a) Other receivables considered good of ' 418.19 Lakhs (March 31,2023: ' 164.05 Lakhs ) includes amount recoverable from employee gratuity trust, rent receivable and GST input credit which is not reflected in GST portal as on balance sheet date.
b) Other Receivables considered doubtful of ' 2639.50 lakh (March 31,2023'2639.50 lakh) includes enhanced compensation of ' 2,335.15 lakh receivable by the company from National Highways Authority of India pursuant to land acquisition by the Central Government under National Highways Act, 1956 (Refer note 37). Also, it includes expenditure recoverable from Jharkhand State Livelihood Promotion Society (Ministry of Rural Development) regarding Project cost component for skilling candidates in state of Jharkhand of ' 304.35 lakh (March 31,2023 : ' 304.35 lakh)
d) Trade receivables are generally on terms of 45- 60 days (March 31,2023: 45-60 days).
e) The Company’s exposure to credit and currency risk, and loss allowances related to trade receivables are disclosed in note 44.
f) The above includes amount due from related parties is ' 2,878.67 Lakhs (March 31,2023: ' 3,526.97 Lakhs) (Refer note no. 47).
g) No trade or other receivables are due from directors and other officers of the Company either severally or jointly with any other persons.
b) Terms/ rights attached to equity shares:
The company has only one class of equity shares having a par value of ' 5 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The final dividend (if any)
proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. During the year, prior to sub division of face value of shares , the Company had declared and paid Interim dividend of ' 5/- per share for FY 2022-23 and ' 17.5/- per share for FY 2023-24 for distribution to shareholders.
The Equity shares of the Company has undergone sub-division from the face value of ' 10 per equity share to ' 5 per equity share i.e. 1 equity share to be split into 2 equity shares. The record date was fixed as January 05, 2024 and thereafter the sub-division has become effective.
A) Nature of Securities :
i) Term Loan from Kotak Mahindra Bank is secured by Fixed Deposit of ' 20.00 Lakhs. (March 31,2023 : secured by lien marked on investment in debt mutual fund and personal gurantee of Mr Pulkit Seth (Promoter Director))
ii) Term Loan Facility from Indusind Bank is secured by Fixed Deposit of ' 83 Lakhs (March 31,2023: ' 83 Lakhs)
iii) Term loans from HDFC Bank are secured by charge over assets financed by term Loan, Immovable Properties of the Company situated at (i) Plot No. 51, Sector 32, Gurgaon & (ii) Plot No. 446, Udyog Vihar, Phase IV, Gurgaon and Personal Guarantee of Mr. Pulkit Seth (Promoter Director).
iv) Term loans from Canara Bank are secured by charge over assets financed by term Loan, Land & building, Plant & Machinary at Survey No. 32/8,31 /5A3,31/5B3,31/8CIB,31/8C2,31/13P31/14,31/15 Melavalam Village, Madurantakam Taluk, Kancheepuram District, TamilNadu. and Personal Guarantee of Mr. Deepak Kumar Seth and Mr. Pulkit Seth (Promoter Director).
v) Emergency credit line guaranteed scheme (ECLGS 2.0) & ECLGS 2.0 (Extension) facilities are secured by second charge over securities provided for base credit facility, except personal guarantees.
vi) Vehicle Loans are secured by Hypothecation over the Vehicle financed by respective loan.
A. Securities for Working Capital Facilities under Consortium Arrangement
i) Primary Securities offered includes:
a) First Pari-Passu Charge by way of hypothecation of the entire current assets both present and future, including but not limited to stocks of raw materials, semi finished and finished goods, raw material, book debts and stock, loans and advances etc.
b) First Pari-Passu charge by way of hypothecation over the entire movable fixed assets belonging to the Borrower, except any assets charged to any banks/financial institutions for securing the terms loans.
ii) Collateral Securities offered includes:
a) First pari passu charge over Immoveable properties of the Company situated at (i) Plot No. 16/17, Udyog Vihar, Phase VI, Gurgaon, (ii) Plot No. 751, Pace City-II, Sector 37, Gurgaon & (iii) Survey No. 30(P), 31(P), 32(P) & 262(P), Ward no 02 in Arryapakkam Village, Madurantakam Taluk, Kancheepuram District, TamilNadu.
b) Principal amount of fixed deposits pledged amounting to ' 710.00 Lakhs (Closing balance as on 31 March 2024 ' 747.43 ) (March 31,2023: ' 710 Lakhs)
c) Irrrevocable and unconditional personal guarantee of Mr. Deepak Kumar Seth (Promoter Director) and Mr. Pulkit Seth (Promoter Director).
iii) Refer Note No. 21 for the terms and conditions, nature of security and maturity profile of the current maturities of long-term borrowings (forming part of long term borrowings of the Company).
