i. No. of shares includes shares held by Companys' nominee.
ii. 2,01,00,000 (March 31, 2023 2,01,00,000) of ' 100 each 0.01% Non- Cumulative Redeemable Preference Shares recorded at fair value in earlier year. Equity component amounting to ' 10,998.61 lakhs (March 31, 2023'10,998.61 lakhs) disclosed above as investment in equity and debt component amounting to ' 47,131.58 lakhs (March 31, 2023 ' 41,552.20 lakhs) disclosed above as investment in debt. As at March 31, 2023 investment in debt component also includes gain of ' 19,783.01 lakhs on account of significant modification in terms of the redeemable preference shares were made on December 7, 2022, refer note 64.
iii. Investment comprises of three shares having face value of 1 Share @ US$ 1 each, face value of 1 Share @ US$ 19,50,000 each and face value of 1 Share @ US$ 70,00,000 each.
iv. National saving certificates were pledged with Government authorities.
v. The investment in subsidiary is sold during the year, refer note 62.
vi. Pursuant to Composite Scheme of Amalgamation approved by NCLT, Jindal Quality Tubular Limited, Jindal Tubular (India) Limited and Jindal Fittings Limited were merged with the Company w.e.f April 1, 2022, refer note 61.1.
vii. 19,99,300 (March 31, 2023 19,99,300) Equity shares of JTIF Shipyard Limited were pledged in favour of lenders for loans availed by the subsidiary company which has been released during the year.
(d) 3,250 (March 31, 2023 3,250) equity shares have been held in abeyance as a result of attachment orders by Government authorities, lost shares certificates and other disputes.
(e) Terms/Rights attached to equity shares - The Company has only one class of equity shares having a par value of ' 2/- per equity share and holder of the equity share is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive the remaining assets of the Company in proportion to the number of equity shares held.
Nature of reserves
Retained earnings represents the undistributed profits of the Company.
Other Comprehensive Income (OCI) reserve represents the balance in equity for items to be accounted in other comprehensive income. OCI is classified into (i) Items that will not be reclassified to profit and loss (ii) Items that will be reclassified to profit and loss.
General Reserve represents free reserve, created in accordance with requirements of Companies Act, 1956/Companies Act, 2013.
Securities Premium represents the amount received in excess of par value of securities (equity shares, preference shares and debentures). Capital Reserve represents the excess of fair value of net assets acquired over consideration paid in a business combination.
Treasury Share Reserve represents purchase value of own shares of the Company by Samruddhi Employees Trust. Also refer note 2.11.
Equity Settled Share Based Payment Reserve is used to recognise the grant date fair value options granted to the employees of the Company under the equity settled share based payment scheme.
Secured non-convertible debentures include:
8.50% Non-Convertible Debentures of ' 10 lakhs each aggregating to ' 50,000 lakhs (March 31, 2023'50,000 lakhs @ 8.50% p.a.)
in single series are secured by way of equitable mortgage on Company's immovable properties and hypothecation of movable fixed
assets both present and future in favour of Debenture Trustees. The same are repayable in three annual equal instalments payable
from March 26, 2029. Interest rate has been increased due to CARE rating revision by 25 bps in September 2022.
Secured term loans from banks, financial institutions and NBFC include :
(i) Term Loan of ' 89,997.35 lakhs (rate of interest 9.10% p.a.) (Including ' 25,000 lakhs shown in current maturity because of its prepayment in April 2024 ) (March 31, 2023 Nil) is secured by first pari-passu charge by way of hypothecation of movable fixed assets both present and future and is to be secured by first pari-passu charge by way of equitable mortgage on Company's immovable properties. The balance loan is repayable in bullet payment of ' 64,997.35 lakhs in financial year 2025-26.
(ii) Term Loan of ' Nil (March 31, 2023'3,192.64 lakhs at 9.20% p.a., including current maturity of ' 3,192.64) were secured by first pari-passu charge by way of equitable mortgage on Company's immovable properties and hypothecation of movable fixed assets both present and future. The loan has been fully paid in FY 2023-24.
(iii) Term Loan of ' 6,000 lakhs (rate of interest 9.15% p.a.) (March 31, 2023 8.70% p.a.) (including ' 6,000 lakhs shown in current maturity) (March 31, 2023 ' 12,000 Lakhs, including ' 6,000 lakhs shown in current maturity) is secured by first pari-passu charge by way of hypothecation of movable fixed assets both present and future and is to be secured by first pari-passu charge by way of equitable mortgage on Company's immovable properties. The loan is repayable in half yearly instalments with annual payment of ' 6,000 lakhs in financial year 2024-25.
(iv) Term Loan of ' 2,000.00 lakhs (rate of interest 9.15% p.a.) (March 31, 2023 9.10% p.a.) (including ' 2,000 lakhs shown in current maturity) (March 31, 2023'4,000 lakhs, including ' 2,000.00 lakhs shown in current maturity) is secured by first pari-passu charge by way of hypothecation of movable fixed assets both present and future and is secured by first pari-passu charges by way of equitable mortgage on Company's immovable properties. The loan is repayable in half yearly instalments with annual payment of ' 2,000 lakhs 2024-25.
(v) Term Loan of ' 3,989.01 lakhs (rate of interest 9.80% p.a.) (March 31, 2023 8.70% p.a.) (including ' 3,989.01 lakhs shown in current maturity) (March 31, 2023'7,989.35 lakhs, including ' 4,000 lakhs shown in current maturity) is secured by first pari-passu charge by way of hypothecation of movable fixed assets both present and future and is secured by first pari-passu charges by way of equitable mortgage on Company's immovable properties. The loan is repayable in half yearly instalments with annual payment of ' 3,989.01 lakhs in financial year 2024-25.
(vi) Term Loan of ' 1,988.94 lakhs (rate of interest 8.25% p.a.) (March 31, 2023 8.25% p.a.) (including ' 1,988.94 lakhs shown in current maturity) (March 31, 2023'3,989.17 lakhs, including ' 2,000 lakhs shown in current maturity) is secured by first pari-passu charge by way of hypothecation of movable fixed assets both present and future and is secured by first pari-passu charges by way of equitable mortgage on Company's immovable properties. The loan is repayable in yearly instalments with annual payment of ' 1,988.94 lakhs in financial year 2024-25.
