(b) The ownership flats and buildings include J 11,760 (Previous Year : J 11,760) being value of shares held in various co-operative societies.
(c) Fleet with a carrying amount of J 1149.56 crores (as at March 31, 2023 : J 1722.29 crores) and buildings with a carrying amount of J 0.47 crore (as at March 31, 2023 : J 0.49 crore) have been mortgaged to secure borrowings (Refer Note 16).
(d) During the previous year, the Company had prepaid certain External Commercial Borrowings (ECBs) to banks and was in the process of satisfying charges on vessels amounting to book value of J 406.10 crores which were registered against such ECBs. The said charges have been released during the current year.
(ii) Capital Work-in-progress
Capital Work-in-progress amounting to J 29.86 crores (as at March 31,2023 : J 27.03 crores) consists of dry-dock expenses, scrubbers, ballast water management systems and other equipments on ships pending installation, buildings and others.
There are no projects whose completion is overdue or has exceeded the cost as compared to original stipulated plan except for dry-dock expenses, scrubbers, ballast water management systems, other equipments on ships pending installation, which are predicated on availability of vessels and drydock yard. Any variations in cost or timelines with regard to such activities are revisited and revised by the management on timely basis.
(i) 24.60% 4,45,00,000 cumulative redeemable preference shares issued by a subsidiary company, Greatship (India) Limited, are redeemable at a
premium of J 30.90 per share in four equal annual tranches from April 1, 2025 to April 1,2028, as per the terms of issue (modified from time to
time) of these preference shares.
The subsidiary company has an option of early redemption by providing one month's notice to the Company. Early redemption can be in part or in full subject to a minimum of 25,00,000 shares at a time. In case of early redemption, the premium on redemption would be determined at such time so as to provide an effective yield to maturity of 7.00% p.a. to the Company. The cumulative redeemable preference shares do not contain any equity component.
(ii) 22.50% 6,06,24,000 cumulative redeemable preference shares issued by a subsidiary company, Greatship (India) Limited, are redeemable at a
premium of J 20.00 per share in four equal annual tranches from April 1, 2025 to April 1,2028, as per the terms of issue (modified from time to
time) of these preference shares.
The subsidiary company has an option of early redemption by providing one month's notice to the Company. Early redemption can be in part or in full subject to a minimum of 25,00,000 shares at a time. The cumulative redeemable preference shares do not contain any equity component.
* Mark-to-market gains on derivatives include gains on derivatives designated and effective as hedging instruments classified as cash flow hedge amounting to J 14.79 crores (as at March 31, 2023 : J 13.98 crores) as non-current and J 10.25 crores (as at March 31,2023 : J 9.82 crores) as current.
** Loan pertains to unsecured rupee denominated loan given to a wholly owned subsidiary, 'Greatship (India) Limited', carrying interest rate of 8.50% payable on quarterly basis and principal repayable in full after two years from the date of drawdown. The said loan was provided for funding a part of repayment tranche due under the existing foreign currency term loan of the subsidiary.
Trade receivables are initially recognised at their original invoiced amounts i.e. the transaction price. Trade receivables are considered to be of short duration, and hence, not discounted. The customers generally have stable financial standings and high credit quality, and historical experience of collection of receivables also indicates that credit risk is low. All trade receivables are reviewed and assessed for recoverability on a regular basis. The trade receivables overdue for one year and above are provided for as expected credit loss. It is ensured that provision for expected credit loss is not less than the amount derived as per the provision matrix which is based on historically observed default rates over the expected life of trade receivables and forward looking estimates. Besides, specific evaluation is done mainly for demurrage receivable which is based on expected outcome of ongoing negotiations with counterparties. While there is no standard credit period offered, the average recovery period for trade receivables is up to 90 days.
(a) Terms/Rights attached to Equity Shares :
The Company has only one class of equity shares having a face value of J 10 each. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. Interim dividend is paid as recommended by the Board of Directors.
In the event of liquidation, the equity shareholders are eligible to receive remaining assets of the Company, after distribution of all preferential amounts in proportion to their shareholding.
