
(a) 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. The Companyâs 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 Companyâs reputation.
The Company regularly monitors the rolling forecasts and the actual cash flows to service the financial liabilities on a day-to-day basis through cash generation from business and by having adequate banking facilities.
(b) Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and loans and advances.
(i) Trade Receivables:
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Concentration of credit risk with respect to trade receivables are limited as the customers are reviewed, assessed and monitored regularly on a monthly basis with pre-determined credit limits assessed based on their payment capacity. Our historical experience of collecting receivables demonstrates that credit risk is low.
The Company has exposure in Cash and cash equivalents,employee loans and investment carried at amortised cost. The Companyâs maximum exposure to credit risk as at 31st March, 2022 is the carrying value of each class of financial assets as on that date.
Cash and Cash Equivalents
The Company held cash and cash equivalents of INR 55.79 lakhs as on March 31, 2022(March 31, 2021 : INR 55.65 lakhs). The cash and cash equivalents are held in hand and with bank. (Refer Note 1).
Market risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices in case of equity investments and Net Asset Value (NAV) in case of mutual fund investments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Company is having certain investments in unlisted companies where the valuation takes place based on certain market multiples of similar companies after duly adjusted for discounts to the same if any.
Risk is an inherent and integral part of the business of investments and business process outsourcing. The Company aims to achieve an appropriate balance between risk and returns by establishing an efficient risk mitigation system. In order to mitigate risks, the Company has instituted a risk management framework, wherein, the Audit Committee under the supervision of the Board is tasked with regular assessment and laying down of policies for management of risks.In respect of certain investments, the Company has established systems to conduct due diligence of proposals received and to ensure that investments are in line with the overall objectives of the Company.
Note 28: Revenue Recognition Sale of Services:
The Company derives revenue from providing support services to our captive clients, which primarily include providing back office administration, data management, contact centre management and training. The Company recognizes revenue when the significant terms of the arrangement are enforceable, services are being delivered and the collectability is reasonably assured. The Company recognizes revenue on an accrual basis when services are performed.
When the terms of the agreement specify service level parameters that must be met, the Company monitors such service level parameters and determine if there are any service credits or penalties that needs to be accounted for. The Company''s revenue is significantly only from group companies, hence it is believed that there is no significant credit risk.
The Company invoices its clients depending on the terms of the arrangement, which include billing based on a per employee basis, a per transaction basis, a fixed price basis, an outcome-based basis or other pricing arrangements including cost-plus arrangements.
The Company''s revenue is exclusive of taxes and includes reimbursements of communication costs, incentives, etc as defined in the terms of agreement.
There are no other revenue under Contract with Customers other than those which are accounted in Profit and Loss Account as revenue which comprises of Service income and Learning income. Refer Note 28.a for the details of income earned from contracts with customers.
The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Refer Note 28.a for the Trade Receivable balances.
Note 30 : Employee Benefits: Defined Contribution Plan
The Company makes contributions to a gratuity fund administered by trustees and managed by LIC of India. During the year, the Company has recognized the following amounts in the Profit and Loss Statement, which are included in Employee Benefits:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied when calculating the defined benefit liability recognised in the balance sheet.
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset Volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets under perform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. The Company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.
Changes in Bond Yield: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plansâ bond holdings.
Inflation risks: In the pension plans, the pensions in payment are not linked to inflation, so this is a less material risk.
Life expectancy: The pension plan obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plan liabilities. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy.
(v) The expected contribution to the plan for the next year amounts to ''32 lakhs
The Board of Directors has recommended a final dividend of ''1/- per share (20%). In addition, the Board of Directors has recommended a Special Dividend of ''0.75 per share (15%), which, together with the Special Dividend of ''1/- per share (20%) paid during the year will make a total Special Dividend of ''1.75 per share (35%).
31c: Contingent Liabilities and Commitments
(i) Estimated amount of investment to be made in JM Financial yield enhancer (Distressed Opportunity ) Fund I - Series I for Capital Commitment - ''31.39 Lakhs.
(ii) The Company has received demand notice for AY 2018-19 to make a payment of ''418.90 lakhs and an appeal has been filed against the Assessment Order with the Commissioner of Income-tax (Appeals).
31g: Other Regulatory Disclosure as required under Schedule III of Companies Act, 2013
(a) The Company does not have any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(b) The Company is not declared as a willful defaulter by any bank or financial Institution or other lender.
(c) The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
(d) The company does not have any charges or satisfaction to be registered with ROC beyond stipulated statutory period.
(e) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(f) The company has not granted any loans or advances in nature of loans to promotors, directors, KMPs and the related parties (as defined under the Companies Act, 2013) either severally or jointly with any other persons. Hence disclosure under clause (v) of Schedule III of The Companies Act 2013, is not applicable.
(g) There are no scheme of arrangements approved. Hence disclosure under clause (xv) of Schedule III of The Companies Act 2013, is not applicable.
(h) There are no transactions in the nature of undisclosed income or income surrendered which needs to be accounted in the books of accounts during the year in the tax assessments under the Income Tax Act, 1961.
During the year, the Company has allotted 7,10,00,000 equity shares of face value of ''5/- each (âRights Equity Sharesâ) at a premium of ''45/- per share aggregating up to ''35,500 lakhs through the fast track mode in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements), 2018, as amended, and various applicable circulars that have been issued by the Securities and Exchange Board of India (âSEBIâ) from time to time.
The above funds has been raised for the purpose of acquisition of shares in Brakes India Private Limited and the same has been utilised for the said purpose.
The total expenses on rights issue ''318.53 lakhs has been adjusted against securities Premium.
31i: Adoption of Financial Statements
The Board has adopted the financial statements at its meeting held on 24th May 2022.
Mar 31, 2022
Measurement of Fair Value Fair Value Hierarchy
The fair value of investment property has been determined by the registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued.
The fair value measurement for all of the investment property has been categorised as a Level 3 fair value based on the inputs to the valuation technique used.
Investment property comprises a number of commercial properties that are leased to third parties. No contingent rents are charged.
* FVOCI - The Company has elected to recognise changes in the FV of certain equity instruments in the OCI. These changes are accumulated within FVOCI Reserve within equity. The Company transfers amounts from this reserve to retained earnings when the relevant equity instruments are derecognised.
# General Reserve - General Reserve is a part of retained earnings. This is available for distribution to shareholders as dividend and capitalisation.
The primary objective of the Companyâs Capital Management is to maximise shareholders value. The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. The Companyâs policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence to sustain future development of the business. For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable
or unobservable and consists of the following three levels:
Level 1 hierarchy - Includes Financial Instruments measured using quoted prices in the active market.
Level 2 hierarchy - The Fair value of Financial Instruments that are not traded in an active market, is determined using valuation techniques which maximize the use of observable market data.
Level 3 hierarchy - Inputs are not based on observable market data. 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. An adjustment to a Level 2 input that is significant to the entire measurement results in a fair value measurement categorised within Level 3 of the fair value hierarchy if the adjustment uses significant unobservable inputs.
Financial instruments fair valued under Level 3 hierarchy are measured using Market multiples method.
The carrying amount of trade receivables, cash and cash equivalents, trade payables and other financial liabilities are considered
to be the fair value due to short term nature.
There are no transfer between level 1 and Level 2 during the year.
The Company has exposure to the following risks arising from financial instruments:
⢠Credit risk;
⢠Liquidity risk ; and
⢠Market risk
The Companyâs 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 Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
(a) 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. The Companyâs 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 Companyâs reputation.
The Company regularly monitors the rolling forecasts and the actual cash flows to service the financial liabilities on a day-to-day basis through cash generation from business and by having adequate banking facilities.
(b) Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and loans and advances.
(i) Trade Receivables:
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Concentration of credit risk with respect to trade receivables are limited as the customers are reviewed, assessed and monitored regularly on a monthly basis with pre-determined credit limits assessed based on their payment capacity. Our historical experience of collecting receivables demonstrates that credit risk is low.
The Company has exposure in Cash and cash equivalents,employee loans and investment carried at amortised cost. The Companyâs maximum exposure to credit risk as at 31st March, 2022 is the carrying value of each class of financial assets as on that date.
Cash and Cash Equivalents
The Company held cash and cash equivalents of INR 55.79 lakhs as on March 31, 2022(March 31, 2021 : INR 55.65 lakhs). The cash and cash equivalents are held in hand and with bank. (Refer Note 1).
Market risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices in case of equity investments and Net Asset Value (NAV) in case of mutual fund investments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Company is having certain investments in unlisted companies where the valuation takes place based on certain market multiples of similar companies after duly adjusted for discounts to the same if any.
Risk is an inherent and integral part of the business of investments and business process outsourcing. The Company aims to achieve an appropriate balance between risk and returns by establishing an efficient risk mitigation system. In order to mitigate risks, the Company has instituted a risk management framework, wherein, the Audit Committee under the supervision of the Board is tasked with regular assessment and laying down of policies for management of risks.In respect of certain investments, the Company has established systems to conduct due diligence of proposals received and to ensure that investments are in line with the overall objectives of the Company.
Note 28: Revenue Recognition Sale of Services:
The Company derives revenue from providing support services to our captive clients, which primarily include providing back office administration, data management, contact centre management and training. The Company recognizes revenue when the significant terms of the arrangement are enforceable, services are being delivered and the collectability is reasonably assured. The Company recognizes revenue on an accrual basis when services are performed.
When the terms of the agreement specify service level parameters that must be met, the Company monitors such service level parameters and determine if there are any service credits or penalties that needs to be accounted for. The Company''s revenue is significantly only from group companies, hence it is believed that there is no significant credit risk.
The Company invoices its clients depending on the terms of the arrangement, which include billing based on a per employee basis, a per transaction basis, a fixed price basis, an outcome-based basis or other pricing arrangements including cost-plus arrangements.
The Company''s revenue is exclusive of taxes and includes reimbursements of communication costs, incentives, etc as defined in the terms of agreement.
There are no other revenue under Contract with Customers other than those which are accounted in Profit and Loss Account as revenue which comprises of Service income and Learning income. Refer Note 28.a for the details of income earned from contracts with customers.
The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Refer Note 28.a for the Trade Receivable balances.
Note 30 : Employee Benefits: Defined Contribution Plan
The Company makes contributions to a gratuity fund administered by trustees and managed by LIC of India. During the year, the Company has recognized the following amounts in the Profit and Loss Statement, which are included in Employee Benefits:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied when calculating the defined benefit liability recognised in the balance sheet.
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset Volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets under perform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. The Company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.
Changes in Bond Yield: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plansâ bond holdings.
Inflation risks: In the pension plans, the pensions in payment are not linked to inflation, so this is a less material risk.
Life expectancy: The pension plan obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plan liabilities. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy.
(v) The expected contribution to the plan for the next year amounts to ''32 lakhs
The Board of Directors has recommended a final dividend of ''1/- per share (20%). In addition, the Board of Directors has recommended a Special Dividend of ''0.75 per share (15%), which, together with the Special Dividend of ''1/- per share (20%) paid during the year will make a total Special Dividend of ''1.75 per share (35%).
31c: Contingent Liabilities and Commitments
(i) Estimated amount of investment to be made in JM Financial yield enhancer (Distressed Opportunity ) Fund I - Series I for Capital Commitment - ''31.39 Lakhs.
(ii) The Company has received demand notice for AY 2018-19 to make a payment of ''418.90 lakhs and an appeal has been filed against the Assessment Order with the Commissioner of Income-tax (Appeals).
31g: Other Regulatory Disclosure as required under Schedule III of Companies Act, 2013
(a) The Company does not have any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(b) The Company is not declared as a willful defaulter by any bank or financial Institution or other lender.
(c) The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
(d) The company does not have any charges or satisfaction to be registered with ROC beyond stipulated statutory period.
(e) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(f) The company has not granted any loans or advances in nature of loans to promotors, directors, KMPs and the related parties (as defined under the Companies Act, 2013) either severally or jointly with any other persons. Hence disclosure under clause (v) of Schedule III of The Companies Act 2013, is not applicable.
(g) There are no scheme of arrangements approved. Hence disclosure under clause (xv) of Schedule III of The Companies Act 2013, is not applicable.
(h) There are no transactions in the nature of undisclosed income or income surrendered which needs to be accounted in the books of accounts during the year in the tax assessments under the Income Tax Act, 1961.
During the year, the Company has allotted 7,10,00,000 equity shares of face value of ''5/- each (âRights Equity Sharesâ) at a premium of ''45/- per share aggregating up to ''35,500 lakhs through the fast track mode in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements), 2018, as amended, and various applicable circulars that have been issued by the Securities and Exchange Board of India (âSEBIâ) from time to time.
The above funds has been raised for the purpose of acquisition of shares in Brakes India Private Limited and the same has been utilised for the said purpose.
The total expenses on rights issue ''318.53 lakhs has been adjusted against securities Premium.
31i: Adoption of Financial Statements
The Board has adopted the financial statements at its meeting held on 24th May 2022.
Mar 31, 2021
Measurement of Fair Value Fair Value Hierarchy
The fair value of investment property has been determined by external, independent property valuers, having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued. The fair value measurement for all of the investment property has been categorised as a Level 3 fair value based on the inputs to the valuation technique used.
Valuation Techniques
"The Company follows discounted cash flows technique. The valuation model considers the present value of net cash flows to be generated from the property, taking into account the expected rental growth rate, vacant periods, occupancy rate, lease incentive costs such as rent-free periods and other costs notpaid by tenants. The expected net cash flows are discounted using risk-adjusted discount rates. Among other factors, the discount rate estimation considers the quality of a building and its location (prime vs secondary), tenant credit quality and lease terms. Investment property comprises a number of commercial properties that are leased to third parties. No contingent rents are charged.
The primary objective of the Companyâs Capital Management is to maximise shareholders value. The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. The Companyâs policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence to sustain future development of the business. For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves.
Note 26 : Financial Instruments - Fair Values and Risk Management A. Accounting Classification and Fair ValuesFair Value Hierarchy
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable
or unobservable and consists of the following three levels:
Level 1 Hierarchy - Includes Financial Instruments measured using quoted prices in the active market.
Level 2 Hierarchy - The Fair value of Financial Instruments that are not traded in an active market, is determined using valuation techniques which maximize the use of observable market data.
Level 3 Hierarchy - Inputs are not based on observable market data. 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. An adjustment to a Level 2 input that is significant to the entire measurement results in a fair value measurement categorised within Level 3 of the fair value hierarchy if the adjustment uses significant unobservable inputs.
Financial instruments fair valued under Level 3 hierarchy are measured using Market multiples method.
The carrying amount of trade receivables, cash and cash equivalents, other financial assets, trade payables and other financial
liabilities are considered to be the fair value due to short term nature.
The Companyâs 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 Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
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. The Companyâs 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 Companyâs reputation.
The Company regularly monitors the rolling forecasts and the actual cash flows to service the financial liabilities on a day-to-day basis through cash generation from business.
Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and loans and advances.
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Concentration of credit risk with respect to trade receivables are limited as the customers are reviewed, assessed and monitored regularly on a monthly basis with pre-determined credit limits assessed based on their payment capacity. Our historical experience of collecting receivables demonstrates that credit risk is low.
The following table sets out the information about the credit quality of financial assets measured at amortised cost.
The Company has exposure in Cash and cash equivalents,employee loans and investment carried at amortised cost. The Companyâs maximum exposure to credit risk as at 31st March, 2021 is the carrying value of each class of financial assets as on that date.
The Company held cash and cash equivalents of INR 55.65 lakhs as on March 31, 2021(March 31, 2020 : INR 166.29 lakhs). The cash and cash equivalents are held in hand and with bank. (Refer Note 1).
Market risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices in case of equity investments and Net Asset Value (NAV) in case of mutual fund investments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Company is having certain investments in unlisted companies in automobile sector where the valuation takes place based on certain market multiples of similar listed automobile companies after duly adjusted for discounts to the same.
Risk is an inherent and integral part of the business of investments and business process outsourcing. The Company aims to achieve an appropriate balance between risk and returns by establishing an efficient risk mitigation system. In order to mitigate risks, the Company has instituted a risk management framework, wherein, the Audit Committee under the supervision of the Board is tasked with regular assessment and laying down of policies for management of risks. In respect of certain investments, the Company has established systems to conduct due diligence of proposals received and to ensure that investments are in line with the overall objectives of the Company.
The Company derives revenue from providing support services to our captive clients, which primarily include providing back office administration, data management, contact centre management and training. The Company recognizes revenue when the significant terms of the arrangement are enforceable, services are being delivered and the collect ability is reasonably assured. The Company recognizes revenue on an accrual basis when services are performed.
When the terms of the agreement specify service level parameters that must be met, the Company monitors such service level parameters and determine if there are any service credits or penalties that needs to be accounted for. The Company''s revenue is significantly only from group companies, hence it is believed that there is no significant credit risk.
The Company invoices its clients depending on the terms of the arrangement, which include billing based on a per employee basis, a per transaction basis, a fixed price basis, an outcome-based basis or other pricing arrangements including cost-plus arrangements.
The Company''s revenue is exclusive of taxes and includes reimbursements of communication costs, incentives, etc as defined in the terms of agreement.
There are no other revenue under Contract with Customers other than those which are accounted in Profit and Loss Account as revenue which comprises of Service income and Learning income. Refer Note 28.a for the details of income earned from contracts with customers.
The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Refer Note 28.a for the Trade Receivable balances.
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset Volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. The Company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.
Changes in Bond Yield: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plansâ bond holdings.
Dividend of ''0.50/- per share has been recommended by the Board for the year ended 31st March 2021.
31c: Contingent Liabilities and Commitments
(i) Estimated amount of investment to be made in JM Financial Yield Enhancer (Distressed Opportunity) Fund I - Series I for Capital Commitment ''5,70 Lakhs.
(ii) The Company has received demand notice for AY 2018-19 to make a payment of ''4,18.90 lakhs and an appeal has been filed against the Assessment Order with the Commissioner of Income-tax (Appeals).
31d: Earnings in Foreign Currency
The company has not received any dividend from foreign Associate companies.(Previous Year ''10,12.21 lakhs)
31h : Post Balance Sheet Events
The âCompany is proposing to undertake a rights issue of up to 7,10,00,000 equity shares of face value of ''5 each (âRights Equity Sharesâ) at a premium of ''45 per share aggregating up to ''355,00 lakhs through the fast track mode in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements), 2018, as amended, and various applicable circulars that have been issued by the Securities and Exchange Board of India (âSEBIâ) from time to time. In connection with the Issue,the letter of offer dated April 21, 2021 has been filed with NSE and SEBI.
The worldwide disruption caused by the COVID-19 pandemic and the consequent lockdown imposed almost till end-November 2020 have considerably impacted the business operations of our associate companies, including their subsidiaries, which in turn, have impacted the financial results of the Company. Even as the automotive sector was beginning to show some signs of recovery from the third quarter of financial year 2020-21, the second wave of the pandemic from March 2021, which has been far more severe in India, has forced another phase of lockdowns in various states across the country.
The impact of the second wave of the pandemic on the Company''s future income flow and results, will depend on ongoing as well as future developments, which are highly uncertain.
The company will however continue to closely monitor any material changes to future economic conditions from time to time and take appropriate risk mitigation measures.
Mar 31, 2021
Note 35: Capital Management:
The Companyâs capital management strategy is to ensure that it has sufficient capital for business operations, strategic investment, and regulatory requirements and to provide reasonable return to the shareholders. Equity share capital and other equity are considered for Capital management.
The company monitors capital Adequacy ratio as stipulated by RBI for NBFC-Investment and credit company - Deposit taking. The Company endeavours to source diversified borrowing, depending on asset liability duration and interest rate sensitivities.
Disaggregate revenue information: Since the requirement of application of Ind AS 115 on Companyâs revenue is insignificant, the company believes that disaggregation of data about the nature, amount, timing of our revenues is not required.
Remaining performance obligation
The remaining performance obligation disclosure provides aggregate amount of transaction price yet to be recognised at the end of reporting period and an explanation as to when the company expects to recognise these amounts in revenue.
The aggregate value of performance obligations that are completely or partially unsatisfied as at March 31, 2021 is ''35.47 lakhs (2019-20 ''5.40 lakhs) which the company expects to recognise in next year.
Note 38: Financial Risk Management framework
Risk is an inherent and integral part of the financial services business and the company has been judiciously managing this through an efficient risk mitigation system, with a view to achieve the Company''s stated objectives of Growth with Quality and Profitability. The risks primarily include credit risk, liquidity risk and market risk.
The policies and procedures laid down by the company for the purpose of risk identification, measurement and management, compare well with contemporary best practices followed by industry peers. The Risk Management Committee and Asset Liability Management Committee, functioning under the supervision of the Audit Committee, have enunciated detailed policies for assessment of various types of risks, and fixed tolerance limits as appropriate.
Credit risk is the risk of financial loss to the Company if a customer fails to meet his contractual obligations and arises principally from the company''s loan receivables.
The company has in place a robust credit policy which clearly defines the credit filters and the terms of acceptance of proposals for financing different categories of borrowers and asset classes.
The credit appraisal process, inter alia, includes filters for stratification of customers, compliance with know your customer (KYC) norms, Field investigation, Credit bureau verification, exposure ceilings, asset risk and segment and geography risks. The risk metrics also address Loan to Value, loan tenure, based on the useful life of the asset, end-use of the asset and credit enhancements, as appropriate.
