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Notes to Accounts of Suditi Industries Ltd.
Mar 31, 2025
a) Allowance for bad & doubtful debts is created in accordance âexpected credit lossâ model prescribed under Ind AS 109.
b) Trade receivables are non-interest bearing and credit period generally falls in the range of 30 to 120 days terms.
c) The company has some balances of certain customers accumulated over a period of time which became non moving particularly after the pandemic crisis. The same continued to remain non-moving and carried forward from year to year without any major movement due to differences in the claims and counterclaims from the customer. Accordingly the company has further provided Rs.251.54 Lakhs provision during the year and now the total amount of provision stands at Rs.807.24 Lakhs.
Note: During the year, the Company has increased the Authorised Capital from Rs.3000 Lakhs to Rs.6000 Lakhs.
a) Preferential Allotment of Equity Shares:
During the year, the Company has made a preferential allotment of 1,32,49,000 equity shares of face value ?10 each at a premium of ?17.50 per share to certain shareholders, including promoters, on a "preferential allotment basis". The allotment was made to members holding shares as on the record date as announced by the Company.
Pursuant to the allotment, the equity share capital of the Company has increased from ^26,36,72,910 to ^39,61,62,910. The shares have been listed and trading approval has been obtained from the designated stock exchange, BSE Limited.
The entire issue complies with the applicable regulations and was made in accordance with the provisions of the Companies Act, 2013 and SEBI (ICDR) Regulations.
b) Issue of Convertible Equity Share Warrants:
The Company has received 25% of the consideration towards the issue of 1,23,00,000 Convertible Equity Share Warrants (âWarrantsâ) on a preferential basis to persons belonging to the Promoter and Non-Promoter Category, as approved by the shareholders at the Extraordinary General Meeting held on January 3, 2025.
Pursuant to the above approval, the Board of Directors, at their meeting held on February 12, 2025, allotted 1,23,00,000 Equity Share Warrants having a face value of ?10/- each, at a premium of ?17.50/- per warrant. Each warrant is convertible into one equity share of the Company at the option of the warrant holder, in accordance with applicable regulations and the terms of issue.
The balance amount shall be payable at the time of conversion of warrants into equity shares, within the prescribed time frame in accordance with SEBI (ICDR) Regulations and the Companies Act, 2013.
Fully paid equity shares, which have a par value of Rs. 10, carry one vote per share and carry a right to dividends.
Details of Ordinary (Equity) shares held by shareholders holding more than 5% of the aggregate shares in the Company:
The company has only one class of shares i.e. Equity Shares having a face value of Rs.10/- each. The equity shareholders are entitled to dividend only if dividend in a particular financial year is recommended by the Board of Directors and approved by the members at the annual general meeting of that year. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by share holders.
The Board of Directors has not recommended any dividend for the financial year 2024-25.
Shares reserved for issue under options
960000 shares were reserved for issue under the Employees Stock Option Plan pursuant to a special resolution passed in 20th Annual General Meeting held on 2nd September, 2011. During the year 2024-25, the Company has neither granted any options to any employees nor any options were exercised as there are no options pending which are yet to be exercised. The details of the options granted and exercised in past are as follows.
1) The company has so far allotted 317320 shares.
2) The balance as on 31st March 2025 is 642680 options which is yet to be granted to the employees from reserved portion of the equity capital.
There has been no allotment of shares pursuant to contract(s) without payment being received in (cash during 5 years immediately preceding 31st March, 2025).
Retained Earnings: Created from Profit/loss of the Company, as adjusted for distribution to owners, transfers to other reserves etc.
Securities Premium: Securities premium reserve is created due to premium on issue of shares. These reserve is utilized in accordance with the provisions of the Companies Act, 2013.
Share option outstanding account: Created for recording the grant date fair value of options issued to employees under the Employees stock option schemes & is adjusted on exercise/forfeiture of options.
Items of other comprehensive income: Created for transferring the re-measurements gains & losses on defined benefit plans.
a) During the year the Company has taken Term Loan of Rs.190 Lakhs from Indian Overseas Bank, Fort branch, Mumbai - 400023 for purchase and installation of machinery.