(vii) Term Loan of ' 1,666.66 lakhs (rate of interest 9.40% p.a.) (March 31, 2023 9.00% p.a.) (including ' 1,666.66 lakhs shown in current maturity) (March 31, 2023'3,888.88 lakhs, including ' 2,222.22 lakhs shown in current maturity) is secured by first pari-passu charge by way of hypothecation of movable fixed assets both present and future and is secured by first pari-passu charges by way of equitable mortgage on Company's immovable properties. The loan is repayable in quarterly instalments with annual payment of '1,666.66 lakhs in financial year 2024-25.
(viii) Term Loan of ' 2,222.22 lakhs (rate of interest 9.60% p.a.) (March 31, 2023 9.25% p.a.) (including ' 2,222.22 lakhs shown in current maturity) (March 31, 2023'4,444.44 lakhs, including ' 2,222.22 lakhs shown in current maturity) is secured by first pari-passu charge by way of hypothecation of movable fixed assets both present and future and is secured by first pari-passu charges by way of equitable mortgage on Company's immovable properties. The loan is repayable in quarterly instalments with annual payment of ' 2,222.22 lakhs in financial year 2024-25.
(ix) Term Loan of ' 2,253.49 lakhs (rate of interest 9.60% p.a.) (March 31, 2023 8.95% p.a.) (including ' 1,126.76 lakhs shown in current maturity) (March 31, 2023'3,098.59 lakhs, including ' 845.07 lakhs shown in current maturity) is secured by first pari-passu charge by way of hypothecation of movable fixed assets both present and future and is secured by first pari-passu charges by way of equitable mortgage on Company's immovable properties. The loan is repayable in two years in half yearly instalments with annual payments of ' 1,126.76 and ' 1,126.73 lakhs in financial year 2024-25 and 2025-26 respectively.
(x) Term Loan of ' 1,184.00 lakhs (rate of interest 9.20%) (March 31, 2023 8.05% p.a.) (including ' 592 lakhs shown in current maturity) (March 31, 2023 ' 1,628.00 lakhs including ' 444 lakhs shown in current maturity) is secured by first pari-passu charge by way of hypothecation of movable fixed assets both present and future and is secured by first pari-passu charges by way of equitable mortgage on Company's immovable properties. The loan is repayable in two years in half yearly instalments with annual payments of ' 592 lakhs and ' 592 lakhs in financial year 2024-25 and 2025-26 respectively.
(xi) Term Loan of ' 1,182.20 lakhs (rate of interest 9.20%) (March 31, 2023 8.05% p.a.) (including ' 591.10 lakhs shown in current maturity) (March 31, 2023'1,625.52 lakhs including ' 443.32 lakhs shown in current maturity) is secured by first pari-passu charge by way of hypothecation of movable fixed assets both present and future and is secured by first pari-passu charges by way of equitable mortgage on Company's immovable properties. The loan is repayable in two years in half yearly instalments with annual payments of '591.10 lakhs and ' 591.10 lakhs in financial year 2024-25 and 2025-26 respectively.
(xii) Interest free loan from state financial institution, for working capital financing secured by bank guarantee for seven years from the date of disbursement. Loan disbursed ' 4,060.07 lakhs (discounted value including interest outstanding ' 3,203.33 lakhs) (March 31, 2023'4,060.07 lakhs (Discounted value including interest outstanding ' 3,385.37 lakhs)). Discount rate taken 10% p.a. repayable after seven years from the date of disbursement i.e.' 520.58 lakhs in financial year 2023-24, ' 2,009.82 lakhs in financial year 2024-25 and ' 1,529.67 lakhs in financial year 2025-26.
(xiii) Term Loan from NBFC of ' 3,380.28 lakhs (rate of interest 9.00% p.a.) (March 31, 2023 9.00% p.a.) (including ' 1,690.14 lakhs shown in current maturity) (March 31, 2023'4,647.89 lakhs, including ' 1,267.61 in current maturity) is secured by first pari-passu charge by way of hypothecation of movable fixed assets both present and future and is secured by first pari-passu charges by way of equitable mortgage on Company's immovable properties. The loan is repayable in two years in half yearly instalments with annual payments of '1,690.14 lakhs and ' 1,690.14 lakhs in financial year 2024-25 and 2025-26 respectively.
(xiv) Term loan from NBFC of ' 2,523.30 lakhs (rate of interest 10.80% p.a.) (March 31, 2023 10.55% p.a.) (including ' 2,147.93 lakhs shown in current maturity) (March 31, 2023'4,824.90 lakhs including ' 2,301.59 lakhs shown in current maturity) is secured by first pari passu charge by way of hypothecation of moveable fixed assets for Stainless Steel pipe division of erstwhile Jindal Quality Tubular Limited located at Kosi unit (both present and future). The term loan facility is payable in 2024-25'2,147.93 lakhs and 2025-26'375.37 lakhs.
(xv) Term Loan from NBFC of ' 3,449.25 lakhs (rate of Interest 10.95% p.a) (March 31, 2023 8.75% p.a.) (including ' 1,000 lakhs shown in current maturity) (March 31, 2023'4,449.25 lakhs including ' 1,000 lakhs shown in current maturity) is secured by way of first charge on all immovable and movable fixed assets for DI Fitting division of erstwhile Jindal Fittings Limited at Tembhurni, Pune and second charge on current assets of DI Fittings division (both present and future). The term loan facility are payable in 2024-25'999.99 lakhs, 2025-26'999.99 lakhs, 2026-27'999.99 lakhs and 2027-28'449.25 lakhs.
