Mar 31, 2023
Note 6.2 :Disclosure as per Ind-AS 36, on Impairment of Investments in Joint Venture
The Company''s investment in Finolex J Power Systems Limited (FJPS) is long term and strategic in nature. FJPS is engaged in
manufacturing and sale of extra high voltage power cables. The operations of FJPS has continued to incur losses, resulting in its net worth being partially eroded. The management expects improvement in operations of FJPS in coming years and along with the Joint Venture partner, continues to support FJPS operations by infusion of equity as required.
Considering above, the Company had in accordance with Ind AS - 36 ""Impairment of Assets"" carried out an impairment assessment of its investment in FJPS by comparing its recoverable amount (enterprise value) with its carrying amount as at 31st March, 2023.
The recoverable amount of the investment in FJPS is assessed based on future discounted cash flows of FJPS (enterprise value).
During the year ended 31st March, 2023, the Company has infused further equity of Rs. 10.78 crores and impaired Rs. 16.00 crores (previous year Rs. 9.81 crores) leading to a total impairment of Rs. 188.57 crores upto 31st March, 2023.
Key assumptions used for value in use to determine the recoverable value are:
1- Discount rate - Weighted Average Cost of Capital (WACC) 15.00 % (Previous year 17.00%)
2- Terminal growth rate 4.00% (Previous year 4.00%)
Note 6.3: Corning Finolex Optical Fibre Private Limited: Discontinuation of JV Agreement
The Joint Venture partners of Corning Finolex Optical Fibre Private Limited ("Corning") in their extra ordinary general meeting
held on 30th March, 2022 had approved the "Voluntary Liquidation" of Corning and appointed an insolvency professional duly registered under the Insolvency and Bankruptcy Code, 2016 as the "Liquidator" of the Corning. Corning is currently under
liquidation and the financial statements of Corning has been prepared on the liquidation basis and not on going concern basis. Considering Corning is in process of liquidation and disposal of the same is other than through sale transaction, accordingly investment in Corning do not qualify as held for sale.
Trade Receivables :
The average credit period for the Company''s receivables is in the range of 30 to 60 days in respect of institutional sales and upto 180 days in case of sales to government owned entities. No interest is charged on trade receivables. Trade receivables balance as at 31st March, 2023 includes Rs. 36.92 crores due from Bharat Sanchar Nigam Limited, Bharat Broadband Nigam Limited, Southern Railway, Eastern Railway and Telecommunication Consultants India Limited (31st March, 2022 included Rs. 65.82 crores due from Bharat Sanchar Nigam Limited, Bharat Broadband Nigam Limited and Telecommunication Consultants India Limited), Rs. 138.35 crores due from Minda Corporation Limited, D-Link India Limited, Bharti Airtel Limited and Telesonic Networks Limited (31st March, 2022 included Rs. 52.40 crores due from Minda Corporation Limited, D-Link India Limited and Logenix Services Private Limited) which represents Company''s large customers. Apart from the above there are no customers who individually represents more than 5% of the total balance of trade receivables.
For trade receivables, the Company applies a simplified approach in calculating expected credit losses (ECLs). Therefore, the Company does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Company has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in the provision matrix. Movement in the expected credit loss allowance:
(b) Terms/ rights attached to equity shares
The Company has issued only one class of equity shares having a par value of Rs. 2 per share. Each holder of equity shares is entitled to one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of Interim dividend.
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 shareholders.
On 26th May, 2023, the Board of Directors of the company have proposed a final dividend of Rs. 7.00 per share in respect of the year ended 31st March, 2023 subject to the approval of shareholders at the Annual General Meeting. If approved, the dividend would result in a cash outflow of Rs. 107.06 crores.
Securities Premium :
Securities Premium is used to record the premium on issue of shares and is utilised in accordance with the provisions of the
Companies Act, 2013.
The Company recognises the difference on purchase, sale, issue or cancellation of Company''s own equity instruments to
Capital Reserve. Capital Reserve is utilised in accordance with the provisions of the Companies Act, 2013.
General Reserve is used from time to time to transfer profits from Retained Earnings for appropriation purposes. As the
general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the General Reserve will not be reclassified subsequently to statement of profit and loss.
During the earlier years, the Company had bought back its own equity out of free reserves. Share buy back reserve (Capital Redemption Reserve) represents amount set-aside in respect of nominal value of the shares bought back as per the Companies Act, 2013.
Retained Earnings are the profits of the Company earned till date net of appropriations.
Equity Instruments through Other Comprehensive Income
This Reserve represents the cumulative gains and losses arising on revaluation of equity instruments measured at fair value through Other Comprehensive Income, net of amounts reclassified to retained earnings when those assets are disposed off.
Salaries, wages and bonus includes Rs. 11.07 crores (previous year Rs. 9.92 crores) paid/ payable to the executive director, during the year, subject to the below.
The resolutions for the reappointment and remuneration of the executive directors were placed before the Annual General
Meeting of the Company held on 25th September, 2018. The Hon''bie High Court of Bombay had in respect of an appeal filed in respect of reappointment and remuneration of the executive directors, stated that the results of the voting shall be subject to the Order to be passed by the Hon''bie High Court of Bombay in this Appeal. The matter remains pending.
Total remuneration paid/payable to the executive directors for the period 1st July, 2018 (being the date of proposed reappointment) upto 31st March, 2023 is Rs. 49.97 crores. (previous year Rs. 38.90 crores)
NOTE 32 : CONTINGENT LIABILITIES AND COMMITMENTS A Contingent Liabilities I Claims against the company not acknowledged as debts (Rs. In Crore) |
||
Particulars |
Year Ended 31st March, 2023 |
Year Ended 31st March, 2022 |
Disputed Matters |
||
(a) Excise (dispute mainly on account of issues of applicablility, classification, etc. to certain goods) |
43.21 |
37.04 |
(b) GST |
0.81 |
0.24 |
(c) Customs |
0.94 |
0.94 |
(d) Sales Tax (dispute mainly on account of non submission of C,F and other forms and rates of tax) |
137.88 |
138.05 |
(e) Entry Tax (dispute on account of applicability, etc.) |
4.85 |
4.85 |
(f) Income Tax (Including Wealth Tax) |
||
wherein the Company is in Appeal |
17.69 |
17.26 |
wherein the Department is in Appeal |
11.52 |
10.33 |
(disputes relating to allowability of certain expenses, deductability, etc.) |
||
II Other claims against the Company not acknowledged as debts |
0.28 |
0.28 |
217.18 |
208.99 |
(a) During the previous year the Company had given the counter corporate guarantee to J-Power System Corporation (JPS), Joint venture Partner of Finolex J Power System Limited (FJPS), Joint Venture to the extent of 49% of Rs. 50 crores (upto
maximum of Rs. 24.50 crores). Whereas, the JPS had given 100% corporate guarantee to the bankers of FJPS towards the credit facility of Rs. 50 crores taken by FJPS to meet its working capital requirements and the same has been withdrawn during the year.
(b) The Company has given guarantee of Rs. 106.75 crores to the bankers of Finolex J Power Systems Limited (FJPS), Joint
Venture of the Company for the purpose of working capital facility availed by the FJPS.
Future cash flows in respect of above matters are determinable only on receipt of judgements/decisions pending at various forums/authorities.
B Commitments: (Rs. In Crore) |
||
Particulars |
Year Ended 31st March, 2023 |
Year Ended 31st March, 2022 |
i Capital Commitments (Tangible Assets): |
||
Estimated amount of contracts remaining to be executed on capital account net of advance and not provided for. |
15.06 |
37.36 |
In respect of Finolex J Power Systems Limited (FJPS), Joint Venture of the Company whose net worth has been substantially eroded, the Company along with its joint venture partner has provided unconditional financial support.
NOTE 33 :EMPLOYEE BENEFIT PLAN33.1 Defined Contribution plan
The Company makes Provident Fund and Superannuation Fund contributions to defined contribution retirement benefit plans for eligible employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions as specified under the law/scheme are paid to the Government administered Provident
fund and in case of Superannuation to the Scheme set up as trust by the Company-Insurer. The Company is liable only for annual contributions.
The Company has recognised Rs. 6.14 crores (31st March, 2022 - Rs. 5.90 crores) for provident fund contributions.
Contribution for superannuation funds Rs. 2.00 crores (31st March, 2022 - Rs. Nil crores) in the Statement of Profit and Loss
because the earlier surplus contribution are available for utilisation.
The contributions payable to these plans by the Company are at rates specified in the rules of the schemes."
33.2 Defined Benefit plan Gratuity-Funded
The Company has a defined benefit gratuity plan. The gratuity plan is primarily governed by the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of five years are eligible for gratuity. The level of benefits provided
depends on the member''s length of service and salary at the separation date. The gratuity plan is funded plan. The Company has formed a trust and is governed by Trustees appointed by the Company. The Trustees are responsible for administration of the plan assets and investment strategy in accordance with the regulations. The funds are deployed in recognised insurer managed funds in India.
The sensitivity results above determine their individual impact on Plan''s end of year Defined Benefit Obligation. In reality, the plan is subject to multiple external experience items which may move the Defined Benefit Obligation in similar or opposite directions, while the Plan''s sensitivity to such changes can vary over time.
Risk exposure:
Through the defined benefit plan, the Company is exposed to a number of risks, the most significant of which are detailed below: Asset Volatility:
The plan Habiltles are calculated using a discount rate set with reference to government bond yield. If plan assets underperform this yield, it will result in deficit. These are subject to interest rate risk. To offset the risk plan assets have been deployed in high
grade insurer managed funds.
Inflation rate risk:
Higher than expected increase in salary will increase the defined benefit obligation.
Demographic risk:
This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligations is not straightforward and depends upon
the combination of salary increase, discount rate and vesting criterion.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:
Level 1 Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. This includes quoted equity instruments, government securities and mutual funds (includes FMP) that have quoted price.
Level 2 Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) such as derivative financial instruments. The Company
does not have any Level 2 instruments as at 31st March, 2023 and 31st March, 2022.
Level 3 Inputs are not based on observable market data (unobservable inputs). Fair values are 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 includes unquoted equity shares.
Valuation technique(s) and key input(s):
Level 1 The fair value of mutual funds (includes FMP) and quoted equity shares is based on net assets value (NAV) and quoted price.
Level 2 The Company does not have any Level 2 instrument as at 31st March, 2023 and 31st March, 2022.
Level 3 The fair value of unquoted equity shares is determined using market approach. This approach involves the application of multiples, derived from market prices of comparable listed companies, to the parameters of the subject company in order to derive a value for the subject company.
The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Company monitors the return on capital as well as the level of dividends
on its equity shares. The Company''s objective when managing capital is to maintain an optimal structure so as to maximize shareholder value.
(i) Debt is defined as long-term borrowings (including current maturities) and short-term borrowings (excluding
contingent considerations, if any).
(ii) Equity is defined as Equity share capital and other equity including reserves and surplus.
The Company is predominantly equity financed which is evident from the capital structure table. Further, the Company
has always been a cash surplus Company with cash and bank balances along with investment. The Company''s investment is predominantly in liquid and short term mutual funds being far in excess of debt.
The Company is exposed primarily to fluctuations in foreign currency exchange rates, credit, liquidity, 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.
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency
exchange rates, interest rates, credit, liquidity and other market changes. The Company''s exposure to market risk is primarily on account of foreign currency exchange rate risk.
3.1.1 Foreign currency risk management
The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit and loss and other comprehensive income and equity, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective entities. Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from
fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar and Euro against the respective functional currency of the company. The Company enters into derivative financial instruments such as
foreign exchange forward contract to mitigate the risk of changes in exchange rates on foreign currency exposures.
ii Derivative financial instruments
The Company holds derivative financial instruments such as foreign currency forward and option contracts to mitigate the risk of changes in exchange rate on foreign currency exposure. The counterparty for these contracts is generally a Bank or a Financial Institution. These derivative financial instrument are valued based on quoted prices for similar asset and liabilities in active markets or inputs that is directly or indirectly observable in the market place.
3.1.2 Interest rate risk management
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Considering borrowing amount outstanding as at 31st March, 2023 and as at 31st March, 2022, Company is not exposed to significant interest rate risk.
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 of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and creditworthiness
of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit.
Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, investments, loans, cash and cash equivalents, other balances with banks and other financial assets. None of the financial instruments of the Company result in material concentration of credit risk.
Credit risk on cash and cash equivalents is limited as the Company generally invest in deposits with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies. Investments primarily include investment in liquid mutual fund units (including FMP).
1) Total Debt includes current as well as non current lease liabilities and borrowings
2) Earnings available for debt service includes Net Profit after taxes Finance Cost Depreciation and amortisation Impairment on financial assets Allowances for doubtful debts and advance Net Loss on disposal of property, plant and equipment.
3) Debt Service includes Interest and lease Payments Borrowing repayment
4) Capital Employed includes Tangible Net worth deferred tax liabilities Total Debt
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 that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). 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 Funding
Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
The Company has been sanctioned working capital limits in excess of Rs. 5 crores, in aggregate, from banks on the basis of security of current assets of the Company. The Company has been regularly filling quarterly returns or statements, provisional/ final containing, inter alia, amount of inventory and trade receivable with such banks and are in agreement with the unaudited books of account of the Company of the respective quarters.
NOTE 40: SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
There were no significant adjusting events that occurred subsequent to the reporting period other than the events disclosed.
Mar 31, 2022
c) Terms/Rights Attached to Equity Shares
The Company has only one class of equity shares having a par value of '' 1/- per share. Each holder of equity shares is entitled to one vote per share. 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 shareholders.
The Company declares and pays dividends in Indian Rupees. The Directors have recommended, subject to approval of the shareholders at the ensuing Annual General Meeting, a Final Dividend for the year ended on 2022 : 125% (2021: 100%). Total dividend including interim dividend for the financial year 2022 is 125% (2021 : 100%).
Nature and purpose of reserve:-Capital Reserve on Business Combination
It represent the difference, between the amount recorded as share capital issued plus any additional consideration in the form of cash or other assets and the amount of net asset value of the transferor company acquired by the company.
Capital Redemption Reserves
As per Companies Act, 2013, capital redemption reserve is created when company purchases its own shares out of free reserves or securities premium. A sum equal to the nominal value of the shares so purchased is transferred to capital redemption reserve and it is a non-distributable reserve.
Securities Premium
Securities premium is used to record the premium on issue of shares. The reserve can be utilised in accordance with the provision of the Companies Act, 2013.
Share Options Outstanding Account
The Employee Stock Options Reserve represents reserve in respect of equity settled share options granted to the Companyâs employees in pursuance of the Employee Stock Option Plan.
General Reserve
The Company created a General reserve in earlier years pursuant to the provisions of the Companies Act, 1956 wherein certain percentage of profits were required to be transferred to General Reserve before declaring dividends. As per Companies Act 2013, the requirements to transfer profits to General Reserve is not mandatory. General reserve is a free reserve available to the Company.
33 CONTINGENT LIABILITIES AND COMMITMENTS |
('' in Crores) |
||
Particulars |
As at 31st March, 2022 |
As at 31st March, 2021 |
|
(i) |
Contingent liabilities |
||
(a) Claims against the Companyâs Disputed Liabilities not Acknowledged as Debts |
|||
- Income Tax Liability for various years |
3.27 |
1.46 |
|
- Value Added Tax Liability |
- |
0.10 |
|
- Outstanding Liability of Tax Deducted at Source |
0.39 |
0.38 |
|
(b) Guarantees & Securities |
|||
- Performance Guarantees given under EPCG (Refer Note No. i below) |
6.32 |
6.32 |
|
(c) Other money for which the Company is contingently liable for litigation matter |
|||
- Bond given to Custom Authority |
18.45 |
18.45 |
|
(ii) |
Capital Commitments |
||
Estimated Amount of Contracts Remaining to be Executed on Capital Account and not Provided for in respect of Capital Assets (Net of Advances paid) |
29.98 |
1.23 |
|
(iii) |
Other Commitments |
||
Estimated Amount of Contracts Remaining to be executed on goods other than on Capital Account(Net of Advances) |
0.75 |
0.46 |
Note:
(i) The Company has obtained licenses under the Export Promotion Capital Goods Scheme (EPCG) for importing capital goods at a concessional rate of custom duty against submission of bank guarantee and bonds.
Under the terms of the respective schemes, the Company is required to earn foreign exchange value equivalent to, eight times and in certain cases six times of the duty saved in respect of licenses where export obligation has been fixed by the order of the Director General Foreign Trade, Ministry of Finance, as applicable within a specified period from the date of import of capital goods. The Export Promotion Capital Goods Schemes, Foreign Trade Policy 2009-2014 as issued by the Central Government of India, covers both manufacturerâs exports and service providers. Accordingly, in accordance with the Chapter 5 of Foreign Trade Policy 2009-2014, the Company has supplied the export of required value. Awaiting the required confirmation from the authorities, full duty saved amount under the above referred scheme has been disclosed as Contingent Liability.
Brief description of the Plans:
The Company has various schemes for employee benefits such as Provident Fund, ESIC, Gratuity and Leave Encashment. The Companyâs defined contribution plans are Provident Fund (in case of certain employees) and Employees State Insurance Fund (under the provisions of the Employeesâ Provident Funds and Miscellaneous Provisions Act, 1952). The Company has no further obligation beyond making the contributions to such plans.
A Defined Benefits Plan
The Companyâs defined benefit plans include Gratuity. The gratuity plan is governed by the Payment of Gratuity Act, 1972 under which an employee who has completed five years of service is entitled to specific benefits. The level of benefits provided depends on the memberâs length of service and salary at retirement age.
The above sensitivity analyses are based on change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
VIII. The Company expects to contribute '' 1.17 Crores (Previous Year : '' 1.74 Crores) to the gratuity trust during the financial year 2022-23.
The Company also has certain defined contribution plans. The contributions are made to registered provident fund, Employee State Insurance Corporation and Labour Welfare Fund administered by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the year towards defined contribution plans are as follows:
The Companyâs lease asset classes primarily consist of leases for land and buildings. The lease period for these contracts varies from 11 months to 5 years, in certain cases, mainly relating to rent of (parts of) buildings, with extension options. The Right-of-use assets and Lease liabilities as disclosed below, do not include short term and low value leases. In general, as usual with leases, the Companyâs obligations under its leases are secured by the lessorâs title to or legal ownership of the leased assets.
C. Rent expenses recorded for short term leases was X 6.69 Crores (Previous Year: X 5.09 Crores) for the year ended 31st March, 2022
D. The total cash out flows for leases are X 10.01 Crores (Previous Year: X 5.95 Crores) in the year, including the payments relating to short term and low value leases.
F. Leases not yet commenced to which Company is committed amounts to X 0.85 Crores (Previous Year: X 0.85 Crores) for a lease term of 5 years.
G. Rental income on assets given on operating lease is X 0.40 Crores (Previous Year : X 0.40 Crores) for the year ended 31st March, 2022.
H. The company has applied the practical expedient to all the eligible rent concessions. The amount recognised in profit or loss for F.Y 2021-22 to reflect changes in lease payments that arise from COVID-19 related rent concessions to which the company has applied the practical expedient is X 0.90 Crores (Previous Year : X 0.60 Crores).
The Company is exposed to Currency Risk arising from its trade exposures and Capital receipt / payments denominated, in other than the Functional Currency. The Company has a detailed policy which includes setting of the recognition parameters, benchmark targets, the boundaries within which the treasury has to perform and also lays down the checks and controls to ensure the continuing success of the treasury function.
The Company has defined strategies for addressing the risks for each category of exposures (e.g. for imports, for loans, etc.). The centralised treasury function aggregates the foreign exchange exposure and takes prudent measures to hedge the exposure based on prevalent macroeconomic conditions.
Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses financial reliability of customers and other counter parties, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of financial assets. Individual risk limits are set and periodically reviewed on the basis of such information.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:
i) Actual or expected significant adverse changes in business,
ii) Actual or expected significant changes in the operating results of the counterparty,
iii) Financial or economic conditions that are expected to cause a significant change to the counterpartyâs ability to meet its obligations,
The Company measures the expected credit loss of trade receivables based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, additional loss on collection of receivable is recognised.
i) Actual or expected significant adverse changes in business,
ii) Actual or expected significant changes in the operating results of the counterparty,
iii) Financial or economic conditions that are expected to cause a significant change to the counterpartyâs ability to meet its obligations,
The Company measures the expected credit loss of trade receivables based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, additional loss on collection of receivable is recognised.
The maximum exposure to the credit risk at the reporting date is primarily from trade receivable amounting to '' 2.49 crores as on 31st March, 2022 (Previous Year : '' 2.84 Crores).
The Company manages its capital to ensure that it will be able to continue as going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the Company consists of net debt (borrowings offset by cash and cash equivalent) and total equity of the Company.
The Company determines the amount of capital required on the basis of annual as well as long term operating plans and other strategic investment plans. The funding requirements are met through Non Current and Current borrowings. The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Companyâs liquidity position and cash and cash equivalents on the basis of expected cash flows.
Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Companyâs position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio. At the year end, there was no borrowing outstanding.
The Company is exposed to price risks arising from equity and mutual fund investments. Certain of the Companyâs equity investments are held for strategic rather than trading purposes.
In accordance with Ind AS 108 âOperating Segmentâ, segment information has been given in the consolidated financial statements and therefore, no separate disclosure on segment information is given in these Standalone financial statements.
Exceptional Item for the year ended 31st March, 2022 includes ? 12.46 Crores towards impairment of investment in wholly owned Subsidiary at Mauritius, which has investment in its wholly owned subsidiary at Sri Lanka. Considering the uncertainties around Sri Lankan economy which does not seems to be improve soon, Company has made impairment provision as a matter of prudence. It also includes ? 1.08 Crores towards interest paid to Government of Goa in relation to transfer of Casino License pursuant to merger of an erstwhile subsidiary company with the company in earlier year. In previous year, the Company has recovered loan of ? 55.95 Crores from Deltin Cruises and Entertainment Private Limited, and accordingly, the provision made towards doubtful recovery is reversed and shown under exceptional item for the year ended 31st March, 2021.
a) The Board of Directors has recommended final Equity dividend of ? 1.25 per equity share (Previous year ? 1/- per equity share) for the financial year 2021-22.
b) On 11th April, 2022 The Board of Director of the Company has approved the Scheme of Amalgamation (âSchemeâ) which comprise of amalgamation of wholly owned subsidiary Companies Daman Hospitality Private Limited and Daman Entertainment Private Limited with the Company. The Appointed date is 1st April, 2022. The Scheme is subject to approval of regulatory authorities and will be given effect to in the financial statement on receipt of such approvals.
Due to COVID-19 pandemic and the consequent lock downs announced by the respective Government Authorities, the operations of the Company were suspended since the third week of March, 2020 to October, 2020. During the current financial year also, consequent to the lock down due to the second/third wave of pandemic announced by the state governments, the Company could operate partially as follows:
- Casinos at Goa: For a part of April 2021 at 50% of normal capacity and with effect from 20th September 2021 with restrictions
- Hotel at Goa: For a part of April 2021 at 50% of normal capacity and with effect from 5th July 2021 with restrictions.
- Casino at Sikkim: For April 2021 and part of May, 2021 at 50 % of normal capacity and with effect from 16th August 2021 with restrictions.
The casino operation are allowed to operate at 100% capacity in Goa from 7th March 2022 and in Sikkim from 11th February 2022. In Daman, Government restriction for Hotel Industry were in force upto 28th February 2022 and thereafter no such restriction has been imposed.
Considering the overall gradual returning to normalcy of all segments of the Company the positive performance for the year and the managementâs assessment of the possible impact of this pandemic on the business operation and financial position of the Company and based on its initial assessment of the current indicators of the future economic condition, the Company expects that the COVID-19 pandemic would not have any material adverse impact on the recoverable values of its financial and non-financial assets and on the net worth of the Company.
Further, the Company is debt free and would have adequate liquidity available to honour its liabilities and obligations, as and when due. The management will continue to monitor any material changes to its COVID-19 impact assessment, resulting from the future economic conditions and future uncertainty, if any.
a Details of the Employee Share Option Plan of the Company
The options are granted at the price determined by the Nomination Remuneration Compensation Committee. Each option entitles the holder to exercise the right to apply for and seek allotment of one equity share of '' 1/- each. The Option granted in Financial Year 2017-18 and 2018-19 shall vest in three installments. On 23rd September, 2019, terms of option granted in FY 2018-19 have been modified, repriced and vesting period reduced to three years from four years. Accordingly fair value recalculated with modified terms. Details of options granted during the financial year 2017-18 & 2018-19 duly approved by the Nomination Remuneration Compensation Committee under the said scheme are given below.
Each employee share option converts into one equity share of the Company on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.
b Details of the Employee Share Appreciation Rights of the Company
The Nomination Remuneration Compensation Committee has granted Employee Stock Appreciation Rights (âESARâ) on 17th March, 2020 and 10th November, 2020 to certain eligible employees pursuant to the Companyâs Employee Stock Appreciation Rights plan, (âPlanâ). The grant price is determined based on a formulas as defined in the Plan. There are scheme under each plan with different vesting periods. The Plans is a administered by the Nomination Remuneration Compensation Committee.
An Employee Stock Appreciation Right (ESAR) is an award which provides the holder with the ability to profit from the appreciation in value of a set number of shares of company stock over a set period of time. The valuation of a stock appreciation right operates exactly like a stock option in that the employee benefits from any increases in stock price above the price set in the award. However, unlike an option, the employee is not required to pay an exercise price to exercise them, but simply receives the net amount of the increase in the stock price in either shares of company stock or Cash, as decided by The Nomination Remuneration Compensation Committee.
a) Volatility: Volatility is a measure of the amount by which a price has fluctuated or is expected to fluctuate during the year. The measure of volatility is used in Black Scholes annualized standard deviation of the continuously compounded rate of return on the stock over a period of time. The Company considered the daily historical volatility of the Companyâs expected life of each vest.
b) Risk Free Rate: The risk free rate being considered for the calculation is the interest rate applicable for a maturity equal to the expected life of the options based on the zero - coupon securities.
c) Expected Life of the Options / ESARs: Expected life of the options / ESARs is the period for which the Company expects the options/ ESARs to be live. The minimum life of a stock option / ESARs is the minimum period before which the options/ ESARs cannot be exercised and the maximum life is the period after which the options / ESARs cannot be exercised. The Company has calculated expected life as the average of life of the options / ESARs.
1. Current ratio: There is more than 25% reduction in Current Ratio from March, 2021 to March, 2022 primarily due to change in terms, the Company has classified Inter Corporate Deposit given to Delta Pleasure Cruises Company Private Limited and Marvel Resort Private Limited of '' 75 Crores & '' 125 Crores respectively as Investment in Quasi Equity in Subsidiary Company, as a consequence of which Current Assets reduced as compared to previous year resulting into decrease in current ratio.
2. Trade Payable turnover ratio: Increase in trade payable turnover in the financial year 2021-22, due to increase in revenue of the Company. Which resulted into more operational outflow during the current year.
3. Net capital turnover ratio: During the financial year 2021-22, Sales turnover of the Company increased as compared to previous year as a consequence of this working capital of the Company got increased, which resulted in to increase in net capital turnover ratio.
4. Net profit ratio: During the previous year, Company has booked Profit of '' 55.95 Crores as Exceptional Item due to which Net Profit ratio of previous year increased. Hence previous year ratio is not comparable with Current Year ratio.
5. Trade Receivable turnover ratio: For the financial year 2021-22 there is increase in trade receivable turnover ratio, due to increase in revenue of the Company, which resulted into more operational inflow during the current year.
6. Inventory turnover ratio: Increase in Inventory turnover in the financial year 2021-22, The Company has more operational days as compared to previous year. Hence Inventory turnover ratio increased as compared to previous year.
