11 (iv) Terms and rights attached to equity shares:
(a) The company has only one class of equity shares having a par value of ' 10/- each. The equity shares of the Company ranks pari passu in all aspects including rights and entitlement to dividend. The Equity shareholders are entitled to one vote per share. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company in proportion to their shareholding.
(b) Dividend proposed by Board of Directors (' 20/- per Equity Share) (PY - ' 18/- per Equity Share) for the Financial Year 2024-25 for Face value of ' 10/- is subject to approval of Shareholders in ensuing Annual General Meeting.
11(vi) Out of Equity and Preference shares issued by the Company, shares held by its holding company, ultimate holding company and their subsidiaries/associates are as below: Nil
Terms: 500000 Share Warrants @ ' 1292/- per warrant issued to promoters on preferential basis with option to exercise their right within 18 months from the date of issue of warrants (13.03.2024) to be issued at ' 10/- per share at a premium of ' 1282/- per share.
As at the balance sheet date, an amount of ' 6,460 lakhs (Previous year; ' 1,615.00Lakhs) has been fully received from the subscribers of the warrants with the warrant holder having exercised their right and accordingly entire 5,00,000 share warrants has been converted into Equity shares of a face value of ' 10/-each at the premium of ' 1,282/- per share during the year as per the terms of the warrants.
The amount of ' 1,615 Lakhs received till the end of the previous financial year and disclosed under Other Equity as ‘Money received against Share warrants in Note no.12 to the financial statement along them amount received during the year has been transferred to Equity share Capital and Securities Premium to the tune of ' 50 lakhs and ' 6,410 lakhs respectively.
Rights: The share warrants shall not carry any voting rights untill they are converted into equity shares and the warrants by itself, until excercised and converted into equity shares, shall not give the warrant holders any rights with respect to that of an equity shareholder of the company.
Nature and Purpose of the Reserve:
Securities premium:
Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance withthe provisions of the Companies Act, 2013 Money received against Share warrants
Money received against Share warrants represents amount received towards share warrants issued by the company. The Company transfers amounts from this reserve to equity share capital and securities premium on allotment of shares against the said warrants.
General reserve:
This is available for distribution to shareholders.
Other Comprehensive Income:
The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within the FVOCI equity investments reserve within equity. The Company transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognised.
Retained earnings:
Company’s share of cumulative earnings since its formation minus the dividends/capitalisation and earnings transferred to general reserve.
13 (i) (a) There was no default in the repayment of loans, borrowing and interest during the year.
(b) Interest rate relating to fixed deposits is in the range of 7.30% to 9.00% during the year
(c) The fixed deposits are repayable on maturity, the period for which ranges from 1 to 3 years.
Level 1:
This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities. This category consists of investment in quoted equity shares
Level 2:
The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3:
This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair value is determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. This Level includes investment in unquoted equity shares.
There are no transfers between levels 1, 2 and 3 during the year.
The company’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period.
(ii) Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
- the use of quoted market prices or dealer quotes for similar instruments
(i) Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
- the fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date.
- the fair value of the remaining financial instruments is determined using discounted cash flow analysis.
All of the resulting fair value estimates are included in level 2 except for unlisted equity securities where the fair values have been determined based on book value per share as per the latest available financial statements.
Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of the amounts that the Company could have realised or paid in sale transactions as of respective dates.
Details of the investment property and its fair value:
Investment property disclosed is net of depreciation.
The fair values of investment properties have been determined based on the valuation report of a certified engineer.
29 FINANCIAL INSTRUMENTS Capital Management
The Company manages its capital to ensure that the Company will be able to continue as going concern, while maximising the return to stakeholders through the optimisation of the debt and equity balance.
The Company determines the amount of capital required on the basis of annual operating plans and longterm product and other strategic investment plans. The funding requirements are met through equity, cash generated from operation, long term and short-term borrowings.
Financial risk Management objectives
The treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.
The Company seeks to minimise the effects of these risks by using natural hedging financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Company’s policies approved by the board of Directors, which provide written principles on foreign exchange risk, the use of financial derivatives, and the investment of excess liquidity. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.
Market risk
Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the price of a financial instrument. The Company’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Company actively manages its currency and interest rate exposures through its finance division and uses derivative instruments such as forward contracts and currency swaps, wherever required, to mitigate the risks from such exposures. The use of derivative instruments is subject to limits and regular monitoring by appropriate levels of Management.
The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The Company actively manages its currency rate exposures and uses natural hedging principles to mitigate the risks from such exposures. The use of derivative instruments, if any, is subject to limits and regular monitoring by appropriate levels of management.
liability and the liability during the year is not material to the company, hence it is considered that the company is not exposed materially to the interest rate changes.
Movement in the functional currencies of the various operations of the Company against major foreign currencies may impact the Company’s revenues from its operations. Any weakening of the functional currency may impact the Company’s cost of imports and cost of borrowings and consequently may increase the cost of financing the Company’s capital expenditures. The foreign exchange rate sensitivity is calculated for each currency by aggregation of the net foreign exchange rate exposure of a currency and a simultaneous parallel foreign exchange rates shift in the foreign exchange rates of each currency by 5%, which represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in foreign currency rates.
