a. The Company measured all of its Investment Property at Cost in accordance with Ind AS 40.
b. During the year, Additions under Free hold Land & Buildings are made for ' 2.71 lakhs and ' 18.04 lakhs respectively in view of change in usage.
c. During the year, withdrawal/Adjustments under Lease hold Land & Building include recalssification from Investment Property Land & Buildings of ' 6.29 lakhs and ' 210.24 lakhs respectively in view of change in usage.
d. The Company has no restrictions on the disposal of its investment properties and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.
e. The fair valuation of the investment properties are valued by Registered Valuer, has required by amendments made to Schedule III of the Companies Act, effective from 01.04.2021, measured using the technique of quoted prices for similar assets in the active markets or recent price of similar properties in less active markets and adjusted to reflect those differences. All resulting fair value estimates for investment properties as given below are included in Level 2. During previous years, the fair valuation of these investment properties were determined by an internal technical team and the fair value of the investment property approximates to the historical cost at which its was carried.
a. The Company has accounted for investments in Subsidiaries and Associates at Cost. Refer Note Nos. 43 (a) and 43 (b) for information on principal place of business / country of incorporation and company’s interest / percentage of shareholding in the above subsidiaries and associates.
b. The carrying amount of Investment in Subsidiaries / Associates is tested for impairment in accordance with Ind AS 36. These investments are strategic and long term in nature. Impairment testing is carried out for listed securities based on fair market value as per stock exchange. However, in case of unlisted securities, impairment testing is carried out based on the recent trade transactions with third parties or DCF method, wherever applicable. Accordingly, no impairment is considered necessary as at the reporting date.
c. During the year, the company has made additional investment of ' 5,061.31 lakhs (5,75,550 equity shares) in The Ramco Cements Limited.
d. During the year, the Company has made strategic investments in equity shares of Lynks Logistics Limited for ' 950.94 Lakhs (9,50,94,028 Equity shares). The investee company has proposed to apply this funds for expansion of their business.
e. During the year, the company has been allotted 21227 equity shares of Rajapalayam Mills Ltd under rights issue entitlement for ' 120.78 lakhs.
Fair Value through Other Comprehensive Income Reserve represents the balance in equity for items to be accounted in Other Comprehensive Income (OCI). The Company has opted to recognise the changes in the fair value of certain investments in equity instruments and remeasurement of defined benefit obligations in OCI. The Company transfers amounts from this reserve to Retained Earnings in case of actuarial loss / gain and in case of fair value recognition of equity instrument, the same will be transferred when the respective equity instruments are derecognised.
a. Short term Borrowings from Banks (other than Current maturities of Long term borrowings) are secured by way of first pari passu hypothecation charge on trade receivables and inventories of the Company, present and future. The quarterly returns or statement filed by the Company with the banks or financial institutions are in agreement with the books of accounts.
b. Loans and advances from Directors represents amount due to Managing Director, which carries an interest. Interest rate have quarterly rest and is equivalent to interest rate of Short term borrowings. The interest accrued during the year amounts to ' 4.43 Lakhs (PY: ' 3.18 Lakhs).
c. The Company has used the borrowings from banks and financial institutions for the specific purpose for which it was taken as at reporting date.
a. Trade payables are non-interest bearing and are normally settled in 10 to 30 days, except where credit term as per contractual obligation is more than 30 days.
b. The dues to Micro and Small Enterprises as at 31-03-2022 is ' 476.04 lakhs (PY: ' 337.51 lakhs). This has been determined to the extent such parties have been identified on the basis of information available with the Company.
c. The dues to related parties are dues to Associate entities and due not more than 45 days. [Refer Note No. 44 (b) (2)]
d. Refer Note No. 46 and 49 (a) for information about risk profile of Trade payables under Financial Risk Management and Ageing Schedule respectively.
a. The Company provides for expenses towards compensated absences provided to its employees. The expense is recognised at the present value of the amount payable determined based on an independent external actuarial valuation as at the Balance sheet date, using Projected Unit Credit method.
b. The company maintains Gratuity fund account in LIC of India. The Company provides for expenses towards Gratuity to its employees. The expense is recognised at the present value of the amount payable determined based on an independent external actuarial valuation as at the Balance sheet date, using Projected Unit Credit method.
(a) As per the Guidance Note on Division II, Ind AS Schedule III to the Companies Act, 2013 issued by ICAI, Revenue includes only the gross inflows of economic benefits received and receivable by the entity on its own account. Amounts collected such as sales taxes, goods and services taxes and value added taxes are not economic benefits which flow to the entity and do not result in increases in equity. Therefore, they have been excluded from revenue.
