Nature and purpose of reserves Securities premium
Rights, preferences and restrictions attached to equity shares
The Company has only one class of issued, subscribed and paid up equity shares having a par value of ' 5 each per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the 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 share holders.
The amount received in excess of face value of the equity shares is recognised in the securities premium. This reserve will be utilised in accordance with the provisions of Section 52 of the Companies Act, 2013 ("the Act”).
Capital reserve
The excess of net assets taken, over the consideration paid, as part of the business combinations have been recorded under the capital reserve during the earlier years.
Capital redemption reserve
Capital redemption reserve was created on buy back of equity shares in the earlier years. The Company uses capital redemption reserve in accordance with the provisions of the Act.
Warrants money appropriated
Warrants money appropriated represents forfeiture of share application money made during the earlier years.
General reserve
The reserve has arisen on transfer of a portion of the net profit pursuant to the provisions of the erstwhile Companies Act, 1956. Mandatory transfer to general reserve is not required under the Act.
Changes in fair value of equity instruments
This represents the cumulative gains and losses arising on the fair valuation of equity instruments measured at FVTOCI, under an irrevocable option, net of amounts reclassified to retained earnings when such assets are disposed off.
Retained earnings
Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distribution to the shareholders.
(a) Gratuity
The Company provides its employees with benefits under a defined benefit plan, referred to as the "Gratuity Plan”. The Gratuity Plan entitles an employee, who has rendered at least five years of continuous service, to receive 15 days salary for each year of completed service (service of six months and above is rounded off as one year) at the time of retirement/exit in accordance with the Payment of Gratuity Act, 1972.
1. Company has transferred ' 6.87 to Asian Healthcare Foundation (AHF) being the implementing partner of the Company as an ongoing/multi-year CSR project, out of which an unspent amount of ' 4.52 is available with AHF as on 31 March 2022 and the same will be spent in accordance with the CSR Amendment Rules, 2021.
2. As the selected projects for CSR spent are ongoing/muli-year in nature, the unspent amount of ' 7.06 available with the Company will be spent in accordance with the CSR Amendment Rules, 2021. In accordance with the provisions of Section 135(6) of the Act, the Company has transferred the unspent amount to a separate bank account and the unspent amount has been provided in the accompanying financial statements.
36. Disclosure pursuant to requirements of Rule 11(e) (i) & (ii) of the Companies (Audit and Auditors) Rules
i) 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(s) or entity(ies), including foreign entities ("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).
ii) The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company ("Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
37. The Company has not extended any loans or advances in the nature of loans to its promoters, directors, key managerial personnel and its related parties, as defined under the Act, during the years ended 31 March 2022 and 31 March 2021.
There are no transfers between levels during the current and previous year ended 31 March 2022 and 31 March 2021 respectively. The Company's policy is to recognise transfers into and transfers out of fair value hierarchy levels at the end of the reporting period.
(ii) Valuation technique and inputs used for level 3 instruments:
The fair value of the level 3 instruments has been estimated using the discounted cash flow model. The valuation requires management to make certain assumptions about the model inputs, including forecasting of cash flows, discount rate, credit risk and volatility. The probabilities of the various estimates within the range can be reasonably assessed and are used in the management's estimate of the fair value for these level 3 instruments.
The significant unobservable inputs used in the fair value measurement categorised within Level 3 of the fair value hierarchy as at 31 March 2022 and 31 March 2021 are as shown below. The impact on account of change in these assumptions are not considered as significant.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was ' 630.32 and ' 454.07 as of 31 March 2022 and 31 March 2021 respectively, representing carrying amount of all financial assets with the Company.
Financial assets that are neither past due nor impaired
None of the Company's cash equivalents, including fixed deposits, were either past due or impaired as at 31 March 2022 and 31 March 2021.
40. Financial risk management objectives and policies
Financial Risk Management Framework
The Company's Board of Directors has an overall responsibility for the establishment and oversight of the Company's risk management framework. The Board of Directors has established Risk Management Committee, which is responsible for developing and monitoring the Company's risk management policies. The Committee reports regularly to the Board of Directors on its activities.
The Company's principal financial liabilities, comprises of borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company's operations. The Company's principal financial assets include investments in equity shares, loans, trade and other receivables, and cash and cash equivalents that the Company derives directly from its operations.