7 Return on Investment ratio and Return on Capital Employed: Company has made earning before tax of '' 108.19 Crores against '' 99.58 crores due to which return of investment ratio and return on Capital Employed improved in Current Year.
8. Debt Equity ratio and Debt Service Coverage Ratio: During the Current Year, the Company is Debt Free therefore Debt Equity Ratio and Debt Service Coverage Ratio is not applicable
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
(ii) The Company has identified five parties having status as struck off companies. Total value of purchase of goods & services from these struck off companies amounts to '' 0.15 Crores and having Closing balance of '' 0.02 Crores payable at the year end.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered
or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
(vi) No funds have been advanced or loaned or invested by the Company to or in any person(s) or entity(ies), including foreign entities (âthe intermediariesâ), 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 (âthe Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries.
(vii) No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âthe Funding Partiesâ), 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 (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
Except as detailed in the following table, the Company considers that the carrying amounts of financial instruments recognised in the financial statements approximate their fair values.
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Mar 31, 2022
The Company''s investment in Finolex J Power Systems Limited, (FJPS) is long term and strategic in nature. FJPS is engaged in manufacturing and sale of extra high voltage power cables. The operations of FJPS continued to be adversely impacted by economic slowdown and has continued to incur losses, resulting in its net worth being partially eroded. The management expects improvement in operations of FJPS upon revival of the economic environment and along with the Joint Venture partner, continues to support FJPS operations by infusion of equity as required.
Considering above, the Company had in accordance with Ind AS - 36 "Impairment of Assets" carried out impairment assessment of its investment in FJPS by comparing its recoverable amount (enterprise value) with its carrying amount as at 31st March 2022.
The recoverable amount of the investment in FJPS is assessed based on future discounted cash flows of FJPS
(enterprise value).
During the year the company had recorded further impairment of Rs. 9.81 crores (previous year Rs. 27.03 crores) leading to a
total impairment Rs.172.57 crores upto 31st March 2022.
1- Discount rate - Weighted Average Cost of Capital (WACC) - 17 % ( Pre vious year 18% )
2- Terminal growth rate 4 % ( Previous year 5% )
The Joint Venture partners of Corning Finolex Optical Fibre Private Limited ("Corning") in their extra ordinary general meeting
held on 30th March, 2022 had approved the "voluntary liquidation" of Corning and appointed an insolvency professional duly registered under insolvency and bankrupcy code as the liquidator of the Corning. Corning is currently under liquidation and the financial statements of the Corning have been prepared on the liquidation basis and not on going concern basis. Considering, Corning is in process of liquidation and accordingly, investment in Corning do not qualify as held for sale.
Trade Receivables :
The average credit period for the Company''s receivables is in the range of 30 to 60 days in respect of institutional sales and upto 190 days in case of sales to government owned entities. No interest is charged on trade receivables. Trade receivables balance as at 31st March 2022 includes Rs. 65.82 crores (31st March 2021, Rs. 84.51 crores) due from Bharat Sanchar Nigam Ltd, Bharat Broadband Nigam Ltd and Telecommunication Consultants India Ltd, Rs. 52.40 crores (31st March 2021, Rs. 30.87 crores) due from Minda Corporation Ltd, D-Link India Limited and Logenix Services Private Limited which represents Company''s large customers. Apart from the above there are no customers who individually represents more than 5% of the total balance of trade receivables.
For trade receivables, the Company applies a simplified approach in calculating expected credit losses (ECLs). Therefore, the Company does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Company has established a provision matrix that is based on its historical credit loss experience, adjusted for forwardlooking factors specific to the debtors and the economic environment.
The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in the provision matrix. Movement in the expected credit loss allowance:
The Company has issued only one class of equity shares having a par value of Rs.2 per share. Each holder of equity shares is entitled to one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of Interim dividend.
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 shareholders.
On 28th May, 2022, the Board of Directors of the company have proposed a final dividend of Rs. 6.00 per share in respect of the year ended 31st March, 2022 subject to the approval of shareholders at the Annual General Meeting. If approved, the dividend would result in a cash outflow of Rs. 91.76 crores.
Securities Premium:
Securities Premium is used to record the premium on issue of shares and is utilised in accordance with the provisions of the
Companies Act, 2013.
The Company recognises the difference on purchase, sale, issue or cancellation of Company''s own equity instruments to Capital Reserve. Capital Reserve is utilised in accordance with the provisions of the Companies Act, 2013.
General Reserve is used from time to time to transfer profits from Retained Earnings for appropriation purposes. As the
general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the General Reserve will not be reclassified subsequently to statement of profit and loss.
During the earlier years, the Company had bought back its own equity out of free reserves. Share buy back reserve (Capital Redemption Reserve) represents amount set-aside in respect of nominal value of the shares bought back as per the Companies Act, 2013.
Retained Earnings are the profits of the Company earned till date net of appropriations.
This Reserve represents the cumulative gains and losses arising on revaluation of equity instruments measured at fair value through Other Comprehensive Income, net of amounts reclassified to retained earnings when those assets are disposed off.
Salaries, wages and bonus includes Rs. 9.92 crores (previous year Rs. 8.63 crores) paid/ payable to the executive director, during the year, subject to the below.
The resolutions for the reappointment and remuneration of the executive directors were placed before the Annual General
Meeting of the Company held on 25th September 2018. The Hon''ble High Court of Bombay had in respect of an appeal hied in respect of reappointment and remuneration of the executive directors, stated that the results of the voting shall be subject to the Order to be passed by the Hon''ble High Court of Bombay in this Appeal. The matter remains pending.
Total remuneration paid/payable to the executive directors for the period 1st July 2018 (being the date of proposed reappointment) upto 31st March 2022 is Rs. 38.90 crores. (previous year Rs. 28.98 crores)
(a) The Company has given the counter corporate guarantee to J-Power System Corporation (JPS), Joint venture Partner of Finolex J Power System Limited (FJPS), to the extent of 49% of Rs. 50 crores (upto maximum of Rs. 24.50 crores). Whereas, the JPS has given 100% corporate guarantee to the bankers of FJPS towards the credit facility of Rs. 50 crores taken by FJPS to meet its working capital requirements.
Future cash flows in respect of above matters are determinable only on receipt of judgements/decisions pending at various
forums/authorities.
Note 33 :Employee Benefit Plan
The Company makes Provident Fund and Superannuation Fund contributions to defined contribution retirement benefit plans for eligible employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions as specified under the law/scheme are paid to the Government
administered Provident fund and in case of Superannuation to the Scheme set up as trust by the Company-Insurer. The Company is liable only for annual contributions.
The Company has recognised Rs. 5.90 crores (31st March, 2021 - Rs 5.49 crores) for provident fund contributions.
Contribution for superannuation funds Rs. Nil crores (31st March, 2021 - Rs Nil crores) in the Statement of Profit and Loss
because the earlier surplus contribution are available for utilisation.
The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.
The Company has a defined benefit gratuity plan. The gratuity plan is primarily governed by the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of five years are eligible for gratuity. The level of benefits provided depends on the member''s length of service and salary at the retirement date. The gratuity plan is funded plan. The fund has form a trust and is governed by Trustees appointed by the Company. The Trustees are responsible for
administration of the plan assets and investment strategy in accordance with the regulations. The funds are deployed in recognised insurer managed funds in India.
Through the defined benefit plan, the Company is exposed to a number of risks, the most significant of which are detailed below:
The plan liabilties are calculated using a discount rate set with reference to government bond yield. If plan assets underperform this yield, it will result in deficit. These are subject to interest rate risk. To offset the risk plan assets have
been deployed in high grade insurer managed funds.
Higher than expected increase in salary will increase the defined benefit obligation.
This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligations is not straightforward and
depends upon the combination of salary increase, discount rate and vesting criterion.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:
Level 1 Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. This includes quoted equity instruments, government securities and mutual funds (includes FMP) that have quoted price.
Level 2 Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) such as derivative financial instruments. The
Company does not have any Level 2 instruments as at 31st March 2022 and 31st March 2021.
Level 3 Inputs are not based on observable market data (unobservable inputs). Fair values are 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 includes unquoted equity shares.
Level 1 The fair value of mutual funds (includes FMP) and quoted equity shares is based on net assets value (NAV) and quoted price.
Level 2 The Company does not have any Level 2 instrument as at 31st March, 2022 and 31st March, 2021.
Level 3 The fair value of unquoted equity shares is determined using market approach. This approach involves the application of multiples, derived from market prices of comparable listed companies, to the parameters of the subject company in order to derive a value for the subject company.
The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Company monitors the return on capital as well as the level of dividends on its equity shares. The Company''s objective when managing capital is to maintain an optimal structure so as to maximize shareholder value.
(i) Debt is defined as long-term borrowings (including current maturities) and short-term borrowings (excluding
contingent considerations, if any).
(ii) Equity is defined as Equity share capital and other equity including reserves and surplus.
The Company is predominantly equity financed which is evident from the capital structure table. Further, the
Company has always been a cash surplus Company with cash and bank balances along with investment. The Company''s investment is predominantly in liquid and short term mutual funds being far in excess of debt.
The Company is exposed primarily to fluctuations in foreign currency exchange rates, credit, liquidity, 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.
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency
exchange rates, interest rates, credit, liquidity and other market changes. The Company''s exposure to market risk is primarily on account of foreign currency exchange rate risk.
The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit and loss and other comprehensive income and equity, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective entities. Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from
fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar and Euro against the respective functional currency of the company. The Company enters into derivative financial instruments such as
foreign exchange forward contract to mitigate the risk of changes in exchange rates on foreign currency exposures.
The Company holds derivative financial instruments such as foreign currency forward and option contracts to mitigate the risk of changes in exchange rate on foreign currency exposure. The counterparty for these contracts is generally a Bank or a Financial Institution. These derivative financial instrument are valued based on quoted prices for similar asset and liabilities in active markets or inputs that is directly or indirectly observable in the market place.
1) /- Gain/(Loss)
2) The impact of depreciation/ appreciation on foreign currency other than U.S.Dollar on profit before tax of the Company is not material.
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Considering borrowing amount outstanding as at 31st March 2022 and as at 31st March 2021, Company is not exposed to significant interest rate risk.
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 of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and creditworthiness
of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit.
Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, investments, loans, cash and cash equivalents, other balances with banks and other financial assets. None of the financial instruments of the Company result in material concentration of credit risk.
Credit risk on cash and cash equivalents is limited as the Company generally invest in deposits with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies. Investments primarily include investment in liquid mutual fund units (including FMP).
The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. The maturity profile of the financial liabilities are listed below:
The table has been drawn up based on the undiscounted contractual maturities of the financial liabilities including interest that will be paid on those liabilities upto the maturity of the instruments.
The Company has undrawn committed borrowing facilities of Rs. 200.00 crores (previous year Rs. 200.00 crores).
1. Key managerial Personnel are entitled to post- employement benefits recognised as per IND-AS 19-''Employee Benefits'' in the financial statements. As these employee benefits are lump sum amounts provided on the basis of
acturiai valuation, the same is not included above.
2. All transactions with related parties have been done at arms length basis.
3. In respect of Finolex J Power Systems Limited (Joint Venture) whose net worth has been substantially eroded, the
Company along with its joint venture partner has committed to provide financial support to the joint venture as and when required.
Operating segments are reported consistently with the internal reporting provided to the Executive Chairman, the highest decision-making executive who is responsible for allocating resources to and assessing the performance of the
operating segments.
1. Electrical Cables
2. Communication Cables
3. Copper Rods
4. Others - Trading of Electrical and other goods
The above business segments have been identified considering
1. The nature of the product/services
2. The Related risks and returns
3. The Internal financial reporting systems
The Company has considered the possible effects that may result from the pandemic relating to COVID-19 on the carrying amounts of its assets. In developing the assumptions relating to the possible future uncertainties in the economic conditions
because of this pandemic, the Company, as at the date of approval of these financial results has used internal and external sources of information. The Company has performed sensitivity analysis on the assumptions used and based on current estimates expects to recover the carrying amounts of these assets. The Company will continue to closely monitor any material changes to future economic conditions.
1) Total Debt includes current as well as non current lease liabilities and borrowings
2) Earnings available for debt service includes Net Profit after taxes Finance Cost Depreciation and amortisation Impairment on financial assets Allowances for doubtful debts and advance Net Loss on disposal of property, plant and equipment.
3) Debt Service includes Interest and lease Payments Borrowing repayment
4) Capital Employed includes Tangible Net worth deferred tax liabilities Total Debt
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 that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). 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 Funding
Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
The Company has been sanctioned working capital limits in excess of Rs. 5 crores, in aggregate, from banks on the basis of security of current assets of the Company. The Company has been regularly filling quarterly returns or statements, provisional/ final containing, inter alia, amount of inventory and trade receivable with such banks and are in agreement with the unaudited books of account of the Company of the respective quarters.
There were no significant adjusting events that occurred subsequent to the reporting period other than the events
disclosed.
Mar 31, 2022
c) Terms/Rights Attached to Equity Shares
The Company has only one class of equity shares having a par value of '' 1/- per share. Each holder of equity shares is entitled to one vote per share. 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 shareholders.
The Company declares and pays dividends in Indian Rupees. The Directors have recommended, subject to approval of the shareholders at the ensuing Annual General Meeting, a Final Dividend for the year ended on 2022 : 125% (2021: 100%). Total dividend including interim dividend for the financial year 2022 is 125% (2021 : 100%).
Nature and purpose of reserve:-Capital Reserve on Business Combination
It represent the difference, between the amount recorded as share capital issued plus any additional consideration in the form of cash or other assets and the amount of net asset value of the transferor company acquired by the company.
Capital Redemption Reserves
As per Companies Act, 2013, capital redemption reserve is created when company purchases its own shares out of free reserves or securities premium. A sum equal to the nominal value of the shares so purchased is transferred to capital redemption reserve and it is a non-distributable reserve.
Securities Premium
Securities premium is used to record the premium on issue of shares. The reserve can be utilised in accordance with the provision of the Companies Act, 2013.
Share Options Outstanding Account
The Employee Stock Options Reserve represents reserve in respect of equity settled share options granted to the Companyâs employees in pursuance of the Employee Stock Option Plan.
General Reserve
The Company created a General reserve in earlier years pursuant to the provisions of the Companies Act, 1956 wherein certain percentage of profits were required to be transferred to General Reserve before declaring dividends. As per Companies Act 2013, the requirements to transfer profits to General Reserve is not mandatory. General reserve is a free reserve available to the Company.
33 CONTINGENT LIABILITIES AND COMMITMENTS |
('' in Crores) |
||
Particulars |
As at 31st March, 2022 |
As at 31st March, 2021 |
|
(i) |
Contingent liabilities |
||
(a) Claims against the Companyâs Disputed Liabilities not Acknowledged as Debts |
|||
- Income Tax Liability for various years |
3.27 |
1.46 |
|
- Value Added Tax Liability |
- |
0.10 |
|
- Outstanding Liability of Tax Deducted at Source |
0.39 |
0.38 |
|
(b) Guarantees & Securities |
|||
- Performance Guarantees given under EPCG (Refer Note No. i below) |
6.32 |
6.32 |
|
(c) Other money for which the Company is contingently liable for litigation matter |
|||
- Bond given to Custom Authority |
18.45 |
18.45 |
|
(ii) |
Capital Commitments |
||
Estimated Amount of Contracts Remaining to be Executed on Capital Account and not Provided for in respect of Capital Assets (Net of Advances paid) |
29.98 |
1.23 |
|
(iii) |
Other Commitments |
||
Estimated Amount of Contracts Remaining to be executed on goods other than on Capital Account(Net of Advances) |
0.75 |
0.46 |
Note:
(i) The Company has obtained licenses under the Export Promotion Capital Goods Scheme (EPCG) for importing capital goods at a concessional rate of custom duty against submission of bank guarantee and bonds.
Under the terms of the respective schemes, the Company is required to earn foreign exchange value equivalent to, eight times and in certain cases six times of the duty saved in respect of licenses where export obligation has been fixed by the order of the Director General Foreign Trade, Ministry of Finance, as applicable within a specified period from the date of import of capital goods. The Export Promotion Capital Goods Schemes, Foreign Trade Policy 2009-2014 as issued by the Central Government of India, covers both manufacturerâs exports and service providers. Accordingly, in accordance with the Chapter 5 of Foreign Trade Policy 2009-2014, the Company has supplied the export of required value. Awaiting the required confirmation from the authorities, full duty saved amount under the above referred scheme has been disclosed as Contingent Liability.
Brief description of the Plans:
The Company has various schemes for employee benefits such as Provident Fund, ESIC, Gratuity and Leave Encashment. The Companyâs defined contribution plans are Provident Fund (in case of certain employees) and Employees State Insurance Fund (under the provisions of the Employeesâ Provident Funds and Miscellaneous Provisions Act, 1952). The Company has no further obligation beyond making the contributions to such plans.
A Defined Benefits Plan
The Companyâs defined benefit plans include Gratuity. The gratuity plan is governed by the Payment of Gratuity Act, 1972 under which an employee who has completed five years of service is entitled to specific benefits. The level of benefits provided depends on the memberâs length of service and salary at retirement age.
The above sensitivity analyses are based on change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
VIII. The Company expects to contribute '' 1.17 Crores (Previous Year : '' 1.74 Crores) to the gratuity trust during the financial year 2022-23.
The Company also has certain defined contribution plans. The contributions are made to registered provident fund, Employee State Insurance Corporation and Labour Welfare Fund administered by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the year towards defined contribution plans are as follows:
The Companyâs lease asset classes primarily consist of leases for land and buildings. The lease period for these contracts varies from 11 months to 5 years, in certain cases, mainly relating to rent of (parts of) buildings, with extension options. The Right-of-use assets and Lease liabilities as disclosed below, do not include short term and low value leases. In general, as usual with leases, the Companyâs obligations under its leases are secured by the lessorâs title to or legal ownership of the leased assets.
C. Rent expenses recorded for short term leases was X 6.69 Crores (Previous Year: X 5.09 Crores) for the year ended 31st March, 2022
D. The total cash out flows for leases are X 10.01 Crores (Previous Year: X 5.95 Crores) in the year, including the payments relating to short term and low value leases.
F. Leases not yet commenced to which Company is committed amounts to X 0.85 Crores (Previous Year: X 0.85 Crores) for a lease term of 5 years.
G. Rental income on assets given on operating lease is X 0.40 Crores (Previous Year : X 0.40 Crores) for the year ended 31st March, 2022.
H. The company has applied the practical expedient to all the eligible rent concessions. The amount recognised in profit or loss for F.Y 2021-22 to reflect changes in lease payments that arise from COVID-19 related rent concessions to which the company has applied the practical expedient is X 0.90 Crores (Previous Year : X 0.60 Crores).
The Company is exposed to Currency Risk arising from its trade exposures and Capital receipt / payments denominated, in other than the Functional Currency. The Company has a detailed policy which includes setting of the recognition parameters, benchmark targets, the boundaries within which the treasury has to perform and also lays down the checks and controls to ensure the continuing success of the treasury function.
The Company has defined strategies for addressing the risks for each category of exposures (e.g. for imports, for loans, etc.). The centralised treasury function aggregates the foreign exchange exposure and takes prudent measures to hedge the exposure based on prevalent macroeconomic conditions.
Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses financial reliability of customers and other counter parties, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of financial assets. Individual risk limits are set and periodically reviewed on the basis of such information.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:
i) Actual or expected significant adverse changes in business,
ii) Actual or expected significant changes in the operating results of the counterparty,
iii) Financial or economic conditions that are expected to cause a significant change to the counterpartyâs ability to meet its obligations,
The Company measures the expected credit loss of trade receivables based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, additional loss on collection of receivable is recognised.
i) Actual or expected significant adverse changes in business,
ii) Actual or expected significant changes in the operating results of the counterparty,
iii) Financial or economic conditions that are expected to cause a significant change to the counterpartyâs ability to meet its obligations,
The Company measures the expected credit loss of trade receivables based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, additional loss on collection of receivable is recognised.
The maximum exposure to the credit risk at the reporting date is primarily from trade receivable amounting to '' 2.49 crores as on 31st March, 2022 (Previous Year : '' 2.84 Crores).
The Company manages its capital to ensure that it will be able to continue as going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the Company consists of net debt (borrowings offset by cash and cash equivalent) and total equity of the Company.
The Company determines the amount of capital required on the basis of annual as well as long term operating plans and other strategic investment plans. The funding requirements are met through Non Current and Current borrowings. The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Companyâs liquidity position and cash and cash equivalents on the basis of expected cash flows.
Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Companyâs position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio. At the year end, there was no borrowing outstanding.
The Company is exposed to price risks arising from equity and mutual fund investments. Certain of the Companyâs equity investments are held for strategic rather than trading purposes.
In accordance with Ind AS 108 âOperating Segmentâ, segment information has been given in the consolidated financial statements and therefore, no separate disclosure on segment information is given in these Standalone financial statements.
Exceptional Item for the year ended 31st March, 2022 includes ? 12.46 Crores towards impairment of investment in wholly owned Subsidiary at Mauritius, which has investment in its wholly owned subsidiary at Sri Lanka. Considering the uncertainties around Sri Lankan economy which does not seems to be improve soon, Company has made impairment provision as a matter of prudence. It also includes ? 1.08 Crores towards interest paid to Government of Goa in relation to transfer of Casino License pursuant to merger of an erstwhile subsidiary company with the company in earlier year. In previous year, the Company has recovered loan of ? 55.95 Crores from Deltin Cruises and Entertainment Private Limited, and accordingly, the provision made towards doubtful recovery is reversed and shown under exceptional item for the year ended 31st March, 2021.
a) The Board of Directors has recommended final Equity dividend of ? 1.25 per equity share (Previous year ? 1/- per equity share) for the financial year 2021-22.
b) On 11th April, 2022 The Board of Director of the Company has approved the Scheme of Amalgamation (âSchemeâ) which comprise of amalgamation of wholly owned subsidiary Companies Daman Hospitality Private Limited and Daman Entertainment Private Limited with the Company. The Appointed date is 1st April, 2022. The Scheme is subject to approval of regulatory authorities and will be given effect to in the financial statement on receipt of such approvals.
Due to COVID-19 pandemic and the consequent lock downs announced by the respective Government Authorities, the operations of the Company were suspended since the third week of March, 2020 to October, 2020. During the current financial year also, consequent to the lock down due to the second/third wave of pandemic announced by the state governments, the Company could operate partially as follows:
- Casinos at Goa: For a part of April 2021 at 50% of normal capacity and with effect from 20th September 2021 with restrictions
- Hotel at Goa: For a part of April 2021 at 50% of normal capacity and with effect from 5th July 2021 with restrictions.
- Casino at Sikkim: For April 2021 and part of May, 2021 at 50 % of normal capacity and with effect from 16th August 2021 with restrictions.
The casino operation are allowed to operate at 100% capacity in Goa from 7th March 2022 and in Sikkim from 11th February 2022. In Daman, Government restriction for Hotel Industry were in force upto 28th February 2022 and thereafter no such restriction has been imposed.
Considering the overall gradual returning to normalcy of all segments of the Company the positive performance for the year and the managementâs assessment of the possible impact of this pandemic on the business operation and financial position of the Company and based on its initial assessment of the current indicators of the future economic condition, the Company expects that the COVID-19 pandemic would not have any material adverse impact on the recoverable values of its financial and non-financial assets and on the net worth of the Company.
Further, the Company is debt free and would have adequate liquidity available to honour its liabilities and obligations, as and when due. The management will continue to monitor any material changes to its COVID-19 impact assessment, resulting from the future economic conditions and future uncertainty, if any.
a Details of the Employee Share Option Plan of the Company
The options are granted at the price determined by the Nomination Remuneration Compensation Committee. Each option entitles the holder to exercise the right to apply for and seek allotment of one equity share of '' 1/- each. The Option granted in Financial Year 2017-18 and 2018-19 shall vest in three installments. On 23rd September, 2019, terms of option granted in FY 2018-19 have been modified, repriced and vesting period reduced to three years from four years. Accordingly fair value recalculated with modified terms. Details of options granted during the financial year 2017-18 & 2018-19 duly approved by the Nomination Remuneration Compensation Committee under the said scheme are given below.
Each employee share option converts into one equity share of the Company on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.
b Details of the Employee Share Appreciation Rights of the Company
The Nomination Remuneration Compensation Committee has granted Employee Stock Appreciation Rights (âESARâ) on 17th March, 2020 and 10th November, 2020 to certain eligible employees pursuant to the Companyâs Employee Stock Appreciation Rights plan, (âPlanâ). The grant price is determined based on a formulas as defined in the Plan. There are scheme under each plan with different vesting periods. The Plans is a administered by the Nomination Remuneration Compensation Committee.
An Employee Stock Appreciation Right (ESAR) is an award which provides the holder with the ability to profit from the appreciation in value of a set number of shares of company stock over a set period of time. The valuation of a stock appreciation right operates exactly like a stock option in that the employee benefits from any increases in stock price above the price set in the award. However, unlike an option, the employee is not required to pay an exercise price to exercise them, but simply receives the net amount of the increase in the stock price in either shares of company stock or Cash, as decided by The Nomination Remuneration Compensation Committee.
a) Volatility: Volatility is a measure of the amount by which a price has fluctuated or is expected to fluctuate during the year. The measure of volatility is used in Black Scholes annualized standard deviation of the continuously compounded rate of return on the stock over a period of time. The Company considered the daily historical volatility of the Companyâs expected life of each vest.
b) Risk Free Rate: The risk free rate being considered for the calculation is the interest rate applicable for a maturity equal to the expected life of the options based on the zero - coupon securities.
c) Expected Life of the Options / ESARs: Expected life of the options / ESARs is the period for which the Company expects the options/ ESARs to be live. The minimum life of a stock option / ESARs is the minimum period before which the options/ ESARs cannot be exercised and the maximum life is the period after which the options / ESARs cannot be exercised. The Company has calculated expected life as the average of life of the options / ESARs.
1. Current ratio: There is more than 25% reduction in Current Ratio from March, 2021 to March, 2022 primarily due to change in terms, the Company has classified Inter Corporate Deposit given to Delta Pleasure Cruises Company Private Limited and Marvel Resort Private Limited of '' 75 Crores & '' 125 Crores respectively as Investment in Quasi Equity in Subsidiary Company, as a consequence of which Current Assets reduced as compared to previous year resulting into decrease in current ratio.
2. Trade Payable turnover ratio: Increase in trade payable turnover in the financial year 2021-22, due to increase in revenue of the Company. Which resulted into more operational outflow during the current year.
3. Net capital turnover ratio: During the financial year 2021-22, Sales turnover of the Company increased as compared to previous year as a consequence of this working capital of the Company got increased, which resulted in to increase in net capital turnover ratio.
4. Net profit ratio: During the previous year, Company has booked Profit of '' 55.95 Crores as Exceptional Item due to which Net Profit ratio of previous year increased. Hence previous year ratio is not comparable with Current Year ratio.
5. Trade Receivable turnover ratio: For the financial year 2021-22 there is increase in trade receivable turnover ratio, due to increase in revenue of the Company, which resulted into more operational inflow during the current year.
6. Inventory turnover ratio: Increase in Inventory turnover in the financial year 2021-22, The Company has more operational days as compared to previous year. Hence Inventory turnover ratio increased as compared to previous year.
7 Return on Investment ratio and Return on Capital Employed: Company has made earning before tax of '' 108.19 Crores against '' 99.58 crores due to which return of investment ratio and return on Capital Employed improved in Current Year.
