n. Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pretax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
o. Contingent liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extreme rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognise a contingent liability but discloses its existence in the financial statements.
p. Retirement and other employee benefits Current employee benefits:
Employee benefits payable wholly within twelve months of availing employee services are classified as short-term employee benefits. These benefits include salaries and wages, bonus and ex-gratia. The undiscounted amount of short term employee benefits such as salaries and wages, bonus and ex-gratia to be paid in exchange of employee services are recognised in the period in which the employee renders the related service.
Post-employment benefits:
(i) Defined contribution plans:
Retirement benefits in the form of contribution to provident fund and pension fund are charged to the Statement of Profit and Loss.
(ii) Defined benefit plan:
Gratuity is in the nature of a defined benefit plan. Provision for gratuity is calculated on the basis of actuarial valuations carried out at the reporting date and is charged to the Statement of Profit and Loss. The actuarial valuation is computed using the projected unit credit method.
Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to statement of profit and loss in subsequent periods.
(iii) Other employee benefits
The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year end. The Company presents the leave as a shortterm provision in the balance sheet to the extent it does not have an unconditional right to defer its settlement for 12 months after the reporting date. Where Company has the unconditional legal and contractual right to defer the settlement for a period beyond 12 months, the same is presented as long-term provision.
q. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial assets
Initial recognition and measurement
All financial assets are recognised initially at fair value, plus in the case of financial assets not recorded at fair value through profit or loss,
transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in following four categories:
- Financial assets at amortised cost
- Financial assets at fair value through other comprehensive income (FVTOCI)
- Financial assets at fair value through profit or loss (FVTPL)
- Equity investments
i. Financial assets at amortised cost
Financial assets is measured at the amortised cost if both the following conditions are met -
- These assets are held within a business model whose objective is to hold assets for collecting contractual cash flows, and
- Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
This category is the most relevant to the Company. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the statement of profit and loss. The losses arising from impairment are recognised in the statement of profit and loss.
ii. Financial assets at fair value through other comprehensive income (FVTOCI)
Financial assets are classified as FVTOCI if both of the following criteria are met:
- These assets are held within a business model whose objective is achieved both by collecting contractual cash flows and selling the financial assets; and
- Contractual terms of the asset give rise on specified dates to cash flows that are SPPI on the principal amount outstanding.
Fair value movements are recognised in the Other Comprehensive Income (OCI). On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity to the Statement of Profit and Loss.
iii. Financial assets at fair value through profit or loss (FVTPL)
FVTPL is a residual category for debt instruments. Any financial assets, which do not meet the criteria for categorisation as at amortised cost or as FVTOCI, are classified as FVTPL. Gain or losses are recognised in the Statement of Profit and Loss.
iv. Equity investments
All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL and any changes in its values are recognised through the statement of profit and loss.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognised in the OCI. There is no recycling of the amounts from OCI to profit and loss, even on sale of investment. However, the company may transfer the cumulative gain or loss within equity.
The Company makes election whether to classify the equity instruments as FVTPL or FVTOCI on instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.
Equity investments made by the Company in subsidiaries are carried at cost less impairment loss (if any).
Derecognition
A financial asset is derecognised when:
- The rights to receive cash flows from the asset have expired, or
- The Company has transferred its rights to receive cash flows from the asset and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset
But when it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company's continuing involvement. In that case, the Company also recognises an associated liability. The transferred
asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
Impairment of financial assets
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the financial assets which are not fair valued through statement of profit and loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL at each reporting date, right from its initial recognition. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-month ECL.
ECL impairment loss allowance (or reversal) recognised during the period is recognised as income/ expense in the statement of profit and loss. This amount is reflected under the head 'other expenses' in the statement of profit and loss.
As a practical expedient, The Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.
ECL is recognised based on assessment of credit risk and since credit risk is low in case of related party. Hence ECL not recognised.
Impairment of non-financial assets
The carrying amounts of assets are reviewed at each reporting date if there is any indication of impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset's fair value less cost of disposals and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset. Fair value is the price that would be received to sell an asset or paid to transfer a liability in orderly transaction between market participants at the measurement date. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.
The Company bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for the Company Cash Generating Unit's (CGU) to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of 5 years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the 5th year. Impairment losses are recognised in the Statement of Profit and Loss.