(b) Industrial Promotion Assistance from:
- Government of Rajasthan - ' 35.18 lakhs [PY - ' NIL]
- Deferred Grant recognised as income -' 9.77 lakhs [PY-' 11.70 lakhs]
(c) Out of Royalty Income of 3035.08 lakhs, a sum of ' 510.04 lakhs is received during the year. The receipt of balance amount is getting delayed due to repatriation restrictions imposed by Central Bank of Sri Lanka on account of prevailing economic situation in that country.
(d) Out of 231.95 lakhs units [PY - 238.69 lakhs units] generated by our windmills, 50.99 lakhs units [PY - 46.46 lakhs units] were sold to concerned state Electricity Board, 180.12 lakhs units [PY - 193.78 lakhs units] were consumed at our plant and 3.74 lakhs units [PY - 2.90 lakhs units] remain unadjusted.
(e) The Company’s Revenue from sale of products is recognised upon transfer of control of such products to the customer at a point of time. Revenue from windmills is recognised upon transmission of energy to the grids of state electricity boards. The revenue from project contract is recognised on using percentage of completion method.
38.2.1 Income tax demand amounting to ' 3,252.64 Lakhs (PY ' 3,362.89 Lakhs) have been disputed by the company and the company has preferred appeals before appellate authorities in respect of various disallowances in assessments and the appeals are pending. Out of this demand ' 1,084.27 Lakhs (PY ' 1,447.40 Lakhs) is provided in books of accounts. Balance amount of ' 2,168.37 Lakhs (PY ' 1915.49 Lakhs) is not acknowledged as Debts by company. In the opinion of the Management, there may not be any further tax liability with regard this contingent liability and due to this no provision has been considered necessary.
38.2.2 Govt. has announced in the Budget 2021-22 that a new Direct tax Vivad se Vishwas (VSV) Scheme launched. Taxpayer would be required to pay only the amount of the disputed taxes. The taxpayer will get a full waiver of interest and penalty on comply with Scheme conditions. We have opted for this scheme for six assessment year as mentioned below for settling the disputes which are pending for very long time.
38.2.3 Sales tax demand amounting to ' 283.92 Lakhs (PY ' 362.81 Lakhs) have been disputed by the company and the company has preferred appeals before appellate authorities in respect of various disallowances in several assessments and the appeals are pending. Above amount is fully provided in the books of accounts.
38.2.4 The Company had put up a plant in Silvassa in The Union Territory of Daman, Diu, Dadra and Nagar Haveli in the year 1998 and availed VAT and CST exemption for the period of 15 years ending on March 2013 based on a certificate of exemption given by appropriate authority in exercise of powers conferred on it by relevant provision of the CST Act, 1956. This power of granting exemption was withdrawn with retrospective effect by an amendment in Finance Act 2002 and the sales tax department has followed it up by issuing a circular for compulsory production of concessional sales tax forms for availing CST exemption. The differential sales tax liability for the year 1998 to the year 2002 works out to ' 37 Crores. However, the Company was not in receipt of any demand from the appropriate authority. Aggrieved by the department circular and as an additional precaution, the Company had filed an appeal with Bombay High Court and the Bombay High Court has quashed the circular issued by the Commercial tax department, Silvassa, The Union Territory of Daman, Diu, Dadra and Nagar Haveli thereby allowing continuance of CST exemption even after amendment of relevant provision of CST Act, 1956 by the Finance Act, 2002. But the department of Commercial Tax, Silvassa has preferred an appeal against the Bombay High Court order before the Honourable Supreme Court and the adjudication and the court hearing is in process pending final disposal by the Honourable Supreme Court.
Based on the decision of Bombay High Court and interpretations of other relevant provisions, the Company has been legally advised that there will not be any demand likely to be raised or if the demand is raised it is likely to be deleted or substantially reduced and accordingly no provision is considered necessary.
38.2.5 Entry tax demand amounting to ' 29.19 Lakhs (PY ' 19.69 Lakhs) have been disputed by the company and the company has preferred appeals before appellate authorities in respect of this disallowances and the appeal are pending. This demand of ' 29.19 Lakhs (PY ' 19.69 Lakhs) is provided in books of accounts.
