Nature and purpose of other reserves:
Securities Premium:
Securities premium account is created when shares are issued at premium. The reserve can be utilized in accordance with the provisions of the Companies Act, 2013.
Equity-settled employee benefits reserve:
Equity settled employee benefit reserve represents reserve towards the premium for the equity shares to be issued against the options granted.
Retained earnings:
Retained earnings represents the accumulated surplus. The reserve can be distributed/utilised by the Company in accordance with the Companies Act, 2013.
Note:
In respect of the current year, the directors propose that a dividend of ' 2.00 per share be paid on equity shares on 31st march, 2022. This equity dividend is subject to approval by shareholders at the annual general meeting and has not been included as a liability in these consolidated financial statements. The proposed equity dividend is payable to all shareholders on the register of members on 31st March, 2022. The total estimated equity dividend to be paid is ' 14.37 crores. The payment of this dividend will not have any tax consequences for the Company.
In the month of July- 2021, a dividend of ' 2.50 per share (total dividend ' 17.94 Crores) was paid to holders of fully paid equity shares.
i) Trade Payables are payables in respect of the amount due on account of goods purchased or services availed in the normal course of business.
ii) Micro, Small & Medium enterprises have been identified by the company on the basis of the information available with the Company. Total outstanding dues of Micro and Small enterprises, which are outstanding and other disclosures as per the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as "the Act") are given below: This has been relied upon by the auditors.
The company has evaluated the impact of COVID-19 resulting from :
(i) the possibility of constraints to render the services which may require revision of estimations of costs to complete the contract because of additional efforts;
(ii) onerous obligations;
(iii) penalties relating to breaches of service level agreements, and
(iv) termination or deferment of contracts by customers.
The company has concluded that the impact of COVID-19 is not material based on these estimates. Due to the nature of the pandemic, the company continues to monitor developments to identify significant uncertainties relating to revenue in future periods.
i) Salaries and wages includes salaries, wages, bonus, compensated absences and all other amounts payable to employees in respect of services rendered as per their employment terms under a contract of service.
ii) Contribution to provident fund and other funds includes contributions to other funds like Superannuation Fund, ESIC etc. pertaining to employees.
iii) Share based payment
The Company has in force two Employee Stock Option schemes under the provisions of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021:
Mahindra Logistics Limited - Key Executive Stock Option Scheme, 2012 ("KESOS 2012") and
Mahindra Logistics Employee Restricted Stock Unit Plan 2018 ("RSU Plan 2018").
Each option carries with it the right to purchase one equity share of the Company at the exercise price determined by the Company under the respective schemes at the time of grant. The vesting pattern of the schemes is in a graded manner as per the vesting criteria approved by the Nomination and Remuneration Committee of the Board ("NRC") for each grant.
During the financial year under review, the NRC granted Restricted Stock Units ("RSUs") to the eligible employees of the Company and its subsidiary company in accordance with the RSU Plan 2018 approved by the Shareholders vide special resolutions dated 2 August 2018 and 27 July 2021 with vesting conditions as summarised hereunder:
29 April 2021 - 4,000 RSUs - single vesting on or after completion of one year from the date of grant;
27 October 2021 - 33,860 RSUs - single vesting on or after completion of one year from the date of grant;
27 January 2022 - 3,025 RSUs - single vesting on or after completion of one year from the date of grant;
The RSUs upon vesting basis the vesting criteria approved by the NRC are exercisable over a period of one year from the date of vesting.
No new grants were made in the KESOS Scheme 2012 during the year under review and all the options vested under the said scheme have been exercised in full.
The Personnel Cost mentioned above includes ' 0.91 crores for the year towards the said grants.
The Company has long-term investments in subsidiaries and joint venture which are measured at cost less impairment or at fair value through profit or loss. The management assesses the performance of these entities including the future projections and relevant economic and market conditions in which they operate to identify if there is any indicator of impairment in the carrying value of the investments. In case indicators of impairment exist, the impairment loss is measured by estimating the recoverable amounts based on the higher of (i) 'fair value less cost of disposal' determined using market price information, where available, and (ii) 'value-in-use' estimates determined using discounted cash flow projections, where available. The fair value less costs of disposal is determined using the market approach and is categorised as Level 3 - unobservable inputs for the asset or liability. The future cash flow projections are specific to the entity based on its business plan and may not be the same as those of market participants. The future cash flows consider key assumptions such as volume projections, margins, terminal growth rates, etc. with due consideration for the potential risks given the current economic environment in which the entity operates. The discount rates used are pre-tax rates based on weighted average cost of capital and reflects market's assessment of the risks specific to the asset as well as time value of money. The recoverable amount estimates are based on judgments, estimates, assumptions and market data as on reporting date and ignore subsequent changes in the economic and market conditions.
During the year ended 31st March 2021, the performance of Joint venture with the relevant economic and market indicator resulted indicator of impairment of investment. Accordingly, Company determined the recoverable value of the investment is lower than carrying value and recorded a provision of Impairment of ' 4.00 Cr. The value- in - use calculation is determined using discount rate at 18% and terminal growth rate at 3%.
Note No. 33 - Financial Instruments
I. Capital Management Policy
a) The Company's capital management objectives are:
- to ensure the Company's ability to continue as a going concern.
- to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.
b) For the purpose of Company's capital management, capital includes issued share capital, equity and all other equity reserves. The Company monitors capital on the basis of the carrying amount of equity as presented on the face of the statement of financial position. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.
III. Financial Risk Management Framework
The Company's activities expose it to a variety of financial risks: credit risk and liquidity risk. In order to manage the aforementioned risks, the Company operates a risk management policy and a program that performs close monitoring of and responding to each risk factors.
