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Notes to Accounts of Kanoria Chemicals & Industries Ltd.
Mar 31, 2025
N. Provisions
Provisions are recognised when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow
of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation.
Where the effect of time value of money is material, provisions are measured at present value using a pre-tax discount rate that refects current
market assessment of the time value of money and risks specific to liability. The increase in the provision due to passage of time is recognised as
interest expense.
O. Contingent Liabilities and Assets
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. The Company does not recognise a contingent liability but discloses its existence
in the financial statements. Contingent assets are not recognised in the financial statements.
P Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
Q. Events after Reporting date
Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such
events is adjusted within the financial statements. Otherwise, events after the Balance Sheet date of material size or nature are only disclosed.
R. Recent applicable Accounting pronouncements
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting
Standards) Rules as issued from time to time. During the year ended March 31, 2025, MCA has notified Ind AS - 117 Insurance Contracts and
amendments to Ind AS 116 - Leases, relating to sale and leaseback transactions, applicable from April 1, 2024. The Company has assessed that
there is no significant impact in its financial statements.
On May 9, 2025, MCA notifies the amendments to Ind AS 21 - Effects of Changes in Foreign Exchange Rates. These amendments aim to provide
clearer guidance on assessing currency exchangeability and estimating exchange rates when currencies are not readily exchangeable. The
amendments are effective for annual periods beginning on or after April 1, 2025. The Company is currently assessing the probable impact of
these amendments on its financial statements.
4: Significant Accounting Judgements, Estimates and Assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported
amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty
about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities
affected in future periods.
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company
based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and
assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of
the Company. Such changes are refected in the assumptions when they occur.
( a) Defined Benefit Plans
The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial
valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the
discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined
benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the
management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit
obligation.
(b) Estimates and Assumptions
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active
markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable
markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include
considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair
value of financial instruments.
(c) Depreciation/Amortisation and Useful Lives of Property, Plant and Equipment/IntangibleAssets
Property, plant and equipment / intangible assets are depreciated / amortised over their estimated useful lives, after taking into account estimated
residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of
depreciation / amortisation to be recorded during any reporting period. The useful lives and residual values are based on the Company''s historical
experience with similar assets and take into account anticipated technological changes. The depreciation / amortisation for future periods is
revised if there are significant changes from previous estimates.
(d) Impairment of Financial Assets
The Company reviews its carrying value of investments carried at amortized cost annually, or more frequently when there is indication of
impairment. If recoverable amount is less than its carrying amount, the impairment loss is accounted for.
(e) Impairment of Non Financial Assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, the Company
estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or Cash Generating Units (CGU''s) fair value
less costs of disposal and its value in use. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount.
Determination of the recoverable amount involves management estimates on highly uncertain matters, such as commodity prices and their impact
on markets and prices for upgraded products, development in demand, inflation, operating expenses and tax and legal systems. The Company uses
internal business plans, quoted market prices and the Company''s best estimate of commodity prices, currency rates, discount rates and other
relevant information. A detailed forecast is developed for a period of three to five years with projections thereafter. The Company does not include a
general growth factor to volumes or cash flows for the purpose of impairment tests, however, cash flows are generally increased by expected
inflation and market recovery towards previously observed volumes is considered.
(f) Taxes
The Company calculates income tax expense based on reported income. Deferred income tax expense is calculated based on the differences
between the carrying value of assets and liabilities for financial reporting purposes and their respective tax basis that are considered temporary
in nature. Valuation of deferred tax assets is dependent on management''s assessment of future recoverability of the deferred benefit.
Expected recoverability may result from expected taxable income in the future, planned transactions or planned tax optimizing measures. Economic
conditions may change and lead to a different conclusion regarding recoverability.
41: Financial Risk Management - Objectives and Policies
The company''s principal financial liabilities comprise borrowings, trade payables, other financial liabilities and financial guarantee contracts. The main purpose
of these financial liabilities is to finance the Company''s operations. The Company''s financial assets include investments, trade receivables, cash and cash
equivalents, other bank balances, loans and other financial assets.
The Company is exposed to market risk, credit risk and liquidity risk. The Company has a Risk management policy and its management is supported by a
Risk management committee that advises on risks and the appropriate risk governance framework for the Company. The Risk management committee
provides assurance to the Company''s management that the Company''s risk activities are governed by appropriate policies and procedures and that risks are
identified, measured and managed in accordance with the Company''s policies and risk objectives. The Board of Directors reviews and agrees policies for
managing each of these risks, which are summarised below.
( i) 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 risk: currency risk and other price risk, such as commodity price risk and equity price risk. Financial instruments affected by market risk include
FVTOCI investments, FVTPL investments, trade payables, trade receivables, etc.
(a) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a foreign currency 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. The Company monitors the
foreign exchange fluctuations on continuous basis and advises the management of any material adverse effect on the Company and for taking risk mitigation
measures. The Company enters into forward exchange contracts against its foreign currency exposure relating to underlying liabilities and firm commitments.
The Company does not enter into any derivative instruments for trading or speculative purposes.
Foreign currency sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in USD, Euro and JPY exchange rates, with all other variables held constant. The
impact on the Company''s profit before tax is due to likely changes in the fair value of monetary assets and liabilities. The Company''s exposure to foreign currency
changes for all other currencies is not material.
(Rs. in million)
(ii) Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is
exposed to credit risk from its operating activities (primarily trade receivables).
Trade receivables
An impairment analysis is performed at each reporting date on an individual basis for all the customers. In addition, a large number of minor receivables are
grouped into homogenous groups and assessed for impairment collectively. The calculation is based on credit losses historical data. The maximum exposure to
credit risk at the reporting date is the carrying value of trade receivables disclosed as the Company does not hold collateral as security. The Company has
evaluated the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries.
(iii) Liquidity risk
Liquidity risk is the risk that Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled
by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.
The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity
management requirements. The Company''s exposure to liquidity risk arises primarily from mismatches of the maturities of financial asset and liabilities.
The Company manages the liquidity risk by maintaining adequate funds in cash and cash equivalents. The Company also has adequate credit facilities agreed
with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost-effective manner.
The table below analyse the financial liabilities of the Company into relevant maturity groupings based on the remaining period from the reporting date to the
contractual maturity date. The amount disclosed in the table are the contractual undiscounted cash flow.
42: Capital Management
The Company being in a capital intensive industry, its objective is to maintain a strong credit rating, healthy capital ratios and establish a capital structure that
would maximise the return to stakeholders through optimum mix of debt and equity.
The Company''s capital requirement is mainly to fund its capacity expansion, repayment of principal and interest on its borrowings and strategic acquisitions.
The principal source of funding of the Company has been, and is expected to continue to be, cash generated from its operations supplemented by funding from
bank borrowings and the capital markets. The Company is not subject to any externally imposed capital requirements.
The Company regularly considers other financing and refinancing opportunities to diversify its debt profile, reduce interest cost and elongate the maturity of
its debt portfolio, and closely monitors its judicious allocation amongst competing capital expansion projects and strategic acquisitions, to capture market
opportunities at minimum risk.
The Company monitors its capital using gearing ratio, which is net debt, divided to total equity. Net debt includes, interest bearing loans and borrowings less cash
and cash equivalents.
(Rs. in million)
47. None of the Loans or Advances in the nature of loans as at 31st March, 2025 and as at 31st March, 2024 are granted to promoters, directors, KMPs and
the related parties (as defined under Companies Act 2013) either severally or jointly with any other person, that are: (a) repayable on demand or
(b) without specifying any terms or period of repayment.
48 . The company has used the borrowings from banks and financial institutions for the specific purpose for which it was taken at the balance sheet date.
49. No proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act,
1988 (45 of 1988) and the rules made there under.
50. All the Registration of Charges or Satisfaction of Charges with the Registrar of Companies are completed within the statutory period.
51. The company has complied with the number of layers prescribed under clause (87) of section 2 of the Companies Act read with Companies (Restriction
on number of Layers) Rules, 2017.
52 . 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 (i) 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 (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
53. The Company has not received any fund 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 (i) 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 (ii) provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries.
54. The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the
year ended 31st March, 2025 and 31st March, 2024 in the tax assessments under the Income Tax Act, 1961.
55. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
56. The company has not been declared wilful defaulter by any bank or financial Institution or other lender.
Signature to Note 1 to 56
Asperourreportofevendateannexed For and on behalf of the Board
For SINGHI & CO.
Chartered Accountants
Firm Registration No. 302049E SIDHARTH K. BIRLA R. V. KANORIA
RAHUL BOTHRA Director Managing Director
Partner (DIN:00004213) (DIN:00003792)
Membership No. 067330
P N. K. NOLKHA PRATIBHA JAISWAL
Place: New Delhi Group Chief Financial Officer Company Secretary
Date: 21st May, 2025 (ACS: 33981)
Mar 31, 2024
3.11. Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized if, as a result of a past event, the company has a present legal or constructive obligation that is reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Provisions are determined based on the best estimate required to settle the obligation at the balance sheet date.
Contingent liability is a possible obligation arising from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events but is not recognized because it is not possible that an outflow of resources embodying economic benefit will be required to settle the obligations or reliable estimate of the amount of the obligations cannot be made. The Company discloses the existence of contingent liabilities in Other Notes to Financial Statements.
Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits. Contingent Assets are not recognized though are disclosed, where an inflow of economic benefits is probable.
3.12. Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
3.13. Cash and Cash Equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks and cash in hand and highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
3.14. Employee Benefits
¦ Defined Contribution Plan: Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation other than the contribution payable to the Provident fund. Contribution payable to the provident fund is recognized as an expenditure in the statement of profit and loss.
¦ Defined Benefiit Plan: The Company''s obligation towards gratuity, a defined benefit employee retirement scheme is recognized on the basis of period end actuarial valuation determined under the Projected Unit Credit Method. Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included
in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.
¦ Compensated Absences: Short term compensated absences are provided for based on estimates. The Company treats accumulated leave expected to be carried forward beyond twelve months as long term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the unit projected credit method at the end of each financial year.
3.15.Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
a) Financial Assets
⢠Recognition and Initial Measurement:
All financial assets are initially recognised when the Company becomes a party to the contractual provisions of the instruments. A financial asset is initially measured at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
⢠Classification and Subsequent Measurement:
For purposes of subsequent measurement, financial assets are classified in four categories:
0 Measured at amortised cost;
0 Measured at fair value through other comprehensive income (FVTOCI);
0 Measured at fair value through profit or loss (FVTPL); and
0 Equity Instruments measured at fair value through other comprehensive income (FVTOCI).
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.
0 Measured at amortised cost (AC):
Financial assets are subsequently measured at amortised cost using the effective interest method, if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The Company may irrevocably elect at initial recognition to classify a debt instrument that meets the amortised cost criteria above as at FVTPL if that designation eliminates or significantly reduces an accounting mismatch had the financial asset been measured at amortised cost.
0 Measured at fair value through other comprehensive income (FVTOCI):
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding and selling financial assets.
0 Measured at fair value through profit and loss (FVTPL):
Financial assets are measured at fair value through profit or loss unless they are measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in statement of profit and loss.
0 Equity Instruments measured at FVTOCI:
All equity investments in scope of Ind AS - 109 are measured at fair value. Equity instruments which are, held for trading are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present subsequent changes in the fair value in other comprehensive income. The Company makes such election on an instrument-by-instrument basis. The classification is made on
initial recognition and is irrevocable. In case the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognised in the OCI. There is no reclassification of the amounts from OCI to the statement of profit and loss, even on sale of investment.
0 Investments in Subsidiaries
The Company has accounted for its investments in Subsidiaries at cost.
⢠Derecognition
The Company derecognises a financial asset on trade date only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
⢠Impairment of Financial Assets
The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS - 109 requires expected credit losses to be measured through a loss allowance. The Company recognizes 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 month 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.
b) Financial Liabilities
⢠Recognition and Initial Measurement:
Financial liabilities are classified at initial recognition, at fair value through profit or loss, as loans and borrowings, as payables or as derivatives, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
⢠Subsequent Measurement:
Financial liabilities are measured subsequently at amortised cost or FVTPL. A financial liability is classified as FVTPL if it is classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.
⢠Derecognition:
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
c) Offsetting Financial Instruments:
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the counterparty.
d) Derivative Financial Instruments:
The Company enters into derivative financial instruments viz. foreign exchange forward contracts, interest rate swaps and cross currency swaps to manage its exposure to interest rate and foreign exchange rate risks. The Company does not hold derivative financial instruments for speculative purposes.
Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in the statement of profit or loss immediately.
3.16.Measurement of Fair Values
A number of the accounting policies and disclosures of the Company require the measurement of fair values, for both financial and non-financial assets and liabilities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
¦ In the principal market for the asset or liability, or
¦ In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the input that is significant to the fair value measurement as a whole:
¦ Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
¦ Level 2 â Inputs other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
¦ Level 3 â Inputs which are unobservable inputs for the asset or liability.
External valuers are involved for valuation of significant assets and liabilities. Involvement of external valuers is decided by the management of the Company considering the requirements of Ind AS and selection criteria include market knowledge, reputation, independence and whether professional standards are maintained.
3.17.Impairment of Non-Financial Assets
e) The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value being higher of value in use and net selling price. Value in use is computed at net present value of cash flow expected over the balance useful lives of the assets. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or group of assets (Cash Generating Units - CGU).
f) An impairment loss is recognised as an expense in the statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognised in earlier accounting period is reversed if there has been an improvement in recoverable amount.
3.18.Cash dividend distribution to equity holders
The Company recognises a liability to make cash distributions to equity holders of the Company when the distribution is authorised and the distribution is no longer at the discretion of the Company. Final dividends on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company''s Board of Directors.
3.19.Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Board of Directors of the Company has been identified as being the chief operating decision maker. Refer note 39 for segment information presented.
3.20. Trade Receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business and reflects Company''s unconditional right to consideration (that is, payment is due only on the passage of time). Trade receivables are recognised initially at the transaction price as they do not contain signi- ficant financing components. The Company holds the trade receivables with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method, less loss allowance.
3.21. Recent accounting pronouncements:
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. During the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company
Note:
1. Promotion of education, health care including preventive health care & sanitation, improving the lives of physically disabled people, awareness programme and to help poor effected by Covid 19 & training program for sewing machine operator.
2. Shortfall amount (Rs 3.66 lakhs) in respect of previous year (FY 22-23) was deposited in fund specified under schedule vii of Section 135 of the Companies Act, 2013 within the stipulated time.
3. During the current Financial year the company has spent excess '' 1.40 Lacs which will be avaibale to set off in succeeding financial years
44 Certain Trade Receivable, Loans and Advances and Trade Payable are subject to confirmation. In the opinion of the management the value of Trade Receivables and Loans & Advances on realization in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.
The Company''s objective to manage its capital is to ensure continuity of business while at the same time provide reasonable returns to it''s various stakeholders but keep associated costs under control. In order to achieve this, requirement of capital is reviewed periodically with reference to operating and business plans that take into account capital expenditure and strategic investments. Sourcing of capital is done through judicious combination of equity / internal accruals and borrowings, both short term and long term. Net debt to Equity ratio is used to monitor capital.
The management has assessed that the fair values of cash and cash equivalents, trade receivables, trade payables, short term borrowings, and other current financial liabilities approximates their carrying amounts largely due to the short-term maturities of these instruments. The management has assessed that the fair value of floating rate instruments approximates their carrying value.
The following methods and assumptions were used to estimate the fair values:
a) The investments being listed, the fair value has been taken at the market rates of the same on the reporting dates. They are classified as Level 1 fair values in the fair value hierarchy.
b) The values of non current borrowings are based on the discounted cash flows using a current borrowing rate. They are classified as Level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including own credit risks, which was assessed as on the balance sheet date to be insignificant.
iii) Fair Value Hierarchy
The following are the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognized and measured at fair value and (b) measured at amortized cost and for which fair value are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into three levels of fair value measurement as prescribed under the Ind AS 113 "Fair Value Measurement". An explanation of each level follows underneath the tables:
Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels: Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities.
Level 2: Inputs other than quoted price including within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.
Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). If one or more of the significant inputs is not based on observable market data, the fair value is determined using generally accepted pricing models based on a discounted cash flow analysis, with the most significant input being the discount rate that reflects the credit risk of counterparty. This is the case with listed instruments where market is not liquid and for unlisted instruments.
The Company''s activities expose it to the following risks:
a) Credit risk
b) Liquidity risk
c) Market risk
a) Credit Risk
Credit risk is the risk that counter party will not meet its obligations under a financial instruments or customer contract leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities including deposits with banks and financial institutions, investments, foreign exchange transactions and other financial instruments.
Trade receivables : Customer credit risk is managed by the Company subject to the Company''s established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored and major customers are generally secured by obtaining security deposits/bank guarantee or other forms of credit insurance. The maximum exposure to credit risk at the reporting date is the carrying value of trade receivable disclosed in note 12.
b) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation. Typically the Company ensures that it has sufficient cash on demand to meet expected short term operational expenses. The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans/internal accruals.The table below provides details regarding the remaining contractual maturities of significant financial liabilities at the reporting date.
c) 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. Market risk comprises four type of risks: Commodity Price Risk, Foreign Exchange Risk, Interest Rate Risk and Other Price Risk.
1) Commodity Price Risk : The Company primarily imports raw jute, stores and spare items etc. It is exposed to commodity price risk arising out of movement in prices of such commodities. Such risks are monitored by tracking of the prices and are managed by entering into fixed price contracts, where considered necessary.
2) Foreign Currency Risk : The Company has Foreign Currency Exchange Risk on imports of input materials, Capital Equipment(s) in foreign currency for its business. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Certain transactions of the Company act as a natural hedge as a portion of both assets and liabilities are denominated in similar foreign currencies. For the remaining exposure to foreign exchange risk, the Company adopts a policy of selective hedging based on risk perception of the management using derivative, wherever required, to mitigate or eliminate the risk.
The following table demonstrates the sensitivity in the US Dollars (USD); Euro (EUR) and Sterling Pound (GBP) to the Indian Rupee with all other variables held constant.
4) Other Price Risk
The Company''s exposure to equity securities price risk arises from investments held by the Company and classified in the Balance Sheet at Fair Value through Profit and Loss. Having regard to the nature of securities, intrinsic worth, intent and long term nature of securities held by the Company, fluctuation in their prices are considered acceptable and do not warrant any management.
50 Loans or advances (repayable on demand or without specifying any terms or period of repayment) to specified persons.
During the year ended March 31,2024 the Company did not provide any Loans or advances which remains outstanding (repayable on demand or without specifying any terms or period of repayment) to specified persons (Nil as on March 31,2023).
51 Wilful Default
The Company is not declared any wilful default during the financial year to any of the Banks or financial Institutions .
52 As at March 31,2024, the register of charges of the Company as available in records of the Ministry of Corporate affairs (MCA) includes charges that were created / modified since the inception of the Company . There are certain charges which are historic in nature and it involves practical challenges in obtaining no-objection certificates ( NOCs) from the charge holders of such charges, despite repayment of the underlying loans. The Company is in the continuous process of filing the charge satisfaction e-form with MCA, within the timelines, as and when it receives NOCs from the respective charge holders.
53 Relationship with Struck off Companies
The Company did not have any transaction with companies struck off during the year ended March 31,2024 and also for the year ended March 31, 2023.
54 Disclosure in relation to undisclosed income
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 ended March 31,2024 and March 31,2023 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)
55 Details of Benami Property held
The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company, during the year ended March 31,2024 and March 31,2023 for holding any Benami property.
56 The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Company''s Act, read with Companies ( Restriction on number of layers ) Rules,2017 .
57 The Company has not filed any scheme of Arrangements in terms of sections 230 and 237 of the Companies Act, 2013 with any Competent authority.
58 Details of Crypto Currency or Virtual Currency
The Company has not traded or invested in Crypto currency or Virtual Currency during the year ended March 31,2024 and March 31, 2023.
59 Utilisation of Borrowed Fund & Share Premium
The Company has not received any fund 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.
The Company has not advanced or lent or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding 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.
60 Dividend
The Board of Directors have not recommended any dividend for the financial year ended 31st,March 2024 in their meeting held on 13th May, 2024 .
61 The company has prepared business estimates and funding plan in respect of its payment of current and non-current liabilities and based on the same the company is confident of meeting its liabilities.
62 Figures for the previous year have been re grouped / re arranged, wherever found necessary .
The Accompanying Notes are an integral part of the Financial Statements
As per our Report annexed. For and on behalf of the Board
For J K V S & C O Chartered Accountants Firm registration No. 318086E
UTSAV SARAF Ashish Chandrakant R.V. Kanoria
Agrawal
Partner Managing Director Non Executive Chairman
Membership No. 306932 DIN - 10198821 DIN - 00003792
5A , Nandalal Jew Road ,
Kolkata-700 026 R.K. Gupta Pratibha Jaiswal
The 13th, day of May, 2024 Chief Financial Officer Company Secretary
Mar 31, 2024
3.11. Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized if, as a result of a past event, the company has a present legal or constructive obligation that is reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Provisions are determined based on the best estimate required to settle the obligation at the balance sheet date.
Contingent liability is a possible obligation arising from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events but is not recognized because it is not possible that an outflow of resources embodying economic benefit will be required to settle the obligations or reliable estimate of the amount of the obligations cannot be made. The Company discloses the existence of contingent liabilities in Other Notes to Financial Statements.
Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits. Contingent Assets are not recognized though are disclosed, where an inflow of economic benefits is probable.
3.12. Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
3.13. Cash and Cash Equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks and cash in hand and highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
3.14. Employee Benefits
¦ Defined Contribution Plan: Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation other than the contribution payable to the Provident fund. Contribution payable to the provident fund is recognized as an expenditure in the statement of profit and loss.
¦ Defined Benefiit Plan: The Company''s obligation towards gratuity, a defined benefit employee retirement scheme is recognized on the basis of period end actuarial valuation determined under the Projected Unit Credit Method. Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included
in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.
