(r) Provisions and contingencies
A provision is recognised when the Company has a present
obligation as a result of past event and it is probable that an
outflow of resources will be required to settle the obligation,
in respect of which a reliable estimate can be made. The
amount recognised as a provision is the best estimate of the
consideration required to settle the present obligation at the
end of the reporting period, taking into account the risks and
uncertainties surrounding the obligation.
(s) Earnings per share:
Basic earnings per share is computed by dividing the profit /
(loss) after tax (including the post tax effect of extraordinary
items, if any) by the weighted average number of equity
shares outstanding during the year. Diluted earnings per
share is computed by dividing the profit / (loss) after tax
(including the post tax effect of extraordinary items, if any) as
adjusted for dividend, interest and other charges to expense
or income (net of any attributable taxes) relating to the
dilutive potential equity shares, by the weighted average
number of equity shares considered for deriving basic
earnings per share and the weighted average number of
equity shares which could have been issued on the
conversion of all dilutive potential equity shares. Potential
equity shares are deemed to be dilutive only if their
conversion to equity shares would decrease the net profit per
share from continuing ordinary operations. Employee share
options with fixed or determinable terms and non-vested
ordinary shares are treated as options in the calculation of
diluted earnings per share, even though they may be
contingent on vesting. They are treated as outstanding on the
grant date.
(t) Business Combination:
In determining whether a particular set of activities and
assets is a business, the Company assesses whether the set
of assets and activities acquired includes, at a minimum, an
input and substantive process and whether the acquired set
has the ability to produce outputs. The Company has an
option to apply a 'concentration test' that permits a simplified
assessment of whether an acquired set of activities and
assets is not a business. The optional concentration test is
met if substantially all of the fair value of the gross assets
acquired is concentrated in a single identifiable asset or
company of similar identifiable assets.
Acquisitions of businesses are accounted for using the
acquisition method. The consideration transferred in a
business combination is measured at fair value, which is
calculated as the sum of the acquisition date fair value of
assets transferred by the Company, liabilities incurred by the
Company to the former owners of the acquiree and the equity
interest issued by the Company in exchange of the controlof
the acquiree. Acquisition related costs are recognised in
Statement of Profit and Loss as incurred.
Business combination involving entities or businesses under
common control are accounted for using the pooling of
interest method. Under pooling of interest method, the assets
and liabilities of the combining entities / business are
reflected at their carrying value.
Purchase consideration paid in excess / shortfall of the fair
value of identifiable assets and liabilities including contingent
liabilities and contingent assets, is recognised as goodwill /
capital reserve respectively.
Deferred tax assets and liabilities and assets or liabilities
related to employee benefits arrangements are recognized
and measured in accordance with Ind AS 12 "Income Taxes"
and Ind AS 19 "Employee Benefits" respectively.
Potential tax effects of temporary differences and carry
forwards of an acquiree that exist at the acquisition date or
arise as a result of the acquisition are accounted in
accordance with Ind AS 12.
Goodwill arising on an acquisition of a business is carried at
cost as established at the date of acquisition of the business
less accumulated impairment losses, if any. For the purposes
of impairment testing, goodwill is tested at the independent
cash generating unit. A cash-generating unit to which
goodwill has been allocated is tested for impairment
annually, or more frequently when there is an indication that
the unit may be impaired. If the recoverable amount of the
cash-generating unit is less than its carrying amount, the
impairment loss is allocated first to reduce the carrying
amount of any goodwill allocated to the unit and then to the
other assets of the unit pro rata based on the carrying amount
of each asset in the unit. Any impairment loss for goodwill is
recognised directly in profit or loss. An impairment loss
recognised for goodwill is not reversed in subsequent
periods.
(u) Operating cycle:
Based on the nature of products / activities of the Company
and the normal time between acquisition of assets and their
realization in cash or cash equivalents, the Company has
determined its operating cycle as 12 months for the purpose
of classification of its assets and liabilities as current and
non-current.
(v) Other borrowing costs:
Borrowing costs directly attributable to the acquisition or
construction of qualifying assets, which are assets that
necessarily take a substantial period of time to get ready for
their intended use or sale, are added to the cost of those
assets, until such time as the assets are substantially ready
for their intended use or sale.
