d. Provisions and Contingent Liabilities:
A provision is recognised when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits and compensated absences) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance sheet date. These are reviewed at each Balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised in the financial statements. A contingent asset is neither recognised nor disclosed in the financial statements.
e. Impairment of Investment in Subsidiaries:
The investments in subsidiaries are carried at cost and tested for impairment in accordance with provisions applicable to impairment of non-financial assets. The recoverable amount is determined based on value in use. The determination of recoverable amount involves significant judgements such as market value, future projection of revenue, EBITDA, weighted average cost of capital and terminal growth.
The recoverable amount is significantly dependant on achievement of revenue growth and any change in revenue growth projection could have an impact on recoverable value.
Based on the above, no impairment was identified as of March 31, 2024 as the recoverable amount is higher than carrying value.
f. Recoverability assessment of Assets:
In assessing the recoverability of assets such as intangible assets (including intangible assets under development), investments, inventories, trade receivables and other assets, based on current indicators of future economic conditions the Company expects to recover the carrying amounts of its assets. The impact of the global health pandemic, COVID 19, may be different from that presently estimated and
would be recognised in the financial statements when material changes to economic conditions arise.
3A. Standards issued but not yet effective:
Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 31, 2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2023, applicable from April 1, 2023, as below:
(i) Ind AS 8 - Definition of accounting estimates: The amendments will help entities to distinguish between accounting policies and accounting estimates. The definition of a "change in accounting estimates" has been replaced with a definition of "accounting estimates." Under the new definition, accounting estimates are "monetary amounts in financial statements that are subject to measurement uncertainty." Entities develop accounting estimates if accounting policies require items in financial statements to be measured in a way that involves measurement uncertainty. The Company does not expect this amendment to have any significant impact in its financial statements.
(ii) Ind AS 12 - Income Taxes The amendments narrowed the scope of the recognition exemption in paragraphs 15 and 24 of Ind AS 12. At the date of transition to Ind ASs, a
first-time adopter shall recognize a deferred tax asset to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilized. Similarly, a deferred tax liability for all deductible and taxable temporary differences associated with:
a) right-of-use assets and lease liabilities.
b) decommissioning, restoration and similar liabilities and the corresponding amounts recognized as part of the cost of the related asset.
Therefore, if a Company has not yet recognised deferred tax on right-of-use assets and lease liabilities or has recognised deferred tax on net basis, the same need to recognize on gross basis based on the carrying amount of right-of-use assets and lease liabilities. The Company does not expect this amendment to have any significant impact in its financial statements.
(iii) Ind AS 103 - Common control Business Combination The amendments modify the disclosure requirement for business combination under common control in the first financial statement following the business combination. It requires to disclose the date on which the transferee obtains control of the transferor. The Company does not expect this amendment to have any significant impact in its financial statements.
Footnotes to Loans:
1. a) During the year, Greaves Finance Limited (100% owned subsidiary) repaid an amount of ' 30 Crore. Further the Company granted loan of
' 30 Crore (previous year ' 17.40 Crore) to Greaves Finance Limited at an interest rate of 10% p.a. (Amount outstanding '30 Cr). This loan is repayable with interest within 12-24 months or such extended period as may be agreed mutually. The borrower to use the loan for its business requirements.
b) During the year, the Company granted loan of ' 1 Crore (previous year ' 1 Crore) to its wholly owned subsidiary Greaves Technologies Limited for its working capital requirements at an interest rate of 10% p.a. (Amount outstanding '3 Cr). This Loan is repayable with interest within 12 months or such extended period as may be agreed mutually.
c) Maximum amount outstanding at any point of time during the year
- ' 30 Crore by Greaves Finance Limited
- ' 3 Crore by Greaves Technologies Limited
2. The Company has not advanced or lent or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall directly or indirectly lend to or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries).
3. Also, Refer Note 32B
Footnotes:
a. Provision matrix
The Company has policy of expected credit loss provisioning. The Overdue debtors are critically reviewed and necessary expected credit loss provisions are made.
b. Short Term non fund based limits are secured by hypothecation of all inventory, spares, tools and book debts, present and future, of the Company, which includes Letters of credit and bank guarantees of ' 19.88 Crore (previous year ' 10.54 Crore) and ' 18.57 Crore (previous year ' 16.82 Crore) respectively.
c. The Company writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into bankruptcy proceedings etc. None of the trade receivables that have been written off is subject to enforcement activities.
d. Also refer Note 32B
15E Dividend
The amount that can be distributed as dividend by the Company to its equity shareholders is determined considering the requirements of the Companies Act, 2013.