¦ Compensated Absences: Short term compensated absences are provided for based on estimates. The Company treats accumulated leave expected to be carried forward beyond twelve months as long term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the unit projected credit method at the end of each financial year.
3.15.Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
a) Financial Assets
⢠Recognition and Initial Measurement:
All financial assets are initially recognised when the Company becomes a party to the contractual provisions of the instruments. A financial asset is initially measured at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
⢠Classification and Subsequent Measurement:
For purposes of subsequent measurement, financial assets are classified in four categories:
0 Measured at amortised cost;
0 Measured at fair value through other comprehensive income (FVTOCI);
0 Measured at fair value through profit or loss (FVTPL); and
0 Equity Instruments measured at fair value through other comprehensive income (FVTOCI).
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.
0 Measured at amortised cost (AC):
Financial assets are subsequently measured at amortised cost using the effective interest method, if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The Company may irrevocably elect at initial recognition to classify a debt instrument that meets the amortised cost criteria above as at FVTPL if that designation eliminates or significantly reduces an accounting mismatch had the financial asset been measured at amortised cost.
0 Measured at fair value through other comprehensive income (FVTOCI):
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding and selling financial assets.
0 Measured at fair value through profit and loss (FVTPL):
Financial assets are measured at fair value through profit or loss unless they are measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in statement of profit and loss.
0 Equity Instruments measured at FVTOCI:
All equity investments in scope of Ind AS - 109 are measured at fair value. Equity instruments which are, held for trading are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present subsequent changes in the fair value in other comprehensive income. The Company makes such election on an instrument-by-instrument basis. The classification is made on
initial recognition and is irrevocable. In case the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognised in the OCI. There is no reclassification of the amounts from OCI to the statement of profit and loss, even on sale of investment.
0 Investments in Subsidiaries
The Company has accounted for its investments in Subsidiaries at cost.
⢠Derecognition
The Company derecognises a financial asset on trade date only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
⢠Impairment of Financial Assets
The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS - 109 requires expected credit losses to be measured through a loss allowance. The Company recognizes 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 month 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.
b) Financial Liabilities
⢠Recognition and Initial Measurement:
Financial liabilities are classified at initial recognition, at fair value through profit or loss, as loans and borrowings, as payables or as derivatives, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
⢠Subsequent Measurement:
Financial liabilities are measured subsequently at amortised cost or FVTPL. A financial liability is classified as FVTPL if it is classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.
⢠Derecognition:
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
c) Offsetting Financial Instruments:
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the counterparty.
d) Derivative Financial Instruments:
The Company enters into derivative financial instruments viz. foreign exchange forward contracts, interest rate swaps and cross currency swaps to manage its exposure to interest rate and foreign exchange rate risks. The Company does not hold derivative financial instruments for speculative purposes.
Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in the statement of profit or loss immediately.
3.16.Measurement of Fair Values
A number of the accounting policies and disclosures of the Company require the measurement of fair values, for both financial and non-financial assets and liabilities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
¦ In the principal market for the asset or liability, or
¦ In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the input that is significant to the fair value measurement as a whole:
¦ Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
¦ Level 2 â Inputs other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
¦ Level 3 â Inputs which are unobservable inputs for the asset or liability.
External valuers are involved for valuation of significant assets and liabilities. Involvement of external valuers is decided by the management of the Company considering the requirements of Ind AS and selection criteria include market knowledge, reputation, independence and whether professional standards are maintained.
3.17.Impairment of Non-Financial Assets
e) The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value being higher of value in use and net selling price. Value in use is computed at net present value of cash flow expected over the balance useful lives of the assets. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or group of assets (Cash Generating Units - CGU).
f) An impairment loss is recognised as an expense in the statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognised in earlier accounting period is reversed if there has been an improvement in recoverable amount.
3.18.Cash dividend distribution to equity holders
The Company recognises a liability to make cash distributions to equity holders of the Company when the distribution is authorised and the distribution is no longer at the discretion of the Company. Final dividends on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company''s Board of Directors.
3.19.Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Board of Directors of the Company has been identified as being the chief operating decision maker. Refer note 39 for segment information presented.
3.20. Trade Receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business and reflects Company''s unconditional right to consideration (that is, payment is due only on the passage of time). Trade receivables are recognised initially at the transaction price as they do not contain signi- ficant financing components. The Company holds the trade receivables with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method, less loss allowance.
3.21. Recent accounting pronouncements:
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. During the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company
Note:
1. Promotion of education, health care including preventive health care & sanitation, improving the lives of physically disabled people, awareness programme and to help poor effected by Covid 19 & training program for sewing machine operator.
2. Shortfall amount (Rs 3.66 lakhs) in respect of previous year (FY 22-23) was deposited in fund specified under schedule vii of Section 135 of the Companies Act, 2013 within the stipulated time.
3. During the current Financial year the company has spent excess '' 1.40 Lacs which will be avaibale to set off in succeeding financial years
44 Certain Trade Receivable, Loans and Advances and Trade Payable are subject to confirmation. In the opinion of the management the value of Trade Receivables and Loans & Advances on realization in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.
The Company''s objective to manage its capital is to ensure continuity of business while at the same time provide reasonable returns to it''s various stakeholders but keep associated costs under control. In order to achieve this, requirement of capital is reviewed periodically with reference to operating and business plans that take into account capital expenditure and strategic investments. Sourcing of capital is done through judicious combination of equity / internal accruals and borrowings, both short term and long term. Net debt to Equity ratio is used to monitor capital.
The management has assessed that the fair values of cash and cash equivalents, trade receivables, trade payables, short term borrowings, and other current financial liabilities approximates their carrying amounts largely due to the short-term maturities of these instruments. The management has assessed that the fair value of floating rate instruments approximates their carrying value.
The following methods and assumptions were used to estimate the fair values:
a) The investments being listed, the fair value has been taken at the market rates of the same on the reporting dates. They are classified as Level 1 fair values in the fair value hierarchy.
b) The values of non current borrowings are based on the discounted cash flows using a current borrowing rate. They are classified as Level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including own credit risks, which was assessed as on the balance sheet date to be insignificant.
iii) Fair Value Hierarchy
The following are the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognized and measured at fair value and (b) measured at amortized cost and for which fair value are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into three levels of fair value measurement as prescribed under the Ind AS 113 "Fair Value Measurement". An explanation of each level follows underneath the tables:
Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels: Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities.
Level 2: Inputs other than quoted price including within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.
Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). If one or more of the significant inputs is not based on observable market data, the fair value is determined using generally accepted pricing models based on a discounted cash flow analysis, with the most significant input being the discount rate that reflects the credit risk of counterparty. This is the case with listed instruments where market is not liquid and for unlisted instruments.
The Company''s activities expose it to the following risks:
a) Credit risk
b) Liquidity risk
c) Market risk
a) Credit Risk
Credit risk is the risk that counter party will not meet its obligations under a financial instruments or customer contract leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities including deposits with banks and financial institutions, investments, foreign exchange transactions and other financial instruments.
Trade receivables : Customer credit risk is managed by the Company subject to the Company''s established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored and major customers are generally secured by obtaining security deposits/bank guarantee or other forms of credit insurance. The maximum exposure to credit risk at the reporting date is the carrying value of trade receivable disclosed in note 12.
b) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation. Typically the Company ensures that it has sufficient cash on demand to meet expected short term operational expenses. The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans/internal accruals.The table below provides details regarding the remaining contractual maturities of significant financial liabilities at the reporting date.
c) 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. Market risk comprises four type of risks: Commodity Price Risk, Foreign Exchange Risk, Interest Rate Risk and Other Price Risk.
1) Commodity Price Risk : The Company primarily imports raw jute, stores and spare items etc. It is exposed to commodity price risk arising out of movement in prices of such commodities. Such risks are monitored by tracking of the prices and are managed by entering into fixed price contracts, where considered necessary.
2) Foreign Currency Risk : The Company has Foreign Currency Exchange Risk on imports of input materials, Capital Equipment(s) in foreign currency for its business. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Certain transactions of the Company act as a natural hedge as a portion of both assets and liabilities are denominated in similar foreign currencies. For the remaining exposure to foreign exchange risk, the Company adopts a policy of selective hedging based on risk perception of the management using derivative, wherever required, to mitigate or eliminate the risk.
The following table demonstrates the sensitivity in the US Dollars (USD); Euro (EUR) and Sterling Pound (GBP) to the Indian Rupee with all other variables held constant.
4) Other Price Risk
The Company''s exposure to equity securities price risk arises from investments held by the Company and classified in the Balance Sheet at Fair Value through Profit and Loss. Having regard to the nature of securities, intrinsic worth, intent and long term nature of securities held by the Company, fluctuation in their prices are considered acceptable and do not warrant any management.
50 Loans or advances (repayable on demand or without specifying any terms or period of repayment) to specified persons.
During the year ended March 31,2024 the Company did not provide any Loans or advances which remains outstanding (repayable on demand or without specifying any terms or period of repayment) to specified persons (Nil as on March 31,2023).
51 Wilful Default
The Company is not declared any wilful default during the financial year to any of the Banks or financial Institutions .
52 As at March 31,2024, the register of charges of the Company as available in records of the Ministry of Corporate affairs (MCA) includes charges that were created / modified since the inception of the Company . There are certain charges which are historic in nature and it involves practical challenges in obtaining no-objection certificates ( NOCs) from the charge holders of such charges, despite repayment of the underlying loans. The Company is in the continuous process of filing the charge satisfaction e-form with MCA, within the timelines, as and when it receives NOCs from the respective charge holders.
53 Relationship with Struck off Companies
The Company did not have any transaction with companies struck off during the year ended March 31,2024 and also for the year ended March 31, 2023.
54 Disclosure in relation to undisclosed income
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 ended March 31,2024 and March 31,2023 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)
55 Details of Benami Property held
The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company, during the year ended March 31,2024 and March 31,2023 for holding any Benami property.
56 The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Company''s Act, read with Companies ( Restriction on number of layers ) Rules,2017 .
57 The Company has not filed any scheme of Arrangements in terms of sections 230 and 237 of the Companies Act, 2013 with any Competent authority.
58 Details of Crypto Currency or Virtual Currency
The Company has not traded or invested in Crypto currency or Virtual Currency during the year ended March 31,2024 and March 31, 2023.
59 Utilisation of Borrowed Fund & Share Premium
The Company has not received any fund 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.
The Company has not advanced or lent or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding 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.
60 Dividend
The Board of Directors have not recommended any dividend for the financial year ended 31st,March 2024 in their meeting held on 13th May, 2024 .
61 The company has prepared business estimates and funding plan in respect of its payment of current and non-current liabilities and based on the same the company is confident of meeting its liabilities.
62 Figures for the previous year have been re grouped / re arranged, wherever found necessary .
The Accompanying Notes are an integral part of the Financial Statements
As per our Report annexed. For and on behalf of the Board
For J K V S & C O Chartered Accountants Firm registration No. 318086E
UTSAV SARAF Ashish Chandrakant R.V. Kanoria
Agrawal
Partner Managing Director Non Executive Chairman
Membership No. 306932 DIN - 10198821 DIN - 00003792
5A , Nandalal Jew Road ,
Kolkata-700 026 R.K. Gupta Pratibha Jaiswal
The 13th, day of May, 2024 Chief Financial Officer Company Secretary
Mar 31, 2024
3.11. Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized if, as a result of a past event, the company has a present legal or constructive obligation that is reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Provisions are determined based on the best estimate required to settle the obligation at the balance sheet date.
Contingent liability is a possible obligation arising from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events but is not recognized because it is not possible that an outflow of resources embodying economic benefit will be required to settle the obligations or reliable estimate of the amount of the obligations cannot be made. The Company discloses the existence of contingent liabilities in Other Notes to Financial Statements.
Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits. Contingent Assets are not recognized though are disclosed, where an inflow of economic benefits is probable.
3.12. Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
3.13. Cash and Cash Equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks and cash in hand and highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
3.14. Employee Benefits
¦ Defined Contribution Plan: Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation other than the contribution payable to the Provident fund. Contribution payable to the provident fund is recognized as an expenditure in the statement of profit and loss.
¦ Defined Benefiit Plan: The Company''s obligation towards gratuity, a defined benefit employee retirement scheme is recognized on the basis of period end actuarial valuation determined under the Projected Unit Credit Method. Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included
in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.
¦ Compensated Absences: Short term compensated absences are provided for based on estimates. The Company treats accumulated leave expected to be carried forward beyond twelve months as long term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the unit projected credit method at the end of each financial year.
3.15.Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
a) Financial Assets
⢠Recognition and Initial Measurement:
All financial assets are initially recognised when the Company becomes a party to the contractual provisions of the instruments. A financial asset is initially measured at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
⢠Classification and Subsequent Measurement:
For purposes of subsequent measurement, financial assets are classified in four categories:
0 Measured at amortised cost;
0 Measured at fair value through other comprehensive income (FVTOCI);
0 Measured at fair value through profit or loss (FVTPL); and
0 Equity Instruments measured at fair value through other comprehensive income (FVTOCI).
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.
0 Measured at amortised cost (AC):
Financial assets are subsequently measured at amortised cost using the effective interest method, if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The Company may irrevocably elect at initial recognition to classify a debt instrument that meets the amortised cost criteria above as at FVTPL if that designation eliminates or significantly reduces an accounting mismatch had the financial asset been measured at amortised cost.
0 Measured at fair value through other comprehensive income (FVTOCI):
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding and selling financial assets.
0 Measured at fair value through profit and loss (FVTPL):
Financial assets are measured at fair value through profit or loss unless they are measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in statement of profit and loss.
0 Equity Instruments measured at FVTOCI:
All equity investments in scope of Ind AS - 109 are measured at fair value. Equity instruments which are, held for trading are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present subsequent changes in the fair value in other comprehensive income. The Company makes such election on an instrument-by-instrument basis. The classification is made on
initial recognition and is irrevocable. In case the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognised in the OCI. There is no reclassification of the amounts from OCI to the statement of profit and loss, even on sale of investment.
0 Investments in Subsidiaries
The Company has accounted for its investments in Subsidiaries at cost.
⢠Derecognition
The Company derecognises a financial asset on trade date only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
⢠Impairment of Financial Assets
The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS - 109 requires expected credit losses to be measured through a loss allowance. The Company recognizes 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 month 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.
b) Financial Liabilities
⢠Recognition and Initial Measurement:
Financial liabilities are classified at initial recognition, at fair value through profit or loss, as loans and borrowings, as payables or as derivatives, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
⢠Subsequent Measurement:
Financial liabilities are measured subsequently at amortised cost or FVTPL. A financial liability is classified as FVTPL if it is classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.
⢠Derecognition:
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
c) Offsetting Financial Instruments:
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the counterparty.
d) Derivative Financial Instruments:
The Company enters into derivative financial instruments viz. foreign exchange forward contracts, interest rate swaps and cross currency swaps to manage its exposure to interest rate and foreign exchange rate risks. The Company does not hold derivative financial instruments for speculative purposes.
Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in the statement of profit or loss immediately.
3.16.Measurement of Fair Values
A number of the accounting policies and disclosures of the Company require the measurement of fair values, for both financial and non-financial assets and liabilities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
¦ In the principal market for the asset or liability, or
¦ In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the input that is significant to the fair value measurement as a whole:
¦ Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
¦ Level 2 â Inputs other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
¦ Level 3 â Inputs which are unobservable inputs for the asset or liability.
External valuers are involved for valuation of significant assets and liabilities. Involvement of external valuers is decided by the management of the Company considering the requirements of Ind AS and selection criteria include market knowledge, reputation, independence and whether professional standards are maintained.
3.17.Impairment of Non-Financial Assets
e) The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value being higher of value in use and net selling price. Value in use is computed at net present value of cash flow expected over the balance useful lives of the assets. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or group of assets (Cash Generating Units - CGU).
f) An impairment loss is recognised as an expense in the statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognised in earlier accounting period is reversed if there has been an improvement in recoverable amount.
3.18.Cash dividend distribution to equity holders
The Company recognises a liability to make cash distributions to equity holders of the Company when the distribution is authorised and the distribution is no longer at the discretion of the Company. Final dividends on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company''s Board of Directors.
3.19.Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Board of Directors of the Company has been identified as being the chief operating decision maker. Refer note 39 for segment information presented.
3.20. Trade Receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business and reflects Company''s unconditional right to consideration (that is, payment is due only on the passage of time). Trade receivables are recognised initially at the transaction price as they do not contain signi- ficant financing components. The Company holds the trade receivables with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method, less loss allowance.
3.21. Recent accounting pronouncements:
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. During the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company
Note:
1. Promotion of education, health care including preventive health care & sanitation, improving the lives of physically disabled people, awareness programme and to help poor effected by Covid 19 & training program for sewing machine operator.
2. Shortfall amount (Rs 3.66 lakhs) in respect of previous year (FY 22-23) was deposited in fund specified under schedule vii of Section 135 of the Companies Act, 2013 within the stipulated time.
3. During the current Financial year the company has spent excess '' 1.40 Lacs which will be avaibale to set off in succeeding financial years
44 Certain Trade Receivable, Loans and Advances and Trade Payable are subject to confirmation. In the opinion of the management the value of Trade Receivables and Loans & Advances on realization in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.
The Company''s objective to manage its capital is to ensure continuity of business while at the same time provide reasonable returns to it''s various stakeholders but keep associated costs under control. In order to achieve this, requirement of capital is reviewed periodically with reference to operating and business plans that take into account capital expenditure and strategic investments. Sourcing of capital is done through judicious combination of equity / internal accruals and borrowings, both short term and long term. Net debt to Equity ratio is used to monitor capital.
The management has assessed that the fair values of cash and cash equivalents, trade receivables, trade payables, short term borrowings, and other current financial liabilities approximates their carrying amounts largely due to the short-term maturities of these instruments. The management has assessed that the fair value of floating rate instruments approximates their carrying value.
The following methods and assumptions were used to estimate the fair values:
a) The investments being listed, the fair value has been taken at the market rates of the same on the reporting dates. They are classified as Level 1 fair values in the fair value hierarchy.
b) The values of non current borrowings are based on the discounted cash flows using a current borrowing rate. They are classified as Level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including own credit risks, which was assessed as on the balance sheet date to be insignificant.
iii) Fair Value Hierarchy
The following are the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognized and measured at fair value and (b) measured at amortized cost and for which fair value are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into three levels of fair value measurement as prescribed under the Ind AS 113 "Fair Value Measurement". An explanation of each level follows underneath the tables:
Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels: Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities.
Level 2: Inputs other than quoted price including within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.
Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). If one or more of the significant inputs is not based on observable market data, the fair value is determined using generally accepted pricing models based on a discounted cash flow analysis, with the most significant input being the discount rate that reflects the credit risk of counterparty. This is the case with listed instruments where market is not liquid and for unlisted instruments.
The Company''s activities expose it to the following risks:
a) Credit risk
b) Liquidity risk
c) Market risk
a) Credit Risk
Credit risk is the risk that counter party will not meet its obligations under a financial instruments or customer contract leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities including deposits with banks and financial institutions, investments, foreign exchange transactions and other financial instruments.
Trade receivables : Customer credit risk is managed by the Company subject to the Company''s established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored and major customers are generally secured by obtaining security deposits/bank guarantee or other forms of credit insurance. The maximum exposure to credit risk at the reporting date is the carrying value of trade receivable disclosed in note 12.
b) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation. Typically the Company ensures that it has sufficient cash on demand to meet expected short term operational expenses. The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans/internal accruals.The table below provides details regarding the remaining contractual maturities of significant financial liabilities at the reporting date.
c) 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. Market risk comprises four type of risks: Commodity Price Risk, Foreign Exchange Risk, Interest Rate Risk and Other Price Risk.
1) Commodity Price Risk : The Company primarily imports raw jute, stores and spare items etc. It is exposed to commodity price risk arising out of movement in prices of such commodities. Such risks are monitored by tracking of the prices and are managed by entering into fixed price contracts, where considered necessary.
2) Foreign Currency Risk : The Company has Foreign Currency Exchange Risk on imports of input materials, Capital Equipment(s) in foreign currency for its business. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Certain transactions of the Company act as a natural hedge as a portion of both assets and liabilities are denominated in similar foreign currencies. For the remaining exposure to foreign exchange risk, the Company adopts a policy of selective hedging based on risk perception of the management using derivative, wherever required, to mitigate or eliminate the risk.
The following table demonstrates the sensitivity in the US Dollars (USD); Euro (EUR) and Sterling Pound (GBP) to the Indian Rupee with all other variables held constant.
4) Other Price Risk
The Company''s exposure to equity securities price risk arises from investments held by the Company and classified in the Balance Sheet at Fair Value through Profit and Loss. Having regard to the nature of securities, intrinsic worth, intent and long term nature of securities held by the Company, fluctuation in their prices are considered acceptable and do not warrant any management.
50 Loans or advances (repayable on demand or without specifying any terms or period of repayment) to specified persons.
During the year ended March 31,2024 the Company did not provide any Loans or advances which remains outstanding (repayable on demand or without specifying any terms or period of repayment) to specified persons (Nil as on March 31,2023).
51 Wilful Default
The Company is not declared any wilful default during the financial year to any of the Banks or financial Institutions .
52 As at March 31,2024, the register of charges of the Company as available in records of the Ministry of Corporate affairs (MCA) includes charges that were created / modified since the inception of the Company . There are certain charges which are historic in nature and it involves practical challenges in obtaining no-objection certificates ( NOCs) from the charge holders of such charges, despite repayment of the underlying loans. The Company is in the continuous process of filing the charge satisfaction e-form with MCA, within the timelines, as and when it receives NOCs from the respective charge holders.
53 Relationship with Struck off Companies
The Company did not have any transaction with companies struck off during the year ended March 31,2024 and also for the year ended March 31, 2023.
54 Disclosure in relation to undisclosed income
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 ended March 31,2024 and March 31,2023 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)
55 Details of Benami Property held
The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company, during the year ended March 31,2024 and March 31,2023 for holding any Benami property.