All other borrowing costs are recognised in statement of
profit and loss in the period in which they are incurred.
The entity suspends capitalisation of borrowing costs during
extended periods in which it suspends active development of
a qualifying asset.
The entity determines the amount of borrowing costs
eligible for capitalisation as the actual borrowing costs
incurred on that borrowing during the period less any
interest income earned on temporary investment of
specific borrowings pending their expenditure on
qualifying assets, to the extent that an entity borrows
funds specifically for the purpose of obtaining a
qualifying asset. If any specific borrowing remains
outstanding after the related asset is ready for its
intended use or sale, that borrowing becomes part of the
funds that an entity borrows generally when calculating
the capitalisation rate on general borrowings. In case if
the entity borrows generally and uses the funds for
obtaining a qualifying asset, borrowing costs eligible for
capitalisation are determined by applying a capitalisation
rate to the expenditure on that asset.
2 Recent Indian Accounting Standards (Ind AS)
Ministry of Corporate Affairs ("MCA") notifies new
standard or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as
issued from time to time. For the year ended 31st March,
2024, MCA has not notified any new standards or
amendments to the existing standards applicable to the
Company.
Footnotes:
i) For details of pledged assets, refer note 49
ii) Salaries, wages and overheads of Rs. 12.58 millions (Previous year : Rs. 11.55 millions) being directly attributable to construction of property, plant and equipment have been capitalised.
iii) Interest of Rs.38.88 millions (Previous year : Rs. Nil) capitalised during the year ended 31st March, 2024.
iv) The Company is not holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988).
v) The Company makes an assessment for impairment of Property, Plant and Equipment when facts and circumstances indicate that carrying values of such assets may not be recoverable. When
evaluating for impairment, the carrying value of the asset is compared to the asset's estimated future undiscounted cash flows. The trigger for impairment occurs if the estimated undiscounted
future cash flows are less than the carrying value of the asset. The value of impairment is determined by comparing the carrying value of the asset to the asset's recoverable value and recognize
an impairment charge when the asset's carrying value exceeds its estimated recoverable value. The recoverable value of the asset is estimated using a discounted cash flow model based on
forecasted future revenues and operating costs, using internal projections. The impairment test is performed at the independent cash generating unit (CGU) level. Depreciation for the year includes
impairment of Rs. 1.27 millions (Previousyear Nil).
Footnotes:
(i) Interest of Rs.10.62 millions capitalised during the year ended 31st March, 2024 (Previous year : Rs. 17.18 millions).
(ii) Salaries, wages and overheads of Rs. 54.66 millions (Previous year : Rs. 144.36 millions) being directly attributable to
construction of capital work in progress have been capitalised.
(iii) There are no cost overrun/ timeline delay in any of the Projects as at 31st March, 2024 and 31st March, 2023.
Note 3(c): Goodwill :
Goodwill represents the cost of acquired business as established at the date of acquisition of the business in excess of the
acquirer's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities less accumulated
impairment losses, if any. Goodwill is tested for impairment annually or when events or circumstances indicate that the
implied fair value of goodwill is less than its carrying amount.
13 (a): Details of rights, preferences and restrictions attached to the equity shareholders:
The Company has only one class of equity shares having at par value of Rs.10/- per share. Members of the Company holding
equity share capital therein have a right to vote, on every resolution placed before the Company and right to receive dividend.
The voting rights on a poll is in proportion to the share of the paid-up equity capital of the Company held by the shareholders.
In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution
of all preferential amounts, in proportion to their shareholding and are subject to the preferential rights of the Preference
shares.
13 (b) Details of rights, preferences and restrictions attached to the preference shareholders:
The term Series K of Compulsorily Convertible Preference Shares ("CCPS1') shall be for a period of 20 years from the date of
their issuance. Each CCPS, having a dividend rate of 0.001% payable at the discretion of the Company, shall be participating
preference share denominated in Indian Rupees and shall be fully and compulsorily convertible into Equity Shares in future date
anytime during the tenure of CCPS in accordance with terms of issuance. Each holder of CCPS shall be entitled to receive
notice of, and to attend, General Meetings of the Company. Except as provided under applicable laws, Series K CCPS shall not
carry any voting rights. During the current year, the Board of Directors have not declared any dividend on the preference shares.