The Companyâs exposure is primarily to retail customers, thereby making for a well-diversified risk portfolio. The time tested monitoring and recovery mechanism ensures timely recovery of instalments and where required, necessary action for resolution of delinquent accounts is initiated, including legal proceedings. Finally, physical presence and in-depth knowledge of the markets in which the Company operates enables early identification of emerging risks thereby facilitating prompt remedial action.
Consequent to the outbreak of COVID-19 pandemic, the Indian government had announced nationwide lockdown in March 2020. Subsequently, the lockdown was lifted in a phased manner outside specified containment zones. While the gradual easing of restrictions by the Government has spurred a revival of activity, the near total lockdown in the first quarter has resulted in lower business acquisition for the year ended 31st March 2021. Even as the economy was beginning to show some signs of recovery from the third quarter of financial year 2020-21, the second wave of the pandemic from March 2021, which has been far more severe in India, has forced another phase of lockdowns in various states across the country. The impact of the ongoing disruptions, on the Companyâs operations and financial results, will depend on future developments, around pace of vaccination, continued adherence to safety protocols and possible emergence of newer variants/strains of the virus, all of which remain uncertain.
There were no adjusting events that would have any material impact on the companyâs financial statements for the year ending 31st March 2021.
Impairment - Expected credit loss (ECL):
The application of Ind AS 109 has necessitated fundamental changes to the accounting for expected default risk (risk provisioning). Specifically, the incurred loss model has been replaced by the Expected Credit Loss model (ECL). Consequent to this change, the Expected Credit losses on financial instruments are classified under three stages.
Stage 1: Every financial asset is classified as stage 1, upon initial recognition. In addition, stage 1 contains all transactions with limited default risk.
Stage 2: Financial assets whose default risk has risen significantly since initial recognition and which are not classified as cases with limited default risk.
Stage 3: Financial assets that display objective evidence of impairment at the reporting date.
The accounting standard, Ind AS 109 does not specifically prescribe any methodology for computing ECL. However, entities are required to adopt sound and market acceptable methodologies which are in line with the size, complexity and risk-profile of the financial entity for computing the ECL. The Company uses three main components to measure ECL. These are, Exposure at Risk (EAR), Probability of Default (PD) and Loss Given Default (LGD). Exposure at Risk (EAR) is defined as the sum of Principal outstanding and interest accrued at the reporting date. PD is defined as the probability of borrowers defaulting on their obligations. LGD represents the economic loss, adjusted for cure rate, as a percentage of exposure at the time of default.
Accordingly, loan assets are categorised under three different stages, as under:
Stage 1: Where instalments are Current and 1-30 days overdue
Stage 2: Where instalments are 31 days - 90 days overdue and
Stage 3: Where instalments are overdue beyond 90 days
The company is required to provide 12-month expected credit loss (12-month ECL) for stage 1 assets and the life time expected credit loss (LECL) for stage 2 & stage 3 assets.
12-month ECL is the expected credit loss that results from default events that are possible within 12 months after the reporting date. LECL represents the expected credit loss from default events over the expected life of a financial asset.
As prescribed under para 5.5 in Ind AS 109, 12-months PD is required to be computed for financial instruments which are in stage 1, and life time PD for those in stage 2 & 3. 12 months PD is the likelihood of the borrower defaulting in the 12 months following the reporting date while life time PD is the likelihood of the borrower defaulting during the residual tenor.
The PD model has been developed for all the major asset classes using a statistical and iterative approach. The design and construction of the model involves identification of various credit parameters and variables that have a strong and direct correlation to propensity of default.
The PD model reflects to the probability of default, taking into consideration the inherent credit quality of the borrower and the residual tenor of each contract. It relies not only historical information and the current economic environment, but also considers forward-looking information such as the forecasts on the macroeconomic outlook, including emerging risks. The PD for stage 3 contracts is considered at 100%.
Where a customer has one contract in stage 3 and one or more contracts in stage 1 / stage 2, the PD for all the contracts is considered at 100%.
LGD
LGD represents the economic loss, adjusted for cure rate, as a percentage of exposure at the time of default. Economic loss is the estimated shortfall in realisation of dues, in the event of default. Contracts that have turned delinquent do not necessarily involve ultimate losses, since many of them are resolved through corrective actions. The cure rate is the probability of a ânon performingâ (i.e. defaulted) contract reverting to a âperformingâ (i.e. non-default) status in a year.
Credit risk management practices
(i) Policy on write off: Loans are written off when the value of underlying security/other collateral is not sufficient to cover the loan exposure or where the underlying security / customer are not traceable. In such cases, the company takes legal recourse for recovery of shortfall of dues, if any.
(ii) Narrative description of collateral: The underlying assets, which are financed, are the primary collateral held. These are typically commercial vehicles, cars, construction equipment, farm equipment, etc. Additional collateral, by way of credit enhancement, is obtained based on the managementâs credit evaluation of the customer.
d. Debt Securities
All debt investments are allocated to stage 1 under initial recognition. If the rating assigned to the security at the time of investment is downgraded by two notches and / or where there is a delay in interest servicing by more than 30 days, this would result in stage 2 classification. Further downgrade of rating and/or delay in interest servicing by more than 90 days/default of payment of principal would result in stage 3 classifications.
For investment in debt instruments, one-year transition matrix provided by the rating agencies is used as the PD. Loss given default (LGD) parameters assume a recovery rate of 65%, 75% and 50% for unsecured senior, unsecured subordinated and secured debt securities respectively.
Liquidity risk relates to our potential inability to meet all payment obligations when they fall due or only being able to meet them at excessive costs. The objective of the liquidity risk management framework is to ensure that the Company can fulfil its payment obligations at all times and can manage liquidity and funding risks within its risk appetite. The Asset Liability Committee regularly monitors the liquidity position and the duration of assets/liabilities and ensures that liquidity is strictly managed as per the policy. Following are the contractual maturities of financial liabilities / financial assets at the reporting date. The amounts are gross and undiscounted and include estimated interest payments / receipts and exclude the impact of netting agreements.
Market risk is the risk of loss arising from potential adverse changes in the value of the firmâs assets and liabilities from fluctuation in market variables like liquidity, interest rate and foreign exchange (Currency risk).
Interest rate risk
The Company''s exposure to changes in interest rates relates to the Company''s outstanding floating rate liabilities. Most of the Company''s outstanding liability in local currency is on fixed rate basis and hence not subject to interest rate risk. Whereas the foreign currency liability is linked to international rate benchmarks like LIBOR and hence subject to interest rate risk. The Company hedges these risks through derivative transactions.
Fair value sensitivity analysis for fixed rate instruments
The Company''s fixed rate instruments are carried at amortised cost and are not measured for interest rate risk, as neither the carrying amount nor the future cash flows will fluctuate because of changes in market interest rates.
Cash flow sensitivity analysis for variable rate instruments
A reasonably possible change of 100 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.
a. Interest rate sensitivity
The major lending of the Company is in the form of Hypothecation loans at fixed rates. The loans are financed by various fixed / floating Rate borrowings. While the assets financed are generally recovered over the tenure of the underlying contract equally, the liabilities are in general repayable on maturity. Hence, the interest rate risk and liquidity (mismatches in the duration of assets and liabilities) are inherent and inevitable.
To measure the above risk the Company adopts the duration gap analysis which is measured for assets and liabilities maturing in next 12 months as well as for the overall assets and liabilities. Also, for Interest rate risk management, the Duration Gap model is used on assets and liabilities maturing in the next 12 months, to assess the change in Net Interest Income (NII) for a 1% increase in interest rate. The change in NII for 1% change in interest rate as on 31.03.2021 is ''5.95 Cr.
b. Currency Risk
The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which borrowings are denominated and the respective functional currency, i.e. INR. The transactions of the Company are primarily denominated in INR. Currency risks arise from the foreign currency loans availed by the Company.
Defined benefit plans
Defined benefit plan exposes the Company to a number of risks, the most significant of which are detailed below: Investment risk: This may arise from volatility in Asset value due to market fluctuations and impairment of assets due to credit losses. The defined benefit plans may hold equity type assets, which may carry volatility and associated risk.
Interest risk: A decrease in bond yields will increase plan liabilities, although this is expected to be partially offset by an increase in the value of the planâs investment in debt instruments.
Salary cost Inflation risk: The present value of some of the defined benefit plan obligations are calculated with reference to the future salaries of plan participants. Increase in salary due to adverse Inflationary pressures might lead to higher liabilities. Longevity risk: The present value of defined benefit plan obligation is calculated by reference to the best estimate of the mortality of plan participants. Increase or decrease in such rate will affect the plan liability.
A. Gratuity (Funded)
Expected contribution to the plan for the next year is ''700 Lakhs.
B. Leave encashment & Compensated absences (funded):
Expected contribution to the plan for the next year is ''650 Lakhs.
C. Post Retirement employees medical scheme (unfunded):
The company earmarks liability towards unfunded post-retirement medical benefit and provides for payments to vested employees. The benefits under the plan are in the form of a medical benefit paid to employees post their employment within the company.
D. Provident Fund
The provident fund contributions to trust are managed through trust investments in addition to contribution of a portion of its provident fund liability relating to Employees Pension Scheme to Employee Provident Fund Organisation.
The fund has relatively balanced mix of investments in order to manage the risks. The investment strategy is designed based on the interest rate scenario, liquidity needs of the Plans and Pattern of the investments as prescribed under the statute.
The trustees regularly monitor the funding and investment, there are systems in place to ensure that health of the portfolio is regularly reviewed and investments do not pose significant risk of impairment.
Operating lease as lessee- Ind AS 116 - Leases
COVID-19 - Related Rent Concessions: Ministry of Corporate Affairs (MCA) has issued an amendment to Ind AS 116 - Leases. (notified on 24th July 2020) The amendment provide lessees with an exemption from assessing whether a COVID-19 related rent concession is a lease modification. The amendments allowed the expedient to be applied to COVID-19 related rent concessions to payments originally due on or before June 30, 2021 and also require disclosure of the amount recognized in profit or loss to reflect changes in lease payments that arise from COVID-19 related rent concessions.
Accordingly, the Company has applied practical expedient to all its rent concessions and the amount in profit and loss for the reporting period that reflect the change in lease payments arising from rent concession is ''35.87 lakhs.
Tax disputes in respect of Income Tax, Service Tax, VAT demands and are pending before various appellate forums/authorities and the cash flows would be determined only upon the receipt of decisions. The Company is of the opinion that the demands are not sustainable and expects to succeed in its appeal.
The contested tax demands have been ascertained on the basis of relief allowed by the appellate authorities, on similar issues in earlier assessment years.
43.05 Pending Litigations
The pending litigations as on 31st March 2021 have been compiled by the company and reviewed by the Statutory Auditors. The current position of the litigation has been evaluated and the effect thereof has been appropriately disclosed in the financial statements.
Note 50: Disclosure as per RBI Notification RBI/2020-21/61 DOR.No.BP.BC.26/21.04.048/2020-21 -Scheme for grant of ex-gratia Payment
The Government of India, Ministry of Finance, vide its notification dt. 23rd October, 2020 had announced COVID-19 Relief Scheme, for grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts, as per the eligibility criteria and other aspects specified therein and irrespective of whether RBI moratorium was availed or not. The ex-gratia amount of ''20.82 cr. had been credited to eligible borrowers. We lodged claim with State Bank of India on 14th December 2020 and received the claim on 31st March 2021.
Note 51: Disclosures as per RBI notification no. DOR.STR.REC.4/21.04.048/2021-22 - Interest on interest during the moratorium period:
In accordance with the RBI''s instruction in their circular dated, April 7, 2021 all lending institutions shall refund/adjust the interest on interest charged to all the borrowers, during the moratorium period. Inpursant of the above instruction, the Indian Banks Association (IBA) through advisory dated April 19, 2021, prescribed the methodolgy of calculation of interest on interest. Accordingly, the company has estimated the amount and reversed the income account during the financial year 2020-21.
Note 52: Disclosure on Liquidity Coverage Ratio (LCR):
As part of the Liquidity Risk Management Framework for NBFCs, RBI has mandated maintenance of Liquidity Coverage Ratio (LCR) effective 1st December, 2020. The Company is required to maintain adequate unencumbered High Quality Liquid Asset (HQLA) to meet its liquidity needs for a 30 calendar-day time horizon under a significantly severe liquidity stress scenario. The objective of the LCR is to promote the short-term resilience of the liquidity risk profile. The LCR requirement shall be binding for the Company from December 1, 2020 with the minimum HQLAs to be held being 50% of the LCR, progressively reaching up to the required level of 100% by December 1, 2024.
The LCR is calculated by dividing the companyâs stock of HQLA by its total net cash outflows over a 30-day stress period. âHigh Quality Liquid Assets (HQLA)â means liquid assets that can be readily sold or immediately converted into cash at little or no loss of value or used as collateral to obtain funds in a range of stress scenarios. Total Net cash outflows is defined as total expected cash outflows minus total expected cash inflows in the specified stress scenario for the subsequent 30 calendar days. The main drivers of LCR are adequate HQLAs and lower net cash outflow.
Major source of borrowings for the Company are Non-Convertible Debentures, Term loans from Banks, Commercial paper and Public deposits. Details of funding concentration from Significant counter party are given in Note 53.
The average LCR for the quarter ended 31st March 2021 is 95.9%, which is well above the regulatory requirement of 50%.
(vi) Institutional setup for Liquidity Risk management
Board has setup the Asset Liability Management Committee (ALCO) and Risk Management Committee to manage various risks of the Company. ALCO meets on a regular basis and is responsible for ensuring adherence to the risk tolerance/limits set by the Board including the Liquidity risk of the Company. The performance of the ALCO is reviewed by Audit Committee / Board.
The Company has formulated a policy on Liquidity Risk Management Framework. Accordingly, the Company,
⢠Performs stress testing on a quarterly basis which enables the Company to estimate the liquidity requirements as well as adequacy and cost of the liquidity buffer under stressed conditions.
⢠Has also formulated a contingency funding plan as a part of the outcome of stress testing results.
⢠Monitors liquidity risk based on âStockâ approach to liquidity by way of pre-defined internal limits for various critical ratios pertaining to liquidity risk.
The Company has diversified source of funding to ensure that there is no significant source, the withdrawal of which could trigger liquidity problems.
The Company monitors cumulative mismatches across all time buckets by establishing internal prudential limits. The Company maintains adequate liquidity buffer of readily marketable assets, to protect itself against any liquidity risk at the same time is mindful of the cost associated with it.
Notes:
1. As per the circular issued by RBI on Liquidity Risk Management Framework for Non-Banking Financial Companies and Core Investment Companies dated 04th Nov 2019, âSignificant counterpartyâ is defined as a single counter party or group of connected or affiliated counter parties accounting in aggregate for more than 1% of the Total Liabilities and "Significant instrument/product" is defined as a single instrument/product of group of similar instruments/products which in aggregate amount to more than 1% of the Total Liabilities.
2. Total Liabilities represent ''Total Liabilities and Equity'' as per Balance sheet less Equity.
3. Public funds are as defined in Master Direction - Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016.
4. Other Short-term liabilities represent all Short-term borrowings other than CPs.
Mar 31, 2021
Measurement of Fair Value Fair Value Hierarchy
The fair value of investment property has been determined by external, independent property valuers, having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued. The fair value measurement for all of the investment property has been categorised as a Level 3 fair value based on the inputs to the valuation technique used.
Valuation Techniques
"The Company follows discounted cash flows technique. The valuation model considers the present value of net cash flows to be generated from the property, taking into account the expected rental growth rate, vacant periods, occupancy rate, lease incentive costs such as rent-free periods and other costs notpaid by tenants. The expected net cash flows are discounted using risk-adjusted discount rates. Among other factors, the discount rate estimation considers the quality of a building and its location (prime vs secondary), tenant credit quality and lease terms. Investment property comprises a number of commercial properties that are leased to third parties. No contingent rents are charged.
The primary objective of the Companyâs Capital Management is to maximise shareholders value. The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. The Companyâs policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence to sustain future development of the business. For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves.
Note 26 : Financial Instruments - Fair Values and Risk Management A. Accounting Classification and Fair ValuesFair Value Hierarchy
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable
or unobservable and consists of the following three levels:
Level 1 Hierarchy - Includes Financial Instruments measured using quoted prices in the active market.
Level 2 Hierarchy - The Fair value of Financial Instruments that are not traded in an active market, is determined using valuation techniques which maximize the use of observable market data.
Level 3 Hierarchy - Inputs are not based on observable market data. 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. An adjustment to a Level 2 input that is significant to the entire measurement results in a fair value measurement categorised within Level 3 of the fair value hierarchy if the adjustment uses significant unobservable inputs.
Financial instruments fair valued under Level 3 hierarchy are measured using Market multiples method.
The carrying amount of trade receivables, cash and cash equivalents, other financial assets, trade payables and other financial
liabilities are considered to be the fair value due to short term nature.
The Companyâs 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 Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
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. The Companyâs 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 Companyâs reputation.
The Company regularly monitors the rolling forecasts and the actual cash flows to service the financial liabilities on a day-to-day basis through cash generation from business.
Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and loans and advances.
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Concentration of credit risk with respect to trade receivables are limited as the customers are reviewed, assessed and monitored regularly on a monthly basis with pre-determined credit limits assessed based on their payment capacity. Our historical experience of collecting receivables demonstrates that credit risk is low.
The following table sets out the information about the credit quality of financial assets measured at amortised cost.
The Company has exposure in Cash and cash equivalents,employee loans and investment carried at amortised cost. The Companyâs maximum exposure to credit risk as at 31st March, 2021 is the carrying value of each class of financial assets as on that date.
The Company held cash and cash equivalents of INR 55.65 lakhs as on March 31, 2021(March 31, 2020 : INR 166.29 lakhs). The cash and cash equivalents are held in hand and with bank. (Refer Note 1).
Market risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices in case of equity investments and Net Asset Value (NAV) in case of mutual fund investments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Company is having certain investments in unlisted companies in automobile sector where the valuation takes place based on certain market multiples of similar listed automobile companies after duly adjusted for discounts to the same.
Risk is an inherent and integral part of the business of investments and business process outsourcing. The Company aims to achieve an appropriate balance between risk and returns by establishing an efficient risk mitigation system. In order to mitigate risks, the Company has instituted a risk management framework, wherein, the Audit Committee under the supervision of the Board is tasked with regular assessment and laying down of policies for management of risks. In respect of certain investments, the Company has established systems to conduct due diligence of proposals received and to ensure that investments are in line with the overall objectives of the Company.
The Company derives revenue from providing support services to our captive clients, which primarily include providing back office administration, data management, contact centre management and training. The Company recognizes revenue when the significant terms of the arrangement are enforceable, services are being delivered and the collect ability is reasonably assured. The Company recognizes revenue on an accrual basis when services are performed.
When the terms of the agreement specify service level parameters that must be met, the Company monitors such service level parameters and determine if there are any service credits or penalties that needs to be accounted for. The Company''s revenue is significantly only from group companies, hence it is believed that there is no significant credit risk.
The Company invoices its clients depending on the terms of the arrangement, which include billing based on a per employee basis, a per transaction basis, a fixed price basis, an outcome-based basis or other pricing arrangements including cost-plus arrangements.
The Company''s revenue is exclusive of taxes and includes reimbursements of communication costs, incentives, etc as defined in the terms of agreement.
There are no other revenue under Contract with Customers other than those which are accounted in Profit and Loss Account as revenue which comprises of Service income and Learning income. Refer Note 28.a for the details of income earned from contracts with customers.
The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Refer Note 28.a for the Trade Receivable balances.
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset Volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. The Company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.
Changes in Bond Yield: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plansâ bond holdings.
Dividend of ''0.50/- per share has been recommended by the Board for the year ended 31st March 2021.
31c: Contingent Liabilities and Commitments
(i) Estimated amount of investment to be made in JM Financial Yield Enhancer (Distressed Opportunity) Fund I - Series I for Capital Commitment ''5,70 Lakhs.
(ii) The Company has received demand notice for AY 2018-19 to make a payment of ''4,18.90 lakhs and an appeal has been filed against the Assessment Order with the Commissioner of Income-tax (Appeals).
31d: Earnings in Foreign Currency
The company has not received any dividend from foreign Associate companies.(Previous Year ''10,12.21 lakhs)
31h : Post Balance Sheet Events
The âCompany is proposing to undertake a rights issue of up to 7,10,00,000 equity shares of face value of ''5 each (âRights Equity Sharesâ) at a premium of ''45 per share aggregating up to ''355,00 lakhs through the fast track mode in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements), 2018, as amended, and various applicable circulars that have been issued by the Securities and Exchange Board of India (âSEBIâ) from time to time. In connection with the Issue,the letter of offer dated April 21, 2021 has been filed with NSE and SEBI.
The worldwide disruption caused by the COVID-19 pandemic and the consequent lockdown imposed almost till end-November 2020 have considerably impacted the business operations of our associate companies, including their subsidiaries, which in turn, have impacted the financial results of the Company. Even as the automotive sector was beginning to show some signs of recovery from the third quarter of financial year 2020-21, the second wave of the pandemic from March 2021, which has been far more severe in India, has forced another phase of lockdowns in various states across the country.
The impact of the second wave of the pandemic on the Company''s future income flow and results, will depend on ongoing as well as future developments, which are highly uncertain.
The company will however continue to closely monitor any material changes to future economic conditions from time to time and take appropriate risk mitigation measures.