56 The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Company''s Act, read with Companies ( Restriction on number of layers ) Rules,2017 .
57 The Company has not filed any scheme of Arrangements in terms of sections 230 and 237 of the Companies Act, 2013 with any Competent authority.
58 Details of Crypto Currency or Virtual Currency
The Company has not traded or invested in Crypto currency or Virtual Currency during the year ended March 31,2024 and March 31, 2023.
59 Utilisation of Borrowed Fund & Share Premium
The Company has not received any fund 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.
The Company has not advanced or lent or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding 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.
60 Dividend
The Board of Directors have not recommended any dividend for the financial year ended 31st,March 2024 in their meeting held on 13th May, 2024 .
61 The company has prepared business estimates and funding plan in respect of its payment of current and non-current liabilities and based on the same the company is confident of meeting its liabilities.
62 Figures for the previous year have been re grouped / re arranged, wherever found necessary .
The Accompanying Notes are an integral part of the Financial Statements
As per our Report annexed. For and on behalf of the Board
For J K V S & C O Chartered Accountants Firm registration No. 318086E
UTSAV SARAF Ashish Chandrakant R.V. Kanoria
Agrawal
Partner Managing Director Non Executive Chairman
Membership No. 306932 DIN - 10198821 DIN - 00003792
5A , Nandalal Jew Road ,
Kolkata-700 026 R.K. Gupta Pratibha Jaiswal
The 13th, day of May, 2024 Chief Financial Officer Company Secretary
Mar 31, 2024
Q. Provisions
Provisions are recognised when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
Where the effect of time value of money is material, provisions are measured at present value using a pre-tax discount rate that refects current market assessment of the time value of money and risks specific to liability. The increase in the provision due to passage of time is recognised as interest expense.
R. Contingent Liabilities and Assets
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. The Company does not recognise a contingent liability but discloses its existence in the financial statements. Contingent assets are not recognised in the financial statements.
S. Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
T. Events after Reporting date
Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted within the financial statements. Otherwise, events after the Balance Sheet date of material size or nature are only disclosed.
U. Recent applicable Accounting pronouncements
Ministry of Corporate Affairs ("MCA") has not notified any new standards or amendments to the existing standards for the year ended 31st March, 2024.
4: Significant Accounting Judgements, Estimates and Assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
( i) Judgements
In the process of applying the accounting policies, management has made the following judgements, which have the most significant effect on the
amounts recognised in the financial statements:
(a) Equity Investments measured at FVTOCI
The company has exercised the option to measure investment in equity instruments, not held for trading at FVTOCI in accordance with Ind AS 109. It has exercised this irrevocable option for its class of quoted equity shares. The option renders the equity instruments elected to be measured at FVTOCI non recyclable to PL.
(b) Business Model for Investment of Debt Instruments
For the purpose of measuring investments in debt instruments in accordance with Ind AS 109, the company has evaluated and determined that the business model for investments in quoted debentures and bonds is to collect the contractual cash flows and sell the financial asset. Such financial assets have been accordingly classified and measured at FVTOCI.
For the purpose of measuring investments in debt instruments in accordance with Ind AS 109, the company has evaluated and determined that the business model for investments in unquoted debentures and bonds is only to collect the contractual cash flows. Such financial assets have been accordingly classified and measured at amortised cost.
(ii) Estimates and Assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are refected in the assumptions when they occur.
(a) Defined Benefit Plans
The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation
(b) Fair Value measurement of Financial Instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
(c) Depreciation/Amortisation and Useful Lives of Property, Plant and Equipment/Intangible Assets
Property, plant and equipment / intangible assets are depreciated / amortised over their estimated useful lives, after taking into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives and residual values are based on the Company''s historical experience with similar assets and take into account anticipated technological changes. The depreciation / amortisation for future periods is revised if there are significant changes from previous estimates.
(d) Impairment of Financial Assets
The Company reviews its carrying value of investments carried at amortized cost annually, or more frequently when there is indication of impairment. If recoverable amount is less than its carrying amount, the impairment loss is accounted for.
(e) Impairment of Non-Financial Assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or Cash Generating Units (CGU''s) fair value less costs of disposal and its value in use. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
Determination of the recoverable amount involves management estimates on highly uncertain matters, such as commodity prices and their impact on markets and prices for upgraded products, development in demand, inflation, operating expenses and tax and legal systems. The Company uses internal business plans, quoted market prices and the Company''s best estimate of commodity prices, currency rates, discount rates and other relevant information. A detailed forecast is developed for a period of three to five years with projections thereafter. The Company does not include a general growth factor to volumes or cash flows for the purpose of impairment tests, however, cash flows are generally increased by expected inflation and market recovery towards previously observed volumes is considered.
(f) Taxes
The Company calculates income tax expense based on reported income. Deferred income tax expense is calculated based on the differences between the carrying value of assets and liabilities for financial reporting purposes and their respective tax basis that are considered temporary in nature. Valuation of deferred tax assets is dependent on management''s assessment of future recoverability of the deferred benefit. Expected recoverability may result from expected taxable income in the future, planned transactions or planned tax optimizing measures. Economic conditions may change and lead to a different conclusion regarding recoverability.
5. Sensitivity Analysis
The Sensitivity Analysis below has been determined based on reasonably possible change of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant. These sensitivities show the hypothetical impact of a change in each of the listed assumptions in isolation. While each of these sensitivities holds all other assumptions constant, in practice such assumptions rarely change in isolation. For presenting the sensitivities, the present value of the Defined Benefit Obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the Defined Benefit Obligation presented above. There was no change in the methods and assumptions used in the preparation of the Sensitivity Analysis from previous year.
7. Description of Risk Exposures
Valuations are performed on certain basic set of pre-determined assumptions and other regulatory framework which may vary over time. Thus, the Company is exposed to various risks in providing the above gratuity benefit which are as follows:
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.
Salary Escalation Risk: The present value of the defined benefit plan is calculated with the 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 assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.
Regulatory Risk: Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts.
B. Defined Contribution Plan
The Company contributes 12% of salary for all eligible employees towards Provident Fund managed either by approved trust or by the Central Government and debit the same to statement of Profit and Loss. The provident fund set up by the employers, require interest shortfall to be met by the employers. The fund set up by the Company had a interest shortfall of Rs. 1.70 million which was paid by the company. The amount debited to Statement of Profit and Loss towards Provident Fund contribution during the year was Rs. 17.29 million (previous year Rs. 17.11 million).
41: Financial Risk Management - Objectives and Policies
The company''s principal financial liabilities comprise borrowings, trade payables, other financial liabilities and financial guarantee contracts. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s financial assets include investments, trade receivables, cash and cash equivalents, other bank balances, loans and other financial assets.
The Company is exposed to market risk, credit risk and liquidity risk. The Company has a Risk management policy and its management is supported by a Risk management committee that advises on risks and the appropriate risk governance framework for the Company. The Risk management committee provides assurance to the Company''s management that the Company''s risk activities are governed by appropriate policies and procedures and that risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.
(i) 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 risk: currency risk and other price risk, such as commodity price risk and equity price risk. Financial instruments affected by market risk include FVTOCI investments, FVTPL investments, trade payables, trade receivables, etc.
(a) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a foreign currency 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. The Company monitors the foreign exchange fluctuations on continuous basis and advises the management of any material adverse effect on the Company and for taking risk mitigation measures. The Company enters into forward exchange contracts against its foreign currency exposure relating to underlying liabilities and firm commitments. The Company does not enter into any derivative instruments for trading or speculative purposes.
Foreign currency sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in USD, Euro and JPY exchange rates, with all other variables held constant. The impact on the Company''s profit before tax is due to likely changes in the fair value of monetary assets and liabilities. The Company''s exposure to foreign currency changes for all other currencies is not material.
(ii) Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables).
Trade receivables
An impairment analysis is performed at each reporting date on an individual basis for all the customers. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based on credit losses historical data. The maximum exposure to credit risk at the reporting date is the carrying value of trade receivables disclosed as the Company does not hold collateral as security. The Company has evaluated the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries.
(iii) Liquidity risk
Liquidity risk is the risk that Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.
The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity management requirements. The Company''s exposure to liquidity risk arises primarily from mismatches of the maturities of financial asset and liabilities. The Company manages the liquidity risk by maintaining adequate funds in cash and cash equivalents. The Company also has adequate credit facilities agreed with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost-effective manner.
The table below analyse the financial liabilities of the Company into relevant maturity groupings based on the remaining period from the reporting date to the contractual maturity date. The amount disclosed in the table are the contractual undiscounted cash flow.
42: Capital Management
The Company''s objective when managing capital (defined as net debt and equity) are to safeguard the Company''s ability to continue as a going concern in order to provide returns to shareholders and benefit for other stakeholders, while protecting and strengthening the balance sheet through the appropriate balance of debt and equity funding. The Company manages its capital structure and makes adjustments to it, in light of changes to economic conditions and strategic objectives of the Company. The Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.
47. None of the Loans or Advances in the nature of loans as at 31st March, 2024 and as at 31st March, 2023 are granted to promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013,) either severally or jointly with any other person, that are: (a) repayable on demand or (b) without specifying any terms or period of repayment.
48 . The company has used the borrowings from banks and financial institutions for the specific purpose for which it was taken at the balance sheet date.
49. No proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made there under.
50. All the Registration of Charges or Satisfaction of Charges with the Registrar of Companies are completed within the statutory period.
51. The company has complied with the number of layers prescribed under clause (87) of section 2 of the Companies Act read with Companies (Restriction on number of Layers) Rules, 2017.
52 . 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 (i) 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 (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
53. The Company has not received any fund 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 (i) 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 (ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
54. The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year ended 31st March, 2024 and 31st March, 2023 in the tax assessments under the Income Tax Act, 1961.
55. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
56. The company has not been declared wilful defaulter by any bank or financial Institution or other lender.
57. Figures for the previous year have been regrouped/rearranged, wherever found necessary.
Signature to Note 1 to 57
Asperourreportofevendateannexed For and on behalf of the Board
For SINGHI & CO.
Chartered Accountants
Firm Registration No. 302049E SIDHARTH K. BIRLA R. V. KANORIA
Director Managing Director
Partner (DIN:00004213) (DIN:00003792)
Membership No. 053518
H N. K. NOLKHA NEHA SARAF
Place: Kolkata Group Chief Financial Officer Company Secretary
Date: 28th May, 2024 (ACS: 27024)
Mar 31, 2024
3.11. Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized if, as a result of a past event, the company has a present legal or constructive obligation that is reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Provisions are determined based on the best estimate required to settle the obligation at the balance sheet date.
Contingent liability is a possible obligation arising from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events but is not recognized because it is not possible that an outflow of resources embodying economic benefit will be required to settle the obligations or reliable estimate of the amount of the obligations cannot be made. The Company discloses the existence of contingent liabilities in Other Notes to Financial Statements.
Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits. Contingent Assets are not recognized though are disclosed, where an inflow of economic benefits is probable.
3.12. Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
3.13. Cash and Cash Equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks and cash in hand and highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
3.14. Employee Benefits
¦ Defined Contribution Plan: Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation other than the contribution payable to the Provident fund. Contribution payable to the provident fund is recognized as an expenditure in the statement of profit and loss.
¦ Defined Benefiit Plan: The Company''s obligation towards gratuity, a defined benefit employee retirement scheme is recognized on the basis of period end actuarial valuation determined under the Projected Unit Credit Method. Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included
in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.
¦ Compensated Absences: Short term compensated absences are provided for based on estimates. The Company treats accumulated leave expected to be carried forward beyond twelve months as long term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the unit projected credit method at the end of each financial year.
3.15.Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
a) Financial Assets
⢠Recognition and Initial Measurement:
All financial assets are initially recognised when the Company becomes a party to the contractual provisions of the instruments. A financial asset is initially measured at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
⢠Classification and Subsequent Measurement:
For purposes of subsequent measurement, financial assets are classified in four categories:
0 Measured at amortised cost;
0 Measured at fair value through other comprehensive income (FVTOCI);
0 Measured at fair value through profit or loss (FVTPL); and
0 Equity Instruments measured at fair value through other comprehensive income (FVTOCI).
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.
0 Measured at amortised cost (AC):
Financial assets are subsequently measured at amortised cost using the effective interest method, if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The Company may irrevocably elect at initial recognition to classify a debt instrument that meets the amortised cost criteria above as at FVTPL if that designation eliminates or significantly reduces an accounting mismatch had the financial asset been measured at amortised cost.
0 Measured at fair value through other comprehensive income (FVTOCI):
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding and selling financial assets.
0 Measured at fair value through profit and loss (FVTPL):
Financial assets are measured at fair value through profit or loss unless they are measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in statement of profit and loss.
0 Equity Instruments measured at FVTOCI:
All equity investments in scope of Ind AS - 109 are measured at fair value. Equity instruments which are, held for trading are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present subsequent changes in the fair value in other comprehensive income. The Company makes such election on an instrument-by-instrument basis. The classification is made on
initial recognition and is irrevocable. In case the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognised in the OCI. There is no reclassification of the amounts from OCI to the statement of profit and loss, even on sale of investment.
0 Investments in Subsidiaries
The Company has accounted for its investments in Subsidiaries at cost.
⢠Derecognition
The Company derecognises a financial asset on trade date only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
⢠Impairment of Financial Assets
The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS - 109 requires expected credit losses to be measured through a loss allowance. The Company recognizes 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 month 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.
b) Financial Liabilities
⢠Recognition and Initial Measurement:
Financial liabilities are classified at initial recognition, at fair value through profit or loss, as loans and borrowings, as payables or as derivatives, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
⢠Subsequent Measurement:
Financial liabilities are measured subsequently at amortised cost or FVTPL. A financial liability is classified as FVTPL if it is classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.
⢠Derecognition:
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
c) Offsetting Financial Instruments:
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the counterparty.
d) Derivative Financial Instruments:
The Company enters into derivative financial instruments viz. foreign exchange forward contracts, interest rate swaps and cross currency swaps to manage its exposure to interest rate and foreign exchange rate risks. The Company does not hold derivative financial instruments for speculative purposes.
Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in the statement of profit or loss immediately.
3.16.Measurement of Fair Values
A number of the accounting policies and disclosures of the Company require the measurement of fair values, for both financial and non-financial assets and liabilities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
¦ In the principal market for the asset or liability, or
¦ In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the input that is significant to the fair value measurement as a whole:
¦ Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
¦ Level 2 â Inputs other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
¦ Level 3 â Inputs which are unobservable inputs for the asset or liability.
External valuers are involved for valuation of significant assets and liabilities. Involvement of external valuers is decided by the management of the Company considering the requirements of Ind AS and selection criteria include market knowledge, reputation, independence and whether professional standards are maintained.
3.17.Impairment of Non-Financial Assets
e) The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value being higher of value in use and net selling price. Value in use is computed at net present value of cash flow expected over the balance useful lives of the assets. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or group of assets (Cash Generating Units - CGU).
f) An impairment loss is recognised as an expense in the statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognised in earlier accounting period is reversed if there has been an improvement in recoverable amount.
3.18.Cash dividend distribution to equity holders
The Company recognises a liability to make cash distributions to equity holders of the Company when the distribution is authorised and the distribution is no longer at the discretion of the Company. Final dividends on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company''s Board of Directors.
3.19.Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Board of Directors of the Company has been identified as being the chief operating decision maker. Refer note 39 for segment information presented.
3.20. Trade Receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business and reflects Company''s unconditional right to consideration (that is, payment is due only on the passage of time). Trade receivables are recognised initially at the transaction price as they do not contain signi- ficant financing components. The Company holds the trade receivables with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method, less loss allowance.
3.21. Recent accounting pronouncements:
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. During the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company
Note:
1. Promotion of education, health care including preventive health care & sanitation, improving the lives of physically disabled people, awareness programme and to help poor effected by Covid 19 & training program for sewing machine operator.
2. Shortfall amount (Rs 3.66 lakhs) in respect of previous year (FY 22-23) was deposited in fund specified under schedule vii of Section 135 of the Companies Act, 2013 within the stipulated time.
3. During the current Financial year the company has spent excess '' 1.40 Lacs which will be avaibale to set off in succeeding financial years
44 Certain Trade Receivable, Loans and Advances and Trade Payable are subject to confirmation. In the opinion of the management the value of Trade Receivables and Loans & Advances on realization in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.
The Company''s objective to manage its capital is to ensure continuity of business while at the same time provide reasonable returns to it''s various stakeholders but keep associated costs under control. In order to achieve this, requirement of capital is reviewed periodically with reference to operating and business plans that take into account capital expenditure and strategic investments. Sourcing of capital is done through judicious combination of equity / internal accruals and borrowings, both short term and long term. Net debt to Equity ratio is used to monitor capital.
The management has assessed that the fair values of cash and cash equivalents, trade receivables, trade payables, short term borrowings, and other current financial liabilities approximates their carrying amounts largely due to the short-term maturities of these instruments. The management has assessed that the fair value of floating rate instruments approximates their carrying value.
The following methods and assumptions were used to estimate the fair values:
a) The investments being listed, the fair value has been taken at the market rates of the same on the reporting dates. They are classified as Level 1 fair values in the fair value hierarchy.
b) The values of non current borrowings are based on the discounted cash flows using a current borrowing rate. They are classified as Level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including own credit risks, which was assessed as on the balance sheet date to be insignificant.
iii) Fair Value Hierarchy
The following are the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognized and measured at fair value and (b) measured at amortized cost and for which fair value are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into three levels of fair value measurement as prescribed under the Ind AS 113 "Fair Value Measurement". An explanation of each level follows underneath the tables:
Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels: Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities.
Level 2: Inputs other than quoted price including within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.
Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). If one or more of the significant inputs is not based on observable market data, the fair value is determined using generally accepted pricing models based on a discounted cash flow analysis, with the most significant input being the discount rate that reflects the credit risk of counterparty. This is the case with listed instruments where market is not liquid and for unlisted instruments.
The Company''s activities expose it to the following risks:
a) Credit risk
b) Liquidity risk
c) Market risk
a) Credit Risk
Credit risk is the risk that counter party will not meet its obligations under a financial instruments or customer contract leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities including deposits with banks and financial institutions, investments, foreign exchange transactions and other financial instruments.
Trade receivables : Customer credit risk is managed by the Company subject to the Company''s established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored and major customers are generally secured by obtaining security deposits/bank guarantee or other forms of credit insurance. The maximum exposure to credit risk at the reporting date is the carrying value of trade receivable disclosed in note 12.
b) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation. Typically the Company ensures that it has sufficient cash on demand to meet expected short term operational expenses. The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans/internal accruals.The table below provides details regarding the remaining contractual maturities of significant financial liabilities at the reporting date.
c) 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. Market risk comprises four type of risks: Commodity Price Risk, Foreign Exchange Risk, Interest Rate Risk and Other Price Risk.
1) Commodity Price Risk : The Company primarily imports raw jute, stores and spare items etc. It is exposed to commodity price risk arising out of movement in prices of such commodities. Such risks are monitored by tracking of the prices and are managed by entering into fixed price contracts, where considered necessary.
2) Foreign Currency Risk : The Company has Foreign Currency Exchange Risk on imports of input materials, Capital Equipment(s) in foreign currency for its business. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Certain transactions of the Company act as a natural hedge as a portion of both assets and liabilities are denominated in similar foreign currencies. For the remaining exposure to foreign exchange risk, the Company adopts a policy of selective hedging based on risk perception of the management using derivative, wherever required, to mitigate or eliminate the risk.
The following table demonstrates the sensitivity in the US Dollars (USD); Euro (EUR) and Sterling Pound (GBP) to the Indian Rupee with all other variables held constant.
4) Other Price Risk
The Company''s exposure to equity securities price risk arises from investments held by the Company and classified in the Balance Sheet at Fair Value through Profit and Loss. Having regard to the nature of securities, intrinsic worth, intent and long term nature of securities held by the Company, fluctuation in their prices are considered acceptable and do not warrant any management.
50 Loans or advances (repayable on demand or without specifying any terms or period of repayment) to specified persons.
During the year ended March 31,2024 the Company did not provide any Loans or advances which remains outstanding (repayable on demand or without specifying any terms or period of repayment) to specified persons (Nil as on March 31,2023).
51 Wilful Default
The Company is not declared any wilful default during the financial year to any of the Banks or financial Institutions .
52 As at March 31,2024, the register of charges of the Company as available in records of the Ministry of Corporate affairs (MCA) includes charges that were created / modified since the inception of the Company . There are certain charges which are historic in nature and it involves practical challenges in obtaining no-objection certificates ( NOCs) from the charge holders of such charges, despite repayment of the underlying loans. The Company is in the continuous process of filing the charge satisfaction e-form with MCA, within the timelines, as and when it receives NOCs from the respective charge holders.
53 Relationship with Struck off Companies
The Company did not have any transaction with companies struck off during the year ended March 31,2024 and also for the year ended March 31, 2023.
54 Disclosure in relation to undisclosed income
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 ended March 31,2024 and March 31,2023 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)
55 Details of Benami Property held
The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company, during the year ended March 31,2024 and March 31,2023 for holding any Benami property.
56 The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Company''s Act, read with Companies ( Restriction on number of layers ) Rules,2017 .
57 The Company has not filed any scheme of Arrangements in terms of sections 230 and 237 of the Companies Act, 2013 with any Competent authority.
58 Details of Crypto Currency or Virtual Currency
The Company has not traded or invested in Crypto currency or Virtual Currency during the year ended March 31,2024 and March 31, 2023.
59 Utilisation of Borrowed Fund & Share Premium
The Company has not received any fund 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.
The Company has not advanced or lent or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding 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.
60 Dividend
The Board of Directors have not recommended any dividend for the financial year ended 31st,March 2024 in their meeting held on 13th May, 2024 .
61 The company has prepared business estimates and funding plan in respect of its payment of current and non-current liabilities and based on the same the company is confident of meeting its liabilities.