Margin: 25% of Cost of macinery
Interest: RLLR (9.10%) 0.20% (SP) 0.95% (CRP), i.e. 10.25% p.a. presently
Security: Hypothecation of Machinery purchased out of loan and entire Fixed Asset of the
Company.
b) * TUF Loan amounting to Rs.53.10 lakhs is secured by lien marked on Fixed Deposit (Refer Note No.8) by the Company. It is further secured by hypothecation of specific plant & machinery procured by utilization of the loan.
Note: An amount of Rs.4,71,015/-, being unclaimed dividend, has been transferred during the year to the Investor Education and Protection Fund as per applicable Rules and reported to the Registrar of Companies, Ministry of Corporate Affairs.
C1. The amounts receivable from customers become due after expiry of credit period which on an average is less than 180 days. There is no significant financing component in any transaction with the customers.
C2. The Company provides agreed upon performance warranty for all range of products. The amount of liability towards such warranty is immaterial.
C3. The Company does not have any remaining performance obligation as contracts entered for sale of goods are for a shorter duration. There are no contracts for sale of services wherein, performance obligation is unsatisfied to which transaction price has been allocated.
35 Financial Risk Management Objectives & Policy
The Companyâs principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Companyâs operations. The Companyâs principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also holds FVTPL investments. The Company is exposed to market risk (including foreign currency risk, interest rate risk and commodity risk, etc.), credit risk and liquidity risk. The Companyâs senior management oversees the management of these risks. The Board of Directors reviews Financial Risk
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Market risk is the risk of loss of future earnings, fair values or future cash flows that may results from change in the price of a financial instrument. The value of a financial instrument may change as result of change in the interest rates, foreign currency exchange rates, equity prices and other market changes may affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments and deposits, foreign currency receivables, payables and loans and borrowings. Market risk comprises mainly of risks related to changes in foreign currency exchange rates, commodity prices and interest rates. The Company has a moderate risk management system monitored by Risk Management Committee to inform Board Members about
a) Foreign currency risk management
The Companyâs functional currency is Indian Rupees (INR). The Company is not having any significant foreign transactions; hence the company is not prone to foreign currency risks as on the date of the balance sheet.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk because funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the Company are principally denominated in rupees with a mix of fixed and floating rates of interest. The Company has exposure to interest rate risk, arising principally on changes in base lending rate. The Company uses a mix of interest rate sensitive financial instruments to manage the liquidity and fund requirements for its day-to-day operations. The Company regularly scans the Market & Interest Rate Scenario to find appropriate Financial Instruments & negotiates with the Lenders in order to reduce the effect Cost of Funding. The risk is managed by the Company by
The Companyâs revenue is exposed to the market risk of price fluctuations related to the sale of its products. Market forces generally determine prices for the products sold by the Company. These prices may be influenced by factors such as supply and demand, production costs (including the costs of raw material inputs) and global and regional economic conditions and growth. Adverse changes in any of these factors may reduce the revenue that the Company earns from the sale of its
products
The Company primarily purchases its raw materials in the open market from third parties. The Company is therefore subject to fluctuations in prices for the purchase of raw materials. The Company purchased substantially all of its textile grade yarn and grey fabrics from third parties in the open market during the year ended 31 March 9095
The Company aims to sell the products at prevailing market prices. Similarly the Company procures key raw materials based on prevailing market rates as the selling prices of its products and the prices of input raw materials move in the same direction.