Mar 31, 2021
Measurement of Fair Value Fair Value Hierarchy
The fair value of investment property has been determined by external, independent property valuers, having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued. The fair value measurement for all of the investment property has been categorised as a Level 3 fair value based on the inputs to the valuation technique used.
Valuation Techniques
"The Company follows discounted cash flows technique. The valuation model considers the present value of net cash flows to be generated from the property, taking into account the expected rental growth rate, vacant periods, occupancy rate, lease incentive costs such as rent-free periods and other costs notpaid by tenants. The expected net cash flows are discounted using risk-adjusted discount rates. Among other factors, the discount rate estimation considers the quality of a building and its location (prime vs secondary), tenant credit quality and lease terms. Investment property comprises a number of commercial properties that are leased to third parties. No contingent rents are charged.
The primary objective of the Companyâs Capital Management is to maximise shareholders value. The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. The Companyâs policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence to sustain future development of the business. For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves.
Note 26 : Financial Instruments - Fair Values and Risk Management A. Accounting Classification and Fair ValuesFair Value Hierarchy
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable
or unobservable and consists of the following three levels:
Level 1 Hierarchy - Includes Financial Instruments measured using quoted prices in the active market.
Level 2 Hierarchy - The Fair value of Financial Instruments that are not traded in an active market, is determined using valuation techniques which maximize the use of observable market data.
Level 3 Hierarchy - Inputs are not based on observable market data. 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. An adjustment to a Level 2 input that is significant to the entire measurement results in a fair value measurement categorised within Level 3 of the fair value hierarchy if the adjustment uses significant unobservable inputs.
Financial instruments fair valued under Level 3 hierarchy are measured using Market multiples method.
The carrying amount of trade receivables, cash and cash equivalents, other financial assets, trade payables and other financial
liabilities are considered to be the fair value due to short term nature.
The Companyâs 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 Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
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. The Companyâs 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 Companyâs reputation.
The Company regularly monitors the rolling forecasts and the actual cash flows to service the financial liabilities on a day-to-day basis through cash generation from business.
Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and loans and advances.
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Concentration of credit risk with respect to trade receivables are limited as the customers are reviewed, assessed and monitored regularly on a monthly basis with pre-determined credit limits assessed based on their payment capacity. Our historical experience of collecting receivables demonstrates that credit risk is low.
The following table sets out the information about the credit quality of financial assets measured at amortised cost.
The Company has exposure in Cash and cash equivalents,employee loans and investment carried at amortised cost. The Companyâs maximum exposure to credit risk as at 31st March, 2021 is the carrying value of each class of financial assets as on that date.
The Company held cash and cash equivalents of INR 55.65 lakhs as on March 31, 2021(March 31, 2020 : INR 166.29 lakhs). The cash and cash equivalents are held in hand and with bank. (Refer Note 1).
Market risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices in case of equity investments and Net Asset Value (NAV) in case of mutual fund investments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Company is having certain investments in unlisted companies in automobile sector where the valuation takes place based on certain market multiples of similar listed automobile companies after duly adjusted for discounts to the same.
Risk is an inherent and integral part of the business of investments and business process outsourcing. The Company aims to achieve an appropriate balance between risk and returns by establishing an efficient risk mitigation system. In order to mitigate risks, the Company has instituted a risk management framework, wherein, the Audit Committee under the supervision of the Board is tasked with regular assessment and laying down of policies for management of risks. In respect of certain investments, the Company has established systems to conduct due diligence of proposals received and to ensure that investments are in line with the overall objectives of the Company.
The Company derives revenue from providing support services to our captive clients, which primarily include providing back office administration, data management, contact centre management and training. The Company recognizes revenue when the significant terms of the arrangement are enforceable, services are being delivered and the collect ability is reasonably assured. The Company recognizes revenue on an accrual basis when services are performed.
When the terms of the agreement specify service level parameters that must be met, the Company monitors such service level parameters and determine if there are any service credits or penalties that needs to be accounted for. The Company''s revenue is significantly only from group companies, hence it is believed that there is no significant credit risk.
The Company invoices its clients depending on the terms of the arrangement, which include billing based on a per employee basis, a per transaction basis, a fixed price basis, an outcome-based basis or other pricing arrangements including cost-plus arrangements.
The Company''s revenue is exclusive of taxes and includes reimbursements of communication costs, incentives, etc as defined in the terms of agreement.
There are no other revenue under Contract with Customers other than those which are accounted in Profit and Loss Account as revenue which comprises of Service income and Learning income. Refer Note 28.a for the details of income earned from contracts with customers.
The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Refer Note 28.a for the Trade Receivable balances.
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset Volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. The Company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.
Changes in Bond Yield: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plansâ bond holdings.
Dividend of ''0.50/- per share has been recommended by the Board for the year ended 31st March 2021.
31c: Contingent Liabilities and Commitments
(i) Estimated amount of investment to be made in JM Financial Yield Enhancer (Distressed Opportunity) Fund I - Series I for Capital Commitment ''5,70 Lakhs.
(ii) The Company has received demand notice for AY 2018-19 to make a payment of ''4,18.90 lakhs and an appeal has been filed against the Assessment Order with the Commissioner of Income-tax (Appeals).
31d: Earnings in Foreign Currency
The company has not received any dividend from foreign Associate companies.(Previous Year ''10,12.21 lakhs)
31h : Post Balance Sheet Events
The âCompany is proposing to undertake a rights issue of up to 7,10,00,000 equity shares of face value of ''5 each (âRights Equity Sharesâ) at a premium of ''45 per share aggregating up to ''355,00 lakhs through the fast track mode in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements), 2018, as amended, and various applicable circulars that have been issued by the Securities and Exchange Board of India (âSEBIâ) from time to time. In connection with the Issue,the letter of offer dated April 21, 2021 has been filed with NSE and SEBI.
The worldwide disruption caused by the COVID-19 pandemic and the consequent lockdown imposed almost till end-November 2020 have considerably impacted the business operations of our associate companies, including their subsidiaries, which in turn, have impacted the financial results of the Company. Even as the automotive sector was beginning to show some signs of recovery from the third quarter of financial year 2020-21, the second wave of the pandemic from March 2021, which has been far more severe in India, has forced another phase of lockdowns in various states across the country.
The impact of the second wave of the pandemic on the Company''s future income flow and results, will depend on ongoing as well as future developments, which are highly uncertain.
The company will however continue to closely monitor any material changes to future economic conditions from time to time and take appropriate risk mitigation measures.
Mar 31, 2021
Measurement of Fair Value Fair Value Hierarchy
The fair value of investment property has been determined by external, independent property valuers, having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued. The fair value measurement for all of the investment property has been categorised as a Level 3 fair value based on the inputs to the valuation technique used.
Valuation Techniques
"The Company follows discounted cash flows technique. The valuation model considers the present value of net cash flows to be generated from the property, taking into account the expected rental growth rate, vacant periods, occupancy rate, lease incentive costs such as rent-free periods and other costs notpaid by tenants. The expected net cash flows are discounted using risk-adjusted discount rates. Among other factors, the discount rate estimation considers the quality of a building and its location (prime vs secondary), tenant credit quality and lease terms. Investment property comprises a number of commercial properties that are leased to third parties. No contingent rents are charged.
The primary objective of the Companyâs Capital Management is to maximise shareholders value. The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. The Companyâs policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence to sustain future development of the business. For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves.
Note 26 : Financial Instruments - Fair Values and Risk Management A. Accounting Classification and Fair ValuesFair Value Hierarchy
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable
or unobservable and consists of the following three levels:
Level 1 Hierarchy - Includes Financial Instruments measured using quoted prices in the active market.
Level 2 Hierarchy - The Fair value of Financial Instruments that are not traded in an active market, is determined using valuation techniques which maximize the use of observable market data.
Level 3 Hierarchy - Inputs are not based on observable market data. 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. An adjustment to a Level 2 input that is significant to the entire measurement results in a fair value measurement categorised within Level 3 of the fair value hierarchy if the adjustment uses significant unobservable inputs.
Financial instruments fair valued under Level 3 hierarchy are measured using Market multiples method.
The carrying amount of trade receivables, cash and cash equivalents, other financial assets, trade payables and other financial
liabilities are considered to be the fair value due to short term nature.
The Companyâs 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 Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
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. The Companyâs 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 Companyâs reputation.
The Company regularly monitors the rolling forecasts and the actual cash flows to service the financial liabilities on a day-to-day basis through cash generation from business.
Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and loans and advances.
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Concentration of credit risk with respect to trade receivables are limited as the customers are reviewed, assessed and monitored regularly on a monthly basis with pre-determined credit limits assessed based on their payment capacity. Our historical experience of collecting receivables demonstrates that credit risk is low.
The following table sets out the information about the credit quality of financial assets measured at amortised cost.
The Company has exposure in Cash and cash equivalents,employee loans and investment carried at amortised cost. The Companyâs maximum exposure to credit risk as at 31st March, 2021 is the carrying value of each class of financial assets as on that date.
The Company held cash and cash equivalents of INR 55.65 lakhs as on March 31, 2021(March 31, 2020 : INR 166.29 lakhs). The cash and cash equivalents are held in hand and with bank. (Refer Note 1).
Market risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices in case of equity investments and Net Asset Value (NAV) in case of mutual fund investments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Company is having certain investments in unlisted companies in automobile sector where the valuation takes place based on certain market multiples of similar listed automobile companies after duly adjusted for discounts to the same.
Risk is an inherent and integral part of the business of investments and business process outsourcing. The Company aims to achieve an appropriate balance between risk and returns by establishing an efficient risk mitigation system. In order to mitigate risks, the Company has instituted a risk management framework, wherein, the Audit Committee under the supervision of the Board is tasked with regular assessment and laying down of policies for management of risks. In respect of certain investments, the Company has established systems to conduct due diligence of proposals received and to ensure that investments are in line with the overall objectives of the Company.
The Company derives revenue from providing support services to our captive clients, which primarily include providing back office administration, data management, contact centre management and training. The Company recognizes revenue when the significant terms of the arrangement are enforceable, services are being delivered and the collect ability is reasonably assured. The Company recognizes revenue on an accrual basis when services are performed.
When the terms of the agreement specify service level parameters that must be met, the Company monitors such service level parameters and determine if there are any service credits or penalties that needs to be accounted for. The Company''s revenue is significantly only from group companies, hence it is believed that there is no significant credit risk.
The Company invoices its clients depending on the terms of the arrangement, which include billing based on a per employee basis, a per transaction basis, a fixed price basis, an outcome-based basis or other pricing arrangements including cost-plus arrangements.
The Company''s revenue is exclusive of taxes and includes reimbursements of communication costs, incentives, etc as defined in the terms of agreement.
There are no other revenue under Contract with Customers other than those which are accounted in Profit and Loss Account as revenue which comprises of Service income and Learning income. Refer Note 28.a for the details of income earned from contracts with customers.
The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Refer Note 28.a for the Trade Receivable balances.
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset Volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. The Company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.
Changes in Bond Yield: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plansâ bond holdings.
Dividend of ''0.50/- per share has been recommended by the Board for the year ended 31st March 2021.
31c: Contingent Liabilities and Commitments
(i) Estimated amount of investment to be made in JM Financial Yield Enhancer (Distressed Opportunity) Fund I - Series I for Capital Commitment ''5,70 Lakhs.
(ii) The Company has received demand notice for AY 2018-19 to make a payment of ''4,18.90 lakhs and an appeal has been filed against the Assessment Order with the Commissioner of Income-tax (Appeals).
31d: Earnings in Foreign Currency
The company has not received any dividend from foreign Associate companies.(Previous Year ''10,12.21 lakhs)
31h : Post Balance Sheet Events
The âCompany is proposing to undertake a rights issue of up to 7,10,00,000 equity shares of face value of ''5 each (âRights Equity Sharesâ) at a premium of ''45 per share aggregating up to ''355,00 lakhs through the fast track mode in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements), 2018, as amended, and various applicable circulars that have been issued by the Securities and Exchange Board of India (âSEBIâ) from time to time. In connection with the Issue,the letter of offer dated April 21, 2021 has been filed with NSE and SEBI.
The worldwide disruption caused by the COVID-19 pandemic and the consequent lockdown imposed almost till end-November 2020 have considerably impacted the business operations of our associate companies, including their subsidiaries, which in turn, have impacted the financial results of the Company. Even as the automotive sector was beginning to show some signs of recovery from the third quarter of financial year 2020-21, the second wave of the pandemic from March 2021, which has been far more severe in India, has forced another phase of lockdowns in various states across the country.
The impact of the second wave of the pandemic on the Company''s future income flow and results, will depend on ongoing as well as future developments, which are highly uncertain.
The company will however continue to closely monitor any material changes to future economic conditions from time to time and take appropriate risk mitigation measures.
Mar 31, 2021
Measurement of Fair Value Fair Value Hierarchy
The fair value of investment property has been determined by external, independent property valuers, having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued. The fair value measurement for all of the investment property has been categorised as a Level 3 fair value based on the inputs to the valuation technique used.
Valuation Techniques
"The Company follows discounted cash flows technique. The valuation model considers the present value of net cash flows to be generated from the property, taking into account the expected rental growth rate, vacant periods, occupancy rate, lease incentive costs such as rent-free periods and other costs notpaid by tenants. The expected net cash flows are discounted using risk-adjusted discount rates. Among other factors, the discount rate estimation considers the quality of a building and its location (prime vs secondary), tenant credit quality and lease terms. Investment property comprises a number of commercial properties that are leased to third parties. No contingent rents are charged.
The primary objective of the Companyâs Capital Management is to maximise shareholders value. The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. The Companyâs policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence to sustain future development of the business. For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves.
Note 26 : Financial Instruments - Fair Values and Risk Management A. Accounting Classification and Fair ValuesFair Value Hierarchy
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable
or unobservable and consists of the following three levels:
Level 1 Hierarchy - Includes Financial Instruments measured using quoted prices in the active market.
Level 2 Hierarchy - The Fair value of Financial Instruments that are not traded in an active market, is determined using valuation techniques which maximize the use of observable market data.
Level 3 Hierarchy - Inputs are not based on observable market data. 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. An adjustment to a Level 2 input that is significant to the entire measurement results in a fair value measurement categorised within Level 3 of the fair value hierarchy if the adjustment uses significant unobservable inputs.
Financial instruments fair valued under Level 3 hierarchy are measured using Market multiples method.
The carrying amount of trade receivables, cash and cash equivalents, other financial assets, trade payables and other financial
liabilities are considered to be the fair value due to short term nature.
The Companyâs 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 Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
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. The Companyâs 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 Companyâs reputation.
The Company regularly monitors the rolling forecasts and the actual cash flows to service the financial liabilities on a day-to-day basis through cash generation from business.
Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and loans and advances.
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Concentration of credit risk with respect to trade receivables are limited as the customers are reviewed, assessed and monitored regularly on a monthly basis with pre-determined credit limits assessed based on their payment capacity. Our historical experience of collecting receivables demonstrates that credit risk is low.
The following table sets out the information about the credit quality of financial assets measured at amortised cost.
The Company has exposure in Cash and cash equivalents,employee loans and investment carried at amortised cost. The Companyâs maximum exposure to credit risk as at 31st March, 2021 is the carrying value of each class of financial assets as on that date.
The Company held cash and cash equivalents of INR 55.65 lakhs as on March 31, 2021(March 31, 2020 : INR 166.29 lakhs). The cash and cash equivalents are held in hand and with bank. (Refer Note 1).
Market risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices in case of equity investments and Net Asset Value (NAV) in case of mutual fund investments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Company is having certain investments in unlisted companies in automobile sector where the valuation takes place based on certain market multiples of similar listed automobile companies after duly adjusted for discounts to the same.
Risk is an inherent and integral part of the business of investments and business process outsourcing. The Company aims to achieve an appropriate balance between risk and returns by establishing an efficient risk mitigation system. In order to mitigate risks, the Company has instituted a risk management framework, wherein, the Audit Committee under the supervision of the Board is tasked with regular assessment and laying down of policies for management of risks. In respect of certain investments, the Company has established systems to conduct due diligence of proposals received and to ensure that investments are in line with the overall objectives of the Company.
The Company derives revenue from providing support services to our captive clients, which primarily include providing back office administration, data management, contact centre management and training. The Company recognizes revenue when the significant terms of the arrangement are enforceable, services are being delivered and the collect ability is reasonably assured. The Company recognizes revenue on an accrual basis when services are performed.
When the terms of the agreement specify service level parameters that must be met, the Company monitors such service level parameters and determine if there are any service credits or penalties that needs to be accounted for. The Company''s revenue is significantly only from group companies, hence it is believed that there is no significant credit risk.
The Company invoices its clients depending on the terms of the arrangement, which include billing based on a per employee basis, a per transaction basis, a fixed price basis, an outcome-based basis or other pricing arrangements including cost-plus arrangements.
The Company''s revenue is exclusive of taxes and includes reimbursements of communication costs, incentives, etc as defined in the terms of agreement.
There are no other revenue under Contract with Customers other than those which are accounted in Profit and Loss Account as revenue which comprises of Service income and Learning income. Refer Note 28.a for the details of income earned from contracts with customers.
The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Refer Note 28.a for the Trade Receivable balances.
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset Volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. The Company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.
Changes in Bond Yield: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plansâ bond holdings.
Dividend of ''0.50/- per share has been recommended by the Board for the year ended 31st March 2021.
31c: Contingent Liabilities and Commitments
(i) Estimated amount of investment to be made in JM Financial Yield Enhancer (Distressed Opportunity) Fund I - Series I for Capital Commitment ''5,70 Lakhs.
(ii) The Company has received demand notice for AY 2018-19 to make a payment of ''4,18.90 lakhs and an appeal has been filed against the Assessment Order with the Commissioner of Income-tax (Appeals).
31d: Earnings in Foreign Currency
The company has not received any dividend from foreign Associate companies.(Previous Year ''10,12.21 lakhs)
31h : Post Balance Sheet Events
The âCompany is proposing to undertake a rights issue of up to 7,10,00,000 equity shares of face value of ''5 each (âRights Equity Sharesâ) at a premium of ''45 per share aggregating up to ''355,00 lakhs through the fast track mode in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements), 2018, as amended, and various applicable circulars that have been issued by the Securities and Exchange Board of India (âSEBIâ) from time to time. In connection with the Issue,the letter of offer dated April 21, 2021 has been filed with NSE and SEBI.
The worldwide disruption caused by the COVID-19 pandemic and the consequent lockdown imposed almost till end-November 2020 have considerably impacted the business operations of our associate companies, including their subsidiaries, which in turn, have impacted the financial results of the Company. Even as the automotive sector was beginning to show some signs of recovery from the third quarter of financial year 2020-21, the second wave of the pandemic from March 2021, which has been far more severe in India, has forced another phase of lockdowns in various states across the country.
The impact of the second wave of the pandemic on the Company''s future income flow and results, will depend on ongoing as well as future developments, which are highly uncertain.
The company will however continue to closely monitor any material changes to future economic conditions from time to time and take appropriate risk mitigation measures.
Mar 31, 2021
Measurement of Fair Value Fair Value Hierarchy
The fair value of investment property has been determined by external, independent property valuers, having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued. The fair value measurement for all of the investment property has been categorised as a Level 3 fair value based on the inputs to the valuation technique used.
Valuation Techniques
"The Company follows discounted cash flows technique. The valuation model considers the present value of net cash flows to be generated from the property, taking into account the expected rental growth rate, vacant periods, occupancy rate, lease incentive costs such as rent-free periods and other costs notpaid by tenants. The expected net cash flows are discounted using risk-adjusted discount rates. Among other factors, the discount rate estimation considers the quality of a building and its location (prime vs secondary), tenant credit quality and lease terms. Investment property comprises a number of commercial properties that are leased to third parties. No contingent rents are charged.
The primary objective of the Companyâs Capital Management is to maximise shareholders value. The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. The Companyâs policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence to sustain future development of the business. For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves.
Note 26 : Financial Instruments - Fair Values and Risk Management A. Accounting Classification and Fair ValuesFair Value Hierarchy
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable
or unobservable and consists of the following three levels:
Level 1 Hierarchy - Includes Financial Instruments measured using quoted prices in the active market.
Level 2 Hierarchy - The Fair value of Financial Instruments that are not traded in an active market, is determined using valuation techniques which maximize the use of observable market data.
Level 3 Hierarchy - Inputs are not based on observable market data. 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. An adjustment to a Level 2 input that is significant to the entire measurement results in a fair value measurement categorised within Level 3 of the fair value hierarchy if the adjustment uses significant unobservable inputs.
Financial instruments fair valued under Level 3 hierarchy are measured using Market multiples method.
The carrying amount of trade receivables, cash and cash equivalents, other financial assets, trade payables and other financial
liabilities are considered to be the fair value due to short term nature.
The Companyâs 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 Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
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. The Companyâs 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 Companyâs reputation.
The Company regularly monitors the rolling forecasts and the actual cash flows to service the financial liabilities on a day-to-day basis through cash generation from business.
Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and loans and advances.
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Concentration of credit risk with respect to trade receivables are limited as the customers are reviewed, assessed and monitored regularly on a monthly basis with pre-determined credit limits assessed based on their payment capacity. Our historical experience of collecting receivables demonstrates that credit risk is low.
The following table sets out the information about the credit quality of financial assets measured at amortised cost.
The Company has exposure in Cash and cash equivalents,employee loans and investment carried at amortised cost. The Companyâs maximum exposure to credit risk as at 31st March, 2021 is the carrying value of each class of financial assets as on that date.
