q) Provisions and Contingent Liabilities
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognise a contingent liability but discloses its existence in the standalone financial statements.
r) Employee Benefits
(i) Short-Term Obligations
Liabilities for wages and salaries, including nonmonetary benefits that are expected to be settled wholly within twelve months after the end of the period in which the employees render the related service are recognised in respect of employees' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
(ii) Other Long-Term Employee Benefit Obligations
The liabilities for compensated absences are not expected to be settled wholly within twelve months after the end of the period in which the employees render the related service. These obligations are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method less fair value of plan assets as at balance sheet date. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Re-measurements as a result of experience adjustments and changes in actuarial assumptions are recognised in profit and loss.
The obligations are presented as current liabilities in the balance sheet as the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
(iii) Post-Employment Obligations
The Company operates the following postemployment schemes: (a) Defined benefit plan (Gratuity) (b) Defined contribution plans (Provident Fund).
Defined Benefit Plan (Gratuity)
The Company contributes to the Gratuity Fund managed by the Life Insurance Corporation of India under its New Company Gratuity Cash Accumulation Plan.
The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plan is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit
obligation is calculated annually by actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss.
Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit and loss as past service cost.
Defined Contribution Plans
The Company pays provident fund contributions to publicly administered provident funds as per local regulations. The Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.
s) Contributed Equity
Equity shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
t) Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
u) Earnings Per Share
Basic earnings per share are calculated by dividing the profit or loss for the year attributable to equity to the owners of the Company by the weighted average number of equity shares outstanding during the year.
The Company does not have any dilutive potential equity shares.
v) Rounding of Amounts
All amounts disclosed in the standalone financial statements and notes have been rounded off to the nearest lakhs upto two decimal places as per the requirement of Schedule III, unless otherwise stated.
w) New and Amended Standards Adopted by the Company
The Ministry of Corporate Affairs has notified Companies (Indian Accounting Standards) Amendment Rules, 2023 dated 31 March 2023 to amend the following Ind AS which were effective for annual periods beginning on or after 1 April 2023.
(i) Definition of Accounting Estimates -Amendments to Ind AS 8
The amendments clarify the distinction between changes in accounting estimates, changes in accounting policies and the correction of errors. It has also been clarified how entities use measurement techniques and inputs to develop accounting estimates.
The amendments had no impact on the Company's standalone financial statements.
(ii) Disclosure of Accounting Policies -Amendments to Ind AS 1
The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their 'significant' accounting policies with a requirement to disclose their 'material' accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.
The amendments have had an impact on the Company's disclosures of accounting policies, but not on the measurement, recognition or presentation of any items in the Company's standalone financial statements.
(iii) Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction -Amendments to
Ind AS 12
The amendments narrow the scope of the initial recognition exception under Ind AS 12, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences such as leases.
The Company previously recognised for deferred tax on leases on a net basis. As a result of these amendments, The amendments had no impact on the Company's standalone financial statements.
Note 2: Critical Estimates and Judgements
The preparation of standalone financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the Company's accounting policies. This note provides overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the standalone financial statements.
The areas involving critical estimates or judgements are:
• Estimates of defined benefit obligation - Note 23
• Estimate of useful life of property, plant and equipment - Note 3 (a)
• Impairment of trade receivables - Refer Note 43 (A)
• Impairment assessment of non-financial asset -Refer Note 46
• Measurement of contingent liabilities - Refer Note 36
Estimation and judgements are continuously evaluated. They are based on historical experience and other factors including expectation of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.
3(b) Leases
This note provides information for leases where the Company is a lessee. The Company leases various premises, where the rental contracts are generally short term except in case of lease hold land where it is upto 99 years.
Land lease
Leasehold land represents land taken on lease under long term multi-decade lease term, capitalised at the present value of the aggregate future minimum lease payments (which include annual lease rentals in addition to the initial payment made at the inception of the lease). There are no contingent payments.
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(vi) Risk exposure
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Interest rate risk: The plan exposes the Company to the risk of fall in the interest rates. A fall in the interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in financial statements)
Salary escalation risk: The present value of the defined benefit plan is calculated with assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan's liability.
Demographic risk: The Company has used certain mortality and attrition assumption in valuation of the liability. The Company is exposed to the risk of the actual experience turning out to be worse.
Regulatory risk: Gratuity benefit is paid in accordance with the requirement of the Payment of Gratuity Act, 1972 (as amended from time to time). There is a risk of change in regulation requiring higher gratuity payouts.
Liquidity risk : This is the risk that the Company is not able to meet the short-term gratuity payouts. This may arise due to non availability of enough cash / cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time.
Asset liability mismatching or market risk: The duration of the liability is longer compared to duration of assets, exposing the Company to market risk for volatilities/ fall in interest rate.
Investment risk : The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.
(vii) Defined benefit liability and employer contributions
The Company's best estimate of contribution towards post-employment benefit plans for the year ended 31 March 2025 are Rs. 402.99 lakhs (year ended 31 March 2024 are Rs.217.68 lakhs).
(i) Fair value hierarchy
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded debentures and mutual funds that have quoted price. The fair value of all equity instruments (including debentures) which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. There are no instruments categorised in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. There are no instruments categoriesed in level 3.
