Note:
1. Security deposits includes deposits for rent.
2. Margin money deposits with a carrying amount of ' 1.40 Crores (March 31, 2023: ' 1.40 Crores) are subject to charge for securing the Company's Bank Guarantee facility.
3. Interest receivable on fixed deposits includes interest for the period from October 2023 till March 2024 on unutilised proceeds from Initial Public Offer (IPO) amounting to ' 30.45 Crores which has been temporarily invested in deposits with scheduled commercial banks .
NOTE 9: INCOME TAX
Indian companies are subject to Indian income tax on a standalone basis. For each fiscal year, the entity profit and loss is subject to the higher of the regular income tax payable or the Minimum Alternative Tax ("MAT").
Statutory income taxes are assessed based on book profits prepared under generally accepted accounting principles in India adjusted in accordance with the provisions of the (Indian) Income Tax Act, 1961. Statutory income tax is charged at 30% plus a surcharge and education cess.
MAT is assessed on book profits adjusted for certain items as compared to the adjustments followed for assessing regular income tax under normal provisions. MAT for the fiscal year 2023-24 is charged at 15% plus a surcharge and education cess. MAT paid in excess of regular income tax during a year can be set off against regular income taxes within a period of fifteen years succeeding the fiscal year in which MAT credit arises subject to the limits prescribed.
Business loss can be carried forward for a maximum period of eight assessment years immediately succeeding the assessment year to which the loss pertains. Unabsorbed depreciation can be carried forward for an indefinite period.
(a) Shares held under ESOP Trust
The Company has created an Employee Stock Ownership Plan (ESOP) for providing share-based payment to its employees.
ESOP is the primary arrangement under which incentive are provided to certain specified employees of the Company and it's subsidiaries. The Company treats ESOP trust as its extension and shares held by ESOP trust are treated as treasury shares.
For the details of shares reserved for issue under the Employee Stock Ownership Plan (ESOP) of the Company (refer note 37).
Pursuant to the Ordinary Resolution passed by the Shareholders of the Company on 28 December 2022, the Company has sub-divided its equity share of face value of '10 each fully paid up, into 5 equity shares of face value '2 each fully paid-up and issued bonus in the ratio of 5 equity shares for one existing fully paid-up equity share held by the member with record date of 20 January 2023. Hence, shares have now been adjusted on account of sub-division of share and bonus done by the Company.
(c) The company , at its IPO Committee meeting held on 28th September , 2023 approved allotment of 23,52,94,117 equity shares of ' 2 each pursuant to Initial Public Offer at a securities premium of RS. 117 per equity share under fresh issue. The Equity Shares of the Company were listed on BSE Limited ("BSE") and National Stock Exchange of India limited ("NSE") on 03rd October, 2023
(d) Rights, preferences and restrictions attached to equity shares:
The Company has one class of share capital, i.e., equity shares having face value of '2 per share (PY of '2 per share). Each holder of equity share is entitled to one vote per share. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing annual general meeting.
Nature and purpose of reserves:
(1) Retained Earnings
Retained earnings are the profits that Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings includes re-measurement loss/(gain) on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss. Retained earnings are free reserves available to the Company.
(2) Capital Reserve:
Forfeiture of equity share warrant on account of option not exercised by the warrant holders.
(3) Security premium reserve:
The amount received in excess of face value of equity shares is recognised in securities premium. This reserve is utilised in accordance with the specific provisions of the Companies Act 2013.
(4) Equity settled share based payment reserve:
For details of shares reserved under employee stock option (ESOP) of the Company refer note 37.
(a) Income Tax cases includes disputes pertaining to disallowances of deduction taken u/s 14A, disallowances of CSR Expenses and disallowance on account mismatch in Annual Information Return. Based on the decisions of the Appellate authorities and the interpretations of other relevant provisions, the Company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly, no provision has been made.
(b) It is not practicable to estimate the timing of cash outflow, if any, in respect of matters above, pending resolution of the arbitration / appellate proceedings.
(a) Mr. Arun Maheshwari and Ms. Gazal Qureshi are in receipt of remuneration from South West Port Limited, subsidiary company where they are holding an office/place of profit.
(b) As the future liability of the gratuity is provided on actuarial basis for the company as a whole, the amount pertaining to individual is not ascertainable and therefore not included above.
(c) The remuneration include perquisite value of ESOPs during the period exercised ' 5.64 crores (P.Y. ' NIL).The Company has recognised an expense of ' 11.97 crores (P.Y ' 7.96 crores) towards employee stock options granted to Key Managerial Personnel.