The Company held cash and cash equivalents of INR 55.65 lakhs as on March 31, 2021(March 31, 2020 : INR 166.29 lakhs). The cash and cash equivalents are held in hand and with bank. (Refer Note 1).
Market risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices in case of equity investments and Net Asset Value (NAV) in case of mutual fund investments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Company is having certain investments in unlisted companies in automobile sector where the valuation takes place based on certain market multiples of similar listed automobile companies after duly adjusted for discounts to the same.
Risk is an inherent and integral part of the business of investments and business process outsourcing. The Company aims to achieve an appropriate balance between risk and returns by establishing an efficient risk mitigation system. In order to mitigate risks, the Company has instituted a risk management framework, wherein, the Audit Committee under the supervision of the Board is tasked with regular assessment and laying down of policies for management of risks. In respect of certain investments, the Company has established systems to conduct due diligence of proposals received and to ensure that investments are in line with the overall objectives of the Company.
The Company derives revenue from providing support services to our captive clients, which primarily include providing back office administration, data management, contact centre management and training. The Company recognizes revenue when the significant terms of the arrangement are enforceable, services are being delivered and the collect ability is reasonably assured. The Company recognizes revenue on an accrual basis when services are performed.
When the terms of the agreement specify service level parameters that must be met, the Company monitors such service level parameters and determine if there are any service credits or penalties that needs to be accounted for. The Company''s revenue is significantly only from group companies, hence it is believed that there is no significant credit risk.
The Company invoices its clients depending on the terms of the arrangement, which include billing based on a per employee basis, a per transaction basis, a fixed price basis, an outcome-based basis or other pricing arrangements including cost-plus arrangements.
The Company''s revenue is exclusive of taxes and includes reimbursements of communication costs, incentives, etc as defined in the terms of agreement.
There are no other revenue under Contract with Customers other than those which are accounted in Profit and Loss Account as revenue which comprises of Service income and Learning income. Refer Note 28.a for the details of income earned from contracts with customers.
The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Refer Note 28.a for the Trade Receivable balances.
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset Volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. The Company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.
Changes in Bond Yield: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plansâ bond holdings.
Dividend of ''0.50/- per share has been recommended by the Board for the year ended 31st March 2021.
31c: Contingent Liabilities and Commitments
(i) Estimated amount of investment to be made in JM Financial Yield Enhancer (Distressed Opportunity) Fund I - Series I for Capital Commitment ''5,70 Lakhs.
(ii) The Company has received demand notice for AY 2018-19 to make a payment of ''4,18.90 lakhs and an appeal has been filed against the Assessment Order with the Commissioner of Income-tax (Appeals).
31d: Earnings in Foreign Currency
The company has not received any dividend from foreign Associate companies.(Previous Year ''10,12.21 lakhs)
31h : Post Balance Sheet Events
The âCompany is proposing to undertake a rights issue of up to 7,10,00,000 equity shares of face value of ''5 each (âRights Equity Sharesâ) at a premium of ''45 per share aggregating up to ''355,00 lakhs through the fast track mode in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements), 2018, as amended, and various applicable circulars that have been issued by the Securities and Exchange Board of India (âSEBIâ) from time to time. In connection with the Issue,the letter of offer dated April 21, 2021 has been filed with NSE and SEBI.
The worldwide disruption caused by the COVID-19 pandemic and the consequent lockdown imposed almost till end-November 2020 have considerably impacted the business operations of our associate companies, including their subsidiaries, which in turn, have impacted the financial results of the Company. Even as the automotive sector was beginning to show some signs of recovery from the third quarter of financial year 2020-21, the second wave of the pandemic from March 2021, which has been far more severe in India, has forced another phase of lockdowns in various states across the country.
The impact of the second wave of the pandemic on the Company''s future income flow and results, will depend on ongoing as well as future developments, which are highly uncertain.
The company will however continue to closely monitor any material changes to future economic conditions from time to time and take appropriate risk mitigation measures.
Mar 31, 2021
Measurement of Fair Value Fair Value Hierarchy
The fair value of investment property has been determined by external, independent property valuers, having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued. The fair value measurement for all of the investment property has been categorised as a Level 3 fair value based on the inputs to the valuation technique used.
Valuation Techniques
"The Company follows discounted cash flows technique. The valuation model considers the present value of net cash flows to be generated from the property, taking into account the expected rental growth rate, vacant periods, occupancy rate, lease incentive costs such as rent-free periods and other costs notpaid by tenants. The expected net cash flows are discounted using risk-adjusted discount rates. Among other factors, the discount rate estimation considers the quality of a building and its location (prime vs secondary), tenant credit quality and lease terms. Investment property comprises a number of commercial properties that are leased to third parties. No contingent rents are charged.
The primary objective of the Companyâs Capital Management is to maximise shareholders value. The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. The Companyâs policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence to sustain future development of the business. For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves.
Note 26 : Financial Instruments - Fair Values and Risk Management A. Accounting Classification and Fair ValuesFair Value Hierarchy
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable
or unobservable and consists of the following three levels:
Level 1 Hierarchy - Includes Financial Instruments measured using quoted prices in the active market.
Level 2 Hierarchy - The Fair value of Financial Instruments that are not traded in an active market, is determined using valuation techniques which maximize the use of observable market data.
Level 3 Hierarchy - Inputs are not based on observable market data. 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. An adjustment to a Level 2 input that is significant to the entire measurement results in a fair value measurement categorised within Level 3 of the fair value hierarchy if the adjustment uses significant unobservable inputs.
Financial instruments fair valued under Level 3 hierarchy are measured using Market multiples method.
The carrying amount of trade receivables, cash and cash equivalents, other financial assets, trade payables and other financial
liabilities are considered to be the fair value due to short term nature.
The Companyâs 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 Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
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. The Companyâs 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 Companyâs reputation.
The Company regularly monitors the rolling forecasts and the actual cash flows to service the financial liabilities on a day-to-day basis through cash generation from business.
Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and loans and advances.
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Concentration of credit risk with respect to trade receivables are limited as the customers are reviewed, assessed and monitored regularly on a monthly basis with pre-determined credit limits assessed based on their payment capacity. Our historical experience of collecting receivables demonstrates that credit risk is low.
The following table sets out the information about the credit quality of financial assets measured at amortised cost.
The Company has exposure in Cash and cash equivalents,employee loans and investment carried at amortised cost. The Companyâs maximum exposure to credit risk as at 31st March, 2021 is the carrying value of each class of financial assets as on that date.
The Company held cash and cash equivalents of INR 55.65 lakhs as on March 31, 2021(March 31, 2020 : INR 166.29 lakhs). The cash and cash equivalents are held in hand and with bank. (Refer Note 1).
Market risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices in case of equity investments and Net Asset Value (NAV) in case of mutual fund investments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Company is having certain investments in unlisted companies in automobile sector where the valuation takes place based on certain market multiples of similar listed automobile companies after duly adjusted for discounts to the same.
Risk is an inherent and integral part of the business of investments and business process outsourcing. The Company aims to achieve an appropriate balance between risk and returns by establishing an efficient risk mitigation system. In order to mitigate risks, the Company has instituted a risk management framework, wherein, the Audit Committee under the supervision of the Board is tasked with regular assessment and laying down of policies for management of risks. In respect of certain investments, the Company has established systems to conduct due diligence of proposals received and to ensure that investments are in line with the overall objectives of the Company.
The Company derives revenue from providing support services to our captive clients, which primarily include providing back office administration, data management, contact centre management and training. The Company recognizes revenue when the significant terms of the arrangement are enforceable, services are being delivered and the collect ability is reasonably assured. The Company recognizes revenue on an accrual basis when services are performed.
When the terms of the agreement specify service level parameters that must be met, the Company monitors such service level parameters and determine if there are any service credits or penalties that needs to be accounted for. The Company''s revenue is significantly only from group companies, hence it is believed that there is no significant credit risk.
The Company invoices its clients depending on the terms of the arrangement, which include billing based on a per employee basis, a per transaction basis, a fixed price basis, an outcome-based basis or other pricing arrangements including cost-plus arrangements.
The Company''s revenue is exclusive of taxes and includes reimbursements of communication costs, incentives, etc as defined in the terms of agreement.
There are no other revenue under Contract with Customers other than those which are accounted in Profit and Loss Account as revenue which comprises of Service income and Learning income. Refer Note 28.a for the details of income earned from contracts with customers.
The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Refer Note 28.a for the Trade Receivable balances.
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset Volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. The Company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.
Changes in Bond Yield: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plansâ bond holdings.
Dividend of ''0.50/- per share has been recommended by the Board for the year ended 31st March 2021.
31c: Contingent Liabilities and Commitments
(i) Estimated amount of investment to be made in JM Financial Yield Enhancer (Distressed Opportunity) Fund I - Series I for Capital Commitment ''5,70 Lakhs.
(ii) The Company has received demand notice for AY 2018-19 to make a payment of ''4,18.90 lakhs and an appeal has been filed against the Assessment Order with the Commissioner of Income-tax (Appeals).
31d: Earnings in Foreign Currency
The company has not received any dividend from foreign Associate companies.(Previous Year ''10,12.21 lakhs)
31h : Post Balance Sheet Events
The âCompany is proposing to undertake a rights issue of up to 7,10,00,000 equity shares of face value of ''5 each (âRights Equity Sharesâ) at a premium of ''45 per share aggregating up to ''355,00 lakhs through the fast track mode in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements), 2018, as amended, and various applicable circulars that have been issued by the Securities and Exchange Board of India (âSEBIâ) from time to time. In connection with the Issue,the letter of offer dated April 21, 2021 has been filed with NSE and SEBI.
The worldwide disruption caused by the COVID-19 pandemic and the consequent lockdown imposed almost till end-November 2020 have considerably impacted the business operations of our associate companies, including their subsidiaries, which in turn, have impacted the financial results of the Company. Even as the automotive sector was beginning to show some signs of recovery from the third quarter of financial year 2020-21, the second wave of the pandemic from March 2021, which has been far more severe in India, has forced another phase of lockdowns in various states across the country.
The impact of the second wave of the pandemic on the Company''s future income flow and results, will depend on ongoing as well as future developments, which are highly uncertain.
The company will however continue to closely monitor any material changes to future economic conditions from time to time and take appropriate risk mitigation measures.
Mar 31, 2019
45.06 Exposures
45.06.01 Exposure to Real Estate Sector
(Rs in lakhs)
|
31.03.2019 |
31.03.2018 |
|
|
Residential Mortgages - |
||
|
Lending My secured by mortgages on residential property that is or will be occupied by the borrower or that is rented |
16,31.83 |
17,83.45 |
|
Commercial Real Estate - |
||
|
Lending secured by mortgages on commercial real estates (office buildings, retail space, multi purpose commercial premises, multi-family residential buildings, multi-tenanted commercial premises, industrial or warehouse space, hotels, land acquisition, development and construction, etc) . Exposure would also include non-fund based limits |
21,63.48 |
10,00.24 |
|
Investments in Mortgage Backed Securities (MBS) and other securitised exposures |
||
|
- Residential |
- |
- |
|
- Commercial Real Estate |
- |
- |
|
Total Exposure to Real Estate Sector |
37,95.31 |
27,83.69 |
45.06.02 Exposure to Capital Market
(Rs in lakhs)
|
31.03.2019 |
31.03.2018 |
|
|
Direct investment in equity shares, convertible bonds, convertible debentures and units of equity-oriented mutual funds the corpus of which is not exclusively invested in corporate debt; (listed Securities) |
23,15.42 |
23,15.18 |
|
Advances against shares / bonds / debentures or other securities or on clean basis to individuals for investment in shares (including IPOs/ESOPs), convertible bonds, convertible debentures, and units of equity-oriented mutual funds; |
" |
" |
|
Advances for any other purposes where shares or convertible bonds or convertible debentures or units of equity oriented mutual funds are taken as primary security; |
- |
- |
|
Advances for any other purposes to the extent secured by the collateral security of shares or convertible bonds or convertible debentures or units of equity oriented mutual funds i.e where the primary security other than shares / convertible bonds / convertible debentures / units of equity oriented mutual funds does not fully cover the advances; |
||
|
Secured and unsecured advances to stockbrokers and guarantees issued on behalf of stockbrokers and market makers; |
- |
- |
|
Loans sanctioned to corporates against the security of shares / bonds / debentures or other securities or on clean basis for meeting promoter''s contribution to the equity of new companies in anticipation of raising resources; |
" |
" |
|
Bridge loans to companies against expected equity flows / issues |
- |
- |
|
All exposures to Venture Capital Funds (both registered and unregistered) |
- |
- |
|
Total Exposure to Capital Market |
23,15.42 |
23,15.18 |
45.06.03 Details of financing of parent company products: NIL
45.06.04 Details of Single Borrower Limit (SBL) / Group Borrower Limit (GBL) exceeded by the company: NIL
45.07 Registration obtained from other financial sector regulators during the year: NIL
45.08 Disclosure of penalties imposed by RBI and other regulators: NIL
45.09 Rating Assignment by Credit Rating Agencies and migration of ratings during the year
|
Instrument |
ICRA |
CRISIL |
|
Deposits |
AAA |
AAA |
|
Debentures |
AAA |
AAA |
|
Subordinated Debentures |
AAA |
AAA |
|
Long Term Bank Loans |
AAA |
AAA |
|
Consortium Bank Facilities |
AAA |
- |
|
Commercial Paper |
A1 |
A1 |
|
Short Term Bank Loans |
A1 |
- |
Migration of ratings during the year: NIL
45.10 Provisions and Contingencies
(Rs in lakhs)
|
Break up of ''Provisions and Contingencies'' shown under the head Expenditure in Profit and Loss Account |
2018-19 |
2017-18 |
|
Provisions for depreciation on Investments |
4,47.26 |
23.40 |
|
Provisions towards Stage III assets (incl. write offs) |
78,42.53 |
68,56.98 |
|
Provisions for Stage I & II assets |
24,43.35 |
16,70.46 |
|
Provisions made towards Income Tax |
361,40.20 |
286,27.75 |
45.12 Concentration of Advances
(Rs in lakhs)
|
2018-19 |
2017-18 |
|
|
Total Advances to twenty largest borrowers |
419,36.11 |
250,74.62 |
|
% of Twenty largest borrowers |
2.45% |
1.60% |
45.13 Concentration of Exposures
(Rs in lakhs)
|
31.03.2019 |
31.03.2018 |
|
|
Total Exposure to twenty largest borrowers |
530,50.29 |
516,20.29 |
|
% of Twenty largest borrowers |
1.92% |
2.33% |
45.14 Concentration of Stage III assets
(Rs in lakhs)
|
31.03.2019 |
31.03.2018 |
|
|
Total Exposure to top four Stage III assets |
22,74.50 |
16,37.09 |
45.15 Sector-wise Stage HI assets as a percentage to Total Advances
(Rs in lakhs)
|
Sector |
31.03.2019 |
31.03.2018 |
|
Truck Operators |
1.03 |
0.96 |
|
Auto Loans |
1.39 |
1.14 |
|
Infrastructure Loans |
0.91 |
0.96 |
|
Agriculture |
4.12 |
5.12 |
|
Others |
1.79 |
1.72 |
45.16 Movement of Stage III assets
(Rs in lakhs)
|
2018-19 |
2017-18 |
|
|
Net Stage III assets to Net Advances (%) |
0.83% |
0.66% |
|
Movement of Stage III assets (Gross) |
||
|
Opening balance |
283,50.46 |
280,59.18 |
|
Additions during the year |
280,07.80 |
198,61.24 |
|
Reductions during the year |
196,61.70 |
195,69.97 |
|
Closing balance |
366,96.56 |
283,50.46 |
|
Movement of Net Stage III assets |
||
|
Opening balance |
145,57.15 |
145,54.50 |
|
Additions during the year |
165,71.55 |
90,10.88 |
|
Reductions during the year |
82,68.42 |
90,08.23 |
|
Closing balance |
228,60.28 |
145,57.15 |
|
Movement of ECL on Stage III assets |
||
|
Opening balance |
137,93.31 |
135,04.69 |
|
Provisions made during the year |
114,36.26 |
108,50.36 |
|
Write-off /Write-back of excess provisions |
113,93.28 |
105,61.74 |
|
Closing balance |
138,36.29 |
137,93.31 |
45.17 Overseas Assets (for those with Joint Ventures and Subsidiaries abroad): NIL
45.18 Off-balance sheet SPVs sponsored (which are required to be consolidated as per accounting norms) : NIL
45.19 Customer Complaints
|
2018-19 |
2017-18 |
|
|
No. of complaints pending at the beginning of the year |
- |
2 |
|
No. of complaints received during the year |
639 |
162 |
|
No. of complaints redressed during the year |
639 |
164 |
|
No. of complaints pending at the end of the year |
- |
- |
Note 46: Disclosure on Restructured Accounts
(Rs in lakhs)
|
Type of Restructuring |
Others |
Total |
|
|
Details |
Stage III assets |
||
|
Restructured Accounts as on April 1, 2018 |
No. of borrowers |
3 |
3 |
|
Amount outstanding |
4,15.49 |
4,15.49 |
|
|
Provision thereon |
1,75.64 |
1,75.64 |
|
|
Fresh restructuring during the year |
No. of borrowers |
- |
- |
|
Amount outstanding |
- |
- |
|
|
Provision thereon |
- |
- |
|
|
Upgradations to restructured standard category during the year |
No. of borrowers |
- |
- |
|
Amount outstanding |
- |
- |
|
|
Provision thereon |
- |
- |
|
|
Restructured standard advances which cease to attract higher provisioning and / or additional risk weight at the end of the year and hence need not be shown as restructured standard advances at the beginning of the next year |
No. of borrowers |
- |
- |
|
Amount outstanding |
- |
- |
|
|
Provision thereon |
- |
- |
|
|
Downgradations of restructured accounts during the year |
No. of borrowers |
- |
- |
|
Amount outstanding |
- |
- |
|
|
Provision thereon |
- |
- |
|
|
Write-offs of restructured accounts during the year |
No. of borrowers |
1 |
1 |
|
Amount outstanding |
1,34.25 |
1,34.25 |
|
|
Provision thereon |
1,34.25 |
1,34.25 |
|
|
Restructured Accounts as on March 31, 2019 |
No. of borrowers |
2 |
2 |
|
Amount outstanding |
1,62.32 |
1,62.32 |
|
|
Provision thereon |
14.24 |
14.24 |
|
Note 47: Disclosure on frauds
During the year, frauds committed by four borrowers, in the nature of criminal breach of trust, to the extent of Rs 3,49.42 lakhs in aggregate were detected and reported to Reserve Bank of India. The company has provided for / written off the amount and has proceeded legally to recover the dues from the respective borrowers.
Signatures to Note 1-47
|
As per our report of even date attached |
S Viji |
S Prasad |
|
|
For Sundaram & Srinivasan |
Chairman |
Director |
|
|
Chartered Accountants |
|||
|
Registration No.004207S |
T T Srinivasaraghavan |
Harsha Viji |
A N Raju |
|
K Srinivasan |
Managing Director |
Deputy Managing Director |
Director (Operations) |
|
Partner |
|||
|
Membership No. 5809 |
|||
|
Place : Chennai |
M Ramaswamy |
P Viswanathan |
|
|
Date : 30th May, 2019 |
Chief Financial Officer |
Secretary & Compliance Officer |
|
Mar 31, 2018
22.02 Scheme of Arrangement:
The Scheme of Arrangement (âthe Schemeâ) between the Company (âResulting Companyâ) and Sundaram Finance Limited (SFL) (âDemerged Companyâ) and their Shareholders and creditors under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013, was approved by the Board of Directors of the Company on 17.02.2017.
The National Company Law Tribunal, Single Bench, Chennai vide Order No. CP/210 to 214/CAA/2017 dated 12th January 2018, approved a Composite Scheme of Arrangement, which was to be effective from the Appointed Date, i.e. 1st April 2016, but to be operative from the Effective Date, i.e. 18th January 2018.
Pursuant to the Scheme,
a) All the non-financial services and investments of Sundaram Finance Limited (SFL), together with identified shared services were vested in the Company.
b) The Authorised Equity Share Capital of the Company stand increased from 2,50,00,000 equity shares of Rs,10/- each aggregating to Rs,25,00.00 lakhs to 16,00,00,000 equity shares of Rs,5/- each aggregating to Rs,80,00.00 lakhs.
c) All shareholders of SFL were allotted one fully paid up equity share of Rs,5/- each in the Company, for every equity share of Rs,10/- each held by them in SFL. Consequently, the Issued and Paid up Equity Share Capital of the Company increased from Rs,20,00.00 lakhs to Rs,75,55.19 lakhs.
Amount credited to reserves after transfer of net assets and issue of share capital amounts to Rs,146,87 lakhs. The net amount was credited to Capital Reserve, General Reserve and Profit & Loss account as per the proportion provided in the Scheme of Arrangement
e) A net amount of Rs,34,89.96 lakhs towards transfer of profits for the financial year 2016-17 has been credited to the Reserves - Profit and Loss Account.
22.03 Segment reporting:
Segment information is presented in the Consolidated Financial Statements in terms of the Accounting Standard 17 - Segment Reporting.
22.04 Details of Corporate Social Responsibility (CSR) :
(a) Gross amount required to be spent by the Company during the year : Rs,19.52 Lakhs
(b) Amount spent during the year on:
22.05 Dividend of Rs,22,66.56 lakhs (Rs, 1.50 per share) has been recommended by the Board for the year ended 31st March 2018.