There are no transfers between levels 1 and 2 during the year.
The Company's policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period.
(ii) Fair value of financial assets and liabilities measured at amortised cost
The carrying amounts of trade receivables, trade payables, cash and cash equivalents, other bank balances, other financial assets, other financial liabilities, short term borrowings, lease liabilities are considered to be the same as their fair values, due to their short-term nature.
Majorly the security deposits and fixed deposits are redeemable on demand and bonds are redeemable at par hence the fair values of security deposits and bank deposits are approximately equivalent to the carrying amount.
The Non-current borrowings and lease liabilities are carried at amortised cost. There is no material difference between carrying amount and fair value of non-current borrowings as at 31 March 2024 and 31 March 2023.
Other note:
The investment in equity shares of subsidiaries are measured at cost. Refer note 4 for further details.
43. Financial risk management
The Company's activities expose it to market risk, liquidity risk and credit risk.
The Company's board of directors has overall responsibility for the establishment and oversight of the Company's risk management framework.
(A) Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company's receivables from customers. The carrying amounts of financial assets represent the maximum credit risk exposure.
A default on a financial asset is when the counterparty fails to make contractual payments as per agreed terms. This definition of default is determined by considering the business environment in which entity operates and other macro-economic factors.
Assets are written off when there is no reasonable expectation of recovery.
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 throughout each reporting year. To assess whether there is a significant increase in credit risk the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forwarding-looking information.
Trade and other receivables
Credit risk refers to the risk of default on its obligation by the counter party resulting in financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivable amounting to Rs.23,467.61 lakhs, Rs. 19,451.51 lakhs as at 31 March 2024 and 31 March 2023 , respectively. The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate. The Company has a credit risk management policy in place to limit credit losses due to non-performance of financial counterparties and customers. The Company monitors its exposure to credit risk on an ongoing basis at various levels. Outstanding customer receivables are regularly monitored. The Company closely monitors the acceptable financial counterparty credit ratings and credit limits and revise where required in line with the market circumstances.
Due to the geographical spread and the diversity of the Company's customers, the Company is not subject to any significant concentration of credit risks at balance sheet date.
On account of adoption of Ind AS 109, the Company uses a simplified approach (lifetime expected credit loss model) for the purpose of computation of expected credit loss for trade receivables.
The Company calculates expected credit loss on its trade receivables using 'allowance matrix' and also takes into account 'delay risk' on trade receivables.
Significant estimates: The impairment provisions for financial assets disclosed above are based on assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the Company's past history, existing market conditions as well as forward looking estimates at the end of each reporting year. For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109, "Financial Instruments", which requires expected lifetime losses to be recognised from initial recognition of the receivables.
Management judgment is required for assessing the recoverability of trade receivables and the valuation of the allowances for impairment of trade receivables. The Company makes impairment allowance for trade receivables based on an assessment of the recoverability of trade receivables. Allowances are applied to trade receivables where events or changes in circumstances indicate that the balances may not be collectible. The impairment
Cash & cash equivalents and bank deposits
Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated banks and diversifying bank deposits accounts in different banks across the country.
Other financial assets measured at amortised cost
Other financial assets measured at amortised cost includes security deposits, investment in subsidiaries and other investments. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously.
(B) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding to meet obligations when due. Management monitors rolling forecasts of the Company's liquidity position and cash and cash equivalents on the basis of expected cash flows.
Maturities of financial liabilities
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements.
44. Events occurring after the reporting year
The Board of Directors has recommended final dividend of Rs.3.00 (i.e. 60%) per Equity Share of Rs.5.00 each aggregating to Rs. 1,318.58 lakhs, which is subject to the approval of shareholders in the ensuing Annual General Meeting.
45. Capital management
The Company's objectives when managing capital are to:
• safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and
• maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. No changes were made in the objectives, policies or processes for managing capital during the year ended 31 March 2024 and 31 March 2023.
The Company has complied with the debt covenants as per the terms of borrowing facilities throughout the reporting period.
46. Impairment of non-financial assets
In accordance with Ind AS 36 "Impairment of Assets", the Company has identified Gwalior plant (the 'Plant') as a separate cash generating unit (CGU) for the purpose of impairment review. Management periodically performs an impairment assessment of the CGUs basis internal and external indicators, in order to determine whether the recoverable value is below the carrying amount as at 31 March 2024.
The Company has considered its property, plant and equipment, inventory, trade receivables and other attributable assets and liabilities of the Gwalior Plant as a single CGU. As at 31 March 2024, carrying value of CGU is Rs. 10,557.72 lakhs.
The Plant has incurred operating losses during the current and previous years and the economic performance of the Plant, has been significantly lower than the budgets. Therefore, basis these indicators, the Plant has been assessed for recoverability as at 31 March 2024 as to whether, the carrying value exceeds the recoverable value of the Plant. Company has assessed the recoverability (fair value) of the property, plant & equipment ('PPE') having carrying values of Rs. 8,464.28 lakhs for CGU as at 31 March 2024 with the help of an external valuation expert using the reproduction cost method (indexation method) under cost approach for PPE (other than land and building) and sales comparison method under market approach for land and building as per Ind AS 36. Remaining carrying values of CGU of Rs. 2,093.44 lakhs, majorly includes Inventory of Rs. 1479.04 lakhs and GST input of Rs. 1055.78 lakhs are recoverable with no impairment risk.