8. Debt Equity ratio and Debt Service Coverage Ratio: During the Current Year, the Company is Debt Free therefore Debt Equity Ratio and Debt Service Coverage Ratio is not applicable
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
(ii) The Company has identified five parties having status as struck off companies. Total value of purchase of goods & services from these struck off companies amounts to '' 0.15 Crores and having Closing balance of '' 0.02 Crores payable at the year end.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered
or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
(vi) No funds have been advanced or loaned or invested by the Company to or in any person(s) or entity(ies), including foreign entities (âthe intermediariesâ), 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 (âthe Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries.
(vii) No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âthe Funding Partiesâ), 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 (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
Except as detailed in the following table, the Company considers that the carrying amounts of financial instruments recognised in the financial statements approximate their fair values.
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Mar 31, 2022
c) Terms/Rights Attached to Equity Shares
The Company has only one class of equity shares having a par value of '' 1/- per share. Each holder of equity shares is entitled to one vote per share. 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 shareholders.
The Company declares and pays dividends in Indian Rupees. The Directors have recommended, subject to approval of the shareholders at the ensuing Annual General Meeting, a Final Dividend for the year ended on 2022 : 125% (2021: 100%). Total dividend including interim dividend for the financial year 2022 is 125% (2021 : 100%).
Nature and purpose of reserve:-Capital Reserve on Business Combination
It represent the difference, between the amount recorded as share capital issued plus any additional consideration in the form of cash or other assets and the amount of net asset value of the transferor company acquired by the company.
Capital Redemption Reserves
As per Companies Act, 2013, capital redemption reserve is created when company purchases its own shares out of free reserves or securities premium. A sum equal to the nominal value of the shares so purchased is transferred to capital redemption reserve and it is a non-distributable reserve.
Securities Premium
Securities premium is used to record the premium on issue of shares. The reserve can be utilised in accordance with the provision of the Companies Act, 2013.
Share Options Outstanding Account
The Employee Stock Options Reserve represents reserve in respect of equity settled share options granted to the Companyâs employees in pursuance of the Employee Stock Option Plan.
General Reserve
The Company created a General reserve in earlier years pursuant to the provisions of the Companies Act, 1956 wherein certain percentage of profits were required to be transferred to General Reserve before declaring dividends. As per Companies Act 2013, the requirements to transfer profits to General Reserve is not mandatory. General reserve is a free reserve available to the Company.
33 CONTINGENT LIABILITIES AND COMMITMENTS |
('' in Crores) |
||
Particulars |
As at 31st March, 2022 |
As at 31st March, 2021 |
|
(i) |
Contingent liabilities |
||
(a) Claims against the Companyâs Disputed Liabilities not Acknowledged as Debts |
|||
- Income Tax Liability for various years |
3.27 |
1.46 |
|
- Value Added Tax Liability |
- |
0.10 |
|
- Outstanding Liability of Tax Deducted at Source |
0.39 |
0.38 |
|
(b) Guarantees & Securities |
|||
- Performance Guarantees given under EPCG (Refer Note No. i below) |
6.32 |
6.32 |
|
(c) Other money for which the Company is contingently liable for litigation matter |
|||
- Bond given to Custom Authority |
18.45 |
18.45 |
|
(ii) |
Capital Commitments |
||
Estimated Amount of Contracts Remaining to be Executed on Capital Account and not Provided for in respect of Capital Assets (Net of Advances paid) |
29.98 |
1.23 |
|
(iii) |
Other Commitments |
||
Estimated Amount of Contracts Remaining to be executed on goods other than on Capital Account(Net of Advances) |
0.75 |
0.46 |
Note:
(i) The Company has obtained licenses under the Export Promotion Capital Goods Scheme (EPCG) for importing capital goods at a concessional rate of custom duty against submission of bank guarantee and bonds.
Under the terms of the respective schemes, the Company is required to earn foreign exchange value equivalent to, eight times and in certain cases six times of the duty saved in respect of licenses where export obligation has been fixed by the order of the Director General Foreign Trade, Ministry of Finance, as applicable within a specified period from the date of import of capital goods. The Export Promotion Capital Goods Schemes, Foreign Trade Policy 2009-2014 as issued by the Central Government of India, covers both manufacturerâs exports and service providers. Accordingly, in accordance with the Chapter 5 of Foreign Trade Policy 2009-2014, the Company has supplied the export of required value. Awaiting the required confirmation from the authorities, full duty saved amount under the above referred scheme has been disclosed as Contingent Liability.
Brief description of the Plans:
The Company has various schemes for employee benefits such as Provident Fund, ESIC, Gratuity and Leave Encashment. The Companyâs defined contribution plans are Provident Fund (in case of certain employees) and Employees State Insurance Fund (under the provisions of the Employeesâ Provident Funds and Miscellaneous Provisions Act, 1952). The Company has no further obligation beyond making the contributions to such plans.
A Defined Benefits Plan
The Companyâs defined benefit plans include Gratuity. The gratuity plan is governed by the Payment of Gratuity Act, 1972 under which an employee who has completed five years of service is entitled to specific benefits. The level of benefits provided depends on the memberâs length of service and salary at retirement age.
The above sensitivity analyses are based on change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
VIII. The Company expects to contribute '' 1.17 Crores (Previous Year : '' 1.74 Crores) to the gratuity trust during the financial year 2022-23.
The Company also has certain defined contribution plans. The contributions are made to registered provident fund, Employee State Insurance Corporation and Labour Welfare Fund administered by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the year towards defined contribution plans are as follows:
The Companyâs lease asset classes primarily consist of leases for land and buildings. The lease period for these contracts varies from 11 months to 5 years, in certain cases, mainly relating to rent of (parts of) buildings, with extension options. The Right-of-use assets and Lease liabilities as disclosed below, do not include short term and low value leases. In general, as usual with leases, the Companyâs obligations under its leases are secured by the lessorâs title to or legal ownership of the leased assets.
C. Rent expenses recorded for short term leases was X 6.69 Crores (Previous Year: X 5.09 Crores) for the year ended 31st March, 2022
D. The total cash out flows for leases are X 10.01 Crores (Previous Year: X 5.95 Crores) in the year, including the payments relating to short term and low value leases.
F. Leases not yet commenced to which Company is committed amounts to X 0.85 Crores (Previous Year: X 0.85 Crores) for a lease term of 5 years.
G. Rental income on assets given on operating lease is X 0.40 Crores (Previous Year : X 0.40 Crores) for the year ended 31st March, 2022.
H. The company has applied the practical expedient to all the eligible rent concessions. The amount recognised in profit or loss for F.Y 2021-22 to reflect changes in lease payments that arise from COVID-19 related rent concessions to which the company has applied the practical expedient is X 0.90 Crores (Previous Year : X 0.60 Crores).
The Company is exposed to Currency Risk arising from its trade exposures and Capital receipt / payments denominated, in other than the Functional Currency. The Company has a detailed policy which includes setting of the recognition parameters, benchmark targets, the boundaries within which the treasury has to perform and also lays down the checks and controls to ensure the continuing success of the treasury function.
The Company has defined strategies for addressing the risks for each category of exposures (e.g. for imports, for loans, etc.). The centralised treasury function aggregates the foreign exchange exposure and takes prudent measures to hedge the exposure based on prevalent macroeconomic conditions.
Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses financial reliability of customers and other counter parties, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of financial assets. Individual risk limits are set and periodically reviewed on the basis of such information.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:
i) Actual or expected significant adverse changes in business,
ii) Actual or expected significant changes in the operating results of the counterparty,
iii) Financial or economic conditions that are expected to cause a significant change to the counterpartyâs ability to meet its obligations,
The Company measures the expected credit loss of trade receivables based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, additional loss on collection of receivable is recognised.
i) Actual or expected significant adverse changes in business,
ii) Actual or expected significant changes in the operating results of the counterparty,
iii) Financial or economic conditions that are expected to cause a significant change to the counterpartyâs ability to meet its obligations,
The Company measures the expected credit loss of trade receivables based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, additional loss on collection of receivable is recognised.
The maximum exposure to the credit risk at the reporting date is primarily from trade receivable amounting to '' 2.49 crores as on 31st March, 2022 (Previous Year : '' 2.84 Crores).
The Company manages its capital to ensure that it will be able to continue as going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the Company consists of net debt (borrowings offset by cash and cash equivalent) and total equity of the Company.
The Company determines the amount of capital required on the basis of annual as well as long term operating plans and other strategic investment plans. The funding requirements are met through Non Current and Current borrowings. The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Companyâs liquidity position and cash and cash equivalents on the basis of expected cash flows.
Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Companyâs position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio. At the year end, there was no borrowing outstanding.
The Company is exposed to price risks arising from equity and mutual fund investments. Certain of the Companyâs equity investments are held for strategic rather than trading purposes.
In accordance with Ind AS 108 âOperating Segmentâ, segment information has been given in the consolidated financial statements and therefore, no separate disclosure on segment information is given in these Standalone financial statements.
Exceptional Item for the year ended 31st March, 2022 includes ? 12.46 Crores towards impairment of investment in wholly owned Subsidiary at Mauritius, which has investment in its wholly owned subsidiary at Sri Lanka. Considering the uncertainties around Sri Lankan economy which does not seems to be improve soon, Company has made impairment provision as a matter of prudence. It also includes ? 1.08 Crores towards interest paid to Government of Goa in relation to transfer of Casino License pursuant to merger of an erstwhile subsidiary company with the company in earlier year. In previous year, the Company has recovered loan of ? 55.95 Crores from Deltin Cruises and Entertainment Private Limited, and accordingly, the provision made towards doubtful recovery is reversed and shown under exceptional item for the year ended 31st March, 2021.
a) The Board of Directors has recommended final Equity dividend of ? 1.25 per equity share (Previous year ? 1/- per equity share) for the financial year 2021-22.
b) On 11th April, 2022 The Board of Director of the Company has approved the Scheme of Amalgamation (âSchemeâ) which comprise of amalgamation of wholly owned subsidiary Companies Daman Hospitality Private Limited and Daman Entertainment Private Limited with the Company. The Appointed date is 1st April, 2022. The Scheme is subject to approval of regulatory authorities and will be given effect to in the financial statement on receipt of such approvals.
Due to COVID-19 pandemic and the consequent lock downs announced by the respective Government Authorities, the operations of the Company were suspended since the third week of March, 2020 to October, 2020. During the current financial year also, consequent to the lock down due to the second/third wave of pandemic announced by the state governments, the Company could operate partially as follows:
- Casinos at Goa: For a part of April 2021 at 50% of normal capacity and with effect from 20th September 2021 with restrictions
- Hotel at Goa: For a part of April 2021 at 50% of normal capacity and with effect from 5th July 2021 with restrictions.
- Casino at Sikkim: For April 2021 and part of May, 2021 at 50 % of normal capacity and with effect from 16th August 2021 with restrictions.
The casino operation are allowed to operate at 100% capacity in Goa from 7th March 2022 and in Sikkim from 11th February 2022. In Daman, Government restriction for Hotel Industry were in force upto 28th February 2022 and thereafter no such restriction has been imposed.
Considering the overall gradual returning to normalcy of all segments of the Company the positive performance for the year and the managementâs assessment of the possible impact of this pandemic on the business operation and financial position of the Company and based on its initial assessment of the current indicators of the future economic condition, the Company expects that the COVID-19 pandemic would not have any material adverse impact on the recoverable values of its financial and non-financial assets and on the net worth of the Company.
Further, the Company is debt free and would have adequate liquidity available to honour its liabilities and obligations, as and when due. The management will continue to monitor any material changes to its COVID-19 impact assessment, resulting from the future economic conditions and future uncertainty, if any.
a Details of the Employee Share Option Plan of the Company
The options are granted at the price determined by the Nomination Remuneration Compensation Committee. Each option entitles the holder to exercise the right to apply for and seek allotment of one equity share of '' 1/- each. The Option granted in Financial Year 2017-18 and 2018-19 shall vest in three installments. On 23rd September, 2019, terms of option granted in FY 2018-19 have been modified, repriced and vesting period reduced to three years from four years. Accordingly fair value recalculated with modified terms. Details of options granted during the financial year 2017-18 & 2018-19 duly approved by the Nomination Remuneration Compensation Committee under the said scheme are given below.
Each employee share option converts into one equity share of the Company on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.
b Details of the Employee Share Appreciation Rights of the Company
The Nomination Remuneration Compensation Committee has granted Employee Stock Appreciation Rights (âESARâ) on 17th March, 2020 and 10th November, 2020 to certain eligible employees pursuant to the Companyâs Employee Stock Appreciation Rights plan, (âPlanâ). The grant price is determined based on a formulas as defined in the Plan. There are scheme under each plan with different vesting periods. The Plans is a administered by the Nomination Remuneration Compensation Committee.
An Employee Stock Appreciation Right (ESAR) is an award which provides the holder with the ability to profit from the appreciation in value of a set number of shares of company stock over a set period of time. The valuation of a stock appreciation right operates exactly like a stock option in that the employee benefits from any increases in stock price above the price set in the award. However, unlike an option, the employee is not required to pay an exercise price to exercise them, but simply receives the net amount of the increase in the stock price in either shares of company stock or Cash, as decided by The Nomination Remuneration Compensation Committee.
a) Volatility: Volatility is a measure of the amount by which a price has fluctuated or is expected to fluctuate during the year. The measure of volatility is used in Black Scholes annualized standard deviation of the continuously compounded rate of return on the stock over a period of time. The Company considered the daily historical volatility of the Companyâs expected life of each vest.
b) Risk Free Rate: The risk free rate being considered for the calculation is the interest rate applicable for a maturity equal to the expected life of the options based on the zero - coupon securities.
c) Expected Life of the Options / ESARs: Expected life of the options / ESARs is the period for which the Company expects the options/ ESARs to be live. The minimum life of a stock option / ESARs is the minimum period before which the options/ ESARs cannot be exercised and the maximum life is the period after which the options / ESARs cannot be exercised. The Company has calculated expected life as the average of life of the options / ESARs.
1. Current ratio: There is more than 25% reduction in Current Ratio from March, 2021 to March, 2022 primarily due to change in terms, the Company has classified Inter Corporate Deposit given to Delta Pleasure Cruises Company Private Limited and Marvel Resort Private Limited of '' 75 Crores & '' 125 Crores respectively as Investment in Quasi Equity in Subsidiary Company, as a consequence of which Current Assets reduced as compared to previous year resulting into decrease in current ratio.
2. Trade Payable turnover ratio: Increase in trade payable turnover in the financial year 2021-22, due to increase in revenue of the Company. Which resulted into more operational outflow during the current year.
3. Net capital turnover ratio: During the financial year 2021-22, Sales turnover of the Company increased as compared to previous year as a consequence of this working capital of the Company got increased, which resulted in to increase in net capital turnover ratio.
4. Net profit ratio: During the previous year, Company has booked Profit of '' 55.95 Crores as Exceptional Item due to which Net Profit ratio of previous year increased. Hence previous year ratio is not comparable with Current Year ratio.
5. Trade Receivable turnover ratio: For the financial year 2021-22 there is increase in trade receivable turnover ratio, due to increase in revenue of the Company, which resulted into more operational inflow during the current year.
6. Inventory turnover ratio: Increase in Inventory turnover in the financial year 2021-22, The Company has more operational days as compared to previous year. Hence Inventory turnover ratio increased as compared to previous year.
7 Return on Investment ratio and Return on Capital Employed: Company has made earning before tax of '' 108.19 Crores against '' 99.58 crores due to which return of investment ratio and return on Capital Employed improved in Current Year.
8. Debt Equity ratio and Debt Service Coverage Ratio: During the Current Year, the Company is Debt Free therefore Debt Equity Ratio and Debt Service Coverage Ratio is not applicable
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
(ii) The Company has identified five parties having status as struck off companies. Total value of purchase of goods & services from these struck off companies amounts to '' 0.15 Crores and having Closing balance of '' 0.02 Crores payable at the year end.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered
or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
(vi) No funds have been advanced or loaned or invested by the Company to or in any person(s) or entity(ies), including foreign entities (âthe intermediariesâ), 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 (âthe Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries.
(vii) No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âthe Funding Partiesâ), 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 (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
Except as detailed in the following table, the Company considers that the carrying amounts of financial instruments recognised in the financial statements approximate their fair values.
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Mar 31, 2022
c) Terms/Rights Attached to Equity Shares
The Company has only one class of equity shares having a par value of '' 1/- per share. Each holder of equity shares is entitled to one vote per share. 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 shareholders.
The Company declares and pays dividends in Indian Rupees. The Directors have recommended, subject to approval of the shareholders at the ensuing Annual General Meeting, a Final Dividend for the year ended on 2022 : 125% (2021: 100%). Total dividend including interim dividend for the financial year 2022 is 125% (2021 : 100%).
Nature and purpose of reserve:-Capital Reserve on Business Combination
It represent the difference, between the amount recorded as share capital issued plus any additional consideration in the form of cash or other assets and the amount of net asset value of the transferor company acquired by the company.
Capital Redemption Reserves
As per Companies Act, 2013, capital redemption reserve is created when company purchases its own shares out of free reserves or securities premium. A sum equal to the nominal value of the shares so purchased is transferred to capital redemption reserve and it is a non-distributable reserve.
Securities Premium
Securities premium is used to record the premium on issue of shares. The reserve can be utilised in accordance with the provision of the Companies Act, 2013.
Share Options Outstanding Account
The Employee Stock Options Reserve represents reserve in respect of equity settled share options granted to the Companyâs employees in pursuance of the Employee Stock Option Plan.
General Reserve
The Company created a General reserve in earlier years pursuant to the provisions of the Companies Act, 1956 wherein certain percentage of profits were required to be transferred to General Reserve before declaring dividends. As per Companies Act 2013, the requirements to transfer profits to General Reserve is not mandatory. General reserve is a free reserve available to the Company.
33 CONTINGENT LIABILITIES AND COMMITMENTS |
('' in Crores) |
||
Particulars |
As at 31st March, 2022 |
As at 31st March, 2021 |
|
(i) |
Contingent liabilities |
||
(a) Claims against the Companyâs Disputed Liabilities not Acknowledged as Debts |
|||
- Income Tax Liability for various years |
3.27 |
1.46 |
|
- Value Added Tax Liability |
- |
0.10 |
|
- Outstanding Liability of Tax Deducted at Source |
0.39 |
0.38 |
|
(b) Guarantees & Securities |
|||
- Performance Guarantees given under EPCG (Refer Note No. i below) |
6.32 |
6.32 |
|
(c) Other money for which the Company is contingently liable for litigation matter |
|||
- Bond given to Custom Authority |
18.45 |
18.45 |
|
(ii) |
Capital Commitments |
||
Estimated Amount of Contracts Remaining to be Executed on Capital Account and not Provided for in respect of Capital Assets (Net of Advances paid) |
29.98 |
1.23 |
|
(iii) |
Other Commitments |
||
Estimated Amount of Contracts Remaining to be executed on goods other than on Capital Account(Net of Advances) |
0.75 |
0.46 |
Note:
(i) The Company has obtained licenses under the Export Promotion Capital Goods Scheme (EPCG) for importing capital goods at a concessional rate of custom duty against submission of bank guarantee and bonds.
Under the terms of the respective schemes, the Company is required to earn foreign exchange value equivalent to, eight times and in certain cases six times of the duty saved in respect of licenses where export obligation has been fixed by the order of the Director General Foreign Trade, Ministry of Finance, as applicable within a specified period from the date of import of capital goods. The Export Promotion Capital Goods Schemes, Foreign Trade Policy 2009-2014 as issued by the Central Government of India, covers both manufacturerâs exports and service providers. Accordingly, in accordance with the Chapter 5 of Foreign Trade Policy 2009-2014, the Company has supplied the export of required value. Awaiting the required confirmation from the authorities, full duty saved amount under the above referred scheme has been disclosed as Contingent Liability.
Brief description of the Plans:
The Company has various schemes for employee benefits such as Provident Fund, ESIC, Gratuity and Leave Encashment. The Companyâs defined contribution plans are Provident Fund (in case of certain employees) and Employees State Insurance Fund (under the provisions of the Employeesâ Provident Funds and Miscellaneous Provisions Act, 1952). The Company has no further obligation beyond making the contributions to such plans.
A Defined Benefits Plan
The Companyâs defined benefit plans include Gratuity. The gratuity plan is governed by the Payment of Gratuity Act, 1972 under which an employee who has completed five years of service is entitled to specific benefits. The level of benefits provided depends on the memberâs length of service and salary at retirement age.
The above sensitivity analyses are based on change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
VIII. The Company expects to contribute '' 1.17 Crores (Previous Year : '' 1.74 Crores) to the gratuity trust during the financial year 2022-23.
The Company also has certain defined contribution plans. The contributions are made to registered provident fund, Employee State Insurance Corporation and Labour Welfare Fund administered by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the year towards defined contribution plans are as follows:
The Companyâs lease asset classes primarily consist of leases for land and buildings. The lease period for these contracts varies from 11 months to 5 years, in certain cases, mainly relating to rent of (parts of) buildings, with extension options. The Right-of-use assets and Lease liabilities as disclosed below, do not include short term and low value leases. In general, as usual with leases, the Companyâs obligations under its leases are secured by the lessorâs title to or legal ownership of the leased assets.
C. Rent expenses recorded for short term leases was X 6.69 Crores (Previous Year: X 5.09 Crores) for the year ended 31st March, 2022
D. The total cash out flows for leases are X 10.01 Crores (Previous Year: X 5.95 Crores) in the year, including the payments relating to short term and low value leases.
F. Leases not yet commenced to which Company is committed amounts to X 0.85 Crores (Previous Year: X 0.85 Crores) for a lease term of 5 years.
G. Rental income on assets given on operating lease is X 0.40 Crores (Previous Year : X 0.40 Crores) for the year ended 31st March, 2022.
H. The company has applied the practical expedient to all the eligible rent concessions. The amount recognised in profit or loss for F.Y 2021-22 to reflect changes in lease payments that arise from COVID-19 related rent concessions to which the company has applied the practical expedient is X 0.90 Crores (Previous Year : X 0.60 Crores).
The Company is exposed to Currency Risk arising from its trade exposures and Capital receipt / payments denominated, in other than the Functional Currency. The Company has a detailed policy which includes setting of the recognition parameters, benchmark targets, the boundaries within which the treasury has to perform and also lays down the checks and controls to ensure the continuing success of the treasury function.
The Company has defined strategies for addressing the risks for each category of exposures (e.g. for imports, for loans, etc.). The centralised treasury function aggregates the foreign exchange exposure and takes prudent measures to hedge the exposure based on prevalent macroeconomic conditions.
Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses financial reliability of customers and other counter parties, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of financial assets. Individual risk limits are set and periodically reviewed on the basis of such information.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:
i) Actual or expected significant adverse changes in business,
ii) Actual or expected significant changes in the operating results of the counterparty,
iii) Financial or economic conditions that are expected to cause a significant change to the counterpartyâs ability to meet its obligations,
The Company measures the expected credit loss of trade receivables based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, additional loss on collection of receivable is recognised.
i) Actual or expected significant adverse changes in business,
ii) Actual or expected significant changes in the operating results of the counterparty,
iii) Financial or economic conditions that are expected to cause a significant change to the counterpartyâs ability to meet its obligations,
The Company measures the expected credit loss of trade receivables based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, additional loss on collection of receivable is recognised.
The maximum exposure to the credit risk at the reporting date is primarily from trade receivable amounting to '' 2.49 crores as on 31st March, 2022 (Previous Year : '' 2.84 Crores).
The Company manages its capital to ensure that it will be able to continue as going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the Company consists of net debt (borrowings offset by cash and cash equivalent) and total equity of the Company.
The Company determines the amount of capital required on the basis of annual as well as long term operating plans and other strategic investment plans. The funding requirements are met through Non Current and Current borrowings. The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Companyâs liquidity position and cash and cash equivalents on the basis of expected cash flows.
Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Companyâs position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio. At the year end, there was no borrowing outstanding.
The Company is exposed to price risks arising from equity and mutual fund investments. Certain of the Companyâs equity investments are held for strategic rather than trading purposes.
In accordance with Ind AS 108 âOperating Segmentâ, segment information has been given in the consolidated financial statements and therefore, no separate disclosure on segment information is given in these Standalone financial statements.
Exceptional Item for the year ended 31st March, 2022 includes ? 12.46 Crores towards impairment of investment in wholly owned Subsidiary at Mauritius, which has investment in its wholly owned subsidiary at Sri Lanka. Considering the uncertainties around Sri Lankan economy which does not seems to be improve soon, Company has made impairment provision as a matter of prudence. It also includes ? 1.08 Crores towards interest paid to Government of Goa in relation to transfer of Casino License pursuant to merger of an erstwhile subsidiary company with the company in earlier year. In previous year, the Company has recovered loan of ? 55.95 Crores from Deltin Cruises and Entertainment Private Limited, and accordingly, the provision made towards doubtful recovery is reversed and shown under exceptional item for the year ended 31st March, 2021.
a) The Board of Directors has recommended final Equity dividend of ? 1.25 per equity share (Previous year ? 1/- per equity share) for the financial year 2021-22.
b) On 11th April, 2022 The Board of Director of the Company has approved the Scheme of Amalgamation (âSchemeâ) which comprise of amalgamation of wholly owned subsidiary Companies Daman Hospitality Private Limited and Daman Entertainment Private Limited with the Company. The Appointed date is 1st April, 2022. The Scheme is subject to approval of regulatory authorities and will be given effect to in the financial statement on receipt of such approvals.
Due to COVID-19 pandemic and the consequent lock downs announced by the respective Government Authorities, the operations of the Company were suspended since the third week of March, 2020 to October, 2020. During the current financial year also, consequent to the lock down due to the second/third wave of pandemic announced by the state governments, the Company could operate partially as follows:
- Casinos at Goa: For a part of April 2021 at 50% of normal capacity and with effect from 20th September 2021 with restrictions
- Hotel at Goa: For a part of April 2021 at 50% of normal capacity and with effect from 5th July 2021 with restrictions.
- Casino at Sikkim: For April 2021 and part of May, 2021 at 50 % of normal capacity and with effect from 16th August 2021 with restrictions.
The casino operation are allowed to operate at 100% capacity in Goa from 7th March 2022 and in Sikkim from 11th February 2022. In Daman, Government restriction for Hotel Industry were in force upto 28th February 2022 and thereafter no such restriction has been imposed.
Considering the overall gradual returning to normalcy of all segments of the Company the positive performance for the year and the managementâs assessment of the possible impact of this pandemic on the business operation and financial position of the Company and based on its initial assessment of the current indicators of the future economic condition, the Company expects that the COVID-19 pandemic would not have any material adverse impact on the recoverable values of its financial and non-financial assets and on the net worth of the Company.
Further, the Company is debt free and would have adequate liquidity available to honour its liabilities and obligations, as and when due. The management will continue to monitor any material changes to its COVID-19 impact assessment, resulting from the future economic conditions and future uncertainty, if any.
a Details of the Employee Share Option Plan of the Company
The options are granted at the price determined by the Nomination Remuneration Compensation Committee. Each option entitles the holder to exercise the right to apply for and seek allotment of one equity share of '' 1/- each. The Option granted in Financial Year 2017-18 and 2018-19 shall vest in three installments. On 23rd September, 2019, terms of option granted in FY 2018-19 have been modified, repriced and vesting period reduced to three years from four years. Accordingly fair value recalculated with modified terms. Details of options granted during the financial year 2017-18 & 2018-19 duly approved by the Nomination Remuneration Compensation Committee under the said scheme are given below.