62 Figures for the previous year have been re grouped / re arranged, wherever found necessary .
The Accompanying Notes are an integral part of the Financial Statements
As per our Report annexed. For and on behalf of the Board
For J K V S & C O Chartered Accountants Firm registration No. 318086E
UTSAV SARAF Ashish Chandrakant R.V. Kanoria
Agrawal
Partner Managing Director Non Executive Chairman
Membership No. 306932 DIN - 10198821 DIN - 00003792
5A , Nandalal Jew Road ,
Kolkata-700 026 R.K. Gupta Pratibha Jaiswal
The 13th, day of May, 2024 Chief Financial Officer Company Secretary
Mar 31, 2024
3.11. Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized if, as a result of a past event, the company has a present legal or constructive obligation that is reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Provisions are determined based on the best estimate required to settle the obligation at the balance sheet date.
Contingent liability is a possible obligation arising from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events but is not recognized because it is not possible that an outflow of resources embodying economic benefit will be required to settle the obligations or reliable estimate of the amount of the obligations cannot be made. The Company discloses the existence of contingent liabilities in Other Notes to Financial Statements.
Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits. Contingent Assets are not recognized though are disclosed, where an inflow of economic benefits is probable.
3.12. Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
3.13. Cash and Cash Equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks and cash in hand and highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
3.14. Employee Benefits
¦ Defined Contribution Plan: Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation other than the contribution payable to the Provident fund. Contribution payable to the provident fund is recognized as an expenditure in the statement of profit and loss.
¦ Defined Benefiit Plan: The Company''s obligation towards gratuity, a defined benefit employee retirement scheme is recognized on the basis of period end actuarial valuation determined under the Projected Unit Credit Method. Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included
in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.
¦ Compensated Absences: Short term compensated absences are provided for based on estimates. The Company treats accumulated leave expected to be carried forward beyond twelve months as long term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the unit projected credit method at the end of each financial year.
3.15.Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
a) Financial Assets
⢠Recognition and Initial Measurement:
All financial assets are initially recognised when the Company becomes a party to the contractual provisions of the instruments. A financial asset is initially measured at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
⢠Classification and Subsequent Measurement:
For purposes of subsequent measurement, financial assets are classified in four categories:
0 Measured at amortised cost;
0 Measured at fair value through other comprehensive income (FVTOCI);
0 Measured at fair value through profit or loss (FVTPL); and
0 Equity Instruments measured at fair value through other comprehensive income (FVTOCI).
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.
0 Measured at amortised cost (AC):
Financial assets are subsequently measured at amortised cost using the effective interest method, if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The Company may irrevocably elect at initial recognition to classify a debt instrument that meets the amortised cost criteria above as at FVTPL if that designation eliminates or significantly reduces an accounting mismatch had the financial asset been measured at amortised cost.
0 Measured at fair value through other comprehensive income (FVTOCI):
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding and selling financial assets.
0 Measured at fair value through profit and loss (FVTPL):
Financial assets are measured at fair value through profit or loss unless they are measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in statement of profit and loss.
0 Equity Instruments measured at FVTOCI:
All equity investments in scope of Ind AS - 109 are measured at fair value. Equity instruments which are, held for trading are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present subsequent changes in the fair value in other comprehensive income. The Company makes such election on an instrument-by-instrument basis. The classification is made on
initial recognition and is irrevocable. In case the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognised in the OCI. There is no reclassification of the amounts from OCI to the statement of profit and loss, even on sale of investment.
0 Investments in Subsidiaries
The Company has accounted for its investments in Subsidiaries at cost.
⢠Derecognition
The Company derecognises a financial asset on trade date only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
⢠Impairment of Financial Assets
The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS - 109 requires expected credit losses to be measured through a loss allowance. The Company recognizes 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 month 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.
b) Financial Liabilities
⢠Recognition and Initial Measurement:
Financial liabilities are classified at initial recognition, at fair value through profit or loss, as loans and borrowings, as payables or as derivatives, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
⢠Subsequent Measurement:
Financial liabilities are measured subsequently at amortised cost or FVTPL. A financial liability is classified as FVTPL if it is classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.
⢠Derecognition:
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
c) Offsetting Financial Instruments:
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the counterparty.
d) Derivative Financial Instruments:
The Company enters into derivative financial instruments viz. foreign exchange forward contracts, interest rate swaps and cross currency swaps to manage its exposure to interest rate and foreign exchange rate risks. The Company does not hold derivative financial instruments for speculative purposes.
Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in the statement of profit or loss immediately.
3.16.Measurement of Fair Values
A number of the accounting policies and disclosures of the Company require the measurement of fair values, for both financial and non-financial assets and liabilities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
¦ In the principal market for the asset or liability, or
¦ In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the input that is significant to the fair value measurement as a whole:
¦ Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
¦ Level 2 â Inputs other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
¦ Level 3 â Inputs which are unobservable inputs for the asset or liability.
External valuers are involved for valuation of significant assets and liabilities. Involvement of external valuers is decided by the management of the Company considering the requirements of Ind AS and selection criteria include market knowledge, reputation, independence and whether professional standards are maintained.
3.17.Impairment of Non-Financial Assets
e) The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value being higher of value in use and net selling price. Value in use is computed at net present value of cash flow expected over the balance useful lives of the assets. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or group of assets (Cash Generating Units - CGU).
f) An impairment loss is recognised as an expense in the statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognised in earlier accounting period is reversed if there has been an improvement in recoverable amount.
3.18.Cash dividend distribution to equity holders
The Company recognises a liability to make cash distributions to equity holders of the Company when the distribution is authorised and the distribution is no longer at the discretion of the Company. Final dividends on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company''s Board of Directors.
3.19.Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Board of Directors of the Company has been identified as being the chief operating decision maker. Refer note 39 for segment information presented.
3.20. Trade Receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business and reflects Company''s unconditional right to consideration (that is, payment is due only on the passage of time). Trade receivables are recognised initially at the transaction price as they do not contain signi- ficant financing components. The Company holds the trade receivables with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method, less loss allowance.
3.21. Recent accounting pronouncements:
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. During the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company
Note:
1. Promotion of education, health care including preventive health care & sanitation, improving the lives of physically disabled people, awareness programme and to help poor effected by Covid 19 & training program for sewing machine operator.
2. Shortfall amount (Rs 3.66 lakhs) in respect of previous year (FY 22-23) was deposited in fund specified under schedule vii of Section 135 of the Companies Act, 2013 within the stipulated time.
3. During the current Financial year the company has spent excess '' 1.40 Lacs which will be avaibale to set off in succeeding financial years
44 Certain Trade Receivable, Loans and Advances and Trade Payable are subject to confirmation. In the opinion of the management the value of Trade Receivables and Loans & Advances on realization in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.
The Company''s objective to manage its capital is to ensure continuity of business while at the same time provide reasonable returns to it''s various stakeholders but keep associated costs under control. In order to achieve this, requirement of capital is reviewed periodically with reference to operating and business plans that take into account capital expenditure and strategic investments. Sourcing of capital is done through judicious combination of equity / internal accruals and borrowings, both short term and long term. Net debt to Equity ratio is used to monitor capital.
The management has assessed that the fair values of cash and cash equivalents, trade receivables, trade payables, short term borrowings, and other current financial liabilities approximates their carrying amounts largely due to the short-term maturities of these instruments. The management has assessed that the fair value of floating rate instruments approximates their carrying value.
The following methods and assumptions were used to estimate the fair values:
a) The investments being listed, the fair value has been taken at the market rates of the same on the reporting dates. They are classified as Level 1 fair values in the fair value hierarchy.
b) The values of non current borrowings are based on the discounted cash flows using a current borrowing rate. They are classified as Level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including own credit risks, which was assessed as on the balance sheet date to be insignificant.
iii) Fair Value Hierarchy
The following are the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognized and measured at fair value and (b) measured at amortized cost and for which fair value are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into three levels of fair value measurement as prescribed under the Ind AS 113 "Fair Value Measurement". An explanation of each level follows underneath the tables:
Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels: Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities.
Level 2: Inputs other than quoted price including within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.
Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). If one or more of the significant inputs is not based on observable market data, the fair value is determined using generally accepted pricing models based on a discounted cash flow analysis, with the most significant input being the discount rate that reflects the credit risk of counterparty. This is the case with listed instruments where market is not liquid and for unlisted instruments.
The Company''s activities expose it to the following risks:
a) Credit risk
b) Liquidity risk
c) Market risk
a) Credit Risk
Credit risk is the risk that counter party will not meet its obligations under a financial instruments or customer contract leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities including deposits with banks and financial institutions, investments, foreign exchange transactions and other financial instruments.
Trade receivables : Customer credit risk is managed by the Company subject to the Company''s established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored and major customers are generally secured by obtaining security deposits/bank guarantee or other forms of credit insurance. The maximum exposure to credit risk at the reporting date is the carrying value of trade receivable disclosed in note 12.
b) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation. Typically the Company ensures that it has sufficient cash on demand to meet expected short term operational expenses. The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans/internal accruals.The table below provides details regarding the remaining contractual maturities of significant financial liabilities at the reporting date.
c) 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. Market risk comprises four type of risks: Commodity Price Risk, Foreign Exchange Risk, Interest Rate Risk and Other Price Risk.
1) Commodity Price Risk : The Company primarily imports raw jute, stores and spare items etc. It is exposed to commodity price risk arising out of movement in prices of such commodities. Such risks are monitored by tracking of the prices and are managed by entering into fixed price contracts, where considered necessary.
2) Foreign Currency Risk : The Company has Foreign Currency Exchange Risk on imports of input materials, Capital Equipment(s) in foreign currency for its business. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Certain transactions of the Company act as a natural hedge as a portion of both assets and liabilities are denominated in similar foreign currencies. For the remaining exposure to foreign exchange risk, the Company adopts a policy of selective hedging based on risk perception of the management using derivative, wherever required, to mitigate or eliminate the risk.
The following table demonstrates the sensitivity in the US Dollars (USD); Euro (EUR) and Sterling Pound (GBP) to the Indian Rupee with all other variables held constant.
4) Other Price Risk
The Company''s exposure to equity securities price risk arises from investments held by the Company and classified in the Balance Sheet at Fair Value through Profit and Loss. Having regard to the nature of securities, intrinsic worth, intent and long term nature of securities held by the Company, fluctuation in their prices are considered acceptable and do not warrant any management.
50 Loans or advances (repayable on demand or without specifying any terms or period of repayment) to specified persons.
During the year ended March 31,2024 the Company did not provide any Loans or advances which remains outstanding (repayable on demand or without specifying any terms or period of repayment) to specified persons (Nil as on March 31,2023).
51 Wilful Default
The Company is not declared any wilful default during the financial year to any of the Banks or financial Institutions .
52 As at March 31,2024, the register of charges of the Company as available in records of the Ministry of Corporate affairs (MCA) includes charges that were created / modified since the inception of the Company . There are certain charges which are historic in nature and it involves practical challenges in obtaining no-objection certificates ( NOCs) from the charge holders of such charges, despite repayment of the underlying loans. The Company is in the continuous process of filing the charge satisfaction e-form with MCA, within the timelines, as and when it receives NOCs from the respective charge holders.
53 Relationship with Struck off Companies
The Company did not have any transaction with companies struck off during the year ended March 31,2024 and also for the year ended March 31, 2023.
54 Disclosure in relation to undisclosed income
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 ended March 31,2024 and March 31,2023 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)
55 Details of Benami Property held
The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company, during the year ended March 31,2024 and March 31,2023 for holding any Benami property.
56 The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Company''s Act, read with Companies ( Restriction on number of layers ) Rules,2017 .
57 The Company has not filed any scheme of Arrangements in terms of sections 230 and 237 of the Companies Act, 2013 with any Competent authority.
58 Details of Crypto Currency or Virtual Currency
The Company has not traded or invested in Crypto currency or Virtual Currency during the year ended March 31,2024 and March 31, 2023.
59 Utilisation of Borrowed Fund & Share Premium
The Company has not received any fund 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.
The Company has not advanced or lent or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding 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.
60 Dividend
The Board of Directors have not recommended any dividend for the financial year ended 31st,March 2024 in their meeting held on 13th May, 2024 .
61 The company has prepared business estimates and funding plan in respect of its payment of current and non-current liabilities and based on the same the company is confident of meeting its liabilities.
62 Figures for the previous year have been re grouped / re arranged, wherever found necessary .
The Accompanying Notes are an integral part of the Financial Statements
As per our Report annexed. For and on behalf of the Board
For J K V S & C O Chartered Accountants Firm registration No. 318086E
UTSAV SARAF Ashish Chandrakant R.V. Kanoria
Agrawal
Partner Managing Director Non Executive Chairman
Membership No. 306932 DIN - 10198821 DIN - 00003792
5A , Nandalal Jew Road ,
Kolkata-700 026 R.K. Gupta Pratibha Jaiswal
The 13th, day of May, 2024 Chief Financial Officer Company Secretary
Mar 31, 2024
3.11. Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized if, as a result of a past event, the company has a present legal or constructive obligation that is reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Provisions are determined based on the best estimate required to settle the obligation at the balance sheet date.
Contingent liability is a possible obligation arising from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events but is not recognized because it is not possible that an outflow of resources embodying economic benefit will be required to settle the obligations or reliable estimate of the amount of the obligations cannot be made. The Company discloses the existence of contingent liabilities in Other Notes to Financial Statements.
Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits. Contingent Assets are not recognized though are disclosed, where an inflow of economic benefits is probable.
3.12. Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
3.13. Cash and Cash Equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks and cash in hand and highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
3.14. Employee Benefits
¦ Defined Contribution Plan: Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation other than the contribution payable to the Provident fund. Contribution payable to the provident fund is recognized as an expenditure in the statement of profit and loss.
¦ Defined Benefiit Plan: The Company''s obligation towards gratuity, a defined benefit employee retirement scheme is recognized on the basis of period end actuarial valuation determined under the Projected Unit Credit Method. Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included
in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.
¦ Compensated Absences: Short term compensated absences are provided for based on estimates. The Company treats accumulated leave expected to be carried forward beyond twelve months as long term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the unit projected credit method at the end of each financial year.
3.15.Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
a) Financial Assets
⢠Recognition and Initial Measurement:
All financial assets are initially recognised when the Company becomes a party to the contractual provisions of the instruments. A financial asset is initially measured at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
⢠Classification and Subsequent Measurement:
For purposes of subsequent measurement, financial assets are classified in four categories:
0 Measured at amortised cost;
0 Measured at fair value through other comprehensive income (FVTOCI);
0 Measured at fair value through profit or loss (FVTPL); and
0 Equity Instruments measured at fair value through other comprehensive income (FVTOCI).
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.
0 Measured at amortised cost (AC):
Financial assets are subsequently measured at amortised cost using the effective interest method, if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The Company may irrevocably elect at initial recognition to classify a debt instrument that meets the amortised cost criteria above as at FVTPL if that designation eliminates or significantly reduces an accounting mismatch had the financial asset been measured at amortised cost.
0 Measured at fair value through other comprehensive income (FVTOCI):
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding and selling financial assets.
0 Measured at fair value through profit and loss (FVTPL):
Financial assets are measured at fair value through profit or loss unless they are measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in statement of profit and loss.
0 Equity Instruments measured at FVTOCI:
All equity investments in scope of Ind AS - 109 are measured at fair value. Equity instruments which are, held for trading are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present subsequent changes in the fair value in other comprehensive income. The Company makes such election on an instrument-by-instrument basis. The classification is made on
initial recognition and is irrevocable. In case the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognised in the OCI. There is no reclassification of the amounts from OCI to the statement of profit and loss, even on sale of investment.
0 Investments in Subsidiaries
The Company has accounted for its investments in Subsidiaries at cost.
⢠Derecognition
The Company derecognises a financial asset on trade date only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
⢠Impairment of Financial Assets
The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS - 109 requires expected credit losses to be measured through a loss allowance. The Company recognizes 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 month 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.
b) Financial Liabilities
⢠Recognition and Initial Measurement:
Financial liabilities are classified at initial recognition, at fair value through profit or loss, as loans and borrowings, as payables or as derivatives, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
⢠Subsequent Measurement:
Financial liabilities are measured subsequently at amortised cost or FVTPL. A financial liability is classified as FVTPL if it is classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.
⢠Derecognition:
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
c) Offsetting Financial Instruments:
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the counterparty.
d) Derivative Financial Instruments:
The Company enters into derivative financial instruments viz. foreign exchange forward contracts, interest rate swaps and cross currency swaps to manage its exposure to interest rate and foreign exchange rate risks. The Company does not hold derivative financial instruments for speculative purposes.
Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in the statement of profit or loss immediately.
3.16.Measurement of Fair Values
A number of the accounting policies and disclosures of the Company require the measurement of fair values, for both financial and non-financial assets and liabilities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
¦ In the principal market for the asset or liability, or
¦ In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the input that is significant to the fair value measurement as a whole:
¦ Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
¦ Level 2 â Inputs other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
¦ Level 3 â Inputs which are unobservable inputs for the asset or liability.
External valuers are involved for valuation of significant assets and liabilities. Involvement of external valuers is decided by the management of the Company considering the requirements of Ind AS and selection criteria include market knowledge, reputation, independence and whether professional standards are maintained.
3.17.Impairment of Non-Financial Assets
e) The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value being higher of value in use and net selling price. Value in use is computed at net present value of cash flow expected over the balance useful lives of the assets. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or group of assets (Cash Generating Units - CGU).
f) An impairment loss is recognised as an expense in the statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognised in earlier accounting period is reversed if there has been an improvement in recoverable amount.
3.18.Cash dividend distribution to equity holders
The Company recognises a liability to make cash distributions to equity holders of the Company when the distribution is authorised and the distribution is no longer at the discretion of the Company. Final dividends on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company''s Board of Directors.
3.19.Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Board of Directors of the Company has been identified as being the chief operating decision maker. Refer note 39 for segment information presented.
3.20. Trade Receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business and reflects Company''s unconditional right to consideration (that is, payment is due only on the passage of time). Trade receivables are recognised initially at the transaction price as they do not contain signi- ficant financing components. The Company holds the trade receivables with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method, less loss allowance.
3.21. Recent accounting pronouncements:
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. During the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company
Note:
1. Promotion of education, health care including preventive health care & sanitation, improving the lives of physically disabled people, awareness programme and to help poor effected by Covid 19 & training program for sewing machine operator.
2. Shortfall amount (Rs 3.66 lakhs) in respect of previous year (FY 22-23) was deposited in fund specified under schedule vii of Section 135 of the Companies Act, 2013 within the stipulated time.
3. During the current Financial year the company has spent excess '' 1.40 Lacs which will be avaibale to set off in succeeding financial years
44 Certain Trade Receivable, Loans and Advances and Trade Payable are subject to confirmation. In the opinion of the management the value of Trade Receivables and Loans & Advances on realization in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.
The Company''s objective to manage its capital is to ensure continuity of business while at the same time provide reasonable returns to it''s various stakeholders but keep associated costs under control. In order to achieve this, requirement of capital is reviewed periodically with reference to operating and business plans that take into account capital expenditure and strategic investments. Sourcing of capital is done through judicious combination of equity / internal accruals and borrowings, both short term and long term. Net debt to Equity ratio is used to monitor capital.
The management has assessed that the fair values of cash and cash equivalents, trade receivables, trade payables, short term borrowings, and other current financial liabilities approximates their carrying amounts largely due to the short-term maturities of these instruments. The management has assessed that the fair value of floating rate instruments approximates their carrying value.
The following methods and assumptions were used to estimate the fair values:
a) The investments being listed, the fair value has been taken at the market rates of the same on the reporting dates. They are classified as Level 1 fair values in the fair value hierarchy.
b) The values of non current borrowings are based on the discounted cash flows using a current borrowing rate. They are classified as Level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including own credit risks, which was assessed as on the balance sheet date to be insignificant.
iii) Fair Value Hierarchy
The following are the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognized and measured at fair value and (b) measured at amortized cost and for which fair value are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into three levels of fair value measurement as prescribed under the Ind AS 113 "Fair Value Measurement". An explanation of each level follows underneath the tables:
Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels: Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities.
Level 2: Inputs other than quoted price including within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.
Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). If one or more of the significant inputs is not based on observable market data, the fair value is determined using generally accepted pricing models based on a discounted cash flow analysis, with the most significant input being the discount rate that reflects the credit risk of counterparty. This is the case with listed instruments where market is not liquid and for unlisted instruments.
The Company''s activities expose it to the following risks:
a) Credit risk
b) Liquidity risk
c) Market risk
a) Credit Risk
Credit risk is the risk that counter party will not meet its obligations under a financial instruments or customer contract leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities including deposits with banks and financial institutions, investments, foreign exchange transactions and other financial instruments.
Trade receivables : Customer credit risk is managed by the Company subject to the Company''s established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored and major customers are generally secured by obtaining security deposits/bank guarantee or other forms of credit insurance. The maximum exposure to credit risk at the reporting date is the carrying value of trade receivable disclosed in note 12.
b) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation. Typically the Company ensures that it has sufficient cash on demand to meet expected short term operational expenses. The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans/internal accruals.The table below provides details regarding the remaining contractual maturities of significant financial liabilities at the reporting date.
c) 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. Market risk comprises four type of risks: Commodity Price Risk, Foreign Exchange Risk, Interest Rate Risk and Other Price Risk.
1) Commodity Price Risk : The Company primarily imports raw jute, stores and spare items etc. It is exposed to commodity price risk arising out of movement in prices of such commodities. Such risks are monitored by tracking of the prices and are managed by entering into fixed price contracts, where considered necessary.
2) Foreign Currency Risk : The Company has Foreign Currency Exchange Risk on imports of input materials, Capital Equipment(s) in foreign currency for its business. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Certain transactions of the Company act as a natural hedge as a portion of both assets and liabilities are denominated in similar foreign currencies. For the remaining exposure to foreign exchange risk, the Company adopts a policy of selective hedging based on risk perception of the management using derivative, wherever required, to mitigate or eliminate the risk.
The following table demonstrates the sensitivity in the US Dollars (USD); Euro (EUR) and Sterling Pound (GBP) to the Indian Rupee with all other variables held constant.