Credit risk management
Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of credit worthiness as well as concentration risks.
Exposure to credit risk
Financial instruments that are subject to credit risk and concentration thereof principally consist of trade receivables, loans receivables, balances with bank, bank deposits provided by the Company. None of the financial instruments of the Company result in material concentration of credit risk except loans provided to wholly owned subsidiary.
Offsetting related disclosures
Offsetting of cash and cash equivalents to borrowings as per the consortium agreement is available only to the bank in the event of a default. Company does not have the right to offset in case of the counter party’s bankruptcy, therefore, these disclosures are not required.
Liquidity risk Management
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk Management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company invests its surplus funds in bank fixed deposit . The Company also constantly monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility.
Liquidity tables
The following tables detail the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.
In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.
Interest rate risk Management
The Company is exposed to interest rate risk because it borrow funds at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings.
For details of the Company’s long-term and short-term loans and borrowings, including interest rate profiles, refer to Note 13 and 15 of these financial statements.
Interest rate sensitivity analysisFixed Rate Instruments
The company’s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in IND AS 107, since neither the carrying amount nor the future cash flow will fluctuate because of a change in market interest rates.
Variable Rate Instruments
A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased / decreased equity and profit or loss. The company as at the Balance Sheet date doesn’t have any floating rate
34 EMPLOYEE BENEFIT PLANS Defined Contribution plans:
The Company makes Providend Fund and Superannuation Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized ' 1275.38 Lakhs (PY - ' 1,170.79 Lakhs) for Providend Fund contributions and ' 35.88 Lakhs (PY - ' 25.75 Lakhs) for Superannuation Fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the Schemes.
State plans:
The Company makes ESI contributions to Employees State Insurance Scheme. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised ' 196.83 Lakhs (PY - ' 205.36 Lakhs) in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the Scheme.
Defined Benefit Plan - Gratuity:
The Company provides gratuity benefit (included as part of employees contribution to funds in Note 23 Employee benefits expense) to all eligible employees, which is funded with Life Insurance Corporation of India.
The following table sets out the funded status of the defined benefit schemes and the amount recognised in the financial statements
v Risk exposure:
The Company’s Gratuity fund is maintained by an approved trust (Life Insurance Corporation of India). A large portion of the investment made by the LIC is in government bonds and securities and other approved securities. Hence, the Company is not exposed to the risk of asset volatality as at the balance sheet date.
vi Defined benefit liability and employer contributions:
The weighted average duration of the defined benefit obligation is 16.54 years (PY - 14.85 years). The expected maturity analysis of undiscounted gratuity is as follows:
45 The Company’s borrowings from banks or financial institutions on the basis of security of current assets and the quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts.
46 The company is not declared as a wilful defaulter by any bank or financial institution
47 The company has no relationship with struck-off companies.
48 The company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.
49 The company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to or in any other person or entity, including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
50 The company has not been received any funds from any person or entity, including foreign entity (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
51 The company has no income which has been surrendered or disclosed as income during the year in any of the tax assessments under the Income Tax Act 1961.
52 The company has not traded/invested in crypto currency/ virtual currency during the financial year.
53 There are no charges or satisfaction of charges that are yet to be registered with Registrar of Companies beyond the statutory period.
54 The company has not issued any securities for a specific purpose.
55 The company has utilised the borrowings from banks and financial institutions for the purpose for which it was availed.
56 There were no significant events that occurred after the Balance Sheet date apart from the ones mentioned in “Material Changes and commitments affecting the financial position between the end of the fiscal and date of the report’ in the Board’s report
57 Since the Company prepares consolidated financial statements, segment information as revised by IND AS 108 “Operating Segments” has been disclosed in consolidated financial statements.
58 Exceptional item represents subsidy received amounting to ' 1250.05 Lakhs (Previous year - ' 995.04 Lakhs) and the Profit / (loss) on sale of Fixed Assets ' 1052.63 Lakhs (Previous year - ' -314.37 Lakhs).
59 Previous year figures have been regrouped and reclassified, wherever necessary, to correspond with the current year’s classification/disclosure.
60 The Code on Social Security 2020 has been notified in the Official Gazette on 29th September 2020. The effective date from which the changes are applicable is yet to be notified and the rules are yet to be framed. Impact, if any of the change will be assessed and accounted in the period in which the said Code becomes effective and the rules framed thereunder are published.
61 The Company had made private placement of 5,00,000 fully convertible warrants to Promoter’s Group, each convertible into 1 Equity share of ' 10/- face value at an issue price of ' 1,292/- per share . On January’2024, the warrants were issued for which the investors (Promoters) had to pay 25% of total price upfront. On September, 2024, the warrants issued were converted into shares after receipt of balance 75% of total price. The funds were used as mentioned in the offer letter.
62 The Company had acquired M/s RSAL Steel Private Limited (“RSAL”) through Corporate Insolvency Resolution Process approved by the Hon’ble National Company Law Tribunal vide its order dated 09.01.2024 for a consideration of ' 3,636.77 Lakhs. Consequently RSAL has become a wholly owned subsidiary with effect from that date.
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