(xvi) Term Loan from NBFC of ' 1,934 lakhs (rate of Interest 9.70% p.a) (March 31, 2023 8.75% p.a.) (including ' 483.50 lakhs shown in current maturity) (March 31, 2023'1,934 lakhs including Nil current maturity) under the Emergency Credit Line Gurantee Scheme ( ECLGS Scheme) is secured by way of second charge on all immovable and movable fixed assets for DI Fitting division of erstwhile Jindal Fittings Limited at Tembhurni, Pune and second charge on current assets of DI Fittings division (both present and future). The term loan facility are payable in 2024-25'483.5 lakhs, 2025-26'483.5 lakhs, 2026-27'483.5 lakhs and 2027-28'483.5 lakhs.
(xvii) Interest accrued but not due on non-current borrowings of ' 129.71 lakhs (March 31, 2023'177.43 lakhs) is included under other current financial liabilities, refer note 30.
(xviii) 8% non-cumulative, non-convertible, unlisted, redeemable preference shares of ' 100 each, redeemable at par on or before eight years from the date of allotment. Allotment for these shares is pending and have been recognised as a liability.
(xix) During the year, loan from Jindal ITF Limited (acquired upon merger of JFL), carrying interest @ 11.25 repayable after 3 years from the date of loan agreement (i.e. November 20, 2021), knocked off against the loan assets.
The figures for borrowings are net of processing fee. There is no default in repayment of principal and interest thereon.
(i) Lease of ' 1,500.23 lakhs (including ' 31.39 lakhs shown in current maturity) (March 31, 2023'1,528.65 lakhs, including ' 28.41 lakhs shown in current lease liabilities) for seamless pipe manufacturing facility for 25 years are effectively secured as the rights to the leased assets recognised in the financial statements revert to the lessor in the event of default. The discount rate considered for discounting minimum lease payments is 10% p.a.
(ii) Lease of ' 2,009.98 lakhs (including ' 69.24 lakhs shown in current maturity) (March 31, 2023 ' 2,025.05 lakhs, including ' 62.73 lakhs shown in current lease liabilities) for installation and maintenance of Solar Power panels for 18 years are effectively secured as the rights to the leased assets recognised in the financial statements revert to the lessor in the event of default. The discount rate considered for discounting minimum lease payments iwith respect to these leases ranges from 15.08% to 16.12% p.a.
(iii) Lease of ' 558.19 lakhs (including ' 169.71 lakhs shown in current maturity) (March 31, 2023 ' 529.13 lakhs, including ' 174.08 lakhs shown in current lease liabilities) for premises/office premises lease/warehouse facility/plant are effectively secured as the rights to the leased assets recognised in the financial statements revert to the lessor in the event of default. The discount rate considered for discounting minimum lease payments is 10% p.a.
The lease liabilities are repayable on monthly basis. Repayment period is from financial year 2024-25 to 2043-44.
(iv) Expense relating to short-term leases and low value leases that are not considered as ROU is ' 211.49 lakhs (March 31, 2023 ' 293.10 lakhs), Refer note 4.8.
# Working capital loans and buyers credit from banks are secured by first pari-passu charge by hypothecation of finished goods, raw-materials, work-in-progress, stores and spares, book debts and second pari-passu charge in respect of movable and immovable assets including property, plant and equipments of the Company. The rate of interest on Indian Rupee borrowings ranging from 7.60% p.a. to 9.70% p.a. (March 31, 2023 7.45% p.a. to 9.70% p.a.) and for foreign currency borrowings at 5.47% to 6.04% p.a. (March 31, 2023 5.28% p.a. to 6.63% p.a.).
Interest accrued on current borrowings of ' 2,388.93 lakhs (March 31, 2023'602.75 lakhs) is shown under other current financial liabilities, refer note 30.
40. Financial risk management40.1 Financial risk factors
The Company's principal financial liabilities, other than derivatives, comprise borrowings, leases, trade and other payables and financial guarantee contracts. The main purpose of these financial liabilities is to manage finances for the Company's operations. The Company has loans, trade and other receivables, cash and short-term deposits that arise directly from its operations. The Company also enters into derivative transactions. The Company's activities expose it to a variety of financial risks detailed below:
i) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: currency rate risk, interest rate risk and other price risks, such as commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits, investments and derivative financial instruments. Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. This is based on the financial assets and financial liabilities held as at March 31, 2024 and March 31, 2023.
ii) Credit risk
Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss.
iii) Liquidity risk
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses.
The Company's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company's financial performance. The Company uses derivative financial instruments to hedge certain risk exposures. The Company does not acquire or issue derivative financial instruments for trading or speculative purposes.
Risk management is carried out by the treasury department under policies approved by the board of directors. The treasury team identifies, evaluates and hedges financial risks in close co-operation with the Company's operating units. The board provides principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, liquidity risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.
Market Risk
The sensitivity analysis excludes the impact of movements in market variables on the carrying value of post-employment benefit obligations provisions and on the non-financial assets and liabilities. The sensitivity of the relevant Statement of Profit and Loss item is the effect of the assumed changes in the respective market risks. The Company's activities expose it to a variety of financial risks, including the effects of changes in foreign currency exchange rates and interest rates. The Company uses derivative financial instruments such as foreign exchange forward contracts of varying maturity depending upon the underlying contract and risk management strategy to manage its exposures to foreign exchange fluctuations.
(a) Foreign exchange risk and sensitivity
The Company transacts business primarily in USD, Euro, OMR and other currencies. The Company has obtained foreign currency loans and has foreign currency trade payables and receivables and is therefore, exposed to foreign exchange risk. Certain transactions of the Company act as a natural hedge as a portion of both assets and liabilities are denominated in similar foreign currencies. For the remaining exposure to foreign exchange risk, the Company adopts a policy of selective hedging based on risk assessment of the management. Foreign exchange hedging contracts are carried at fair value.
(c) Commodity price risk and sensitivity
The Company is exposed to the movement in price of key raw materials in domestic and international markets. The Company has in place policies to manage exposure to fluctuations in the prices of the key raw materials used in operations. For procurement of material, majority of transactions have short term fixed price contract. Further to minimise the risk of import, the Company enters into foreign exchange forward contracts, when considered appropriate.
(d) Credit risk
Credit risk arises from cash and cash equivalents, contractual cash flows of debt investments carried at amortised cost, deposited with banks, credit exposures from customers including outstanding receivables and other financial instruments.