An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the asset's or CGU's recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset's recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through Statement of Profit and Loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The Company's financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in Statement of Profit and Loss when the liabilities are derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit and Loss. This category generally applies to borrowings.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.
r. Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and shortterm deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and shortterm deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company's cash management.
s. Cash flow statement
Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated in the Cash flow statement.
t. Cash dividend and non-cash distribution to equity holders of the parent
The Company recognises a liability to make cash or non-cash distributions to equity holders of the
parent when the distribution is authorised and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.
Non-cash distributions are measured at the fair value of the assets to be distributed with fair value re-measurement recognised directly in equity.
Upon distribution of non-cash assets, any difference between the carrying amount of the liability and the carrying amount of the assets distributed is recognised in the Statement of Profit and Loss.
u. Earnings per equity share
Basic earnings per share (EPS) amounts is calculated by dividing the profit for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net profit of the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.
Recent Accounting Developments
Ministry of Corporate Affairs ('MCA') notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended 31 March 2024, MCA has not notified any new standards. The amendments to the existing standards have been applied by the Company wherever applicable. They do not have material impact on the financials results of the Company.
2.3 Significant accounting judgements, estimates and assumptions:
The preparation of the Company's financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes
that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. Some of the significant accounting judgement and estimates are given below:
Determining the lease term of contracts with renewal and termination options - Company as lessee
The Company determines the lease term as the noncancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.
The Company has several lease contracts that include extension and termination options. The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customisation to the leased asset).
Leases - Estimating the incremental borrowing rate
The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Company 'would have to pay', which requires estimation when no observable rates are available. The Company estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates (such as the credit rating).
Defined benefit plans (gratuity benefits)
The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. All assumptions are reviewed at each reporting date.
The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries. The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes.
Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the discounted cash flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 28 for further disclosures.
Property, plant and equipment
Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset's expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Company assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets.
Investment property
Investment property represent a significant proportion of the asset base of The Group. The charge in respect of periodic depreciation is derived after determining an estimate of an asset's expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Company assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets.
27 Related party disclosures
27A Name of related parties
(i) Related parties where control exists - Subsidiaries
Allcargo Inland Park Private Limited
Allcargo Multimodal Private Limited (Ceased to be a subsidiary w.e.f 07 March 2024)
Malur Logistics and Industrial Parks Private Limited (Ceased to be a subsidiary w.e.f 01 February 2023)
Venkatapura Logistics and Industrial Parks Private Limited (Ceased to be a subsidiary w.e.f 01 February 2023)
AGL Warehousing Private Limited
Jhajjar Warehousing Private Limited
Koproli Warehousing Private Limited
Bhiwandi Multimodal Private Limited
Allcargo Warehousing Management Private Limited
Marasandra Logistics and Industrial Parks Private Limited
Avvashya Projects Private Limited
Avvashya Inland Park Private Limited
Ecu Worldwide India Private Limited (Formally known as Panvel Industrial Parks Private Limited) (ceased to be a subsidiary w.e.f 23rd March 2023)
Dankuni Industrial Parks Private Limited
Hoskote Warehousing Private Limited
Madanahatti Logistics & Industial Park Private Limited (becomes a subsidiary w.e.f 21st February 2023)
(ii) Companies having common directors (with whom transactions have taken place)