Such valuation model requires management to make significant estimates and assumptions related to selection of the discount rates, estimated future life and market values of property to be considered for impairment testing as per Ind AS 36. "
Based on above, recoverable value (fair value less cost of disposal) calculated as at 31 March 2024 is Rs. 11,254.43 lakhs.
Key assumptions used in determining the recoverable value are:
(a) Discount rate (b) Estimated future life (c) Market values of property
If we apply senstivity on discount rate and market values, the recoverable value will still exceed the carrying value of the CGU. Hence, no impairment required to be recognized.
47. Note on audit trail
The Ministry of Corporate Affairs (MCA) has prescribed a new requirement for Companies under the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 inserted by the Companies (Accounts) Amendment Rules 2021 requiring Companies which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.
The Company uses accounting software SAP where the audit trail (edit logs) at the application level of the accounting software has operated throughout the year for all relevant transactions recorded in the software. But the feature of recording audit trail was not enabled at the database level to log any direct data changes, used for maintenance of all accounting records.
The Company follows a specific procedure for direct database changes in a controlled environment which includes taking prior approval for any changes required at database level. In the approval mail all the specific details are mentioned regarding audit trail requirements for capturing timing, the executor, and the details of the change. Further, this information was available for the entire fiscal year.
48. Capitalisation of expenditure incurred during construction period (refer note 3a)
The costs that are directly attributable to the acquisition or construction of property, plant and equipment have been apportioned to certain property, plant and equipment on reasonable basis. details of such costs capitalised is as under :-
50. Additional regulatory information required by schedule III of Companies Act, 2013
(i) Details of benami property:
No proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.
(ii) Utilisation of borrowed funds and share premium:
(A) The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or
any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities
(intermediaries) with the understanding (whether recorded in writing or otherwise) that the intermediary shall:
(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (ultimate beneficiaries) or
(b) Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.
(B) 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 to or on behalf of the ultimate beneficiaries.
(iii) Compliance with approved scheme(s) of arrangements:
No scheme of arrangement has been approved by the Competent Authority in terms of Sections 230 to 237 of the Companies Act, 2013, hence, this is not applicable.
(iv) Undisclosed income:
There are no transactions not recorded in the books of account that have been surrendered or disclosed as income during the current or previous year in the tax assessments under the Income-tax Act, 1961.
(v) Details of crypto currency or virtual currency:
The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.
(vi) Valuation of property, plant and equipment and intangible assets:
As the Company has chosen cost model for its property, plant and equipment (including right-of-use assets) and intangible assets, the question of revaluation does not arise.
(vii) Loans or advances to specified persons:
The Company has not granted any loans or advances in the nature of loans to promoters, directors, KMPs or the related parties (as defined under Companies Act, 2013,) either severally or jointly with any other person.
(viii) Borrowings secured against current assets:
The Company had sanctioned borrowings limits as disclosed in note 16. The quarterly returns/ statements of current assets filed by the Company with the bank were in agreement with the books of account for the year ended 31 March 2024.
(ix) Willful defaulter:
The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority.
(x) Transaction with struck-off Companies:
The Company has not entered into any transaction with the struck off Companies.
(xi) Registration of charges or satisfaction with registrar of Companies:
There are no charges or satisfaction yet to be registered with Registrar of Companies beyond the statutory period.
(xii) Compliance with number of layers of Companies:
The Company complies with the number of layers prescribed under clause (87) of Section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.
(xiii) Utilisation of borrowings availed from banks and financial institutions:
The borrowings obtained by the Company have been utilised for the purpose for which the same was obtained.
51. Per transfer pricing legislation under section 92-92F of the Income-Tax Act 1961, the Company is required to use certain specific methods in computing arm's length price of international transactions with associated enterprises and maintains adequate documentation in this respect. The legislations require that such information and documentation to be contemporaneous in nature. The Company has appointed independent consultants for conducting the Transfer Pricing Study to determine whether the transactions with associated enterprises undertake during the financial year are on an "arm's length basis". The Company is in the process of conducting a transfer pricing study for the current financial year and expects such records to be in existence latest by the due date as required by law. However, in the opinion of the management the update would not have a material impact on these financial statements. Accordingly, these financial statements do not include any adjustments for the transfer pricing implications, if any.
For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of
Firm Registration No: 001076N/N500013 Mayur Uniquoters Limited
Tarun Gupta Suresh Kumar Poddar Arun Kumar Bagaria Vinod Kumar Sharma Pawan Kumar Kumawat
Partner (Chairman and Managing Director & CEO) (Executive Director) (Chief Financial Officer) (Company Secretary)
Membership No.: 507892 DIN- 00022395 DIN- 00373862 Membership No.: 078135 Membership No.: ACS 25377
Place : Jaipur Place : Jaipur
Date : 21 May 2024 Date : 21 May 2024
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