Each employee share option converts into one equity share of the Company on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.
b Details of the Employee Share Appreciation Rights of the Company
The Nomination Remuneration Compensation Committee has granted Employee Stock Appreciation Rights (âESARâ) on 17th March, 2020 and 10th November, 2020 to certain eligible employees pursuant to the Companyâs Employee Stock Appreciation Rights plan, (âPlanâ). The grant price is determined based on a formulas as defined in the Plan. There are scheme under each plan with different vesting periods. The Plans is a administered by the Nomination Remuneration Compensation Committee.
An Employee Stock Appreciation Right (ESAR) is an award which provides the holder with the ability to profit from the appreciation in value of a set number of shares of company stock over a set period of time. The valuation of a stock appreciation right operates exactly like a stock option in that the employee benefits from any increases in stock price above the price set in the award. However, unlike an option, the employee is not required to pay an exercise price to exercise them, but simply receives the net amount of the increase in the stock price in either shares of company stock or Cash, as decided by The Nomination Remuneration Compensation Committee.
a) Volatility: Volatility is a measure of the amount by which a price has fluctuated or is expected to fluctuate during the year. The measure of volatility is used in Black Scholes annualized standard deviation of the continuously compounded rate of return on the stock over a period of time. The Company considered the daily historical volatility of the Companyâs expected life of each vest.
b) Risk Free Rate: The risk free rate being considered for the calculation is the interest rate applicable for a maturity equal to the expected life of the options based on the zero - coupon securities.
c) Expected Life of the Options / ESARs: Expected life of the options / ESARs is the period for which the Company expects the options/ ESARs to be live. The minimum life of a stock option / ESARs is the minimum period before which the options/ ESARs cannot be exercised and the maximum life is the period after which the options / ESARs cannot be exercised. The Company has calculated expected life as the average of life of the options / ESARs.
1. Current ratio: There is more than 25% reduction in Current Ratio from March, 2021 to March, 2022 primarily due to change in terms, the Company has classified Inter Corporate Deposit given to Delta Pleasure Cruises Company Private Limited and Marvel Resort Private Limited of '' 75 Crores & '' 125 Crores respectively as Investment in Quasi Equity in Subsidiary Company, as a consequence of which Current Assets reduced as compared to previous year resulting into decrease in current ratio.
2. Trade Payable turnover ratio: Increase in trade payable turnover in the financial year 2021-22, due to increase in revenue of the Company. Which resulted into more operational outflow during the current year.
3. Net capital turnover ratio: During the financial year 2021-22, Sales turnover of the Company increased as compared to previous year as a consequence of this working capital of the Company got increased, which resulted in to increase in net capital turnover ratio.
4. Net profit ratio: During the previous year, Company has booked Profit of '' 55.95 Crores as Exceptional Item due to which Net Profit ratio of previous year increased. Hence previous year ratio is not comparable with Current Year ratio.
5. Trade Receivable turnover ratio: For the financial year 2021-22 there is increase in trade receivable turnover ratio, due to increase in revenue of the Company, which resulted into more operational inflow during the current year.
6. Inventory turnover ratio: Increase in Inventory turnover in the financial year 2021-22, The Company has more operational days as compared to previous year. Hence Inventory turnover ratio increased as compared to previous year.
7 Return on Investment ratio and Return on Capital Employed: Company has made earning before tax of '' 108.19 Crores against '' 99.58 crores due to which return of investment ratio and return on Capital Employed improved in Current Year.
8. Debt Equity ratio and Debt Service Coverage Ratio: During the Current Year, the Company is Debt Free therefore Debt Equity Ratio and Debt Service Coverage Ratio is not applicable
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
(ii) The Company has identified five parties having status as struck off companies. Total value of purchase of goods & services from these struck off companies amounts to '' 0.15 Crores and having Closing balance of '' 0.02 Crores payable at the year end.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered
or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
(vi) No funds have been advanced or loaned or invested by the Company to or in any person(s) or entity(ies), including foreign entities (âthe intermediariesâ), 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 (âthe Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries.
(vii) No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âthe Funding Partiesâ), 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 (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
Except as detailed in the following table, the Company considers that the carrying amounts of financial instruments recognised in the financial statements approximate their fair values.
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Mar 31, 2022
c) Terms/Rights Attached to Equity Shares
The Company has only one class of equity shares having a par value of '' 1/- per share. Each holder of equity shares is entitled to one vote per share. 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 shareholders.
The Company declares and pays dividends in Indian Rupees. The Directors have recommended, subject to approval of the shareholders at the ensuing Annual General Meeting, a Final Dividend for the year ended on 2022 : 125% (2021: 100%). Total dividend including interim dividend for the financial year 2022 is 125% (2021 : 100%).
Nature and purpose of reserve:-Capital Reserve on Business Combination
It represent the difference, between the amount recorded as share capital issued plus any additional consideration in the form of cash or other assets and the amount of net asset value of the transferor company acquired by the company.
Capital Redemption Reserves
As per Companies Act, 2013, capital redemption reserve is created when company purchases its own shares out of free reserves or securities premium. A sum equal to the nominal value of the shares so purchased is transferred to capital redemption reserve and it is a non-distributable reserve.
Securities Premium
Securities premium is used to record the premium on issue of shares. The reserve can be utilised in accordance with the provision of the Companies Act, 2013.
Share Options Outstanding Account
The Employee Stock Options Reserve represents reserve in respect of equity settled share options granted to the Companyâs employees in pursuance of the Employee Stock Option Plan.
General Reserve
The Company created a General reserve in earlier years pursuant to the provisions of the Companies Act, 1956 wherein certain percentage of profits were required to be transferred to General Reserve before declaring dividends. As per Companies Act 2013, the requirements to transfer profits to General Reserve is not mandatory. General reserve is a free reserve available to the Company.
33 CONTINGENT LIABILITIES AND COMMITMENTS |
('' in Crores) |
||
Particulars |
As at 31st March, 2022 |
As at 31st March, 2021 |
|
(i) |
Contingent liabilities |
||
(a) Claims against the Companyâs Disputed Liabilities not Acknowledged as Debts |
|||
- Income Tax Liability for various years |
3.27 |
1.46 |
|
- Value Added Tax Liability |
- |
0.10 |
|
- Outstanding Liability of Tax Deducted at Source |
0.39 |
0.38 |
|
(b) Guarantees & Securities |
|||
- Performance Guarantees given under EPCG (Refer Note No. i below) |
6.32 |
6.32 |
|
(c) Other money for which the Company is contingently liable for litigation matter |
|||
- Bond given to Custom Authority |
18.45 |
18.45 |
|
(ii) |
Capital Commitments |
||
Estimated Amount of Contracts Remaining to be Executed on Capital Account and not Provided for in respect of Capital Assets (Net of Advances paid) |
29.98 |
1.23 |
|
(iii) |
Other Commitments |
||
Estimated Amount of Contracts Remaining to be executed on goods other than on Capital Account(Net of Advances) |
0.75 |
0.46 |
Note:
(i) The Company has obtained licenses under the Export Promotion Capital Goods Scheme (EPCG) for importing capital goods at a concessional rate of custom duty against submission of bank guarantee and bonds.
Under the terms of the respective schemes, the Company is required to earn foreign exchange value equivalent to, eight times and in certain cases six times of the duty saved in respect of licenses where export obligation has been fixed by the order of the Director General Foreign Trade, Ministry of Finance, as applicable within a specified period from the date of import of capital goods. The Export Promotion Capital Goods Schemes, Foreign Trade Policy 2009-2014 as issued by the Central Government of India, covers both manufacturerâs exports and service providers. Accordingly, in accordance with the Chapter 5 of Foreign Trade Policy 2009-2014, the Company has supplied the export of required value. Awaiting the required confirmation from the authorities, full duty saved amount under the above referred scheme has been disclosed as Contingent Liability.
Brief description of the Plans:
The Company has various schemes for employee benefits such as Provident Fund, ESIC, Gratuity and Leave Encashment. The Companyâs defined contribution plans are Provident Fund (in case of certain employees) and Employees State Insurance Fund (under the provisions of the Employeesâ Provident Funds and Miscellaneous Provisions Act, 1952). The Company has no further obligation beyond making the contributions to such plans.
A Defined Benefits Plan
The Companyâs defined benefit plans include Gratuity. The gratuity plan is governed by the Payment of Gratuity Act, 1972 under which an employee who has completed five years of service is entitled to specific benefits. The level of benefits provided depends on the memberâs length of service and salary at retirement age.
The above sensitivity analyses are based on change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
VIII. The Company expects to contribute '' 1.17 Crores (Previous Year : '' 1.74 Crores) to the gratuity trust during the financial year 2022-23.
The Company also has certain defined contribution plans. The contributions are made to registered provident fund, Employee State Insurance Corporation and Labour Welfare Fund administered by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the year towards defined contribution plans are as follows:
The Companyâs lease asset classes primarily consist of leases for land and buildings. The lease period for these contracts varies from 11 months to 5 years, in certain cases, mainly relating to rent of (parts of) buildings, with extension options. The Right-of-use assets and Lease liabilities as disclosed below, do not include short term and low value leases. In general, as usual with leases, the Companyâs obligations under its leases are secured by the lessorâs title to or legal ownership of the leased assets.
C. Rent expenses recorded for short term leases was X 6.69 Crores (Previous Year: X 5.09 Crores) for the year ended 31st March, 2022
D. The total cash out flows for leases are X 10.01 Crores (Previous Year: X 5.95 Crores) in the year, including the payments relating to short term and low value leases.
F. Leases not yet commenced to which Company is committed amounts to X 0.85 Crores (Previous Year: X 0.85 Crores) for a lease term of 5 years.
G. Rental income on assets given on operating lease is X 0.40 Crores (Previous Year : X 0.40 Crores) for the year ended 31st March, 2022.
H. The company has applied the practical expedient to all the eligible rent concessions. The amount recognised in profit or loss for F.Y 2021-22 to reflect changes in lease payments that arise from COVID-19 related rent concessions to which the company has applied the practical expedient is X 0.90 Crores (Previous Year : X 0.60 Crores).
The Company is exposed to Currency Risk arising from its trade exposures and Capital receipt / payments denominated, in other than the Functional Currency. The Company has a detailed policy which includes setting of the recognition parameters, benchmark targets, the boundaries within which the treasury has to perform and also lays down the checks and controls to ensure the continuing success of the treasury function.
The Company has defined strategies for addressing the risks for each category of exposures (e.g. for imports, for loans, etc.). The centralised treasury function aggregates the foreign exchange exposure and takes prudent measures to hedge the exposure based on prevalent macroeconomic conditions.
Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses financial reliability of customers and other counter parties, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of financial assets. Individual risk limits are set and periodically reviewed on the basis of such information.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:
i) Actual or expected significant adverse changes in business,
ii) Actual or expected significant changes in the operating results of the counterparty,
iii) Financial or economic conditions that are expected to cause a significant change to the counterpartyâs ability to meet its obligations,
The Company measures the expected credit loss of trade receivables based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, additional loss on collection of receivable is recognised.
i) Actual or expected significant adverse changes in business,
ii) Actual or expected significant changes in the operating results of the counterparty,
iii) Financial or economic conditions that are expected to cause a significant change to the counterpartyâs ability to meet its obligations,
The Company measures the expected credit loss of trade receivables based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, additional loss on collection of receivable is recognised.
The maximum exposure to the credit risk at the reporting date is primarily from trade receivable amounting to '' 2.49 crores as on 31st March, 2022 (Previous Year : '' 2.84 Crores).
The Company manages its capital to ensure that it will be able to continue as going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the Company consists of net debt (borrowings offset by cash and cash equivalent) and total equity of the Company.
The Company determines the amount of capital required on the basis of annual as well as long term operating plans and other strategic investment plans. The funding requirements are met through Non Current and Current borrowings. The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Companyâs liquidity position and cash and cash equivalents on the basis of expected cash flows.
Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Companyâs position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio. At the year end, there was no borrowing outstanding.
The Company is exposed to price risks arising from equity and mutual fund investments. Certain of the Companyâs equity investments are held for strategic rather than trading purposes.
In accordance with Ind AS 108 âOperating Segmentâ, segment information has been given in the consolidated financial statements and therefore, no separate disclosure on segment information is given in these Standalone financial statements.
Exceptional Item for the year ended 31st March, 2022 includes ? 12.46 Crores towards impairment of investment in wholly owned Subsidiary at Mauritius, which has investment in its wholly owned subsidiary at Sri Lanka. Considering the uncertainties around Sri Lankan economy which does not seems to be improve soon, Company has made impairment provision as a matter of prudence. It also includes ? 1.08 Crores towards interest paid to Government of Goa in relation to transfer of Casino License pursuant to merger of an erstwhile subsidiary company with the company in earlier year. In previous year, the Company has recovered loan of ? 55.95 Crores from Deltin Cruises and Entertainment Private Limited, and accordingly, the provision made towards doubtful recovery is reversed and shown under exceptional item for the year ended 31st March, 2021.
a) The Board of Directors has recommended final Equity dividend of ? 1.25 per equity share (Previous year ? 1/- per equity share) for the financial year 2021-22.
b) On 11th April, 2022 The Board of Director of the Company has approved the Scheme of Amalgamation (âSchemeâ) which comprise of amalgamation of wholly owned subsidiary Companies Daman Hospitality Private Limited and Daman Entertainment Private Limited with the Company. The Appointed date is 1st April, 2022. The Scheme is subject to approval of regulatory authorities and will be given effect to in the financial statement on receipt of such approvals.
Due to COVID-19 pandemic and the consequent lock downs announced by the respective Government Authorities, the operations of the Company were suspended since the third week of March, 2020 to October, 2020. During the current financial year also, consequent to the lock down due to the second/third wave of pandemic announced by the state governments, the Company could operate partially as follows:
- Casinos at Goa: For a part of April 2021 at 50% of normal capacity and with effect from 20th September 2021 with restrictions
- Hotel at Goa: For a part of April 2021 at 50% of normal capacity and with effect from 5th July 2021 with restrictions.
- Casino at Sikkim: For April 2021 and part of May, 2021 at 50 % of normal capacity and with effect from 16th August 2021 with restrictions.
The casino operation are allowed to operate at 100% capacity in Goa from 7th March 2022 and in Sikkim from 11th February 2022. In Daman, Government restriction for Hotel Industry were in force upto 28th February 2022 and thereafter no such restriction has been imposed.
Considering the overall gradual returning to normalcy of all segments of the Company the positive performance for the year and the managementâs assessment of the possible impact of this pandemic on the business operation and financial position of the Company and based on its initial assessment of the current indicators of the future economic condition, the Company expects that the COVID-19 pandemic would not have any material adverse impact on the recoverable values of its financial and non-financial assets and on the net worth of the Company.
Further, the Company is debt free and would have adequate liquidity available to honour its liabilities and obligations, as and when due. The management will continue to monitor any material changes to its COVID-19 impact assessment, resulting from the future economic conditions and future uncertainty, if any.
a Details of the Employee Share Option Plan of the Company
The options are granted at the price determined by the Nomination Remuneration Compensation Committee. Each option entitles the holder to exercise the right to apply for and seek allotment of one equity share of '' 1/- each. The Option granted in Financial Year 2017-18 and 2018-19 shall vest in three installments. On 23rd September, 2019, terms of option granted in FY 2018-19 have been modified, repriced and vesting period reduced to three years from four years. Accordingly fair value recalculated with modified terms. Details of options granted during the financial year 2017-18 & 2018-19 duly approved by the Nomination Remuneration Compensation Committee under the said scheme are given below.
Each employee share option converts into one equity share of the Company on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.
b Details of the Employee Share Appreciation Rights of the Company
The Nomination Remuneration Compensation Committee has granted Employee Stock Appreciation Rights (âESARâ) on 17th March, 2020 and 10th November, 2020 to certain eligible employees pursuant to the Companyâs Employee Stock Appreciation Rights plan, (âPlanâ). The grant price is determined based on a formulas as defined in the Plan. There are scheme under each plan with different vesting periods. The Plans is a administered by the Nomination Remuneration Compensation Committee.
An Employee Stock Appreciation Right (ESAR) is an award which provides the holder with the ability to profit from the appreciation in value of a set number of shares of company stock over a set period of time. The valuation of a stock appreciation right operates exactly like a stock option in that the employee benefits from any increases in stock price above the price set in the award. However, unlike an option, the employee is not required to pay an exercise price to exercise them, but simply receives the net amount of the increase in the stock price in either shares of company stock or Cash, as decided by The Nomination Remuneration Compensation Committee.
a) Volatility: Volatility is a measure of the amount by which a price has fluctuated or is expected to fluctuate during the year. The measure of volatility is used in Black Scholes annualized standard deviation of the continuously compounded rate of return on the stock over a period of time. The Company considered the daily historical volatility of the Companyâs expected life of each vest.
b) Risk Free Rate: The risk free rate being considered for the calculation is the interest rate applicable for a maturity equal to the expected life of the options based on the zero - coupon securities.
c) Expected Life of the Options / ESARs: Expected life of the options / ESARs is the period for which the Company expects the options/ ESARs to be live. The minimum life of a stock option / ESARs is the minimum period before which the options/ ESARs cannot be exercised and the maximum life is the period after which the options / ESARs cannot be exercised. The Company has calculated expected life as the average of life of the options / ESARs.
1. Current ratio: There is more than 25% reduction in Current Ratio from March, 2021 to March, 2022 primarily due to change in terms, the Company has classified Inter Corporate Deposit given to Delta Pleasure Cruises Company Private Limited and Marvel Resort Private Limited of '' 75 Crores & '' 125 Crores respectively as Investment in Quasi Equity in Subsidiary Company, as a consequence of which Current Assets reduced as compared to previous year resulting into decrease in current ratio.
2. Trade Payable turnover ratio: Increase in trade payable turnover in the financial year 2021-22, due to increase in revenue of the Company. Which resulted into more operational outflow during the current year.
3. Net capital turnover ratio: During the financial year 2021-22, Sales turnover of the Company increased as compared to previous year as a consequence of this working capital of the Company got increased, which resulted in to increase in net capital turnover ratio.
4. Net profit ratio: During the previous year, Company has booked Profit of '' 55.95 Crores as Exceptional Item due to which Net Profit ratio of previous year increased. Hence previous year ratio is not comparable with Current Year ratio.
5. Trade Receivable turnover ratio: For the financial year 2021-22 there is increase in trade receivable turnover ratio, due to increase in revenue of the Company, which resulted into more operational inflow during the current year.
6. Inventory turnover ratio: Increase in Inventory turnover in the financial year 2021-22, The Company has more operational days as compared to previous year. Hence Inventory turnover ratio increased as compared to previous year.
7 Return on Investment ratio and Return on Capital Employed: Company has made earning before tax of '' 108.19 Crores against '' 99.58 crores due to which return of investment ratio and return on Capital Employed improved in Current Year.
8. Debt Equity ratio and Debt Service Coverage Ratio: During the Current Year, the Company is Debt Free therefore Debt Equity Ratio and Debt Service Coverage Ratio is not applicable
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
(ii) The Company has identified five parties having status as struck off companies. Total value of purchase of goods & services from these struck off companies amounts to '' 0.15 Crores and having Closing balance of '' 0.02 Crores payable at the year end.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered
or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
(vi) No funds have been advanced or loaned or invested by the Company to or in any person(s) or entity(ies), including foreign entities (âthe intermediariesâ), 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 (âthe Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries.
(vii) No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âthe Funding Partiesâ), 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 (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
Except as detailed in the following table, the Company considers that the carrying amounts of financial instruments recognised in the financial statements approximate their fair values.
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Mar 31, 2022
c) Terms/Rights Attached to Equity Shares
The Company has only one class of equity shares having a par value of '' 1/- per share. Each holder of equity shares is entitled to one vote per share. 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 shareholders.
The Company declares and pays dividends in Indian Rupees. The Directors have recommended, subject to approval of the shareholders at the ensuing Annual General Meeting, a Final Dividend for the year ended on 2022 : 125% (2021: 100%). Total dividend including interim dividend for the financial year 2022 is 125% (2021 : 100%).
Nature and purpose of reserve:-Capital Reserve on Business Combination
It represent the difference, between the amount recorded as share capital issued plus any additional consideration in the form of cash or other assets and the amount of net asset value of the transferor company acquired by the company.
Capital Redemption Reserves
As per Companies Act, 2013, capital redemption reserve is created when company purchases its own shares out of free reserves or securities premium. A sum equal to the nominal value of the shares so purchased is transferred to capital redemption reserve and it is a non-distributable reserve.
Securities Premium
Securities premium is used to record the premium on issue of shares. The reserve can be utilised in accordance with the provision of the Companies Act, 2013.
Share Options Outstanding Account
The Employee Stock Options Reserve represents reserve in respect of equity settled share options granted to the Companyâs employees in pursuance of the Employee Stock Option Plan.
General Reserve
The Company created a General reserve in earlier years pursuant to the provisions of the Companies Act, 1956 wherein certain percentage of profits were required to be transferred to General Reserve before declaring dividends. As per Companies Act 2013, the requirements to transfer profits to General Reserve is not mandatory. General reserve is a free reserve available to the Company.
33 CONTINGENT LIABILITIES AND COMMITMENTS |
('' in Crores) |
||
Particulars |
As at 31st March, 2022 |
As at 31st March, 2021 |
|
(i) |
Contingent liabilities |
||
(a) Claims against the Companyâs Disputed Liabilities not Acknowledged as Debts |
|||
- Income Tax Liability for various years |
3.27 |
1.46 |
|
- Value Added Tax Liability |
- |
0.10 |
|
- Outstanding Liability of Tax Deducted at Source |
0.39 |
0.38 |
|
(b) Guarantees & Securities |
|||
- Performance Guarantees given under EPCG (Refer Note No. i below) |
6.32 |
6.32 |
|
(c) Other money for which the Company is contingently liable for litigation matter |
|||
- Bond given to Custom Authority |
18.45 |
18.45 |
|
(ii) |
Capital Commitments |
||
Estimated Amount of Contracts Remaining to be Executed on Capital Account and not Provided for in respect of Capital Assets (Net of Advances paid) |
29.98 |
1.23 |
|
(iii) |
Other Commitments |
||
Estimated Amount of Contracts Remaining to be executed on goods other than on Capital Account(Net of Advances) |
0.75 |
0.46 |
Note:
(i) The Company has obtained licenses under the Export Promotion Capital Goods Scheme (EPCG) for importing capital goods at a concessional rate of custom duty against submission of bank guarantee and bonds.
Under the terms of the respective schemes, the Company is required to earn foreign exchange value equivalent to, eight times and in certain cases six times of the duty saved in respect of licenses where export obligation has been fixed by the order of the Director General Foreign Trade, Ministry of Finance, as applicable within a specified period from the date of import of capital goods. The Export Promotion Capital Goods Schemes, Foreign Trade Policy 2009-2014 as issued by the Central Government of India, covers both manufacturerâs exports and service providers. Accordingly, in accordance with the Chapter 5 of Foreign Trade Policy 2009-2014, the Company has supplied the export of required value. Awaiting the required confirmation from the authorities, full duty saved amount under the above referred scheme has been disclosed as Contingent Liability.
Brief description of the Plans:
The Company has various schemes for employee benefits such as Provident Fund, ESIC, Gratuity and Leave Encashment. The Companyâs defined contribution plans are Provident Fund (in case of certain employees) and Employees State Insurance Fund (under the provisions of the Employeesâ Provident Funds and Miscellaneous Provisions Act, 1952). The Company has no further obligation beyond making the contributions to such plans.
A Defined Benefits Plan
The Companyâs defined benefit plans include Gratuity. The gratuity plan is governed by the Payment of Gratuity Act, 1972 under which an employee who has completed five years of service is entitled to specific benefits. The level of benefits provided depends on the memberâs length of service and salary at retirement age.
The above sensitivity analyses are based on change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
VIII. The Company expects to contribute '' 1.17 Crores (Previous Year : '' 1.74 Crores) to the gratuity trust during the financial year 2022-23.
The Company also has certain defined contribution plans. The contributions are made to registered provident fund, Employee State Insurance Corporation and Labour Welfare Fund administered by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the year towards defined contribution plans are as follows:
The Companyâs lease asset classes primarily consist of leases for land and buildings. The lease period for these contracts varies from 11 months to 5 years, in certain cases, mainly relating to rent of (parts of) buildings, with extension options. The Right-of-use assets and Lease liabilities as disclosed below, do not include short term and low value leases. In general, as usual with leases, the Companyâs obligations under its leases are secured by the lessorâs title to or legal ownership of the leased assets.
C. Rent expenses recorded for short term leases was X 6.69 Crores (Previous Year: X 5.09 Crores) for the year ended 31st March, 2022
D. The total cash out flows for leases are X 10.01 Crores (Previous Year: X 5.95 Crores) in the year, including the payments relating to short term and low value leases.
F. Leases not yet commenced to which Company is committed amounts to X 0.85 Crores (Previous Year: X 0.85 Crores) for a lease term of 5 years.
G. Rental income on assets given on operating lease is X 0.40 Crores (Previous Year : X 0.40 Crores) for the year ended 31st March, 2022.
H. The company has applied the practical expedient to all the eligible rent concessions. The amount recognised in profit or loss for F.Y 2021-22 to reflect changes in lease payments that arise from COVID-19 related rent concessions to which the company has applied the practical expedient is X 0.90 Crores (Previous Year : X 0.60 Crores).
The Company is exposed to Currency Risk arising from its trade exposures and Capital receipt / payments denominated, in other than the Functional Currency. The Company has a detailed policy which includes setting of the recognition parameters, benchmark targets, the boundaries within which the treasury has to perform and also lays down the checks and controls to ensure the continuing success of the treasury function.
The Company has defined strategies for addressing the risks for each category of exposures (e.g. for imports, for loans, etc.). The centralised treasury function aggregates the foreign exchange exposure and takes prudent measures to hedge the exposure based on prevalent macroeconomic conditions.
Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses financial reliability of customers and other counter parties, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of financial assets. Individual risk limits are set and periodically reviewed on the basis of such information.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:
i) Actual or expected significant adverse changes in business,
ii) Actual or expected significant changes in the operating results of the counterparty,
iii) Financial or economic conditions that are expected to cause a significant change to the counterpartyâs ability to meet its obligations,
The Company measures the expected credit loss of trade receivables based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, additional loss on collection of receivable is recognised.
i) Actual or expected significant adverse changes in business,
ii) Actual or expected significant changes in the operating results of the counterparty,
iii) Financial or economic conditions that are expected to cause a significant change to the counterpartyâs ability to meet its obligations,
The Company measures the expected credit loss of trade receivables based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, additional loss on collection of receivable is recognised.
The maximum exposure to the credit risk at the reporting date is primarily from trade receivable amounting to '' 2.49 crores as on 31st March, 2022 (Previous Year : '' 2.84 Crores).
The Company manages its capital to ensure that it will be able to continue as going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the Company consists of net debt (borrowings offset by cash and cash equivalent) and total equity of the Company.
The Company determines the amount of capital required on the basis of annual as well as long term operating plans and other strategic investment plans. The funding requirements are met through Non Current and Current borrowings. The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Companyâs liquidity position and cash and cash equivalents on the basis of expected cash flows.
Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Companyâs position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio. At the year end, there was no borrowing outstanding.
The Company is exposed to price risks arising from equity and mutual fund investments. Certain of the Companyâs equity investments are held for strategic rather than trading purposes.
In accordance with Ind AS 108 âOperating Segmentâ, segment information has been given in the consolidated financial statements and therefore, no separate disclosure on segment information is given in these Standalone financial statements.