B. Securities for Working Capital Facilities by HDFC Bank (Adhoc Outside Consortium)
a) Exclusive Charge over corpotate office (Land and Building) situated in Gurugram, Haryana.
C. For interest rate & liquidity risk related disclosures, (refer note 44).
D. In respect of working capital loans, quarterly returns or statements of current assets filed by the Company with banks are materially in agreement with the books of account.
a) The company’s exposure to currency and liquidity risk related to trade payables is disclosed in note 44.
b) There are no amounts due for payment to the Investor Education and Protection Fund under Section 125 of the Companies Act, 2013 as at the year end (March 31,2023: Nil)
c) Other payables of ' Nil (March 31,2023 : ' 34.34 Lakhs represents amount payable to banks on hedged instruments).
c) Trade payable are non- interest bearing and are generally on a credit period of not more than 90 days except in case of Micro & Small Enterprises (if any) which are settled within 45 days.
d) This amount includes amount due to related parties amounting to ' 519.08 Lakhs (March 31,2023: ' 507.95 Lakhs) (Refer Note No. 47)
e) As per Schedule III of the Companies Act, 2013, the amount due to Micro & Small Enterprises as defined in Micro, Small and Medium Enterprises Development Act, 2006 is as under :
a) Performance obligation
Revenue is recognised upon transfer of control of products.
During the year, The Company has not entered into long term contracts with Customers and accordingly disclsoure of unsatisfied or remaining performance obligation (which is affected by several factors like changes in scope of Contracts, periodic revalidations, adjustment for revenue that has not been materialised, tax laws etc.) is not applicable to the Company.
b) Disaggregation of revenue: The table below presents disaggregated revenues from contracts with customers on the basis
of geographical spread of the operations of the Company. The Company believes that this disaggregation best depicts how the nature, amount of revenues and cash flows are affected by market and other economic factors:
d) Trade Receivables, Contract Balances
For Trade Receivables, Refer note no. 16.
Further, the Company has no contracts where the period between the transfer of the promised goods or services to the customer and payment terms by the customer exceeds one year. In light of above;
- it does not adjust any of the transaction prices for the time value of money, and
- there is no unbilled revenue as at March 31,2024.
Further, the Company doesn’t have any contract liabilities as at March 31,2024 and March 31,2023
40*| GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS
a) Defined contribution plans
The Company makes contribution towards Employees Provident Fund, Employee's State Insurance scheme and other welfare schemes. Under the rules of these schemes, the Company is required to contribute a specified percentage of payroll costs. The Company during the year recognised the following amount in the Statement of profit and loss under company's contribution to defined contribution plan.
b) Defined benefit plans
In accordance with Ind AS 19 "Employee benefits", an actuarial valuation on the basis of "Projected Unit Credit Method" was carried out, through which the Company is able to determine the present value of obligations. "Projected Unit Credit Method" recognises each period of service as giving rise to additional unit of employees benefit entitlement and measures each unit separately to built up the final obligation.
i) Gratuity scheme
The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member's length of service and salary at retirement age. The gratuity is funded in current year for all the units and maintained by Life Insurance Corporation of India.
ii) Other long term employee benefits
As per the Company's policy, eligible leaves can be accumulated by the employees and carried forward to future periods to either be utilised during the service, or encashed. Encashment can be made during the service, on early retirement, on withdrawal of scheme, at resignation by employee and upon death of employee. The scale of benefits
is determined based on the seniority and the respective employee's salary. The Company records an obligation for such compensated absences in the period in which the employee renders the services that increase this entitlement. The obligation is measured on the basis of independent actuarial valuation using the projected unit credit method. Re-measurements, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding interest and if applicable), is reflected immediately in Other Comprehensive Income in the statement of profit and loss in case of Gratuity. All other expenses related to defined benefit plans are recognised in statement of profit and loss as employee benefit expenses. Re-measurements recognised in Other Comprehensive Income will not be reclassified to statement of profit and loss hence it is treated as part of retained earnings in the statement of changes in equity. Gains or losses on the curtailment or settlement of any defined benefit plan are recognised when the curtailment or settlement occurs. Curtailment gains and losses are accounted for as past service costs.
