Ind AS 37- Provisions, Contingent liabilities and Contingent assets:
The amendment specifies that the 'cost of fulfilling' a contract comprises the 'costs that related directly to the contract'. Costs that related directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour, materials) or an allocation of other costs that relate directly to fulfilling contracts (an example would be the allocation of depreciation charge for an item of property, plant and equipment used in fulfilling the contract). The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2022, although early adoption is permitted.
The amendments are extensive and the Company will evaluate the same to give effect to them as required by law.
(b) Right, preference and restrictions attached to equity shares
The Company has equity shares having a par value of Rs. 10 each. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
* Terms of classification of Canara Bank Limited- GECL 2.0 Fund
Loan is under Guaranteeed Emergency Credit Line (GECL 2.0) is secured against second pari passu charge on current asset, collateral security and personal and corporate guarantee.
* Terms of classification of Canara Bank Limited- GECL 2.0 Ext-Fund
Loan is under Guaranteeed Emergency Credit Line (GECL 2.0 Ext) is secured against second pari passu charge on current asset, collateral security and personal and corporate guarantee.
* Terms of classification of Canara Bank Limited
Secured against hypothecation of respective vehicles. Repayable in equated monthly installments over different periods till November 2027.
* Terms of classification of Daimler Finacial Services
Secured against hypothecation of respective vehicles. Repayable in equated monthly installments over different periods till September 2026.
Notes:
(a) Borrowings from Canara Bank in the nature of packing credit facilities and foreign bill discounting are secured by way of first pari passu charge on stock of raw materials, stock in process, stores and spares, trade receivables, finished goods, bills receivables. The aforesaid facilities are secured by collateral, corporate guarantee and personal guarantees of promoter directors.
(b) Borrowings from Kotak Mahindra Bank in the nature of packing credit facilities and domestic bill discounting are secured by way of first pari passu charge on stock of raw materials, stock in process, stores and spares, trade receivables, finished goods, bills receivables. The aforesaid facilities are secured by collateral, corporate guarantee and personal guarantees of promoter directors.
(c) Borrowings from Standard Chartered Bank in the nature of cash credit facilities and overdraft facility are secured by way of first pari passu charge on stock of raw materials, stock in process, stores and spares, trade receivables, finished goods, bills receivables. The aforesaid facilities are secured by collateral and personal guarantees of promoter directors.
(d) Loans from body corporate represents interest bearing unsecured loans, which loan is repayable within 90 days from the date of disbursement. There is no repayment of principal or payment of interest due by the Company as at the year end.
(e) Loans from related parties represents interest bearing unsecured loans obtained from its director, which loan is repayable wherever stipulated or as mutually agreed. There is no repayment of principal or payment of interest due by the Company as at the year end.
(f) The Company has not made any default in repayment as at the reporting date in respect of aforesaid (a),(b),( c), (d ) and (e) facilities.
38 Financial Instruments Capital Management
For the purpose of the Company's capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company's capital management is to maximise the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents.
39 Fair value measurements
The Company uses the following hierarchy for determining and/or disclosing the fair value of financial instruments by valuation techniques:
The following is the basis of categorising the financial instruments measured at fair value into Level 1 to Level 3: Level 1: This level includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: This level includes financial assets and liabilities, measured using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices). Level 3: This level includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.
Trade receivables, cash & cash equivalents, other bank balances, loans, other current financial assets, trade payables and other current financial liabilities: Approximate their carrying amounts largely due to short-term maturities of these instruments.
Management uses its best judgment in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of all the amounts that the Company could have realized or paid in sale transactions as of respective dates. As such, the fair value of the financial instruments subsequent to the respective reporting dates may be different from the amounts reported at each year end..
40 Financial risk management objectives
The Company's principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance and support Company's operations. The Company's principal financial assets include inventory, trade and other receivables, cash and cash equivalents and land advances that derive directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The Company's senior management oversees the management of these risks. The Company's senior management provides assurance that the Company's financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company's policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:
a) Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: interest rate risk and other price risk, such as equity price risk and commodity/ realestate risk. Financial instruments affected by market risk include loans and borrowings.
b) Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including refundable joint development deposits, security deposits, loans to employees and other financial instruments.
c) Trade receivables
i) Receivables resulting from sale of properties: Customer credit risk is managed by requiring customers to pay advances before transfer of ownership, therefore, substantially eliminating the Company's credit risk in this respect.
ii) Receivables resulting from other than sale of properties: Credit risk is managed by each business unit subject to the Company's established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored. The impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogeneous groups and assessed for impairment collectively.
d) Financial Instrument and cash deposits
Credit risk from balances with banks and financial institutions is managed by the Company's treasury department in accordance with the Company's policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company's Board of Directors on an annual basis, and may be updated throughout the year. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through a counterparty's potential failure to make payments.
e) Liquidity risk
The Company's objective is to maintain a balance between continuity of funding and flexibility through the use of bank deposits and loans.
41 During the year, the Company assessed the investment in equity instrument of subsidiary and associate companies carried at cost for impairment testing.These companies are start-ups or are at early stage of their operations and are expected to generate positive cash flows in the future years. Detailed analysis has been carried out on the future projections and the Company is confident that the investments do not require any impairment.
42 There are no transactions during the year with struck off companies as defined under Section 248 of the Companies Act, 2013.
43 Figures have been rounded off to the nearest lakhs.
44 Figures in brackets pertain to previous year, unless otherwise indicated.
45. Following are the ratios applicable to Company:
As per our report of even date attached.
AS PER OUR REPORT OF EVEN DATE For G A M S & Associates, LLP CHARTERED ACCOUNTANTS
Firm Reg. No. 0N500094 For and on Behalf of the Board of Directors
Anil Gupta Prem Anand Vimal Anand Amit Anand
(Partner) (Director & Chairperson) (Director) (Managing Director)
Membership No: 088218 DIN:00951873 DIN: 00951380 DIN: 00951321
UDIN : 23088218BGWJXB5674
Manisha Anand
Date : May 30, 2023 (CFO)
Place : New Delhi
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