4) Other Price Risk
The Company''s exposure to equity securities price risk arises from investments held by the Company and classified in the Balance Sheet at Fair Value through Profit and Loss. Having regard to the nature of securities, intrinsic worth, intent and long term nature of securities held by the Company, fluctuation in their prices are considered acceptable and do not warrant any management.
50 Loans or advances (repayable on demand or without specifying any terms or period of repayment) to specified persons.
During the year ended March 31,2024 the Company did not provide any Loans or advances which remains outstanding (repayable on demand or without specifying any terms or period of repayment) to specified persons (Nil as on March 31,2023).
51 Wilful Default
The Company is not declared any wilful default during the financial year to any of the Banks or financial Institutions .
52 As at March 31,2024, the register of charges of the Company as available in records of the Ministry of Corporate affairs (MCA) includes charges that were created / modified since the inception of the Company . There are certain charges which are historic in nature and it involves practical challenges in obtaining no-objection certificates ( NOCs) from the charge holders of such charges, despite repayment of the underlying loans. The Company is in the continuous process of filing the charge satisfaction e-form with MCA, within the timelines, as and when it receives NOCs from the respective charge holders.
53 Relationship with Struck off Companies
The Company did not have any transaction with companies struck off during the year ended March 31,2024 and also for the year ended March 31, 2023.
54 Disclosure in relation to undisclosed income
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 ended March 31,2024 and March 31,2023 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)
55 Details of Benami Property held
The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company, during the year ended March 31,2024 and March 31,2023 for holding any Benami property.
56 The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Company''s Act, read with Companies ( Restriction on number of layers ) Rules,2017 .
57 The Company has not filed any scheme of Arrangements in terms of sections 230 and 237 of the Companies Act, 2013 with any Competent authority.
58 Details of Crypto Currency or Virtual Currency
The Company has not traded or invested in Crypto currency or Virtual Currency during the year ended March 31,2024 and March 31, 2023.
59 Utilisation of Borrowed Fund & Share Premium
The Company has not received any fund 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.
The Company has not advanced or lent or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding 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.
60 Dividend
The Board of Directors have not recommended any dividend for the financial year ended 31st,March 2024 in their meeting held on 13th May, 2024 .
61 The company has prepared business estimates and funding plan in respect of its payment of current and non-current liabilities and based on the same the company is confident of meeting its liabilities.
62 Figures for the previous year have been re grouped / re arranged, wherever found necessary .
The Accompanying Notes are an integral part of the Financial Statements
As per our Report annexed. For and on behalf of the Board
For J K V S & C O Chartered Accountants Firm registration No. 318086E
UTSAV SARAF Ashish Chandrakant R.V. Kanoria
Agrawal
Partner Managing Director Non Executive Chairman
Membership No. 306932 DIN - 10198821 DIN - 00003792
5A , Nandalal Jew Road ,
Kolkata-700 026 R.K. Gupta Pratibha Jaiswal
The 13th, day of May, 2024 Chief Financial Officer Company Secretary
Mar 31, 2024
3.11. Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized if, as a result of a past event, the company has a present legal or constructive obligation that is reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Provisions are determined based on the best estimate required to settle the obligation at the balance sheet date.
Contingent liability is a possible obligation arising from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events but is not recognized because it is not possible that an outflow of resources embodying economic benefit will be required to settle the obligations or reliable estimate of the amount of the obligations cannot be made. The Company discloses the existence of contingent liabilities in Other Notes to Financial Statements.
Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits. Contingent Assets are not recognized though are disclosed, where an inflow of economic benefits is probable.
3.12. Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
3.13. Cash and Cash Equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks and cash in hand and highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
3.14. Employee Benefits
¦ Defined Contribution Plan: Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation other than the contribution payable to the Provident fund. Contribution payable to the provident fund is recognized as an expenditure in the statement of profit and loss.
¦ Defined Benefiit Plan: The Company''s obligation towards gratuity, a defined benefit employee retirement scheme is recognized on the basis of period end actuarial valuation determined under the Projected Unit Credit Method. Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included
in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.
¦ Compensated Absences: Short term compensated absences are provided for based on estimates. The Company treats accumulated leave expected to be carried forward beyond twelve months as long term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the unit projected credit method at the end of each financial year.
3.15.Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
a) Financial Assets
⢠Recognition and Initial Measurement:
All financial assets are initially recognised when the Company becomes a party to the contractual provisions of the instruments. A financial asset is initially measured at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
⢠Classification and Subsequent Measurement:
For purposes of subsequent measurement, financial assets are classified in four categories:
0 Measured at amortised cost;
0 Measured at fair value through other comprehensive income (FVTOCI);
0 Measured at fair value through profit or loss (FVTPL); and
0 Equity Instruments measured at fair value through other comprehensive income (FVTOCI).
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.
0 Measured at amortised cost (AC):
Financial assets are subsequently measured at amortised cost using the effective interest method, if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The Company may irrevocably elect at initial recognition to classify a debt instrument that meets the amortised cost criteria above as at FVTPL if that designation eliminates or significantly reduces an accounting mismatch had the financial asset been measured at amortised cost.
0 Measured at fair value through other comprehensive income (FVTOCI):
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding and selling financial assets.
0 Measured at fair value through profit and loss (FVTPL):
Financial assets are measured at fair value through profit or loss unless they are measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in statement of profit and loss.
0 Equity Instruments measured at FVTOCI:
All equity investments in scope of Ind AS - 109 are measured at fair value. Equity instruments which are, held for trading are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present subsequent changes in the fair value in other comprehensive income. The Company makes such election on an instrument-by-instrument basis. The classification is made on
initial recognition and is irrevocable. In case the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognised in the OCI. There is no reclassification of the amounts from OCI to the statement of profit and loss, even on sale of investment.
0 Investments in Subsidiaries
The Company has accounted for its investments in Subsidiaries at cost.
⢠Derecognition
The Company derecognises a financial asset on trade date only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
⢠Impairment of Financial Assets
The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS - 109 requires expected credit losses to be measured through a loss allowance. The Company recognizes 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 month 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.
b) Financial Liabilities
⢠Recognition and Initial Measurement:
Financial liabilities are classified at initial recognition, at fair value through profit or loss, as loans and borrowings, as payables or as derivatives, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
⢠Subsequent Measurement:
Financial liabilities are measured subsequently at amortised cost or FVTPL. A financial liability is classified as FVTPL if it is classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.
⢠Derecognition:
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
c) Offsetting Financial Instruments:
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the counterparty.
d) Derivative Financial Instruments:
The Company enters into derivative financial instruments viz. foreign exchange forward contracts, interest rate swaps and cross currency swaps to manage its exposure to interest rate and foreign exchange rate risks. The Company does not hold derivative financial instruments for speculative purposes.
Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in the statement of profit or loss immediately.
3.16.Measurement of Fair Values
A number of the accounting policies and disclosures of the Company require the measurement of fair values, for both financial and non-financial assets and liabilities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
¦ In the principal market for the asset or liability, or
¦ In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the input that is significant to the fair value measurement as a whole:
¦ Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
¦ Level 2 â Inputs other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
¦ Level 3 â Inputs which are unobservable inputs for the asset or liability.
External valuers are involved for valuation of significant assets and liabilities. Involvement of external valuers is decided by the management of the Company considering the requirements of Ind AS and selection criteria include market knowledge, reputation, independence and whether professional standards are maintained.
3.17.Impairment of Non-Financial Assets
e) The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value being higher of value in use and net selling price. Value in use is computed at net present value of cash flow expected over the balance useful lives of the assets. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or group of assets (Cash Generating Units - CGU).
f) An impairment loss is recognised as an expense in the statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognised in earlier accounting period is reversed if there has been an improvement in recoverable amount.
3.18.Cash dividend distribution to equity holders
The Company recognises a liability to make cash distributions to equity holders of the Company when the distribution is authorised and the distribution is no longer at the discretion of the Company. Final dividends on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company''s Board of Directors.
3.19.Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Board of Directors of the Company has been identified as being the chief operating decision maker. Refer note 39 for segment information presented.
3.20. Trade Receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business and reflects Company''s unconditional right to consideration (that is, payment is due only on the passage of time). Trade receivables are recognised initially at the transaction price as they do not contain signi- ficant financing components. The Company holds the trade receivables with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method, less loss allowance.
3.21. Recent accounting pronouncements:
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. During the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company
Note:
1. Promotion of education, health care including preventive health care & sanitation, improving the lives of physically disabled people, awareness programme and to help poor effected by Covid 19 & training program for sewing machine operator.
2. Shortfall amount (Rs 3.66 lakhs) in respect of previous year (FY 22-23) was deposited in fund specified under schedule vii of Section 135 of the Companies Act, 2013 within the stipulated time.
3. During the current Financial year the company has spent excess '' 1.40 Lacs which will be avaibale to set off in succeeding financial years
44 Certain Trade Receivable, Loans and Advances and Trade Payable are subject to confirmation. In the opinion of the management the value of Trade Receivables and Loans & Advances on realization in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.
The Company''s objective to manage its capital is to ensure continuity of business while at the same time provide reasonable returns to it''s various stakeholders but keep associated costs under control. In order to achieve this, requirement of capital is reviewed periodically with reference to operating and business plans that take into account capital expenditure and strategic investments. Sourcing of capital is done through judicious combination of equity / internal accruals and borrowings, both short term and long term. Net debt to Equity ratio is used to monitor capital.
The management has assessed that the fair values of cash and cash equivalents, trade receivables, trade payables, short term borrowings, and other current financial liabilities approximates their carrying amounts largely due to the short-term maturities of these instruments. The management has assessed that the fair value of floating rate instruments approximates their carrying value.
The following methods and assumptions were used to estimate the fair values:
a) The investments being listed, the fair value has been taken at the market rates of the same on the reporting dates. They are classified as Level 1 fair values in the fair value hierarchy.
b) The values of non current borrowings are based on the discounted cash flows using a current borrowing rate. They are classified as Level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including own credit risks, which was assessed as on the balance sheet date to be insignificant.
iii) Fair Value Hierarchy
The following are the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognized and measured at fair value and (b) measured at amortized cost and for which fair value are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into three levels of fair value measurement as prescribed under the Ind AS 113 "Fair Value Measurement". An explanation of each level follows underneath the tables:
Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels: Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities.
Level 2: Inputs other than quoted price including within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.
Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). If one or more of the significant inputs is not based on observable market data, the fair value is determined using generally accepted pricing models based on a discounted cash flow analysis, with the most significant input being the discount rate that reflects the credit risk of counterparty. This is the case with listed instruments where market is not liquid and for unlisted instruments.
The Company''s activities expose it to the following risks:
a) Credit risk
b) Liquidity risk
c) Market risk
a) Credit Risk
Credit risk is the risk that counter party will not meet its obligations under a financial instruments or customer contract leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities including deposits with banks and financial institutions, investments, foreign exchange transactions and other financial instruments.
Trade receivables : Customer credit risk is managed by the Company subject to the Company''s established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored and major customers are generally secured by obtaining security deposits/bank guarantee or other forms of credit insurance. The maximum exposure to credit risk at the reporting date is the carrying value of trade receivable disclosed in note 12.
b) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation. Typically the Company ensures that it has sufficient cash on demand to meet expected short term operational expenses. The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans/internal accruals.The table below provides details regarding the remaining contractual maturities of significant financial liabilities at the reporting date.
c) 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. Market risk comprises four type of risks: Commodity Price Risk, Foreign Exchange Risk, Interest Rate Risk and Other Price Risk.
1) Commodity Price Risk : The Company primarily imports raw jute, stores and spare items etc. It is exposed to commodity price risk arising out of movement in prices of such commodities. Such risks are monitored by tracking of the prices and are managed by entering into fixed price contracts, where considered necessary.
2) Foreign Currency Risk : The Company has Foreign Currency Exchange Risk on imports of input materials, Capital Equipment(s) in foreign currency for its business. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Certain transactions of the Company act as a natural hedge as a portion of both assets and liabilities are denominated in similar foreign currencies. For the remaining exposure to foreign exchange risk, the Company adopts a policy of selective hedging based on risk perception of the management using derivative, wherever required, to mitigate or eliminate the risk.
The following table demonstrates the sensitivity in the US Dollars (USD); Euro (EUR) and Sterling Pound (GBP) to the Indian Rupee with all other variables held constant.
4) Other Price Risk
The Company''s exposure to equity securities price risk arises from investments held by the Company and classified in the Balance Sheet at Fair Value through Profit and Loss. Having regard to the nature of securities, intrinsic worth, intent and long term nature of securities held by the Company, fluctuation in their prices are considered acceptable and do not warrant any management.
50 Loans or advances (repayable on demand or without specifying any terms or period of repayment) to specified persons.
During the year ended March 31,2024 the Company did not provide any Loans or advances which remains outstanding (repayable on demand or without specifying any terms or period of repayment) to specified persons (Nil as on March 31,2023).
51 Wilful Default
The Company is not declared any wilful default during the financial year to any of the Banks or financial Institutions .
52 As at March 31,2024, the register of charges of the Company as available in records of the Ministry of Corporate affairs (MCA) includes charges that were created / modified since the inception of the Company . There are certain charges which are historic in nature and it involves practical challenges in obtaining no-objection certificates ( NOCs) from the charge holders of such charges, despite repayment of the underlying loans. The Company is in the continuous process of filing the charge satisfaction e-form with MCA, within the timelines, as and when it receives NOCs from the respective charge holders.
53 Relationship with Struck off Companies
The Company did not have any transaction with companies struck off during the year ended March 31,2024 and also for the year ended March 31, 2023.
54 Disclosure in relation to undisclosed income
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 ended March 31,2024 and March 31,2023 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)
55 Details of Benami Property held
The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company, during the year ended March 31,2024 and March 31,2023 for holding any Benami property.
56 The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Company''s Act, read with Companies ( Restriction on number of layers ) Rules,2017 .
57 The Company has not filed any scheme of Arrangements in terms of sections 230 and 237 of the Companies Act, 2013 with any Competent authority.
58 Details of Crypto Currency or Virtual Currency
The Company has not traded or invested in Crypto currency or Virtual Currency during the year ended March 31,2024 and March 31, 2023.
59 Utilisation of Borrowed Fund & Share Premium
The Company has not received any fund 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.
The Company has not advanced or lent or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding 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.
60 Dividend
The Board of Directors have not recommended any dividend for the financial year ended 31st,March 2024 in their meeting held on 13th May, 2024 .
61 The company has prepared business estimates and funding plan in respect of its payment of current and non-current liabilities and based on the same the company is confident of meeting its liabilities.
62 Figures for the previous year have been re grouped / re arranged, wherever found necessary .
The Accompanying Notes are an integral part of the Financial Statements
As per our Report annexed. For and on behalf of the Board
For J K V S & C O Chartered Accountants Firm registration No. 318086E
UTSAV SARAF Ashish Chandrakant R.V. Kanoria
Agrawal
Partner Managing Director Non Executive Chairman
Membership No. 306932 DIN - 10198821 DIN - 00003792
5A , Nandalal Jew Road ,
Kolkata-700 026 R.K. Gupta Pratibha Jaiswal
The 13th, day of May, 2024 Chief Financial Officer Company Secretary
Mar 31, 2023
Q. Provisions
Provisions are recognised when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
Where the effect of time value of money is material, provisions are measured at present value using a pre-tax discount rate that refects current market assessment of the time value of money and risks specific to liability. The increase in the provision due to passage of time is recognised as interest expense.
R. Contingent Liabilities and Assets
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. The Company does not recognise a contingent liability but discloses its existence in the financial statements. Contingent assets are not recognised in the financial statements.
S. Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
T. Events after Reporting date
Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted within the financial statements. Otherwise, events after the Balance Sheet date of material size or nature are only disclosed.
U. Recent applicable Accounting pronouncements
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) Rules, 2015 by issuing the Companies (Indian Accounting Standards) Amendment Rules, 2023, applicable from April 1,2023, as below:
I Ind AS 1 - Presentation of Financial Statements: The amendments require companies to disclose their material accounting policies rather than their significant accounting policies. Accounting policy information, together with other information, is material when it can reasonably be expected to influence decisions of primary users of general purpose financial statements. The Company does not expect this amendment to have any significant impact in its standalone financial statements.
II Ind AS 12 - Income Taxes: The amendments clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations. The amendments narrowed the scope of the recognition exemption in paragraphs 15 and 24 of Ind AS 12 (recognition exemption) so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. The Company is evaluating the impact, if any, in its standalone financial statements.
III Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors: 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 standalone financial statements.
4: Significant Accounting Judgements, Estimates and Assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
( i) Judgements
In the process of applying the accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements:
(a) Equity Investments measured at FVTOCI
The company has exercised the option to measure investment in equity instruments, not held for trading at FVTOCI in accordance with Ind AS 109. It has exercised this irrevocable option for its class of quoted equity shares. The option renders the equity instruments elected to be measured at FVTOCI non recyclable to PL.
(b) Business Model for Investment of Debt Instruments
For the purpose of measuring investments in debt instruments in accordance with Ind AS 109, the company has evaluated and determined that the business model for investments in quoted debentures and bonds is to collect the contractual cash flows and sell the financial asset. Such financial assets have been accordingly classified and measured at FVTOCI.
For the purpose of measuring investments in debt instruments in accordance with Ind AS 109, the company has evaluated and determined that the business model for investments in unquoted debentures and bonds is only to collect the contractual cash flows. Such financial assets have been accordingly classified and measured at amortised cost.
(ii) Estimates and Assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are refected in the assumptions when they occur.
(a) Defined Benefit Plans
"The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial
valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.
(b) Fair Value measurement of Financial Instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
(c) Depreciation/Amortisation and Useful Lives of Property, Plant and Equipment/Intangible Assets
Property, plant and equipment / intangible assets are depreciated / amortised over their estimated useful lives, after taking into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives and residual values are based on the Company''s historical experience with similar assets and take into account anticipated technological changes. The depreciation / amortisation for future periods is revised if there are significant changes from previous estimates.
(d) Impairment of Financial Assets
The Company reviews its carrying value of investments carried at amortized cost annually, or more frequently when there is indication of impairment. If recoverable amount is less than its carrying amount, the impairment loss is accounted for.
(e) Impairment of Non-Financial Assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or Cash Generating Units (CGU''s) fair value less costs of disposal and its value in use. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
Determination of the recoverable amount involves management estimates on highly uncertain matters, such as commodity prices and their impact on markets and prices for upgraded products, development in demand, inflation, operating expenses and tax and legal systems. The Company uses internal business plans, quoted market prices and the Company''s best estimate of commodity prices, currency rates, discount rates and other relevant information. A detailed forecast is developed for a period of three to five years with projections thereafter. The Company does not include a general growth factor to volumes or cash flows for the purpose of impairment tests, however, cash flows are generally increased by expected inflation and market recovery towards previously observed volumes is considered.
(f) Taxes
The Company calculates income tax expense based on reported income. Deferred income tax expense is calculated based on the differences between the carrying value of assets and liabilities for financial reporting purposes and their respective tax basis that are considered temporary in nature. Valuation of deferred tax assets is dependent on management''s assessment of future recoverability of the deferred benefit. Expected recoverability may result from expected taxable income in the future, planned transactions or planned tax optimizing measures. Economic conditions may change and lead to a different conclusion regarding recoverability.
41: Financial Risk Management - Objectives and Policies
The company''s principal financial liabilities comprise borrowings, trade payables, other financial liabilities and financial guarantee contracts. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s financial assets include investments, trade receivables, cash and cash equivalents, other bank balances, loans and other financial assets.
The Company is exposed to market risk and credit risk. The Company has a Risk management policy and its management is supported by a Risk management committee that advises on risks and the appropriate risk governance framework for the Company. The Risk management committee provides assurance to the Company''s management that the Company''s risk activities are governed by appropriate policies and procedures and that risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.
( i) 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 risk: currency risk and other price risk, such as commodity price risk and equity price risk. Financial instruments affected by market risk include FVTOCI investments, FVTPL investments, trade payables, trade receivables, etc.
(a) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a foreign currency 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. The Company monitors the foreign exchange fluctuations on continuous basis and advises the management of any material adverse effect on the Company and for taking risk mitigation measures. The Company enters into forward exchange contracts against its foreign currency exposure relating to underlying liabilities and firm commitments. The Company does not enter into any derivative instruments for trading or speculative purposes.
Foreign currency sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in USD, Euro and JPY exchange rates, with all other variables held constant. The impact on the Company''s profit before tax is due to likely changes in the fair value of monetary assets and liabilities. The Company''s exposure to foreign currency changes for all other currencies is not material.
50 : All the Registration of Charges or Satisfaction of Charges with the Registrar of Companies are completed within the statutory period.
51: The company has complied with the number of layers prescribed under clause (87) of section 2 of the Companies Act read with Companies (Restriction on number of Layers) Rules, 2017.
52: 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 (i) 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 (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
53: The Company has not received any fund 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 (i) 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 (ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
54: The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year ended 31st March, 2023 and 31st March, 2022 in the tax assessments under the Income Tax Act, 1961.
55 : The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
56 : The company has not been declared wilful defaulter by any bank or financial Institution or other lender.
57 : Figures for the previous year have been regrouped/rearranged, wherever found necessary.
Signature to Note 1 to 57
Asperourreportofevendateannexed For and on behalf of the Board
For SINGHI & CO.
Chartered Accountants
Firm Registration No. 302049E SIDHARTH K. BIRLA R. V. KANORIA
Director Managing Director
Partner (DIN:00004213) (DIN:00003792)
Membership No. 053518
H N. K. NOLKHA NEHA SARAF
Place: Kolkata Group Chief Financial Officer Company Secretary
Date: 26th May, 2023 (ACS: 27024)
Mar 31, 2018
1 CORPORATE AND GENERAL INFORMATION
Ludlow Jute & Specialities Limited , which has remained in the forefront of product innovation and technological breakthroughs was built by Ludlow Corp. of the U.S.A on the bank of the river Hooghly at Chengail in Howrah district of West Bengal. The management has been making adequate investment in modernization and installation of specialized equipment, but it also has heralded the introduction of a number of value added products as the blending of jute with other natural/manmade fibres. Ludlow has developed products like Jute Mesh/Scrim for Roofing Felt, Agriculture, Horticulture and Webbing for Furniture Industry, Rubber Bonded jute cloth for Landscaping, special fabrics for Furnishing and Apparel, Soil Saver known as Geo-textile and Carpet-backing Cloth.