The Government of West Bengal enacted “The West Bengal Tax on Entry of goods into Local Areas Act, 2012” and writ petitions was filed by the Company challenging the validity of the said Act. The Calcutta High Court passed an order on 20.04.2017 stating that it is no longer retains the jurisdiction over the subject writ petition and directed “West Bengal Taxation tribunal” to decide the case. The Company has filed additional petition with “West Bengal Taxation tribunal” during the FY 2018-19. The Hon’ble West Bengal Tribunal passed an order dated 25.03.2022, stating that the State of West Bengal had no legislative competence to introduce Sections 5 and 6 (Entry tax) of the West Bengal Finance Act, 2017 and declared the said provisions to be ultra vires and unconstitutional.
The company has paid and expensed the said tax upto May 2013 from its inception. Company also made provision in the book of accounts for the above tax for ' 295.37 Lakhs for the period from June 2013 to Jun 2017. Provision has been made in the books of accounts for interest to the extent of ' 498.70 Lakhs (Previous year ' 427.81 Lakhs)
38.2.6 GST demands amounting to ' 0.99 Lakhs (Previous year: 0.99 Lakhs) have been disputed by the Company and necessary appeals have been filed. This amount is fully provided in books of Accounts.
38.2.7 In respect of the electricity matters relating to our Textile Division, the Company has filed appeals / writ petition for ' 291.87 lakhs (PY: ' 291.87 lakhs) against various subject to the matter of the appeal and the same is pending with Tamilnadu Electricity Regulatory Commission (TNERC) / Honourable High Court / Honourable Supreme Court for resolution. The Company is confident of resolving the matter in its favour and hence no provision is made in the books of accounts.
38.2.8 Under Tamil Nadu Electricity Regulatory Commission (Renewable Energy Purchase Obligations) Regulations 2010, consumers owning grid connected captive power generating plants and open access consumers with a sanctioned demand of more than 2 MVA are obligated to consume a minimum of 0.5% of their energy requirements from solar sources. The non-complainants are required to purchase Renewable Energy Certificates (REC) from markets @ 1 REC per 1,000 units of shortage or deposit an equivalent amount in a separate designated fund. Even though the Company is consuming wind energy generated from its own wind farms, it has been excluded for reckoning the obligatory consumption, since the Company has wheeling and banking arrangement with TNEB. Aggrieved, the Company including other affected producers have approached the Honourable High court of Madras and obtained an interim stay against the implementation of the said regulation.
38.2.9 The Company received a notice from the Department of Revenue Intelligence (DRI) for an amount of ' 41.23 lakhs excluding interest and penalty pertaining to the year 2009-10 for short payment of customs duty to the extent of utilization of DEPB Scrip’s purchased in the open market by the Company and which were originally obtained by the ultimate export firms fraudulently as alleged by the DRI. The Company had denied the allegations made in the notice in so far as they relate to the Company’s role is concerned and also the obligation to pay the duty demanded in the notice vide its letter dated August 4, 2014. We attended the personal hearing before the assistant commissioner of customs JNPT Mumbai during October 2016 and awaiting for the favourable order. The Management is confident of resolving the matter in favour of the Company and hence no provision is considered necessary.
38.3 (A) The Company is eligible for incentives under the “Bihar Industrial Incentive Policy 2006” in respect of its Fibre
Cement Plant at Bihiya in the State of Bihar. During the year under review,
• We have recognised a sum of ' 9.77 lakhs (PY 11.70 lakhs) due to fair valuation of Govt. Grants as per Ind AS.
• Incentive Scheme under GST regime from 1st July, 2017 has been announced by the Gov. of Bihar. Company has applied for the same and is awaiting for approval from Govt.
(B) The company is eligible for incentive under the “Rajasthan Investment Promotion Scheme 2010” in respect of its Calcium Silicate Board Plant at Kotputli in the state of Rajasthan, during the year under review,
• A sum of ' 35.18 lakhs (Previous year: Nil) received as Industrial Promotion Assistance has been credited to Profit and loss Account which was received as per VAT scheme.
• Incentive Scheme under GST regime from 1st July, 2017 has been announced by the Gov. of Rajasthan. Company has applied for the same and is awaiting for approval from Govt
46. FINANCIAL RISK MANAGEMENT
The Board of Directors (BOD) has overall responsibility for the establishment and oversight of the Company’s risk management framework and thus established a risk management policy to identify and analyses the risk faced by the Company. Risk Management systems are reviewed by the BOD periodically to reflect changes in market conditions and the Company’s activities. The Company through its training and management standards and procedures develop a disciplined and constructive control environment in which all employees understand their roles and obligations. The Audit Committee oversees how management monitors compliance with the Company’s risk management policies and procedures, and reviews the risk management framework. The Audit committee is assisted in the oversight role by Internal Audit. Internal Audit undertakes reviews of the risk management controls and procedures, the results of which are reported to the Audit Committee.