The Company is exposed primarily to Credit risk, Liquidity risk and Market risk (fluctuations in interest rates, foreign currency rates, and prices of equity instruments), which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.
A. Credit risk
Credit risk is the risk that the counterparty shall not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of the creditworthiness as well as concentration of risks. Credit risk arises primarily from financial assets such as trade receivables, investment in equity shares, balances with banks, loans and other receivables.
Credit risk is controlled by analyzing credit limits and creditworthiness of the customers on a continuous basis to whom credits have been granted after obtaining necessary approvals. Financial instruments that are subject to concentration of credit risk principally consist of trade receivables, investments, cash and cash equivalents, bank deposits and other financial assets. None of the financial instruments of the Company result in material concentration of credit risk.
Ind AS requires expected credit losses to be measured through a loss allowance. The Company assesses at each date of Balance Sheet whether a financial asset or a group of financial assets are impaired. Expected credit losses are measured at an amount equal to 12 months expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial assets have increased significantly since the initial recognition. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward-looking information.
B. Liquidity risk
Liquidity risk refers to the risk that the Company cannot meet its financial obligations as and when they become due. The objective of liquidity risk management is to maintain sufficient liquidity and to ensure that funds are available for meeting due obligations of the Company. The Company manages liquidity risk by maintaining adequate reserves, banking facilities, continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of the financial assets and financial liabilities.
40. Financial risk management objectives and policies (continued)
C. 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 the market rates and prices. Market risk is attributable to all market risk-sensitive financial instruments, all foreign currency receivables and
payables and all short-term and long-term borrowings. Market risk comprises three types of risk: interest rate risk, currency risk and other price risks such as equity price risk.
i. Interest risk:
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument shall fluctuate because of changes in the market interest rates. The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's long-term obligations with floating interest rates. The impact on account of change in interest rate on the Company's long-term obligations is not considered as significant.
ii. Foreign currency risk:
Foreign currency risk is the risk that the fair value or future cash flows of an exposure shall fluctuate because of changes in foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates relates primarily to the Company's operating and investing activities (when revenue or expense including capital expenditure is denominated in a foreign currency). The exposure of foreign currency risk to the entity is low as it enters very limited transactions in foreign currencies and accordingly any impact on account of change in the exchange rate is not considered as significant.
In order to achieve this overall objective, the Company's capital management, amongst other things, aims to ensure that it meets financial covenants attached to the borrowings. Breaches in meeting the financial covenants would permit the lenders to immediately call back the borrowings. There was no breach in the financial covenants of any borrowings during the year ended 31 March 2022 and 31 March 2021.
iii. Equity price risk:
The Company's listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company's senior management on a regular basis. The Company's Board of Directors reviews and approves all equity investment decisions.
At the reporting date, the exposure to unlisted equity securities at fair value was ' 2.60 (31 March 2021:' 2.60). Sensitivity analyses of these investments have been provided in Note 38.
41. Capital risk management
For the purpose of the Company's capital management, capital includes issued equity capital, share premium and all other reserves attributable to the equity holders. The primary objective of the Company's capital management is to maximise the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payments to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total equity plus net debt. The Company's policy is to keep the gearing ratio up to 35%. The Company includes within net debt, borrowings from banks less cash and cash equivalents. Borrowings from banks comprise of term loans and loans repayable on demand.
(a) The sales to and purchases 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. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2022, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2021: Nil). This assessment is undertaken each financial year through examining the financial position of the related parties and the market in which such parties operates.
(b) Post-employment and other long-term benefits, disclosed above, does not include those benefits which are computed for the Company as a whole.
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44. Contingent liabilities and commitments
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31 March 2022
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» at
31 March 2021
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(a) Commitments
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|
|
|
(i) Estimated amount of contracts remaining to be executed on capital account and not provided for
|
60.45
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52.06
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(b) Contingent liabilities, not provided for
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|
|
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In respect of income tax matters [refer (i) below]
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5.21
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-
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In respect of sales tax / value added tax matters [refer (ii) below]
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18.67
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18.67
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In respect of other matters [refer (iii) below]
|
59.73
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20.65
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(i) The Company had received demand order from the income tax authorities for the assessment years 2017-18 and 2018-19 in relation to the inadmissibility of expenditure claimed under Section 80G of the Income Tax Act, 1961. The management, on the basis of its internal assessment of the facts of the case, the underlying nature of transactions, is of the view that the probability of the case being settled against the Company is remote and accordingly do not foresee any adjustment to these standalone financial statements in this regard. The litigation is currently pending with the Commissioner of Income Tax (Appeals) ("CIT(A)”).