2 BASIS OF ACCOUNTING
2.1 Statement of Compliance
The financial statement are prepared in accordance with Indian Accounting Standards (âInd- ASâ) as prescribed under Section 133 of the Companies Act, 2013 (âthe Actâ), as notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended by Companies (Indian Accounting Standard ) Amendment Rules, 2016 and other accounting principles generally accepted in India.
The financial Statements for all periods up to and including the year ended 31st March 2017, were prepared in accordance with the accounting standards notified under Section 133 of the Companies Act 2013, read with Rule 7 of The Companies (Accounts) Rules, 2014,the Companies Act, 2013 and in accordance with the Generally Accounting Principal in India.
These financial statements for the year ended 31st March 2018 are the first the Company has prepared in accordance with Indian Accounting Standards (âInd-ASâ). Further, in accordance with the Rules, the Company has restated its Balance Sheet as at 1st April 2016 also as per Ind-AS. For preparation of opening balance sheet under Ind-AS as at 1st April 2016, the Company has availed exemptions and first time adoption policies in accordance with Ind-AS 101 âFirst-time Adoption of Indian Accounting Standardsâ, the details of which have been explained thereof in the âNotes to Reconciliation of Balance Sheet & Equity as at 1st April 2016 and 31st March, 2017 and Profit or Loss for the year ended 31st March, 2017.â (Refer note 52(iv)).
2.2 Basis of Measurement
The financial statements have been prepared on historical cost convention on accrual basis except for following assets and liabilities which have been measured at fair value or revalued amount:
(i) Financial assets and liabilities (including derivative instruments) that is measured at Fair value/ Amortised cost;
(ii) Plan assets under defined benefit plans - Measured at fair value.
(iii) Property Plant and Equipment being Land-Measured at Fair Value.
2.3 Functional and Presentation Currency
The Financial Statements have been presented in Indian Rupees (INR), which is also the Companyâs functional currency. All financial information presented in INR has been rounded off to the nearest lakhs as per the requirements of Schedule III, unless otherwise stated.
2.4 Use of Estimates and Judgements
The preparation of financial statements require judgements, estimates and assumptions to be made that affect the reported amount of assets and liabilities including contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period prospectively in which the results are known/ materialized.
2.5 Operating Cycle
All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013 and Ind AS 1 âPresentation of Financial Statementsâ. The Company has ascertained its operating cycle as twelve months for the purpose of current and non-current classification of assets and liabilities.
b) Terms /Rights attached to Shareholders
The Company has only one class of issued shares i.e. Equity Shares having par value of Rs.10 per share. Each holder of Equity Shares is entitled to one vote per share and equal right for dividend. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after payment of all preferential amounts, in proportion to their shareholding.
c) R.V. Investment & Dealers Limited is the Holding Company of this Company.
d) Details of shareholders holding more than 5% shares in the Company :
e) No Equity Shares have been reserved for issue under options and contracts/commitments for the sale of shares/disinvestment as at the Balance Sheet date.
f) The company has neither alloted any equity shares for consideration other than cash nor has issued any bonus shares nor has bought back any shares during the period of five years preceeding the date at which Balance Sheet is prepared.
g) No securities which are convertible into Equity/Preference shares have been issued by the Company during the year.
h) No calls are unpaid by any directors or officers of the company during the year.
Nature & Purpose of Reserves
Securities Premium Reserve : The Reserve represents the premium on issue of shares and can be utilized in accordance with the provisions of the Companies Act, 2013.
General Reserve : The Reserve is created by an appropriation from one component of equity (generally retained earnings) to another, not being an item of Other Comprehensive Income. The same can be utilised by the company in accordance with the provisions of the Companies Act, 2013.
Retained Earnings : This reserve represents the cumulative profits of the Company and effects of remeasurement of defined benefit obligations. This reserve can be utilised in accordance with the provisions of the Companies Act 2013.
Item of other Comprehensive Income (Re-Measurement of defined benefit plans) : Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the Balance Sheet with a charge or credit recognised in Other Comprehensive Income (OCI) in the period in which they occur. Re-measurement recognised in OCI is reflected immediately in retained earnings and will not be reclassified to Statement of Profit and Loss.
a) Rupee Term Loan from Bank @ 11.70% interest p.a. is repayable in 10 semi-annual instalment for Rs.146.00 between March 2012 to September 2016, 10 semi - annual instalments for Rs.150.00 between September 2013 to March 2018, in 9 semi-annual instalments for Rs. 405.41 from April 2015 to April 2019,and 9 semi - annual instalment for Rs.148.21 between January 2013 to January 2017. The primary security against such loan is hypothecation of machineries purchased under the Term Loan.
b) Term loan of Rs.84.64 @ 11.70% interest p.a., is secured by hypothecation of machineries and 1st. pari passu charges on entire assets both present and future and repayable in 9 half yearly instalment of Rs.9.40 each starting after 6 months of disbursement i.e 25.11.2015.
c) Term loan of Rs. 155.00 @ 8.90% interest p.a., is secured as exclusive charge over all the assets of the Company funded by the specified bank and subservient charge over all the current Assets and Movable Fixed Assets of the Company (both present & future) and repayable in 20 quarterly instalments of Rs.7.75 each starting after 1 year from date of disbursement i.e 16.05.2018.
d) Term loan of Rs. 850.12 @ 8.95% interest p.a., is secured as exclusive charge over all the assets of the Company funded by the specified bank and subservient charge over all the current Assets and Movable Fixed Assets of the Company (both present & future) and repayable in 20 quarterly instalments of Rs. 42.51 each starting after 2 years from the date of disbursement i.e 03.10.2019.
Working Capital Borrowings of Rs.3,083 (P.Y. - Rs.2,226) are unsecured while the balance Working Capital Borrowings are secured. Working Capital Borrowings in Rupee is secured against hypothecation of entire stocks and trade receivable together with bankâs pari passu 1st charge on entire assets both present and future of the Company.
3. EMPLOYEE BENEFITS
In accordance with the revised Ind AS 19 on Employee Benefits, the requisite disclosure are as follows :
a) Defined Contribution Plans : The amount recognized as expense for the Defined Contribution Plans are as under:-
b) Defined Benefit Plans : Benefits are of the following types :
i) Gratuity Plan
Every employee who has completed continuous five years or more of service is entitled to gratuity on terms not less favourable than the provisions of the Payment of Gratuity Act, 1972.
ii) Provident Fund
Provident Fund (other than government administered) as per the provisions of Employees Provident Funds and Miscellaneous Provisions Act, 1952.
The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for Gratuity Plan:
4. A quantitative sensitivity analysis for significant assumption as at 31 March 2018 are as shown below :
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period, while holding all other assumptions constant, The results of sensitivity analysis is given below :
Please note that the sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Funding arrangements and Funding Policy :
The Company has purchased an insurance policy to provide for payment of gratuity to the employees every year, the insurance company carries out a funding valuation based on the latest employee data provided by the Company. Any deficit in the assets arising as a result of such valuation is funded by the Company.
5. In respect of provident funds for eligible employees maintained by a trust, in the nature of defined benefits plan, shortfall towards âinterest rate guarantee liabilityâ amounting to Rs.35.58 lacs upto 31.03.18, as per actuarial valuation in respect of contribution towards such funds has been provided and included as expenses in âContribution to PF & Other Fundâ under the heading âEmployees Benefit Expensesâ.
6. Segment Reporting
For managementâs purpose, the Companyâs business activities fall within two business segment viz. Jute Goods & Power. The disclosure requirements as per Ind AS 108 âOperating Segmentsâ is given below :
(iii) Other Disclosures
a) The Companyâs operations predominantly relate to Jute and other product is Power. Accordingly, these business segments comprise the primary basis of segmental information set out in these financial statements.
b) Inter-segment transfers are based on prevailing market prices.
c) The accounting policies adopted for segment reporting are in line with the accounting policy of the Company.
d) The Operating Segments have been reported in a manner consistent with the internal reporting and evaluation by Chief Operating Decision Maker (CODM).
7. Related Party Transactions
As defined in Indian Accounting Standard 24, âRelated Party Disclosuresâ are given below :-
8. Corporate Social Reporting
1) In accordance with the Guidance Note on Accounting for Expenditure on Corporate Social Responsibility Activities, the requisite disclosure are as follows :
Expenditure incurred on CSR activities :
9. There being uncertainties in realization from Insurance claims, the same are accounted for on settlement/realization.
10. Certain Trade Receivable, Loans and Advances and Trade Payable are subject to confirmation In the opinion of the management the value of Trade Receivables and Loans & Advances on realization in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.
11. The Company has not received any memorandum as required to be filed by the suppliers with the notified authority under Micro, Small and Medium enterprises development Act, 2006 for claiming their status as micro, small or medium enterprises. Consequently the amount paid/payable to such parties during the year is Rs.Nil. (Previous Year Rs.Nil).
12. Capital Management
The Company objective to manage its capital is to ensure continuity of business while at the same time provide reasonable returns to its various stakeholders but keep associated costs under control. In order to achieve this, requirement of capital is reviewed periodically with reference to operating and business plans that take into account capital expenditure and strategic Investments. Sourcing of capital is done through judicious combination of equity / internal accruals and borrowings, both short term and long term. Net debt to Equity ratio is used to monitor capital.
The management has assessed that the fair values of cash and cash equivalents, trade receivables, trade payables, short term borrowings, and other current financial liabilities approximates their carrying amounts largely due to the shortterm maturities of these instruments. The management has assessed that the fair value of floating rate instruments approximates their carrying value.
The following methods and assumptions were used to estimate the fair values :
(a) The investments being listed, the fair value has been taken at the market rates of the same on the reporting dates. They are classified as Level 1 fair values in the fair value hierarchy.
(b) The values of non current borrowings are based on the discounted cash flows using a current borrowing rate. They are classified as Level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including own credit risks, which was assessed as on the balance sheet date to be insignificant.
iii) Fair Value Hierarchy
The following are the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognized and measured at fair value and (b) measured at amortised cost and for which fair value are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels of fair value measurement as prescribed under the Ins AS 113 âFair Value Managementâ. An explanation of each level follows underneath the tables :
Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels
Level 1 : Quoted prices (unadjusted) in active market for identical assets or liabilities.
Level 2 : Inputs other than quoted price including within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.
Level 3 : Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). If one or more of the significant inputs is not based on observable market data, the fair value is determined using generally accepted pricing models based on a discounted cash flow analysis, with the most significant input being the discount rate that reflects the credit risk of counterparty. This is the case with listed instruments where market is not liquid and for unlisted instruments.
During the year ended 31st March 2018 and 31st March 2017, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfer into and out of Level 3 fair value measurements.
13. Financial risk management objectives and policies
The Companyâs activities expose it to the following risks :
a) Credit risk
b) Liquidity risk
c) Market risk
a) Credit Risk
Credit risk is the risk that counter party will not meet its obligations under a financial instruments or customer contract leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities including deposits with banks and financial institutions, investments, foreign exchange transactions and other financial instruments.
Trade receivables : Customer credit risk is managed by the Company subject to the Companyâs established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored and major customers are generally secured by obtaining security deposits/bank guarantee or other forms of credit insurance. The maximum exposure to credit risk at the reporting date is the carrying value of trade receivable disclosed in note 12.
b) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation. Typically the Company ensures that it has sufficient cash on demand to meet expected short term operational expenses. The Companyâs objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans/internal accruals. The table below provides details regarding the remaining contractual maturities of significant financial liabilities at the reporting date.
c) 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. Market risk comprises four type of risks: Commodity Price Risk, Foreign Exchange Risk, Interest Rate Risk and Other Price Risk.
1) Commodity Price Risk : The Company primarily imports raw jute , stores and spare items etc. It is exposed to commodity price risk arising out of movement in prices of such commodities. Such risks are monitored by tracking of the prices and are managed by entering into fixed price contracts, where considered necessary.
2) Foreign Currency Risk : The Company has Foreign Currency Exchange Risk on imports of input materials, Capital Equipment(s) in foreign currency for its business. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Certain transactions of the Company act as a natural hedge as a portion of both assets and liabilities are denominated in similar foreign currencies. For the remaining exposure to foreign exchange risk, the Company adopts a policy of selective hedging based on risk perception of the management using derivative, wherever required, to mitigate or eliminate the risk.
The following table demonstrates the sensitivity in the US Dollars (USD); Euro (EUR) and Sterling Pound (GBP) to the Indian Rupee with all other variables held constant.
i) Exposure to currency risk
The Companyâs exposure to foreign currency risk at the end of the reporting period are as follows :
3) Interest rate risk : The fair value or future cash flows of a financial instrument fluctuates due to changes in market interest rates. The Companyâs exposure to the interest rate risk relates primarily to the Companyâs long-term debt obligations with floating interest rates.
The Company is exposed to risk due to interest rate fluctuation on long term borrowings. Such borrowings are based on fixed as well as floating interest rate. Interest rate risk is determined by current market interest rates, projected debt servicing capability and view on future interest rate. Such interest rate risk is actively evaluated and is managed through portfolio diversification and exercise of prepayment/refinancing options where considered necessary.
4) Other Price Risk : The Companyâs exposure to equity securities price risk arises from investments held by the Company and classified in the Balance Sheet at Fair Value through Profit and Loss. Having regard to the nature of securities, intrinsic worth, intent and long term nature of securities held by the Company, fluctuation in their prices are considered acceptable and do not warrant any management.
14. The Board of Directors of the Company has recommended to pay a final dividend @ 20% (Rs.2.00 per share on Face Value of Rs.10/) amounting to Rs.215.46 lakhs (which will attract liability towards Dividend Distribution Tax amounting to Rs.44.29 lakhs) subject to the approval of shareholders in the Annual General Meeting.
15. Transition to Ind AS
These financial statements, for the year ended 31 March 2018, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2017, the Company prepared its financial statements in accordance with generally accepted accounting principles in India (Previous GAAP).
Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on or after 31 March 2018, together with the comparative period data as at and for the year ended 31st March 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Companyâs opening statement of financial position was prepared as at 1st April 2016, the Companyâs date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Previous GAAP financial statements as at 1st April 2016 and the financial statements as at and for the year ended 31st March 2017.
Exceptions and Exemptions Applied
Ind AS 101 âFirst-time adoption of Indian Accounting Standardsâ (hereinafter referred to as Ind AS 101) allows first time adopters certain mandatory exceptions and optional exemptions from the retrospective application of certain Ind AS, effective for 1st April, 2016 opening balance sheet. In preparing these Standalone financial statements, the Company has applied the below mentioned mandatory exceptions and optional exemptions.
I. Applicable Mandatory Exceptions
(i) Estimates
As per para 14 of Ind AS 101, an entityâs estimates in accordance with Ind AS at the date of transition to IND AS at the end of the comparative period presented in the entityâs first Ind AS financial statements, as the case may be, should be consistent with estimates made for the same date in accordance with the previous GAAP unless there is objective evidence that those estimates were in error. However, the estimates should be adjusted to reflect any differences in accounting policies. As per para 16 of the standard, where application of Ind AS requires an entity to make certain estimates that were not required under previous GAAP, those estimates should be made to reflect conditions that existed at the date of transition or at the end of the comparative period. The Companyâs estimates under Ind AS are consistent with the above requirement. Key estimates considered in preparation of the financial statement that were not required under the previous GAAP are listed below:
- Fair Valuation of financial instruments carried at FVTPL
- Determination of the discounted value for financial instruments carried at amortized cost.
(ii) Classification and measurement of financial assets
Para B8 - B8C of Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortized cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable. Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of the financial assets accounted at amortized cost has been done retrospectively.
II. Optional Exemptions Availed
(i) Property Plant and Equipment and Intangible Assets
The company has elected to measure items of Property Plant & Equipment and Intangible Assets at its carrying value at the Transition Date except for land which is measured at fair value as deemed cost.
(ii) Determining whether an arrangement contains a Lease
Para D9-D9AA of Ind AS 101 includes an optional exemption that permits an entity to apply the relevant requirements in Appendix C of Ind AS 17 âLeasesâ for determining whether an arrangement existing at the date of transition contains a lease by considering the facts and circumstances existing at the date of transition (rather than at the inception of the arrangement). The Company has applied the above transitional provision and has assessed all the arrangements at the date of transition.
(iii) Investments in Subsidiaries
As permitted by para D14 & D15 of Ind AS 101, the Company has elected to measure the investments in equity shares of subsidiaries at Deemed Cost calculated at the previous GAAP carrying amount as on the date of transition, as the company has elected to measure such investments at Cost under Ind AS 27 âSeparate Financial Statementsâ.
15. (iv) Notes to the reconciliation of Balance Sheet & Equity as at April 1, 2016 and March 31, 2017 and Profit or Loss for the year ended March 31, 2017.
Explanations to the material adjustments made in the process of Ind AS transition from previous GAAP
I) Fair Valuation as deemed Cost for Property Plant & Equipment
The Company have considered fair value for one item property i.e. Land measuring 149.48 acres situated in Chengail, Howrah, West Bengal in India with favourable impact of Rs.11095.66 lakhs in accordance with stipulations of Ind AS 101 with the resultant impact of accumulation in reserves.
II) Long term borrowings
Under Indian GAAP, the Company accounted for long term borrowings measured at transaction value. Under IND AS, the Company has recognised the long term borrowings at amortised cost using effective interest rate (EIR).
III) Fair Valuation of Financial Instruments
Under the Indian GAAP, investments in equity instruments and mutual funds were classified as long-term investments or current investments based on the intended holding period and realisability. Long-term investments were carried at cost less provision for other than temporary decline in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments(other than equity instruments designated at FVOCI) have been recognised in retained earnings as at the date of transition and subsequently in the profit or loss for the year ended 31st March 2017.
IV) Proposed Dividend & Dividend Distribution Tax
Under Indian GAAP till F.Y. 2015-16 proposed dividends including Dividend Distribution Taxes (DDT) were recognized as a liability in the period to which they relate, irrespective of when they were declared. Under Ind AS, a 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. Since declaration of dividend occurs after period end in the Company, the Provision for proposed dividend has been derecognized against retained earnings on 1st April 2016 and Liabilities recognized in the year ended 31st March 2017.
V) Re-classifications
a) Assets / liabilities which do not meet the definition of financial asset / financial liability have been reclassified to other asset / liability.
b) Remeasurement gain/loss on long term employee defined benefit plans are re-classified from statement of profit and loss to OCI.
c) Jute Manufacturing Cess on sales was earlier netted off with Sales, now have been presented separately.
VI) Leases
a) Under Ind AS, where the payments to the lessor are structured to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases, straight lining of lease is not required. The same was required under AS-19. The Company has initially recognised security deposit paid to the lessor at fair value and subsequently at amortised cost as per Ind AS 109.
VII) Deferred Revenue
Under Indian GAAP, grants received from government agencies against specific fixed assets (Property, Plant and Equipment) are adjusted to the cost of the assets. Under Ind AS the same has been presented as deferred revenue being amortised in the statement of profit & loss on a systematic basis.
VIII) Stores and Spares
The Company accounted for certain spares which are capable of being used for more than one accounting period or which can be used specifically only in combination with another fixed assets as part of inventories under IGAAP. Under Ind AS, any asset which satisfies the criteria of Ind AS 16 mentioned above needs to be accounted for as a part of Property, plant and equipment. Accordingly, the Company has done an assessment of the relevant inventory and reclassified such items from inventory to Property, plant and equipment.
IX) Forward Contract
Under Ind AS mark to market gain/loss on restatement of forward contract as at the reporting date has been recognized in the statement of profit & loss.
X) Bill Discounting
Under IGAAP, trade receivables derecognised by way of bills of exchange were shown as contingent liability since there was a recourse clause. Under Ind AS, the trade receivable have been restated with corresponding recognition of short term borrowings of Rs.246.40 as on 31st March, 2017 and Rs.595.68 as on 1st April, 2016.
XI) Deferred tax
Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP.
In addition, the various transitional adjustments lead to temporary differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or a separate component of equity.
16. Previous GAAP figures have been reclassified/regrouped to conform the presentation requirements under Ind AS and the requirements laid down in division - II of the Schedule - III of the Companies Act, 2013.
Mar 31, 2018
1: Consequent to the introduction of Goods and Service Tax (GST) with effect from 1st July 2017, Central Excise, Value Added Tax (VAT) etc. have been subsumed into GST. In accordance with Indian Accounting Standard - 18 on Revenue and Schedule III of the Companies Act, 2013, unlike Excise duties, levies like GST, VAT etc. are not part of Revenue. Accordingly, the figures of Revenue from Operation and Segment Revenue of Alco Chemicals for the Year ended 31st March, 2018 are not comparable with the previous year.
2 : Disclosures as required under Indian Accounting Standard 19 on "Employee Benefits" A. Defined Benefit Plan
The Company has unfunded scheme for payment of gratuity to all eligible employees calculated at specified number of days of last drawn salary depending upon tenure of service for each year of completed service subject to minimum five years of service payable at the time of separation upon superannuation or on exit otherwise.
The following tables summaries the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the Post - retirement benefit plans .
3. Sensitivity Analysis
The Sensitivity Analysis below has been determined based on reasonably possible change of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant. These sensitivities show the hypothetical impact of a change in each of the listed assumptions in isolation. While each of these sensitivities holds all other assumptions constant, in practice such assumptions rarely change in isolation. For presenting the sensitivities, the present value of the Defined Benefit Obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the Defined Benefit Obligation presented above. There was no change in the methods and assumptions used in the preparation of the Sensitivity Analysis from previous year.