On May 8, 2024, the Board of Directors has proposed final dividend of ' 2 per share (previous year ' 0.90 per share) on face value of ' 2 each (total dividend payout ' 46.4 Crore, (previous year ' 20.8 Crore)). The proposed dividend is subject to approval of the shareholders in the ensuing Annual General Meeting.
16A Employee Stock option Plan
I.
A. During the earlier years, the Company introduced and implemented 'Greaves Cotton- Employees Stock option Plan 2020' (ESOP
2020), with following terms:
i. Create, grant, offer, issue and allot stock options at any time in one or more tranches to or for the benefit of such person(s) who are in the permanent employment of the Company, whether working in India or outside India, including Director of the Company, whether Whole-time Director or not, and such other persons as may from time to time be allowed to be eligible, but excluding Promoter, Promoter group and Independent Directors.
ii. Such number of stock options convertible into Equity Shares of the Company, in one or more tranches, not exceeding 2.00% of the paid-up share capital of the Company of the face value of ' 2/- each (Rupees Two only) to the eligible employees of the Company, at such price or prices, and on such terms and conditions as may be fixed or determined by the Board.
iii. The options would vest after 1 year but not later than 8 years from the date of individual grant as decided by the Nomination and remuneration committee.
iv. Exercise Price is the par value of the Share payable by the Eligible Employee for the Exercise of each Option Granted under the Scheme for the allotment of one Share.
v. The Company will follow fair value method for computing the compensation cost, if any, for the Options Granted, in accordance with the applicable Law.
Employee benefit plans 27A Defined contribution plans
The amount recognised as an expense during the year ended March 31, 2024 towards Provident Fund (including admin charges), ESIC contribution and Superannuation & National Pension Scheme is ' 4.73 Crore (previous year ' 4.13 Crore), ' 0.01 Crore (previous year ' 0.02 Crore) and ' 4.22 Crore (previous year ' 3.67 Crore) respectively.
27B Defined benefit plans
The Company has a defined benefit plan (the 'Gratuity Plan') which is managed by the trusts. The Gratuity Plan provides for a lump sum payment to vested employees at retirement or termination of employment, whichever is earlier, based on the respective employee's last drawn salary and years of employment with the Company. The benefit vests after five years of continued service.
Sensitivity analysis:
Gratuity is a lump sum plan and the cost of providing these benefits is typically less sensitive to small changes in demographic assumptions. The key actuarial assumptions to which the benefit obligation results are particularly sensitive to are discount rate and future salary escalation rate. The following table summarizes the impact in percentage terms on the reported defined benefit obligation (DBO) at the end of the reporting period arising on account of an increase or decrease in the reported assumptions by 50 basis points.
32. Risk management
The Company's activities expose it to a variety of financial risks: market risk, credit risk, and liquidity risk. The Company's primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.
32A Capital risk management :
The Company's objective for capital management is to maximize shareholder wealth, safeguard business continuity and support the growth of the Company. The Company determines the capital management requirement based on annual operating plans and long term and other strategic investment plan.
32C Financial and liquidity risk management objectives :
i) Liquidity risk is the risk that the Company may encounter difficulty in meeting its obligations. The Company monitors the rolling forecast of its liquidity position based on expected cash flows. The Company's approach is to ensure that it has sufficient liquidity or borrowing headroom to meet its obligations at all points in time. The Company has sufficient short-term fund-based lines, which provide healthy liquidity and these carry the highest credit quality rating from a reputed credit rating agency.
ii) The Company has a policy of investing surplus funds in fixed deposits with banks and in overnight debt mutual funds.
iii) The average payment terms of creditors (trade payables) is in the range of 60-180 days. In case of MSMED creditors the payment terms are within 45 days. Other financial liabilities viz. employee payments, dealer deposits are payable within one year.
iv) Trade receivables are secured against letters of credit, factoring arrangements, bank guarantees and security deposits. At the end of the year, there is no significant concentration of credit risk for trade receivables as only five parties have more than 5%
32D Foreign currency risk management :
Foreign currency risk is the risk that the fair value of future cash flows of exposure will fluctuate because of changes in foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates relates primarily to the Company's operating activities (when revenue or expense is denominated in a foreign currency).
The use of foreign currency forward contracts is governed by the Company's Risk Management Policy. The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions for amounts in excess of natural hedge available on export realisations against import payments. The Company does not use forward contracts for speculative purposes.