(c) There are no shares reserved for issue under options and contracts or commitments for the sale of shares.
(d) For the period of five years immediately preceding the date as at which the Balance Sheet is prepared :
(i) No shares were allotted pursuant to contracts without payment being received in cash.
(ii) No bonus shares have been issued.
(iii) 38,10,581 equity shares have been bought back during the financial year 2019-20. 41,99,323 equity shares have been bought back during the financial year 2021-22.
(e) There are no securities convertible into equity/preference shares.
B. Nature of Reserves :
(f) Under orders from the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992, the allotment of 2,53,522 (as at March 31, 2023 : 2,53,522) rights equity shares of the Company have been kept in abeyance in accordance with the Companies Act, 2013 till such time as the title of the bonafide owner is certified by the concerned Stock Exchanges. Additional 40,608 (as at March 31,2023 : 40,608) shares have also been kept in abeyance for disputed cases in consultation with the BSE Ltd. 92,231 (as at March 31, 2023 : 92,231) shares are unsubscribed out of the total offered to employees on rights basis during the earlier years.
(i) Capital Reserve : Capital Reserve was created on cancellation of convertible warrants during the year ended March 31,2009.
(ii) General Reserve : General Reserve is used from time to time to transfer profits from Retained Earnings for appropriation purposes and for transfer from Tonnage Tax Reserve.
(iii) Capital Redemption Reserve : As per the Companies Act, 2013, Capital Redemption Reserve is created when the Company purchases its own shares out of free reserves or securities premium. A sum equal to the nominal value of the shares so purchased is transferred to capital redemption reserve. The reserve is utilised in accordance with the provisions of Section 69 of the Companies Act, 2013.
(iv) Tonnage Tax Reserve : Tonnage Tax Reserve is created as per the provisions of the Section 115VT of the Income-tax Act, 1961, whereby a minimum of 20% of book profits from the tonnage tax activities is to be utilised for acquiring new ships within 8 years.
(v) Retained Earnings : Retained Earnings are the profits that the Company has earned till date, less any transfers to reserves and dividend distributions to the shareholders.
The Board of Directors has -
- paid the fourth interim dividend for financial year 2022-23 of J 9.00 per equity share of J 10/- each during the year. The outgo on this account was J 128.49 crores.
- for nine months period ended December 31,2023, declared and paid three interim dividends totalling to J 18.00 per equity share of J 10/- each. In addition, a special dividend of J 7.50/- per equity share of J 10/- each to commemorate the 75th anniversary of the Company was declared and paid in August 2023. The total outgo on this account was J 364.05 crores.
- declared fourth interim dividend for financial year 2023-24 of J 10.80 per equity share of J 10/- each. The outgo on this account will be J 154.19 crores.
The total dividend declared for financial year 2023-24 aggregates to J 36.30 per equity share. The total outgo on this account will be J 518.24 crores.
Retained Earnings comprise of gain on remeasurement of defined employee benefit plans amounting to J 6.30 crores (Previous Year : loss of J 4.08 crores) and loss on fair value changes relating to own credit risk of financial liabilities designated at fair value through profit or loss amounting to J 8.03 crores (Previous Year : gain of J 0.03 crore).
(vi) Cash Flow Hedging Reserve : The Cash Flow Hedging Reserve is the cumulative effective portion of gains or losses arising on changes in fair values of designated portion of hedging instruments entered into for cash flow hedges. The gains or losses arising thereon are transferred to the Statement of Profit and Loss when hedged transaction affects the profit or loss.
(i) 8.85% 3000 Secured Redeemable Non-Convertible Debentures of J 10,00,000 each, redeemable on April 12, 2028, 8.05% 1500 Secured Redeemable Non-Convertible Debentures of J 10,00,000 each, redeemable on August 31, 2024 and 8.05% 1500 Secured Redeemable NonConvertible Debentures of J 10,00,000 each, redeemable on November 2, 2028 are secured by exclusive charge on specified ships with 1.20 times cover on the market value of ships and additional security by way of mortgage on certain immovable property of the Company.