22.06 Contingent liabilities and commitments :
Uncalled commitment on partly paid equity shares of Flomettalic India Private Limited Rs,5,50.00 lakhs as of 31.03.2018.
22.07 Estimated amount of contractual commitments for the acquisition of Property Plant & Equipment - Nil
22.08 Earnings in foreign currency- Dividend from an Associate Company - Rs,26,07.72 lakhs.
22.09 Disclosure as per AS 15 :
The Company has recognised the following amounts in the Profit and Loss Statement, which are included in Employee benefits in Note 19.
22.10 Details of transactions with related parties
Related party disclosures, as per Accounting Standard 18 - ''Related Party Disclosures'', for the year ended 31st March 2018 are given below:
Related parties:
Company having significant influence Subsidiaries
Sundaram Finance Limited Sundaram Business Services Limited
Sundaram BPO India Limited
Subsidiaries of Company having significant influence
Sundaram Asset Management Company Ltd Associate Companies
Sundaram BNP Paribas Fund Services Ltd Flometallic India Private Limited
Sundaram BNP Paribas Home Finance Ltd Dunes Oman LLC (FZC)
Royal Sundaram General Insurance Co. Ltd Sundaram Hydraulics Limited
LGF Services Limited Axles India Limited
Sundaram Alternate Assets Limited Turbo Energy Private Limited
Sundaram Trustee Company Limited Transenergy Limited
Sundaram Asset Management Singapore Pte Ltd. Sundaram Dynacast Private Limited
Key Management Personnel:
Sri. Paramesh Krishnaier Chief Executive Officer from 12th February 2018
22.11 As per the information available with the company, there are no vendors under the category of micro and small enterprises to whom the Company owes dues as at 31st March, 2018.
22.12 Figures for the previous year have been re-grouped / reclassified wherever necessary to conform with the classification of the current year.
22.13 Figures for the current year are after giving effect to the Scheme of Arrangement (Note 22.02) and hence not directly comparable with those of previous year.
Mar 31, 2018
22.02 Scheme of Arrangement:
The Scheme of Arrangement (âthe Schemeâ) between the Company (âResulting Companyâ) and Sundaram Finance Limited (SFL) (âDemerged Companyâ) and their Shareholders and creditors under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013, was approved by the Board of Directors of the Company on 17.02.2017.
The National Company Law Tribunal, Single Bench, Chennai vide Order No. CP/210 to 214/CAA/2017 dated 12th January 2018, approved a Composite Scheme of Arrangement, which was to be effective from the Appointed Date, i.e. 1st April 2016, but to be operative from the Effective Date, i.e. 18th January 2018.
Pursuant to the Scheme,
a) All the non-financial services and investments of Sundaram Finance Limited (SFL), together with identified shared services were vested in the Company.
b) The Authorised Equity Share Capital of the Company stand increased from 2,50,00,000 equity shares of Rs,10/- each aggregating to Rs,25,00.00 lakhs to 16,00,00,000 equity shares of Rs,5/- each aggregating to Rs,80,00.00 lakhs.
c) All shareholders of SFL were allotted one fully paid up equity share of Rs,5/- each in the Company, for every equity share of Rs,10/- each held by them in SFL. Consequently, the Issued and Paid up Equity Share Capital of the Company increased from Rs,20,00.00 lakhs to Rs,75,55.19 lakhs.
Amount credited to reserves after transfer of net assets and issue of share capital amounts to Rs,146,87 lakhs. The net amount was credited to Capital Reserve, General Reserve and Profit & Loss account as per the proportion provided in the Scheme of Arrangement
e) A net amount of Rs,34,89.96 lakhs towards transfer of profits for the financial year 2016-17 has been credited to the Reserves - Profit and Loss Account.
22.03 Segment reporting:
Segment information is presented in the Consolidated Financial Statements in terms of the Accounting Standard 17 - Segment Reporting.
22.04 Details of Corporate Social Responsibility (CSR) :
(a) Gross amount required to be spent by the Company during the year : Rs,19.52 Lakhs
(b) Amount spent during the year on:
22.05 Dividend of Rs,22,66.56 lakhs (Rs, 1.50 per share) has been recommended by the Board for the year ended 31st March 2018.
22.06 Contingent liabilities and commitments :
Uncalled commitment on partly paid equity shares of Flomettalic India Private Limited Rs,5,50.00 lakhs as of 31.03.2018.
22.07 Estimated amount of contractual commitments for the acquisition of Property Plant & Equipment - Nil
22.08 Earnings in foreign currency- Dividend from an Associate Company - Rs,26,07.72 lakhs.
22.09 Disclosure as per AS 15 :
The Company has recognised the following amounts in the Profit and Loss Statement, which are included in Employee benefits in Note 19.
22.10 Details of transactions with related parties
Related party disclosures, as per Accounting Standard 18 - ''Related Party Disclosures'', for the year ended 31st March 2018 are given below:
Related parties:
Company having significant influence Subsidiaries
Sundaram Finance Limited Sundaram Business Services Limited
Sundaram BPO India Limited
Subsidiaries of Company having significant influence
Sundaram Asset Management Company Ltd Associate Companies
Sundaram BNP Paribas Fund Services Ltd Flometallic India Private Limited
Sundaram BNP Paribas Home Finance Ltd Dunes Oman LLC (FZC)
Royal Sundaram General Insurance Co. Ltd Sundaram Hydraulics Limited
LGF Services Limited Axles India Limited
Sundaram Alternate Assets Limited Turbo Energy Private Limited
Sundaram Trustee Company Limited Transenergy Limited
Sundaram Asset Management Singapore Pte Ltd. Sundaram Dynacast Private Limited
Key Management Personnel:
Sri. Paramesh Krishnaier Chief Executive Officer from 12th February 2018
22.11 As per the information available with the company, there are no vendors under the category of micro and small enterprises to whom the Company owes dues as at 31st March, 2018.
22.12 Figures for the previous year have been re-grouped / reclassified wherever necessary to conform with the classification of the current year.
22.13 Figures for the current year are after giving effect to the Scheme of Arrangement (Note 22.02) and hence not directly comparable with those of previous year.
Mar 31, 2018
Notes:
Consequent to the Scheme, the non-core investments held by Sundaram Finance Limited (the company) in various companies, as mentioned below, have been transferred to Sundaram Finance Holdings Limited (SFHL) and in consideration, all shareholders of the company have been allotted 1 share of Rs,5/- each fully paid up in SFHL, for every share held in the company. Consequently, the company holds 26.47% in SFHL and SFHL became an associate company effective 12/02/2018. The shares held by the company in SFHL are under lock-in period of 3 years. Further, investments held by the company in Sundaram Insurance Broking Services Limited & Infreight Logistics Solutions Limited stands cancelled on account of amalgamation with the company, in line with the said scheme. (Refer Note no. 26.03).
(Sundaram Business Services Limited, Sundaram BPO India Limited, Flometallic India Private Limited, Dunes Oman LLC (FZC), Sundaram Hydraulics Limited, Axles India Limited, Turbo Energy Private Limited, Transenergy Limited, Sundaram Dynacast Private Limited, Sundaram Clayton Limited, Wheels India Limited, India Motor Parts and Accessories Limited, TVS Investments Limited, Lucas-TVS Limited, Delphi-TVS Diesel Systems Limited, Brakes India Private Limited, Techtran Polylenses Limited and Vishnu Forge Industries Limited)
i) During the year, the company subscribed to the rights issue of equity shares offered by:
- Royal Sundaram General Insurance Co. Limited to the extent of 8,95,62,000 equity shares of Rs,10/- each at a premium of Rs,15/- per share, amounting to Rs,223,90.50 lakhs.
- Sundaram BNP Paribas Fund Services Limited to the extent of 25,50,000 equity shares of Rs,10/- each at par, amounting to Rs,2,55.00 lakhs.
ii) Consequent to amalgamation of Sundaram Infotech Solutions Limited with the company during the year, investment (net of provision) stand cancelled. (Refer Note no. 26.02)
iii) Denotes investment where provision for diminution in value has been made.
iv) Investments in the growth option of the open-ended schemes of Sundaram Mutual Fund is in compliance with the seed capital requirements stipulated by SEBI Mutual Funds (Amendment) Regulations, 2014 and cannot be redeemed unless the scheme is wound up.
v) During the year, the company as sponsor of the fund, invested Rs,8,50.00 lakhs & Rs,10,00.00 lakhs in Sundaram Alternative Opportunities Fund _ Nanocap Series I & Series II respectively, category III AIF, of Sundaram Alternative Investment Trust, in compliance with SEBI (Alternative Investment Funds) Regulations, 2012. Similarly, the company has also invested Rs,25,00.00 lakhs, out of the overall commitment Rs,50,00.00 lakhs, in Sundaram High Yield Debt Fund, a category II AIF.
vi) In accordance with the Reserve Bank of India directives, the company has created a floating charge on the statutory liquid assets comprising investment in Government Securities of face value Rs,386,62.30 lakhs (cost - Rs,386,39.19 lakhs) and bank deposits of Rs,12,44.00 lakhs in favour of trustees representing the deposit holders of the company.
Note 26: General
26.01 Segment Reporting
Segment information is presented in the Consolidated Financial Statements in terms of the Accounting Standard 17 - Segment Reporting.
26.02 a) Pursuant to the Scheme of Amalgamation of Sundaram Infotech Solutions Limited (SISL) - a wholly owned subsidiary
(transferor company) with the Company, as sanctioned by the National Company Law Tribunal vide their order dated September 26, 2017, the assets and liabilities of the transferor company were transferred to and vested with the Company with effect from the appointed date, April 1, 2016. The Scheme was to be effective from the Appointed Date, i.e. 1st April 2016, and is operative from the Effective Date, i.e. 27th September 2017.
b) The Amalgamation has been accounted for under the "Pooling of Interests method" prescribed by Accounting Standard (AS - 14) - Accounting for Amalgamations issued by the Institute of Chartered Accountants of India. (ICAI) and other Generally Accepted Accounting Principles.
c) Pursuant to the Scheme of Amalgamation, the authorised equity share capital of the Company stands increased by Rs,17,00.00 Lakhs (1,70,00,000 equity shares of Rs,10/- each). Consequent to the merger, the entire issued, subscribed and paid up capital of SISL, held by the company and its nominees would stand cancelled.
26.03 The National Company Law Tribunal, Division Bench, Chennai vide Order No. CP/210-214/CAA/2017 dated 12th January 2018 approved the Composite Scheme of Arrangement and Amalgamation (Scheme) between the Company and its four subsidiaries, viz., Sundaram Insurance Broking Services Limited, Infreight Logistics Solutions Limited, Sundaram BPO India Limited and Sundaram Finance Holdings Limited which was received on 18th January 2018. The Scheme was to be effective from the Appointed Date, i.e. 1st April 2016, and is operative from the Effective Date, i.e. 18th January 2018. The scheme envisages the following:
- Amalgamation of Sundaram Insurance Broking Services Limited (SIBSL) and Infreight Logistics Solutions Limited (ILSL) into the Company. Pursuant to the scheme, the authorised equity share capital of the Company stands increased by 1,11,00,000 equity shares of Rs,10/- each aggregating to Rs,11,10.00 Lakhs. Consequent to the merger, the entire issued, subscribed and paid up capital of SIBSL & ILSL, held by the company and its nominees would stand cancelled. The net amount debited to reserves on account of the Amalgamation amounts to Rs,1,73.43 lakhs;
- Demerger of the shared services of Sundaram BPO India Limited (SBPO) into the Company; and subsequently
- Demerger of the non-core investments and shared services of the Company into Sundaram Finance Holdings Limited (SFHL). All shareholders of the company have been allotted shares in SFHL, in the ratio of 1:1 and the shares have been listed in NSE.
b) A net amount of Rs,34,81.65 lakhs towards transfer of profits for the financial year 2016-17 has been reduced from the Reserves.
26.05 The Company has spent an amount of Rs,12,64.84 lakhs (2016-17 - Rs,12,37.42 lakhs) towards Corporate Social Responsibility (CSR) under Sec 135 of the Companies Act 2013, in the various areas covered under the regulatory provisions like healthcare, education, environment and protection of art and culture.
26.06 The pending litigations as on 31st March 2018 have been compiled by the company and reviewed by the Statutory Auditors. The current position of the litigation has been evaluated and the effect thereof has been appropriately disclosed in the financial statements.
26.07 In respect of a lease transaction, the Company preferred appeals against the demands raised by Commissioner of Customs / CESTAT / Appellate Tribunal for Foreign Exchange, towards duty and penalty, aggregating to Rs,63.79 lakhs (2016-17 - Rs,63.79 lakhs).
Tax disputes in respect of Income Tax, Service Tax and VAT demands are pending before various appellate forums/authorities and the cash flows would be determined only upon the receipt of decisions. The Company is of the opinion that the demands are not sustainable and expects to succeed in its appeal.
The contested tax demands have been ascertained on the basis of relief allowed by the appellate authorities, on similar issues in earlier assessment years.
26.04 RELATED PARTIES DISCLOSURES:
Related party disclosures, as per Accounting Standard 18 - ''Related Party Disclosures'', for the year ended 31st March 2018 , are given below:
RELATED PARTIES:
Subsidiary Companies: Associates:
Sundaram BNP Paribas Home Finance Ltd. Sundaram Finance Holdings Limited (from 12/02/2018)*
Sundaram Asset Management Company Ltd. Axles India Ltd.*
Sundaram Asset Management Singapore Pte Ltd. Turbo Energy Private Ltd.*
Sundaram Trustee Company Ltd. Transenergy Ltd.*
Sundaram Alternate Assets Limited Sundaram Dynacast Private Ltd.*
LGF Services Ltd. Sundaram Hydraulics Ltd.*
Sundaram BNP Paribas Fund Services Ltd. Flometallic India Private Ltd.*
Royal Sundaram General Insurance Co. Ltd. Dunes Oman LLC (FZC)*
Sundaram Business Services Limited (till 18/01/2018)*
Sundaram BPO India Limited (till 18/01/2018)*
Sundaram Finance Holdings limited (till 11/02/2018)*
Sundaram Infotech Solutions Ltd.*
Infreight Logistics Solutions Ltd.*
Sundaram Insurance Broking Services Ltd.*
Key Management Personnel (KMP):
Mr. T.T. Srinivasaraghavan, Managing Director Mr. Harsha Viji, Deputy Managing Director Mr. A.N. Raju, Director (Operations)
Enterprises over which Key Management Personnel (KMP) and his relatives can exercise significant influence
Mr. Harsha Viji M/s. Athreya Harsha Holdings Private Ltd.
Mrs. Chitra Viji & Mr. Sriram Viji M/s. Uthirattadhi Sriram Holdings Private Ltd.
* As per Scheme , refer note 26.02 and 26.03
26.09 Estimated amount of contracts remaining to be executed on capital account Rs,3,24.86 lakhs (net of advances of Rs,35.67 lakhs) (31.03.2017 - Rs,6,11.15 lakhs, net of advances of Rs,2,28.11 lakhs). Uncalled liability on partly paid equity shares Rs, Nil (31.03.2017 - Rs,5,50.00 lakhs) and uncalled commitment in Alternate Investment Fund Schemes amounting to Rs,33,61.22 lakhs (31.03.2017 - Rs,13,50.00 lakhs).
26.10 Interim Dividend of Rs, 55,55.19 lakhs (Rs, 5/- per share) has been approved by the Board for the year ended 31st March 2018 during Apr 18. Final dividend of Rs, 77,77.27 lakhs (Rs, 7/- per share) has been recommended by the board for the year ended 31st March 2018 in May 18.
26.11 Based on the current assessment of the long-term contracts in the ordinary course of business, the Company has made adequate provision for losses where required. The derivative contracts have been entered into for hedging the foreign currency liability and interest liability. Derivative contracts being in the nature of hedge contracts, the Company does not anticipate any material losses from the same.
26.12 Miscellaneous expenses under Administrative and other expenses include payment to Auditors towards:
26.13 There are no amounts due to Small Scale Industries in terms of âThe Micro, Small and Medium Enterprises Development Act, 2006â.
27.03.02 Exchange Traded Interest Rate (IR) Derivaties : NIL
27.03.03 Qualitative disclosures on risk exposure of derivatives i) Qualitative disclosures
The Company has a Board approved policy for entering into derivative transactions. Derivative transaction comprises Forward Rate Agreements, Interest Rate Swaps, Coupon Only Swaps, Currency and Interest Rate Swap and Forward Exchange contracts. The Company undertakes such transactions for hedging balance sheet assets and liabilities. Such outstanding derivative transactions are accounted on accrual basis over the life of the underlying instrument. The Asset Liability Management Committee and Risk Management Committee periodically monitors and reviews the risks involved.
27.04.03 Details of Financial Assets Sold to Securitisation / Reconstruction Company for Asset Reconstruction: NIL
27.04.04 Details of non-performing financial assets purchased / sold : NIL
27.05 Maturity Pattern of certain items of Assets and Liabilities as at March 31, 2018:
Mar 31, 2017
Note 1: General
1.01 Segment Reporting
Segment information is presented in the Consolidated Financial Statements in terms of the Accounting Standard 17 - Segment Reporting.
1.02 The Board of Directors, at its meeting held on 25th November 2016, approved the Scheme of Amalgamation for the merger of Sundaram Infotech Solutions Limited, a wholly-owned subsidiary, with the Company, effective 1st April 2016.
The Company has obtained a âno objection â letter from the National Stock Exchange of India Limited, in accordance with the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Application has been filed by Sundaram Infotech Solutions Limited with the National Company Law Tribunal for approval.
On approval, the Scheme will be given effect to in the Books, effective 1st April 2016.
1.03 The Board of Directors, at its meeting held on 17th February 2017, approved a composite Scheme of Arrangement and Amalgamation between the Company and its subsidiaries effective 1st April 2016. The Scheme will result in:
- Merger of Sundaram Insurance Broking Services Limited and Infreight Logistics Solutions Limited into the Company;
- Demerger of the shared services of Sundaram BPO India Limited into the Company; and subsequently
- Demerger of the non-core investments and shared services of the Company into Sundaram Finance Holdings Limited,
The Company has obtained a âno objectionâ letter from the National Stock Exchange of India Limited, in accordance with the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and approval from the Competition Commission of India for the transactions contemplated in the composite Scheme of Arrangement and Amalgamation. Necessary steps are being taken to file an application with the National Company Law Tribunal for approval.
On approval, the Scheme will be given effect to in the Books, effective 1st April 2016.
1.04 Disclosure of Specified Bank Notes (SBN) - Pursuant to Ministry of Corporate Affairs Notification G.S.R.308 Dated 30th March, 2017.
1.05 The Company has spent an amount of Rs.12,37.42 lakhs (2015-16 - Rs.12,04.65 lakhs) towards Corporate Social Responsibility (CSR) under Sec 135 of the Companies Act 2013, in the various areas covered under the regulatory provisions like healthcare, education, environment and protection of art and culture.
1.06 The pending litigations as on 31st March 2017 have been compiled by the company and reviewed by the Statutory Auditors. The current position of the litigation has been evaluated and the effect thereof has been appropriately disclosed in the financial statements.
1.07 In respect of a lease transaction, the Company preferred appeals against the demands raised by Commissioner of Customs / CESTAT / Appellate Tribunal for Foreign Exchange, towards duty and penalty, aggregating to Rs.63.79 lakhs.
Tax disputes in respect of Income Tax, Service Tax and VAT demands are pending before various appellate forums/authorities and the cash flows would be determined only upon the receipt of decisions. The Company is of the opinion that the demands are not sustainable and expects to succeed in its appeal.
1.08 Estimated amount of contracts remaining to be executed on capital account Rs.6,11.15 lakhs (net of advances of Rs.2,28.11 lakhs) (31.03.2016 - Rs.2,89.49 lakhs, net of advances of Rs.3,27.83 lakhs). Uncalled liability on partly paid equity shares of Rs.5,50 lakhs (31.03.2016 - Rs.5,50 lakhs) and Uncalled sponsor commitment in Alternate Investment Fund Schemes of Sundaram Mutual Fund Rs.13,50 lakhs (31.03.2016 - Nil).
1.09 Final dividend of Rs.72,21.75 lakhs (Rs.6.50 per share) has been recommended by the Board for the year ended 31st March 2017. The Central Government vide notification dated 30.03.2016 has amended the Companies (Accounting Standards) Rules, 2006. According to the amended Rule, the dividend declared after the Balance Sheet date shall not be recorded as a liability in the previous year. Therefore, the Company has not recorded Rs.81,59.47 lakhs as liability for proposed dividend including dividend distribution tax as at 31st March 2017. However, the same will be recognised as liability on approval of the shareholders in the Annual General Meeting.
1.10 Based on the current assessment of the long-term contracts in the ordinary course of business, the Company has made adequate provision for losses where required. The derivative contracts have been entered into for hedging the foreign currency liability and interest liability. Derivative contracts being in the nature of hedge contracts, the Company does not anticipate any material losses from the same.
1.11 There are no amounts due to Small Scale Industries in terms of âThe Micro, Small and Medium Enterprises Development Act, 2006â,
2.01.01 Exchange Traded Interest Rate (IR) Derivaties : NIL
2.01.02 Qualitative disclosures on risk exposure of derivatives i) Qualitative disclosures
The Company has a Board approved policy for entering into derivative transactions. Derivative transaction comprises Forward Rate Agreements, Interest Rate Swaps, Coupon Only Swaps, Currency and Interest Rate Swap and Forward Exchange contracts. The Company undertakes such transactions for hedging balance sheet assets and liabilities. Such outstanding derivative transactions are accounted on accrual basis over the life of the underlying instrument. The Asset Liability Management Committee and Risk Management Committee periodically monitors and reviews the risks involved.