The Board of Directors regularly reviews these risks and approves the risk management policies, which covers the management of these risks:
Credit Risk
Credit Risk is the risk of financial loss to the Company if the customer or counterparty to the financial instruments fails to meet its contractual obligations and arises principally from the Company’s receivables, treasury operations and other operations that are in the nature of lease.
Receivables
The Company’s exposure to credit risk is influenced mainly by the individual characteristic of each customer. The Company extends credit to its customers in the normal course of business by considering the factors such as financial reliability of customers. The Company evaluates the concentration of the risk with respect to trade receivables as low, as its customers are located in several jurisdictions and operate in largely independent markets. The Company maintains adequate security deposits from its customers in case of wholesale and retail segment. The exposures with the Government are generally unsecured but they are considered as good. However, unsecured credits are extended based on creditworthiness of the customers on case to case basis.
Financial Instruments and Cash deposits
I nvestments of surplus funds are made only with the approved counterparties. The Company is presently exposed to counter party risk relating to short term and medium term deposits placed with banks, and also investments made in mutual funds. The Company places its cash equivalents based on the creditworthiness of the financial institutions.
Liquidity Risk
Liquidity Risks are those risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. In the management of liquidity risk, the Company monitors and maintains a level of cash and cash equivalents deemed adequate by the management to finance the Company’s operations and to mitigate the effects of fluctuations in cash flows.
Fund Management
Due to the dynamic nature of the underlying business, the Company aims at maintaining flexibility in funding by keeping both committed and uncommitted credit lines available. The Company has laid well defined policies and procedures facilitated by robust information system for timely and qualitative decision making by the management including its day to day operations
Foreign Currency Risk
The Company’s exposure in USD and other foreign currency denominated transactions in connection with import of raw material, capital goods and spares, besides exports of finished goods and borrowings in foreign currency, gives rise to exchange rate fluctuation risk. The Company has following policies to mitigate this risk:
Decisions regarding borrowing in Foreign Currency and hedging thereof, (both interest and exchange rate risk) and the quantum of coverage is driven by the necessity to keep the cost comparable. Foreign Currency loans, imports and exports transactions are hedged by way of forward contract after taking into consideration the anticipated Foreign exchange inflows/outflows, timing of cash flows, tenure of the forward contract and prevailing Foreign exchange market conditions.
Cash flow and fair value interest rate risk
Interest rate risk arises from long term borrowings with variable rates which exposed the company to cash flow interest rate risk. The Company’s fixed rate borrowing are carried at amortized cost and therefore are not subject to interest rate risk as defined in Ind AS 107 since neither the carrying amount nor the future cash flows will fluctuate because of the change in market interest rates. The Company is exposed to the evolution of interest rates and credit markets for its future refinancing, which may result in a lower or higher cost of financing, which is mainly addressed through the management of the fixed/floating ratio of financial liabilities. The Company constantly monitors credit markets to strategize a well-balanced maturity profile in order to reduce both the risk of refinancing and large fluctuations of its financing cost. The Company believes that it can source funds for both short term and long term at a competitive rate considering its strong fundamentals on its financial position. Sensitivity on interest rate fluctuation.
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 interest-bearing loans and borrowings that define capital structure requirements. There have been no breaches in the financial covenants of any interest-bearing loans/borrowing. The Company has been consistently focusing on reduction in long term borrowings. There are no significant changes in the objectives, policies or processes for managing capital during the years ended 31-03-2022 and 31-03-2021.
48. PROJECT REVENUE RECOGNITION
Contract revenue from Project activity on fixed price contracts is recognized when the outcome of the contract is ascertained reliably, contract revenue is recognized at cost of work performed on the contract plus proportionate margin, using percentage of completion method. Percentage of completion is determined based on work certified by the customer.
Disclosure as per Indian Accounting Standard - 11 in respect of projects in progress
[a] Contract Revenue during the year ' 217.02 Lakhs [PY: 129.74 Lakhs]
[b] Aggregate amount of cost incurred ' 201.33 Lakhs [PY: 132.91 Lakhs] and recognised profit ' 15.69 Lakhs [PY: (3.17) Lakhs] (less recognised losses) to date
[c] Advances received [Outstanding] ' 26.73 Lakhs [PY: 13.30 Lakhs]
[d] Retention Money [Outstanding] ' 31.12 Lakhs [PY: 24.00 Lakhs]*
[e] Gross Amount due from Customers for Contract Work [including Retention at (d) above] ' 92.56 Lakhs [PY: 69.19 Lakhs]
[f] Gross Amount due to Customers for Contract Work [other than advances at (c) above] - Nil
[g] Unbilled revenue - Nil
* Retention Money [Outstanding] is after adjusting amounts released against furnishing of Bank Guarantees.