4. In respect of Provident Fund in the nature of defined benefit plans contribution amounting to Rs. 2.92 million (Previous year Rs. 2.55 million) and the accrued past service liability of Rs. Nil (Previous year Rs. Nil) as valued by the actuary using Projected Unit Credit Method is recognized as expenses and included in "Employee Benefits Expense".
5. Description of Risk Exposures
Valuations are performed on certain basic set of pre-determined assumptions and other regulatory framework which may vary over time. Thus, the Company is exposed to various risks in providing the above gratuity benefit which are as follows:
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.
Salary Escalation Risk: The present value of the defined benefit plan is calculated with the 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 assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.
Regulatory Risk: Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts.
B. Defined Contribution Plan
The Company contributes 12% of salary for all eligible employees towards Provident Fund managed either by approved trust or by the Central Government and debit the same to statement of Profit and Loss. The provident fund set up by the employers, require interest shortfall to be met by the employers. The fund set up by the Company does not have existing deficit of interest shortfall. The amount debited to Statement of Profit and Loss towards Provident Fund contribution during the year was Rs. 10.19 million (previous year Rs. 8.98 million).
6 : Financial Risk Management - Objectives and Policies
The companyâs principal financial liabilities comprise borrowings, trade payables, other financial liabilities and financial guarantee contracts. The main purpose of these financial liabilities is to finance the Companyâs operations. The Companyâs financial assets include investments, trade receivables, cash and cash equivalents, other bank balances and loans.
The Company is exposed to market risk and credit risk. The Company has a Risk management policy and its management is supported by a Risk management committee that advises on risks and the appropriate risk governance framework for the Company. The Risk management committee provides assurance to the Companyâs management that the Companyâs risk activities are governed by appropriate policies and procedures and that risks are identified, measured and managed in accordance with the Companyâs policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.
(i) 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 risk: currency risk and other price risk, such as commodity price risk and equity price risk. Financial instruments affected by market risk include FVTOCI investments, FVTPL investments, trade payables, trade receivables, etc.
(a) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a foreign currency exposure will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities. The Company monitors the foreign exchange fluctuations on continuous basis and advises the management of any material adverse effect on the Company and for taking risk mitigation measures. The Company enters into forward exchange contracts against its foreign currency exposure relating to underlying liabilities and firm commitments. The Company does not enter into any derivative instruments for trading or speculative purposes.
Foreign currency sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in USD, Euro and SGD exchange rates, with all other variables held constant. The impact on the Companyâs profit before tax is due to changes in the fair value of monetary assets and liabilities. The Companyâs exposure to foreign currency changes for all other currencies is not material.
(b) Commodity price risks
The company is affected by the price volatility of methanol, one of its major raw material. Its operating activities require a continuous supply of methanol. The Company monitors price and demand/supply situation on continuous basis and advises the management of any material adverse effect on the Company and for taking risk mitigation measures.
(c) Equity price risks
The Companyâs listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments/mutual funds. Reports on the investment portfolio are submitted to the Companyâs management on a regular basis.
Equity price sensitivity
The following table shows the effect of price changes in quoted and unquoted equity shares (other than that in subsidiaries), quoted preference shares, quoted and unquoted equity mutual funds, unquoted alternative investment funds and unquoted equity funds.
(ii) Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables).
Trade receivables
An impairment analysis is performed at each reporting date on an individual basis for all the customers. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based on credit losses historical data. The maximum exposure to credit risk at the reporting date is the carrying value of trade receivables disclosed as the Company does not hold collateral as security. The Company has evaluated the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries.
(iii) Liquidity risk
Liquidity risk is the risk that Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.
The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity management requirements. The Company''s exposure to liquidity risk arises primarily from mismatches of the maturities of financial asset and liabilities. The Company manages the liquidity risk by maintaining adequate funds in cash and cash equivalents. The Company also has adequate credit facilities agreed with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost-effective manner.
The table below analysis financial liabilities of the Company into relevant maturity groupings based on the remaining period from the reporting date to the contractual maturity date. The amount disclosed in the table are the contractual undiscounted cash flow.
7 : Capital Management
The Company''s objective when managing capital (defined as net debt and equity) are to safeguard the Company''s ability to continue as a going concern in order to provide returns to shareholders and benefit for other stakeholders, while protecting and strengthening the balance sheet through the appropriate balance of debt and equity funding. The Company manages its capital structure and makes adjustments to it, in light of changes to economic conditions and strategic objectives of the Company. The Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.
8 : Related Party Disclosures:
(i) List of related parties and relatives with whom transaction taken place:
1. Vardhan Limited Ho|ding C°mpany
2. Pipri Limited
3. Kanoria Africa Textiles Plc, Ethiopia
4. APAG Holding AG, Switzerland
5. APAG Elektronik AG, Switzerland
6. APAG Elektronik s.r.o., Czech Republic
7. CoSyst Control Systems GmbH, Germany Subsidiary Companies
8. APAG Elektronik LLC, USA
9. APAG Elektronik S. De R.L. De C.V., Mexico (up to 4th March, 2018)
10. APAG Services S. De R.L. De C.V., Mexico (up to 4th March, 2018)
11. APAG Elektronik Corp., Canada (w.e.f. 13th February, 2018)
12. Mr. R. V. Kanoria - Chairman & Managing Director
13. Mr. S. V. Kanoria - Whole Time Director
14. Mr. Amitav Kothari - Director
15. Mr. H.K. Khaitan - Director
16. Mr. Ravindra Nath - Director
Key Management Personnel (KMP)
17. Mr. G. Parthasarathy - Director
18. Mr. S. L. Rao - Director
19. Mr. A. Vellayan - Director
20. Mrs. M. Kanoria - Director
21. Mr. A. V. Kanoria
Relative of KMP
22. Mrs. V. Kanoria
23. KPL International Limited Enterprise over which KMP exercises significant influence
24. Kanoria Employees'' Provident Fund Trust Post Employment Benefit Plan entity
Mar 31, 2016
1. For the year ended 31st March, 2016, the Board of Directors of the Company have recommended dividend of Rs.1.50 per share (Previous year Rs. 1.50 per share) to equity shareholders aggregating to Rs. 65.54 million (Previous year Rs. 65.54 million). Together with the Corporate Dividend Distribution Tax of Rs. 13.34 million (Previous year Rs. 13.10 million), the total payout will be Rs. 78.88 million (Previous year Rs. 78.64 million).
2. There are no Micro, Small & Medium Enterprises to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2016. This information is required to be disclosed under the Micro, Small & Medium enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.
3. Income from Investments represent the income earned on the temporary investments for deployment in businesses in due course.
(B) Secondary Segment information
Not applicable, as all the plants of the Company are located in India and Exports does not constitute 10% or more of total Segment Revenue.
(C) Other Disclosures
Basis of pricing inter/Intra segment transfer and any change therein:
At prevailing market-rate at the time of transfers.
Segment Accounting Policies
The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.
Type of products included in each reported business segment:
Alco Chemicals business includes Pentaerythritol, Sodium Formate, Acetaldehyde, Formaldehyde & Hexamine etc. and Solar Power business includes Power generation from Solar energy.
4. Figures for the previous year have been regrouped/rearranged, wherever found necessary.
Mar 31, 2016
1 Rupee Term Loan from Bank is repayable in 10 semi-annual installment for Rs. 14,600/- between March 2012 to September 2016, for Rs. 15,000/- between September 2013 to March 2018 and in 9 semi-annual installments for Rs. 40,541/- from April 2015 to April 2019, for Rs. 14,821/- between January 2013 to January 2017. The primary security against such asset is hypothecation of machineries purchased under the Term Loan.
b) Term loan of Rs. 90 lacs, is secured by hypothecation of machineries and 1st. pari passu charges on entire assets both present and future and repayable in 9 half yearly installment of Rs. 10 lacs each starting after 6 months of disbursement i.e 25.11.2015.
2 Raw materials, Stores & Spares Parts consumed include profit and/or loss on sale and excess/short found on physical verification.
3 The amount of borrowing cost capitalized during the year is Rs. Nil (Previous Year Rs. Nil).
4 a) Outstanding forward exchange contracts booked for the purpose of hedging receivables/firm commitment are USD 535, EURO 9 & Sterling Pound 155 (Previous year USD 276, EURO 30 and Sterling Pound Nil) and payable / firm commitments are USD NIL ( Previous Year USD NIL ).
b) Unhedged foreign currency receivables USD NIL, EURO NIL and Sterling Pound NIL (Previous Year USD 100, EURO 26 and Sterling Pound NIL) and payables are USD NIL (Previous Year USD NIL).
c) The marked to market loss amounting to Rs. NIL (Previous Year Rs. 9) has been accounted for. However, marked to market gain amounting to Rs. 420 (Previous Year Rs. 156) on Forward Exchange Contracts for firm commitments and highly probable forecast transaction has not been accounted for
4 The Company has not received any memorandum as required to be filed by the suppliers with the notified authority under Micro, Small and Medium Enterprises Development Act, 2006 for claiming their status as micro, small or medium enterprises. Consequently the amount paid/payable to such parties during the year is Rs. Nil. (Previous Year Rs. Nil).
5 As Company''s business activities fall within a single primary business segment viz. Jute Goods, the disclosure requirements of Accounting Standard - AS-17Rs. Segment Reporting issued by The Institute of Chartered Accountants of India are not applicable in respect of business segment. However, the geographical segments considered for disclosures on the basis of sales are as under :-
6 There being uncertainties in realization from Insurance claims, the same are accounted for on settlement/realization.
7 Certain Trade Receivables, Loans and Advances and creditors are subject to confirmation. In the opinion of the management the value of Trade Receivables and Loans & Advances on realization in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.
Notes 8. RELATED PARTY DISCLOSURES
Related Party disclosures as required by AS-18 are given below :
A. Relationships
1) Holding Company of the Company a) R. V. Investments & Dealers Ltd.
2) Subsidiary Company of the Company
a) Ludlow Exports Ltd.
b) Sijberia Industries Ltd.
3) Enterprise (within Group)
a) Kirtivardhan Finvest Services Ltd.
b) Belvedere Gardens Limited.
4) Key Managerial Personnel (KMP)
a) Mr. S. S. Kanoria (Executive Chairman till 29th July, 2014)
b) Mr. J. P. Sonthalia ( Managing Director till 9th May, 2014)
c) Mr. B. M. Thakkar ( Managing Director from 9th May, 2014 till 23rd June, 2014)
d) Mr. Ajay Todi (Managing Director from 1st July, 2014)
e) Mr. R. K. Gupta (Chief Financial Officer)
f) Ms. Minu Rohila (Company Secretary and Compliance Officer from 2nd November, 2015)
g) Mrs. Puja Guin (Company Secretary till 15th May, 2015)
Notes 9. Figures of less than Rupee 1 have been shown at actual in brackets in Notes to Account No 2.10 and 2.11. ___Other than these all other figures in bracket are in negatives._
Notes 10. Figures of the Previous Year have been regrouped/rearranged wherever considered necessary.
Mar 31, 2015
(A) The Company has only one class of issued shares i.e. Equity Share
having par value of Rs.5 pershare. Each holder of Equity Share is
entitled to one vote per share and equal right for dividend. The
dividend proposed by the Board of Directors is subject to the approval
of shareholders in the ensuing Annual General Meeting, except in case
of interim dividend. In the event of liquidation, the equity
shareholders are eligible to receive the remaining assets of the
Company after payment of all preferential amounts, in proportion to
theirshareholding.
(B) Vardhan Limited, the holding company, holds 26,133,872 Equity
Shares of 5 each in the company.
(C) Details of shareholders holding more than 5 percent equity shares.
(D) No Shares have been reserved for issue under options and
contracts/commitmentsforthe sale of shares/disinvestmentas at the
Balance Sheetdate.
(E) The Company, during the year 2012-13, had bought back 12,603,167
Equity Shares of Rs. 5 each.
(F) None of the securities are convertible into shares at the end of
the reporting period.
(G) No calls are unpaid by any Director or Officer of the Company
during the year.
2. Managing Director''s appointmentand remuneration of Rs. 2.91 million
for the period from 10th January, 2015 to 31st March, 2015 is subject
to the approval of Shareholders.
3. For the year ended 31 st March, 2015, the Board of Directors of the
Company have recommended dividend of Rs. 1.50 per share (Previous year Rs.
1.50 per share) to equity shareholders aggregating to Rs. 65.54 million
(Previous yearRs. 65.54 million). Together with the Corporate Dividend
Distribution Tax of Rs. 13.10 million (Previous yearRs. 11.14 million), the
total payout will be Rs. 78.64 million (Previous yearRs. 76.68 million).
4. There are no Micro, Small & Medium Enterprises to whom the Company
owes dues, which are outstanding for more than 45 days as at
31st March, 2015. This information is required to be disclosed under
the Micro, Small & Medium enterprises DevelopmentAct, 2006 has been
determined to the extent such parties have been identified on the basis
of information available with the company.
5. Income from Investments represent the income earned on the
temporary investments made out of sale proceeds of a business
undertaking for deployment in businesses in due course.
(B) Secondary Segment information
Not applicable, as all the plants of the Company are located in India
and Exports does not constitute 10% or more of total Segment Revenue.
(C) Other Disclosures
Basis of pricing inter/lntra segment transfer and any change therein:
At prevailing market-rate at the time of transfers.
Segment Accounting Policies
The accounting policies adopted for segment reporting are in line with
the accounting policies of the Company.
Type of products included in each reported business segment:
Alco Chemicals business includes Pentaerythritol, Sodium Formate,
Acetaldehyde, Formaldehyde & Hexamine etc. and Solar Power business
includes Power generation from Solar energy.
(B) Secondary Segment information
Not applicable, as all the plants of the Company are located in India
and Exports does not constitute 10% or more of total Segment Revenue.
(C) Other Disclosures
Basis of pricing inter/lntra segment transfer and any change therein:
At prevailing market-rate at the time of transfers.
Segment Accounting Policies
The accounting policies adopted for segment reporting are in line with
the accounting policies of the Company.
Type of products included in each reported business segment:
Alco Chemicals business includes Pentaerythritol, Sodium Formate,
Acetaldehyde, Formaldehyde & Hexamine etc. and Solar Power business
includes Power generation from Solar energy.
6. Details of Loans given, Investment made, Guarantees given and
Security provided under Section 186 (4) of the Companies Act, 2013.
Investments made are disclosed in Note No. 12 to the Financial
Statements.
Corporate Guarantees given are disclosed in Note No. 29 to the
Financial Statements
The Company has unfunded scheme for payment of gratuity to all eligible
employees calculated at specified numberof days of lastdrawn salary
depending upon tenure of service for each year of completed service
subject to minimum five years of service payable at the time of
separation upon superannuation oron exit otherwise.
In respect of Defined contribution schemes -
The guidance notes on implementation of AS-15 (revised) issued by the
ICAI states that provident fund set up by the employers, which require
interest shortfall to be met by the employers, needs to be treated as
defined benefit plan. The fund set up by the Company does not have
existing deficit of interest shortfall. The Company contributes 12% of
salary for all eligible employees towards Provident Fund managed either
by approved trusts or by the Central Government. The amount debited to
Profit and Loss account during the year was Rs. 7.48 million (previous
yearRs. 6.92 million).
Mar 31, 2014
1. Share Capital
a) There has been no change/movements in number of shares outstanding
at the beginning and at the end of the reporting period.
b) The Company has only one class of issued shares i.e. Equity Shares
having par value of Rs.10 per share. Each holder of Equity Shares is
entitled to one vote per share and equal right for dividend. The
dividend proposed by the Board of Directors is subject to the approval
of shareholders in the ensuing Annual General Meeting. In the event of
liquidation, the equity shareholders are eligible to receive the
remaining assets of the Company after payment of all preferential
amounts, in proportion to their shareholding.
c) R.V. Investment & Dealers Limited is the Holding Company of this
Company.
d) No Equity Shares have been reserved for issue under options and
contracts/commitments for the sale of shares/ disinvestment as at the
Balance Sheet date.
e) No shares have been allotted or has been bought back by the Company
during the period of 5 years preceding the date as at which the Balance
Sheet is prepared.
f) No securities which are convertible into Equity/Preference shares
have been issued by the Company during the year.
g) No calls are unpaid by any directors or officers of the company
during the year.
2. Long-Term Borrowings
a) Rupee Term Loan from Bank is repayable in 10 semi-annual installment
for Rs.14600/- between March, 2012 to March, 2016, for Rs. 14821/-
between January 2013 to March 2018 and for Rs. 15000/- between
September 2013 to March 2018. The primary security against such asset
is hypothecation of machineries purchased under the Term Loan. For the
Term Loan of Rs. 28779/-received during the year, terms of repayments
have not been finalised till date.
3. Short-Term Borrowings
a) Working Capital Borrowings in Rupee is secured against hypothecation
of entire stocks together with bank''s pari passu 1st charge on entire
assets both present and future of the company.
b) Export Packing Credit is secured against hypothecation of Stock of
materials, semi-finished and finished goods.
4. Fixed Assets
Note :
Fixed Assets of the Company excluding minor items,were revalued by an
external Independent Valuer on 31st March,1992 which resulted in
increase of Fixed Assets Value by Rs. 300,476 on Net Current
Replacement Basis. This increase had been transfered to Revaluation
Reserve Account. After adjustment in respect of Fixed Assets
sold/discarded and Depreciation Provided,the Revaluation Reserve now
stands at Rs. 6,971 as on 31.03.2014.(PY Rs. 15,190)
5. Investments
* BIFR Companies
@ Shares in Reliance Jute Mills (Int.) Ltd. has been aquired as per
scheme of Arrangement of Reliance Jute Ltd. with Reliance International
Ltd.
# In absence of availability of unquoted rates,market value of such
shares have been considered at Rs. (1)/-.
6. OTHER ASSETS
* The above Insurance Claim is outstanding for the last three years. On
06-12-2013 the company has filed a legal suit at National Consumer
Dispute Redressal Commission (NCRDC ), New Delhi. The Management is
hopeful of gettng a favourable verdict in this regard. Hence creating
provision against it has not been considered necessary by the
management.
7. CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF :
As at March 31, As at March 31,
2014 2013
a) Bills Discounted with Banks 53,892 46,168
a) Other Disputed Claims (ESI)(Gross)
(Adv. paid Rs. 1,873, PY Rs. 1,873)
c) Excise Duty Demand disputed 5,691 5,691
(i) Excise Authority raised the 43 43
demand on transit loss of Jute
Batching Oil from 1964 to
1969. Writ Petition pending
before High Court at Kolkata
(ii)Excise Authority raised the 1,780 1,780
demand on Jute Webbing as
differential duty between
specific rate as per
classification list and
advalorem rate. Matter is
pending before Appeallate
Authority for the year
1986-87 to 1991-92.
(Advance paid Rs. 300
PY Rs. 300)
d) i) Disputed demand against Sales 4,498 4,708
Tax for the year 1999-00 and
2004 -05 for which the Company
has preferred appeal and it is
pending before W.B.C.T. (A & R)
Board (Adv. paid Rs. 1,120, PY.
Rs.1,120)(Gross)
ii) Disputed demand against Sales 1,35,960 1,03,282
Tax for the year 2005-06 to
2010- 2011 for which Appeal
is pending before SR. and AD.
Joint commissioner (CD) and
WBCT (A&R) Board.
e) Land Revenue (Rent) raised by the 11,546 10,392
office of the B.L. & L.R. Officer
Uluberia- II, Howrah due to
retrospective changes in W.B.Land
Reform Act. Matter is pending before
W.B.Land Reform Tribunal since
2002-03.
f) a) Outstanding Bank Guarantees 37,021 36,889
b) Outstanding Letter of Credit 59,064 75,481
8. In respect of Defined Benefits Plans, necessary disclosures are as
under :
i) Benefits are of the following types :
- Every employee who has completed continuous five years or more of
service is entitled to gratuity on terms not less favourable than the
provisions of the Payment of Gratuity Act, 1972.
- Provident Fund (other than government administered) as per the
provisions of Employees Provident Funds and Miscellaneous Provisions
Act, 1952.
ii) The estimates of future salary increases, considered in actuarial
valuation, take account of inflation, seniority, promotion and other
relevant factors.
iii) In respect of provident funds for eligible employees maintained by
a trust, in the nature of defined benefits plan, upto date shortfall,
if any, as per actuarial valuation, in respect of contribution towards
such fund is yet to be identified. However, contribution to those
provident fund amounting to Rs. 8,844 (previous year Rs. 8,803)is
recognized as expense and included in "Employees Benefit Expenses".
9. Raw materials, Stores & Spares Parts consumed include profit and/or
loss on sale and excess/short found on physical verification.
10. The amount of borrowing cost capitalized during the year is Rs. Nil
(previous year Nil).
11. a) Outstanding forward exchange contracts booked for the purpose of
hedging Receivables/firm commitment are USD 115, EURO 41 & Sterling
Pound Nil(Previous year USD 383,EURO 58 and Sterling Pound 23)
b) Unhedged foreign currency receivables USD 127, EURO 22 and Sterling
Pound 21 (Previous Year USD 77, EURO Nil and Sterling Pound Nil) and
payables are USD 249 (Previous Year USD 282).
c) The marked to market loss amounting to Rs. NIL(Previous Year - 4)
has been accounted for. However, marked to market gain amounting to Rs.
329(Previous Year - Rs. 608) on Forward Exchange Contracts for firm
commitments and highly probable forecast transaction has not been
accounted for.
11. The Company has not received any memorandum as required to be filed
by the suppliers with the notified authority under Micro, Small and
Medium enterprises development Act,2006 for claiming their status as
micro, small or medium enterprises. Consequently the amount
paid/payable to such parties during the year is Rs. Nil. (Previous Year
Rs. Nil).
12. As Company''s business activities fall within a single primary
business segment viz. Jute Goods, the disclosure requirements of
Accounting Standard - AS-17'' Segment Reporting issued by The Institute
of Chartered Accountants of India are not applicable in respect of
business segment. However, the geographical segments considered for
disclosures on the basis of sales.