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting
in financial loss to the Company. Credit risk encompasses both, the direct risk of default and the
risk of deterioration of creditworthiness as well as concentration risks. The Company has adopted
a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where
appropriate, as a means of mitigating the risk of financial loss from defaults. Companyâs credit
risk arises principally from the trade receivables and financial instruments and deposits with 1____
Customer credit risk is managed centrally by the Company and subject to established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits defined in accordance with the assessment. Credit risk on receivables from organized and bigger buyers is mitigated by securing the same against letters of credit and guarantees of reputed nationalized and
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The outstanding trade receivables are regularly monitored and appropriate action is taken for collection of overdue receivables. The outstanding from the trade segment is secured by two tier security - security deposit from the dealer himself, and our business associates who manage the dealers are also responsible for the outstanding from any of the dealers in their respective region. Impairment analysis is performed based on historical data at each reporting period on an
Financial Instruments and Deposits with Banks:
The Company considers factors such as track record, size of institution, market reputation and service standards to select the bank with which balances and deposits are maintained. Generally, balances are maintained with the institutions with which the Company has also availed borrowings. The Company does not maintain significant cash and deposit balances other than
those required for its day to day operation
Liquidity risk refers to the risk of financial distress or extraordinary high financing costs arising due to shortage of liquid funds in a situation where business conditions unexpectedly deteriorate and requiring financing. The Company requires funds both for short term operational needs as well as for long term capital expenditure growth projects. The Company generates sufficient cash flow for operations, which together with the available cash and cash equivalents and short term investments provide liquidity in the short-term and long term. The Company has established an appropriate liquidity risk management framework for the management of the Companyâs short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. The following tables detail the Companyâs remaining contractual maturity for its non derivative financial liabilities with agreed repayment periods and its nonderivative financial assets. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of the
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Companyâs primary objective when managing capital is to ensure that it maintains an efficient capital structure and healthy capital ratios and safeguard the Companyâs ability to continue as a going concern in order to support its business and provide maximum returns for shareholders. The Company also proposes to maintain an optimal structure to reduce the cost of capital as well as to maintain proper
For the purpose of the Companyâs capital management, capital includes issued capital, securities premium and all other equity reserves. Net debt includes, interest bearing loans and borrowings, less cash & cash Equivalents.
The Company monitors capital using a gearing ratio, which is Net Debt divided by Total Capital plus Net Debt. Net Debt is calculated as total borrowings including short term and current maturities of long term debt.
(a) The above details of consumption consists of Raw materials which are consumed directly for manufacture of finished products and also other items which are indirectly related to manufacture of finished products, i.e. stores, spares and packing materials.
46 Forward Contracts and Unhedged Foreign Currency Outstanding Balances
The company has not executed any forward contract for hedging exchange rate risk; the outstanding unhedged foreign currency balances as on 31st March, 2025 are as under:
(a) The foreign currency outstanding balances that have not been hedged by any derivative instrument or otherwise as at the Balance Sheet date are NIL as at 31st March 2025. (31st March 2024 - NIL).
There is no amount payable in foreign currency outstanding as on 31st March, 2025.
47 Employee Benefits Gratuity:
The Company has a defined benefit gratuity plan governed by the Payments of Gratuity Act, 1972. Every employee who has completed five years or more of services is eligible for gratuity on separation at 15 days salary (last drawn salary) for each completed year of service. The Company has formed a Gratuity Trust to which contribution is made and an insurance policy is taken by the trust, which is a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance Company, as part of the policy rules, makes payment of all gratuity outgoes happening during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate, particularly, the significant fall in interest rates, which should result in a increase in liability without corresponding increase in the asset.
The company has classified various employee benefits as under:
(A) Defined Contribution Plans
The company has recognised the following amounts in the Statement of Profit and Loss for the year:
i. Leave Encashment liability is determined by an independent actuary and relevant provisions are made in the books of account. The payment towards the liabilty is made by the company as and when the employee becomes eligible to claim the encashment.
ii. The liability towards gratuity is determined by an independent actuary and the relevant amounts towards gratuity liability is paid by the company to the "Suditi Employees Group Gratuity Trust". The said Trust administers the scheme.
The sales to and purchase from related parties are made in the ordinary course of business and on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year end are unsecured and settlement occurs in cash. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
49 Leases
The company recognizes all the Lease agreements including Leave & License Agreements executed for tenue which is more than one year as per the requirements under Ind AS 116-Leases.
In terms of the provisions of Ind AS 116, the Lease Liability is determined as the present value of lease rentals over the period discounted at the effective interest rate applicable to the Company. An equal amount has been recognised under the head "Property, Plant and Equipment" as a ''Right to Use Asset''. This Right to Use Asset will be depreciated over the period of lease and the lease liability is reduced by accounting the monthly lease payments.