The Carrying amounts of the Company's foreign currency denominated unhedge monetary assets and liabilities at the end of each reporting period are as follows.
32E Credit risk management :
The Company has credit management policy for its trade receivables. To minimise the risk, the Company takes letters of credit, bank guarantees and security deposits from the customers based on the credit worthiness. Ongoing credit evaluation is performed on the financial condition of trade receivables.
Trade receivables are secured against letters of credit, factoring arrangements, bank guarantees and security deposits. At the end of the year, there is no significant concentration of credit risk for trade receivables as only five parties have more than 5% of the total outstanding amount and one of them is fully secured against factoring arrangement & two of them are fully secured against letter of credit.
There is no single customer dependency. As at March 31 2024, the Company has top five unsecured customers that owed to the company '36.7 Crore which accounted for 18% of the total trade receivables. (As at March 31 2023, the Company has top five unsecured customers that owed to the company '30.2 Crore which accounted for 19% of the total trade receivables).
32G Market Risk :
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risks: Currency risk and interest rate risk. Financial instruments affected by market risk include investments, trade payables, trade receivables and loans.
32H Interest Rate Risk :
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Interest rate change does not affect significantly to the company. Company does not have any exposure to the future cash flows resulting from change in interest rate as the Company's net obligations and assets carries fixed interest rate.
33. Segment information
In accordance with Ind AS 108 'Operating Segments', segment information has been given in the consolidated financial statements of the Company and therefore, no separate disclosure on segment information is given in standalone financial statements.
34B Audit Trail
The Company has used accounting software for maintaining its books of account for the year ended March 31, 2024 which have a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software except that no audit trail has been enabled at the database level for accounting Software to log any direct data changes.
35. Related party transactions
List of related parties :
35A Name of Related party where control exists:
DBH Investment Capital India Private Limited (Formerly known as Karun Carpets Private Limited)
35B Subsidiary Companies :
Greaves Electric Mobility Private Limited (Formerly known as Ampere Vehicles Private Limited) Bestway Agencies Private Limited
Greaves Technologies Limited (Formerly known as Dee Greaves Limited)
Greaves Finance Limited (Formerly known as Greaves Leasing Finance Limited)
Greaves Technologies Inc.
MLR Auto Limited (w.e.f. May 16, 2023)
Excel Controlinkage Private Limited (w.e.f. May 8, 2023)
35C Associate Company :
MLR Auto Limited (Upto May 15, 2023)
35D Fellow group company where company had transactions during the year :
Premium Transmission Private Limited
35E Enterprises owned or significantly influenced by Key Management Personnel
Peak 15 Advisors LLP
35F Key management personnel as per applicable accounting standards :
Mr Karan Thapar : Chairman & Non Executive Director
Mr Nagesh A Basavanhalli : Vice Chairman upto May 12, 2023
Non-Executive Director and Vice-Chairman from May 12, 2023 Dr Arup Basu : Managing Director
Mr Dalpat Raj Jain : Chief Financial Officer upto June 12, 2023
Mrs Akhila Balachandar : Chief Financial Officer from June 13, 2023
Mr Atindra Basu : Group General Counsel & Company Secretary
Mr Arvind Kumar Singhal : Independent Director
Mr Kewal Handa : Independent Director
Ms Sree Patel : Independent Director
Mr Vinay V Sanghi : Independent Director
Mr Firdose A Vandrevala : Independent Director
Mr Ravi M Kirpalani : Independent Director
Mr Raja Venkataraman : Independent Director
38. Leases
On adoption of Ind AS 116 : Leases, the Company recognised lease liabilities in relation to leases which had previously been classified as 'operating leases' under the principles of Ind AS 17 Leases. These liabilities are measured at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate, presently determined at 8.50% p.a.
On application of Ind AS 116, the nature of expenses has changed from lease rent to depreciation cost for the right-of-use assets, and finance cost for interest accrued on lease liability.
38A Disclosure as per the requirement of Ind AS 116 Amounts recognised in the Balance Sheet
The Balance Sheet shows the following amounts relating to leases:
iv. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
v. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
vi. The Company has not received any funds from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
vii. The Company does not have any such transaction which is not recorded in the books of account 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.)
42. The figures for the corresponding previous year have been regrouped, wherever necessary, to make them comparable with the figures of the current year.
For and on behalf of the Board
Dr. Arup Basu Raja Venkataraman
Managing Director Director
DIN :02325890 DIN :00669376
Akhila Balachandar Atindra Basu
Chief Financial Officer Group General Counsel & Company Secretary
Mumbai, May 8, 2024
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