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(ii) - Disputed purchase tax levied under Andhra Pradesh Value Added Tax Act, 2005 on purchase of milk @
|
9.51
|
9.51
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- Disputed Input tax credit disallowed under Andhra Pradesh Value Added Tax Act, 2005 @
|
4.69
|
4.69
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- Disputed Input tax credit disallowed under The Central Sales Tax, 1956 #
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4.47
|
4.47
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@ litigation pending with Hon'ble High Court of Telangana; # litigation pending with Joint Commissioner of commerical Taxes (Appeals), Bangalore.
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|
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(iii) - Disputed entry tax levied under Andhra Pradesh Tax on Entry of Goods into Local Areas Act, 2001 on interstate purchases &
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3.77
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-
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- Disputed entry tax levied under Telangana Tax on Entry of Goods into Local Areas Act, 2001 on interstate purchases @
|
10.37
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10.34
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- Disputed amount levied under Central GST Act, 2017 on classification of flavored milk product &
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35.28
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-
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- Disputed milk cess levied on installed capacity under the Haryana Murrah Buffalo and other Milch Animal Breed Act, 2001 A
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10.31
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10.31
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& litigation pending with Hon'ble High Court of Andhra Pradesh; a litigation pending with Supreme Court of India
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|
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Based on the internal assessment and / or legal opinion, the Management is confident that, for the aforesaid mentioned contingent liabilities under paragraph (ii) and (iii) above, no further provision is required to be made as at 31 March 2022.
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| |
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(c) Guarantees excluding financial guarantees
|
2.38
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2.91
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45. Leases
The movement in lease liabilities is as follows:
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Particulars
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31 March 2022
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ear ended
31 March 2021
|
|
Balance at the beginning of the year
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44.87
|
65.49
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Additions during the year
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65.40
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17.01
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Finance cost accrued during the year
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6.77
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5.86
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Payment of lease liabilities
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(41.68)
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(43.49)
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Lease liabilities at the end of the year
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75.36
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44.87
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Current lease liabilities
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28.23
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22.51
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Non-current lease liabilities
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47.13
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22.36
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The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.
Rental expense recorded for short-term leases for the year ended 31 March 2022 was ' 37.14 (31 March 2021: ' 19.98). Leases not yet commenced to which the Company is committed aggregated to ' Nil as on 31 March 2022.
46. Segment reporting
In accordance with Ind AS 108 - 'Operating segments', segment information has been given in the consolidated financial statements of the Company and therefore no separate disclosure on segment information is given in these standalone financial statements.
Note: Reasons for change more than 25% is as under
(i) Principal reason for change in the current ratio is attributed to the increase in current assets balances as at 31 March 2022.
(ii) Principal reason for change in the debt equity ratio is attributed to the decrease in borrowings on account of prepayment of long
term borrowings during the year ended 31 March 2022.
(iii) Principal reason for change in the debt service coverage ratio is attributed to the increase in prepayment of loan term borrowings during the year ended 31 March 2021 when compared to prepayments made during the year ended 31 March 2022.
(iv) Principal reason for change in the return on equity ratio / return on investment ratio / net profit margin / return on capital employed is attributed to the increase in raw material prices resulting in decrease in profits reported during the year ended 31 March 2022 compared to the year ended 31 March 2021.
(v) Principal reason for change in net capital turnover ratio is attributed to the increase in current assets balances as at 31 March 2022.
(vi) Principal reason for change in trade payables turnover ratio is attributed to the increase in cost of goods sold during the year ended
31 March 2022, on account of increase in revenue from operations.
Explanation - The terms 'appointed day', 'buyer', 'enterprise', 'micro enterprise', 'small enterprise' and 'supplier' shall have the same meaning as assigned to them under clauses (b), (d), (e), (h), (m) and (n) respectively of section 2 of the Micro, Small and Medium Enterprises Development Act, 2006.
50 . Additional information as required under paragraph 5 of the part II of the Schedule III to the Act to the extent either "Nil” or "Not Applicable” has not been furnished.
This is the summary of significant accounting policies and other explanatory information referred to in our report of even date.
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