Allcargo Logistics & Industrial Park Private Limited (Ceased to be a Company having common directors w.e.f 07 March 2024)
Panvel Warehousing Private Limited (Ceased to be a Company having common directors w.e.f 07 March 2024) Kalina Warehousing Private Limited (Ceased to be a Company having common directors w.e.f 07 March 2024) Madanahatti Logistics & Industrial Park Private Limited (Till 20th February 2023)
Malur Logistics and Industrial Parks Private Limited (w.e.f 02 February 2023 to 07 March 2024)
Venkatapura Logistics and Industrial Parks Private Limited (w.e.f 02 February 2023 to 07 March 2024)
27 Related party disclosures (contd)
(iii) Entities over which key managerial personnel or their relatives exercises significant influences (with whom transactions have taken place)
Allcargo Supply chain Private Limited
Conserve buildcon LLP
Ecu Worldwide India Private Limited (Formally known as Panvel Industrial Parks Private Limited) (w.e.f 24th March 2023)
Talentos India Pvt Limited
Allcargo Logistics Limited
Allcargo Terminals Limited
Meridien Tradeplace Private Limited
Gati-Kintetsu Express Private Limited
Speedy Multimodes Limited
Maneksha and Sethna (w.e.f 13 April 2023)
Avvashya Foundation Trust
(iv) Key managerial personnel
Mr Shashi Kiran Shetty (Promoter)
Mr Adarsh Hegde (Promoter)
Mrs. Arathi Shetty (Promoter)
Mrs. Priya Adarsh Hegde (Promoter Group)
Mr. Mohinder Pal Bansal (Chairman and Non-executive Independent Director)
Mr Jatin Chokshi (Managing Director) (w.e.f 13 April 2023)
Ms.Shoka Shetty (Non-executive Non Independent director) (w.e.f 08 May 2023)
Mr.Kaiwan Kayaniwalla (Non-executive Non Independent director) (w.e.f 13 April 2023)
Mrs.Alka Arora Misra (Non-executive Independent director) (w.e.f 13 April 2023)
Mr. Vinit Prabhugaokar (Non-executive Independent director) (w.e.f 13 April 2023)
Mr Ravi Jakhar (Ceased to be a director w.e.f 13 April 2023)
Mr.Prabhakar Shetty (Ceased to be a director w.e.f 14 April 2023)
Mr. Ashok Khimji Parmar (From 01 April 2023 to 27 November 2023)
Ms. Khushboo Dinesh Mishra (w.e.f 01 April 2023)
Mr. Mahesh Shetty (w.e.f 01 December 2023)
Mr. Ram Walase (w.e.f 18 March 2024)
(v) Relatives of Key Management Personnel holding significant influence over the entites as defined in (iii) above (with whom transactions have taken place)
Mr. Vaishnav Shetty
27B. Summary of transactions with related parties: (contd)
(G) By virtue of Demerger order dated 05 January 2023 (refer note 32) passed by Hon'able NCLT Mumbai bench, the entire equipment hiring business (with Crane and Non crane constituents) of Allcargo Logistics Limited (Demerged Company) got transfererd to Transindia Real Estate Limited (TREL) with effect from appointed date i.e 01 April 2022. The Certified true copy of Final Demerger order along with sanctioned scheme have been received from Hon'able NCLT, Mumbai bench on 10 March 2023 and the same got filed with Registrat of Companies on 01 April 2023 (Effective date). Soon thereafter, Business Transfer Agreement (BTA) was entered into between Transindia Real Estate Limited (TREL) and Premier Heavy Lift Private Limited (PHL) on 27 April 2023 (with subsequent addendum thereto forming part of BTA) by virtue of which the entire Crane buisness of TREL has been transferred to PHL on slump sale arrangement basis with effect from 01 April 2023. As a matter of practical expedient and as per the terms and conditions contained in said BTA/addendum thereto, till the time the requisite work orders of existing customers gets novated (which was in the name of Demerged Company) or assigned in favor of PHL, the business continued to be carried on by TREL on behalf of PHL in trust (via demerged company medium on back to back arrangement basis). The summary of transactions between the Allcargo and TREL for the year ended 31 March 2024 was as under:-
Terms and conditions of trade transactions with related parties
The services provided to and services received from 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 and settlement occurs in cash.
The Company has entered into Long term lease contract with Allcargo Logistics Limited wherein the rent is receivable with effect from 1 April 2022 for lease of 6th floor Allcargo house.
On 28 April 2023, the Company has entered into Long term lease contract with Allcargo Terminals Limited wherein the rent is receivable with effect from 1 April 2022 for lease of land and building at certain locations.
27D Transfer in/ Transfer out of provision of Employee related benefits (Acturial) between the related parties:-
During current financial year, there is a transfer of Gratuity Liability of ' 30 lakhs on account of employee transfer from Allcargo Logistics Limited to the Company. Also some of the employees of the Company got transferred to the Allcargo Terminals Limited hence there is a divestiture of Gratuity liability of ' 35 lakhs to that extent.
During the current financial year, there is a transfer of Leave encashment of ' 13 lakhs as well as ' 3 lakhs on account of employee transfer from Allcargo Logistics Limited as well as from Allcargo Terminals Limited to the Company. Also some of the employees of the Company got transferred to the Allcargo Terminals Limited hence there is a divestiture of Leave encashment liability of ' 8 lakhs to that extent.