(ii) Foreign currency USD loans availed from banks carry interest rates of overnight SOFR/LIBOR plus 152 to 156 bps (Previous Year : LIBOR plus 100 to 156 bps). The principal repayments are due quarterly or half yearly. These loans are secured by mortgage of specific ships of the Company.
The Company has opted for computation of its income from shipping activities under Tonnage Tax Scheme as per Section 115VA of the Income-tax Act, 1961. Thus, income from the business of operating ships is assessed on the basis of the Deemed Tonnage Income of the Company and no deferred tax is applicable to such income as there are no temporary differences.
The Company, with effect from financial year 2019-20, has chosen to exercise the option of lower tax rate of 25.17% (inclusive of surcharge and cess) under Section 115BAA of the Income-tax Act, 1961 as introduced by The Taxation Laws (Amendment) Ordinance, 2019.
The contingent liability includes liability for matters arising out of disallowance under Section 14A of the Income-tax Act, 1961 upto assessment year 2020-21. Similar claims have been made by the Company for subsequent assessment years for which assessments are pending.
The contingent liabilities include the liability pertaining to the disallowance under Section 14A of the Income-tax Act, 1961 upto assessment year 2020-21. The Tribunal has decided this issue in favour of the Company upto assessment year 2015-16. Post assessment year 2020-21 there is no such disallowance possible in the hands of the Company.
(ii) General description of Defined Contribution Plans :
Superannuation Fund :
In addition to gratuity benefits, employees have the option to become a member of the Superannuation Fund Trust set up by the Company and receive benefits thereunder. It is a defined contribution plan. The Company makes contributions to the trust in respect of the said employees until their retirement or resignation. The Company recognises such contributions as an expense when incurred. The Company has no further obligation beyond its contribution.
National Pension Scheme (NPS) :
NPS is an additional option for offering retirement benefits to the employees. NPS is designed on defined contribution basis wherein the Company contributes to the employees account.
There is no defined benefit that would be available at the time of exit from the system and the accumulated wealth depends on the contributions made and the income generated from the investment of such wealth. The Company recognises such contributions as an expense when incurred. The Company has no further obligation beyond its contribution.
Seamen's Provident Fund :
The Company's contribution towards Provident Fund in respect of seamen i.e. crew who sail on Company's ships is paid to the Seamen's Provident Fund as per the National Maritime Board Agreement binding on the Company.
Seamen's Annuity Fund :
The Company's contribution towards Annuity in respect of seamen is paid to the Seamen's Annuity Fund as per the National Maritime Board Agreement binding on the Company.
Seamen's Rehabilitation Fund :
The Company's contribution towards rehabilitation in respect of seamen is paid to the National Maritime Board Rehabilitation and Welfare Trust as per the National Maritime Board Agreement binding on the Company.
Seamen's Gratuity Fund :
The Company's contribution towards Gratuity in respect of seamen is paid to the Seafarer's Welfare Fund Society as per the National Maritime Board Agreement binding on the Company.
(x) General description of Defined Benefit Plans :
Gratuity Plan :
Gratuity is payable to all eligible employees of the Company on superannuation, death, permanent disablement or resignation in terms of the provisions of the Payment of Gratuity Act or as per the Company's scheme whichever is more beneficial. Benefit would be paid at the time of separation based on the last drawn basic salary.
The defined benefit plan is administered by a separate fund that is legally separated from the Company. The Company's investment strategy in respect of its funded plan is implemented within the framework of the applicable statutory requirements.
The plan exposes the Company to a number of actuarial risks such as investment risk, interest rate risk, longevity risk and salary risk.
- Investment/Interest Rate Risk
The Company is exposed to investment/interest rate risk if the return on the invested fund falls below the discount rate used to arrive at present value of the benefit.
- Longevity Risk
The Company is not exposed to risk of the employees living longer as the benefit under the scheme ceases on the employee separating from the employer for any reason.