c) The following tables summarise the components of net benefit expense recognised in the Statement of profit and loss and the funded status and amounts recognised in the balance sheet for the defined benefit plan and other long term benefits. These have been provided on accrual basis, based on year end actuarial valuation.
4lJ CAPITAL MANAGEMENT
The Company’s objectives when managing capital are to:
- safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders, and
- maintain an appropriate capital structure of debt and equity.
The Board of Directors have the primary responsibility to maintain a strong capital base and reduce the cost of capital through prudent management in deployment of funds and sourcing by leveraging opportunities in domestic and international markets so as to maintain investors, creditors and markets confidence and to sustain future development of the business.
The Company monitors capital, using a medium term view ranging between three to five years, on the basis of a number of financial ratios generally used by the industry. The Company monitors capital structure using a gearing ratio, which is net debt divided by total capital plus net debt. Net debt comprises of long term and short term borrowings less cash and cash equivalents. Equity includes equity share capital and reserves that are managed as capital. The gearing ratio at the end of reporting periods were as follows:
No changes were made in the objectives, policies or processes for managing capital during the years ended March 31,2024 and March 31,2023.
In order to achieve overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements.
42*| DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY EXPOSURE I) Hedge Accounting
(i) The Company enters into hedging instruments in accordance with policies as approved by the Board of Directors with written principles which is consistent with the risk management strategy of the Company. The Company has decided to apply hedge accounting for certain derivative contracts that meets the qualifying criteria of hedging relationship entered post April 01,2019. Hedging strategies are decided and monitored periodically by Chief Financial Officer and Board of Directors of the Company.
Cash Flow Hedges
Foreign exchange forward contracts are designated as hedging instruments in cash flow hedges of forecasted hedged items in US dollar. These forecast transactions are highly probable. The foreign exchange forward contract balances vary with the level of expected foreign currency sales and changes in foreign exchange forward rates.
The critical terms of the foreign currency forward contracts match the terms of the expected highly probable forecast sale transactions.
The cash flow hedges of the forecasted sale transactions for the year ended March 31, 2024 were assessed to be highly effective and unrealised profit of ' 184.28 Lakhs, with a deferred tax asset / (liability) of ' (46.38) Lakhs relating to the hedging instruments, is included in OCI. [March 31,2023: Unrealised profit of ' (-) 595.46 Lakhs with a corresponding deferred tax asset / (liability) of ' 149.87 Lakhs].
(vii) Valuation Technique
The Company enters into derivative financial instruments which are valued using valuation techniques which employs the use of market observable inputs. The most frequently applied valuation techniques include forward pricing models, using present value calculations. Where quoted market prices are not available, fair values are based on Management best estimates, which are arrived at by the reference to market prices.
III) In respect of the derivative contracts entered into by the Company, the Management asessess no material foreseeable losses as at the reporting date.
43*| FAIR VALUE MEASUREMENTS I Financial instruments
a) Financial instruments by category
Except Investment in equity instruments (Quoted) and investment in mutual funds which are measured at fair value through profit or loss, all other financial assets and liabilities viz. trade receivables, security deposits, cash and cash equivalents, other bank balances, interest receivable, other receivables, trade payables, employee related liabilities and borrowings, are measured at amortised cost. Derivative financial instruments are measured at fair value through other comprehensive income.
b) Fair value hierarchy
This section explains the judgments 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 and for which fair values are disclosed in the standalone 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 the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
The following table shows the carrying amounts and fair values of financial assets and financials liabilities, including their levels of in the fair value hierarchy:
c) The Company has an established control framework with respect to the measurement of fair values. The finance and accounts team that has overall responsibility for overseeing all significant fair value measurements and reports directly to the board of directors. The team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the team assesses the evidence obtained from the third parties to support the conclusion that these valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which the valuations should be classified. Significant valuation issues are reported to the Company’s board of directors.
d) Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
There have been no transfers in either direction for the year ended March 31,2024 and March 31,2023.
e) Fair value of financial assets and liabilities measured at amortised cost
The carrying amounts of short-term trade and other receivables, trade payables, cash and cash equivalents and other bank balances are considered to be the same as their fair values, due to their short-term nature. For other financial liabilities/ assets that are measured at fair value, the carrying amounts are equal to the fair values.