2.02 Disclosures relating to Securitisation
2.02.01 Details of Financial Assets Sold to Securitisation / Reconstruction Company for Asset Reconstruction: NIL
2.02.02 Details of non-performing financial assets purchased / sold : NIL
2.02.03 Details of financing of parent company products : NIL
2.02.04 Details of Single Borrower Limit (SBL) / Group Borrower Limit (GBL) exceeded by the company : NIL
2.03 Registration obtained from other financial sector regulators during the year : NIL
2.04 Disclosure of penalties imposed by RBI and other regulators : NIL
2.05 Overseas Assets (for those with Joint Ventures and Subsidiaries abroad) : NIL
2. 06 Off-balance sheet SPVs sponsored (which are required to be consolidated as per accounting norms) : NIL
Note 2: Disclosure on frauds
During the year, a fraud committed by an outsourced employee, in the nature of cheating and forgery, to the extent of Rs.24.14 lakhs was detected and reported to Reserve Bank of India. The Company has provided for the amount and has proceeded legally to recover the dues.
Note 3: Previous year figures have been regrouped / reclassified wherever necessary to conform to the current yearâs presentation.
Mar 31, 2015
1 Net proceeds from SFL Share Trust
During the year, SFL Shares Trust sold 17,37,012 equity shares of
Sundaram Finance Limited. These shares accrued to the Trust on account
of the merger of Lakshmi General Finance Limited with Sundaram Finance
Limited, in the year 2005, in accordance with a Scheme of Amalgamation
approved by the High Court of Madras. Sundaram Finance Limited, being
the sole beneficiary of the Trust received an amount of Rs.25655.70
lakhs arising from the sale of above shares and credited the same
directly to the Capital Reserve, in line with the underlying substance
of the transaction.
2 During the year, the Company entered into an agreement with Royal
Sun Alliance Plc UK (RSA) whereby the Company would acquire 26% equity
stake of RSA in Royal Sundaram Alliance Insurance Company Ltd (Royal
Sundaram) for a consideration of Rs.450 Crores which is awaiting
regulatory approvals. The Company currently holds 49.90% in Royal
Sundaram and the said acquisition would increase its holding to 75.90%.
3 The Company has spent an amount of Rs.913.95 lakhs towards
Corporate Social Responsibility (CSR) under Sec 135 of the Companies
Act 2013, in the various areas covered under the regulatory provisions
like health care, education, environment and protection of art and
culture.
4 RELATED PARTIES DISCLOSURES:
Related party disclosures, as per Accounting Standard 18 - ''Related
Party Disclosures'', for the year ended 31st March 2015, are given
below:
RELATED PARTIES:
Subsidiary Companies: Associates:
Sundaram BNP Paribas Home Finance Ltd. Axles India Ltd.
Sundaram Asset Management Company Ltd. Turbo Energy Private Ltd.
Sundaram Asset Management Singapore
Pte Ltd. Transenergy Ltd.
Sundaram Trustee Company Ltd. Sundaram Dynacast Private
Ltd.
Sundaram Business Services Ltd. Sundaram Hydraulics Ltd.
Sundaram BPO India Ltd. Flometallic India Private
Ltd.
Sundaram Insurance Broking Services
Ltd. The Dunes Oman LLC (FZC)
Sundaram Finance Distribution Ltd.
LGF Services Ltd.
Sundaram BNP Paribas Fund Services Ltd.
Sundaram Infotech Solutions Ltd.
Infreight Logistics Solutions Ltd.
Sundaram Parekh Warehousing Services Ltd.(merged with Infreight
Logistics Solutions Ltd. with effect from 01.04.2014)
Joint Ventures:
Royal Sundaram Alliance Insurance Company Ltd.
BNP Paribas Sundaram Global Securities Operations Private Ltd (BNP
Paribas Sundaram GSO)
Key Management Personnel:
Mr T T Srinivasaraghavan, Managing Director
Mr Harsha Viji, Director (Strategy & Planning)
Mr A N Raju, Director (Operations)
5 The pending litigations as on 31st March 2015 have been compiled
by the company and reviewed by the Statutory Auditors. The current
position of the litigation has been evaluated and the effect thereof
has been appropriately disclosed in the financial statements.
6 The Company preferred an appeal against the demand raised by the
Commissioner of Customs, Tuticorin, in respect of a lease transaction.
The Customs Excise and Service Tax Appellate Tribunal (CESTAT) in its
Order, remanded the appeal to the Adjudicating Commissioner for
requantifying the duty. The Commissioner of Customs, Tuticorin vide
Order dated 19.12.2012, re-quantified the duty at Rs.43.79 lakhs. The
company filed an appeal against the Order and remitted the duty under
protest.
The Hon''ble High Court of Madras granted an interim stay against the
collection of penalty of Rs.10 lakhs imposed by CESTAT.
The Special Director of Enforcement, New Delhi, imposed a penalty of
Rs.10 lakhs on the Company. The Company has preferred an appeal against
the penalty with the Appellate Tribunal for Foreign Exchange and
obtained a stay after remitting Rs.2.50 lakhs as directed by the
Tribunal. Meanwhile the company has initiated arbitration proceedings
against the Lessee and has received an award in its favour.
7 Contingent liabilities in respect of (Rs. in lakhs)
31.03.2015 31.03.2014
a) Liability -
To Banks -on Cheques discounted 3,41.05 6,97.09
on Letters of Credit 22,76.74 7,57.91
b) Claims against the company not acknowledged as debts:
Service Tax 75,89.23 64,84.63
Others 14,90.22 15,84.04
8 Estimated amount of contracts remaining to be executed on capital
account - v312.65 lakhs (net of advances of Rs.611.87 lakhs)
(31.03.2014 - Rs.508.63 lakhs, net of advances of Rs.346.56 lakhs)
Investment in Partly paid-up Equity shares Rs.550.00 lakhs (31.03.2014
- Rs.1,098.90 lakhs)
9 Based on the current assessment of the long-term contracts in the
ordinary course of business, the Company has made adequate provision
for losses where required.
The derivative contracts have been entered into for hedging the foreign
currency liability and interest liability. Derivative contracts being
in the nature of hedge contracts, the Company does not anticipate any
material losses from the same.
10 Exchange Traded Interest Rate (IR) Derivaties : NIL
11 Details of Financial Assets Sold to Securitisation /
Reconstruction
Company for Asset Reconstruction: NIL
12 Details of non-performing financial assets purchased / sold
during the year 2014-15:
A Details of non-performing financial assets purchased : NIL
B Details of non-performing financial assets sold : NIL
13 Details of financing of parent company products: NIL
14 Details of Single Borrower Limit (SBL) /
Group Borrower Limit (GBL) exceeded by the company : NIL
15 Registration obtained from other financial sector regulators:
IRDA - Composite Corporate Agency
16 Disclosure of penalties imposed by
Reserve Bank of India and other regulators : NIL
17 Overseas Assets (for those with Joint Ventures and Subsidiaries
abroad) NIL
18 Off-balance sheet SPVs sponsored NIL
(which are required to be consolidated as per accounting norms)
Mar 31, 2014
1.1 Segment Reporting
Segment information is presented in the Consolidated Financial
Statements in terms of the Accounting Standard 17 - Segment Reporting.
1.2 The Company preferred an appeal against the demand raised by the
Commissioner of Customs, Tuticorin, in respect of a lease transaction.
The Customs Excise and Service Tax Appellate Tribunal (CESTAT) in its
Order, remanded the appeal to the adjudicating Commissioner for
Re quantifying the duty. The Commissioner of Customs, Tuticorin vide
order dated 19.12.2012, re-quantified the duty at Rs. 43.79 lakhs. The
company fled an appeal against the order and remitted the duty under
protest.
The Hon''ble High Court of Madras granted an interim stay against the
collection of penalty of Rs. 10 lakhs imposed by CESTAT.
The Special Director of Enforcement, New Delhi, imposed a penalty of Rs.
10 lakhs on the Company. The Company has preferred an appeal against
the penalty with the Appellate Tribunal for Foreign Exchange and
obtained a stay after remitting Rs. 2.50 lakhs as directed by the
Tribunal. Meanwhile the company has initiated arbitration proceedings
against the Lessee and has received an award in its favour.
2. Estimated amount of contracts remaining to be executed on capital
account  Rs. 508.63 lakhs (net of advances of Rs. 346.56 lakhs)
(31.03.2013 Â Rs. 1949.34 lakhs, net of advances of Rs. 101.54 lakhs)
Investment in Partly paid-up Equity shares Rs. 1098.90 lakhs (31.03.2013
 Nil).
3. There are no amounts due to Small Scale Industries in terms of
"The Micro, Small and Medium Enterprises Development Act, 2006".
4. Contingent liabilities in respect of (Rs. in lakhs)
31.03.2014 31.03.2013
a) Liability Â
To Banks  on Cheques
discounted 6,97.09 16,46.19
on Letters
of Credit 7,57.91 3,94.67
b) Claims against the
company not acknowledged
as debts:
Hire Purchase/Lease
transactions  31.07
Service Tax 64,84.63 61,04.70
Others 16,37.83 14,13.47
5. Previous year''s figures have been regrouped /reclassified wherever
necessary to conform to the current year''s presentation.
Mar 31, 2013
1.1 Segment Reporting
Segment information is presented in the Consolidated Financial
Statements in terms of the Accounting Standard 17 - Segment Reporting.
1.2 The details of securitised assets outstanding as on 31st March
2013 as per books of the Special Purpose Vehicles (SPV) sponsored by
the Company are given below
1.3 In December 2012, the Reserve Bank of India, issued draft
guidelines on the regulatory framework for NBFCs, which, inter alia,
propose that the asset classification and provisioning norms for NBFCs
should, in a phased manner, be made similar to those for banks. In view
of the imminent tightening of regulations, the Company has made a
provision of Rs. 1,581 lakhs on assets whose instalments are overdue
for 120 days and above. Further, given the difficult economic
environment, the Company has, as a measure of prudence, made an
additional provision of Rs. 2,091 lakhs during the year.
1.4 The Company preferred an appeal against the demand raised by the
Commisioner of Customs, Tuticorin, in respect of a lease transaction.
The Customs Excise and Service Tax Appellate Tribunal (CESTAT) in its
Order, remanded the appeal to the adjudicating Commissioner for
requantifying the duty. The Commissioner of Customs, Tuticorin vide its
order dated 19.12.2012, re-quantified the duty at Rs. 43.79 lakhs. The
Company filed an appeal against the order and remitted the duty under
protest.
The Hon''ble High Court of Madras granted an interim stay against the
collection of penalty of Rs. 10 lakhs imposed by CESTAT.
The Special Director of Enforcement, New Delhi, imposed a penalty of
Rs. 10 lakhs on the Company. The Company has preferred an appeal
against the penalty with the Appellate Tribunal for Foreign Exchange
and obtained a stay after remitting Rs. 2.50 lakhs as directed by the
Tribunal. Meanwhile the Company has initiated arbitration proceedings
against the Lessee and has received an award in its favour.
1.5 Estimated amount of contracts remaining to be executed on capital
account - Rs. 1,949.34 lakhs (net of advances of Rs. 101.54 lakhs)
(31.03.2012 - Rs. 774.63 lakhs, net of advances of Rs. 2,204.47 lakhs)
1.6 There are no amounts due to Small Scale Industries in terms of
"The Micro, Small and Medium Enterprises Development Act, 2006".
1.7 Contingent liabilities in respect of (Rs. in lakhs)
31.03.2013 31.03.2012
a) Liability -
To Banks - on Cheques discounted 16,46.19 15,08.96
on Letter of Credit 3,94.67 28,28.95
b) Claims against the Company not
acknowledged as Debts:
Hire Purchase / Lease transactions 31.07 31.07
Service Tax 61,04.70 45,01.73
Others 14,13.47 12,54.69
1.8 Previous year''s figures have been regrouped /reclassified
wherever necessary to conform to the current year''s presentation.
Mar 31, 2012
A) Paid-up share capital includes 5,09,75,545 Equity Shares allotted as
fully paid-up by way of bonus shares by Capitalisation of Reserves and
Securities Premium and 37,75,965 Equity Shares allotted for
consideration other than cash pursuant to a Scheme of Amalgamation.
b) The number of shares outstanding at the beginning and at the end of
the reporting period are the same.
c) No shareholder of the Company holds more than 5% of the Equity
Shares.
d) The Company issued 2,77,75,965 Equity Shares by way of bonus shares
during the financial year 2008-09.
The Secured Non Convertible Debentures are secured by mortgage of
immovable property ranking pari passu with charges created in favour of
the trustees in addition to specific assets covered by charge on
Hypothecation Loan receivables / Hire purchase / Lease agreements with
a security cover of 100% / 125%, as per the terms of issue.
The Term loans from banks are secured by hypothecation of specific
assets covered by a charge on Hypothecation Loan Receivables / Hire
purchase / Lease agreements.
The Unsecured Subordinated Non Convertible Debentures are subordinated
to the existing and future unsecured borrowings of the Company and
qualify as Tier II Capital under the Non Banking Financial (Deposit
accepting or holding) Companies Prudential Norms (Reserve Bank)
Directions, 2007.
Working capital demand loans and cash credit are secured by
hypothecation of assets covered by charge on Hypothecation Loan
Receivables, Hire Purchase / Lease agreements, ranking pari passu,
excluding assets which are specifically charged to others.
Refer Note 4 for Security provided for Term Loans from Banks and
Non-Convertible Debentures.
Face value of commercial paper outstanding as on 31.03.2012 was Rs
555,00.00 lakhs (31.03.2011 - Rs 580,00.00 lakhs). Maximum amount of
face value of commercial paper outstanding at any time during the year
was Rs 1715,00.00 lakhs (2010-11 - Rs 1290,00.00 lakhs)
In accordance with the Reserve Bank of India directives, the Company
has created a floating charge on the statutory liquid assets comprising
investment in Government Securities of face value Rs 143,62.30 lakhs
(Cost - Rs 143,92.77 lakhs) and bank deposits of Rs 66,70.50 lakhs (Refer
Note 17 'Cash and Bank balances') in favour of trustees
representing the deposit holders of the Company.
During the year the Company has subscribed to the rights equity shares
of Sundaram BNP Paribas Fund Services Ltd., Professional Management
Consultants Ltd., Transenergy Ltd and Royal Sundaram Alliance Insurance
Company Ltd.
During the year the Company has subscribed to the preferential equity
share of Sundaram Infotech Solutions Ltd. and Sundaram Hydraulics Ltd.
(a) denotes shares are under a lock in period
(b) denotes investments where provision for diminution in value has
been made
(c) denotes increase in holding on receipt of bonus shares @ face value
in Omani Riyal
The Long-term loans and advances includes Non-performing Assets of Rs
2,77.00 lakhs (Previous Year - Rs 19,90.53 lakhs)
Advance income tax and tax deducted at source (net of provision)
comprises:
Provision for Income Tax Rs 477,86.25 lakhs (31.03.2011 - Rs 381,34.20
lakhs)
Income tax paid under dispute Rs 47,72.76 lakhs(31.03.2011 - Rs 37,51.69
lakhs)
Advance Fringe Benefit Tax Rs 0.16 lakhs (31.03.2011 - Rs 1,70.16 lakhs)
Provision for Fringe Benefit Tax Rs 21.10 lakhs (31.03.2011 - Rs 1,60.87
lakhs)
1 General
1.1 The presentation in the Balance Sheet, Profit and Loss Statement
and Notes to the Accounts is in terms of the Revised Schedule VI to the
Companies Act, 1956 which has become mandatory with effect from 01st
April, 2011. The assets and liabilities have been classified as current
and non-current based on a twelve month operating cycle. Previous
year's figures have been regrouped / reclassified wherever necessary
to conform to the current year's presentation.
1.2 Segment Reporting:
Segment information is presented in the Consolidated Financial
Statements in terms of the Accounting Standard - 17 - Segment
Reporting.
The credit enhancement and liquidity support were provided in the form
of bank deposits for Rs 46,75.00 lakhs. The Company continues to collect
and service the receivables in respect of the securitised assets.
During the year, the Company assigned a part of its Hypothecation Loan
receivables / Hire purchase assets - 'at par' representing the
principal component, aggregating Rs 129999.44 lakhs (Previous Year - Rs
75094.31 lakhs).
1.2 RELATED PARTIES DISCLOSURES:
Related party disclosures, as stipulated by Accounting Standard - 18 -
'Related Party Disclosures', are given below:
RELATED PARTIES:
Subsidiary Companies:
Sundaram Finance Distribution Ltd.
Sundaram BNP Paribas Home Finance Ltd.
Sundaram Asset Management Company Ltd.
Sundaram Trustee Company Ltd.
LGF Services Ltd.
Infreight Logistics Solutions Ltd.
Sundaram Infotech Solutions Ltd.
Sundaram Business Services Ltd.
Professional Management Consultants Ltd.
Sundaram BNP Paribas Fund Services Ltd.
Sundaram Parekh Warehousing Services Ltd.
Sundaram Insurance Broking Services Ltd.
Caltec Servicez Private Limited
Associates:
Axles India Ltd.
Turbo Energy Ltd.
Transenergy Ltd.
Sundaram Dynacast Private Ltd.
Sundaram Hydraulics Ltd.
The Dunes Oman LLC (FZC)
Flometallic India Ltd.
Joint Ventures:
Royal Sundaram Alliance Insurance Company Ltd.
BNP Paribas Sundaram Global Securities Operations Private Ltd (BNP
Paribas Sundaram GSO)
Key Management Personnel:
Mr. T. T. Srinivasaraghavan, Managing Director
Mr. Harsha Viji, Director (Strategy & Planning)
1.3 The Commissioner of Customs, Tuticorin raised a demand of Rs 500
lakhs towards penalty on the Company and Rs 1824 lakhs (towards duty) on
the Company in September 2006 jointly and severally with the Lessee, in
respect of a Lease transaction. The Appellate Tribunal admitted the
appeal preferred by the Company and granted stay against the recovery
proceedings in March 2007.
During the year, the Customs Excise and Service Tax Appellate Tribunal
(CESTAT) in its Order, while mentioning the approximate duty to be
around Rs 43 lakhs, remanded the appeal to the adjudicating Commissioner
for requantifying the duty. The Tribunal has also revised the penalty
to Rs 10 lakhs. The Company has sought legal opinion on the further
course of action.
The Special Director of Enforcement, New Delhi, imposed a penalty of Rs
10 lakhs on the Company. The Company has preferred an appeal against
the penalty with the Appellate Tribunal for Foreign Exchange and
obtained a stay after remitting Rs 2.50 lakhs as directed by the
Tribunal. Meanwhile the Company initiated arbitration proceedings
against the Lessee and has received an award in its favour.
1.4 Estimated amount of contracts remaining to be executed on capital
account - Rs 774.63 lakhs (net of advances of Rs 2204.47 lakhs).
(31.03.2011 - Rs 3098.26 lakhs, net of advances of Rs 922.69 lakhs).
1.5 There are no amounts due to Small Scale Industries in terms of
"The Micro, Small and Medium Enterprises Development Act, 2006".
1.6 Contingent liabilities in respect of
(Rs in lakhs)
31.03.2012 31.03.2011
a) Liability -
To Banks - on Cheques discounted 15,08.96 16,66.75
on Letter of Credit 28,28.95 11,86.00
b) Claims against the Company not
acknowledged as Debts:
Hire Purchase transactions and
termination of Lease 31.07 31.07
transactions - Appeals filed by the Company
Service Tax 45,01.73 20,60.01
Others 12,54.69 10,81.69
1.7 Derivative contracts outstanding:
Hedging exchange rate risk 47,10.00 -
Hedging interest rate risk - 545,00.00
1.8 Cost Insurance Freight (CIF)
value of imports:
Capital goods (on payment basis) 12,98.14 9,57.19
1.9 Expenditure in foreign currency
(on payment basis): Interest 9,74.76 -
On other matters 25.43 16.94
1.10 Earnings in foreign currency
Dividend from an Associate Company 2,89.25 -
Income from other services (IT support
services) 86.28 68.41
Mar 31, 2011
1. BALANCE SHEET:
1.1 Secured Loans:
a) Non convertible debentures amounting to Rs. 374425.75 lakhs
(31.03.2010 Ã Rs. 317682.03 lakhs), are redeemable at par between 2011
and 2015.
The above debentures are secured by mortgage of two immovable
properties ranking pari passu with charges created in favour of the
trustees in addition to specific assets covered by Hire Purchase /
Lease agreements and a charge on Hypothecation Loan Receivables with a
security cover of 100% / 125%, as per the terms of issue.
These Debentures include zero coupon debentures of Rs. 72425.75 lakhs
of face value Rs. 80500 lakhs (31.03.2010 Ã Rs. 34383.03 lakhs, face
value Rs. 38100 lakhs).
b) Loans from scheduled banks under "Secured Loans" include
i) Rs. 73984.67 lakhs availed under working capital facilities are
secured by hypothecation of assets covered by Hire Purchase / Lease
agreements and a charge on Hypothecation Loan Receivables, ranking pari
passu, excluding assets which are specifically charged to others.
ii) Rs. 300200.00 lakhs availed as Term Loans are secured by
hypothecation of specific assets covered by Hire Purchase / Lease
agreements and a charge on Hypothecation Loan Receivables. The charge
in respect of Term Loan amounting to Rs. 60000.00 lakhs is pending
creation.
