17.1. In the financial year 2019- 2020, the Company bought back and extinguished 65911 equity shares, which reduced the paid-up share capital of the Company from R 9,650.20 lakhs to R 9,643.61 lakhs.
17.2. In the financial year 2020- 2021, the Company bought back and extinguished 2415376 equity shares, which reduced the paid-up share capital of the Company from R 9,643.61 lakhs to R 9,402.07 lakhs.
17.3. Consequent to the order dated 10/03/2022 of NCLT, Mumbai, face value of each equity shares stands reduced to R 4 /-per share from R 10 /- per share. Accordingly the authorised capital is changed to 312500000 equity shares of R 4/- each aggregating to R 12,500 Lakhs and Company's share capital reduced from R 9402.07 Lakhs to R 3760.83 Lakhs consequent to reduction of nominal value of shares to R 4/- per share from R 10/- per share and payment of R 6/- per share to the eligible shareholders on the record date.
17.4. In the financial year 2022-23, the Company sub-divided its share with nominal value of R 4/- per share into two share of R 2/- per share.
17.5. The details of Shareholding of Promoters
17.6. The Company has only one class of shares referred to as equity shares having a par value R 2/- per share. Each holder of equity shares is entitled to one vote per share. The holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts in the event of liquidation of the Company. The distribution will be in proportion to the number of equity shares held by the shareholders.
17.7. Dividend
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 except in case of interim dividend. The remittance of dividends outside India is governed by Indian law on foreign exchange and is subject to applicable distribution taxes.
In the Board meeting held on October 31,2022 the board declared an amount of R 4.00 per equity shares (FV R 4.00) as a interim dividend (previous Year R 4 FV R 4) which was distributed to equity shares holder. The amount of interim dividend distributed to equity shares holder was R 3,760.82/- lakhs (previous Year R 3760.82/- Lakhs).
The Board of Directors, in their meeting on April 26, 2023 , have proposed a final dividend of R 7/- per equity share (Previous year R 14/- per equity share) for the financial year ended March 31, 2023. The proposal is subject to the approval of shareholders at the Annual General Meeting to be held on July 04, 2023 and if approved would result in a cash outflow of approximately R 13,162.89 lakhs (previous year R 13,162.89 lakhs)
B. Leave Encashment
The valuation of Leave Encashment has been done on exit as well as availment during the service. This liability forms part of other long term benefits as per the standard and does not require disclosures as mentioned in Para 158 of the I nd AS 19.
C. Provident Fund
The provident fund contribution is made to a trust administered by the Company. In terms of the guidance note issued by the Institute of Actuaries of India, the actuary has provided a valuation of provident fund liability based on assumptions listed below and determined that there is no Interest shortfall as at 31st March, 2023.
The assumptions used in determining the present value of obligation of interest rate guarantee under deterministic approach are: Average holding period of assets 5 Years
Guaranteed rate 8.15 %
The above table show sensitivity of open forex exposure to USD/INR movement. We have considered 1% ( /-) change in the currency movement, increase indicates appreciation whereas decrease indicates depreciation in the currency rates. The movement does not reflect management forecast on currency movement.
2. Change in Interest rate
The Company being a debt free Company is not exposed to Interest rate risks.
Financial Risk Management
The Company's activities expose it to variety of financial risks viz. commodity price risk, credit risk, liquidity risk, capital risk and foreign currency risk. These risks are managed by the senior management of the Company supervised by the Board of Directors to minimise potential adverse effects on the financial performance of the Company.
Commodity Risk:
International pricing and demand/ supply risk are inherent in the import of styrene monomer, the main raw material. The Company enters into procurement contracts for import of styrene monomer on annual basis. The contracts specify the quantity and attributes for arriving at monthly pricing. However, a part of the requirement is sourced on spot basis so as to float with fluctuations in the market and to guard against price volatility. The Company has also linked part of its sales to raw material prices so that the Company has adequate cushion to protect its margin in the event of any increase/decrease in raw material costs.
Credit Risk:
Credit risk from cash and cash equivalents, derivative financial instruments and bank deposits is considered immaterial in view of the creditworthiness of the banks the Company works with. The Company has specific policies for managing customer credit risk on an ongoing basis; these policies factor in the customer's financial position, past experience and other customer specific factors.
Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the company. In any case all doubtful debts over 18 months are provided for 100% under ECL working or written off. When loans or receivables have either been provided for or written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. When recoveries are made, these are recognised in Statement of Profit and Loss.
The Company is debt free (except amortised value of right to use assets taken on lease) and has, adequate liquidity as detaile above, to meet any exigencies. In addition to the undrawn fund-based credit limits, the Company also has recourse to discour trade receivables backed by letters of credit. These measures are considered by the management adequate to ensure that th Company is not exposed to any liquidity risk.
To overcome these risks of cost and pricing due to foreign exchange volatility, the Company hedges part of open foreign exchange exposure relating to imports so as to lessen the impact of foreign exchange rate fluctuations if any in respect of import of raw materials. The Company also has a natural hedge to the extent of its exports and pricing its products locally on import parity basis. These measures are considered adequate by the management of the Company to safeguard from foreign exchange fluctuation risk. However foreign currency exchange rate being dynamic is monitored constantly to decide on proper response measure.
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(R in Lakhs)
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Particulars
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March 31, 2023
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March 31, 2022
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(1) Contingent liabilities
(A) Claims against the Company not acknowledged as debt; (matters pending in court/ arbitration. No cash outflow is expected in future).
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Disputed Excise/ Service Tax demand.
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117.57
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117.57
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Disputed Sales Tax demand
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1.20
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22.89
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Disputed GST matter
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16.71
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16.72
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Disputed matter in Income Tax
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12.58
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-
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(B) Counter guarantees given to banks against guarantees issued by the banks.
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Other bank guarantees.
(C) Other money for which the Company is contingently liable
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1,031.19
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609.94
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Letters of Credit opened by Banks and outstanding at the year end. (2) Commitments
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51,890.61
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49,061.82
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Estimated amount of contracts remaining to be executed on capital account and not provided for;
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15,144.00
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11,163.00
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The management has estimated the provisions for pending litigation, claims and demands (including cases relating to direct and indirect taxes) on its assessment of probability for these demands crystallizing against the Company in due course. The difference between the amount demanded and provision made is disclosed as contingent liabilities.
Investments
Investments in the Balance Sheet comprises of short-term surplus funds invested in debt and arbitrage schemes of Mutual Funds which are measured at fair value through Profit and Loss. And in fixed deposit with bank and HDFC Ltd measured through amortized cost.
NOTE : 44
Working capital facilities (including letters of credit) from banks are secured by hypothecation of Company's all moveable assets, stock and trade receivables and by second charge by way of mortgage of the Company's immovable properties (including plant and machinery) situated at Tamil Nadu plants.
The Board of Directors of the Company, in their meeting held on October 27, 2022 recommended sub-division of shares from face value of R 4/- to face value of R 2/- which was approved by the members vide postal ballot on December 02, 2022. New shares of face value of R 2/- were issued to the shareholders whose name appeared on the record date of January 06, 2023.
The new Code on Social Security, 2020 has been enacted but the effective date from which the changes are applicable is yet to be notified and the rules are yet to be framed. The Company shall give appropriate impact in its financial statements in the period in which the Code becomes effective and the related rules are published.
NOTE : 54
Additional Regulatory Information detailed in clause 6L of General Instructions given in Part I of Division II of the Schedule III to the Companies Act, 2013 are furnished to the extent applicable to the Company.
NOTE : 55
Previous year's figures have been regrouped and rearranged wherever necessary to conform to this period's classification.
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