♦Discount rate used in determining fair value
The interest rate used to discount estimated future cash flows, where applicable, are based on the incremental borrowing rate of borrower which in case of financial liabilities is average market cost of borrowings of the Company and in case of financial asset is the average market rate of similar credit rated instrument. The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available.
44*| FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company’s principal financial liabilities comprises of trade and other payables, borrowings, current maturity of borrowings, interest accrued and capital creditors. The main purpose of these financial liabilities is to finance the Company’s operations and to provide guarantees to support its operations. The Company’s principal financial assets includes Investment in mutual funds, loans to related parties, security deposits, trade receivables, cash and cash equivalents, deposits with bank, interest accrued in deposits, receivables from related and other parties and interest accrued thereon.
The Company has exposure to the following risks arising from financial instruments:
- credit risk,
- liquidity risk and
- market risk.
The Company’s senior level management oversees the management of these risks and is supported by finance department that advises on the appropriate financial risk governance framework.
A. Credit Risk
Credit risk is the risk that counterparty will default on its contractual obligations resulting in finance loss to the Company. Credit risk arise from Cash and cash equivalents, deposit with banks, trade receivables and other financial assets measure at amortised cost. The Company continuously monitors defaults of customers and other counterparties and incorporate this information into its credit risk control.
(i) Trade Receivables
The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The credit risk is managed by the Company based on credit approvals, establishing credit limits and continuosly monitoring the credit worthiness of the customers, to whom the Company grants credit period in the normal course of business inlcuding taking credit insurance against export receivables. The Company uses expected credit loss model to assess the impairement loss in trade receivables and makes an allowance of doubtful trade receivables using this model.
(ii) Other Financial Assets: The Company maintains exposure in cash & cash equivalents, term deposits with banks, investments, advances and security deposits etc. Credit risk from balances with banks, investment in mutual funds and loan to related parties is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company’s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Company’s finance committee. The Company’s maximum exposure to the credit risk as at March 31,2024 and March 31,2023 is the carrying value of each class of financial assets.
- Policy of managing risk: To assess whether there is a significant increase in credit risk the Company compares the risk of default as at the reporting date with the risk of default as at the date of initial recognition. The Company considers reasonable and supportive forward-looking information such as significant changes in the value of guarantee or in the quality of exposure or credit enhancements.
B. 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 objective is to, maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including loans from banks at an optimised cost.
C. Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Company’s income. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. The objective of market risk management is to manage and control market risk exposures withing acceptables parameters, while optimising the return. The Board of Directors is responsible for setting up the policies and procedures to amange risks of the Company.
i) 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’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations with floating interest rates. The Company manages its net exposure to interest rate risk related to borrowings, by balancing a proportion of fixed rate and floating rate borrowing in its total borrowing portfolio.
Interest Rate Sensitivity: The sensitivity analysis in the following sections relate to the position as at March 31,2024 and March 31, 2023. The following table demonstrates the sensitivity to a reasonably possible change in interest rates on the portion of borrowings affected. With all other variables held constant, the Company’s profit before tax is affected through the impact on floating rate borrowings, as follows:
The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment, showing a significantly higher volatility than in prior years.
ii) Foreign currency risk
The Company is exposed to foreign currency risk on certain transactions that are denominated in a currency other than entity’s funactional currency, hence exposure to exchange rate fluctuations arises. The risk is that the functional currency value of cash flows will vary as a result of movements in exchange rates. The following tables demonstrate the sensitivity (strengthening or weakening of Indian Rupee) to a reasonably possible change in exchange rates, with all other variables held constant.