Basic earnings per share has been calculated by dividing profit for the year attributable to equity shareholders, by the weighted average number of equity shares outstanding during the year. Diluted earnings per share has been calculated by dividing profit for the year attributable to equity shareholders, by the weighted average number of equity shares outstanding during the year and also the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the year, unless they have been issued at a later date. Dilutive potential equity shares that have been converted in to equity shares during the year are included in the calculation of diluted earnings per share from the beginning of the year to the date of conversion and from the date of conversion, the resulting equity shares are included in computing both basic and diluted earnings per share. Earnings per Share has been computed as under:
(i) Future cash outflows in respect of (a)(i) and a(ii) above is determinable only on receipt of judgments/decisions pending with various authorities/forums and/or final outcome of the matters. Accordingly, no provision in the accounts has been made as management is confident that these matters would be decided in the company''s favour.
(ii) The aforesaid amount referred to in (a)(i) above is inclusive of interest and other penalties/levies.
Capital Commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. Nil (Previous year Rs. Nil).
52 Segment Reporting
The Company is primarily in the business of manufacturing and sales of textile products (i.e., Fabrics and Garments). The Chief Operating Decision Maker (CODM), the Chairman & Managing Director, performs a detailed review of the operating results, takes decisions about the allocation of resources based on the analysis of the various performance indicators of the Company as a whole. Therefore, there is only one operating segment in accordance with Ind AS 108 âOperating Segmentsâ namely, âTextilesâ.
53 The Company has exercised the option permitted under Section 115 BAA of the Income Tax Act, 1961 as promulgated by the Taxation Laws (Amendment) Ordinance, 2019. Section 115BAA states that domestic companies have the option to pay tax at a rate of 22% plus sc of 10% and cess of 4%. The Effective Tax rate being 25.17% from the FY 2020-21 (AY 2021-22) onwards if such domestic companies adhere to certain condition and do not avail any exemptions/incentives under different provisions of income tax like Claiming a set-off of any loss carried forward or depreciation from earlier years, if such losses were incurred in respect of the aforementioned deductions. Since the Company has carry forwards losses of previous years, hence the need for making any provision for Income Tax does not arise for F.Y. 202425.
54 During the year 2019-20, the Company had received a cash refund of Rs.30,83,919/- from the Central Excise Department consequent upon receiving a favorable judgement from the Appellate Tribunal. Subsequently, the Excise Assistant Commissioner (Refund) Central Excise - Belapur division had issued an order directing the Holding Company to refund the Cash amount and to receive equivalent CENVAT credit for future setoff. The Holding Company had filed an appeal against the said order with the Commissioner (Appeals). The Excise Commissioner passed an Order in favour of the Department against which the Holding Company has filed an appeal with the Appellate authorities. There is no further development in the matter. The Management of the Holding Company strongly believes that the final outcome of the Tribunal will be in it''s favour.
55 Physical verification of inventory was conducted by the Internal Auditor (an external Chartered Accountant firm appointed by the company) alongwith a team member of the Statutory Auditors on a periodically basis. Each item was physically examined in the presence of the companyâs team and any difference or variation was rectified on the spot. Only unresolved items are listed out and discussed separately with the Chief Executive Officer of the company. The report was presented before the Audit committee and also commended to the Board for noting.
56 a) During the year the company has valued the remaining slow moving/unsaleable inventory at the best realizable value and accordingly has written down the value of the retail division finished goods inventory by Rs.22.58 lakhs. Accordingly, the company has passed necessary entries in the books. b) The Company has made a provision for probable estimated credit loss of Rs.251.54 lakhs as required under Ind AS 109.
57 Credit loss is calculated on the basis of actual outstanding receivables based on the age wise analysis and also based on the past three yearâs average. Accordingly a certain specified percentage of the amount arrived based on the three years average is computed post which some adjustments are made as per the Holding Company''s estimates & judgements and provided in the books. As per the prevailing trend and past experience the computed amount of Rs.251.54 lakhs has been provided in the books during the current year.
58 Additional regulatory information not disclosed elsewhere in the financial information
(a) The Company has disclosed the contingent liabilities in its financial statements in Note 52. The Company does not expect the outcome of these proceedings to have a material impact on its financial position.
(b) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
(c) There has been no delay in transferring amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
(d) The Company did not hold any benami property during the year.
(e) The Company has not been declared as a wilful defaulter by any bank or financial Institution or other lender.