Trade receivables and contract assets
The Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings for extension of credit to customers. The Company monitors the payment track record of the customers. Outstanding customer receivables and contract assets are regularly monitored. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets. The Company has obtained advances and security deposits from its customers & distributors, which mitigate the credit risk to an extent.
Provision for expected credit losses (ECL)
The Company extends credit to customers as per the internal credit policy. Any deviation are approved by appropriate officials, after due consideration of the customers credentials and financial capacity, trade practices and prevailing business and economic conditions. The Company's historical experience of collecting receivables and the level of default indicate that credit risk is low and generally uniform across markets; consequently, trade receivables and contract assets are considered to be a single class of financial assets. All overdue customer balances are evaluated taking into account the age of the dues, specific credit circumstances, the track record of the customers etc. Loss allowances and impairment is recognised as per the Company policy.
The Company assigns the following internal credit ratings to each class of financial assets based on the assumptions, inputs and factors specific to the class of the financial assets. The Company provides for expected credit loss based on the following:
Others
All of the entity's debt investments (preference shares, government securities, loan to related parties and others and security deposits) at amortised cost are considered to have low credit risk, when they have a low risk of default and the issuer/holder has a strong capacity to meet its contractual cash flow obligations in the near term. For cash and cash equivalents and deposit held with banks, the Company considers factors such as track record, size of the institution, market reputation and service standards to select the banks with which balances and deposits are maintained. Generally, the balances are maintained with the institutions with which the Company has also availed borrowings. The Company does not maintain significant cash and deposit balances other than those required for its day to day operations. The company invests in liquid schemes of mutual fund which have a very short maturity. These schemes are readily convertible and have insignificant changes in value and are held as means for settling liabilities or for working capital limits from banks. The loss allowance recognised during the period was therefore limited upto 12 months expected losses.
There are no receivables which have significant increase in credit risk or credit impaired.
(e) Liquidity risk
The Company's objective is to maintain optimum levels of liquidity to meet its cash and collateral requirements at all times. The Company relies on a mix of borrowings, capital infusion and excess operating cash flows to meet its needs for funds. The current committed lines of credit are sufficient to meet its short to medium term expansion needs. The Company monitors rolling forecasts of its liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.
The table below provides undiscounted cash flows towards non-derivative financial liabilities and net-settled derivative financial liabilities into relevant maturity based on the remaining period at the balance sheet to the contractual maturity date.
The Company is required to maintain ratios as per loan agreements. In the event of failure to meet any of these ratios these loans become callable at the option of lenders, except where exemption is provided by lender. The Company aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches of the financial covenants of any interest bearing loans and borrowing for reported periods.
40.2 Competition risk
The Company faces competition from local and foreign competitors. Nevertheless, it believes that it has competitive advantage in terms of high quality products and by continuously upgrading its expertise and range of products to meet the needs of its customers.
40.3 Capital risk management
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 primary objective of the Company's capital management is to maximize the shareholder value. The Company's primary objective when managing capital is to ensure that it maintains an efficient capital structure andhealthycapitalratiosandsafeguardtheCompany's abilityto continueasagoingconcerninorderto supportitsbusiness and provide maximum returns for shareholders. The Company also proposes to maintain an optimal capital structure to reduce the cost of capital. No changes were made in the objectives, policies or processes during the year ended March 31, 2024 and year ended March 31, 2023. The Company monitors capital using gearing ratio, which is net debt divided by sum of capital and net debt.
For the purpose of the Company's capital management, capital includes equity share capital and other equity as per the balance sheet. Net debt includes, interest bearing loans and borrowings less cash and cash equivalents.
Fair valuation techniques
The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant available data. The fair values of the financial assets and liabilities represents the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The following methods and assumptions were used to estimate the fair values:
1) Fair value of cash, bank and deposits, trade receivables, trade payables, and other current financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
2) Long-term fixed-rate and variable-rate loans/ borrowings are evaluated by the Company based on parameters such as interest rates, specific country risk factors, credit risk and other risk characteristics. Fair value of variable interest rate borrowings approximates their carrying values. For fixed interest rate borrowings, fair value is determined by using the discounted cash flow (DCF) method using discount rate that reflects the Company's borrowings rate. Risk of non-performance for the company is considered to be insignificant in valuation.
3) The fair values of derivatives are estimated by using pricing models, where the inputs to those models are based on readily observable market parameters basis contractual terms, period to maturity, and market parameters such as interest rates, foreign exchange rates, and volatility. These models do not contain a high level of subjectivity as the valuation techniques used do not require significant judgement, and inputs thereto are readily observable from actively quoted market prices. Management has evaluated the credit and non-performance risks associated with its derivative counterparties and believe them to be insignificant and not warranting a credit adjustment.
Fair Value hierarchy
The following table provides the fair value measurement hierarchy of Company's asset and liabilities, grouped into Level 1 to Level 3 as described below:
Level 1: It includes fair value of financial instruments traded in active markets and are based on quoted market prices at the balance sheet date like mutual funds. The mutual funds are valued using the closing net assets value (NAV) as at the balance sheet date.
Level 2: It includes fair value of the financial instruments that are not traded in an active market like over-the-counter derivatives, which is valued by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on the company specific estimates. If all significant inputs required to fair value if instrument are observable then instrument is included in level 2.
Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
The following table provides the fair value measurement hierarchy of Company's asset and liabilities, grouped into Level 1 to Level 2 as described below:-
42. Segment Information
The Company is engaged into manufacturing of iron and steel pipes and pellets. The Group CEO and Whole-time Director has been identified as the Chief operating decision maker (CODM), who evaluates the Company performance, allocate resources based on the analysis of the various performance indicator of the Company as a single unit. Therefore there is no other reportable segment for the Company as per the requirements of Ind AS 108- Operating Segments.
a) Information about geographical segment
The Company's operations are located in India. The following table provides an analysis of the Company's sales by geography in which the customer is located, and non-current assets other than financial instruments on the basis of location of the assets.