- Salary Risk
The Company is exposed to higher liability if the future salaries rise more than assumption of salary escalation.
The Company does an Asset - Liability matching study each year in which the consequences of the strategic investment policies are analysed in terms of risk and return profiles.
Retirement Benefit Scheme including Pension Plan :
The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation as recognised in the Balance Sheet.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
Under the Company's Retirement Benefit Scheme for the eligible Whole-time Directors, all the eligible Whole-time Directors are entitled to the benefits of the scheme only after attaining the age of 62 years, except for retirement due to physical disability or death while in office, in which case, the benefits shall start on his retirement due to such physical disability or death. The benefits are in the form of monthly pension @ 50% of his eligible salary subject to maximum of J 1.25 crores p.a. during his lifetime. If he predeceases the spouse, she will be paid monthly pension @ 50% of eligible pension during her lifetime. Benefits include reimbursement of medical expenses for self and spouse, overseas medical treatment upto J 0.50 crore for self/spouse, office space including office facilities in the Company's office premises. Benefits also include use of Company's car including reimbursement of driver's salary and other related expenses during his lifetime and in the event of his demise, his spouse will be entitled to avail the said benefit during her lifetime.
Post Retirement Medical Benefit Scheme for Executive Directors and Senior Management Employees:
As per the Company's Post Retirement Medical Benefit Scheme for Executive Directors and Senior Management Employees ('Scheme'), selected employees who fulfil the conditions for eligibility and entitlement as prescribed in the Scheme shall be eligible for the benefits of the Scheme upon retirement. The benefits are in the form of reimbursement/payment of hospitalisation (including domiciliary hospitalisation) expenses incurred in India or abroad for the selected employee and his/her spouse for life, pre and post hospitalisation expenses and annual preventive health check-up package, subject to the annual limit not exceeding J 0.50 crore. If either of the selected employee or his/her spouse passed away, the limit will continue for eligible survivor. Selected employee, who has been Executive Director of the Company, will also be entitled to reimbursement of all other medical expenses for himself/herself and his/her spouse.
Compensated Absences :
All eligible union grade employees had an option to freeze the accumulated leave balance as on June 30, 2008. Such frozen accumulated leave balance will be encashed as per the last drawn basic salary at the time of superannuation, death, permanent disablement, resignation or promotion to the non-union category.
With effect from April 1, 2012, all eligible non-union employees have an option to freeze their leave accumulation days on 30th June every year and such frozen accumulated leave balance will be encashed as per the basic salary for the month of June of the relevant year for which leave was frozen at the time of superannuation, death, permanent disablement or resignation.
For all union and non-union grade employees, maximum leave that can be carried forward is 15 days.
The leave over and above 15 days is encashed and paid to employees on an annual basis.
Provident Fund :
Eligible employees of the Company receive benefits from a provident fund, which is a defined benefit plan. Both the eligible employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee's salary. The Company contributes a portion to the Provident Fund Trust and the remaining portion is contributed to the government administered pension fund. The trust invests in specific designated instruments as permitted by Indian law. The rate at which the annual interest is payable to the beneficiaries by the trust is being administered by the Government. The Company has an obligation to make good the shortfall, if any.
Valuations in respect of Provident Fund have been carried out by an independent actuary as at the Balance Sheet date as per the Deterministic Cashflow Approach based on the following assumptions :
(c) Information about major customers :
Included in revenue from operations of J 4102.33 crores (Previous Year : J 4808.55 crores) are revenues of J 1165.76 crores which arose from sales to the Company's two major customers (Previous Year : J 551.55 crores from single largest customer). No other customer contributed 10% or more to the Company's revenue for both current year and previous year.
Note 33 : Right-of-use Assets (ROU) and Lease Liabilities
The Company's lease assets primarily consist of leases for buildings and IT equipments. The Company has elected to apply recognition exemption as per Ind AS 116 for leases which are expiring within 12 months from the date of transition by class of assets and leases for which the underlying asset is of low value on a lease by lease basis. The Company has also used the practical expedient provided by the standard when applying Ind AS 116 to leases. The Company has used a single discount rate to a portfolio of leases with similar characteristics.