45*| SEGMENT INFORMATION
a) The Company’s operating segments are established on the basis of those components that are evaluated regularly by the Executive Committee (the 'Chief Operating Decision Maker’ as defined in Ind AS 108 - 'Operating Segments’). In light of Para 4 of Ind AS 108- Operating Segments, the Company has presented segment information on geographical basis in its consolidated financial statements.
b) Revenue from major customer: During the year, the Company generates 90% of its external revenues from 7 customers (March 31,2023: 7 customers).
~| CONTINGENT LIABILITIES AND COMMITMENTS
a) Contingent liabilities (To the extent not provided for)
I (i) The company has reviewed all its pending claims, litigations and other proceedings and has adequately provided for wherever required. The company does not expect the outcome of these proceedings to have a material or adverse effect on financial position of the Company. In certain cases, it is difficult for the Company to estimate the timings of cash outflows, if any, as it is determinable only on receipt of judgement/decisions pending with various forums/authorities. The company does not expect any reimbursements in respect of the below contingent liabilities.
Corporate Guarantee given by the Company (as per Section 186(4) of the Companies Act 2013)
• To Standard Chartered Bank, Hongkong Branch for securing credit facilities to its wholly owned subsidiary Pearl Global (HK) Limited, Hong Kong for USD 20.00 Lakhs equivalent to ' 1667.40 Lakhs (March 31,2023 : USD Nil equivalent to ' Nil).
• To Vietnam Technological and Commercial Joint Stock Bank for securing credit facilities to its wholly owned subsidiary Pearl Global Vietnam Company Limited for USD 55.00 Lakhs equivalent to ' 4585.35 Lakhs. (March 31,2023 : USD Nil equivalent to ' Nil)
• To Heng Seng Bank Limited, Hong Kong for securing credit facilities to its wholly owned subsidiary Pearl Global (HK) Limited, Hong Kong and its step down subsidiary DSSP Global Limited for USD 30.00 Lakhs equivalent to ' 2501.10 Lakhs. (March 31,2023 : USD Nil equivalent to ' Nil)
• To Heng Seng Bank Limited, Hong Kong for securing credit facilities to its wholly owned subsidiary Pearl Global (HK) Limited, Hong Kong and its step down subsidiary DSSP Global Limited for USD 20.00 Lakhs equivalent to ' 1667.40 Lakhs. (March 31,2023 : USD Nil equivalent to ' Nil)
• To Hongkong and Shanghai Banking Corporation Limited, Hong Kong Branch for securing credit facilities to its wholly owned subsidiary Pearl Global (HK) Limited, Hong Kong and its step down subsidiary DSSP Global Limited and Pearl Grass Creations Limited for USD Nil equivalent to ' Nil at year end ( March 31,2023: USD 290 Lakhs equivalent to ' 23,843.80 Lakhs
Above Corporate Guarantees have been given for business purpose.
d) Terms and conditions of transactions with related parties
All the transaction with the related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year end are unsecured and interest free except the interest bearing loan and settlement occurs in cash.
e) Personal Guarantee given by Mr. Deepak Kumar Seth (Promoter Director) and Mr. Pulkit Seth (Director) against the Borrowings (refer note no. 21 & 22).
f) The remuneration of Key managerial Personnel does not include amount in repect of gratuity and leave encashment payable as the same are not determinable as individual basis for the KMP The liabilities of gratuity and leave encashment are provided for company as whole on the basis of acturial valuation.
g) During the financial year 2020-21, Pearl Apparel Fashions Limited, a wholly owned subsidiary of the Company had gone into voluntarily liquidation. The NCLT order has been received on December 16, 2022 and company has been liquidated.
h) During the financial year 2022-23, Investement was made in SEAD Apparels Private limited during the third quarter of FY 2022-23, making it a wholly owned subsidiary of the Company.
i) During the year, the Company had acquired 55% equity interest in substance in Pearl GT HoldCo Limited. Further, Pearl GT HoldCo Limited is the Holding Company of Corporacion de Productos Y Servicios Asociados, Sociedad Anonima (CORPASA) and Shoretex, Sociedad Anonima (SHORETEX), thereby making both CORPASA and SHORTEX, step down subsidiaries of the Company.
The maturity analysis of lease liabilities is given in Note 44 in the 'Liquidity risk’ section.
Cash flows from operating activities includes cash flow from short term lease & leases of low value. Cash flows from financing activities includes the payment of interest and the principal portion of lease liabilities.