A) Credit risk management
Trade receivables and deposits
(i) Credit risk arises when a counterparty defaults on its contractual obligations to pay resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties. The Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends and analysis of historical bad debts and ageing of accounts receivable. Credit exposure is controlled by counterparty credit period which is monitored through an approved policy.
(ii) Trade receivables consist of a large number of customers, spread across diverse industries and places across India.
(iii) Apart from one large customers of the Company, the Company does not have significant credit risk exposure to any single customer and concentration of credit risk related to a single company did not exceed 15% of trade receivables at the end of the year.
(iv) The Company applies the simplified approach in providing for expected credit losses prescribed by Ind AS 109, which permits the use of the lifetime expected loss provision for all trade receivables. The Company has computed expected credit losses based on a provision matrix which uses historical credit loss experience of the Company and individual receivable specific provision where applicable.
(v) There is no change in estimation techniques or significant assumptions during the reporting year.
(viii) During the year, the Company has made write off of ' 0.49 crores (Previous year ' 2.38 crores) of trade receivables and ' 0.29 Crores (Previous year ' 0.14 Crores ) of deposits given. These trade receivables and deposits are not subject to enforcement activity.
Investment in Mutual Funds
The Company has ' 116.08 crores investments as at 31st March, 2022 (Previous year ' 55.07 crores) in growth oriented mutual funds which have not been impaired till date.
Cash and Cash equivalents
As at 31st March, 2022, the Company holds cash and cash equivalents of ' 130.40 crores (As at 31st March, 2021 ' 196.61 crores). The cash and cash equivalents are held with banks with good credit rating.
B) Liquidity risk management
(i) The Company's treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company's net liquidity position through rolling forecasts on the basis of expected cash flows.
The above table details the Company's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The amount disclosed in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows.
The contractual maturity is based on the earliest date on which the Company may be required to pay.
Note No. 35 - Segment information
i) The management of the Company has chosen to organise the Company on the basis of nature of services. No operating segments have been aggregated in arriving at the reportable segments of the Company.
ii) Specifically, the Company's reportable segments and the type of product or service from which they derive income are:
a) Supply Chain Management (SCM) - Goods transportation service, including warehouse management service.
b) Enterprise Mobility Services - People transportation service
iii) The CEO monitors the operating results of the business segments separately for the purpose of making decisions about the allocation of resources and performance assessment.
Other disclosures:
a) Unallocable Expenditure/Assets:
(i) Finance income and costs, fair value gains and losses on financial assets and indirect expenses are not allocated to individual segments as the underlying instruments are managed on an entity basis.
(ii) Current taxes, deferred taxes and certain financial assets and liabilities are not allocated to those segments as they are also managed on an entity basis.
(iii) The accounting policies of the reportable segments are the same as the Company's accounting Policies described in Note 2.20.
There is no difference between segment profit as reviewed by CEO and the profit before tax as appearing in the financial statements.
Leases not yet commenced to which Company is committed amounts to ' 9.95 crores for a lease term up to 10 years.
Note No. 37 - Employee benefits
a) Defined Contribution Plan
The Company's contribution to Provident Fund, superannuation Fund and other funds aggregating ' 11.38 crore (2021: ' 12.60 crore) has been recognised in the Statement of Profit or Loss under the head Employee Benefits Expense.
b) Defined Benefit Plans:
Gratuity
a) The Company operates a gratuity plan covering qualifying employees. The benefit payable is the greater of the amount calculated as per the Payment of Gratuity Act, 1972 or the Company scheme applicable to the employee. The benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting. The Company makes annual contribution to the group gratuity scheme administered by the Life Insurance Corporation of India through its Gratuity Trust Fund.
b) Through its defined benefit plans the Company is exposed to a number of risks, the most significant of which are detailed below:
(1) Asset volatility
The plan liabilities are calculated using a discount rate set with references to government bond yields; if plan assets under perform compared to the government bonds discount rate, this will create or increase a deficit. The funds of the defined benefit plans are held with LIC.
As the plans mature, the Company intends to reduce the level of investment risk by investing more in assets that better match the liabilities.
(2) Change in bond yields
A decrease in government bond yields will increase plan liabilities.
(3) Inflation risk
Defined benefit obligations are linked to inflation, and higher inflation will lead to higher liabilities (although caps on the level of inflationary increases are in place to protect the plan against extreme inflation).
(4) Life expectancy
The majority of the plan's obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plan's liabilities. This is particularly significant in the Company's defined benefit plans, where inflationary increases result in higher sensitivity to changes in life expectancy.
i) The above sensitivity analyses are based on a 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.
ii) The methods and types of assumptions used in preparing the sensitivity analyses did not change compared to previous year.
iii) The weighted average duration of the defined benefit obligation as at 31st March, 2022 is 7 years
The expected rate of return on plan assets is based on the average long term rate of return expected on investments of the fund during the estimated term of obligation.
The estimate of future salary increases, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
The current service cost and the net interest expense for the year are included in the employee benefits expense in profit or loss of the expense for the year.
Notes:
i) The Company does not expect any payout in respect of the above contingent liabilities.
ii) It is not practicable to estimate the timings of cash outflows, if any, in respect of maters at (a) to (d) above, pending resolution of appellate/court proceedings.
B Commitments
The Company has provided finnacial support letter to 2X2 Logistics Limited its subsidiary, to meet any shortfall in its ability to meet its liability and obligation as they fall due during the period until March 2022
Note No. 41 - Additional Regulatory Information
i) 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 persons or entities, 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 parties (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 Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
ii) The Company did not have any transactions with struck off companies under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
iii) The Company did not have any charges or satisfaction which were yet to be registered with ROC beyond the statutory period.
iV) The Company did not have any transaction which had not been recorded in the books of account that had 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).
Note No. 42
Previous year numbers have been regrouped wherever necessary.
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