Terms and conditions of transactions with related parties :
All related party transactions entered during the year were in ordinary course of the business.
Notes :
(i) Contribution to post-employment benefit plans to the extent of J 1.30 crores (Previous Year : J 1.25 crores) in respect of key management personnel and close members of their family is included under post-employment benefits.
(ii) Post-employment benefits provision for retirement pension benefits payable J 0.29 crore (Previous Year : J 0.06 crore) on the basis of actuarial valuation as per the Retirement Benefits Scheme approved by the Board of Directors.
Note 35 : Commitments
|
(a) Capital Commitments :
|
|
(K in crores)
|
|
Particulars
|
As at 31/03/2024
|
As at 31/03/2023
|
|
Estimated amount of contracts, net of advances paid thereon, remaining to be executed on capital account and not provided for
|
518.88
|
42.77
|
(b) Other Commitments :
The Company has given letter of comfort to Standard Chartered Bank for credit facility availed by its wholly owned subsidiary Greatship (India) Limited (GIL). The financial obligation of GIL shall be endeavored to be fulfilled by the Company in case the same is not met by GIL. This letter of comfort is not in the nature of financial guarantee.
|
Note 36 : Contingent Liabilities
|
|
(K in crores)
|
|
Sr. No.
|
Particulars
|
As at 31/03/2024
|
As at 31/03/2023
|
|
Claims against the Company, not acknowledged as debts :
(a) Sales Tax demands under BST Act, CST Act and VAT Act against which the Company has preferred appeals. *
|
4.73
|
4.73
|
|
(b)
|
Demand from the Office of the Collector and District Magistrate, Mumbai City and from Brihanmumbai Mahanagarpalika towards transfer charges for transfer of premises not acknowledged by the Company.
|
4.34
|
4.34
|
|
(c)
|
Demand for Custom Duty disputed by the Company. *
|
6.75
|
6.75
|
|
(d)
|
[The Company has given bank guarantees amounting to J 3.63 crores (as at March 31, 2023 : J 3.63 crores) against the said Custom Duty demand.]
Income Tax demands for various assessment years disputed by the Company.
|
58.54
|
58.54
|
|
(e)
|
Demand for dividend and interest on shares disputed.
|
10.60
|
10.60
|
|
* Amounts pertaining to points above are excluding interest and penalty.
|
|
|
B. Financial Assets and Liabilities :
The material accounting policies, including the criteria for recognition, the basis of measurement and the basis on which incomes and expenses are recognised, in respect of each class of financial asset, financial liability and equity instruments are disclosed in Note 2(q) to the financial statements.
Notes :
(i) It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings as it is determinable only on receipt of judgements/decisions pending with various forums/authorities.
(ii) The Company does not expect any reimbursements in respect of the above contingent liabilities.
(iii) The Company's pending litigations comprise of claims pertaining to proceedings pending with Income Tax, Custom, Sales Tax/VAT, Service Tax and other authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions were required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial statements.
Note 37 : Financial Instruments
A. Capital Management :
The Company's capital management is intended to create value for shareholders by facilitating the meeting of long-term and short-term goals of the Company.
The capital structure of the Company consists of net debt (borrowings as detailed in Note 16 and offset by cash and bank balances and current
investments) and total equity of the Company.
The Company is not subject to any externally imposed capital requirements.
The Company's risk management committee reviews the capital structure of the Company on a regular basis considering the cyclicity of business.
C. 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 - Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
> Level 2 - Inputs are 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).
The interest rate swaps are entered to hedge interest payments from floating to fixed on borrowings. The bunker swaps are entered to hedge the bunker price risk. Fair value gains/(losses) on the interest rate swap contracts and bunker swap contracts recognised in Cash Flow Hedging Reserve are transferred to the Statement of Profit and Loss as part of interest expense and fuel oil and water expense on settlement. The fair value on reporting date is reported under "Other financial assets” and "Other financial liabilities".