(f) The Company did not have any transactions with struck off companies during the year under Section 248 or 560 of the Companies Act, 2013.
(g) No loans/advances were given to promoters, directors, KMPs & other related parties that were payable on demand or without specifying any terms & conditions.
(h) Neither any charges were created on the assets of the company during the year with the Registrar of companies nor was satisfaction of any charge pending beyond the stipulated period.
(i) The Company did not deal in any manner whatsoever with crypto currency/virtual currency during the year.
(j) The Company has not advanced/loaned/invested 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
(k) The Company has not received funds from any other 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 to or on behalf of the Ultimate Beneficiaries
(l) The Company neither declared nor paid any Dividend during the financial year.Hence, disclosure under provisions of Section 123 are not applicable.
(m) The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961 such as search, survey or any other provisions of the Income Tax Act, 1961.
(n) The Company has used borrowings from Banks and Financial Institutions for the specific purpose for which it was obtained.
(o) During the year, the Company does not have any borrowings against current assets (Book Debts & Inventories). Hence, Company is not required to furnish Quarterly returns or statements of current assets filed by the Company with Banks or Financial Institutions are in agreement with the books of accounts.
(p) The title deeds of all immovable properties (other than immovable properties where the Company is the lessee and the lease agreements are duly executed in favour of the Company) disclosed in the financial statements included in property, plant and equipment and capital work in process are held in the name of the Company as at the Balance Sheet date.
(q) The company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.
(r) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.
(s) The Company has maintained its books of account using accounting software that includes the audit trail (edit log) feature, as mandated under Rule 3 of the Companies (Accounts) Rules, 2014 (as amended). The said feature has remained operational throughout the financial year for all relevant financial transactions recorded in the software. There have been no instances of the audit trail feature being disabled or tampered with during the year.
In respect of the software used for recording inventory transactions, the audit trail (edit log) functionality was under configuration during FY 2024-25 and has been successfully implemented and activated. The feature will remain active going forward in compliance with statutory requirements.
The Company maintains payroll records externally in Excel format. While this format does not have a system-generated audit trail, appropriate manual controls and documentation are in place to ensure the integrity and traceability of payroll data.
60 The Financial results have been presented in accordance with the Division II of Schedule III to the Companies Act, 2013. Certain Balances of assets and liabilities as at March 31, 2025 have been regrouped/reclassified, wherever necessary, to comply with the amended Division II of Schedule III. Such reclassifications did not have a material impact on the financial results.
61 Events after the reporting date
No other adjusting or significant non-adjusting events has occurred between the reporting date (31st March, 2025) and the report release date (19th May, 2025).
62 The previous period figures have been regrouped / reclassified, wherever necessary to conform to the current period presentation.
Signatures to Notes 1 to 62
The accompanying notes are an intergral part of the standalone financial statements.
Mar 31, 2024
3.9 Provisions, Contingent liability & Contingent Assets
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
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 recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
Contingent Assets are neither recognised nor disclosed in the financial statements.
3.10 Employee Benefits
i) Defined Contribution Plans.
Contributions to the Employees'' Regional Provident Fund, Superannuation Fund, Employees Pension Scheme and Employees'' State Insurance are recognized as defined contribution plan and charged as expenses during the period in which the employees perform the services.
ii) Defined Benefit Plans.
Retirement benefits in the form of Gratuity and Leave Encashment are considered as defined benefit plan and determined on actuarial valuation using the Projected Unit Credit Method at the balance sheet date. Actuarial Gains or Losses through re-measurement of the net obligation of a defined benefit liability or asset is recognized in Other Comprehensive Income. Such re-measurements are not reclassified to the Statement of Profit and Loss in subsequent periods.
The Provident Fund Contribution other than contribution to Employees'' Regional Provident Fund, is made directly to the fund administerd by the Employees provident fund authority. a Trust administered by the Trustees. The interest rate to the members of the fund shall not be lower than the statutory rate declared by the Central Government under Employees'' Provident Fund and Miscellaneous Provision Act, 1952. The Employer shall make good deficiency, if any.
iii) Short-term Employee Benefits.
Short term benefits are charged off at the undiscounted amount in the year in which the related service is rendered.
iv) Long-term Employee Benefit.
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognized as a liability at the present value of the defined benefit obligation at the balance sheet date.