The Company will issue variable number of shares, based on the terms as defined in the shareholder's agreement. During the
year the company has converted CCPS into equity shares.
Nature and purpose of reserves:
(a) Securities premium is used to record the premium on issue of shares. The reserve shall be utilised in accordance with the
provisions of section 52 of the Companies Act, 2013.
(b) Share options outstanding account: The Company has an employee share option scheme under which options to
subscribe for the Company's shares have been granted to the key employees and directors. The share option outstanding
account is used to recognise the value of equity settled share based payments provided to the key employees and directors.
Refer to Note: 38 for further details of the scheme.
(c) Retained earnings represent the amount of accumulated earnings of the Company.
(d) Capital reserve on business acquisition mainly represents the amount of net assets acquired over and above consideration
paid consequent to the business acquisitions during the year.
(e) Debenture redemption reserve is created out of profits of the Company for the purpose of redemption of debentures issued
by the Company. On completion of redemption, the reserve is transferred to retained earnings.
ii) Other Commitments
(a) The Company's Subsidiaries have undertaken projects that have been duly appraised by various Lenders for their credit
eligibility and secured disbursements as per terms agreed by said subsidiaries with respective Lenders. As the
borrower-cum-principal obligor, each Subsidiary has also undertaken to repay those loan arrangements promptly and in
accordance with terms thereof. Further, as the Holding Company (of said Subsidiary(ies)) the Company is required not to move,
pass and adopt any resolution or other decision in derogation of such undertaking given by said Subsidiary(ies) to respective
Lenders. There is a contingency associated with this assurance extended to the extent of Rs.90.90 million (Previous year : Rs.
90.90 million)
(b) In respect of few subsidiaries of the Company, the Company has put option obligations in respect of 26% shareholding held
by the other non-controlling interest shareholders of those subsidiaries which are exercisable at the termination of the
contract, completion of the power purchase agreement or the breach of performance obligation by the Company, as applicable.
These put options are exercisable at fair market value of the underlying shares of such subsidiaries at the time of the exercise
of the option by the non-controlling interest shareholder of those respective subsidiaries.
Note 34: Financial Instruments
34.1 Capital Management
The Company's objectives for managing capital comprise safeguarding the business as a going concern, creating value for
stakeholders and supporting the development of the Company. The Company also has obtained borrowings which are secured
against the assets owned by the Company and unsecured borrowings from parent company.
The management reviews the capital structure on a quarterly basis. As part of this review, the management considers risks
associated with the Company that could result in erosion of its total equity.
Gearing Ratio
The Capital structure of the Company consists of net debt and total equity.
The gearing ratio at the end of the year is as follows:
c) Sensitivity analysis of items measured using unobservable inputs (Level 3):
A one percentage point change in the unobservable inputs used in fair valuation of Level 3 assets and liabilities does not have
a significant impact in its value.
34.4 Financial Risk Management objectives
The management of the Company monitors and manages the financial risks relating to the operations of the Company on a
continuous basis. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and
liquidity risk.
Compliance with policies and exposure limits is reviewed internally on a continuous basis.
34.5 Market Risk
The Company's activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest
rates. The Company enters into forward contracts to hedge their foreign currency exposure
Foreign Currency Sensitivity Analysis
The Company is exposed to US Dollar. Transactions in other foreign currency is with subsidiary companies and does not have
any significant exposure.
The following table details the Company's sensitivity to a 5% increase and decrease in the Rupee against USD. 5% is a sensitivity
rate used when reporting foreign currency internally to the key management personnel and represents management's
assessment of the reasonably possible changes in the 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
the foreign currency rates. A positive number below indicates an increase in profit or equity where the Rupee strengthens 5%
against the relevant currency. For a 5% weakening of the Rupee against the relevant currency, there would be a comparable
impact on the profit or equity, and the balances below would be negative.
The line-items in the balance sheet that include the above hedging instruments are "Other financial assets" and "Other financial
liabilities.
As at 31st March, 2024, the aggregate amount of mark to market losses/(profit) under forward foreign exchange contracts
relating to the exposure on these anticipated future transactions is Rs. 5.42 millions {Previous year : Rs. (24.16) millions}.