> Level 3 - Inputs 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.
The hedging gain recognised in other comprehensive income during the year is J 16.19 crores (Previous Year : loss of J 44.58 crores) of which gain of J 12.10 crores (Previous Year : loss of J 5.21 crores) has been reclassified to Statement of Profit and Loss.
Valuation technique and key inputs :
Investments in mutual funds are valued at the net asset value of the respective units. Derivative instruments are fair valued at the discounted cash flows. Future cash flows are estimated based on forward exchange/interest rates and contract forward/interest rates discounted at a rate that reflects the credit risk of various counterparties.
D. Derivative Financial Instruments and Risk Management :
The Company uses foreign exchange forward contracts and interest rate swaps to hedge its exposure to the movements in foreign exchange and interest rates. The use of these reduces the risk to the Company arising out of movement in exchange and interest rates. The Company does not use foreign exchange forward contracts and interest rate swaps for trading purpose. The Company has also entered into cross currency swaps to swap its INR borrowings into US dollars to mitigate the exchange risk arising out of foreign currency receivables. The interest rate swap component in the cross currency swap reduces the effective interest costs to the Company. The Company also uses commodity futures contracts for hedging the exposure to bunker price risk.
Sensitivity analysis :
E. Market Risk :
(i) Foreign currency risk management :
The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuation arise.
A 5% strengthening/weakening of Indian Rupee against key currencies to which the Company is exposed (net of hedge), with all other variables being held constant, would have led to approximately a gain/loss of J 16.45 crores (Previous Year : J 20.52 crores) in the Statement of Profit and Loss.
(ii) Interest rate risk :
The Company has mix of fixed and floating rate loans and generally uses interest rate swaps as cash flow hedges of future interest payments, which have economic effect of converting the borrowings from floating to fixed interest rate loans. Under the interest rate swaps, the Company agrees with other parties to exchange, at specified intervals, the difference between fixed contract rates and floating rate interest amounts calculated by reference to the agreed notional principal amounts.
Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the Company are principally denominated in rupees and US dollars with a mix of fixed and floating rates of interest. The Company hedges its US dollar interest rate risk through interest rate swaps to reduce the floating interest rate risk. The Company has exposure to interest rate risk, arising principally on changes in base lending rate and SOFR/LIBOR rates. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings, and by the use of interest rate swap contracts.
Sensitivity analysis :
The sensitivity analysis has been determined based on the exposure to interest rates for unhedged floating rate liabilities. A 0.50% decrease in interest rates and other variables held constant, would have led to approximately gain of J 0.68 crore (Previous Year : J 1.76 crores) in the Statement of Profit and Loss. A 0.50% increase in interest rate would have led to an equal but opposite effect.
(iii) Price risk :
The Company is mainly exposed to the price risk due to its investment in debt mutual funds. The price risk arises due to uncertainties about the future market values of these investments.
Sensitivity analysis :
A 1% increase in prices would have led to approximately an additional gain of J 16.24 crores (Previous Year : J 12.68 crores) in the Statement of Profit and Loss. A 1% decrease in prices would have led to an equal but opposite effect.
(iv) Credit risk management :
Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the Company. The major class of financial asset of the Company is trade receivables. For credit exposures to customer, the management assesses the credit quality of the customer, taking into account its financial position, past experience and other factors.
As the Company does not hold any collateral, the maximum exposure to credit risk for each class of financial instruments is the carrying amount of that class of financial instruments presented on the statement of financial position.
Cash and Cash Equivalents, derivatives and mutual fund investments :
Credit risk on cash and cash equivalents is limited as the Company invests in deposits with banks with high credit ratings assigned by international and domestic credit rating agencies. Investments primarily include investments in liquid mutual funds units from reputed funds. For derivative and financial instruments, the Company attempts to limit the credit risk by only dealing with reputable banks having high credit ratings assigned by credit rating agencies.