29 Financial risk management objectives and policies
The Company's activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Company's primary risk management focus is to minimise potential adverse effects of market risk on its financial performance. The Company's risk assessment and policies and processes are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the policies and processes. Risk assessment and policies and processes are reviewed regularly to reflect changes in market conditions and the Company's activities. The Board of Directors and the management is responsible for overseeing the Company's risk assessment and policies and processes.
i) Market risk
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates and prices (such as interest rates and foreign currency exchange rates) or in the price of market risk-sensitive instruments as a result of such adverse changes in market rates and prices. Market risk is attributable to all market risk-sensitive financial instruments, and all short term and long-term debt. The Company is exposed to market risk primarily related to interest rate risk. Thus, the Company's exposure to market risk is a function of investing and borrowing activities and it's revenue generating and operating activities.
ii) 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.
Interest rate sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Company's profit/(loss) before tax is affected as follows:
in) Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions and other financial instruments.
Trade receivables
Customer credit risk is managed by each business unit subject to the Company's established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored. The Company has diversified customer base considering the nature and type of business.
An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based on historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 7.2. The Company does not hold collateral as security. 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.
As per managmenet policy there is no credit risk on trade receivables arising on account of transactions with related parties.
(iv) Liquidity risk
The Company's objective is to maintain a balance between continuity of funding and flexibility through the use of bank term loans etc.33% (31 March 2023: 37%) of the Company's borrowings including current maturities of noncurrent borrowings will mature in less than one year at 31 March 2024 based on the carrying value of borrowings including current maturities of non-current borrowings reflected in the financial statements. The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding and debt maturing within 12 months can be rolled over with existing lenders.
(v) Capital management
For the purpose of the Company's capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders of the Company. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The funding requirement is met through a mixture of equity, internal accruals, long term borrowings and short term borrowings.
31 Other Statutory Information
i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
ii) The Company has not advanced or loaned or invested funds to any other persons or entities, 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.
iii) The Company has not received any fund from any persons or entities, 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,
iv) The Company has not entered 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.
v) The Company do not have any transactions with companies struck off.
vi) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.
32 Demerger taken place in financial year 2023-24 w.e.f April 01, 2022 (appointed date):-
Demerger of businesses related to Leasing of land and Commercial Properties, Logistics Park, Warehousing, real estate development and leasing activities, Engineering and equipment hiring solutions from Allcargo Logistics Limited through Scheme of arrangement
The Company along with Allcargo Logistics Limited and Allcargo Terminals Limited had filed a Scheme of Demerger ("Scheme”) with the National Company Law Tribunal ("NCLT”) whereby business of Leasing of land and Commercial Properties, Logistics Park, Warehousing, real estate development and leasing activities, Engineering and equipment hiring solutions and other related businesses of Allcargo Logistics Limited would be transferred to the Company with effect from appointed date April 01, 2022. As a consideration, 24,56,95,524 equity shares of the Holding Company of ' 2 each fully paid up would be issued to the shareholders of Allcargo Logistics Limited (Share Exchange Ratio 1:1). The Company in its Board Meeting held on April 26, 2023 has allotted 24,56,95,524 equity shares to the shareholders of Allcargo Logistics Limited holding as on record date April 18, 2023.
Further, with issuance and allotment of equity shares by the Company, in accordance with the Scheme the initial issued and paid-up equity capital comprising of 7 equity share of ' 10 each, aggregating to ' 70 shall stand cancelled. Also the Shareholders of the Company at its Extra Ordinary General Meeting held on March 01, 2023, approved the sub-division (split) of the face value of the equity shares of the Company from ' 10 to ' 2 per share.
NCLT vide its order dated January 05, 2023 approved the Scheme. Certified Copy of the Scheme was filed with ROC on April 01, 2023. As per the accounting treatment specified in the Scheme and Ministry of Corporate Affairs General Circular No. 09/2019 dated 21st August 2019 ("MCA circular”), assets and liabilities relating to warehousing and equipment hiring have been recognised (at book values as appearing in the books of the Allcargo Logistics Limited) in the books of Holding Company from the appointed date. Pending legal formalities for issue of shares, the face value of equity shares to be issued has been credited to "Equity Shares issuable Pursuant to Demerger” and balance is credited to Capital Reserve.
During the previous year ended 31 March, 2023, the authorised share capital of the Holding Company has been increased to ' 5,500 Lakhs.