The Company has entered into contracts to purchase raw materials from overseas suppliers. The Company mainly enters into
forward foreign exchange contracts (for terms not exceeding 6 months) to hedge the exchange rate risk arising from these
purchases.
34.7 Interest rate risk management
The Company is exposed to interest rate risk because Company borrows fund at prevailing interest rates.
34.8 Credit risk management
Credit risk refers to the risk that the counter party will default on its contractual obligations resulting in financial loss to the
Company. Credit risk arises primarily from financial assets such as trade receivable, other balances with bank and other
receivables.
Credit is extended only after due approvals and evaluation in terms of the Credit Policy applicable for such sale. The process of
extending credit approval, takes into account various factors such as publicly available financial information, market feedback,
and past business patterns etc. Many of the Company's customers have been transacting since inception and the incidence of
bad debts has been very low. Such credit limits extended to trade receivables are monitored by the Board of Directors and
protective action are initiated to avoid a default. In view of the short nature of its trade receivables, the Company makes
provision for credit risk on an individual basis, if any. Individual customer credit limits are imposed based on relevant factors
such as market feedback, business potential and past records on selective basis. All Customer balances which are overdue for
more than 180 days are evaluated for provision and considered for impairment on an individual basis.
Credit risk arising from other balance with bank is limited and there is no collateral held against these because the counter
parties are bank and recognised financial institutions with high credit ratings.
34.9 Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate
liquidity risk management framework for the management of the Company's short-term, medium-term and long-term funding
and liquidity management requirements. The Company manages its funds from internal accruals, borrowings and fund raising
through equity. The liquidity risk is managed by utilising banking facilities and by matching the maturity profiles of financial
assets and liabilities.
Maturities of financial liabilities:
The following tables detail the Company's remaining contractual maturity for its 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.
34.10 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
non current debt obligations with floating interest rates. The Company's external borrowings are at variable floating interest rate
of interest and for which the sensitivity analysis have been carried out based on the exposure to interest rates for such
borrowings at the end of the reporting periods. The said analysis has been carried on the amount of floating rate non - current
borrowings outstanding at the end of the reporting period. A 50 basis point increase or decrease represents the management's
assessment of the reasonably possible change in interest rates.
In accordance with Ind AS - 19 Employee Benefits, specified
under Section 133 of the Companies Act, 2013 the following
disclosures are made:
36.1:
The Company recognised in FY 23-24 Rs. 15.28 millions (FY
22-23: Rs. 11.59 millions) for Provident 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.
36.2: Defined benefit plans:
The Company has an unfunded gratuity plan for qualifying
employees. The benefit payable is calculated as per the
Payment of Gratuity Act. The benefit vests upon completion
of five years of continuous service and once vested it is
payable to employees on retirement or on termination of
employment. In case of death while in service, the gratuity is
payable irrespective of vesting.
Actuarial gains and losses in respect of defined benefit plans
are recognised in the financial statements through other
comprehensive income.
Interest risk
A decrease in the bond interest rate will increase the plan
liability.
Longevity risk
The present value of defined benefit plan liability is calculated
by reference to the best estimate of the mortality of plan
participants both during and after their employment. An
increase in the life expectancy of the plan participants will
increase the plan's liability.
Salary risk
The present value of the defined benefit plan liability is
calculated by reference to the future salaries of plan
participants. As such, an increase in the salary of the plan
participants will increase the plan's liability.
The following table set out the unfunded status of the defined
benefit schemes and the amount recognised in financial
statements.
Sensitivity Analysis
Gratuity is a lump sum plan and the cost of providing these
benefits is typically less sensitive to small changes in
demographic assumptions. The key actuarial assumptions to
which the benefit obligation results are particularly sensitive
to are discount rate and future salary escalation rate. The
following tables summarizes the impact on the reported
defined benefit obligation at the end of the reporting period
arising on account of an increase or decrease in the reported
assumption by 100 basis points. These sensitivities have
been calculated to show the movement in defined benefit
obligation in isolation and assuming there are no other
changes in market conditions at the accounting date. There
have been no changes from the previous periods in the
methods and assumptions used in preparing the sensitivity
analysis.