43. a) Disaggregation of revenue from contracts with customers:
The Company derives revenue at point in time from sale of goods and over time from sale of services- job work. The Company's operations are located in India. Company's sales by geography is determined on the basis of location of customers. Below are the details for revenue from customers:
47. Compliance with audit trail for accounting software
The Company is using an ERP which is widely used internationally. The ERP software is having an audit trail feature for maintaining its books of account.
The Company enabled audit trail in all the tables throughout the year except:-
a) On some of the tables, audit trail feature enabled during the year.
b) On certain tables for specific access, audit trail feature has not been enabled as per the advise of ERP provider as it would result into considerable degradation of performance.
c) On database for a specific standard default user used by the ERP itself, due to performance related issue. As per ERP provider though system administrator can use this id, an audit trail for command executed by system administrator is not available. To mitigate this, Company implemented a customised solution that allows to check if system administrator has logged in through this user id, the command executed and final modified values. It was implemented towards the end of the year.
48. Employee Benefit Obligations
The Company has certain defined contribution plans. Contributions are made to provident fund in India for employees at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. Refer table below for the expense recognised during the period towards defined contribution plan:
The above sensitivity analysis 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 (projected unit credit method) has been applied as when calculating the defined benefit obligation recognised within the Balance Sheet. The method and types of assumption used in preparing the sensitivity analysis did not change as compared to the previous year.
OCI presentation of defined benefit plan
Gratuity is in the nature of defined benefit plan, Accordingly, re-measurement gains and losses on gratuity is presented under OCI as an Item that will not be reclassified to profit and loss along with income tax effect on the same.
Presentation in Statement of Profit & Loss and Balance Sheet
Expense for service cost, net Interest expense and expected return on plan assets is charged to Statement of Profit & Loss. Actuarial liability for gratuity is shown as current and non-current provision in balance sheet.
The entire amount of the provision for compensated absences of ' 8,535.90 lakhs (March 31, 2023 - ' 7,328.07 lakhs) is presented as current, since the company does not have an unconditional right to defer settlement for any of these obligations. However, based on past experience, the company does not expect all employees to avail the full amount of accrued leave or require payment for such leave within the next 12 months.
The Company has taken policy from an insurance company for managing gratuity fund. The major categories of plan assets for the year ended March 31, 2024 and March 31, 2023 has not been provided by the insurance company. Accordingly, the disclosure for major categories of plan assets has not been provided.
Risk exposure
Due to the restrictions in the type of investment that can be held by the gratuity fund, it's not possible to explicitly follow on assets-liability matching strategy to manage risk actively.
The insurance policy is non participating variable insurance plan and will not participate in the profits of the insurance company. These policies provide for minimum floor rate (MFR), i.e. a guaranteed interest rate that the policy account will earn during the entire policy term. In addition to MFR the insurance company shall also declare a non-zero positive additional interest rate (AIR) at the beginning of every financial quarter on the policy account and AIR shall remain guaranteed for that financial quarter. In addition to this, the policy also earns residual addition.
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below: Asset volatility
This may arise from volatility in asset values due to market fluctuations. Most of the plan asset investments are in fixed income securities.
Changes in government bond yields
The plan liabilities are calculated using a discount rate set with reference to government bond yields. A decrease in government bond yields will increase plan liabilities and vice-versa, although this will be partially offset by an increase in the value of the plans' holdings in such bonds.
Salary Cost Inflation Risk
The present value of the Defined Benefit Plan liability is calculated with reference to the future salaries of participants under the Plan. Increase in salary due to adverse inflationary pressures might lead to higher liabilities.
* Includes audit fees amounting to ' Nil (March 31, 2023: ' 1.93) pertaining to fees paid to auditor of merged entity i.e. Jindal Quality Tubular Limited, Jindal Tubular (India) Limited, Jindal Fittings Limited pursuant to Composite Scheme of Amalgamation. private Limited.
“Includes Out of pocket expenses amounting to ' Nil (March 31, 2023: ' 0.59) pertaining to fees paid to auditor of merged entity i.e. Jindal Quality Tubular Limited, Jindal Tubular (India) Limited, Jindal Fittings Limited pursuant to Composite Scheme of Amalgamation.
d. Details of loans given, investment made and guarantees given, covered u/s 186(4) of the Companies Act 2013.
- Loans given (refer note 10 and 18) and investment (refer note 8) made are given under the respective heads.
- Corporate guarantees have been issued on behalf of subsidiary companies and joint venture company, details of which are given in related party transactions. Refer Note 51 and 52.
50. Additional Regulatory Information
(a) Loans or Advances
The Company has not granted any loans or advances in the nature of loans to promoters, directors, KMPs and the related parties (as defined under Companies Act 2013), either severally or jointly with any other person which are repayable on demand or without specifying any terms of repayment except as stated below:
(b) Details of benami property held
No proceedings have been initiated on or are pending against the company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
(c) Borrowing secured against current assets
The Company has borrowings from banks and financial institutions on the basis of security of current assets. The quarterly returns or statements of current assets filed by the Company with banks and financial institutions are in agreement with the books of account.
(d) Wilful defaulter
The company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
Formulae for computation of ratios are as follows :
(i) Current Ratio (times) : Current assets/ Current liabilities
(ii) Debt Equity Ratio (times) : Total debt/ Net Worth
Total Debt : Secured Loans Unsecured Loans - Liquid Investments/ FDR Net Worth : Equity Share Capital Reserves (Excluding Revaluation Reserve)
(iii) Debt Service Coverage Ratio (times) : EBDIT / (Finance costs Principal repayment of long term debt during the period)
(iv) ROE (%) = Net Income/Shareholder's equity
(v) Inventory turnover ratio (times): cost of goods sold ( RM, SFG, FG and scrap) / (average of opening and closing inventory of RM, SFG, FG and Scrap)
(vi) Trade Receivables turnover ratio (times) : Net Annual Credit SalesAverage Accounts Receivables
(vii) Trade payables turnover ratio (times) : (Cost of material consumed Purchases stock in trade changes in inventory)^Average Accounts Payables
(viii) Net Capital Turnover Ratio (times) : Total income / Shareholder's Equity
(ix) Net Profit ratio (%) : Net Profit/Total income*100
(x) Return on Capital employed (%) : EBIT/ Total Assets- Current Liablities
(xi) Return on investment (%) : EBIT/ Closing total assets
(i) Utilisation of borrowings
The borrowings obtained by the company from banks and financial institutions have been applied for the purposes for which such loans were taken.
