(i) Rights and preferences attached to equity share:
Every shareholder is entitled to such rights as to attend the meeting of the shareholders, to receive dividends distributed and also has a right in the residual interest of the assets of the company. Every shareholder is also entitled to right of inspection of documents as provided in the Companies Act 2013.
There are no restrictions attached to equity shares.
(ii) Rights attached to NCRPS share:
The NCRPS do not have voting rights other than in respect of matters directly affecting it, The NCRPS will be redeemed along with coupon at the end of 1 year from the date of allotment.
Securities Premium:
This represents premium on issue of shares. It will be utilised in accordance with the provisions of the Companies Act, 2013.
Statutory Reserves:
According to Section 45 - IC of the Reserve Bank of India Act, 1934, the Company transfers a sum not less than 20% of its net profit every year as disclosed in the statement of Profit and Loss and before declaration of any dividend to the Statutory reserves.
Retained Earnings:
Represents Company's cumulative undistributed earnings since its inception. This is available for distribution to Shareholders through dividends / capitalisation.
The above sensitivity analyses 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 (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied when calculating the defined benefit liability recognised in the balance sheet.
(iii) Risk exposure
Through its defined benefit plans, the company is exposed to a number of risks, the most significant of which are detailed below:
Asset volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. Most of the plan asset investments are in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an
acceptable level. A portion of the funds are invested in equity securities and in alternative investments which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. The company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. The company intends to maintain the above investment mix in the continuing years.
Changes in bond yield: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plans' bond holdings.
Inflation risks: In the pension plans, the pensions in payment are not linked to inflation, so this is a less material risk.
Life expectancy: The pension plan obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plan liabilities. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy.
Defined contribution plans: The Company's contribution to defined contribution plan i.e., provident fund of $ 3.63 crores (previous year Rs.6.75 crores) has been recognised in the Statement of Profit and Loss.
(i) Fair value hierarchy
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 and 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 group has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.
There are no transfers between levels 1 and 2 during the year.
The company’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period.
(ii) Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
- the use of quoted market prices or dealer quotes for similar instruments
- the fair value of interest rate swaps is calculated as the present value of estimated cash flows based on observable yield curves.
- the fair value of forward exchange contract and principle only swap is determined using forward exchange rate at the balance sheet date.
- the fair value of the remaining financial instruments is determined using discounted cash flow analysis.
FVTPL - Fair value through statement of Profit and Loss; FVOCI - Fair value through Other Comprehensive Income.
iii) Price risk
The company's exposure to equity securities price risk arises from investments held by the Company and classified in the balance sheet either as fair value through other comprehensive income or at fair value through statement of profit and loss. To manage its price risk from investments in equity securities, the Company diversifies its portfolio. The impact of the changes in price risk is not material.
(ix) Borrowing costs capitalised :
Borrowing cost capitalised during the year $ Nil (Previous year- $ 0.89 Cr)
The capitalisation rate used to determine borrowing costs to be capitalised is weighted average interest rate for the previous year 8.20%.
(x) Composite scheme of arrangement:
On February 9, 2022, the board of directors of the Company approved a composite scheme of arrangement (the Scheme) of Sundaram-Clayton Limited (“Transferee Company” or “Demerged Company”) and TVS Holdings Private Limited (“Transferor Company 1”) and VS Investments Private Limited (“Transferor Company 2”) and Sundaram-Clayton DCD Limited (“Resulting Company”) subject to necessary approvals of shareholders, creditors, SEBI, Stock Exchanges, National Company Law Tribunal, Chennai, (NCLT), other governmental authorities and third parties as may be required.
During the previous year, NSE and BSE by their respective letter dated July 29, 2022, issued to the Company have conveyed their "No Objection" on the Scheme, and based on their No Objection, the Company filed an application with Hon'ble National Company Law Tribunal, Chennai Bench, (“Hon'ble NCLT”) for approval of the Scheme.
Hon'ble NCLT vide their Order dated November 9, 2022, directed to convene the meetings of the Equity Shareholders, Unsecured Creditors of the Company, and Secured Creditors of Transferor Company 2, on December 16, 2022 (“NCLT Convened Meeting”) for their approval. Pursuant to the directions of Hon'ble NCLT, the NCLT Convened Meetings were held, and the resolutions were passed with requisite majority. Post the approval of the shareholders and creditors, the Company filed a petition with Hon'ble NCLT, and the Composite Scheme was sanctioned vide its Order dated March 6, 2023.
The Board at its meeting held on March 13, 2023, noted the Hon'ble NCLTs Order and the first part of the Scheme was made effective on March 14, 2023. The Board also authorised the issuance of bonus NCRPS, by fixations of Record Date as March 24, 2023, for the purpose of determining the eligible shareholders of the Company. The third part of the scheme was made effective on June 16, 2023. As part of third part of scheme of arrangement, the carrying value of the assets, liabilities, and reserves of TVS Holding Private Limited as appearing in the consolidated financial statements of the Company have been recognised in the standalone financial statements of the TVS Holdings Limited prior to the demerger, which is in accordance with Ind-AS 103, read with Ind AS Transition Facilitation Group (ITFG). Fourth part of the scheme was made effective on August 4, 2023. The Last part of the scheme was made effective on August 11, 2023.