i) Pursuant to the approval of "CMEEPSL ESOP Scheme 2015"
by the shareholders in the Extra-Ordinary General Meeting
held on 5th August, 2015 and subsequent ammendment in
the scheme in the Annual General Meeting held on 22nd
October, 2021, 69,853 and 63,458 options were approved by
the shareholders respectively. In the current year, there was
further ammendment to the ESOP scheme which was
approved by the shareholders in the Extra-Ordinary General
Meeting held on 26th October, 2023, thereby introducing 'New
Category A Primary ESOP Pool' with 63,805 options & 'New
Category B Secondary ESOP Pool' with 46,404 options.
ii) The ESOPs Scheme allows the issue of options to
employees of the Company. Each option comprises one
underlying equity share.
iii) The vesting period of these options range over a period of
1 year to 5 years from the date of grant. The options may be
exercised within a period of 10 years from the date of vesting.
iv) The Company has granted 75,947 options (net-off options
issued and lapsed, represented by equal number of equity
shares) under ESOPs scheme in current year to eligible
employees of the Company.
v) The fair value of the share options granted during the year
is expensed over the vesting period.
The following share based payment arrangements were in
existence as on 31 st March, 2024
Modification to ESOP Scheme:
The Management modified the ESOP scheme, wherein the employees were given one time option to cash settle the ESOP's.
The terms of share based payments are modified for vested options and consequently as per Ind AS 102, the excess of the fair
value on modification over the fair value of the option on grant date of Rs. 100.27 million is accounted in the retained earnings.
22,396 ESOPs were encashed by employees at fair value determined based on equity raised by the Company.
The share options outstanding at the end of the year had a weighted average remaining contractual life of 8.65 years (Previous
year : 7.77 years)
Note 40: Segment information
The Company prepares and disclose the standalone financial statements of the Company along with the consolidated financial
statements. In accordance with Ind AS 108, Operating Segments, the Company has disclosed the segment information in the
consolidated financial statements.
Information about major customers:-
The details of the customers from where the Company has earned more than 10% of its total revenue are as under:-
k) Return on Investment = Income from investment divided by the Opening balance of the investment
The above ratio is not applicable as the Company has no projects/investments other than the current business operations
Footnote:
The above Non-GAAP measures presented may not be comparable to similarly titled measures reported by other companies.
Further, it should be noted that these are not a measure of operating performance or liquidity defined by generally accepted
accounting principles and may not be comparable to similarly titled measures presented by other companies
(b) 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, 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.
(c) No funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding
Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, 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.
Note 52
As at the year ended 31st March 2024, the Company's current liabilities have exceeded the current assets by Rs. 1,031.76
million. Having regard to, non-current lien marked fixed deposits and mutual funds of Rs. 366.50 million and Rs. 206.73 million
respectively which can be used to repay current maturities of borrowings, predicated cash flows from operations (including
incremental cash flows to be generated upon completion of certain under construction projects) in the financial year 2024-25
and the sanctioned undrawn loan facilities from various lenders, the Board of Directors have concluded on the ability of the
Company to generate sufficient future cash flows to be able to meet its obligations, as and when due, in the foreseeable future
and accordingly, the standalone financial statement have been prepared on a going concern basis.
Note 53
i. The Company has no relationship and transactions with struck off companies.
ii. The Company has not any entered in scheme of arrangement under section 230 to 237 of Companies Act 2013.
iii. The Company does not have any 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.
iv. The Company has complied with the number of layers prescribed under clause (87) of Section 2 of the Companies Act, 2013
read with the companies (Restriction on number of layer) Rules, 2017.
Note 54
(a) Previous years figures have been regrouped / reclassified wherever necessary to correspond with the current year's
classification / disclosure.
(b) Wherever the figures are less than the denominated disclosed, the figures do not appear.
For and on behalf of the Board of Directors of
Clean Max Enviro Energy Solutions Private Limited
CIN : U93090MH2010PTC208425
Kuldeep Jain Pratap R Jain Nikunj Ghodawat Ratika Gandhi
Director Director Chief Financial Officer Company Secretary
DIN:02683041 DIN:00101829
Memership No. : 29732
Place: Mumbai Place: Mumbai Place: Mumbai Place: Mumbai
Date: 27th May, 2024 Date: 27th May, 2024 Date: 27th May, 2024 Date: 27th May, 2024
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