Trade receivables :
Trade receivables consist of a large number of various types of customers, spread across geographical areas. Credit risk arising from trade receivables is managed in accordance with the Company's established policy, procedures and control relating to customer credit risk management. Ongoing credit evaluation is performed on these trade receivables and where appropriate, allowance for losses are provided.
Exposure to credit risk :
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was J 6591.56 crores as at March 31, 2024 (as at March 31, 2023 : J 5217.82 crores), being the total of the carrying amount of investment in subsidiaries (other than investments in equity instruments of subsidiaries), cash and cash equivalents, other bank balances, trade receivables, investments in mutual funds and other financial assets including derivatives instruments.
(v) Liquidity risk management :
Liquidity risk may arise from inability to meet financial obligations, including loan repayments and payments for vessel acquisitions. This is dealt with by keeping low leverage, as a result of which the Company is able to borrow even in challenging markets. It is also mitigated by keeping substantial liquidity at all times, which enables the Company to capitalise on any opportunities that may arise.
Note 38 : Government Grants
The Company receives government assistance in the form of Duty Free Credit Entitlement Certificates (DFCEC) under Service Exports From India Scheme (SEIS), which are issued to eligible Indian service providers having free foreign exchange earnings. It can be utilised for duty-free imports of office and professional equipment, spares, furniture and consumables or any other items notified by the Government from time to time.
Note 39 : Particulars of loans, guarantees and investments covered under Section 186 of the Companies Act, 2013
(a) During the year, the Company has given J 65.00 crores loan to its subsidiary 'Greatship (India) Limited'. No guarantees have been given to
Contract assets include mainly unbilled revenue. Contract liabilities are towards charter hire received in advance and part of the freight amount received for incomplete voyages which will be recognised as per progress of the voyage.
Applying the practical expedient as given in Ind AS 115, 'Revenue from Contracts with Customers', the Company has not disclosed the remaining performance obligation related to contracts as the original expected duration of these contracts is one year or less.
Payment terms differ for each charter party contract. In case of time charter, the amounts receivable from customers become due in advance on raising of invoice and in case of voyage charter, on expiry of credit period which on an average is a maximum of 90 days.
The Company's operations include deployment of vessels on time charter basis for short-term. The operation and maintenance of the vessels given on time charter, which includes specialised activities, is responsibility of the Company under the contract. Accordingly, the Company deploys trained and skilled crew to run the vessels for providing logistics services or for shipment of cargo, and ensures maintenance of these assets including dry docking, as per applicable regulatory standards. The charterer does not deploy its crew for these activities. The time charter rate negotiated with the charterer for provision of services which, inter-alia, involves all the above activities is a lumpsum day rate as per the industry practice, and hence, it is not possible to segregate any lease component embedded in the time charter rate for the purposes of the Ind AS 116, 'Leases'.
Note 44 : Other Statutory Information
(i) The Company does not have any benami property, where any proceeding has been initiated or pending against the Company for holding any benami property.
(ii) The Company has not taken any loans from banks or financial institutions against security of current assets and is not required to file quarterly returns or statements.
(iii) The Company is not declared wilful defaulter by bank or financial institution or lender during the year.
(iv) The Company does not have any transactions with companies struck off.
(v) The Company does not have any charges or satisfaction which is yet to be registered with the Registrar of Companies beyond the statutory period.
(vi) The Company has complied with the number of layers prescribed under clause (87) of Section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017.
(vii) The Company has used the borrowings from banks and financial institutions for the specific purpose for which they were obtained.
(viii) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall :
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (ultimate beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.
(ix) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (funding party) with the understanding (whether recorded in writing or otherwise) that the Company shall :
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
(x) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income-tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income-tax Act, 1961).
(xi) The Company has not traded or invested in Crypto currency or Virtual currency during the financial year.
Note 45 : Asset classified as held for sale
During the year, the Company has contracted to sell its 2004 built Medium Range Product Tanker named 'Jag Pahel' to be delivered in first quarter of the financial year 2024-25.
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