Exceptional Item for the year ended 31st March, 2022 includes ? 12.46 Crores towards impairment of investment in wholly owned Subsidiary at Mauritius, which has investment in its wholly owned subsidiary at Sri Lanka. Considering the uncertainties around Sri Lankan economy which does not seems to be improve soon, Company has made impairment provision as a matter of prudence. It also includes ? 1.08 Crores towards interest paid to Government of Goa in relation to transfer of Casino License pursuant to merger of an erstwhile subsidiary company with the company in earlier year. In previous year, the Company has recovered loan of ? 55.95 Crores from Deltin Cruises and Entertainment Private Limited, and accordingly, the provision made towards doubtful recovery is reversed and shown under exceptional item for the year ended 31st March, 2021.
a) The Board of Directors has recommended final Equity dividend of ? 1.25 per equity share (Previous year ? 1/- per equity share) for the financial year 2021-22.
b) On 11th April, 2022 The Board of Director of the Company has approved the Scheme of Amalgamation (âSchemeâ) which comprise of amalgamation of wholly owned subsidiary Companies Daman Hospitality Private Limited and Daman Entertainment Private Limited with the Company. The Appointed date is 1st April, 2022. The Scheme is subject to approval of regulatory authorities and will be given effect to in the financial statement on receipt of such approvals.
Due to COVID-19 pandemic and the consequent lock downs announced by the respective Government Authorities, the operations of the Company were suspended since the third week of March, 2020 to October, 2020. During the current financial year also, consequent to the lock down due to the second/third wave of pandemic announced by the state governments, the Company could operate partially as follows:
- Casinos at Goa: For a part of April 2021 at 50% of normal capacity and with effect from 20th September 2021 with restrictions
- Hotel at Goa: For a part of April 2021 at 50% of normal capacity and with effect from 5th July 2021 with restrictions.
- Casino at Sikkim: For April 2021 and part of May, 2021 at 50 % of normal capacity and with effect from 16th August 2021 with restrictions.
The casino operation are allowed to operate at 100% capacity in Goa from 7th March 2022 and in Sikkim from 11th February 2022. In Daman, Government restriction for Hotel Industry were in force upto 28th February 2022 and thereafter no such restriction has been imposed.
Considering the overall gradual returning to normalcy of all segments of the Company the positive performance for the year and the managementâs assessment of the possible impact of this pandemic on the business operation and financial position of the Company and based on its initial assessment of the current indicators of the future economic condition, the Company expects that the COVID-19 pandemic would not have any material adverse impact on the recoverable values of its financial and non-financial assets and on the net worth of the Company.
Further, the Company is debt free and would have adequate liquidity available to honour its liabilities and obligations, as and when due. The management will continue to monitor any material changes to its COVID-19 impact assessment, resulting from the future economic conditions and future uncertainty, if any.
a Details of the Employee Share Option Plan of the Company
The options are granted at the price determined by the Nomination Remuneration Compensation Committee. Each option entitles the holder to exercise the right to apply for and seek allotment of one equity share of '' 1/- each. The Option granted in Financial Year 2017-18 and 2018-19 shall vest in three installments. On 23rd September, 2019, terms of option granted in FY 2018-19 have been modified, repriced and vesting period reduced to three years from four years. Accordingly fair value recalculated with modified terms. Details of options granted during the financial year 2017-18 & 2018-19 duly approved by the Nomination Remuneration Compensation Committee under the said scheme are given below.
Each employee share option converts into one equity share of the Company on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.
b Details of the Employee Share Appreciation Rights of the Company
The Nomination Remuneration Compensation Committee has granted Employee Stock Appreciation Rights (âESARâ) on 17th March, 2020 and 10th November, 2020 to certain eligible employees pursuant to the Companyâs Employee Stock Appreciation Rights plan, (âPlanâ). The grant price is determined based on a formulas as defined in the Plan. There are scheme under each plan with different vesting periods. The Plans is a administered by the Nomination Remuneration Compensation Committee.
An Employee Stock Appreciation Right (ESAR) is an award which provides the holder with the ability to profit from the appreciation in value of a set number of shares of company stock over a set period of time. The valuation of a stock appreciation right operates exactly like a stock option in that the employee benefits from any increases in stock price above the price set in the award. However, unlike an option, the employee is not required to pay an exercise price to exercise them, but simply receives the net amount of the increase in the stock price in either shares of company stock or Cash, as decided by The Nomination Remuneration Compensation Committee.
a) Volatility: Volatility is a measure of the amount by which a price has fluctuated or is expected to fluctuate during the year. The measure of volatility is used in Black Scholes annualized standard deviation of the continuously compounded rate of return on the stock over a period of time. The Company considered the daily historical volatility of the Companyâs expected life of each vest.
b) Risk Free Rate: The risk free rate being considered for the calculation is the interest rate applicable for a maturity equal to the expected life of the options based on the zero - coupon securities.
c) Expected Life of the Options / ESARs: Expected life of the options / ESARs is the period for which the Company expects the options/ ESARs to be live. The minimum life of a stock option / ESARs is the minimum period before which the options/ ESARs cannot be exercised and the maximum life is the period after which the options / ESARs cannot be exercised. The Company has calculated expected life as the average of life of the options / ESARs.
1. Current ratio: There is more than 25% reduction in Current Ratio from March, 2021 to March, 2022 primarily due to change in terms, the Company has classified Inter Corporate Deposit given to Delta Pleasure Cruises Company Private Limited and Marvel Resort Private Limited of '' 75 Crores & '' 125 Crores respectively as Investment in Quasi Equity in Subsidiary Company, as a consequence of which Current Assets reduced as compared to previous year resulting into decrease in current ratio.
2. Trade Payable turnover ratio: Increase in trade payable turnover in the financial year 2021-22, due to increase in revenue of the Company. Which resulted into more operational outflow during the current year.
3. Net capital turnover ratio: During the financial year 2021-22, Sales turnover of the Company increased as compared to previous year as a consequence of this working capital of the Company got increased, which resulted in to increase in net capital turnover ratio.
4. Net profit ratio: During the previous year, Company has booked Profit of '' 55.95 Crores as Exceptional Item due to which Net Profit ratio of previous year increased. Hence previous year ratio is not comparable with Current Year ratio.
5. Trade Receivable turnover ratio: For the financial year 2021-22 there is increase in trade receivable turnover ratio, due to increase in revenue of the Company, which resulted into more operational inflow during the current year.
6. Inventory turnover ratio: Increase in Inventory turnover in the financial year 2021-22, The Company has more operational days as compared to previous year. Hence Inventory turnover ratio increased as compared to previous year.
7 Return on Investment ratio and Return on Capital Employed: Company has made earning before tax of '' 108.19 Crores against '' 99.58 crores due to which return of investment ratio and return on Capital Employed improved in Current Year.
8. Debt Equity ratio and Debt Service Coverage Ratio: During the Current Year, the Company is Debt Free therefore Debt Equity Ratio and Debt Service Coverage Ratio is not applicable
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
(ii) The Company has identified five parties having status as struck off companies. Total value of purchase of goods & services from these struck off companies amounts to '' 0.15 Crores and having Closing balance of '' 0.02 Crores payable at the year end.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered
or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
(vi) No funds have been advanced or loaned or invested by the Company to or in any person(s) or entity(ies), including foreign entities (âthe intermediariesâ), 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 (âthe Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries.
(vii) No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âthe Funding Partiesâ), 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 (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
Except as detailed in the following table, the Company considers that the carrying amounts of financial instruments recognised in the financial statements approximate their fair values.
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Mar 31, 2022
c) Terms/Rights Attached to Equity Shares
The Company has only one class of equity shares having a par value of '' 1/- per share. Each holder of equity shares is entitled to one vote per share. 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 shareholders.
The Company declares and pays dividends in Indian Rupees. The Directors have recommended, subject to approval of the shareholders at the ensuing Annual General Meeting, a Final Dividend for the year ended on 2022 : 125% (2021: 100%). Total dividend including interim dividend for the financial year 2022 is 125% (2021 : 100%).
Nature and purpose of reserve:-Capital Reserve on Business Combination
It represent the difference, between the amount recorded as share capital issued plus any additional consideration in the form of cash or other assets and the amount of net asset value of the transferor company acquired by the company.
Capital Redemption Reserves
As per Companies Act, 2013, capital redemption reserve is created when company purchases its own shares out of free reserves or securities premium. A sum equal to the nominal value of the shares so purchased is transferred to capital redemption reserve and it is a non-distributable reserve.
Securities Premium
Securities premium is used to record the premium on issue of shares. The reserve can be utilised in accordance with the provision of the Companies Act, 2013.
Share Options Outstanding Account
The Employee Stock Options Reserve represents reserve in respect of equity settled share options granted to the Companyâs employees in pursuance of the Employee Stock Option Plan.
General Reserve
The Company created a General reserve in earlier years pursuant to the provisions of the Companies Act, 1956 wherein certain percentage of profits were required to be transferred to General Reserve before declaring dividends. As per Companies Act 2013, the requirements to transfer profits to General Reserve is not mandatory. General reserve is a free reserve available to the Company.
33 CONTINGENT LIABILITIES AND COMMITMENTS |
('' in Crores) |
||
Particulars |
As at 31st March, 2022 |
As at 31st March, 2021 |
|
(i) |
Contingent liabilities |
||
(a) Claims against the Companyâs Disputed Liabilities not Acknowledged as Debts |
|||
- Income Tax Liability for various years |
3.27 |
1.46 |
|
- Value Added Tax Liability |
- |
0.10 |
|
- Outstanding Liability of Tax Deducted at Source |
0.39 |
0.38 |
|
(b) Guarantees & Securities |
|||
- Performance Guarantees given under EPCG (Refer Note No. i below) |
6.32 |
6.32 |
|
(c) Other money for which the Company is contingently liable for litigation matter |
|||
- Bond given to Custom Authority |
18.45 |
18.45 |
|
(ii) |
Capital Commitments |
||
Estimated Amount of Contracts Remaining to be Executed on Capital Account and not Provided for in respect of Capital Assets (Net of Advances paid) |
29.98 |
1.23 |
|
(iii) |
Other Commitments |
||
Estimated Amount of Contracts Remaining to be executed on goods other than on Capital Account(Net of Advances) |
0.75 |
0.46 |
Note:
(i) The Company has obtained licenses under the Export Promotion Capital Goods Scheme (EPCG) for importing capital goods at a concessional rate of custom duty against submission of bank guarantee and bonds.
Under the terms of the respective schemes, the Company is required to earn foreign exchange value equivalent to, eight times and in certain cases six times of the duty saved in respect of licenses where export obligation has been fixed by the order of the Director General Foreign Trade, Ministry of Finance, as applicable within a specified period from the date of import of capital goods. The Export Promotion Capital Goods Schemes, Foreign Trade Policy 2009-2014 as issued by the Central Government of India, covers both manufacturerâs exports and service providers. Accordingly, in accordance with the Chapter 5 of Foreign Trade Policy 2009-2014, the Company has supplied the export of required value. Awaiting the required confirmation from the authorities, full duty saved amount under the above referred scheme has been disclosed as Contingent Liability.
Brief description of the Plans:
The Company has various schemes for employee benefits such as Provident Fund, ESIC, Gratuity and Leave Encashment. The Companyâs defined contribution plans are Provident Fund (in case of certain employees) and Employees State Insurance Fund (under the provisions of the Employeesâ Provident Funds and Miscellaneous Provisions Act, 1952). The Company has no further obligation beyond making the contributions to such plans.
A Defined Benefits Plan
The Companyâs defined benefit plans include Gratuity. The gratuity plan is governed by the Payment of Gratuity Act, 1972 under which an employee who has completed five years of service is entitled to specific benefits. The level of benefits provided depends on the memberâs length of service and salary at retirement age.
The above sensitivity analyses are based on change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
VIII. The Company expects to contribute '' 1.17 Crores (Previous Year : '' 1.74 Crores) to the gratuity trust during the financial year 2022-23.
The Company also has certain defined contribution plans. The contributions are made to registered provident fund, Employee State Insurance Corporation and Labour Welfare Fund administered by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the year towards defined contribution plans are as follows:
The Companyâs lease asset classes primarily consist of leases for land and buildings. The lease period for these contracts varies from 11 months to 5 years, in certain cases, mainly relating to rent of (parts of) buildings, with extension options. The Right-of-use assets and Lease liabilities as disclosed below, do not include short term and low value leases. In general, as usual with leases, the Companyâs obligations under its leases are secured by the lessorâs title to or legal ownership of the leased assets.
C. Rent expenses recorded for short term leases was X 6.69 Crores (Previous Year: X 5.09 Crores) for the year ended 31st March, 2022
D. The total cash out flows for leases are X 10.01 Crores (Previous Year: X 5.95 Crores) in the year, including the payments relating to short term and low value leases.
F. Leases not yet commenced to which Company is committed amounts to X 0.85 Crores (Previous Year: X 0.85 Crores) for a lease term of 5 years.
G. Rental income on assets given on operating lease is X 0.40 Crores (Previous Year : X 0.40 Crores) for the year ended 31st March, 2022.
H. The company has applied the practical expedient to all the eligible rent concessions. The amount recognised in profit or loss for F.Y 2021-22 to reflect changes in lease payments that arise from COVID-19 related rent concessions to which the company has applied the practical expedient is X 0.90 Crores (Previous Year : X 0.60 Crores).
The Company is exposed to Currency Risk arising from its trade exposures and Capital receipt / payments denominated, in other than the Functional Currency. The Company has a detailed policy which includes setting of the recognition parameters, benchmark targets, the boundaries within which the treasury has to perform and also lays down the checks and controls to ensure the continuing success of the treasury function.
The Company has defined strategies for addressing the risks for each category of exposures (e.g. for imports, for loans, etc.). The centralised treasury function aggregates the foreign exchange exposure and takes prudent measures to hedge the exposure based on prevalent macroeconomic conditions.
Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses financial reliability of customers and other counter parties, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of financial assets. Individual risk limits are set and periodically reviewed on the basis of such information.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:
i) Actual or expected significant adverse changes in business,
ii) Actual or expected significant changes in the operating results of the counterparty,
iii) Financial or economic conditions that are expected to cause a significant change to the counterpartyâs ability to meet its obligations,
The Company measures the expected credit loss of trade receivables based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, additional loss on collection of receivable is recognised.
i) Actual or expected significant adverse changes in business,
ii) Actual or expected significant changes in the operating results of the counterparty,
iii) Financial or economic conditions that are expected to cause a significant change to the counterpartyâs ability to meet its obligations,
The Company measures the expected credit loss of trade receivables based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, additional loss on collection of receivable is recognised.
The maximum exposure to the credit risk at the reporting date is primarily from trade receivable amounting to '' 2.49 crores as on 31st March, 2022 (Previous Year : '' 2.84 Crores).
The Company manages its capital to ensure that it will be able to continue as going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the Company consists of net debt (borrowings offset by cash and cash equivalent) and total equity of the Company.
The Company determines the amount of capital required on the basis of annual as well as long term operating plans and other strategic investment plans. The funding requirements are met through Non Current and Current borrowings. The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Companyâs liquidity position and cash and cash equivalents on the basis of expected cash flows.
Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Companyâs position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio. At the year end, there was no borrowing outstanding.
The Company is exposed to price risks arising from equity and mutual fund investments. Certain of the Companyâs equity investments are held for strategic rather than trading purposes.
In accordance with Ind AS 108 âOperating Segmentâ, segment information has been given in the consolidated financial statements and therefore, no separate disclosure on segment information is given in these Standalone financial statements.
Exceptional Item for the year ended 31st March, 2022 includes ? 12.46 Crores towards impairment of investment in wholly owned Subsidiary at Mauritius, which has investment in its wholly owned subsidiary at Sri Lanka. Considering the uncertainties around Sri Lankan economy which does not seems to be improve soon, Company has made impairment provision as a matter of prudence. It also includes ? 1.08 Crores towards interest paid to Government of Goa in relation to transfer of Casino License pursuant to merger of an erstwhile subsidiary company with the company in earlier year. In previous year, the Company has recovered loan of ? 55.95 Crores from Deltin Cruises and Entertainment Private Limited, and accordingly, the provision made towards doubtful recovery is reversed and shown under exceptional item for the year ended 31st March, 2021.
a) The Board of Directors has recommended final Equity dividend of ? 1.25 per equity share (Previous year ? 1/- per equity share) for the financial year 2021-22.
b) On 11th April, 2022 The Board of Director of the Company has approved the Scheme of Amalgamation (âSchemeâ) which comprise of amalgamation of wholly owned subsidiary Companies Daman Hospitality Private Limited and Daman Entertainment Private Limited with the Company. The Appointed date is 1st April, 2022. The Scheme is subject to approval of regulatory authorities and will be given effect to in the financial statement on receipt of such approvals.
Due to COVID-19 pandemic and the consequent lock downs announced by the respective Government Authorities, the operations of the Company were suspended since the third week of March, 2020 to October, 2020. During the current financial year also, consequent to the lock down due to the second/third wave of pandemic announced by the state governments, the Company could operate partially as follows:
- Casinos at Goa: For a part of April 2021 at 50% of normal capacity and with effect from 20th September 2021 with restrictions
- Hotel at Goa: For a part of April 2021 at 50% of normal capacity and with effect from 5th July 2021 with restrictions.
- Casino at Sikkim: For April 2021 and part of May, 2021 at 50 % of normal capacity and with effect from 16th August 2021 with restrictions.
The casino operation are allowed to operate at 100% capacity in Goa from 7th March 2022 and in Sikkim from 11th February 2022. In Daman, Government restriction for Hotel Industry were in force upto 28th February 2022 and thereafter no such restriction has been imposed.
Considering the overall gradual returning to normalcy of all segments of the Company the positive performance for the year and the managementâs assessment of the possible impact of this pandemic on the business operation and financial position of the Company and based on its initial assessment of the current indicators of the future economic condition, the Company expects that the COVID-19 pandemic would not have any material adverse impact on the recoverable values of its financial and non-financial assets and on the net worth of the Company.
Further, the Company is debt free and would have adequate liquidity available to honour its liabilities and obligations, as and when due. The management will continue to monitor any material changes to its COVID-19 impact assessment, resulting from the future economic conditions and future uncertainty, if any.
a Details of the Employee Share Option Plan of the Company
The options are granted at the price determined by the Nomination Remuneration Compensation Committee. Each option entitles the holder to exercise the right to apply for and seek allotment of one equity share of '' 1/- each. The Option granted in Financial Year 2017-18 and 2018-19 shall vest in three installments. On 23rd September, 2019, terms of option granted in FY 2018-19 have been modified, repriced and vesting period reduced to three years from four years. Accordingly fair value recalculated with modified terms. Details of options granted during the financial year 2017-18 & 2018-19 duly approved by the Nomination Remuneration Compensation Committee under the said scheme are given below.
Each employee share option converts into one equity share of the Company on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.
b Details of the Employee Share Appreciation Rights of the Company
The Nomination Remuneration Compensation Committee has granted Employee Stock Appreciation Rights (âESARâ) on 17th March, 2020 and 10th November, 2020 to certain eligible employees pursuant to the Companyâs Employee Stock Appreciation Rights plan, (âPlanâ). The grant price is determined based on a formulas as defined in the Plan. There are scheme under each plan with different vesting periods. The Plans is a administered by the Nomination Remuneration Compensation Committee.
An Employee Stock Appreciation Right (ESAR) is an award which provides the holder with the ability to profit from the appreciation in value of a set number of shares of company stock over a set period of time. The valuation of a stock appreciation right operates exactly like a stock option in that the employee benefits from any increases in stock price above the price set in the award. However, unlike an option, the employee is not required to pay an exercise price to exercise them, but simply receives the net amount of the increase in the stock price in either shares of company stock or Cash, as decided by The Nomination Remuneration Compensation Committee.
a) Volatility: Volatility is a measure of the amount by which a price has fluctuated or is expected to fluctuate during the year. The measure of volatility is used in Black Scholes annualized standard deviation of the continuously compounded rate of return on the stock over a period of time. The Company considered the daily historical volatility of the Companyâs expected life of each vest.
b) Risk Free Rate: The risk free rate being considered for the calculation is the interest rate applicable for a maturity equal to the expected life of the options based on the zero - coupon securities.
c) Expected Life of the Options / ESARs: Expected life of the options / ESARs is the period for which the Company expects the options/ ESARs to be live. The minimum life of a stock option / ESARs is the minimum period before which the options/ ESARs cannot be exercised and the maximum life is the period after which the options / ESARs cannot be exercised. The Company has calculated expected life as the average of life of the options / ESARs.
1. Current ratio: There is more than 25% reduction in Current Ratio from March, 2021 to March, 2022 primarily due to change in terms, the Company has classified Inter Corporate Deposit given to Delta Pleasure Cruises Company Private Limited and Marvel Resort Private Limited of '' 75 Crores & '' 125 Crores respectively as Investment in Quasi Equity in Subsidiary Company, as a consequence of which Current Assets reduced as compared to previous year resulting into decrease in current ratio.
2. Trade Payable turnover ratio: Increase in trade payable turnover in the financial year 2021-22, due to increase in revenue of the Company. Which resulted into more operational outflow during the current year.
3. Net capital turnover ratio: During the financial year 2021-22, Sales turnover of the Company increased as compared to previous year as a consequence of this working capital of the Company got increased, which resulted in to increase in net capital turnover ratio.
4. Net profit ratio: During the previous year, Company has booked Profit of '' 55.95 Crores as Exceptional Item due to which Net Profit ratio of previous year increased. Hence previous year ratio is not comparable with Current Year ratio.
5. Trade Receivable turnover ratio: For the financial year 2021-22 there is increase in trade receivable turnover ratio, due to increase in revenue of the Company, which resulted into more operational inflow during the current year.
6. Inventory turnover ratio: Increase in Inventory turnover in the financial year 2021-22, The Company has more operational days as compared to previous year. Hence Inventory turnover ratio increased as compared to previous year.
7 Return on Investment ratio and Return on Capital Employed: Company has made earning before tax of '' 108.19 Crores against '' 99.58 crores due to which return of investment ratio and return on Capital Employed improved in Current Year.
8. Debt Equity ratio and Debt Service Coverage Ratio: During the Current Year, the Company is Debt Free therefore Debt Equity Ratio and Debt Service Coverage Ratio is not applicable
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
(ii) The Company has identified five parties having status as struck off companies. Total value of purchase of goods & services from these struck off companies amounts to '' 0.15 Crores and having Closing balance of '' 0.02 Crores payable at the year end.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered
or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
(vi) No funds have been advanced or loaned or invested by the Company to or in any person(s) or entity(ies), including foreign entities (âthe intermediariesâ), 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 (âthe Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries.
(vii) No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âthe Funding Partiesâ), 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 (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
Except as detailed in the following table, the Company considers that the carrying amounts of financial instruments recognised in the financial statements approximate their fair values.
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Mar 31, 2019
a) Terms/Rights attached to Equity Shares
The Company has only one class of equity shares having a par value of Rs. 1/- per share. Each holder of equity shares is entitled to one vote per share. 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 shareholders.
The Company declares and pays dividends in Indian Rupees. Dividends paid during the year ended 31st March, 2019 include an amount of Rs. 1/- per equity share towards final dividend for the year ended 31st March, 2018 and an amount of Rs. 0.60 per equity share towards interim dividend for the year ending 31st March, 2019. The Directors have recommended, subject to approval of the shareholders at the ensuing Annual General Meeting, a Dividend for the year ended on 2019 : 65% (2018 : 100%). Total dividend including interim dividend for the financial year 2019 is 125% (2018 : 100%).
Nature and purpose of reserve:-Capital Reserve on Business Combination
It represent the difference, between the amount recorded as share capital issued plus any additional consideration in the form of cash or other assets and the amount of net asset value of the transferor company acquired by the company.
Capital Redemption Reserves
As per Companies Act, 2013, capital redemption reserve is created when company purchases its own shares out of free reserves or securities premium. A sum equal to the nominal value of the shares so purchased is transferred to capital redemption reserve and it is a non-distributable reserve.
Securities Premium
Securities premium is used to record the premium on issue of shares. The reserve can be utilised in accordance with the provisions of the Companies Act, 2013.
Share Options Outstanding Account
The Employee Stock Options Reserve represents reserve in respect of equity settled share options granted to the Companyâs employees in pursuance of the Employee Stock Option Plan.
General Reserve
The Company created a General reserve in earlier years pursuant to the provisions of the Companies Act, 1956 wherein certain percentage of profits were required to be transferred to General Reserve before declaring dividends. As per Companies Act 2013, the requirements to transfer profits to General Reserve is not mandatory. General reserve is a free reserve available to the Company.
Note :
The Company has recognised deferred tax assets on carried forwarded capital losses based on the reasonable certainty of future taxable Capital Gain which will be sufficient to offset capital losses.
Details of dues to Micro and Small Enterprises as defined under The Micro, Small and Medium Enterprises Development Act, 2006.
Company has sent letters to suppliers to confirm whether they are covered under Micro, Small and Medium Enterprises Development Act 2006 as well as they have file required memorandum with the prescribed authorities. Based on the confirmation received till the date of finalisation of balance sheet the detail of outstanding are as under:
Note:
(I) The Company has obtained licenses under the Export Promotion Credit Guarantee (âEPCGâ) Scheme for importing capital goods at a concessional rate of custom duty against submission of bank guarantee and bonds.
Under the terms of the respective schemes, the Company is required to earn foreign exchange value equivalent to, eight times and in certain cases six times of the duty saved in respect of licenses where export obligation has been fixed by the order of the Director General Foreign Trade, Ministry of Finance, as applicable with in a specified period from the date of import of capital goods. The Export Promotion Capital Goods Schemes, Foreign Trade Policy 2009-2014 as issued by the Central Government of India, covers both manufacturerâs exports and service providers. Accordingly, in accordance with the Chapter 5 of Foreign Trade Policy 20092014, the Company is required to export goods of FOB value of : Rs. Nil (Previous Year : Rs. 2.61 Crores). Non fulfillment of the balance of such future obligation, if any entails to the Government to recover full duty saved amount and other penalties under the above referred scheme.
1. EMPLOYEE BENEFITS
Brief description of the Plans:
The Company has various schemes for employee benefits such as Provident Fund, ESIC, Gratuity and Leave Encashment. The Companyâs defined contribution plans are Provident Fund (in case of certain employees) and Employees State Insurance Fund (under the provisions of the Employeesâ Provident Funds and Miscellaneous Provisions Act, 1952). The Company has no further obligation beyond making the contributions to such plans.
A Defined Benefits Plan
The Companyâs defined benefit plans include Gratuity. The gratuity plan is governed by the Payment of Gratuity Act, 1972 under which an employee who has completed five years of service is entitled to specific benefits. The level of benefits provided depends on the memberâs length of service and salary at retirement age.
The Plan typically exposes the Company to actuarial risk such as Interest Risk, Longevity Risk and Salary Risk;
a) Interest Risk:- A decrease in the bond interest rate will increase the plan liability.
b) Longevity Risk: The present value of the 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 planâs liability.
c) Salary Risk: The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the planâs participants will increase the planâs liability.
The above sensitivity analyses are based on change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
B Defined contribution plans
The Company also has certain defined contribution plans. The contributions are made to registered provident fund, Employee State Insurance Corporation and Labour Welfare Fund administered by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the year towards defined contribution plans are as follows:
C Leave obligations
The leave obligations cover the Companyâs liability for earned leave.
The amount of the provision of Rs. 1.51 Crores (31st March, 2018 Rs. 1.70 Crores) is presented as current, since the Company does not have an unconditional right to defer settlement for any of these obligations.
- Loans and Advances shown above, to subsidiaries and Step-Down Subsidiary Company fall under the category of Loans and Advances in nature of Loans where there is no repayment schedule and are re-payable on demand. Investment made in Fully Convertible Debenture (FCD) are not reported here.