2.2 Unsecured Loans:
a) Non convertible debentures amounting to Nil (31.03.2010 Ã Rs. 33500
lakhs) are partly secured by mortgage of an immovable property, ranking
pari passu, with the charges created in favour of the debenture
trustees.
b) During the year, the Company issued subordinated non convertible
debentures of Rs. 15210 lakhs (2009-10 Ã Rs. 19500 lakhs) which are
redeemable at the end of 10 years.
The debentures are subordinated to the existing and future unsecured
borrowings of the Company and qualify as Tier II Capital under the Non
Banking Financial (Deposit accepting or holding) Companies Prudential
Norms (Reserve Bank) Directions, 2007.
c) Short Term Loans and Advances:
The maximum amount of face value of the commercial paper outstanding at
any time during the year was Rs. 129000 lakhs (2009-10 Ã Rs. 150000
lakhs). The face value of the commercial paper outstanding as of
31.03.2011 was Rs. 58000 lakhs (31.03.2010- Rs. 63500 lakhs)
2.3 Derivative Contracts:
Derivative contracts outstanding as on 31.03.2011, for Interest Rate
Swaps is Rs. 54500 lakhs (31.03.2010 Ã Rs. 12500 lakhs) for hedging
interest rate risk.
2.4 Fixed Assets:
a) Buildings on leasehold land include Rs. 1228.16 lakhs (31.03.2010 Ã
Rs. 1228.16 lakhs) being the cost of ownership flats in co-operative
societies / associations.
b) Land and Buildings include Rs. 1086.80 lakhs representing undivided
share of land (31.03.2010- Rs. 1086.80 lakhs).
c) Plant and Machinery and Vehicles include assets costing Rs. 26713.75
lakhs (gross block) on operating lease contracts (31.03.2010 Ã Rs.
20047.67 lakhs).
d) Intangible Assets:
In accordance with Accounting Standard à AS 26 à Intangible Assets,
software purchased / developed amounting to Rs. 617.47 lakhs (2009-10
à Rs. 447.66 lakhs) is amortised over their expected useful life of
three to five years based on a technical evaluation.
2.5 Investments:
In accordance with the Reserve Bank of India directives, the Company
has created a floating charge on the statutory liquid assets comprising
investment in Government Securities of face value Rs. 13237.30 lakhs
(Cost Rs. 13309.75 lakhs) and bank deposits of Rs. 6154.50 lakhs
(grouped under Schedule 9, Current Assets à Cash and Bank Balances) in
favour of trustees representing the public deposit holders of the
Company.
2.6 Current Assets:
a) Cash and Bank balances - with scheduled banks in deposit accounts
includes Rs. 12723.60 lakhs (31.03.2010 Ã Rs. 14595.20 lakhs) provided
as collateral for sell down transactions for which a lien has been
noted.
2.7 "Secured Loans" from Scheduled Banks and Current Accounts with
Scheduled Banks under "Cash and Bank Balances" are stated after
deduction / addition of cheques on hand to the extent of Rs. 4828.87
lakhs (31.03.2010 Ã Rs. 4480.76 lakhs).
2.8 Loans and advances are secured, considered good. Unless otherwise
stated.
a) Secured loans include Nil (31.03.2010 Ã Rs. 18.45 lakhs) due from a
Director of the Company. Maximum amount due at any time during the year
Rs. 18.45 lakhs (2009-10 Ã Rs. 19.72 lakhs).
b) Unsecured loans include Rs. 0.12 lakh (31.03.2010 Ã Rs. 0.18 lakh)
due from officer of the Company. Maximum amount due at any time during
the year Rs. 0.18 lakh (2009-10 Ã Rs. 0.24 lakh).
c) Advance income tax and tax deducted at source is net of provision
for tax of Rs. 38134.20 lakhs (31.03.2010 - Rs. 35489.44 lakhs) and
includes Rs. 3751.69 lakhs (31.03.2010 Ã Rs. 2050.77 lakhs) towards
income tax paid under dispute. Advance Fringe Benefit tax is net of
provision for Fringe Benefit tax of Rs. 160.87 lakhs (31.03.2010 Ã Rs.
298.52 lakhs).
d) Advances and deposits recoverable in cash or kind or for value to be
received include Rs. 213.09 lakhs (31.03.2010 Ã Rs. 213.09 lakhs)
towards sales tax paid under dispute in respect of which appeals are
pending.
2.9 Current liabilities:
a) Sundry creditors for expenses include Rs. 201.00 lakhs (31.03.2010 -
Rs. 182.00 lakhs) payable to directors.
b) Interest accrued but not due includes Rs. 51.15 lakhs on deposits of
Directors (31.03.2010 Ã Rs. 106.64 lakhs).
3. PROFIT AND LOSS ACCOUNT
3.1 Income from operations:
a) Hypothecation Loans / Hire Purchase is net of business origination
cost of Rs. 3034.91 lakhs (previous yearà Rs. 2641.09 lakhs).
b) During the year, the Company sold a part of its Hire Purchase /
Hypothecation Loan receivables Ãat par representing the principal
component, aggregating to Rs. 75094.31 lakhs. The excess interest
spread (EIS) which the Company is entitled to retain from the interest
to be collected from the borrowers, over and above the specified amount
of interest to be passed on to the acquirer, will be accounted over the
remaining life of the assets sold.
c) Lease income is net of depreciation of Rs. 52.16 lakhs (Previous
Year Rs. 98.66 lakhs) and Lease Equalisation Account Rs. 40.53 lakhs
(Previous Year à Rs. (91.85) lakhs).
3.3 Income from Services includes Trading of Computer Accessories and
Software:
The revenue from sale of computer accessories and software and their
individual related costs constitute less than 10% of the total turnover
of the Company. Therefore, quantitative information relating to this
business has not been stated.
3.5 Financial Expenses:
Interest à Fixed loans includes interest on fixed / cumulative deposits
amounting to Rs. 55.12 lakhs paid / credited to Directors (Previous
Year - Rs. 75.98 lakhs).
3.6 Employee Benefits:
Defined Contribution Plan:
During the year, the Company has recognised the following amounts in
the Profit and Loss account, which are included in Establishment
Expenses in Schedule 16:
3.11 Contingent Provision against Standard Assets of Rs. 646.30 lakhs
(Previous Year à Rs. 3161.69 lakhs) has been made during the year @
0.40% of the outstanding Standard Assets. Reserve Bank of India
requires a contingent provision @ 0.25% of the outstanding Standard
Assets.
3.12 Provisions and Write offs:
Loss on sale of investments comprises Rs. 12.76 lakhs (Previous Year Ã
NIL ) pertaining to current investments and Rs. 396.90 lakhs (Previous
Year à NIL) pertaining to long term investments.
3.13 Exchange difference amounting to Rs. 0.27 lakh (net loss)
(Previous Year à Rs. 2.88 lakhs-net loss) arising on account of foreign
currency transactions has been accounted in the Profit and Loss account
in accordance with Accounting Standard à AS 11 à Accounting for the
effects of changes in foreign exchange rates.
4. GENERAL
4.1 Segment Reporting: Segment information is presented in the
Consolidated Financial Statements in terms of the Accounting Standard Ã
AS 17 Ã Segment Reporting.
4.2 Related Parties Disclosures: 4.2.1 Related party disclosures, as
stipulated by Accounting Standard à AS 18 à Related Party Disclosures,
are given below:
Related Parties:
Subsidiary Companies: Associates:
Sundaram Finance Distribution Ltd. Axles India Ltd.
Sundaram BNP Paribas Home Finance Ltd. Turbo Energy Ltd.
Sundaram Asset Management Company Ltd. Transenergy Ltd.
Sundaram Trustee Company Ltd. Sundaram Dynacast Private Ltd.
LGF Services Ltd. Sundaram Mutual Fund
Infreight Logistics Solutions Ltd. Sundaram Medical Foundation
Sundaram Infotech Solutions Ltd. Sundaram Hydraulics Ltd.
Sundaram Business Services Ltd. The Dunes Oman LLC (FZC)
Professional Management Consultants Ltd.
Flometallic India Ltd.
Sundaram BNP Paribas Fund Services Ltd.
Sundaram Parekh Warehousing Services Ltd.
Sundaram Insurance Broking Services Ltd.
Joint Ventures:
Royal Sundaram Alliance Insurance Company Ltd.
Gulf Outsourcing Services Ltd. (till 16.02.2011)
BNP Paribas Sundaram Global Securities Operations Private Ltd. (BNP
Paribas Sundaram GSO)
Key Management Personnel:
Mr. T. T. Srinivasaraghavan, Managing Director
Mr. Harsha Viji, Director (Strategy & Planning) - with effect from
24.09.2010
Relatives of Key Management Personnel:
Mr. T. T. Srinivasaraghavan Mr. T. T. Rangaswamy Father
Mrs. Vimala Rangaswamy Mother
Mrs. Bagyam Raghavan Wife
Miss. Anjana Raghavan Daughter
Mr. T. T. Venkatraghavan Son
Mr. T. T. Narendran Brother
Mr. Harsha Viji Mr. S. Viji Father
Mrs. Chitra Viji Mother
Mrs. Sara Vetteth Wife
Miss. Anya Padma Viji Daughter
Master. Arun Mathew Viji Son
Mr. Sriram Viji Brother
4.5 The Commissioner of Customs, Tuticorin raised a demand of Rs. 500
lakhs towards penalty on the Company and Rs. 1824 lakhs (towards duty)
on the Company in September 2006 jointly and severally with the Lessee,
in respect of a Lease transaction. The Appellate Authority admitted the
appeal preferred by the company and granted stay against the recovery
proceedings in March 2007.
The Special Director of Enforcement, New Delhi, imposed a penalty of
Rs. 10 lakhs on the Company. The Company has preferred an appeal
against the penalty with the Appellate Tribunal for Foreign Exchange
and obtained a stay after remitting Rs. 2.50 lakhs as directed by the
Tribunal. Meanwhile the company initiated arbitration proceedings
against the Lessee and has received an award in its favour.
4.6 Estimated amount of contracts remaining to be executed on capital
account à Rs. 3098.26 lakhs (net of advance of Rs. 922.69 lakhs).
(31.03.2010 - Rs. 2225.15 lakhs - net of advance of Rs. 448.68 lakhs).
4.7 There are no amounts due to Small Scale Industries in terms of "The
Micro, Small and Medium Enterprises Development Act, 2006".
4.12 Previous years figures have been regrouped / reclassified
wherever necessary to conform to current years classification.
Mar 31, 2010
1. BALANCE SHEET:
1.1 Reserves and Surplus:
A Special Reserve was created in terms of the Rupee Term Loan agreement
entered into with International Finance Corporation, Washington.
Consequent to the repayment of the term loan, the balance in the
Special Reserve has been withdrawn.
1.2 Secured Loans:
a) Non convertible debentures amounting to Rs.317682.03 lakhs
(31.03.2009 Ã Rs.233906.86 lakhs), include zero coupon debentures of
Rs.34383.03 lakhs (31.03.2009 Ã Rs.4306.85 lakhs). The face value of
the zero coupon debentures are Rs.38100.00 lakhs (31.03.2009-
Rs.4600.00 lakhs). These debentures are redeemable at par between 2010
and 2013.
The above debentures are secured by mortgage of two immovable
properties ranking pari passu with the charges created / to be created
in favour of the trustees in addition to specific assets covered by
Hire Purchase / Lease agreements and a charge on Hypothecation Loan
Receivables with a security cover of 100%, as per the terms of issue.
The charge in respect of Non convertible debentures amounting to
Rs.9500.00 lakhs is pending creation.
1.3 Unsecured Loans:
a) Non convertible debentures amounting to Rs.33500 lakhs (31.03.2009 -
Rs.57800 lakhs) are partly secured by mortgage of an immovable
property, ranking pari passu, with the charge created / to be created
in favour of the debenture trustees. These debentures are redeemable
at par during 2010.
b) During the year, the Company raised Rs.19500 lakhs (31.03.2009 Ã
Nil) by the issue of long term unsecured redeemable non convertible
subordinated debentures. As on 31st March, 2010 the CompanyÃs
outstanding subordinated debentures were Rs.24500 lakhs (31.03.2009 Ã
Rs.5000 lakhs). These debentures are redeemable at par between 2012 and
2017.
The debentures are subordinated to the existing and future unsecured
borrowings of the Company and qualify as Tier II Capital under the Non
Banking Financial (Deposit Accepting or Holding) Companies Prudential
Norms (Reserve Bank) Directions, 2007.
c) Short Term Loans and Advances:
The maximum amount of face value of the commercial paper outstanding at
any time during the year was Rs.150000 lakhs (2008-09 Ã Rs.118500
lakhs). The face value of the commercial paper outstanding as of
31.03.2010 was Rs.63500.00 lakhs (31.03.2009- Rs.49000.00 lakhs)
1.4 Derivative Contracts:
Derivative contracts outstanding as on 31.03.2010 for Interest Rate
Swaps is Rs.12500 lakhs (31.03.2009 Ã Rs.61800 lakhs) for hedging
against floating interest rates.
1.5 Fixed Assets:
a) Buildings on leasehold land include Rs. 1093.97 lakhs (31.03.2009 Ã
Rs.1093.97 lakhs) being the cost of ownership flats in co-operative
societies / associations.
b) Land and Buildings include Rs.1086.80 lakhs representing undivided
share of land (31.03.2009-Rs.1086.80 lakhs).
c) Plant and Machinery and Vehicles include assets costing Rs. 20047.67
lakhs (gross block) on operating lease contracts (31.03.2009 Ã
Rs.15087.71 lakhs).
d) Intangible Assets:
In accordance with Accounting Standard à AS 26 à Intangible Assets,
software purchased / developed amounting to Rs.447.66 lakhs (31.03.2009
à Rs.302.50 lakhs) is amortised based on a technical evaluation.
1.6 Investments:
In accordance with the Reserve Bank of India directives, the Company
has created a floating charge on the statutory liquid assets comprising
investment in Government Securities of face value Rs.12187.30 lakhs
(Cost Rs.12249.70 lakhs) and bank deposits of Rs.5509.70 lakhs (grouped
under Schedule 9, Current Assets à Cash and Bank Balances) in favour of
trustees representing the public deposit holders of the Company.
1.7 Current Assets:
a) During the year the Company realised Rs.28304.94 lakhs (31.03.2009 Ã
Rs. 69583.50 lakhs) on sell down of receivables. Bank deposits of
Rs.3336.00 lakhs have been given as collateral by way of credit
enhancement. (31.03.2009 Ã Rs.10466.60 lakhs).
Cash and Bank balances - with scheduled banks in deposit accounts
includes Rs.14595.20 lakhs provided as collateral for sell down
transactions for which the lien has been noted.
1.8 ÃSecured Loansà from Scheduled Banks and Current Accounts with
Scheduled Banks under ÃCash and Bank Balancesà are stated after
deduction / addition of cheques on hand to the extent of Rs.4480.76
lakhs (31.03.2009 - Rs.4275.95 lakhs).
1.9 Loans and advances:
a) Secured loans include Rs.18.45 lakhs (31.03.2009 - Rs.19.72 lakhs)
due from a Director of the Company. Maximum amount due at any time
during the year Rs. 19.72 lakhs (2008-09 - Rs.20.89 lakhs).
b) Unsecured loans include Rs.0.18 lakhs (31.03.2009- Rs.0.39 lakhs)
due from officer of the Company. Maximum amount due at any time during
the year Rs.0.24 lakhs (2008-09 - Rs.0.84 lakhs).
c) Advance income tax and tax deducted at source is net of provision
for tax of Rs.35489.44 lakhs (31.03.2009 - Rs. 31194.31 lakhs) and
includes Rs.2050.77 lakhs (31.03.2009 -Rs.2898.72 lakhs) towards income
tax paid under dispute.
Advance Fringe Benefit tax is net of provision for Fringe Benefit tax
of Rs.298.52 lakhs (31.03.2009-Rs.404.76 lakhs)
d) Advances and deposits recoverable in cash or kind or for value to be
received include Rs. 213.09 lakhs (31.03.2009 - Rs. 186.09 lakhs)
towards sales tax paid under dispute in respect of which appeals are
pending.
1.10 Current liabilities:
a) Sundry creditors for expenses include Rs.182.00 lakhs (31.03.2009 -
Rs. 125.50 lakhs) payable to directors.
b) Interest accrued but not due includes Rs.106.64 lakhs on deposits of
Directors (31.03.2009 Ã Rs.43.63 lakhs).
2. PROFIT AND LOSS ACCOUNT
2.1 Income from operations:
a) Hypothecation Loans / Hire Purchase is net of business origination
cost of Rs.2641.09 lakhs (Previous Year à Rs.2047.86 lakhs).
b) Lease is net of depreciation of Rs.98.66 lakhs (Previous Year
Rs.160.10 lakhs) and Lease Equalisation Account Rs.(91.85) lakhs
(Previous Year à Rs.55.77 lakhs).
2.2 Profit on sale of shares:
Profit on sale of shares is on the sale of 11,60,066 equity shares of
face value of Rs.5 each à WABCO - TVS (India) Ltd. pursuant to an
agreement.
2.3 Financial Expenses:
Interest à Fixed loans includes interest on fixed/cumulative deposits
amounting to Rs.75.98 lakhs (Previous Year - Rs.54.76 lakhs) paid /
credited to Directors.
2.4 A general provision of Rs.3161.69 lakhs (Previous Year à NIL) has
been made during the year @ 0.40% of the standard assets.
2.5 Provisions and Write offs:
Loss on sale of investments comprises Rs.NIL lakhs (Previous Year Ã
Rs.2.15 lakhs) pertaining to current investments.
2.6 Exchange difference amounting to Rs.2.88 lakhs (net loss)
(Previous Year - Rs.4.24 lakhs-net gain) arising on account of foreign
currency transactions has been accounted in the Profit and Loss account
in Accordance with Accounting Standard à AS 11 à Accounting for the
effects of changes in foreign exchange rates.
3. GENERAL
3.1 Segment Reporting
Segment information is presented in the Consolidated Financial
Statements in terms of the Accounting Standard à AS 17 à Segment
Reporting.
3.2 Related Parties Disclosures:
3.2.1 Related party disclosures, as stipulated by Accounting Standard Ã
AS 18 Ã Related Party Disclosures, are given below:
Related Parties:
Subsidiary Companies: Associates:
Sundaram Finance Distribution Ltd. Axles India Ltd.
Sundaram BNP Paribas Home Finance Ltd. Turbo Energy Ltd.
Sundaram BNP Paribas Asset Management Co. Ltd. Transenergy Ltd.
Sundaram BNP Paribas Trustee Co. Ltd. Sundaram Dynacast Pvt. Ltd.
LGF Services Ltd. Sundaram BNP Paribas Mutual Fund
Infreight Logistics Solutions Ltd. Sundaram Medical Foundation
Sundaram Infotech Solutions Ltd. Sundaram Hydraulics Ltd.
Sundaram Business Services Ltd. The Dunes Oman LLC (FZC)
Professional Management Consultants Ltd.
Sundaram BNP Paribas Fund Services Ltd.
Key Management Personnel: Joint Venture:
Mr. T. T. Srinivasaraghavan, Managing Director Royal Sundaram Alliance
Insurance Co. Ltd.
Mr. Srinivas Acharya, Deputy Managing Director Gulf Outsourcing
Services Ltd.
BNP Paribas Sundaram Global Securities Operations Pvt. Ltd.
Relatives of Key Management Personnel:
Mr. T. T. Srinivasaraghavan Mr. T. T. Rangaswamy Father
Mrs. Vimala Rangaswamy Mother
Mrs. Bagyam Raghavan Wife
Miss. Anjana Raghavan Daughter
Master T. T. Venkatraghavan Son
Mr. T. T. Narendran Brother
Mr. Srinivas Acharya Mrs. Revathi Srinivas Wife
Mr. Vishal Srinivas Son
Mrs. Radha Venkatesh Sister
4.0 The Writ Petition challenging the levy of Service Tax on Hire
Purchase and Leasing w.e.f. 16.07.2001 filed before Madras High Court
by the Trade Associations had been dismissed. S.L.P against the High
Court Order filed by the Trade Associations has been admitted and
notice ordered without stay. Till date no service tax has been
remitted.
4.1 The Commissioner of Customs, Tuticorin raised a demand of Rs. 500
lakhs towards penalty on the Company and Rs. 1824 lakhs (towards duty)
on the Company jointly and severally with the Lessee, in respect of a
Lease transaction. The Appellate Authority admitted the appeal
preferred by the Company and granted stay against the recovery
proceedings.
The Special Director of Enforcement, New Delhi, imposed a penalty of
Rs. 10 lakhs on the Company. The Company has preferred an appeal
against the penalty with the Appellate Tribunal for Foreign Exchange
and obtained a stay after remitting Rs. 2.50 lakhs as directed by the
Tribunal. Meanwhile the Company initiated arbitration proceedings
against the Lessee and has received an award in its favour.
4.2 Securities and Exchange Board of India has alleged violation of
Regulation 13(6) of SEBI (Prohibition of Insider Trading) Regulations,
1992 and imposed a penalty of Rs.10 lakhs on the Company vide its Order
dated 31st March 2010. The Company has preferred an appeal against the
said Order before Securities Appellate Tribunal which has since been
admitted.