(A) Sale of crane business
The Board of directors of the Company in its meeting held on 26 April 2023 had approved and signed Business Transfer Agreement with Premier Heavy Lift Private Limited, for sale of Crane Division as a going concern on a slump sale basis at a lump sum cash consideration of ' 12,100 lakhs plus the net working capital as on 01 April 2023 being effective date. The related Conditions Precedents as mentioned in Business Transfer agreement has been complied by the Company to the satisfaction of the buyer on 04 July 2023 and Company recorded gain of ' 9,679 lakhs as an exceptional item. Accordingly, revenue and corresponding expenses of the crane division for the period ended 04 July 2023 are incurred on behalf of the buyer. Thus profit / (loss ) attributable to crane division does not impact Statement of Profit and Loss of the company. For the previous year ended 31 March 2023 crane business of Equipment Hiring segment same has been classified as 'discontinuing operations'.
(B) Transaction with BRE Asia Urban Holdings Limited:-
(i) During the financial year ending 31 March 2020, Allcargo Logistics Limited ("ALL” or "Demerged Company”) and its wholly-owned subsidiaries viz. Malur Logistics and Industrial Parks Private Limited, Venkatapura Logistics and Industrial Parks Private Limited, Madanahatti Logistics and Industrial Parks Private Limited, Allcargo Logistics & Industrial Park Private Limited, Kalina Warehousing Private Limited and Panvel Warehousing Private Limited (collectively referred to as "Specified Companies”) entered into definitive documentation with BRE Asia Urban Holdings Limited ("the Investor”) for transfer of its majority shareholding and controlling stake in the Specified Companies in favour of the Investor, for the consideration and subject to the satisfaction of the closing conditions and achievement of certain milestones (together the 'Obligations') and upon the other terms and conditions therein mentioned. In terms of the definitive documentation, the Investor was entitled to a call option whereby the Investor was entitled to purchase ALL's shareholding in Allcargo Multimodal Private Limited, to be exercised within 24 months of the closing of the aforesaid transaction. Accordingly, ALL transferred majority shareholding and control in Madanahatti Logistics and Industrial Park Private Limited, Allcargo Logistics & Industrial Park Private Limited, Kalina Warehousing Private Limited and Panvel Warehousing Private Limited in favour of the Investor and retained a minority stake in the Specified Companies as at 31 March 2020. In the case of Malur Logistics and Industrial Parks Private Limited and Venkatapura Logistics and Industrial Parks Private Limited , the compliance with customary closing conditions were delayed due to outbreak of the Coronavirus (COVID-19) pandemic globally and in India as well as due to other operational/commercial reasons and accordingly the timelines earlier set for Closing of the transaction of the sale of the majority stake was, by mutual consent of the parties, extended from time to time.
In the previous year, the balance stake in such specified companies have been transferred to Transindia Real Estate Limited ("hereinafter referred as The Company”) pursuant to Scheme of Arrangement for Demerger entered amongst ALL, Allcargo Terminals Limited and The Company as approved by the National Company Law Tribunal as per Order dated 05 January 2023. The Company has subsequently re-acquired the 100% shareholding in Madanahatti Logistics and Industrial Parks Private Limited as referred in Note no.36 (below) as per the commercial arrangements with the Investor.
Also In the previous year, after execuing the subsequent definitive documentation, The Company has sold its 90% shareholding in Malur Logistics and Industrial Parks Private Limited and Venkatapura Logistics and Industrial Parks Private Limited to the Investor on 01 February 2023 for the cash consideration of ' 411 lakhs on satisfaction of conditions precedent and conditions subsequent, and accordingly a closure letter dated 01 February 2023 was executed between the parties.
(ii) The Investor has called upon the Company to sell and transfer its 100% shareholding in Allcargo Multimodal Private Limited to the Investor in terms of the aforesaid definitive documentation.
(iii) The Board of Directors of the Company at its meeting held on June 02, 2023, has considered and provided in principle approval for the proposal for divestment of its balance 10% shareholding in the Specified Companies as well as sale of its 100% share in Allcargo Multimodal Private Limited to the Investor subject to shareholders' approval and other statutory approvals/compliances, if any.