- In the current year, the terms of loan granted to Daman Hospitality Private Limited of Rs. 320.33 Crores has been classified as equity contribution.
2. OPERATING LEASE EXPENSES
The Companyâs significant operating lease arrangements are mainly in respect of commercial premises. The aggregate lease rentals payable on these leasing arrangements are charged as rent under âOther Expensesâ in Note No. 32.
These Non Cancellable lease arrangements are for a period not exceeding 5 years and are renewable by mutual consent, on mutually agreeable terms. On an average, an escalation of 9% to 16% is noted in the lease arrangements.
3. EARNING PER SHARES (EPS)
Earnings Per Share is calculated by dividing the profit attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year. Numbers used for calculating basic and diluted earnings per equity share are as stated below:
The Company is exposed to Currency Risk arising from its trade exposures and Capital receipt / payments denominated, in other than the Functional Currency. The Company has a detailed policy which includes setting of the recognition parameters, benchmark targets, the boundaries within which the treasury has to perform and also lays down the checks and controls to ensure the continuing success of the treasury function. The Company has defined strategies for addressing the risks for each category of exposures (e.g. for imports, for loans, etc.). The centralised treasury function aggregates the foreign exchange exposure and takes prudent measures to hedge the exposure based on prevalent macro-economic conditions.
4. CREDIT RISK
Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses financial reliability of customers and other counter parties, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of financial assets. Individual risk limits are set and periodically reviewed on the basis of such information.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:
i) Actual or expected significant adverse changes in business,
ii) Actual or expected significant changes in the operating results of the counter party,
iii) Financial or economic conditions that are expected to cause a significant change to the counter partyâs ability to meet its obligations,
The Company measures the expected credit loss of trade receivables and loan from individual customers based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, loss on collection of receivable is not material hence no additional provision considered.
5. CAPITAL RISK MANAGEMENT
The Company manages its capital to ensure that it will be able to continue as going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the Company consists of net debt (borrowings as detailed in notes 17, 20 and 22 offset by cash and cash equivalent and total equity of the Company.
The Company determines the amount of capital required on the basis of annual as well as long term operating plans and other strategic investment plans. The funding requirements are met through non current and current borrowings. The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
6. LIQUIDITY RISK
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Companyâs liquidity position and cash and cash equivalents on the basis of expected cash flows.
7. INTEREST RATE RISK & SENSITIVITY ANALYSIS
Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Companyâs position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio. At the year end, there was no borrowing outstanding.
8. OTHER PRICE RISKS
The Company is exposed to price risks arising from equity & mutual fund investments. Certain of the Companyâs equity investments are held for strategic rather than trading purposes.
In accordance with Ind AS 108 âOperating Segment â, segment information has been given in the consolidated financial statements and therefore, no separate disclosure on segment information is given in these Standalone financial statements.
During Current year there is no transaction under exceptional items. Last yearâs exceptional items includes profit of Rs. 0.90 Crores on liquidation of a subsidiary company and one time expenses in relation to Government Dues of Rs. 0.83 Crores and Interest there upon of Rs. 1.09 Crores.
9. CORPORATE SOCIAL RESPONSIBILITY (CSR) EXPENDITURE
a) Gross amount required to be spent by the Company during the year 2018-19 is Rs. 1.80 Crores (Previous Year 2017-18: Rs. 1.19 Crores)
b) Amount spent during the year on:
c) Related party transactions in relation to Corporate Social Responsibility : Refer Note No. 35
d) Provision movement during the year
10. EVENT OCCURRING AFTER BALANCE SHEET DATE
The Board of Directors has recommended final Equity dividend of Rs. 0.65 per equity share (Previous year Rs. 1 per equity share) for the financial year 2018-19.
11. SHARE-BASED PAYMENTS
Details of the employee share option plan of the Company
The options are granted at the price determined by the Compensation Committee. Each option entitles the holder to exercise the right to apply for and seek allotment of one equity share of Rs. 1/- each. The Option granted in Financial Year 2017-18 shall vest in three installments and the option granted in Financial Year 2018-19 shall vest in four installments. Details of options granted during the financial year 2017-18 & 2018-19 duly approved by the Nomination Remuneration Compensation Committee under the said scheme are given below.
Each employee share option converts into one equity share of the Company on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.
Fair value of share options granted
Options were priced using a Black Scholes Option Pricing Model. Where relevant, the expected life used in the model has been adjusted based on managementâs best estimate for the effects of non-transferability, exercise restrictions and behavioural considerations. Expected volatility is based on the historical share price volatility over the past 3 years.
Note:
a) Volatility: Volatility is a measure of the amount by which a price has fluctuated or is expected to fluctuate during the year. The measure of volatility is used in Black Scholes annualized standard deviation of the continuously compounded rate of return on the stock over a period of time. The Company considered the daily historical volatility of the Companyâs expected life of each vest.
b) Risk Free Rate: The risk free rate being considered for the calculation is the interest rate applicable for a maturity equal to the expected life of the options based on the zero - coupon securities
c) Expected Life of the Options: Expected life of the options is the period for which the Company expects the options to be live. The minimum life of a stock option is the minimum period before which the options cannot be exercised and the maximum life is the period after which the options cannot be exercised. The Company has calculated expected life as the average of life of the options.
Deferred tax assets and liabilities are recognised for the future tax consequences of temporary differences between the carrying values of assets and liabilities and their respective tax bases and unutilized business loss and depreciation carry forwards and tax credits. Deferred tax assets are recognised to the extent that it is probable that future taxable income will be available against which the deductible temporary differences, unused tax losses, depreciation carry-forwards and unused tax credits could be utilized.
b) Fair Value Hierarchy and Method of Valuation
Except as detailed in the following table, the Company considers that the carrying amounts of financial instruments recognised in the financial statements approximate their fair values.
Level 1 : Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
The following table presents fair value of assets and liabilities measured at fair value on recurring basis as of 31st March, 2019.
c) Fair value measurements using significant unobservable inputs (level 3)
The following table presents the changes in value of equity shares (level 3 items) for the year ended 31st March, 2019 and 31st March, 2018.
Mar 31, 2018
Company Overview
Delta Corp Limited (âthe Companyâ), was incorporated in the year 1990 under the provision of the Companies Act applicable in India. The Company along with its subsidiaries currently operates in Goa, Daman, Gurgaon and Sikkim in the Gaming, Hospitality and Online Skill Gaming Segment. The shares of the company is listed on the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited (BSE). The registered office of the company is located at Pune.
a) Terms/Rights Attached to Equity Shares
The Company has only one class of equity shares having a par value of Rs.1/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. The Directors have recommended, subject to approval of the shareholders at the ensuing Annual General Meeting, a Dividend for the Year Ended on 2018 : 100% (2017 : 35%). 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 shareholders â(Exclusive charge on current assets of the Company present and future, on Credit Card receivables of the Company present and future, extension of exclusive charge by way of equitable mortgage of the fixed assets being hotel building, by way of hypothecation of movable assets hotel at Goa.). The Facility has been repaid during the current year.
Dues to micro and small enterprises have been determined to the extent such parties have been identified on the basis of information available with the company.
(iii) Other Commitments
The Company has obtained licenses under the Export Promotion Credit Guarantee (âEPCGâ) Scheme for importing capital goods at a concessional rate of custom duty against submission of bank guarantee and bonds.
Under the terms of the respective schemes, the Company is required to earn foreign exchange value equivalent to, eight times and in certain cases six times of the duty saved in respect of licenses where export obligation has been fixed by the order of the Director General Foreign Trade, Ministry of Finance, as applicable with in a specified period from the date of import of capital goods. The Export Promotion Capital Goods Schemes, Foreign Trade Policy 2009-2014 as issued by the Central Government of India, covers both manufacturerâs exports and service providers. Accordingly, in accordance with the Chapter 5 of Foreign Trade Policy 2009-2014, the Company is required to export goods of FOB value of : Rs.261.00 Lakhs (Previous Year : Rs.3,675.66 Lakhs). Non fulfilment of the balance of such future obligation, if any entails to the Government to recover full duty saved amount and other penalties under the above referred scheme.
1 EMPLOYEE BENEFITS :
Brief description of the Plans:
The Company has various schemes for employee benefits such as Provident Fund, ESIC, Gratuity and Leave Encashment. The Companyâs defined contribution plans are Provident Fund (in case of certain employees) and Employees State Insurance Fund (under the provisions of the Employeesâ Provident Funds and Miscellaneous Provisions Act, 1952). The Company has no further obligation beyond making the contributions to such plans.
A Defined Benefits Plan:
The Companyâs defined benefit plans include Gratuity. The gratuity plan is governed by the Payment of Gratuity Act, 1972 under which an employee who has completed five years of service is entitled to specific benefits. The level of benefits provided depends on the memberâs length of service and salary at retirement age.
The Plan typically to expose the Company to actuarial risk such as Interest Risk, Longevity Risk and Salary Risk;
a) Interest Risk:- A decrease in the bond interest rate will increase the plan liability.
b) Longevity Risk: The present value of the 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 planâs liability.
c) Salary Risk: The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the planâs participants will increase the planâs liability.
The above sensitivity analyses are based on change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
B Defined contribution plans
The Company also has certain defined contribution plans. The contributions are made to registered provident fund, Employee State Insurance Corporation and Labour Welfare Fund administered by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the year towards defined contribution plans are as follows:
C Leave obligations
The leave obligations cover the Companyâs liability for earned leave. The amount of the provision of Rs.170.07 Lakhs (Previous Year: Rs.42.21 Lakhs) is presented as current, since the Company does not have an unconditional right to defer settlement for any of these obligations.
2 INFORMATION IN ACCORDANCE WITH THE REQUIREMENTS OF INDIAN ACCOUNTING STANDARD 24 ON RELATED PARTY DISCLOSURES.
List of related parties
(i) Relationship
@ Voting Power as on 31.03.2018 is 87.16% (Previous Year : 87.16%)
# Liquidated on 31.05.2017
(ii) Key Management Personnels (KMP):
- Mr. Jaydev Mody (JM) - Chairman
- Mr. Ashish Kapadia (AK) - Managing Director
- Mrs. Alpana Chinai (AC) - Director
- Mr. Rajesh Jaggi (RJG) - Director
- Mr. Rakesh Jhunjhunwala (RJ) - Director
- Mr. Vrajesh Udani (VU) - Director
- Mr. Ravi Jain (RJN) - Director
- Mr. Chetan Desai (CD) - Director
- Mr. Hardik Dhebar (HD) - Group CFO
- Mr. Dilip Vaidya (DV) - Company Secretary
(iii) Relatives of Key Management Personnels:
- Mrs. Zia Mody (ZM) - Wife of Chairman
- Mrs. Urvi Piramal (UP) - Sister of Chairman
- Mrs. Kalpana Singhania (KS) - Sister of Chairman
- Ms. Anjali Mody (AM) - Daughter of Chairman
(iv) Enterprises over which persons mentioned in (ii) and (iii) above exercise significant influence with whom company has transactions :
- AAA Holding Trust (AAAHT)
- Aarti J Mody Trust (AAJMT)
- Aditi J Mody Trust (ADJMT)
- Anjali J Mody Trust (ANJMT)
- AZB & Partners (AZB)
- Delta Foundation (DF)
- Freedom Registry Limited (FRL)
- Goan Football Club Private Limited (FCG)
- Highland Resorts Private Limited (HRPL)
- J M Township and Real Estate Private Limited (JMT)
- Jayem Properties Private Limited (JPPL)
- NMRT Partners Communication and Consultancy LLP (SKR)
- Peninsula Land Limited (PLL)
- Skarma Consultancy Private Limited (SCPL)
- Urvi Ashok Piramal Foundation (UAPF)
- Brandlife Entertainment Private Limited (Formerly known as Delta Lifestyle and Entertainment Private Limited) (DLEPL)
- Caravella Entertainment Private Limited (Formerly known as Caravela Casino (Goa) Private Limited) (CCGPL) (till 2.04.2017)
* Subsidiary Company w.e.f. 3rd April, 2017
- Loans and Advances shown above, to subsidiaries and other Company fall under the category of Loans and Advances in nature of Loans where there is no repayment schedule and are re-payable on demand. Investment made in Compulsory Convertible Debenture (CCD) are not reported here.
- Loan to employees as per Companyâs policy is not considered.
3 OPERATING LEASE EXPENSES
The Companyâs significant operating lease arrangements are mainly in respect of commercial premises. The aggregate lease rentals payable on these leasing arrangements are charged as rent under âOther Expensesâ in Note No. 32.
These Non Cancellable lease arrangements are for a period not exceeding 5 years and are renewable by mutual consent, on mutually agreeable terms. On an average, an escalation of 9% to 16% is noted in the lease arrangements.
4 EARNINGS PER SHARES (EPS)
Earnings Per Share is calculated by dividing the profit attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year. Numbers used for calculating basic and diluted earnings per equity share are as stated below:
Note: In calculating diluted earning per share for the year, the effect of dilutive Employee Stock Option outstanding till the date of actual exercise of option is considered and convertible preference shares issued by Company are anti dilutive.
5 UNHEDGED FOREIGN CURRENCY (FC) EXPOSURE
The Foreign currency exposures that are not hedged by a derivative instrument or otherwise as at year end are given below:
Of the above, the Company is mainly exposed to USD, EURO, KES & GBP. Hence the following table analyses the Companyâs Sensitivity to a 5% increase and a 5% decrease in the exchange rates of these currencies against INR on profit before tax.
The Company is exposed to Currency Risk arising from its trade exposures and Capital receipt / payments denominated, in other than the Functional Currency. The Company has a detailed policy which includes setting of the recognition parameters, benchmark targets, the boundaries within which the treasury has to perform and also lays down the checks and controls to ensure the continuing success of the treasury function. The Company has defined strategies for addressing the risks for each category of exposures (e.g. for imports, for loans, etc.). The centralised treasury function aggregates the foreign exchange exposure and takes prudent measures to hedge the exposure based on prevalent macro-economic conditions.
6 CREDIT RISK
Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses financial reliability of customers and other counter parties, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of financial assets. Individual risk limits are set and periodically reviewed on the basis of such information.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:
i) Actual or expected significant adverse changes in business,
ii) Actual or expected significant changes in the operating results of the counter-party,
iii) Financial or economic conditions that are expected to cause a significant change to the counter-partyâs ability to meet its obligations,
The Company measures the expected credit loss of trade receivables and loan from individual customers based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, loss on collection of receivable is not material hence no additional provision considered.
7 CAPITAL RISK MANAGEMENT
a) The Company manages its capital to ensure that it will be able to continue as going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the Company consists of net debt (borrowings as detailed in notes 18, 20 and 22 offset by cash and cash equivalent and total equity of the Company.
The Company determines the amount of capital required on the basis of annual as well as long term operating plans and other strategic investment plans. The funding requirements are met through long-term and short-term borrowings. The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
8 LIQUIDITY RISK
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Companyâs liquidity position and cash and cash equivalents on the basis of expected cash flows.
9 INTEREST RATE RISK & SENSITIVITY ANALYSIS
Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Companyâs position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.
The sensitivity analyses below have been determined based on the exposure to interest rates for assets and liabilities at the end of the reporting period. For floating rate assets and liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year and the rates are reset as per the applicable reset dates. The basis risk between various benchmarks used to reset the floating rate assets and liabilities has been considered to be insignificant.
If interest rates had been 100 basis points higher/lower and all other variables were held constant, the Companyâs Profit for the year would decrease/increase by amount as stated below.
10 OTHER PRICE RISKS
The Company is exposed to price risks arising from equity & mutual fund investments. Certain of the Companyâs equity investments are held for strategic rather than trading purposes.
Price sensitivity analysis:
The sensitivity analysis below have been determined based on the exposure to equity & mutual fund price risks at the end of the year.
11 In accordance with Ind AS 108 âOperating Segmentâ, segment information has been given in the consolidated financial statements and therefore, no separate disclosure on segment information is given in these financial statements.
12 Exceptional Items for the year ended 31st March, 2018 include profit of Rs.90.73 Lakhs on liquidation of a subsidiary company and one time expenses in relation to government dues of Rs.83.09 Lakhs and interest there upon of Rs.109.37 Lakhs. Last yearâs exceptional items includes profit on sale of Subsidiary Companies.
13 CORPORATE SOCIAL RESPONSIBILITY (CSR) EXPENDITURE
a) Gross amount required to be spent by the Company during the year 2017-18 - Rs.119.20 Lakhs ( previous year 2016-17 - Rs.115.23 Lakhs)
b) Amount spent during the year on:
14 EVENT OCCURRING AFTER BALANCE SHEET DATE:
The Board of Directors has recommended Equity dividend of â1/- per share (Previous year Rs.0.35 per equity shares) for the financial year 2017-18.
15 BUSINESS COMBINATION
(i) Pursuant to the Scheme of Amalgamation (âThe Schemeâ) between Delta Corp Limited (â the Companyâ) (âTransferee Companyâ) and Gauss Networks Private Limited (âTransferor Companyâ), approved by the respective shareholders and by the National Company Law Tribunal (âNCLTâ) vide its Order dated 28th June, 2017 which has been filed with the Registrar of Companies on 5th July, 2017 (the Effective Date), the entire business and the whole undertakings of a transferor company was transferred to the Company, effective from 1st April, 2016 (the appointed date). The Company has accounted the business combination in its books as per the Ind AS 103 â Business Combinationâ from 5th July, 2017, is the day on which Company has obtained the control to give the effect of the business combination in the books.
(ii) All the assets and liabilities of transferor companies as at acquisition date were incorporated in the Financial of the Company at their fair value.
(iii) The excess of Net Assets of the Transferor Companies transferred to the Transferee Company over the Sales Consideration paid by the transferee Company has been credited to Capital Reserve of the Transferee Company as detailed below-
16 SHARE-BASED PAYMENTS
Employee share option plan of the Company
Details of the employee share option plan of the Company
The options are granted at the price determined by the Compensation Committee. Each option entitles the holder to exercise the right to apply for and seek allotment of one equity share of Rs.1/- each. The Option granted in Financial in Financial Year 2013-14 shall vest in one instalment only, while the Option granted in Financial Year 2014-15 and 2017-18 shall vest in three instalments. Details of options granted during the financial year 2013-14, 2014-15 & 2017-18 duly approved by the Nomination, Remuneration Compensation Committee under the said scheme are given below.
Each employee share option converts into one equity share of the Company on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.
The following share-based payment arrangements were in existence during the current and prior years:
Exercise period will expire after five years from the date of vesting of options or such other period as may be decided by the Compensation Committee.
Fair value of share options granted
Options were priced using a Black Scholes Option Pricing Model. Where relevant, the expected life used in the model has been adjusted based on managementâs best estimate for the effects of non-transferability, exercise restrictions and behavioural considerations. Expected volatility is based on the historical share price volatility over the past 3 years.
Note:
a) Volatility:
Volatility is a measure of the amount by which a price has fluctuated or is expected to fluctuate during the year. The measure of volatility is used in Black Schole annualized standard deviation of the continuously compounded rate of return on the stock over a period of time. The Company considered the daily historical volatility of the Companyâs expected life of each vest.
b) Risk Free Rate:
The risk free rate being considered for the calculation is the interest rate applicable for a maturity equal to the expected life of the options based on the zero - coupon securities
c) Expected Life of the Options:
Expected life of the options is the period for which the Company expects the options to be live. The minimum life of a stock option is the minimum per cannot be exercised and the maximum life of the options cannot be exercised. The Company has calculated expected life as the average of life of the options.
Deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the carrying values of assets and liabilities and their respective tax bases, and unutilized business loss and depreciation carry-forwards and tax credits. Deferred tax assets are recognized to the extent that it is probable that future taxable income will be available against which the deductible temporary differences, unused tax losses, depreciation carry-forwards and unused tax credits could be utilized.
b) Fair Value Hierarchy and Method of Valuation
Except as detailed in the following table, the Company considers that the carrying amounts of financial instruments recognised in the financial statements approximate their fair values.
Level 1 : Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly. Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data. The following table presents fair value of assets and liabilities measured at fair value on recurring basis as of 31st March, 2018
Mar 31, 2018
1. CORPORATE INFORMATION
The Company is a public company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. Its shares are listed on two recognised stock exchanges (i.e. BSE & NSE) in India. The registered office of the Company is located at 26/27, Mumbai-Pune Road, Pimpri, Pune 411018 (India). The Company is principally engaged in the manufacturing of Electricals Cables, Communication Cables &other electrical appliances.
These standalone financial statements for the year ended 31st March, 2018 were approved for issue by the Board of Directors in accordance with their resolution dated 28th May, 2018.
Trade Receivables
The average credit period for the Companyâs receivables is in the range of 30 to 60 days in respect of institutional sales and upto 190 days in case of sales to government owned entities. No interest is charged on trade receivables. Of the trade receivables balance as at 31st March, 2018, 1,386.7 million (31st March, 201 7 - 433.4 million ) is due from Bharat Sanchar Nigam Ltd, Bharat Broadband Nigam Ltd and Telecommunication Consultants India Ltd which represents Companyâs large customers. Apart from the above there are no customers which individually represents more than 5% of the total balance of trade receivables,
Expected credit loss
The Company assesses at each date of statements of financial position whether a financial asset or a group of financial assets is impaired. The Company recognises lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12 months expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since 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 adjusted for forward-looking information. The concentration of credit risk is limited due to the fact that the customer base is large and unrelated,
The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in the provision matrix. Movement in the expected credit loss allowance:
(b) Terms/ rights attached to equity shares
The Company has only one class of Equity Shares having a par value of Rs.2 per share. Each holder of Equity Shares is entitled to one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of Interim dividend.
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 shareholders.
On 28th May, 2018, the Board of Directors of the company have proposed a final dividend of Rs. 4 per share in respect of the year ended 31st March, 2018 subject to the approval of shareholders at the Annual General Meeting. If approved, the dividend would result in a cash outflow of Rs. 736.3 Million inclusive of dividend distribution tax of Rs. 124.5 Million.
2.1 DUES TO MICRO, SMALL AND MEDIUM ENTERPRISES
(a) Outstanding to suppliers other than Micro and Small Enterprises Rs. 1,655.4 million (previous year Rs.1,876.4 million)
(b) Outstanding to Micro and Small enterprises Rs. 119.1 million (previous year Rs. 6.5 million)
The identification of suppliers as Micro and Small Enterprises covered under the âMSMED Act, 2006â was done to the basis of the information to the extent provided by the suppliers to the Company.This has been reliad upon the auditors,
3. EMPLOYEE BENEFIT PLAN
1. Defined Contribution plan
The Company makes Provident Fund and Superannuation Fund contributions to defined contribution retirement benefit plans for eligible employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions as specified under the law/scheme and are paid to the Government administered Provident fund and in case of Superannuation to the Scheme set up as trust by the Company - Insurer the Company is liable only for annual contributions.
The Company has recognised Rs 43.3 million (31st March, 2017 - Rs 39.2 million) for provident fund contributions and Rs 18.5 million (31st March, 2017 - Rs 15.4 million ) for superannuation 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,
2. Defined Benefit plan Gratuity-Funded
The Company has a defined benefit gratuity plan. The gratuity plan is primarily governed by the Payment of Gratuity Act,1972. Employees who are in continuous service for a period of five years are eligible for gratuity. The level of benefits provided depends on the memberâs length of service and salary at the retirement date. The gratuity plan is funded plan. The fund has the form of a trust and is governed by Trustees appointed by the Company. The Trustees are responsible for the administration of the plan assets and for the definition of the investment strategy in accordance with the regulations. The funds are deployed in recognised insurer managed funds in India. The Company does not fully fund the liability and maintains a target level of funding to be maintained over a period of time based on estimates of expected gratuity payments,
The sensitivity results above determine their individual impact on Planâs end of year Defined Benefit Obligation. In reality, the plan is subject to multiple external experience items which may move the Defined Benefit Obligation in similar or opposite directions, while the Planâs sensitivity to such changes can vary over time.
Risk exposure
Through it defined benefit plan, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset Volatility:
The plan liabilties are calculated using a discount rate set with reference to government bond yield. If plan assets underperform this yield, it will result in deficit.These are subject to interest rate risk. To offset the risk the plan assets have been deployed in high grade insurer managed funds.
Inflation rate risk:
Higher than expected increase in salary and medical cost will increase the defined benefit obligation.
Demographic risk:
This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligations is not straightforward and depends upon the combination of salary increase, discount rate and vesting criterion.
1.2. Fair value hierarchy
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:
Level 1 Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. This includes quoted equity instruments, government securities and mutual funds (includes FMP) that have quoted price,
Level 2 Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) such as derivative financial instruments. The Company does not have any Level 2 instruments as at 31st March 2018 and 2017.
Level 3 I nputs are not based on observable market data (unobservable inputs). Fair values are 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 includes unquoted equity shares.
# other than Investment in associates and joint ventures accounted at cost in accordance with Ind AS 27,
Valuation technique(s) and key input(s):
Level 1 The fair value of mutual funds (includes FMP) and quoted equity shares is based on quoted price,
Level 2 The Company does not have any Level 2 instrument as at 31st March, 2018 and 2017,
Level 3 The fair value of unquoted equity shares is determined using market approach.This approach involves the application of multiples, derived from market prices of comparable listed companies, to the parameters of the subject company in order to derive a value for the subject company.
2. Capital Management
The Companyâs policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Company monitors the return on capital as well as the level of dividends on its equity shares. The Companyâs objective when managing capital is to maintain an optimal structure so as to maximize shareholder value,
(i) Debt is defined as long-term borrowings (including current maturities) and short-term borrowings (excluding contingent considerations (if any)).
(ii) Equity is defined as Equity share capital and other equity including reserves and surplus,
The Company is predominantly equity financed which is evident from the capital structure table. Further, the Company has always been a net cash Company with cash and bank balances along with investment which is predominantly investment in liquid and short term mutual funds being far in excess of debt,
3. Financial risk management
The Company is exposed primarily to fluctuations in foreign currency exchange rates, credit, liquidity, 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
3.1 Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, interest rates, credit, liquidity and other market changes. The Companyâs exposure to market risk is primarily on account of foreign currency exchange rate risk,
3.1.1 Foreign currency risk management
The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other comprehensive income and equity, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective entities. Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar and Euro against the respective functional currency of the company. The Company enters into derivative financial instruments such as foreign exchange forward to mitigate the risk of changes in exchange rates on foreign currency exposures.
The carrying amounts of the Companyâs foreign currency denominated monetary liabilities/ assets at the end of the reporting period are as follows:
3.1.2 Interest rate risk management
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates.Considering borrowing amount outstanding as at 31st March 2018 and as at 31st March 2017, Company is not exposed to significant interest rate risk.
3.2. 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 of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit.
Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, investments, loans, cash and cash equivalents, other balances with banks and other financial assets. None of the financial instruments of the Company result in material concentration of credit risk.
Credit risk on cash and cash equivalents is limited as the Company generally invest in deposits with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies. Investments primarily include investment in liquid mutual fund units (including FMP), quoted bonds issued by government and quasi government organizations for specified time period.
The Company takes on exposure to credit risk,which is the risk that counterparty will default on its contractual obligations resulting in financial loss to the company.Financial asset that potentially expose the Company to credit risks are listed below:
3.3. Liquidity risk management
The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. The maturity profile of the financial liabilities are listed below:
The table has been drawn up based on the undiscounted contractual maturities of the financial liabilities including interest that will be paid on those liabilities upto the maturity of the instruments.
3.4. Financing Facilities
As at 31st March, 2018, the Company has available Rs. 2,000.0 million (31st March, 2017: Rs. 2,000.0 million) of undrawn committed borrowing facilities,
4. RELATED PARTY DISCLOSURES
Names of Related Parties :
Where transactions have taken place during the year and previous year/ balance outstanding.