Unbilled Revenue represents revenue recognised based on percentage of completion method over and above the amount due from the customers as per the agreed payment plans.
e. Unbilled Revenue Ageing Schedule
The Company do not have any such transaction.
f. Undisclosed Income
The Company do not have any transaction which are not recorded in the books of accounts that has been surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961 during any of the years.
g. CSR Disclosure:
Disclosure has been given in (Note no:34 (b) & (c)) of note on accounts.
h. Compliance with approved Scheme(s) of arrangements.
The Company do not have any such approved Scheme(s) of arrangements.
i. Relationship with Struck off Companies
The Company did not have any transactions with Companies struck off under Section 248 of Companies Act, 2013 or Section 560 of Companies Act, 1956 considering the information available with the Company.
j. Details of Crypto Currency or Virtual Currency
The Company did not trade or invest in Crypto Currency or virtual currency during the financial year.
k. Disclosure on loans / advance to directors / KMP / related parties:
Disclosure has given in note on accounts (Note no:9 (a) & (b)) as per the Schedule III.
l. Benami Property
The Company did not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
m. The Company has neither advanced or loaned or invested, nor received any fund, to or from, any other persons or entities including foreign entities (intermediaries) with the understanding that the intermediary shall:
i. Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company or
ii. Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.
Formula adopted for above Ratios:
(a) Current Ratio = Total Current Assets / Total Current Liabilities
(b) Debt-Equity Ratio = Total Debt / Total Equity
(c) Debt Service Coverage Ratio = (EBITDA - Current Tax) / (Principal Repayment Gross Interest)
(d) Return on Equity Ratio = Total Comprehensive Income / Average Total Equity
(e) Inventory Turnover Ratio = (Average Inventory days) = 365 / (Net Revenue / Average Inventories)
(f) Trade receivable Turnover Ratio = (Average Receivables days) = 365 (Net Revenue / Average Trade receivables)
(g) Trade payable Turnover Ratio = (Average Payables days) = 365 (Net Revenue / Average Trade payables)
(h) Net Capital Turnover Ratio = (Inventory Turnover Ratio Trade Receivable Turnover Ratio - Trade Payable Ratio)
(i) Net Profit Ratio = Net Profit / Total Income
(j) Return on Capital Employed = (Total Comprehensive Income Interest) / (Average of (Equity Total Debt))
(k) Return on Investment (Assets) = Total Comprehensive Income / Average Total Assets
Reasons for Variation if more than 25%
The increase in Debt-Equity Ratio by 29% from 0.17 times in previous year to 0.22 times in current year is mainly due to increased Working capital borrowing.
The increase in Debt-Service Coverage Ratio by 119% from 3.52 times in previous year to 7.73 times in current year is mainly due to Lower Term Loan repayments and reduced interest rates
The decline in Return on Equity Ratio by 26% from 15% in previous year to 11% in current year is mainly due to decrease in operational margin.
The decline in Return on Investment (Assets) Ratio by 25% from 10% in previous year to 7% in current year is mainly due to decrease in operational margin and increase in assets.
51. THE CODE ON SOCIAL SECURITY, 2020 AND INDUSTRIAL RELATIONS CODE, 2020
The Central Government has published The Code on Social Security, 2020 and Industrial Relations Code,2020 (“the codes”) in the Gazette of India, inter alia, subsuming various existing labour and industrial laws which deals with employees including postemployment period. The effective date of the code and the rules are yet to be notified. The impact of the legislative changes if any will be assessed and recognised post notification of relevant provisions
52. IMPACT ON COVID 19 PANDEMIC
The second wave of COVID 19 has impacted the demand for the product as the pandemic is now affecting rural areas also. The Company is continuing its operations in compliance with the directives issued by the Government Authorities. The company is monitoring the situation closely and is taking necessary steps to continue operations in due compliance with applicable regulations.
The Company has considered the possible effects that may result from the pandemic relating to COVID19 in the preparation of these standalone financial statements including the recoverability of carrying amounts of financial and nonfinancial assets. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, the Company has, at the date of approval of these financial statements, used internal and external sources of information including economic forecasts and expects that the carrying amount of these assets will be recovered. However, the final impact may differ from the current estimates made as at the date of approval of the financial statements for the year ended 31-03-2022 considering the prevailing uncertainties.
54. The previous period figures have been re-grouped / restated wherever considered necessary.
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