(d) The Independent Non-Executive Directors are paid remuneration by way of sitting fees. The Company pays sitting fees at the rate of ' 50,000/- (' 20,000/- till 02 November 2023) for each meeting of the Board and ' 30,000/- (' 20,000/- till 02 November 2023) for sub-committees attended by them. The amount paid to them by way of commission and sitting fees during the year is ' 0.26 Crores (PY ' 0.20 Crores), which is not included above.
(e) The transactions are disclosed under various relationships (i.e. subsidiary and other related parties) based on the status of related parties on the date of transactions.
(f) The Company gives or receives trade advances during normal course of business. The transactions against those trade advances are part of above-mentioned purchases or sales and accordingly, such trade advances have not been shown separately
(g) The transactions with related parties are made on terms equivalent to those that prevail in arm's length transactions. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates. Outstanding balances at the year-end are unsecured and settlement occurs in cash.
Terms and Conditions
Sales:
The sales to related parties are made on terms equivalent to those that prevail in arm's length transactions and in the ordinary course of business. Sales transactions are based on prevailing price lists and memorandum of understanding signed with related parties. For the year ended 31st March 2024, the Company has not recorded any impairment of receivables relating to amounts owed by related parties.
Purchases:
The purchases from related parties are made on terms equivalent to those that prevail in arm's length transactions and in the ordinary course of business. Purchase transactions are based on made on normal commercial terms and conditions and market rates.
Loans to Related Parties:
The Company had given loans to related parties for business requirement. The loan balances as at 31st March, 2024 was ' 3,973.60 Crores (As on 31st March, 2023 was ' 2,932.67 Crores). These loans are unsecured in nature.
(a) Loan to Group companies : If the tenure of the loan is one year from the date of disbursement than interest rate is SBI MCLR 175 BPS and if tenure is more than one year then interest rate is fixed based on cost of capital at the time of disbursement. Interest rate for loans to subsidiaries out of IPO proceeds is SBI MCLR 175 BPS.
(b) Loans to employee welfare trusts : these loans are given as interest free.
Interest Income
Interest is accrued on loan given to related party as per terms of agreement.
Interest expnese:
Interest is charged on loan from related party as per terms of agreement.
Financial Guarantee given
Financial guarantees given on behalf of subsidiary company are for availing term loan and the transactions are in ordinary course of business and at arms' length basis.
Financial Guarantee received
Financial guarantees received from subsidiary company for External Commercial Borrowings and the transactions are in ordinary course of business and at arms' length basis.
NOTE 33: CORPORATE SOCIAL RESPONSIBILITY (CSR)
As per section 135 of the Companies Act 2013, a company, meeting the applicabilty threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibilty (CSR) activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education and culture, healthcare, ensuring environmental sustainability, rural development.A CSR Committee has been formed by the company as per the Act.The funds were primarily allocated and utilised through the year on these activites which are specified in Schedule VII of the Companies Act, 2013.
NOTE 34 EMPLOYEE BENEFITS (a) Defined contribution plans:
Retirement Benefits in the form of Provident Fund, Employee State Insurance Scheme and Employee Pension Scheme which are defined contribution schemes are charged to the statement of profit and loss for the year in which the contributions to the respective funds accrue as per relevant rules / statutes. These contributions are made to respective statutory authority.
(b) Defined benefit plans:
The Company provides for gratuity for employees as per the Payment of Gratuity Act, 1972. The amount of gratuity shall be payable to an employee on the termination of employment after rendering continuous service for not less than five years, or on their superannuation or resignation. However, in case of death of an employee, the minimum period of five years shall not be required. The amount of gratuity payable on retirement / termination is the employee's last drawn basic salary per month computed proportionately for 15 days salary multiplied by the number of years of service completed. The gratuity plan is a funded plan administered by a separate fund that is legally separated from the entity and the Company makes contributions to the insurer (LIC).
Compensated absences:
Privileged Leave (PL) - Unutilised PL balance at the end of the calendar year (31st December) shall be encashed at the prevailing basic pay and no carry forward is allowed.
Contingency Leave (CoL) - The existing casual leave and sick leave were clubbed together and shall becalled as CoL. The annual credit of a contingency leave shall be 8 days. Maximum accumulation of 30 days is allowed and can not be encashed.
These plans typically expose the Company to the following actuarial risks:
Investment Risk:
The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to government bond yields; if the return on plan asset is below this rate, it will create a plan deficit. Currently the plan has a relatively balanced investment in equity securities and debt instruments.
Interest Risk:
A fall in the discount rate, which is linked, to the G-Sec rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
Salary risk:
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan's liability.
Asset Liability matching risk:
The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.
Mortality risk:
Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk. Concentration risk:
Plan is having a concentration risk as all the assets are invested with the insurance company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.