Annual leaves can either be availed or encashed subject to restriction on the maximum accumulation of leaves.
v) Termination Benefits.
Termination benefits are recognized as an expense in the period in which they are incurred.
The Company shall recognize a liability and expense for termination benefits at the earlier of the following dates:
(a) When the entity can no longer withdraw the offer of those benefits; and
(b) When the entity recognizes costs for a restructuring that is within the scope of Ind AS 37 and involves the payment of termination benefits.
3.11 Financial instruments 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.
1 Financial Assets.
1.1 Definition:
Financial Assets include Cash and Cash Equivalents, Trade and Other Receivables, Investments in Securities and other eligible Current and Non-Current Assets.
At initial recognition, all financial assets are measured at fair value. The classification is reviewed at the end of each reporting period.
(i) Financial Assets at Amortised Cost:
At the date of initial recognition, are held to collect contractual cash flows of principal and interest on principal amount outstanding on specified dates. These financial assets are intended to be held until maturity. Therefore, they are subsequently measured at amortized cost by applying the Effective Interest Rate (EIR) method to the gross carrying amount of the financial asset. The EIR amortization is included as interest income in the statement of profit and loss. The losses arising from impairment are recognized in the statement of Profit and Loss.
(ii) Financial Assets at Fair value through Other Comprehensive Income :
At the date of initial recognition, are held to collect contractual cash flows of principal and interest on principal amount outstanding on specified dates, as well as held for selling. Therefore, they are subsequently measured at each reporting date at fair value, with all fair value movements recognized in Other Comprehensive Income (OCI). Interest income calculated using the effective interest rate (EIR) method, impairment gain or loss and foreign exchange gain or loss are recognized in the Statement of Profit and Loss. On derecognition of the asset, cumulative gain or loss previouslyrecognized in Other Comprehensive Income is reclassified from the OCI to the Statement of Profit and Loss.
(iii) Financial Assets at Fair value through Profit or Loss (FVTPL):
At the date of initial recognition, Financial assets are held for trading, or which are measured neither at Amortized Cost nor at Fair Value through OCI. Therefore, they are subsequently measured at each reporting date at fair value, with all fair value movements recognized in the Statement of Profit and Loss.
1.2 Trade Receivables.
A Receivable is classified as a ''trade receivable'' if it is in respect of the amount due from customers on account of goods sold or services rendered in the ordinary course of business. Trade receivables are recognized at fair value less provision for impairment, if any. For some trade receivables the Company may obtain security in the form of guarantee, security deposit, in cash or goods or letter of credit which can be called upon if the counterparty is in default under the terms of the agreement.
1.3 Investment in Equity Shares.
Investment in Equity Securities are initially measured at cost. Any subsequent fair value gain or loss is recognized through Profit or Loss if such investments in Equity Securities are held for trading purposes. The fair value gains or losses of all other Equity Securities are recognized in Other Comprehensive Income.
1.4 Derecognition of Financial Assets.
A Financial Asset is primarily derecognized when:
⢠The right to receive cash flows from asset has expired, or
⢠The Company has transferred its right to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a "pass-through" arrangement and either:
a) The Company has transferred substantially all the risks and rewards of the asset, or
b) The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred or ceased the control of the asset. When the Company has transferred its right to receive cash flows from an asset or has entered into a pass through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognize the transferred asset to the extent of the Company''s continuing involvement. In that case, the Company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.
2 Financial Liabilities.
2.1 Definition:
Financial liabilities include Long-term and Short-term Loans and Borrowings, Trade and Other payables and Other eligible Current and Non-current Liabilities.
(a) Initial Recognition and Measurement.
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The Company''s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts.
(b) Subsequent Measurement.
The measurement of financial liabilities depends on their classification, as described below :
i) Financial Liabilities at Fair Value through Profit and Loss.
Financial liabilities at fair value through profit and loss include financial liabilities held for trading. The Company has not designated any financial liabilities upon initial measurement recognition at fair value through profit and loss. Financial liabilities at fair value through profit and loss are at each reporting date at fair value with all the changes recognized in the Statement of Profit and Loss.
ii) Financial Liabilities measured at Amortized Cost.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral part of the EIR. The EIR amortization is included in finance costs in the Statement of Profit and Loss.