4.3 Estimated amount of contracts remaining to be executed on capital
account à Rs.2225.15 lakhs (net of advance of Rs.448.68 lakhs).
(31.03.2009 Ã Rs.1028.07 lakhs - net of advance of Rs.312.48 lakhs).
4.4 There are no amounts due to Small Scale Industries in terms of ÃThe
Micro, Small and Medium Enterprises Development Act, 2006Ã.
4.5 Previous YearÃs figures have been regrouped / reclassified
wherever necessary to conform to current yearÃs classification.
Mar 31, 2010
1. Advance payment of Income Tax and Tax deducted at source is net of
Provision for Income Tax of Rs. 2,14,79,829/- (31.03.2009 -
Rs.2,20,57,446/-).
C) Other Long Term Benefts
The Companys liability towards other long term benefts are given
below: Staff Medical Scheme as on 31.03.2010 Â Rs.3,808/-
2. General
2.1 The company is engaged primarily in the business of Agency and
Retail Distribution. There are no separate reportable segments as per
Accounting Standard  AS 17  Segment Reporting.
2.2 Related Party disclosures: In accordance with the Accounting
Standard  AS 18  Related Party Disclosures, the details of related
parties and the transactions with related parties are given below:
Related parties:
holding Company:
Sundaram Finance Limited
Fellow subsidiaries:
Sundaram BNP Paribas home Finance Limited
Sundaram BNP Paribas Asset Management Company Limited
Sundaram BNP Paribas Trustee Company Limited
LGF Services Limited
Sundaram Infotech Solutions Limited
Sundaram Business Services Limited
Infreight Logistics Solutions Limited
Professional Management Consultants Limited
Sundaram BNP Paribas Fund Services Limited
Associate:
Sundaram BNP Paribas Mutual Fund
3.0 There is no amount due to Small Scale Industries in terms of ÂThe
Micro, Small and Medium Enterprises Development Act, 2006Â.
4.0 Previous years figures have been regrouped / reclassified wherever
necessary to conform to current years classification.
5.0 Figures have been rounded off to the nearest rupees.
Mar 31, 2010
1. Advance payment of Income Tax and Tax deducted at source is net of
Provision for Income Tax of Rs. 2,14,79,829/- (31.03.2009 -
Rs.2,20,57,446/-).
C) Other Long Term Benefts
The Companys liability towards other long term benefts are given
below: Staff Medical Scheme as on 31.03.2010 Â Rs.3,808/-
2. General
2.1 The company is engaged primarily in the business of Agency and
Retail Distribution. There are no separate reportable segments as per
Accounting Standard  AS 17  Segment Reporting.
2.2 Related Party disclosures: In accordance with the Accounting
Standard  AS 18  Related Party Disclosures, the details of related
parties and the transactions with related parties are given below:
Related parties:
holding Company:
Sundaram Finance Limited
Fellow subsidiaries:
Sundaram BNP Paribas home Finance Limited
Sundaram BNP Paribas Asset Management Company Limited
Sundaram BNP Paribas Trustee Company Limited
LGF Services Limited
Sundaram Infotech Solutions Limited
Sundaram Business Services Limited
Infreight Logistics Solutions Limited
Professional Management Consultants Limited
Sundaram BNP Paribas Fund Services Limited
Associate:
Sundaram BNP Paribas Mutual Fund
3.0 There is no amount due to Small Scale Industries in terms of ÂThe
Micro, Small and Medium Enterprises Development Act, 2006Â.
4.0 Previous years figures have been regrouped / reclassified wherever
necessary to conform to current years classification.
5.0 Figures have been rounded off to the nearest rupees.
Mar 31, 2009
1. GENERAL
1.1 The company is engaged primarily in the business of Agency and
Retail Distribution. There are no separate reportable segments as per
Accounting Standard  AS 17  Segment Reporting.
1.2 Related Party disclosures: In accordance with the Accounting
Standard  AS 18  Related Party disclosures, the details of related
parties and the transactions with related parties are given below:
Related parties:
holding Company:
Sundaram Finance Limited
Fellow subsidiaries:
Sundaram BNP Paribas Home Finance Limited
Sundaram BNP Paribas Asset Management Company Limited
Sundaram BNP Paribas Trustee Company Limited
LGF Services Limited
Sundaram Infotech Solutions Limited
Sundaram Business Services Limited
Infreight Logistics Solutions Limited
Professional Management Consultants Private Limited
Sundaram Securities Services Limited
Associate:
Sundaram BNP Paribas Mutual Fund
2008-09 2007-08
2.1 Contingent Liability:
Disputed Income Tax demand Rs. 23,17,479
2.2 There is no amount due to Small Scale Industries in terms of ÂThe
Micro, Small and Medium Enterprises Development Act, 2006Â.
2.3 Previous yearÂs figures have been regrouped / reclassified wherever
necessary to conform to current yearÂs classification.
2.4 Figures have been rounded off to the nearest rupees.
Mar 31, 2009
1. GENERAL
1.1 The company is engaged primarily in the business of Agency and
Retail Distribution. There are no separate reportable segments as per
Accounting Standard  AS 17  Segment Reporting.
1.2 Related Party disclosures: In accordance with the Accounting
Standard  AS 18  Related Party disclosures, the details of related
parties and the transactions with related parties are given below:
Related parties:
holding Company:
Sundaram Finance Limited
Fellow subsidiaries:
Sundaram BNP Paribas Home Finance Limited
Sundaram BNP Paribas Asset Management Company Limited
Sundaram BNP Paribas Trustee Company Limited
LGF Services Limited
Sundaram Infotech Solutions Limited
Sundaram Business Services Limited
Infreight Logistics Solutions Limited
Professional Management Consultants Private Limited
Sundaram Securities Services Limited
Associate:
Sundaram BNP Paribas Mutual Fund
2008-09 2007-08
2.1 Contingent Liability:
Disputed Income Tax demand Rs. 23,17,479
2.2 There is no amount due to Small Scale Industries in terms of ÂThe
Micro, Small and Medium Enterprises Development Act, 2006Â.
2.3 Previous yearÂs figures have been regrouped / reclassified wherever
necessary to conform to current yearÂs classification.
2.4 Figures have been rounded off to the nearest rupees.
Mar 31, 1998
1. BALANCE SHEET :
2.1 Unsecured Loans : The Company has availed an unsecured credit
facility from a Scheduled Bank.
2.2 Advances recoverable in cash or in kind under Loans and Advances
include deposits of Rs. 36 lakhs with National Stock Exchange of India
Ltd and Rs. 9 lakhs with National Securities Clearing Corporation Ltd.
2. PROFIT AND LOSS ACCOUNT :
3.1 Miscellaneous expenses under "Administrative and other Expenses"
include remuneration to Auditors towards :
1997-98 1996-97
(Rs. in lakhs) (Rs. in lakhs)
Statutory Audit 0.15 0.15
Tax audit 0.06 0.06
Certification 0.08 0.03
Total 0.29 0.24
3. GENERAL :
4.1 Contracts for purchase and sale of shares in respect of which the
Company is liable as principal/agent as on 31st March,1998 Rs. 283.33
lakhs (31/03/97 Rs. 107.5 lakhs).
4.2 Details of Closing stock of shares and securities as on 31st March,
1998 :
Non Trade - Quoted :
(At lower of cost and market value)
particulars Quantity Value
(in numbers) (Rs. in lakhs)
I Equity Shares
Face Value of Rs. 10/- each
Andhra Valley Power Supply
Corporation Ltd 250 0.22
Anasuya Spinners Ltd 49200 2.66
Carrier Aircon Ltd 100 0.24
Cepham Organics Ltd 1000 0.02
Corporation Bank 1100 0.98
Dr. Reddy's Laboratories Ltd 100 0.33
Hindustan Zinc Ltd 100 0.01
Hindustan lever Ltd 95 1.32
Hindustan Motors Ltd 1500 0.09
Industrial Credit and Investment
Corporation of India Ltd 100 0.09
Indian Rayon Ltd 300 0.47
Infosys Technologies Ltd 100 1.77
Integrated Enterprises Ltd 50 0.01
Jindal Drilling & Industries Ltd 50 0.05
Karthik Alloys Ltd 800 0.01
The Karur Vysya Bank Ltd 100 0.13
Maris Spinners Ltd 10000 0.06
Mc Dowell & Co. Ltd 100 0.02
Nagarjuna Construction Co. Ltd 100 0.01
Nahar Spinning Mills Ltd 10 0.01
Nicholas Piramal India Ltd 5 0.02
Ponds (India) Ltd 50 0.58
Premier Auto Electric Ltd 50 0.03
Reliance Industries Ltd 50 0.09
Reliance Petroleum Ltd 100 0.02
Renewable Energy System Ltd 1500 0.06
Saw Pipes Ltd 300 0.12
Shiva Egg Products Ltd 74200 0.85
Sree Rayalaseeema Alkali &
Chemicals Ltd 200 0.01
Sudarsan Chemicals Ltd 50 0.02
Tata Engineering and Locomotive Co. Ltd 357 1.04
Tata Tea Ltd 100 0.42
Thomas Cook (India) Ltd 100 0.63
Triveni Engineering & Industries Ltd 166 0.07
Housing Development Finance
Corporation of India Ltd 5 0.16
Total 142388 12.62
Particulars Quantity Value
(in numbers) (Rs. in lakhs)
Brought Forward 142388 12.62
II. Bonds
face Value of Rs. 1000/- each :
16% Bank of Baroda 600 6.37
15% State Bank of India 40 0.40
16% Industrial Development Bank
of India 40 0.43
16% ICICI Bonds -- Face value of
Rs. 5000/- each 6 0.33
Total 686 7.53
III. Mutual Funds
Face Value of Rs. 10/- each
Reliance Growth Fund 500 0.04
Reliance Vision Fund 500 0.06
Tata Equity Fund 500 0.05
UTI Master Growth 200 0.03
UTI Master Share 396 0.05
GIC Fortune 94 5000 0.36
SBI Magnum Express -- Face
Value of Rs. 100/- each 10 0.02
Total 7106 0.61
Grand Total 150180 20.76
4.3 Information in respect of opening stock, purchases, sales and
closing stock of shares and securities traded in :
Opening Stock Purchases/Transfer Sales/Transfer Closing Stock
Accounting Qty. Value Qty. Value Qty. Value Qty. Value
year ended (No.) (Rupees (No.) (Rupees (No.) (Rupees (No.) (Rupees
in lakhs) in Lakhs) in lakhs) in lakhs)
31st March,
1998 11060 7.41 451109 3,79.87 311989 3,68.06 150180 20.76
31st March,
1997 74313 81.80 705996 5,28.73 769249 6,14.36 11060 7.41
4.4 Assets have been taken on lease in respect of which the future
rentals payable under the agreements amount to Rs. 9.41 lakhs (31/03/97
Rs. 0.73 lakhs)
4.5 Previous year's figures have been regrouped / reclassified wherever
necessary to conform to current year's classification.
Mar 31, 1998
1. BALANCE SHEET :
2.1 Unsecured Loans : The Company has availed an unsecured credit
facility from a Scheduled Bank.
2.2 Advances recoverable in cash or in kind under Loans and Advances
include deposits of Rs. 36 lakhs with National Stock Exchange of India
Ltd and Rs. 9 lakhs with National Securities Clearing Corporation Ltd.
2. PROFIT AND LOSS ACCOUNT :
3.1 Miscellaneous expenses under "Administrative and other Expenses"
include remuneration to Auditors towards :
1997-98 1996-97
(Rs. in lakhs) (Rs. in lakhs)
Statutory Audit 0.15 0.15
Tax audit 0.06 0.06
Certification 0.08 0.03
Total 0.29 0.24
3. GENERAL :
4.1 Contracts for purchase and sale of shares in respect of which the
Company is liable as principal/agent as on 31st March,1998 Rs. 283.33
lakhs (31/03/97 Rs. 107.5 lakhs).
4.2 Details of Closing stock of shares and securities as on 31st March,
1998 :
Non Trade - Quoted :
(At lower of cost and market value)
particulars Quantity Value
(in numbers) (Rs. in lakhs)
I Equity Shares
Face Value of Rs. 10/- each
Andhra Valley Power Supply
Corporation Ltd 250 0.22
Anasuya Spinners Ltd 49200 2.66
Carrier Aircon Ltd 100 0.24
Cepham Organics Ltd 1000 0.02
Corporation Bank 1100 0.98
Dr. Reddy's Laboratories Ltd 100 0.33
Hindustan Zinc Ltd 100 0.01
Hindustan lever Ltd 95 1.32
Hindustan Motors Ltd 1500 0.09
Industrial Credit and Investment
Corporation of India Ltd 100 0.09
Indian Rayon Ltd 300 0.47
Infosys Technologies Ltd 100 1.77
Integrated Enterprises Ltd 50 0.01
Jindal Drilling & Industries Ltd 50 0.05
Karthik Alloys Ltd 800 0.01
The Karur Vysya Bank Ltd 100 0.13
Maris Spinners Ltd 10000 0.06
Mc Dowell & Co. Ltd 100 0.02
Nagarjuna Construction Co. Ltd 100 0.01
Nahar Spinning Mills Ltd 10 0.01
Nicholas Piramal India Ltd 5 0.02
Ponds (India) Ltd 50 0.58
Premier Auto Electric Ltd 50 0.03
Reliance Industries Ltd 50 0.09
Reliance Petroleum Ltd 100 0.02
Renewable Energy System Ltd 1500 0.06
Saw Pipes Ltd 300 0.12
Shiva Egg Products Ltd 74200 0.85
Sree Rayalaseeema Alkali &
Chemicals Ltd 200 0.01
Sudarsan Chemicals Ltd 50 0.02
Tata Engineering and Locomotive Co. Ltd 357 1.04
Tata Tea Ltd 100 0.42
Thomas Cook (India) Ltd 100 0.63
Triveni Engineering & Industries Ltd 166 0.07
Housing Development Finance
Corporation of India Ltd 5 0.16
Total 142388 12.62
Particulars Quantity Value
(in numbers) (Rs. in lakhs)
Brought Forward 142388 12.62
II. Bonds
face Value of Rs. 1000/- each :
16% Bank of Baroda 600 6.37
15% State Bank of India 40 0.40
16% Industrial Development Bank
of India 40 0.43
16% ICICI Bonds -- Face value of
Rs. 5000/- each 6 0.33
Total 686 7.53
III. Mutual Funds
Face Value of Rs. 10/- each
Reliance Growth Fund 500 0.04
Reliance Vision Fund 500 0.06
Tata Equity Fund 500 0.05
UTI Master Growth 200 0.03
UTI Master Share 396 0.05
GIC Fortune 94 5000 0.36
SBI Magnum Express -- Face
Value of Rs. 100/- each 10 0.02
Total 7106 0.61
Grand Total 150180 20.76
4.3 Information in respect of opening stock, purchases, sales and
closing stock of shares and securities traded in :
Opening Stock Purchases/Transfer Sales/Transfer Closing Stock
Accounting Qty. Value Qty. Value Qty. Value Qty. Value
year ended (No.) (Rupees (No.) (Rupees (No.) (Rupees (No.) (Rupees
in lakhs) in Lakhs) in lakhs) in lakhs)
31st March,
1998 11060 7.41 451109 3,79.87 311989 3,68.06 150180 20.76
31st March,
1997 74313 81.80 705996 5,28.73 769249 6,14.36 11060 7.41
4.4 Assets have been taken on lease in respect of which the future
rentals payable under the agreements amount to Rs. 9.41 lakhs (31/03/97
Rs. 0.73 lakhs)
4.5 Previous year's figures have been regrouped / reclassified wherever
necessary to conform to current year's classification.
Mar 31, 1996
2. BALANCE SHEET
2.1 Unsecured Loans: The Company has availed an unsecured
cash credit facility from a Scheduled Bank. There is no
outstanding balance due by the Company as on 31.03.1996.
4. GENERAL
4.1 Contracts for purchase and sale of shares in respect of
which the company is liable as principal/agent as on 31st
March, 1996 Rs.114.19 lakhs (31.12.94 Rs.94.21 lakhs)
4.2 The statements of account of some business related
accounts are under reconciliation.
4.3 The Company has been allotted 100, 13% Secured Partly
Convertible Debentures of Face Value of Rs.475 each of and
100 tradable warrants in Sundaram Brake Linings Ltd. Each
Warrant would entitle the company to apply for one equity
share of Face Value of Rs.10/- at a premium of Rs.5/- per
share between the 15th and 17th month from the date of
allotment of the debentures i.e. 18.12.1995.
4.5 The Company has taken assets on lease in respect of
which the future rentals payable under the agreements
amount to Rs.3.81 lakhs (31.12.94 Rs.3.45 lakhs)
4.6 Claims against the Company not acknowledged as debts:
Rs.0.32 lakhs (31.12.1994 is Nil)
4.7 The current accounting period is for fifteen months
i.e. from 1st January, 1995 to 31st March, 1996. The
previous accounting period was from the date of
incorporation of the company i.e. 13th October, 1993 to
31st December, 1994. Therefore, the figures are not
comparable.
4.8 Previous years figures have been regrouped/reclassified
wherever necessary.
Mar 31, 1996
2. BALANCE SHEET
2.1 Unsecured Loans: The Company has availed an unsecured
cash credit facility from a Scheduled Bank. There is no
outstanding balance due by the Company as on 31.03.1996.
4. GENERAL
4.1 Contracts for purchase and sale of shares in respect of
which the company is liable as principal/agent as on 31st
March, 1996 Rs.114.19 lakhs (31.12.94 Rs.94.21 lakhs)
4.2 The statements of account of some business related
accounts are under reconciliation.
4.3 The Company has been allotted 100, 13% Secured Partly
Convertible Debentures of Face Value of Rs.475 each of and
100 tradable warrants in Sundaram Brake Linings Ltd. Each
Warrant would entitle the company to apply for one equity
share of Face Value of Rs.10/- at a premium of Rs.5/- per
share between the 15th and 17th month from the date of
allotment of the debentures i.e. 18.12.1995.
4.5 The Company has taken assets on lease in respect of
which the future rentals payable under the agreements
amount to Rs.3.81 lakhs (31.12.94 Rs.3.45 lakhs)
4.6 Claims against the Company not acknowledged as debts:
Rs.0.32 lakhs (31.12.1994 is Nil)
4.7 The current accounting period is for fifteen months
i.e. from 1st January, 1995 to 31st March, 1996. The
previous accounting period was from the date of
incorporation of the company i.e. 13th October, 1993 to
31st December, 1994. Therefore, the figures are not
comparable.
4.8 Previous years figures have been regrouped/reclassified
wherever necessary.
Dec 31, 1994
2. BALANCE SHEET
2.1 LOANS AND ADVANCES : Advances and Deposits recoverable
in cash or in kind include an interest free deposit of Rs.30
Lakhs to a director of the company for conversion of his
individual membership of the exchange to a corporate
membership, in the name of the Company.
(Maximum amount due at any time during the year Rs.30 Lakhs)
2.2 Sundry Creditors - others - include Rs.2,139.84 due to a
Director of the Company.
4. GENERAL
4.1 Contracts for purchase and sale of shares in respect of
which the Company is liable as principal/agent as on 31st
December, 1994 is Rs. 94,20,804/-.
4.2 The Company has taken a motorcar on lease in respect of
which the future rentals payable under the agreement amount
to Rs.3,45,525/-.
During the period
4.3 C.I.F. Value of Imports NIL
4.4 Expenditure in foreign currency NIL
4.5 Earnings in foreign exchange NIL
4.6 The Company was incorporated on 13th October, 1993 and
the accounts have been drawn up for the first time for the
period ended 31st December 1994. Therefore the
corresponding amounts for the previous period have not been
stated.
4.7 Figures have been rounded off to the nearest rupee.
Dec 31, 1994
2. BALANCE SHEET
2.1 LOANS AND ADVANCES : Advances and Deposits recoverable
in cash or in kind include an interest free deposit of Rs.30
Lakhs to a director of the company for conversion of his
individual membership of the exchange to a corporate
membership, in the name of the Company.
(Maximum amount due at any time during the year Rs.30 Lakhs)
2.2 Sundry Creditors - others - include Rs.2,139.84 due to a
Director of the Company.
4. GENERAL
4.1 Contracts for purchase and sale of shares in respect of
which the Company is liable as principal/agent as on 31st
December, 1994 is Rs. 94,20,804/-.
4.2 The Company has taken a motorcar on lease in respect of
which the future rentals payable under the agreement amount
to Rs.3,45,525/-.
During the period
4.3 C.I.F. Value of Imports NIL
4.4 Expenditure in foreign currency NIL
4.5 Earnings in foreign exchange NIL
4.6 The Company was incorporated on 13th October, 1993 and
the accounts have been drawn up for the first time for the
period ended 31st December 1994. Therefore the
corresponding amounts for the previous period have not been
stated.
4.7 Figures have been rounded off to the nearest rupee.
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കേന്ദ്രബജറ്റ് സെഷന് 2026: ഇടിവോടെ തുടങ്ങി നിഫ്റ്റിയും സെന്സെക്സും, നിക്ഷേപകര് പ്രതീക്ഷിക്കുന്നതെന്ത്? -
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തളരുന്ന രൂപയും കൊഴിയുന്ന വിദേശ നിക്ഷേപവും: നിഫ്റ്റിക്ക് മുന്നേറ്റമോ? ഈ ആഴ്ച സ്വാധീനിക്കുന്ന ഘടകങ്ങൾ
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