(j) Compliance with approved scheme(s) of arrangements
During the year, the Hon'ble Hyderabad bench of NCLT vide its order dated March 31, 2023, approved the resolution plan submitted by the Company for Sathavahana Ispat Limited (SIL). The conditions precedents as per the said Plan were achieved on April 26, 2023, thereby Sathavahana Ispat Limited stands merged with the Company on the said date.
The Hon'ble National Company Law Tribunal (NCLT), vide its order dated March 21, 2024, has approved the Composite Scheme of Amalgamation ("the Scheme”) of Jindal Quality Tubular Limited ("JQTL”), Jindal Tubular (India) Limited ("JTIL”) and Jindal Fittings Limited ("JFL”) with the Company, the appointed date being April 01, 2022. The said order became effective on March 29, 2024 on filing of order to Registrar of Company, Kanpur.
The Company has done the compliances for the approved schemes..
(k) Utilisation of Borrowed funds and share premium:
(I) The company has not advanced or loaned or invested funds to any other person or entity, 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.
(II) 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 group 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.
(l) Undisclosed income
There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.
(m) Details of crypto currency or virtual currency
The company has not traded or invested in crypto currency or virtual currency during the current or previous year.
(n) During the current year, The Company has made investment in Renew Surya Tejas Private Limited amounting to ' 445.68 lakhs, has granted unsecured loan to 346 employees amounting to ' 715.16 lakhs, gave additional guarantee to a subsidiary ' 16,859.29 lakhs and renewed existing two guarantees to a subsidiary amounting to ' 23,868.58 lakhs and provided security to banks amounting to ' 6,60,000 lakhs.
During the previous year, The Company has made investments in one joint venture company amounting to ' 1,530 lakhs, granted unsecured loan to one subsidiary company amounting to ' 1,380 lakhs and 314 employees amounting to ' 658.49 lakhs, stood guarantee to a subsidiary and a joint venture amounting to ' 23,053.50 lakhs and ' 14,500 lakhs respectively and provided security to four banks amounting to ' 1,37,500 lakhs.
(o) During the current year, the company has not granted any additional loan.
During the previous year, the Company has granted additional loan aggregating to ' 1,380.00 lakhs to Jindal ITF Limited. This additional loan amount has been repaid during year. The loan is covered under Section 2(76) which is repayable on demand.
1. Terms and conditions of transactions with related parties - All related party transactions entered during the year were in ordinary course of the business and are on arm's length basis. All outstanding receivable balances are unsecured and repayable in cash.
2. Transaction above excludes indirect taxes and includes materials in transit.
3. During the previous year, the Company has exceeded the limit of related party transaction of ' 2,40,000 lakhs in the case of JSW Steel Limited which was approved by audit committee and shareholders in accordance with the applicable listing regulations by ' 39,972 lakhs (including ' 10,308 lakhs for material in transit) due to business exigency. Necessary intimation has been made to the stock exchanges. The impact of the above is not likely to be material. During the current year, the transactions value is within the limit for both JSW Steel Limited and Jindal Steel and Power Limited.
(iv) Hon'ble Supreme Court Judgment dated February 28, 2019 relating to the provident fund, has been evaluated and assessed based on legal opinion, the Company has arrived at the conclusion that there is no significant impact of this matter and accordingly no provision is made in the books of accounts.
(v) Income Tax Assessment orders for financial year (FYs) 2014-15 to 2019-20 have been passed by the Assessing Officer under reassessment proceedings. In these Assessment Orders additions have been made by the assessing officer without substantiating and following the principles of natural justice. These orders have some procedural deficiencies as well. The Company, after due consideration and consultation with the experts in the matter has gone in appeal and believes that the resulting Income Tax demand amounting to ' 11,458.82 Lakhs crores (March 31, 2023'8,969.05 Lakhs), is not sustainable and accordingly no adjustment to the financial statements is required.
It is not possible to predict the outcome of the pending litigations with accuracy, the Company believes, based on legal opinions received, that it has meritorious defences to the claims. The management believe the pending actions will not require outflow of resources embodying economic benefits and will not have a material adverse effect upon the results of the operations, cash flows or financial condition of the Company.
55. Government granti. Packaged Scheme of Incentive (PSI) - Maharashtra
The Company's manufacturing facility at Nashik has been granted "Mega Project Status” by Government of Maharashtra and therefore is eligible for Industrial Promotion Subsidy (IPS) under Packaged Scheme of Incentive (PSI) 2007. The purpose of the scheme is for intensifying and accelerating the process of dispersal of industries to the less developed regions and promoting high tech industries in the developed areas of the state coupled with the object of generating mass employment opportunities.
Entitlements under the scheme consists of the following:
a) Electricity duty exemption for a period of 7 years from the date of commencement of commercial production- from September 10, 2009 to September 09, 2016.
b) 100% exemption from payment of stamp duty.
c) VAT and CST payable to the State Government (on sales made from Nashik plant, within a period of 7 years starting from September 10, 2009).
IPS will be payable so as to restrict up to 75% of the eligible fixed capital investments made from September 13, 2007 to September 10, 2009. The eligibility certificate issued allows maximum fixed capital investment of '35,000 lakhs and restricts IPS to 75% of ' 35,000 lakhs i.e. ' 26,250 lakhs.
There are no unfulfilled conditions or other contingencies attaching to these grants.
ii. Rajasthan Investment Promotion Scheme (RIPS) - Rajasthan
The Company's manufacturing facility at Bhilwara has been granted "Customized Package” by Government of Rajasthan and
therefore is eligible for Investment Promotion Subsidy (IPS) under Rajasthan Investment Promotion Scheme-2010 (RIPS-2010).