(a) Associate Company
Finolex Industries Limited
(b) Joint Venture Entities
Finolex J- Power Systems Private Limited Corning Finolex Optical Fibre Private Limited
(c) Promotor Group Entities
Orbit Electrical Private Limited Finolex Infrastructure Limited Finolex Plassson Industries Private Limited Magnum Machines Technologies Limited
(d) Enterprises controlled by KMP; (Mr. P. G. Pawar)
Sakal Media Private Limited Sakal India Foundation Sakal Relief Fund
(e) Employee Benefit Funds
Finolex Cables Limited Employeeâs Group Gratuity Scheme Finolex Cables Limited Group Superannuation Scheme
5. SEGMENT REPORTING
Operating segments are reported consistently with the internal reporting provided to the Executive Chairman, the highest decision-making executive who is responsible for allocating resources to and assessing the performance of the operating segments.
A. The business segment has been considered as a primary segment for disclosure. The categories included in each of the reported business segment are as follows.
1. Electrical Cables
2. Communication Cables
3. Copper Rods
4. Others - Electrical Products and Appliances
The above business segments have been identified considering
1. The nature of the product/services
2. The Related risks and returns
3. The Internal financial reporting systems
Revenues and expenses have been accounted for based on their relationship to the operating activities of the segment. Revenues and expenses which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis have been included under âUnallocable Expensesâ. Assets and Liabilities which relate to the enterprise as a whole and are not allocable to segment on a reasonable basis have been included under âUnallocable Assets / Liabilitiesâ.
6. SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
There were no significant adjusting events that occurred subsequent to the reporting period other than the events disclosed,
Mar 31, 2017
Note 1 : Dividend Distributed and Proposed
Under the previous GAAP, proposed dividend including Dividend Distributed Tax (DDT), were recognized as liability in the period to which they related, irrespective of the fact of when they are declared. Under Ind AS, proposed dividend is recognized as liability only after the Shareholders approve the proposal at their General Meeting.
Proposed Dividend, including DDT liability as on April, 1 2015 amounting to Rs. 331.3 million was derecognized on the transaction date with corresponding entries to Retained Earnings. The same has been recognized in Retained Earnings during the year ended March 31, 2016 during which period dividend was declared and paid. Proposed Dividend including DDT liability as on March 31, 2016 amounting to Rs.459.6 million was also derecognized on that date with the corresponding in the retained earnings.
Proposed dividends on equity shares are subject to approval at the annual general meeting and are not recognized as a liability (including DDT thereon) as at 31 March 17.
Note 2 : Earnings Per Share (EPS)
Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent by the weighted average number of Equity shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the parent (after adjusting for interest on the convertible preference shares) by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.
The following reflects the income and share data used in the basic and diluted EPS computations:
The identification of suppliers as Micro and Small Enterprises covered under the "MSMED Act, 2006" was done on the basis of the information to the extent provided by the suppliers to the Company.
Note 3 : Related Party Transactions ( As per Ind AS-24 on Related Party Disclosures Specified under Section 133 of the Companies Act, 2013) :
(a) Key Management Personnel and Relatives
Key Management Personnel
Mr. D. K. Chhabria Executive Chairman
Mr. Mahesh Viswanathan Executive Director and Chief Financial Officer
Mr. R G D''Silva Company Secretary & President (Legal)
Relatives
Mr. K. P. Chhabria Father of Executive Chairman
(b) Enterprises over which key management Personnel and their relatives exercise significant influence
Orbit Electrical Private Limited.
Finolex Infrastructure Limited.
Magnum Machine Technologies Ltd.
Finolex Plasson Industries Private Limited.
(c) Individual having significant influence over the Company Mr. D.K. Chhabria
Ind-AS effects: (1) Proposed Dividend
Under Previous GAAP, proposed dividends including Dividend Distribution Tax (DDT) are recognized as a liability in the period to which they relate, irrespective of when they are declared. Under Ind AS, proposed dividend is recognized as a liability in the period in which it is declared by the company (usually when approved by shareholders in a general meeting) or paid.
In the case of the Company, the declaration of dividend for March 15 had occurred after period end. Therefore, the liability of Rs. 331.3 million for the year ended on March 31, 2015 and Rs 459.6 million as on March 31, 2016 recorded for dividend has been reversed with corresponding adjustment to retained earnings. Correspondingly, total equity increased by this amount.
(2) Fair value adjustments on investments
Current investments: Under Previous GAAP, current investments in equity instruments such as mutual funds and government securities are recognized at cost or net realizable value, whichever is lower. Long-term investments in equity instruments are recorded at cost unless there is an other than temporary decline in the value of investments.
The Company holds investment in equity shares. The fair value changes of these investments have been recognized in retained earnings as at the date of transition and subsequently in Other Comprehensive Income for the year ended 31st March, 2016. This resulted a decrease in retained earnings as at 1st April 2015 by Rs 72.3 million, increase in 31st March 2016 by Rs 56 million
(3) Deferred Tax
The various transitional adjustments have led to temporary differences and accordingly, the Company has accounted for such differences. Deferred tax adjustments are recognized in correlation to the underlying transaction either in retained earnings or a separate component of equity.
(4) Actuarial loss transferred to Other Comprehensive Income
Under Ind AS, re-measurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognized in other comprehensive income instead of statement of profit and loss. As a result of this change, the profit for the year ended 31st March 2017 has decreased by Rs. 18.3 million. There is no impact on total equity.
(5) Other Comprehensive Income
Under Ind AS, all items of income and expense recognized in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in profit and loss but are shown in the Statement of profit and loss as âother comprehensive income'' includes re-measurements of defined benefit plans and net gain on cash flow hedge. The concept of other comprehensive income did not exist under the Previous GAAP.
(6) Spares Capitalized
Spares worth Rs. 75.2 million having useful life of more than one year were capitalized as property, plant and equipment. The average useful life of such spares was assessed to be 10 years, in-line with the balance average useful life of plant and machinery where such spares will be used.
(b) Commitment
(i) The Company has Imported capital goods under the Export Promotion Capital Goods (EPCG) scheme, of the Government of India, at concessional rates of duty on an understanding to fulfill quantified export against which future obligation aggregated to Rs. 1047.9 million (previous year Rs. 1047.9 million) which is to be discharges over a period of six / eight years from the date of license this includes amount of Rs. 329.20 million, refer to note 45 (a)(iii) above.
Note 4 : Segment Reporting
The business segment has been considered as a primary segment for disclosure. The categories included in each of the reported business segment are as follows.
1. Electrical Cables
2. Communication Cables
3. Copper Rods
4. Others
The above business segments have been identified considering
1. The nature of the product/services
2. The Related risks and returns
3. The Internal financial reporting systems
Revenues and expenses have been accounted for based on their relationship to the operating activities of the segment. Revenues and expenses which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis have been included under "Unallocable Expenses". Assets and Liabilities which relate to the enterprise as a whole and are not allocable to segment on a reasonable basis have been included under "Unallocable Assets / Liabilities".
Note 5 : Previous year figures have been regrouped / reclassified to conform to current yearâs classification.
Mar 31, 2016
A) Commitments
i. The Company has imported capital goods under the Export Promotion
Capital Goods (EPCG) scheme, of the Government of India, at
concessional rates of duty on an understanding to fulfill quantified
exports against which future obligation aggregates to Rs. 1,047.9
million (Previous year Rs. 1,057.3 million) which is to be discharged
over a period of six / eight years from the date of licence. This
includes amount of Rs.123.64 million, referred in Note 29 (a) III
above.
ii. Estimated amount of contracts remaining to be executed on capital
account (net of advances paid), not provided for Rs. 251.2 million
(Previous year Rs. Nil).
1. (a) Other Provisions:
Other provision for duties and taxes represents provision for disputed
duties and taxes. There are no changes during the year.
Outflow on account of said provision depends on the settlement of the
pending cases.
2. Foreign Exchange differences
a. Exchange differences either on settlement or on translation are
dealt with in the Statement of Profit and Loss. However exchange
differences, arising either on settlement or on translation, in case of
long-term borrowings used for acquisition of fixed assets are
capitalised. Accordingly, foreign exchange loss of Rs Nil million
(Previous year: Rs 11.3 million) arising during the year has been added
to the cost of fixed assets.
3. Corporate Social Responsibility Expenses (CSR)
During the year, the company has incurred an expenditure of Rs. 30.1
million towards Corporate Social Responsibilities (CSR) activities
which includes contribution to a educational Institute for construction
of a Library, which is eligible under section 135 of Companies Act 2013
read with Schedule VII.
4. Segment Reporting:
The Business segment has been considered as a primary segment for
disclosure. The categories included in each of the reported business
segment are as follows:
i) Electrical Cables
ii) Communication Cables
iii) Copper Rods
iv) Others
The above business segments have been identified considering
i) The Nature of the product/services
ii) The Related risks and returns
iii) The Internal financial reporting systems
Revenue and expenses have been accounted for based on their
relationship to the operating activities of the segment. Revenues and
expenses which relate to the enterprise as a whole and are not
allocable to segments on a reasonable basis have been included under
"Unallocable Expenses". Assets and Liabilities which relate to the
enterprise as a whole and are not allocable to segments on a reasonable
basis have been included under "Unallocable Assets/Liabilities".
5. Previous year figures have been regrouped / reclassified to conform
to current year''s classification
Mar 31, 2015
1) Terms/Rights Attached to Equity Shares
The Company has only one class of equity shares having a par value of
Rs. 1/- per share. Each holder of equity share is entitled to one vote
per share. The Company declares and pays dividends in Indian Rupees.
The dividend proposed by the Board of Directors is subject to the
approval of the shareholders in the ensuing Annual General Meeting.
The Directors have recommended, subject to approval of the shareholders
at the ensuing Annual General Meeting, a Dividend for the Year Ended on
2015 : 10% (2014: 25%).
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 shareholders.
2. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED
FOR)
(Rs. in Lacs)
As at 31st March
Particulars
2015 2014
(i) Contingent Liabilities
(a) Claims against the Company's Disputed
Liabilities not
Acknowledged as Debts
Appeal filed in respect of disputed
demand of Income Tax for
Assessment Year 2007-08 146.22 146.22
(Management is contesting against
these matters and hopeful
to succeed the same)
(b) Guarantees & Securities
* Corporate Guarantees given for
Credit facilities taken by
Subsidiary Companies 15,962.74 15,836.54
* Corporate Guarantees given and
Security provided for Credit
facilities taken by Subsidiary 9,500.00 -
Companies
* Performance Guarantees given
under EPCG (Refer Note No.iii) 566.17 566.17
(c) Other money for which the Company is
contingently liable for
litigation matter
* Bond given to Custom Authority 3,580.75 3,580.75
29,755.88 20,129.68
(d) A search and seizure was carried out u/s 132 of the Income Tax Act,
1961 (the Act) by the Income Tax Authorities on 29th April, 2014 on the
Company. Consequently, the Company have disclosed a sum of Rs. 351.36
Lacs for earlier years. Such disclosed amount for earlier years does
not affect the accumulated profits of the Company as on 1st April, 2014
only such tax of Rs. 117.69 Lacs have been accounted for. Such
disclosed amount is subject to final acceptance by the tax authorities
u/s 143(3)/153A of the Act. Further any additional liability
consequent to such disclosure under the Income Tax Act or any other Act
is presently not ascertainable.
3. Other Commitment
The Company has obtained licenses under the Export Promotion Credit
Guarantee ('EPCG') Scheme for importing capital goods at a concessional
rate of custom duty against submission of bank guarantee and bonds.
Under the terms of the respective schemes, the Company is required to
earn foreign exchange value equivalent to, eight times and in certain
cases six times of the duty saved in respect of licenses where export
obligation has been fixed by the order of the Director General Foreign
Trade, Ministry of Finance, as applicable with in a specified period
from the date of import of capital goods. The Export Promotion Capital
Goods Schemes, Foreign Trade Policy 2009-2014 as issued by the Central
Government of India, covers both manufacturer's exports and service
providers. Accordingly, in accordance with the Chapter 5 of Foreign
Trade Policy 2009-2014, the Company is required to export goods of FOB
value of Rs. 3,882.39 Lacs (Previous Year : Rs. 3,675.32 Lacs). Non
fulfilment of the balance of such future obligation, if any entails to
the Government to recover full duty saved amount and other penalties
under the above referred scheme.
4. SEGMENT DISCLOSURES
As per Accounting Standard (AS) 17 on "Segment Reporting", segment
information has been provided under the Notes to Consolidated Financial
Statements.
5. EMPLOYEE STOCK OPTION PLAN
i. During the Financial Year 2014-15, 2013-14 and 2010-11, the Company
has granted Employee Stock Options to Employees of the Company and its
Subsidiary Companies.
ii. Silent Features
(iii) Method of Accounting of ESOP
The Company has adopted the Intrinsic Value-Based Method of Accounting
for Stock Options granted to the employees of the Company and its
Subsidiaries. The difference between the Intrinsic Value and the
Exercise Price is being amortized as Employee Compensation Cost over
the vesting period. For the year ended March 31, 2015 the Company has
recorded Stock Compensation Expense of Rs. 44.99 Lacs (Previous Year
Rs. 364.17 Lacs)
6. DISCLOSURE REQUIRED BY CLAUSE 32 OF THE LISTING AGREEMENT
Amount of Loans and Advances in the nature of Loans outstanding to
Subsidiaries / Step Down Subsidiaries and Other Companies.
a) Investment by the loanee in the share of the Company
None of the loanees and loanees of subsidiary companies has, per se,
made investments in Shares of the Company.
7. RELATED PARTY DISCLOSURES
Related parties and transactions with them during the year as
identified by the Management are given below:
(i) Parties where control exists
Direct Subsidiary Companies:
* Atled Technologies Private Limited (ATPL)
* Caravella Casino (Goa) Private Limited (CCGPL)
* Coastal Sports and Ventures Private Limited (CSVPL) (w.e.f.
01.04.2013 till 31.07.2013)
* Daman Entertainment Private Limited (DEPL)
* Daman Hospitality Private Limited (DHPL)
* Delta Holding (USA) Inc. (DHUSA) (till 10.12.2014)
* Delta Hospitality & Entertainment Mauritius Limited (DHEML)
* Delta Lifestyle and Entertainment Private Limited (DLEPL)
* Delta Offshore Developers Limited (DODL)
* Delta Pan Africa Limited (DPAL)
* Delta Pleasure Cruise Company Private Limited (DPCCPL)
* Highstreet Cruises & Entertainment Private Limited (HCEPL)
* Interactive Gaming & Sports Pty Limited (IGSP)
* Marvel Resorts Private Limited (MRPL)
Step down Subsidiaries / LLPS:
* Buddy Communication and Productions Pte Limited (BCPL)
* Delta Corp East Africa Limited (DCEAL)
* Delta Hotels Lanka (Private) Limited (DHLKPL)
* Kaizan LLP (KLLP) (till 21.08.2014)
* Victor Hotels and Motels Limited (VHML)(amalgamated with the Company
w.e.f. 01.10.2013
* iGAS Services Pty Limited (IGSPL)
* Results International Pte Limited (RIPEL)
* Results International Pty Limited (RIPYL)
* Canbet UK Limited (CUKL)
* Canbet Sports Bookmakers UK Limited (CSBUKL)
Associate Company
* Zeicast Pte Limited (ZPL) (through its Step down subsidiary Company
HCEPL)
Joint Venture
* Freedom Charter Services Private Limited (FCSPL) (from 28.03.2014)
(ii) Key Management Personnels (KMP):
* Mr. Jaydev Mody (JM) - Chairman
* Mr. Ashish Kapadia (AK) - Managing Director
* Mr. Hardik Dhebar (HD) - Group CFO
(iii) Relatives of Key Management Personnels:
* Mrs. Zia Mody (ZM) - Wife of Chairman
* Mrs. Urvi Piramal (UP) - Sister of Chairman
* Mrs. Kalpana Singhania (KS) - Sister of Chairman
* Ms. Aditi Mody (ADM) - Daughter of Chairman
* Ms. Anjali Mody (AM) - Daughter of Chairman
(iv) Enterprises over which persons mentioned in (ii) and (iii) above
exercise significant influence:
* AAA Holding Trust (AAAHT)
* Aarti J Mody Trust (AAJMT)
* Aditi J Mody Trust (ADJMT)
* Anjali J Mody Trust (ANJMT)
* Arrow Textiles Limited (ATL)
* AZB & Partners (AZB)
* Delta Magnets Limited (DML)
* Delta Foundation (DF)
* Freedom Registry Limited (FRL)
* Highland Resorts Private Limited (HRPL)
* J M Township and Real Estate Private Limited (JMT)
* Jayem Realty Solutions Private Limited (JRSPL)
* NMRT Partners Communication and Consultancy LLP (SKR)
* Pavurotti Finance & Investments Private Limited (PFIPL)
* Peninsula Facility Management Services Limited (PFMS)
* Peninsula Land Limited (PLL)
* Whitecity Mercantile Company Private Limited (WC)
9. EMPLOYEE BENEFITS
Disclosure required under Accounting Standard - 15 (revised 2005) for
"Employee Benefits" are as under:
i) The Company has recognized the expected liability arising out of the
compensated absence and gratuity as at 31st March, 2015 based on
actuarial valuation carried out using the Projected Unit Credit Method.
9. EXCEPTIONAL ITEMS
An exceptional item included in financial statement is on account of
gain of Rs. 343.32 Lacs (Previous Year : ' 1,546.11 Lacs) arising on
partial liquidation proceeds received from overseas subsidiary (in
Liquidation) and gain on account of depreciation gain of Rs. 23.40 Lacs
(Previous Year : Rs. Nil) due to change in method of depreciation as
per Companies Act, 2013 and provision made for diminution in value of
Investment and loans & advances in Foreign Subsidiary in the business
of online gaming amounting to Rs. Nil (Previous Year : Rs. 1424.05 Lacs
) respectively.
10. MAT CREDIT ENTITLEMENT
MAT Credit Entitlement of Rs. 2,167.61 Lacs (Previous Year Rs. 2,374.51
Lacs) is based on future business projections of Company as projected
by Management, and the same have been relied upon by the Auditors.
11. The Company has incurred total expenditure of Rs. 82.23 Lacs on CSR
activities as defined under section 135 of the Companies Act, 2013
along with relevant rules.
12. PREVIOUS YEAR COMPARATIVES
Previous year's figures have been regrouped/ rearranged/
recasted/reclassified/ re-adjusted wherever necessary to conform to the
Current Year's classifications. Current Year Figures are really not
Comparable with corresponding Previous Year figures as Current Year
Figures includes the figures of amalgamated Companies for whole year
while previous year they were for part of the year.
Mar 31, 2014
1. a. Terms / rights attached to Equity Shares
The Company has only one class of Equity Shares having a par value of
Rs.2/- per share. Each holder of Equity Shares is entitled to one vote
per share held. The dividend proposed by the Board of Directors is
subject to the approval of the shareholders in the ensuing Annual
General Meeting,except in case of Interim dividend.
During the year ended 31st March, 2014 the amount of per share dividend
recognised as distributions to the equity shareholders is Rs. 1.60 per
share ( Previous year Rs. 1.20 per share) 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 shareholders.
b. Shares held by holding/ultimate holding company and/or their
subsidiaries/associates
There are no Shares held by holding/ultimate holding company and/or
their subsidiaries/associates.
c. Aggregate number of bonus Shares issued, Shares issued for
consideration other than cash and Shares bought back during the period
of five years immediately preceding the reporting date
There are no bonus Shares issued, Shares issued for consideration other
than cash and Shares bought back during the period of five years
immediately preceding the reporting date.
d. Terms of securities
issued with conversion option into Equity / Preference Shares There are
no securities issued with conversion option into Equity/preference
Shares
2. Contingent Liabilities and commitments
a) Contingent liabilities
(Rs. in million)
Particulars 2014 2013
Demands disputed by the Company in appeal
Excise 141.3 201.5
Customs 13.4 13.4
Sales tax 944.5 946.9
Income tax 76.6 497.9
Appeals preferred by the authorities against
Appellate decisions in favour of the Company
Income tax 42.4 524.4
Guarantees given by Bankers on behalf of the
Company, towards performance and other 1,212.1 573.8
matters, (Secured by hypothecation of Stock
in trade, Book Debts,
Stores and Spares etc.)
Margin deposits against the above guarantee
Rs 29.7 million (Previous Year Rs 75.0 million)
Corporate counter guarantee given to J-Power
Systems Corporation Japan, joint venture 245.0 -
partner towards credit facilities from a
bank availed by the Joint Venture Company,
Finolex J-Power Systems Limited
Claims against the Company by a bank not
acknowledged as debts in respect of
derivative transactions which are under dispute 175.0 170.9
b) Commitments
i. The Company has imported capital goods under the Export Promotion
Capital Goods (EPCG) scheme, of the Government of India, at
concessional rates of duty on an understanding to fulfil quantified
exports against which future obligation aggregates to Rs. 1,211.7
million (Previous year Rs. 1,474.0 million) over a period of six /
eight years from the date of license.
ii. Estimated amount of contracts remaining to be executed on capital
account (net of advances paid), not provided for Rs. 77.0 million
(Previous year Rs. 279.6 million).
30. Provision for Derivatives:
Provision for derivatives as at the year-end is Rs. 525.2 million
(Previous year Rs. 525.2 million) including provided during the year of
Rs. Nil million (Previous year Rs. 233.9 million).
3. Foreign Exchange differences
a) In terms of the circular issued by Ministry of Corporate Affairs
("MCA"), in respect of changes to Accounting Standard 11 and subsequent
amendments thereto, the Company had in earlier years exercised the
option of capitalising foreign exchange difference arising on long term
foreign currency borrowings taken for acquisition of fixed assets.
Accordingly, foreign exchange loss of Rs 46.1 million (Previous year:
Rs 35.2 million) arising during the year has been added to the cost of
fixed assets.
b) As per the clarifications of MCA, the Company in the previous year
had adjusted exchange loss of Rs 34.9 million to the cost of respective
fixed assets with retrospective effect from 1 April 2011, which was
earlier charged to Statement of Profit and Loss as borrowing cost. The
corresponding reversal was reflected in Other Income in the previous
year.
4. Preform Manufacturing Facility Based on the periodic review, it is
the CompanyÂs view that the Preform Manufacturing Facility which was
impaired in 2004-05 continues to remain impaired. During the year the
Company has not made any further provision (Previous Year: Rs 15.5
million). Consequently, the impairment loss of Rs. 304.0 million
(Previous Year Rs.304.0 million) is being carried forward.
5. Segment Reporting
The Business segment has been considered as a primary segment for
disclosure. The categories included in each of the reported business
segment are as follows:
i) Electrical Cables
ii) Communication Cables
iii) Copper Rods
iv) Others
The above business segments have been identified considering
i) The nature of the product/services
ii) The related risks and returns
iii) The internal financial reporting systems
Revenue and expenses have been accounted for based on their
relationship to the operating activities of the segment. Revenues and
expenses which relate to the enterprise as a whole and are not
allocable to segments on a reasonable basis have been included under
"Unallocable Expenses". Assets and Liabilities which relate to the
enterprise as a whole and are not allocable to segments on a reasonable
basis have been included under "Unallocable Assets/Liabilities".
Mar 31, 2013
1 DEFERRED TAX
In accordance with Accounting Standard 22 "Accounting for Taxes on
Income" issued by the Institute of Chartered Accountants of India,
the Company has accounted for Deferred Tax during the year. The
components of Deferred Tax Assets to the extent recognized and Deferred
Tax Liabilities as on 31st March, 2013 are as follows:
2 SEGMENT DISCLOSuRES
As per Accounting Standard (AS) 17 on "Segment Reporting", segment
information has been provided under the Notes to Consolidated Financial
Statements.
3 employee stock option plan
i. During the year 2010-11, the Company has granted Employee Stock
Options to Employees of the Company and Subsidiaries.
ii. Salient Features
The options are granted at the price determined by the Compensation
Committee. Each option entitles the holder to exercise the right to
apply for and seek allotment of one equity share of Rs. 1/- each. The
option shall vest in four equal installments. Details of options
granted during the financial year 2010-11 duly approved by the
Compensation Committee under the said scheme are as under:
**Out of ESOP granted in November, 2010 employees of the Company and
Subsidiary Companies have surrendered their unexercised right of ESOP
to the Company. The Compensation Committee of the Board of Directors of
the Company at its meeting held on 30th March, 2013, have cancelled
23,15,100 options granted in November, 2010.
4 DISCLOSURE REQUIRED BY CLAUSE 32 OF THE LISTING AGREEMENT
Amount of Loans and Advances in the nature of Loans outstanding to
Subsidiaries /Step down Subsidiaries / Associates etc.
a) Loans and Advances in the nature of Loans
b) Investment by the loanee in the share of the Company
None of the loanees and loanees of subsidiary Companies has, per se,
made investments in Shares of the Company.
5 RELATED PARTY DISCLOSURES
(A) Related parties and transactions with them during the year as
identified by the Management are given below:
(i) Parties where control exists Direct Subsidiaries:
- Daman Entertainment Private Limited
- Delta Pleasure Cruise Company Private Limited (DPCCPL)
- Delta Adventures and Entertainment Private Limited (DAEPL)
- Delta Holding USA Inc. (DHUSA)
- Delta Hospitality & Leisure Private Ltd (DHLPL)
- Delta Leisure and Entertainment Private Limited (earlier known as
Delta Cruises and Entertainment Private Limited (DLENPL)
- Delta Lifestyle and Entertainment Private Limited (DLEPL) (upto
19.03.2013)
- Delta Offshore Developers Limited (DODL)
- Delta Pan Africa Limited (DPAL)
Step-down Subsidiaries / LLPS:
- AAA Township Private Limited (AAATPL)
- Aman Infrastructure Private Limited (AIPL)
- Argyll Hotels Private Limited (AHPL)
- Atled Technologies Private Limited (ATPL)
- Caravella Casino (Goa) Private Limited (CCGPL)
- Coastal Sports and Ventures Private Limited (CSVPL)
- Daman Hospitality Private Limited (DHPL)
- Delta Corp East Africa Limited (DCEAL)
- Delta Hospitality and Entertainment Private Limited (DHEPL)
- Delta Square Limited (DSL)
- Delta Hotels Lanka (Private) Limited (DHLKPL)
- Freedom Charter Services Private Limited (FSCPL) (from 16.10.2012)
- Highstreet Cruises & Entertainment Private Limited (HCEPL)
- Highstreet Riviera Leisure (Goa) Private Ltd (HRLGPL) (through its
Subsidiary Company DLEPL)
- Kaizan LLP (KLLP)
- Marvel Resorts Private Limited (MRPL)
- Samarpan Properties and Construction Private Limited (SPCPL)
- Samarpan Township Private Limited (STPL)
- Shree Mangesh Realty Private Limited (SMRPL)
- Victor Hotels and Motels Limited (VHML)
- Delta Hospitality and Entertainment (Mauritius) Ltd (DHEML)
Associate Companies:
- Zeicast Pte Limited (ZPL) (through its Step down subsidiary Company
HCEPL)
- Interactive Gaming & Sports Pty Ltd (IGSP) (through its Step down
subsidiary Company DLEPL)
(ii) Key Management Personnels (KMP):
- Mr. Jaydev Mody (JM) - Chairman
- Mr. Ashish Kapadia (AK) - Managing Director
- Mr. Hardik Dhebar (HD) - Group CFO
(iii) Relatives of Key Management Personnels:
- Mrs. Zia Mody (ZM) - Wife of Chairman
- Mrs. Urvi Piramal (UP) - Sister of Chairman
- Mrs. Kalpana Singhania (KS) - Sister of Chairman
- Ms. Anjali Mody (AM) - Daughter of Chairman
(iv) Enterprises over which persons mentioned in (ii) and (iii) above
exercise significant influence:
- Anjoss Trading Private Limited (ATPL)
- Aarti Management Consultancy Private Limited (AMCPL)
- Aditi Management Consultancy Private Limited (ADCPL)
- Blackpool Realty Private Limited (BRPL)
- Arrow Textiles Limited (ATL)
- AZB & Partners (AZB)
- Delta Magnets Limited (DML)
- Freedom Registry Private Limited (FRPL)
- Peninsula Facility Management Services Private Limited (PFMS)
- Peninsula Land Ltd (PLL)
- Aarti J Mody Trust (AAJMT)
- Aditi J Mody Trust (ADJMT)
- Anjali J Mody Trust (ANJMT)
- Jayem Realty Solutions Private Limited (JRSPL)
- AAA Holding Trust (AAAHT)
- Pavurotti Finance & Investments Private Limited (PFIPL)
- Khemani & Sorabjee Charitable Trust (KSCT)
6 EMPLOYEE BENEFITS
Disclosure required under Accounting Standard - 15 (revised 2005) for
"Employee Benefits" are as under:
i) The Company has recognized the expected liability arising out of the
compensated absence and gratuity as at 31st March, 2013 based on
actuarial valuation carried out using the Project Credit Method.
ii) The below disclosure have been obtained from independent actuary.