The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out at 31st March, 2024 by Independent actuarial Agency. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.
a) The Company expects to contribute ' Nil (previous year ' Nil ) to its gratuity plan for the FY 2023-24.
b) In assessing the Company's post retirement liabilities, the Company monitors mortality assumptions and uses up-to-date mortality tables, the base being the Indian assured lives mortality (2012-14) ultimate.
c) Expected return on plan assets is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations after considering several applicable factors such as the composition of plan assets, investment strategy, market scenario, etc.
d) The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
e) The discount rate is based on the prevailing market yields of Government of India securities as at the balance sheet date for the estimated term of the obligations.
Compensated Absences
Under the compensated absences plan, leave encashment is payable to all eligible employees on separation from the Company due to
death, retirement, superannuation or resignation. Employee are entitled to encash leave while serving in the Company. At the rate of daily
salary, as per current accumulation of leave days.
NOTE 35: FINANCIAL INSTRUMENTS - ACCOUNTING CLASSIFICATIONS AND FAIR VALUE MEASUREMENTS 35.1 Capital Risk Management
The Company being in a capital intensive industry, its objective is to maintain a strong credit rating, healthy capital ratios and establish a capital structure that would maximise the return to stakeholders through optimum mix of debt and equity.
The Company's capital requirement is mainly to fund its capacity expansion, repayment of principal and interest on its borrowings and strategic acquisitions. The principal source of funding of the Company has been, and is expected to continue to be, cash generated from its operations supplemented by funding from bank borrowings and the capital markets. The Company is not subject to any externally imposed capital requirements.
The Company regularly considers other financing and refinancing opportunities to diversify its debt profile, reduce interest cost and elongate the maturity of its debt portfolio, and closely monitors its judicious allocation amongst competing capital expansion projects and strategic acquisitions, to capture market opportunities at minimum risk.
Fair value hierarchy of financial instruments:
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are
a) recognised and measured at fair value and
b) measured at amortised cost for which fair values are disclosed in the financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into three levels prescribed under the accounting standard.
NOTE 36:-FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company's activities expose it to a variety of financial risks: market risk, credit risk, liquidity risk and foreign exchange risk. The Company's focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.
Market risk:
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in the market prices. The Company is exposed in the ordinary course of its business to risks related to changes in foreign currency exchange rates and interest rates.
Foreign currency risk:
The Company's functional currency is Indian Rupees (INR). The Company undertakes transactions denominated in foreign currencies; consequently, exposure to exchange rate fluctuations arise. Volatility in exchange rates affects the Company's revenue . The Company is exposed to exchange rate risk under its trade and debt portfolio.
Foreign currency sensitivity
The following table details the Company's sensitivity to a 1% appreciation and depreciation in the INR against the relevant foreign currencies. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year-end for a 1% change in foreign currency rates, with all other variables held constant. A positive number below indicates an increase in profit or equity where INR strengthens 1% against the relevant currency. For a 1% weakening of INR against the relevant currency, there would be a comparable impact on profit or equity, and the balances below would be negative.
Interest rate risk
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. The Company is exposed to interest rate risk because funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The Company borrows funds for onward investment in/Loan to subsidiaries. In order to optimize the company's position with regard to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by ensuring cost of funds are lower than income earned from utilisation of funds.
Interest Rate Sensitivity
The sensitivity analysis determines the exposure to interest rates for financial instruments at the end of the year. The Company does not have any floating rate exposures as on 31st March 2024.
Credit risk management:
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to ' 96.48 Crores and ' 74.80 Crores as of March 31, 2024 and March 31, 2023, respectively. The Company has its major revenue from group companies. Hence no credit risk is perceived.
Credit Risk Exposure:
The allowance for credit loss on customer balances for year ended March 31, 2024 ' Nil Crores (March 31, 2023 : ' Nil Crores)
Credit risk on cash and cash equivalents is limited as we generally invest in deposits with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies. Investments primarily include investment in liquid mutual fund units with high credit rating mutual funds
Liquidity risk:
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Long-term borrowings generally mature between one and 10 years. Liquidity is reviewed on a daily basis based on weekly cash flow forecast.
As of March 31, 2024 the Company had a working capital of ' 155.52 Crores. As of March 31, 2023, the Company had a working capital of ' 206.46 Crores. The Company is confident of managing its financial obligation through short term borrowing and liquidity management.
The following tables detail the Company's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment Years and its non-derivative financial assets. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows
Collateral
The company has not pledged any of part of its trade receivables, Short-term investments and cash and cash equivalents in order to fulfil certain collateral requirements for the banking facilities extended to the company.