The purpose of the Customize Package Scheme of RIPS-2010 is to promote investment in the State of Rajasthan and to further
generate employment opportunities through such investment. Modalities of payment of IPS consists of the following:
a) 50% exemption from payment of electricity duty for a period of 10 years from the date of issuance of entitlement certificate- from December 09, 2015 to December 08, 2025.
b) Investment subsidy equivalent to 70% of state tax due and deposited by Company into the Government exchequer, for a period of 07 years from the date of issuance of entitlement certificate- from December 09, 2015 to December 08, 2022.
c) Employment generation subsidy- for general category: '15,000/- per employee & for women/SC/ST/PwD: ' 18,000/- per employee per completed year of service, subject to maximum, 5% of state tax due and deposited by Company into the Government exchequer, for a period of 7 years from the date of issuance of entitlement certificate- from December 09, 2015 to December 08, 2022.
d) 50% exemption from payment of stamp duty & conversion charges for change of land use.
There are no unfulfilled conditions or other contingencies attaching to these grants.
The Government of Uttar Pradesh implemented an Industrial Investment Promotion Scheme, 2003 for the purpose of providing interest free loan under the scheme by way of working capital assistance during the initial years of production to promote setting up of a mega unit. Company has an Industrial unit having investment exceeding ' 2,500 lakhs at Kosi Kalan as per above mentioned scheme and became eligible for sanction of interest free loan as a mega unit. Pradeshiya Industrial & Investment Corporation of Uttar Pradesh Limited (PICUP), on behalf of the state Government has given interest free loan. There are no unfulfilled conditions or other contingencies attached to this grant.
iv. Bellary Unit
The Company's manufacturing facility at Bellary has been granted, "Subsidy for setting up of ETP Plant” by Government of Karnataka. As per operational guidelines of Karnataka Industrial Policy 2009-2014 and package of incentive and concession scheme offered for investment, Bellary unit is eligible for subsidy for setting up of ETP Plant (Effluent treatment plant).
As per the scheme, one time capital subsidy up to 50% of the cost of Effluent Treatment Plants (ETPs) is available to Manufacturing Micro, Small and Medium Enterprises and Service Enterprises, Manufacturing SEZ Enterprises, Large and Mega industries both for establishment of new enterprises or for expansion, diversification, and modernization of existing industries, subject to a ceiling of ' 100 lakhs per manufacturing enterprises in zone-1, 2 and 3 and a ceiling of ' 50 lakhs in zone-4. The Company being eligible under the scheme, got sanctioned a capital subsidy of ' 31.50 lakhs from District Industries Centre, Bellary and Directorate of Industries and Commerce, Bengaluru.
There are no unfulfilled conditions or other contingencies attaching to these grants.
The Government of Madhya Pradesh implemented an Industrial Promotion Policy, 2014 for promoting industrialization, employment generation. Company has an Industrial unit at Indore became eligible as a large scale industrial unit for capital subsidy which will be disbursed over the years.
vi. Export Promotion Capital Goods (EPCG)
The Company avails export promotion capital goods licenses. The objective of the EPCG scheme is to facilitate import of capital goods for producing quality goods and services and enhance manufacturing competitiveness.
EPCG scheme
EPCG Scheme allows import of capital goods and their spare parts without payment of custom duty including cess and IGST under the Foreign Trade Policy 2015-20. Scheme covers manufacturer exporter, supporting manufacturer and service provider. EPCG authorisation shall be valid for import for 18 months from the date of issue of authorisation. Imported capital goods shall be subject to actual user condition till export obligation is completed and export obligation discharge certificate (EODC) is granted.
Import under EPCG scheme shall be subject to export obligation which are manufactured by manufacturer exporter or its supporting manufacturer equivalent to 6 times of duties, taxes and cess saved on capital goods to be fulfilled in 6 years reckoned from the date of issue of authorisation. Export obligation (EO) under the scheme shall be over and above, the average level of exports achieved by the applicant in the preceding three licensing years for the same and EO shipment under advance authorisation, duty free import authorisation scheme (DFIA), drawback scheme or reward schemes would also be considered for fulfilment of EO.
As on the reporting date there is no outstanding export obligation against the EPCG licenses. There are no other contingencies relating to these grants.
56. Lessor- Operating lease
The Company has entered into operating lease arrangements for lease of land & building and the term of lease arrangement is 10 years. The Company has recognised a rental income of ' 429.91 lakhs under the opertaing lease during the year ended March 31, 2024 ' 152.15 lakhs.
58. Impairment review
Assets are tested for impairment annually or whenever there are any indicators for impairment. Impairment test is performed at the level of each Cash Generating Unit ('CGU') or group of CGUs within the Company at which assets are monitored for internal management purpose. The impairment assessment is based on higher of value in use and fair value less cost of disposal.
Impairment assessment of Goodwill
Goodwill has been recognised on amalgamation of erstwhile associate namely Jindal Fittings Limited with the Company pursuant to Composite scheme of Amalgamation approved by NCLT. The said goodwill is initially measured, being the excess of cost of investment and consideration to other shareholder in Jindal Fittings Limited over its net identifiable assets acquired and liabilities assumed.
The Company performed annual impairment test for carrying value of the goodwill.
The recoverable amount has been considered based on the fair value less cost of disposal or value in use, whichever is higher as required to be assessed under Ind AS 36.
The recoverable amount of the unit has been determined based on value in use calculation using cash flow projections from financial projections. The pre-tax discount rate of 13.5% (March 31, 2023 13.5 %) applied to cash flow projections for impairment testing and cash flow beyond the five year period are extrapolated using a 4% (March 31, 2023 4%) growth rate which is consistent with the normal business growth rate and industry forecasts. As a result of the analysis, management did not identify any impairment for the goodwill for this unit and accordingly, there is no need for impairment of goodwill.
The management believes that any reasonably possible change in the key assumptions on which recoverable amount is based would not cause the carrying amount to exceed the recoverable amount of the unit.