Effective 11th August 2023, Sundaram- Clayton (USA) Limited, USA, Sundaram- Clayton GmbH, Germany, Sundaram Holdings USA Inc., USA and its four subsidiaries were ceased as subsidiaries of the Company pursuant to the demerger of Demerged Undertaking (as defined in the scheme) into Sundaram-Clayton DCD Limited ("Resulting Company ") now known as Sundaram-Clayton Limited as part of the Composite Scheme of Arrangement sanctioned by the Hon'ble National Company Law Tribunal, Chennai.
(xi) Core Investment Company Registration :
During the quarter ended 31 March 2024 the Company received Certificate of Registration as Core Investment Company ("CIC'') from Reserve Bank of India ("RBI'') with CIC code -N-07-00904 to commence / carry on the business of non-banking financial institution without accepting public deposits subject to the conditions given on the reverse.
41 Additional notes forming part of Standalone Financial Statements for the year ended March 31, 2024.
(i) Pursuant to para 2 of general instructions for preparation of financial statements of a NBFC as mentioned in Division III of Schedule III of The Companies Act, 2013, the current and non-current classification has not been provided.
(ii) The Company has no transactions with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956.
(iii) The Company does not deal with virtual currency.
(iv) The Company is in compliance 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.
(v) The Company has acquired additional stake of 10.74% in Emerald Haven Realty Limited, Subsidiary thereby the shareholding of the Company in Emerald Haven Realty Limited has increased from 89.26% to 100% consequent to which, EHRL has become a wholly owned subsidiary of the Company.
(vi) As per the Company's accounting policy, Property, Plant and Equipment (including Right of Use Assets) and intangible assets are carried at historical cost (less accumulated depreciation & impairment, if any), hence the revaluation related disclosures required as per Additional Regulatory Information of Schedule III (revised) to the Companies Act, is not applicable / do not apply
(vii) The Company has not granted Loans or Advances in the nature of loan to any promoters, Directors, KMPs and the related parties (As per Companies Act, 2013) , which are repayable on demand or without specifying any terms or period of repayments.
(viii) No proceedings have been initiated or pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.
(ix) The Company has sanctioned facilities from banks on the basis of security of current assets. The periodic returns filed by the Company with such banks are in agreement with the books of accounts of the Company.
(x) The Company has adhered to debt repayment and interest service obligations on time. "Wilful defaulter" related disclosures required as per Additional Regulatory Information of Schedule III (revised) to the Companies Act, is not applicable / do not apply
(xi) No funds (which are material either individually or in the aggregate) 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, whether, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(xii) No funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
Schedule to the Balance Sheet of a non-deposit taking Core Investment company (as required in terms of Annex II as amended from time to time of Systemically Important Core Investment Company (Reserve Bank) Directions, 2016)
The Company has obtained for CIC registration in the current year and therefore the disclosures for the previous financial year FY 22-23 in the foregoing tables/sections is not provided as the same is not applicable.
# The Reserve Bank of India (RBI) vide its circular no. RBI/2021-2022/125 DOR.STR.REC.68/21.04.048/2021-22, dated November 12, 2021 on "Prudential norms on Income Recognition, Asset Classification and Provisioning (IRACP) pertaining to Advances - Clarifications", had clarified / harmonized certain aspects of extant regulatory guidelines with a view to ensuring uniformity in the implementation of IRACP norms across all lending institutions. The Company has since taken necessary steps to implement the provisions of this circular under IRACP norms for regulatory purpose. The aforementioned circular has no impact on the financial results for the quarter and year ended March 31, 2024, as the Company continues to prepare financial statements in accordance with Indian Accounting Standards ('Ind AS') notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended and the RBI circular dated March 13, 2020 on "Implementation of Indian Accounting Standards.
(vi) Institutional set-up for Liquidity Risk Management
The Company constituted an Asset Liability management committee as guideline issued by RBI to NBFCs. ALCO consists of members having requisite skill set and expertise of the business & sector of the Company. ALCO monitors asset liability mismatches to ensure that there are no excessive imbalances on either side of the balance sheet and also reviews Asset Liability Management strategy. The borrowing strategy of the Company has always been in tandem with assets composition with appropriate consideration for mitigation of interest rate and liquidity risk. The Asset Liability Committee constantly reviews and monitors the funding mix and ensures the optimum mix of funds based on the cash flow requirements, market conditions and keeping the interest rate view in consideration. The company has put in place robust processes to monitor and manage liquidity risks. ALCO supervises the liquidity management of the Company at regular intervals.
The Company has taken various initiatives to raise funds at the cost commensurate with its rating by way of diversified mix of borrowings with respect to the source, type of instrument, tenor and nature of security. The Company has raised subordinated debt (Tier II) to the extent of Rs.600 Crores with participation from Assets Management Companies and maiden investment by leading Insurance Companies during year ended March 31,2023.
(vii) Disclosure on Liquidity Coverage Ratio ( LCR )
The Liquidity Coverage Ratio (LCR) is a key compliance requirement for NBFCs. Its objective is to ensure short-term resilience of the liquidity risk profile of the NBFCs by way of maintenance of adequate High Quality Liquid Assets (HQLA) to survive a significant financial/ economic stress scenario lasting for thirty days period. The Company is maintaining adequate liquidity to manage its commitments. Additionally, the Company has unutilized sanctioned lines of credits from banks to meet liquidity needs.
Disclosure pursuant to Scale Based Regulation (SBR) disclosure requirements vide notification no. RBI/2021-22/112 DOR.CRE.REC.No.60/ 03.10.001/2021-22:
The Statutory Auditors have not expressed any modified opinion on the financial statement for the year ended March 31,2024.
42 Previous year's figures have been regrouped wherever necessary to conform to the current year's classification.
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