The other disclosures are made in accordance with AS - 15 (revised)
pertaining to the Defined Benefit Plan is as given below :
7 Pursuant to the Scheme of Amalgamation (Âthe Scheme'') between
the Company and Richtime Realty Private Ltd (RRPL) (the Transferor
Company), as approved by the respective shareholders of both the
Companies and subsequently approved by the Honorable High Court of
Judicature at Mumbai vide its Order dated 21st December, 2012, which
has been filed with the Registrar of Companies on 10th January, 2013
(the Effective Date), the entire business and the whole undertakings of
the Richtime Realty Private Ltd (the Transferor Company) were
transferred to, as a going concern and became vested in, the Company,
effective from 1st April, 2011 (the appointed date). The Transferor and
Transferee Company both are engaged in the business of real estate.
Accordingly, accounting treatment as per the scheme approved by the
Hon''ble High Court has been given effect in the above financial
statements and is as under:
- All the Assets and Liabilities of RRPL as at April 01, 2011 were
incorporated in the financial of the Company at their book value.
- Inter-Company balances, if any, stands cancelled.
- The Equity Shares, if any held by the Transferee Company or its
Wholly Owned Subsidiary in the Transferor Company stands cancelled and
there shall be no further obligation/outstanding in that behalf.
- The excess of Net Assets of the Transferor Company transferred to
the Transferee Company over the Equity Shares issued by the Transferee
Company were credited to Capital Reserve of the Transferee Company.
Working of Goodwill/ (Capital Reserve) is as under:
Pursuant to the Scheme, the Company had credited 335 Equity shares for
each Equity Shares held by the Shareholders of the Transferor Company
whose name was appearing as Registered Member / Shareholder of the
Transferor Company on the record date. Accordingly, 16,74,665 Equity
Shares of Rs. 1 each credited as fully paid up have been issued to the
Shareholder of Transferor Company.
As per the conditions prescribed in the Accounting Standard (AS) 14 -
"Accounting for Amalgamations" (AS 14), the Company was suppose to
adopt Pooling of Interest method. However, to reflect the impact of the
Scheme (approved by the High Court), the Company has adopted Purchase
Method prescribed under the AS 14.
As per the Pooling of Interest method as prescribed in Accounting
Standard 14, the difference arising if any, needs to be adjusted in the
balance of General Reserve. However, as prescribed in the merger scheme
approved by the Honorable High Court of Judicature at Mumbai vide its
Order dated 1st April, 2011, the difference of Rs. 1,040.98 Lacs arising
of account of such merger is recognized as Capital Reserve.
8 EXCEPTIONAL ITEM
An exceptional item included in financial statement is comprised of
employee compensation expenses written back during the year. Due to the
unexpected decrease in share price of the Company, which has fallen
beyond Rs. 51 which is exercise price of ESOP granted in November, 2012
tranche, employees of the Company and it''s subsidiary Companies have
surrendered their unexercised rights of ESOP to the Company. The
Compensation Committee of the Board of Directors of the its Company at
its meeting held on March 30, 2013, has accordingly, cancelled
23,15,100 options granted to grantees under ESOP Scheme of the Company
and Subsidiary Companies. In view of the same, the Compensation Cost
debited in Current Year as well as Earlier Years amounting to Rs. 516.27
Lacs has been reversed and shown as exceptional item in financial
statements.
9 MAT CREDIT ENTITLEMENT
MAT Credit Entitlement of Rs. 1,808.11 Lacs (Previous Year Rs. 1,818.14
Lacs) is based on business projections of Company provided by
Management, and the same have been relied upon the Auditors.
10 Borrowing cost capitalized for the year amounts to Rs. Nil (Previous
year Rs. 168.58 Lacs).
11 PREVIOUS YEAR COMPARATIVES
Previous year''s figures have been regrouped/ rearranged/
recasted/reclassified/ readjusted wherever necessary to conform to
Current Year''s classifications.
Mar 31, 2012
A. Terms / rights attached to Equity Shares
The Company has only one class of equity shares having a par value of
Rs. 2 per share. Each holder of Equity Shares is entitled to one vote
per share. The Company declares and pays dividends in Indian Rupees.
The dividend proposed by the Board of Directors is subject to the
approval of the shareholders in the ensuing Annual General Meeting.
During the year ended 31st March 2012, the amount of per share dividend
recognised as distributions to the equity shareholders is Re. 0.80 (
Previous year Re. 0.70 )
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.
b. Shares held by holding/ultimate holding company and/or their
subsidiaries/associates
There are no shares held by holding/ultimate holding company and/or
their subsidiaries/associates.
The company does not have any continuing defaults in repayment of loans
and interest as on the reporting date.
Cash Credit and Packing credit from bank is secured by hypothecation of
inventories and book debts. The cash credit is repayable on demand.
Packing Credit and Acceptances are generally repayable within 180 days.
*The figure does not include any amount due and outstanding to be
credited to Investor Education & Protection Fund.
1. Contingent Liabilities:
a) Disputed demands in appeal towards Excise Rs. 156.4 million
(Previous year Rs. 107.1 million), Customs Rs. 13.4 million (Previous
year Rs. 13.4 million) and Sales Tax Rs. 599.0 million (Previous year
Rs. 471.3 million)
b) i) Disputed Income Tax demands and matters in Appellate proceedings
Rs. 424.9 million (Excluding consequential interest or penalty),
(Previous year Rs. 439.4 million).
ii) Appeals preferred by Income Tax Department against Appellate
decisions in favour of the Company, wherein, should the ultimate
decision be unfavourable to the Company, the liability is estimated to
be Rs. 485.6 million (Previous year Rs. 570.1 million)
c) Guarantees given by Company's Bankers on behalf of the Company,
towards performance and other matters, amounting to Rs. 474.3 million
(Previous year Rs. 485.4 million), are secured by hypothecation of
Stock in trade, Book Debts, Stores and Spares etc.
d) The Company has imported capital goods under the Export Promotion
Capital Goods (EPCG) scheme, of the Government of India, at
concessional rates of duty on an understanding to fulfil quantified
exports against which future obligation aggregates to Rs. 728.3 million
(Previous year Rs. 791.9 million) over a period of six / eight years
from the date of license.
e) Amounts claimed by Banks in respect of derivative transactions which
are under dispute not acknowledged as debt Rs. 170.9 million (Previous
year Rs.138.7).
2. Estimated amount of contracts remaining to be executed on capital
account (net of advances paid), not provided for Rs. 37.1 million
(Previous year Rs.307.9 million).
3. Pursuant to notification of 31st March 2009 issued by Ministry of
Corporate Affairs, Government of India, in respect of changes to
Accounting Standard 11 and subsequent amendments thereto the Company
had opted for capitalisation of exchange difference in respect of long
term foreign currency loans taken for acquisition of assets.
Accordingly, the exchange difference has been recalculated based on the
exchange rate prevalent on date of repayment of loan or 31.03.2012 as
the case may be and an amount of Rs. 111.9 million has been capitalised
during the year 2011-12.
Similar treatment has been accorded to foreign currency borrowings made
after April 1, 2009 and the foreign exchange fluctuation gain
pertaining to previous year amounting to Rs. 10.2 million being
transitional has been debited to General Reserve.
Current Tax:
Provided in accordance with the provisions of the Income Tax Act 1961.
4. Trade Payable:
A) Outstanding to Suppliers other than Micro, Small & Medium Enterprise
Rs. 563.6 million (Previous year Rs. 306.3 million) (Interest
Paid/Payable is Rs. Nil, Previous year Rs. Nil)
B) Outstanding to Micro, Small & Medium Enterprise Rs. 4.5 million
(Previous year Rs.0.7 million) includes Trade Payable Rs. 0.2 million
(Previous year Rs. 0.6 million).
The identification of suppliers as Micro and Small Enterprises covered
under the "Micro, Small and Medium Enterprises Development Act,
2006" was done on the basis of the information to the extent provided
by the suppliers to the company. Total Outstanding dues of Micro and
Small Enterprises, which were outstanding for more than stipulated
period, are given below:
5. Based on the periodic review, it is the Company's view that the
Preform Manufacturing Facility which was impaired in 2004-05 continues
to remain impaired. Consequently, the impairment loss of Rs 288.5
million (Gross) is being carried forward. No further additions have
been made to the impairment provisions, since there is no significant
change in status.
6. Investment in Joint Venture
(a) 1. The name of the joint venture company : Finolex J-Power Systems
Private Limited
2. Ownership interest : 49%
3. Country of Incorporation : India
On 13th December, 2007, the Company entered into a joint venture
agreement with J-Power Systems Corporation of Japan, to offer complete
turnkey solutions in extra high voltage (EHV) cable systems in India
and abroad.
As on 31st March 2012, the Company has invested Rs. 480.2 million in
the shares of the joint venture.
(b) 1. The name of the joint venture company : Corning Finolex Optical
Fibre Private Limited
2. Ownership interest : 50%
3. Country of Incorporation : India
As on 31st March 2012, the Company has invested Rs. 0.5 million in the
shares ofthe joint venture.
7. Related Party Transactions: Disclosures as required by Accounting
Standard 18 "Related Party Disclosures" are given below:
a) List of Related Parties:
Associate Companies : Finolex Industries Limited
: Finprop Advisory Services Limited : Finolex Plasson Industries
Private Limited
Joint Venture
: Finolex J-Power Systems Private Limited : Corning Finolex Optical
Fibre Private Limited
Others
: Orbit Electricals Private Limited : Finolex Infrastructure Limited
b) Key management Personnel and Relatives
Key Management Personnel
1. Mr. P. P. Chhabria - Chairman
2. Mr. D. K. Chhabria - Managing Director
3. Mr. Mahesh Viswanathan - Director - Finance and Chief Financial
Officer Relatives
Mr. K. P. Chhabria - Brother of Mr. P.P. Chhabria, and Father of Mr. D.
K. Chhabria
B. The Company has entered into derivative transactions with an
objective to hedge the financial risks associated with its business
viz. foreign exchange and interest rate.
C. The Company has not hedged the following foreign currency
exposures:
(i) Borrowings grouped under long and short categories equivalent to
Rs. 891.9 million (Previous year Rs.1,493.9 million).
(ii) Creditors for imports equivalent to Rs. 144.6 million (Previous
year Rs. 65.6 million)
(iii) Receivables equivalent to Rs. 39.6 million. (Previous year Rs.
25.3 million)
Revenue and expenses have been accounted for based on their
relationship to the operating activities of the segment. Revenues and
expenses which relate to the enterprise as a whole and are not
allocable to segments on a reasonable basis have been included under
"Unallocable Expenses". Assets and Liabilities which relate to the
enterprise as a whole and are not allocable to segments on a reasonable
basis have been included under "Unallocable Assets/Liabilities".
8. During the year ended 31st March 2012, the revised Schedule VI
notified under the Companies Act 1956, has become applicable to the
Company. Revised Schedule VI significantly impact presentation and
disclosures made in the financial statements, particularly presentation
of Balance Sheet. The Company has reclassified previous year figures to
conform to this year's classification.
Mar 31, 2011
A) In the opinion of the Board, the current assets, loans and advances
are approximately of the value stated if realized in the ordinary
course of business. The provisions for all known liabilities are
adequate.
b) Contingent Liabilities
Claims against the Company not acknowledged as debts:
- Income Tax Liabilities for Ass. Year 2007-08: Rs. 146.22 Lacs (Previous
yearRs. 146.22 Lacs).
- Corporate Guarantee given: Rs. 1,836.40 Lacs (Previous year Rs. 1,000.00
Lacs).
c) Estimated amount of contracts remaining to be executed on capital
account not provided for (net of advance) Rs. 147.13 Lacs (Previous Year
Rs. NIL)
d) Segment Disclosures
As per Accounting Standard (AS) 17 on "Segment Reporting", segment
information has been provided under notes to Consolidated Financial
Statements.
e) Acquisitions / Divestments
- Acquisitions:
During the year, the Company has formed/ acquired following subsidiary
Companies:
Delta Offshore Developers Ltd, (Mauritius) having paid up Equity share
capital of US$ 1.20 Lacs comprising of 1,200 equity Shares of US$ 100
for Rs. 54.20 Lacs each and share application money paid for Investment
made in 0% Optionally Convertible Redeemable 34,300 Preference shares @
100 US$ for Rs. 1,549.33 Lacs .
The Board of Directors and Investment Committee of the Company has at
their meeting held on 19th January, 2010, approved the purchase of
50.99% Equity Shares (22,18,400 Equity Shares ofRs. 10/- each) of Advani
Pleasure Cruise Company Private Limited (APCCPL) upon terms and
conditions agreed in the Share Purchase Agreement (SPA) between the
Company and Advani Hotels and Resorts (India) Limited (AHRIL).
Accordingly, on 20th September, 2010 the Company has acquired 22,18,500
shares of APCCPL from AHRIL and thereby said Company becomes the
Subsidiary Company.
During the year, the Company has acquired 10,000 equity shares of Rs. 10
each amounting to Rs. 1 Lacs each of Goodluck Renewable Energy Resources
Private Limited and Delta Hospitality & Leisure Private Limited
(earlier known as PLL Delta Hotels Private Limited).
- Disinvestments:
The Company disinvested 1,38,00,000 equity shares ofRs. 10/- each
amounting to Rs. 1,380 Lacs of its Subsidiary Company namely AAA Aviation
Private Ltd, thereby the said Company ceased to remain subsidiary of
the Company.
The Company disinvested 10,000 equity shares ofRs. 10/- each amounting to
Rs. 1 Lacs of its Subsidiary Company namely Goodluck Renewable Energy
Resources Private Limited, thereby the said Company ceased to remain
subsidiary of the Company.
Under corporate restructuring plan, the Company has transferred shares
of following directly owned Subsidiaries Companies to its wholly owned
Subsidiaries Companies at cost and thereby it becomes step down
subsidiaries;
a. Highstreet Cruises & Entertainment Private Limited
b. Delta Hospitality & Entertainment Private Limited
c. Richtime Realty Private Limited
d. Delta Hospitality & Leisure Private Limited
Under corporate restructuring plan, the Company has transferred shares
of 1,60,29,946 equity shares of Rs. 2/- of Advani Hotels & Resorts
(India) Limited to its subsidiary company at Rs. 39 per share as per SEBI
Order dated 10th February, 2011. In standalone fnancial, company has
booked loss of Rs. 2,559.55 Lacs.
f) Employee Stock Option Plan
i) During the year, the Company has granted Employee Stock Options to
employees of the Company and Subsidiaries.
ii) Salient Features
The options are granted at the price determined by the Compensation
Committee. Each option entitles the holder to exercise the right to
apply for and seek allotment of one equity
iii) Method of Accounting of ESOP
The Company has adopted the Intrinsic Value-based method of accounting
for stock options to the employee of the company and subsidiaries. The
difference between the intrinsic value and the exercise price is being
amortized as employee compensation cost over the vesting period. For
the year ended March 31, 2011 the Company has recorded stock
compensation expense of Rs. 196.82 Lacs (previous year Rs. Nil).
iv) Method and assumption used to estimate the fair value of options
granted during the year;
g) Related Party Disclosures
(A) Related parties and transactions with them during the year as
identifed by the Management are given below:
(i) Parties where control exists
Subsidiaries:
- AAA Aviation Private Limited (AAPL) (till 13.09.2010)
- Advani Pleasure Cruise Company Private Limited (APCCPL) (from
20.09.2010)
- Delta Adventures and Entertainment Private Limited (DAEPL)
- Delta Holding (USA) Inc. (DHUSA)
- Delta Hospitality & Leisure Private Ltd (DHLPL) (from 30.04.2010)
- Delta Hospitality and Entertainment Private Limited (DHEPL) (till
25.05.2010)
- Delta Leisure and Entertainment Private Limited (earlier known as
Delta Cruises and Entertainment Private Limited) (DLENPL)
- Delta Lifestyle and Entertainment Private limited (DLEPL)
- Delta Offshore Developers Ltd (DODL) (from 15.12.2010)
- Delta Pan Africa Limited (DPAL)
- Goodluck Renewable Energy Resources Private Limited (GRERPL) (from
08.09.10 to 20.01.11)
- Highstreet Cruises & Entertainment Private Limited (HCEPL) (till
15.05.2010)
- Richtime Realty Private Limited (RRPL) (till 15.05.2010)
Step down Subsidiaries / LLPS:
- AAA Township Private Limited (AAATPL)
- Aman Infrastructure Private Limited (AIPL) (from 24.11.2010)
- Argyll Hotels Private Limited (AHPL) (from 24.11.2010)
- Caravella Casino (Goa) Private Limited (CCGPL) (from 23.09.2010)
- Coastal Sports and Ventures Private Limited (CSVPL)
- Delta Corp East Africa Limited (DCEAL)
- Delta Hospitality and Entertainment Private Limited (DHEPL) (from
26.05.2010)
- Delta Square Limited (DSL)
- Highstreet Cruises & Entertainment Private Limited (HCEPL) (from
15.05.2010)
- Kaizan LLP (KLLP) (From 10.08.2009)
- Marvel Resorts Private Limited (MRPL) (from 21.02.2011)
- Richtime Realty Private Limited (RRPL) (from 15.05.2010)
- Samarpan Properties and Construction Private Limited (SPCPL)(from
18.03.2011)
- Samarpan Township Private Limited (STPL) (from 14.03.2011)
- Shree Mangesh Realty Private Limited (SMRPL) (from 10.03.2011)
- Victor Hotels and Motels Limited (VHML)
Joint Venture:
- Highstreet Riviera Leisure (Goa) Private Ltd (HRLGPL) (through its
Subsidiary Company DLEPL)
(ii) Individuals owning directly or indirectly an Interest in the
voting power that gives them signifcant infuence:
- Mr. Jaydev Mody (JM) - Chairman
- Mrs. Zia Mody (ZM)
(iii) Key Management Personnels:
- Mr. Ashish Kapadia (AK) Ã Managing Director
- Mr. Hardik Dhebar (HD) - Group C.F.O.
(iv) Enterprises over which persons mentioned in (ii) and (iii) above
exercise signifcant infuence:
- Aarti Management Consultancy Private Limited (AMCLP)
- Aarti J Mody Trust
- Aditi Management Consultancy Private Limited (ADMPL)
- Aditi J Mody Trust
- Anjoss J Mody Trust
- Anjoss Trading Private Limited (ATPL)
- Arrow Textiles Limited (ATL)
- AZB & Partners (AZB)
- Dacapo Brokerage India Private Limited (DBIPL)
- Delta Magnets Limited (DML)
- Freedom Aviation Private Limited (FAPL)
- Freedom Registry Limited (FRPL)
- J M Realty Management Private Limited (JMRMPL)
- J M Township Real Estate Private Limited (JMTPL)
- Peninsula Facility Management Services Private Limited (PFMS)
- Peninsula Land Ltd (PLL)
h) Employee Benefts
Disclosure required under Accounting Standard à 15 (revised 2005) for
"employee benefts" are as under:
i) The Company has recognized the expected liability arising out of the
compensated absence and gratuity as at 31st March, 2011 based on
actuarial valuation carried out using the Project Credit Method.
i) Disclosure required by clause 32 of the Listing Agreement and as per
Section 370 (1B) of Companies Act, 1956
Amount of Loans and Advances in the nature of Loans outstanding to
Subsidiaries /Step down Subsidiaries / Associates etc.
b) Investment by the loanee in the share of the Company
None of the loanees and loanees of subsidiary companies has, per se,
made investments in shares of the Company.
During the year Company has sold the Delta Plaza, immovable property at
Prabhadevi, Mumbai and hence disclosure about future minimum lease
income from Delta plaza is not given.
The Company has taken Bareboat - M. V. Caravela from Waterways Shipyard
Private Limited which is sub lease to its subsidiary - Advani Pleasure
Cruises & Entertainment
k) Deferred Tax & MAT Credit Entitlement
(i) Deferred Tax
In accordance with Accounting Standard 22 "Accounting for Taxes on
Income" issued by the Institute of Chartered Accountants of India, the
Company has accounted for Deferred Tax during the year.
Mar 31, 2010
1. Contingent Liabilities:
a) Liability on account of Sales Bills discounted with Bank Rs. 385.096
million (Previous year Rs. 395.817 million).
b) Disputed demands in appeal towards excise Rs. 73.623 million
(Previous year Rs. 61.860 million), customs Rs. 13.427 million
(Previous year 13.427 million) and sales tax Rs. 453.491 million
(Previous year Rs. 71.370 million)
c) i) Disputed Income Tax demands and matters in appellate proceedings
Rs. 440.390 million (Excluding consequential
interest or penalty), (Previous year Rs. 468.110 million).
Notes forming part of the Accounts
ii) Appeals preferred by Income Tax Department against Appellate
decisions in favour of the Company, wherein, should the ultimate
decision be unfavourable to the Company, the liability is estimated to
be Rs. 538.290 million (Previous year Rs. 535.860 million)
d) Guarantees given by Companys Bankers on behalf of the Company,
towards performance and other matters, amounting to Rs. 523.237 million
(Previous year Rs. 663.149 million), are secured by hypothecation of
Stock in trade, Book Debts, Stores and Spares etc.
e) The Company has imported capital goods under the Export Promotion
Capital Goods (EPCG) scheme, of the Government of India, at
concessional rates of duty on an understanding to fulfil quantified
exports against which future obligation aggregates to Rs. 1,017.00
million (Previous year Rs. 1,297.321 million) over a period of eight
years from the date of license.
2. Estimated amount of contracts remaining to be executed on capital
account (net of advances paid), not provided for Rs. 187.750 million
(Previous year Rs. 236.239 million).
3. Pursuant to notification of 31st March 2009 issued by Ministry of
Corporate Affairs, Government of India, in respect of changes to
Accounting Standard 11 the Company had in 2008-09 capitalised exchange
differences to the tune of Rs. 196.723 million. Further an amount of Rs
62.300 million debited to General Reserve towards exchange difference
previously recognised in the Profit and loss Account for the year
2007-08. As required under the said notification, the exchange
difference has been recalculated based on the exchange rate prevalent
on 31.03.2010 and accordingly an amount of Rs. 143.600 million has been
decapitalised during the year 2009-10.
4. Sundry Creditors:
A) Outstanding to creditors other than Micro, Small & Medium Enterprise
Rs. 530.547 million (Previous year Rs. 581.133 million) (Interest
Paid/Payable is Rs. Nil, Previous year Rs. Nil)
B) Outstanding to Micro, Small & Medium Enterprise : Rs. 2.249 million
(Previous year Rs. 11.433 million)
The identification of suppliers as Micro & Small Enterprises covered
under the "Micro, Small and Medium Enterprises Development Act, 2006"
was done on the basis of the information to the extent provided by the
suppliers to the company. Total Outstanding dues of Micro and Small
Enterprises, which were outstanding for more than stipulated period are
given below:
5. Based on the periodic review, it is the Companys view that the
Preform Manufacturing Facility which was impaired in 2004-05 continues
to remain impaired. Consequently, the impairment loss of Rs 288.510
million (Gross) is being carried forward. No further addition have been
made to the impairment provisions, since there is no significant change
in status.
6. Investment in Joint Venture
1. The name of the joint venture company : Finolex J-Power Systems
Private Limited
2. Ownership interest : 49%
3. Country of Incorporation : India
On 13th December, 2007, the Company entered into a joint venture
agreement with J- Power Systems Corporation of Japan, to offer complete
turnkey solutions in extra high voltage (EHV) cable systems in India
and abroad.
As on 31st March, 2010 the Company has invested Rs. 284.200 million in
the shares of the joint venture with a commitment to invest a further
Rs. 100.000 million.
7. Related Party Transactions: Disclosures as required by Accounting
Standard 18 "Related Party Disclosures" are given below: a) List of
Related Parties :
Associate Companies
Finolex Industries Limited
Finprop Advisory Services Limited
Corrugated Box Industries (India) Private Limited
Finolex Plasson Industries Limited
Finolex Infrastructure Limited
Other Companies
Akash-Tatva Investments Private Limited
Coated Fabrics Private Limited
Devita Investments Private Limited
Fino Communication Equipments Private Limitf
Finolib Chemicals Private Limited
Hi-Tech Poly Coatings Private Limited
K. R Investments Private Limited
Majesty Investments Private Limited
Mohini Investments Private Limited
Orbit Electricals Private Limited
Pratibha Xero-Graph. Imp. Private Limited
VKC Investments Private Limited
Joint Venture Finolex J-Power Systems Private Limited
B. The Company has entered into derivative transactions with an
objective to hedge the financial risks associated with its business
viz. foreign exchange and interest rate.
C. The Company has not hedged the following foreign currency exposures
:
(i) Borrowings grouped under secured loans equivalent to Rs. 1,347.000
million (Previous year Rs. 1,521.600 million).
(ii) Creditors for imports equivalent to Rs. 97.435 million (Previous
year Rs. 48.954 million) (Hi) Receivables equivalent to Rs. 23.194
million (Previous year Rs. 50.372 million)
D. Loss on Derivative / Forex transactions includes Rs. 100.000
million (Previous year 100.000 million) loss on certain outstanding
derivatives at the Balance Sheet date assessed by the management based
on the principle of prudence.
The Company has provided for remuneration of whole time Directors in
accordance with the resolution passed by the Shareholders at the Annual
General Meeting of the Company held on SO"1 July, 2008.
Pursuant to the recommendation of the Remuneration Committee of
Directors and the approval of the Members in the Annual General Meeting
held on 26th August, 2009 in terms of the provisions of Section 198,
269, 309 and other applicable provisions, if any, of the Companies Act,
1956 (the "Act") read with Schedule XIII to the Act, the Company has
filed separate applications with
the Central Government for obtaining its approval for payment of
remuneration including all perquisites but excluding commission due to
inadequacy or absence of profits for the previous financial year 2008 -
2009, to the following whole time Directors of the Company namely : Mr.
P. P. Chhabria, Chairman, Mr. D. K. Chhabria, Managing Director, Mr. V.
K. Chhabria, Deputy Managing Director and Mr. M. L. Jain, Assistant
Managing Director and Chief Operating Officer. The approval of the
Central Government is yet to be received by the Company
8. Figures in respect of the previous year have been regrouped or
rearranged wherever necessary to conform to current years
classification.