Leases committed and not yet commenced: There are no leases commited which have not yet commenced as on reporting date.
Company as a Lessor
The Company is not required to make any adjustments on transition to Ind AS 116 for leases in which it acts as a lessor. The Company accounted for its leases in accordance with Ind AS 116 from the date of initial application. The Company does not have any significant impact on account of sub-lease on the application of this standard.
The Company has given its building space, lying under property, plant and equipments, on operating lease through operating lease arrangements. Income from operating leases is recognised as revenue on a straight-line basis over the lease term. Lease income of ' 728.92 Lakhs (March 31,2023: ' 774.49 Lakhs) has been recognised and included under Other Income. (Refer Note No. 29)
The following table sets out a maturity analysis of lease receivable, showing the undiscounted lease payments to be received after the reporting date.
52*| EMPLOYEE SHARE BASED PAYMENT
A. The Board of Directors had accorded their consent for the implementation of Pearl Global Industries Limited Employee Stock Option Plan 2022 (the Plan) on June 30, 2022 which was approved by the shareholders of the Company vide Postal Ballot on August 28, 2022. Pursuant to the terms of the said plan, the Company had granted 1,280,200 options till date to employees of the Company/ subsidiary company. During the year ended March 31, 2024, the Company has granted 4,54,000* (March 31,2023: 8,26,200*) stock options to the eligible employees of the Company/subsidiary companies. Each option when exercised would be converted into one fully paid-up equity share of ' 5/- each of the Company. The options granted under ESOP scheme carry no rights to dividends and no voting rights till the date of exercise. The fair value of the share options is estimated at the grant date using Black and Scholes Model, taking into account the terms and conditions upon which the share options were granted.
Further, during the year ended March 31,2024, the Company has accelerated the vesting of 135,000 options based on the approval of Nomination and Remuneration Committee in accordance with 'the Plan’, due to which an additional amount of ' 63.01 Lakhs has been charged to statement of profit and loss account.
The company has recognised an expense of ' 600.38 Lakhs (March 31,2023: ' 143.92 Lakhs) arising from equity settled share based payment transactions for employee services received during the year. The carrying amount of Employee stock options outstanding reserve as at March 31,2024 is ' 899.19 Lakhs (March 31,2023: ' 259.51 Lakhs).
*The movement of options & the fair value assumptions have been restated to give effect of share split of equity shares of face value of ' 10 each sub-divided into 2 equity shares of face value of ' 5 each held vide shareholder’s approval dated December 19, 2023 through postal ballot.
The expected life of the share options is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The volatility is based on annualised standard deviation of the continuously compounded rates of return based on the peer companies and competitive stocks over a period of time. The company has determined the market price on grant date based on latest equity valuation report available with the Company preceding the grant date.
53. Pursuant to transfer pricing legislations under the Income-tax Act, 1961, the Company is required to use specified methods for computing arm’s length price in relation to specified international transactions with its associated enterprises. Further, the Company is required to maintain prescribed information and documents in relation to such transactions. The appropriate method to be adopted will depend on the nature of transactions/ class of transactions, class of associated persons, functions performed and other factors, which have been prescribed.The Company is in the process of updating its transfer pricing documentation for the current financial year. Based on the preliminary assessment, the management is of the view that the update would not have a material impact on the tax expense recorded in these financial statements. Accordingly, these financial statements do not include any adjustments for the transfer pricing implications, if any.
54. No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity ("Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries).
The Company has not received any fund from any party (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entity identified by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
55*| DISCLOSURE OF TRANSACTIONS WITH STRUCK OFF COMPANIES
The Company did not have any material transactions with companies struck off under Section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956 during the financial years.
A) No transactions to report against the following disclosure requirements as notified by MCA pursuant to amended Schedule III:
(a) Crypto Currency or Virtual Currency
(b) Benami Property held under Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder
(c) Registration of charges or satisfaction with Registrar of Companies.
(d) Relating to borrowed funds:
i) Wilful defaulter
ii) Utilisation of borrowed funds & share premium
iii) Borrowings obtained on the basis of security of current assets
iv) Discrepancy in utilisation of borrowings
57. Figures have been rounded off to the nearest Lakhs upto two decimal places except otherwise stated.
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