NOTE 37: EMPLOYEE SHARE BASED PAYMENT PLAN Employee Stock Ownership Plan 2016 (ESOP Plan 2016)
The board of directors approved the "Employee Stock Ownership Plan 2016" on March 23, 2016 for issue of stock options to the employee of the Company and its subsidiaries. Board has authorised the Nomination and Remuneration committee for the superintendence of the ESOP Plan.
The maximum value and share options that can be awarded to eligible employees is calculated by reference to certain percentage of individuals salary. 50% of the grant would vest at the end of the third year and 50% of the grant would vest at the end of the forth year with a vesting condition that the employee is in continuous employment with the Company till the date of vesting. These options are equity settled.
Employee Stock Ownership Plan 2021 (ESOP Plan 2021)
The board of directors approved the "Employee Stock Ownership Plan 2021" on January 30, 2022 for issue of stock options to the employee of the Company and its subsidiaries. Board has authorised the Nomination and Remuneration committee for the superintendence of the ESOP Plan.
The maximum value and share options that can be awarded to eligible employees is calculated by reference to certain percentage of individuals salary. 25% of the grant would vest at the end of the first year, 25% of the grant would vest at the end of the second year and 50% of the grant would vest at the end of the third year with a vesting condition that the employee is in continuous employment with the Company till the date of vesting. These options are equity settled.
NOTE 39: SEGMENT REPORTING
The Company is primarily engaged in one business segment, namely developing, operating and maintaining the Ports services, Ports related Infrastructure development activities and development of infrastructure as determined by chief operational decision maker, in accordance with Ind-AS 108 "Operating Segment".
Considering the inter relationship of various activities of the business, the chief operational decision maker monitors the operating results of its business segment on overall basis. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements.
NOTE 41:
During the year ended 31st March 2024, the company has completed its Initial Public Offer ("IPO") of 23,52,94,117 Equity Shares at the face value of ' 2/- each at an issue price of ' 119/- per Equity Share (including securities premium of ' 117 per share). The issue comprised of fresh issue of equity share aggregating to ' 2,800 crores . The Equity Shares of the Company were listed on BSE Limited ("BSE") and National Stock Exchange of India limited ("NSE") on 3rd October, 2023
NOTE 42:- ADDITIONAL REGULATORY INFORMATION REQUIRED BY SCHEDULE III TO THE COMPANIES ACT, 2013
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 traded or invested in Crypto currency or Virtual Currency during the year.
iii) 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.
iv) 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.
v) 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.
vi) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.
vii) The Company does not have any transactions with companies which are struck off.
viii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period
ix) The Company is not declared willful defaulter by any bank or financials institution or lender during the year
x) The Company has been maintaining its books of accounts in the SAP which has feature of recording audit trail of each and every transaction,
creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled, throughout the year as required by proviso to sub rule (1) of rule 3 of The Companies (Accounts) Rules, 2014 known as the Companies (Accounts) Amendment Rules, 2021. However, the audit trail feature is not enabled for direct changes to data in the underlying database and in the application when using certain privileged access rights. The Company as per its policy has not granted privilege access for change to data in the underlying database as evident from the manual log being maintained in this regard and further privilege access rights to application are restricted only to specific authorised users for which audit trail exists except in certain debugging cases.
The Company in the month of March 2024 has also implemented Privileged Access Management tool (PAM), onboarded the SAP database servers on the PAM tool and the process of monitoring database is currently under testing phase. The PAM is an identity management tool which focuses on the control, monitoring, and protection of privileged accounts within an organization. The PAM tool saves complete screen video recording sessions of all the admin activities as soon as they authenticate on the PAM console and connect to the target resources (Servers, Network Devices, Applications and Database) which acts as an audit trail feature.
NOTE 43 : The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and post employment benefits has received Presidential assent in September 2020. However, the effective date of the Code is yet to be notified and final rules for quantifying the financial impact are also yet to be issued. In view of this, the company will assess the impact of the Code when relevant provisions are notified and will record related impact, if any, in the period the Code becomes effective.
NOTE 44 : EVENTS OCCURRING AFTER BALANCE SHEET:
The Board of Directors has recommended a dividend of ' 0.55 per equity share of ' 2 each for the year ended 31 March, 2024 subject to approval of the members at the ensuing Annual General Meeting.
NOTE 45 The company evaluates events and transactions that occur subsequent to the balance sheet date but prior to the approval of financial statements to determine the necessity for recognition and/or reporting of subsequent events and transactions in the financial statements. As of 03rd May, 2024 there were no subsequent events and transactions to be recognized or reported that are not already disclosed.
NOTE 46 Previous year's figures have been reclassified and regrouped wherever necessary.
NOTE 47 : The financial statements are approved for issue by the Audit Committee at its meeting held on 03rd May, 2024 and by the Board of Directors on 03rd May, 2024.
|