(iv) On 28 February 2024, the Company has executed the Securities Subscription and Purchase Agreement ("SSPA”) between specified companies, ALL, Horizon Industrial Parks Private Limited ("HIPPL”) and BRE Asia Urban Holdings Ltd ("Investor”) to sell remaining 10% equity stake in the specified companies and 100% equity stake in Allcargo Multimodal Private Limited for an agreed consideration of ' 25,136 lakhs. The transfer of shareholding happened on 07 March 2024. As on 31 March 2024 the Company has received ' 23,036 lakhs and balance consideration of ' 2,100 lakhs stands receivable from the investor and HIPPL subject to satisfaction of customary closing conditions as agreed in the SSPA. The Company has recognised a profit of ' 22,831 lakhs on dilution of its equity stake for the yead ended 31 March 2024 as shown under the exceptional item (refer note 22) in its financial statements. The Company has also received as on 31 March 2024'16,647 lakhs through redemption of OCD B series debentures of the Specified Companies.
35 Segment reporting
Disclosure of segment reporting as per the requirements of I nd AS 108 "Operating Segment” is reported in the consolidated financial statements of the Company. Therefore, the same has not been separately disclosed in the standalone financial statements in line with the requirement of Ind AS 108.
36 During the previous year, TREL has entered into a Securities Purchase Agreement ("SPA”) on February 21, 2023, with BRE Asia Urban Holdings Ltd. (the "Seller”) to acquire: (a) 5,40,000 (Five Lakhs and Forty Thousand) equity shares (representing 90% of the equity share capital), and (b) 1,07,78,147 (One Crore, Seven Lakhs, Seventy Eight Thousand, One Hundred and Forty Seven) Class A Optionally Convertible Debentures ("Class A OCDs”) of Madanahatti Logistics and Industrial Parks Private Limited (the "Target”). The same has been accounted for as Investments in subsidiary company as at 31 March 2023.
37 A Scheme of Arrangement was approved between two of the subsidiaries, Allcargo Inland Park Private Limited (Demerged company) and Allcargo Multimodal Private Limited (Resulting company) and their respective shareholders to demerge their warehousing business (the demerged undertaking.) for transfer of warehousing business of demerged Company. The scheme got approved by NCLT vide its final order dated 01 March 2022.The said order stated that the appointed date for the said Arrangement to be April 01, 2021.During the previous financial year ended March 31, 2023, the management of the demerged company has observed a correction to be made in the Annexure of the aforesaid order and accordingly filed a rectification application to the NCLT order. The same has been allowed by NCLT vide their order dated December 18, 2023. There is no impact to the accounting treatment nor a change in the share exchange ratio due to the rectification application being made to the NCLT order.
*Excess amount spend towards CSR activties may be set off against the requirement to spend under sub-section (5) of the Section 135 up to immediately suceeding three financial years subject to the condition that the excess amount available for set off shall not include the surplus arising out of the CSR activities,if any, in pursuance of sub-rule (2) of this rule.
(b) Includes a sum of ' 50 lakhs as a contribution to Avvashya Foundation Trust (where key managerial personnel and relatives are able to exercise significant influence) (refer note 27B).
(c) As per the rules contained and notified under Companies (Corporate Social Responsibility Policy) Amendment Rules 2021 as at 31 March 2024, the Company do not have any unspent Corporate Social Responsibility amount which needs to be transferred to a separate account maintained with a scheduled bank within a period of 30 days from the end of financial year.
39 Note on Audit trail
The Company has used accounting software for maintaining its books of accounts for the year ended 31 March, 2024 which has a feature of recording audit trail, (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software, except vendor management records (Vendor Master) maintained in Microsoft Dynamics D365 application and eMerge application used for consolidation, where audit trail feature was not enabled. Further, audit trail feature has not been tampered with in respect of other accounting software.
40 Previous year figures
Previous year figures have been regrouped/reclassified, where necessary, to conform to this year's classification.
41 As per management assessment there are no adjusting event subsequent to 31 March 2024 other than those disclosed in the financial statements.
As per our report of even date For and on behalf of Board of directors of Transindia Real Estate Limited
For C C Dangi & Associates (Formerly known as Transindia Realty and Logistics Parks Limited)
Chartered Accountants CIN No:U61200MH2021PLC372756
ICAI Firm Registration Number: 102105W
Ashish C. Dangi Jatin Jayantilal Chokshi Mohinder Pal Bansal Mahesh Shetty
Partner Managing Director Chairman and Independent Director Chief Financial Officer
Membership No: 122926 DIN:00495015 DIN:01626343
Khushboo Dinesh Mishra
Company Secretary & Compliance Officer
M.No:68324
Place: Mumbai Place: Mumbai
Date: 21 May 2024 Date: 21 May 2024
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