60. Employee Share Based Payments
The establishment of the Jindal Saw Stock Appreciation Right Scheme, 2018 ('Scheme'), was approved by shareholders at 33rd Annual General Meeting held on September 27, 2018. The employee stock appreciation right plan ('SAR') is designed to provide incentives to employees of the senior management in the Company. All vice presidents and above besides the functional heads and unit heads and above would be eligible for stocks appreciation rights.
The Company has set up a trust to administer the ESOP scheme under which Stock Appreciation Rights (SAR) have been granted to employees. The employee can excercise their right to monetise SAR's anytime within 5 years of the vesting date or cumpulsorily at the end of the employment, whichever is earlier. Pursuant to shareholders approval, the above scheme was modified from cash settled to equity settled with effect from November 24, 2023.
The expected price volatility is based on the historic volatility (based on the remaining life of options), adjusted for any expected changes to future volatility due to publicly available information.
Modification of Scheme:
The above scheme was modified from cash settled to equity settled with effect from November 24, 2023. Company determined the fair value of options on the dtae of modification which has not resulted into any incremental fair value. Liability arising from share-based payment payable to employees shown as other current financial liabilities has been transferred to Equity Settled Share Based Payment Reserve upon modification of Scheme, refer note 22.
61. Business Combination 61.1 Merger - JQTL, JTIL and JFL
The Hon'ble National Company Law Tribunal (NCLT), vide its order dated March 21, 2024, has approved the Composite Scheme of Amalgamation ("the Scheme”) of Jindal Quality Tubular Limited ("JQTL”), Jindal Tubular (India) Limited ("JTIL”) ("Subsidiaries”) and Jindal Fittings Limited ("JFL”) ("Associate”) with the Company, the appointed date being April 01, 2022. JQTL and JTIL were in the business of pipe manufacturing and coating and JFL was in the business of manufacturing of Ductile Iron fittings. Consequently, the standalone financial statements of the Company, for the previous year have been restated based on the audited financial statements of the Company, JQTL, JTIL and JFL to give effect to the business combination.
For JQTL and JTIL, the Company has accounted for the business combination as a common control transaction using the pooling of interest method (as prescribed in Appendix - C to Ind AS 103) and for JFL using acquisition method in accordance with the Ind AS 103 - Business Combination and the Scheme.
61.2 Acquisition of Sathavahana Ispat Limited in Insolvency (IBC)
The Hon'ble Hyderabad bench of NCLT vide its order dated March 31, 2023, approved the resolution plan submitted by the Company for Sathavahana Ispat Limited (SIL). The conditions precedents as per the said Plan were achieved on April 26, 2023, thereby SIL stands merged with the Company on the said date. The SIL has ductile iron pipe and pig iron manufacturing facility at Haresamudram, Andhra Pradesh and coal to coke conversion facility and waste heat recovery thermal power plant at Kudithini, Karnataka. Company already has ductile iron pipe manufacturing facility in Gujarat and with this acqusition Company can serve both western and southern India with savings in logistics costs.
The acquisition was accounted for in the books as bargain purchase, using the acquisition method and accordingly, all the assets and liabilities were measured at their fair values as on the acquisition date and the purchase consideration was allocated to the net assets acquired.
Acquisition-related costs amounting to ' 31.05 lakhs have been recognised as an expense in the statement of profit and loss within other expenses and in operating cash flows in the statement of cash flows.
The acquired business contributed to revenue and profit before tax amounting ' 1,48,621.67 lakhs and ' 7,766.11 lakhs respectively for the year ended March 31, 2024.
If the acquisition had occurred on April 01, 2023, revenue and profit before tax of the company would have been ' 18,03,728.58 and ' 2,17,970.18 respectively for the year ended March 31, 2024.
63. Jindal ITF Limited, subsidiary of the Company, had won an arbitral award allowing various claims to the tune of ' 1,89,108 lakhs plus interest and applicable taxes. During the financial year 2019-20, the subsidiary had filed enforcement application under section 36 of Arbitration and Conciliation Act, 1996, for the execution of arbitral award being pronounced in favour of the subsidiary whereas the customer had preferred appeal under Section 34 of Arbitration and Conciliation Act, 1996, challenging the said arbitral award. Both the aforesaid cases are presently sub-judice before Hon'ble High Court of Delhi. As per interim relief granted by Hon'ble High Court, the subsidiary received ' 85,631 lakhs on submission of bank guarantees. Based on the current status and the expert legal advice received, the Company is expecting a favorable outcome which would cover all the investments, loans and advances in Jindal ITF and consequently no adjustments have been made to the carrying values of loans and investments in the books of the Company.
64. The Company had invested in ' 20,100 lakhs redeemable preference shares (RPS) of Jindal ITF Limited, subsidiary, on December 07, 2015, redeemable at the end of seven years which was accounted for at fair value as a compound financial instrument. During 2022-23, the terms of the RPS were modified extending the redemption date by 5 years and introducing a redemption premium of 11% at monthly rest, payable on maturity, with retrospective effect from its date of issue. Based on opinions taken by the Company, the modification resulted into extinguishment of old debt component of RPS and recognition of same on its new fair value resulting in a gain of ' 19,783.01 lakhs in the financial statements of 2022-23 as other income.
65. Interest free loan ' 1,147.77 lakhs (March 31, 2023'1,500 lakhs) to Samruddhi Employees Trust (the 'Trust'), is for the purpose of employee benefit scheme. The Trust utilised the proceeds of the loan received from the Company for purchase of the Company's own shares. The Company considers the Trust as an extension of the entity and hence has incorporated the assets and liabilities of the Trust in the standalone financial statements of the Company. The shares of the Company held by the Trust are shown under 'Treasury share reserve' in 'Other equity'.
66 Events after the Balance Sheet Date - The Board of directors have recommended dividend for the financial year 2023-24, which is subject to the approval of the shareholders in the ensuing annual general meeting. For details of dividend, refer note 40.4.
67 These financial statements were approved and adopted by the board of directors of the Company in their meeting dated May 07, 2024, and are subject to shareholder approval at the forthcoming Annual General Meeting of shareholders.
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