Mar 31, 2013
1. For the year ended 31st March, 2013, the Board of Directors of the
Company have recommended dividend of Rs. 1.50 per share (Previous year Rs.
1.50 per share) to equity shareholders aggregating to Rs. 65.54 million
(Previous year Rs. 84.44 million). Together with the Corporate Dividend
Distribution Tax of Rs. 11.14 million (Previous year Rs. 13.70 million),
the total payout will be Rs. 76.68 million (Previous year Rs. 98.14
million).
2. There are no Micro, Small & Medium Enterprises to whom the Company
owes dues, which are outstanding for more than 45 days as at 31st
March, 2013. This information is required to be disclosed under the
Micro, Small & Medium enterprises Development Act, 2006 has been
determined to the extent such parties have been identified on the basis
of information available with the company.
3. Due to inadequacy of profits as per Section 349 of the Companies
Act, 1956 (the Act), the remuneration of Rs. 13.53 million (including Rs.
2.53 million paid in previous year) to Managing Director for the period
from 10th January, 2012 to 31st March, 2013, which includes an amount
of Rs. 6.94 million in excess of limit specified under section 309 (3)
read with schedule XIII of the Act., is subject to the approval of the
Central Government which is awaited.
(B) Secondary Segment information
Not applicable, as all the plants of the Company are located in India
and Exports does not constitute 10% or more of total Segment Revenue.
(C) Other Disclosures
Basis of pricing inter/Intra segment transfer and any change therein:
At prevailing market-rate at the time of transfers.
Segment Accounting Policies
The accounting policies adopted for segment reporting are in line with
the accounting policies of the Company.
Type of products included in each reported business segment:
Alco Chemicals business includes Pentaerythritol, Sodium Formate,
Acetaldehyde, Formaldehyde, Hexamine, Industrial Alcohol, Acetic
Acid & Ethyl Acetate etc. and Solar Power business includes Power
generation from Solar energy. 36. As per Business Transfer Agreement
dated 16th April, 2011 the Company has divested its Chloro Chemicals
Division at the close of business hours on 23rd May, 2011 for a Cash
consideration of Rs. 8.3 billion. In line with the requirement of
Accounting Standard 24 on Discontinued Operations, the following
statement shows the revenue and expenses of this division which are
included in the Statement of Profit & Loss :
The Company has unfunded scheme for payment of gratuity to all eligible
employees calculated at specified number of days of last drawn salary
depending upon tenure of service for each year of completed service
subject to minimum five years of service payable at the time of
separation upon superannuation or on exit otherwise.
In respect of Defined contribution schemes -
The guidance notes on implementation of AS-15 (revised) issued by the
ICAI states that provident fund set up by the employers, which require
interest shortfall to be met by the employers, needs to be treated as
defined benefit plan. The fund set up by the Company does not have
existing deficit of interest shortfall. With regard to future
obligation arising due to interest shortfall, pending issuance of the
guidance notes from Actuarial Society of India, the Company''s actuary
has expressed his inability to reliably measure the provident fund
liability. The Company contributes 12% of salary for all eligible
employees towards Provident Fund managed either by approved trusts or
by the Central Government. The amount debited to Profit and Loss
account during the year was Rs. 6.44 million (previous year Rs. 8.58
million).
4. Figures for the previous year have been regrouped/rearranged,
wherever found necessary.
Mar 31, 2012
(a) The Company has only one class of issued shares i.e. Equity Share
having par value of Rs.5 per share. Each holder of Equity Share is
entitled to one vote per share and equal right for dividend. The
dividend proposed by the Board of Directors is subject to the approval
of shareholders in the ensuing Annual General Meeting, except in case
of interim dividend. In the event of liquidation, the equity
shareholders are eligible to receive the remaining assets of the
Company after payment of all preferential amounts, in proportion to
their shareholding.
(b) The company does not have a holding company.
(c) No Shares have been reserved for issue under options and
contracts/commitments for the sale of shares/disinvestment as at the
Balance Sheet date.
(d) 18,765,500 Equity Shares of Rs. 5 each as fully paid up Bonus
Shares were allotted on 11th January, 2008 by Capitalisation of Capital
Redemption Reserve.
(e) None of the securities are convertible into shares at the end of
the reporting period.
(f) No calls are unpaid by any Director or Officer of the Company
during the year.
1. EXCEPTIONAL ITEMS CONSIST OF
i) The gain/(loss) arising from the effect of change in the foreign
exchange rates on revaluation of the outstanding Foreign Currency
Convertible Bonds (FCCB) & premium thereon, together with gain/(loss)
on remittance/reinstatement of FCCB bank balances which existed during
previous year, as calculated pursuant to the requirement of Accounting
Standard (AS) 11 Rs. (9.25) million (Previous Year Rs. (1.56) million).
ii) Profit on Sale of Chloro Chemicals Division of the Company Rs.
3,579.62 million (Previous Year Rs. Nil).
2. CONTINGENT LIABILITIES AND COMMITMENTS
(to the extent not provided for)
(i) Contingent Liabilities
(a) Claims/Disputed liabilities not acknowledged as debt
Nature of Contingent Liability Status Indicating Uncertainties
Demand notice issued by Central The matter is pending with Asstt.
Excise Department Commissioner of Central
Excise - 1.20
Demand notices issued by
Central The matter is pending
with Allahabad
Excise Department High Court - 0.95
Demand notices issued by
Central The matter is pending with
Commissioner
Excise Department (Appeal) 4.52 8.67
Demand notices issued by
Central The matter is pending
with CESTAT - 9.99
Excise Department
Demand notice issued by
Custom The matter is pending
with Asstt.
Department Commissioner of Custom - 0.43
Entry tax demand issued by The matter is pending
with Allahabad
assessing authority High Court - 9.06
Sales tax/VAT demands issued
by The matter is pending
with Allahabad
assessing authority High Court - 4.51
Sales tax/VAT demands issued
by The matter is pending
with Trade Tax
assessing authority Tribunal (paid Rs. 0.43
million) 0.43 0.43
Income tax demands issued
by The matter is pending
with CIT (Appeal) 128.13 175.99
DCIT
(b) Outstanding Bank Guarantees 16.86 73.59
(c) Corporate Guarantee given to
Gujarat Industrial Development
Corporation for securing loan by
Bharuch Eco -Aqua Infrastructure
Limited. 11.63 11.63
(ii) Commitments
Estimated amount of contracts
remaining to be executed on
capital account and not provided
for 102.10 27.07
Advances paid 4.57 4.67
3. For the year ended 31st March, 2012, the Board of Directors of the
Company have recommended dividend of Rs.1.50 per share (Previous year
Rs. 5 per share) to equity shareholders aggregating to Rs. 84.44
million (Previous year Rs. 281.48 million). Together with the Corporate
Dividend Distribution Tax of Rs.13.70 million (Previous year Rs. 45.21
million), the total payout will be Rs.98.14 million (Previous year Rs.
326.69 million).
4. There are no Micro, Small & Medium Enterprises to whom the Company
owes dues, which are outstanding for more than 45 days as at 31st
March, 2012. This information required to be disclosed under the
Micro, Small & Medium enterprises Development Act, 2006, has been
determined to the extent such parties have been identified on the basis
of information available with the company.
5. Due to inadequacy of profits as per Section 349 of the Companies
Act, 1956 (the Act), the remuneration paid to Managing Director during
the period from 1st April, 2011 to 9th January, 2012, exceeds the limit
prescribed under Section 309 read with the Schedule XIII of the Act, by
Rs. 3.52 million. The Company has initiated steps to obtain the
approvals for the same from the shareholders in the ensuing Annual
General Meeting and the Central Government, as required.
The remuneration of Rs. 2.53 million paid to Managing Director for the
period from 10th January, 2012 to 31st March, 2012 (on his re-
appointment), is subject to the approval of the shareholders in the
ensuing Annual General Meeting, and further the same is subject to the
approval of the Central Government.
(C) Other Disclosures
Basis of pricing inter/Intra segment transfer and any change therein:
At prevailing market-rate at the time of transfers.
Segment Accounting Policies
The accounting policies adopted for segment reporting are in line with
the accounting policies of the Company.
Type of products included in each reported business segment:
Chloro Chemicals business includes Caustic Soda, Liquid Chlorine,
Hydrochloric Acid, Stable Bleaching Powder, Chlorinated Paraffins, Poly
Aluminium Chloride, Captive Power, Aluminium Chloride, Salt etc. and
Alco Chemicals business includes Pentaerythritol, Sodium Formate,
Acetaldehyde, Formaldehyde, Hexamine, Industrial Alcohol, Acetic Acid &
Ethyl Acetate etc.
The Company has unfunded scheme for payment of gratuity to all eligible
employees calculated at specified number of days of last drawn salary
depending upon tenure of service for each year of completed service
subject to minimum five years of service payable at the time of
separation upon superannuation or on exit otherwise.
In respect of Defined contribution schemes -
The guidance notes on implementation of AS-15 (revised) issued by the
ICAI states that provident fund set up by the employers, which require
interest shortfall to be met by the employers, needs to be treated as
defined benefit plan. The fund set up by the Company does not have
existing deficit of interest shortfall. With regard to future
obligation arising due to interest shortfall, pending issuance of the
guidance notes from Actuarial Society of India, the Company's actuary
has expressed his inability to reliably measure the provident fund
liability. The Company contributes 12% of salary for all eligible
employees towards Provident Fund managed either by approved trusts or
by the Central Government. The amount debited to Profit and Loss
account during the year was Rs. 8.58 million (previous year Rs. 20.81
million).
6. The financial statements for the year ended 31st March, 2011 had
been prepared as per the applicable, pre-revised Schedule VI to the
Companies Act, 1956. Consequent to the notification of Revised Schedule
VI under the Companies Act, 1956, the financial statements for the year
ended 31st March,2012 are prepared as per Revised Schedule VI.
Accordingly, the previous year figures have also been reclassified to
conform to this year's classification. The adoption of Revised Schedule
VI for previous year figures does not impact recognition and
measurement principles followed for preparation of financial statements
except for accounting for dividend on investments in subsidiaries.
Mar 31, 2011
(Rs. in million)
2010-2011 2009-2010
1. Contingent Liabilities not
provided for in respect of:
(a) Outstanding Bank Guarantees 73.59 78.16
(b) Claims/Disputed liabilities
not acknowledged as debt
Nature of Contingent Liability Status Indicating
Uncertainties
Demand notice issued by Central The matter is
pending with Asstt.
Excise Department Commissioner of
Central Excise 1.20 1.20
Demand notices issued by Central The matter is
pending with
Allahabad
Excise Department High Court (Paid
Rs. 0.43 million) 0.95 1.05
Demand notices issued by Central The matter is
pending with
Commissioner
Excise Department (Appeal) (Paid
Rs. 2.50 million) 8.67 0.77
Demand notices issued by Central The matter is
pending with
CESTAT
Excise Department (Paid Rs. 0.20
million) 69.99 42.27
Demand notice issued by Custom The matter is
pending with
Asstt.
Department Commissioner of
Custom (Paid Rs.
0.31 million) 0.43 0.43
Entry tax demand issued by The matter is
pending with
Allahabad
assessing authority High Court (Paid
Rs. 2.53 million) 9.06 16.02
Sales tax demands issued by The matter is
pending with Joint - 8.39
assessing authority Commissioner
(Appeal)
Sales tax demands issued by The matter is
pending with
Allahabad 4.51 -
assessing authority High Court
(Paid Rs. 0.16
million)
VAT demands issued by The matter is
pending with
Value Added Tax
assessing authority Tribunal (paid
Rs. 0.43 million) 0.43 1.56
Income tax demands issued by The matter is
pending with CIT
(Appeal)
DCIT (Disallowance u/s
80IA Rs.163.36
million) 175.99 29.38
2. The Company had issued 200 0% Foreign Currency Convertible Bonds
(FCCB) of USD 100,000 each aggregating to USD 20 million, at par, on
May 31, 2006. These Bonds are convertible into Equity Shares of Rs.5/-
each fully paid, till May 27, 2011 at the option of the bondholder.
Unless converted, these Bonds are redeemable on June 07, 2011 at
144.715 percent of their principal amount. The premium up to 31st
March, 2011 amounting to Rs. 382.40 million has been accounted for
under Provisions.
The Company has utilised the FCCBs issue proceeds towards funding of
capital expenditure and related issue expenses.
3. The gain/loss arising from the effect of change in the foreign
exchange rates on revaluation of the outstanding Foreign Currency
Convertible Bonds (FCCB) & premium thereon, together with gain/loss on
remittance/reinstatement of FCCB bank balances which existed during
previous year, as calculated pursuant to the requirement of Accounting
Standard (AS) 11 are shown as exceptional items.
4. There are no Micro, Small & Medium Enterprises to whom the Company
owes dues, which are outstanding for more than 45 days as at 31st
March, 2011. This information is required to be disclosed under the
Micro, Small & Medium enterprises Development Act, 2006 has been
determined to the extent such parties have been identified on the basis
of information available with the company.
5. The Company has exited from Joint Venture with Soluciones
Extractivas Alimentarias S.L.A, Spain (Solutex) by an agreement dated
1st March, 2011. As per the terms of agreement the entire investment
in Minerva Flavours & Fragrance Private Limited, the Joint Venture
Company, will be transferred at face value (at cost) to a wholly owned
subsidiary of Solutex by 24th September, 2011. During the year under
review Equity Shares of the face value of Rs. 5.30 million has already
been transferred leaving a balance investment of Rs. 10.99 million.
6. As per Business Transfer Agreement dated 16th April, 2011 the
Company has divested its Chloro Chemicals Division to Aditya Birla
Chemicals (India) Ltd. on a slump sale basis at the close of business
hours on 23th May, 2011 for a Cash consideration of Rs. 8.30 billion.
7. Disclosure as required by Accounting Standard 15 (Revised) on
Employee Benefits: -
In respect of Leave Encashment & Gratuity, a defined benefit scheme
(based on Actuarial Valuation)-
The Company has unfunded scheme for payment of gratuity to all eligible
employees calculated at specified number of days of last drawn salary
depending upon tenure of service for each year of completed service
subject to minimum five years of service payable at the time of
separation upon superannuation or on exit otherwise.
In respect of Defined contribution schemes -
The guidance notes on implementation of AS-15 (revised) issued by the
ICAI states that provident fund set up by the employers, which require
interest shortfall to be met by the employers, needs to be treated as
defined benefit plan. The company has made provision for interest
shortfall of Rs.0.42 million for the year. With regard to future
obligation arising due to interest shortfall, pending issuance of the
guidance notes from Actuarial Society of India, the Company's actuary
has expressed his inability to reliably measure the provident fund
liability. The Company contributes 12% of salary for all eligible
employees towards Provident Fund managed either by approved trusts or
by the Central Government. The amount debited to Profit and Loss
account during the year was Rs. 20.81 million (previous year Rs. 19.06
million).
8. Related Party Disclosures:
(i) List of related parties over which control exists and relationship:
Name of the Related Parties Relationship
1. Pipri Limited Wholly Owned Subsidiary
2. Minerva Flavours and Fragrance
Private Limited* Joint Venture
3. Mr. R. V. Kanoria - Chairman
& Managing Director Key Management Personnel
4. Mr. J. R Sonthalia -
Managing Director (Designate)-
Chloro Chemicals
5. Mr. T. D. Bahety -
Whole Time Director
6. Mr. S. V. Kanoria Relative of Key Management
Personnel
7. Mrs. V. Kanoria
8. KPL International Limited Enterprises over which Key
Management Personnel
9. KCI Alco Chem Limited exercises significant influence
* Exited from Joint Venture vide an agreement dated 1st March, 2011
9. Segment Reporting:
(C) Other Disclosures
Basis of pricing inter/lntra segment transfer and any change therein:
At prevailing market-rate at the time of transfers.
Segment Accounting Policies
The accounting policies adopted for segment reporting are in line with
the accounting policies of the Company.
Type of products included in each reported business segment:
Chloro Chemicals business includes Caustic Soda, Liquid Chlorine,
Hydrochloric Acid, Stable Bleaching Powder, Chlorinated Paraffins, Poly
Aluminium Chloride, Captive Power, Aluminium Chloride, Salt etc. and
Alco Chemicals business includes Pentaerythritol, Sodium Formate,
Acetaldehyde, Formaldehyde, Hexamine, Industrial Alcohol, Acetic Acid &
Ethyl Acetate etc.
10. Figures for the previous year have been regrouped/rearranged,
wherever found necessary.
Mar 31, 2010
(Rs. in million)
2009-2010 2008-2009
1. Contingent Liabilities not
provided for in respect of:
(a) Outstanding Bank Guarantees 78.16 69.34
(b) Claims/Disputed liabilities not
acknowledged as debt
Nature of Contingent
Liability Status Indicating
Uncertainties
Demand notice issued
by Central The matter is pending
with Asstt.
Excise Department Commissioner of
Central Excise 1.20 1.90
Demand notices issued
by Central The matter is pending
with Allahabad
Excise Department High Court (Paid Rs.
0.43 million) 1.05 1.05
Demand notices
issued by Central The matter is pending
with Commissioner
Excise Department (Appeal) 0.77 1.78
Demand notices
issued by Central The matter is pending
with CESTAT
Excise Department (Paid Rs. 0.52 million) 42.27 20.00
Demand notice
issued by Custom The matter is pending
with Asstt.
Department Commissioner of Custom
(Paid Rs. 0.31 million) 0.43 0.43
Entry tax demand
issued by The matter is pending
with Allahabad
assessing authority High Court (Paid Rs.
2.53 million) 16.02 13.49
Sales tax demands
issued by The matter is pending
with Joint
assessing authority Commissioner (Appeal) 8.39 -
Sales tax/VAT
demands issued by The matter is pending
with Trade Tax
assessing authority Tribunal (paid Rs.
0.60 million) 1.56 1.68
Income tax demands
issued by The matter is pending
with CIT (Appeal)
DCIT (Paid Rs. 3.00 million) 29.38 1.42
2. The Company had issued 200 0% Foreign Currency Convertible Bonds
(FCCB) of USD 100,000 each aggregating to USD 20 million, at par, on
May 31,2006. These Bonds are convertible into Equity Shares of Rs.5
each fully paid, at the conversion price of Rs. 44.67 per share,
subject to the terms of issue and price adjustment on the happening of
certain events and price reset at the end of 3rd year of issue with a
fixed rate of exchange of Rs. 46.19 equal to USD 1. The conversion is
at the option of bond-holders at any time on or after June 05,2006 and
prior to the close of business on May 27,2011. As at the end of the
year the entire FCCBs issued were outstanding.
Based on the current applicable conversion price, the Share Capital of
the Company will increase by 20,682,090 Equity Shares of Rs.5 each on
conversion of these Bonds.
Unless previously converted, the Bonds are redeemable on June 07, 2011
at 144.715 percent of their principal amount. The premium up to 31st
March, 2010 amounting to Rs.295.07 million has been accounted for under
Provisions.
The Company has utilised the FCCBs issue proceeds towards funding of
capital expenditure and related issue expenses.
3. The gain/loss arising from the effect of change in the foreign
exchange rates on revaluation of the outstanding Foreign Currency
Convertible Bonds (FCCB) & premium thereon, together with gain/loss on
remittance/reinstatement of FCCB bank balances which existed during
previous year, as calculated pursuant to the requirment of Accounting
Standard (AS) 11 are shown as exceptional items.
4. There are no Micro, Small & Medium Enterprises to whom the Company
owes dues, which are outstanding for more than 45 days as at 31st
March, 2010. This information is required to be disclosed under the
Micro, Small & Medium enterprises Development Act, 2006 has been
determined to the extent such parties have been identified on the basis
of information available with the company.
5. The Company has entered into a Joint Venture Agreement with
Soluciones Extractivas Alimentarias S.L.A., Spain (Solutex) for
manufacturing and marketing, world wide, products such as ingredients
and extracts obtained by using the SFE technology with carbon di-oxide
including for the flavour and fragrances market or any other market as
may be determined by Minerva Flavours and Fragrance Private Limited,
the JV Company. The Company together with its wholly owned subsidiary
holds 26% stake in joint venture and 74% is held by Solutex. The
Company has invested a total amount of Rs.16.29 million (including
Rs.3.95 million for share application money pending allotment) till
31st March, 2010
The Company has unfunded scheme for payment of gratuity to all eligible
employees calculated at specified number of days of last drawn salary
depending upon tenure of service for each year of completed service
subject to minimum five years of service payable at the time of
separation upon superannuation or on exit otherwise.
In respect of Defined contribution schemes -
The guidance notes on implementation of AS-15 (revised) issued by the
ICAI states that provident fund set up by the employers, which require
interest shortfall to be met by the employers, needs to be treated as
defined benefit plan. The fund set up by the Company does not have
existing deficit of interest shortfall. With regard to future
obligation arising due to interest shortfall, pending issuance of the
guidance notes from Actuarial Society of India, the Companys actuary
has expressed his inability to reliably measure the provident fund
liability. The Company contributes 12% of salary for all eligible
employees towards Provident Fund managed either by approved trusts or
by the Central Government. The amount debited to Profit and Loss
account during the year was Rs. 19.06 million (previous year Rs. 17.97
million).
6. Related Party Disclosures:
(i) List of related parties over which control exists and relationship:
Name of the Related Parties Relationship
1. Pipri Limited Wholly Owned Subsidiary
2. Minerva Flavours and
Fragrance Private Limited Joint Venture
3. Mr. R. V. Kanoria - Chairman
& Managing Director Key Management Personnel
4. Mr. J. R Sonthalia - Managing
Director (Designate)-Chloro
Chemicals
5. Mr. T. D. Bahety - Wholetime
Director
6. Mr. S. V. Kanoria Relative of Key Management
Personnel
7. KPL International Limited Enterprises over which Key
Management Personnel
8. Prajapati Chemicals &
Alfreds Limited exercises significant influence
9. KCI Alco Chem Limited
7. Figures for the previous year have been regrouped/rearranged,
wherever found necessary.
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