2.2 Trade and Other Payables.
A payable is classified as trade payable if it is in respect of the amount due on account of goods purchased or services received in the normal course of business. These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method.
2.3 De-recognition of Financial Liability.
A Financial Liability is derecognized when the obligation under the liability is discharged or cancelled or expires. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit and loss as other income or finance costs.
3 Offsetting of Financial Instruments.
Financial Assets and Financial Liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
Fair value Hierarchy
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 lowest level 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 Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
3.12 Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
3.13 Cash Flow
Cash flows are reported using the indirect method, whereby profit/loss before exceptional items and tax is adjusted for the efects of transactions of non-cash nature and any deferrals or accruals of past or future receiptsor payments. In the cash flow statement, cash and cash equivalents includes cash in hand, cheques on hand, balances with banks in current accounts and other short term highly liquid investments with original maturities of 3 months or less, as applicable.
3.14 Investment in subsidiaries and joint venture
An investor, regardless of the nature of its involvement with an entity (the investee), shall determine whether it is a parent by assessing whether it controls the investee. An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
Thus, an investor controls an investee if and only if the investor has all the following:
a) power over the investee;
b) exposure, or rights, to variable returns from its involvement with the investee; and
c) the ability to use its power over the investee to affect the amount of the investor''s returns.
The Company has elected to recognise its investments in subsidiary companies at cost in accordance with the option available in Ind AS 27, ''Separate Financial Statements'' except where investments accounted for at cost shall be accounted for in accordance with Ind AS 105, ''Non-current Assets Held for Sale and Discontinued Operations'', when they are classified as held for sale.
Investment carried at cost is tested for impairment as per Ind-AS 36.
The company has only one class of shares i.e. Equity Shares having a face value of Rs.10/- each. The equity shareholders are entitled to dividend only if dividend in a particular financial year is recommended by the Board of Directors and approved by the members at the annual general meeting of that year. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by share holders.
in view of losses reported as well as uncertainty prevailing in the market, the Board of Directors has not recommended any dividend for the financial year 2023-24.
Shares reserved for issue under options
960000 shares were reserved for issue under the Employees Stock Option Plan pursuant to a special resolution passed in 20th Annual General Meeting held on 2nd September, 2011. During the year 2023-24, the Company has neither granted any options to any employees nor any options were exercised as there are no options pending which are yet to be exercised. The details of the options granted and exercised in past are as follows.
1) The company has so far allotted 317320 shares.
2) The balance as on 31st March 2024 is 642680 options which is yet to be granted to the employees from reserved portion of the equity capital.
There has been no allotment of shares pursuant to contract(s) without payment being received in (cash during 5 years immediately preceding 31st March, 2024).
Description of nature & purpose of each reserve:
Retained Earnings: Created from Profit/loss of the Company, as adjusted for distribution to owners, transfers to other reserves etc.
Securities Premium: Securities premium reserve is created due to premium on issue of shares. These reserve is utilized in accordance with the provisions of the Companies Act, 2013.
Share option outstanding account: Created for recording the grant date fair value of options issued to employees under the Employees stock option schemes & is adjusted on exercise/forfeiture of options.
Items of other comprehensive income: Created for transferring the remeasurements gains & losses on defined benefit plans.
The Company''s principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also holds FVTPL investments. The Company is exposed to market risk (including foreign currency risk, interest rate risk and commodity risk, etc.), credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Board of Directors reviews Financial Risk Management Policy for managing and mitigating these risks, which are summarized below:
1) Market Risk
Market risk is the risk of loss of future earnings, fair values or future cash flows that may results from change in the price of a financial instrument. The value of a financial instrument may change as result of change in the interest rates, foreign currency exchange rates, equity prices and other market changes may affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments and deposits, foreign currency receivables, payables and loans and borrowings. Market risk comprises mainly of risks related to changes in foreign currency exchange rates, commodity prices and interest rates. The Company has a moderate risk management system monitored by Risk Management Committee to inform Board Members about risk management and minimization procedures.
a) Foreign currency risk management
The Company''s functional currency is Indian Rupees (INR). The Company is not having any significant foreign transactions; hence the company is not prone to foreign currency risks as on the date of the balance sheet.
b) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk because funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the Company are principally denominated in rupees with a mix of fixed and floating rates of interest. The Company has exposure to interest rate risk, arising principally on changes in base lending rate. The Company uses a mix of interest rate sensitive financial instruments to manage the liquidity and fund requirements for its day-to-day operations. The Company regularly scans the Market & Interest Rate Scenario to find appropriate Financial Instruments & negotiates with the Lenders in order to reduce the effect Cost of Funding. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings.
c) Commodity price risk:
The Company''s revenue is exposed to the market risk of price fluctuations related to the sale of its products. Market forces generally determine prices for the products sold by the Company. These prices may be influenced by factors such as supply and demand, production costs (including the costs of raw material inputs) and global and regional economic conditions and growth. Adverse changes in any of these factors may reduce the revenue that the Company earns from the sale of its products.
The Company primarily purchases its raw materials in the open market from third parties. The Company is therefore subject to fluctuations in prices for the purchase of raw materials. The Company purchased substantially all of its textile grade yarn and grey fabrics from third parties in the open market during the year ended 31 March 2024.
The Company aims to sell the products at prevailing market prices. Similarly the Company procures key raw materials based on prevailing market rates as the selling prices of its products and the prices of input raw materials move in the same direction.
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk encompasses both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. Company''s credit risk arises principally from the trade receivables and financial instruments and deposits with banks.
Trade receivables:
Customer credit risk is managed centrally by the Company and subject to established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits defined in accordance with the assessment. Credit risk on receivables from organized and bigger buyers is mitigated by securing the same against letters of credit and guarantees of reputed nationalized and private sector banks/ part advance payments/post dated cheques.
The outstanding trade receivables are regularly monitored and appropriate action is taken for collection of overdue receivables. The outstanding from the trade segment is secured by two tier security - security deposit from the dealer himself, and our business associates who manage the dealers are also responsible for the outstanding from any of the dealers in their respective region. Impairment analysis is performed based on historical data at each reporting period on an individual basis.
The Company considers factors such as track record, size of institution, market reputation and service standards to select the bank with which balances and deposits are maintained. Generally, balances are maintained with the institutions with which the Company has also availed borrowings. The Company does not maintain significant cash and deposit balances other than those required for its day to day operation.
3) Liquidity risk management
Liquidity risk refers to the risk of financial distress or extraordinary high financing costs arising due to shortage of liquid funds in a situation where business conditions unexpectedly deteriorate and requiring financing. The Company requires funds both for short term operational needs as well as for long term capital expenditure growth projects. The Company generates sufficient cash flow for operations, which together with the available cash and cash equivalents and short term investments provide liquidity in the short-term and long term. The Company has established an appropriate liquidity risk management framework for the management of the Company''s short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. The following tables detail the Company''s remaining contractual maturity for its non derivative financial liabilities with agreed repayment periods and its non-derivative financial assets. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the Company may be required to pay.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Company''s primary objective when managing capital is to ensure that it maintains an efficient capital structure and healthy capital ratios and safeguard the Company''s ability to continue as a going concern in order to support its business and provide maximum returns for shareholders. The Company also proposes to maintain an optimal structure to reduce the cost of capital as well as to maintain proper leverage.
For the purpose of the Company''s capital management, capital includes issued capital, securities premium and all other equity reserves. Net debt includes, interest bearing loans and borrowings, less cash & cash Equivalents.
Fair Valuation Techniques
1. Fair Value of Investments in quoted shares are based on the prevailing market price at the reporting date.
2. Fair Value of Trade receivables is derived after considering the expected credit losses of these receivables.
47 Forward Contracts and Unhedged Foreign Currency Outstanding Balances
The company has not executed any forward contract for hedging exchange rate risk; the outstanding unhedged foreign currency balances as on 31st March, 2024 are as under:
(a) The foreign currency outstanding balances that have not been hedged by any derivative instrument or otherwise as at the Balance Sheet date are as follows:
48 Employee Benefits Gratuity:
The Company has a defined benefit gratuity plan governed by the Payments of Gratuity Act, 1972. Every employee who has completed five years or more of services is eligible for gratuity on separation at 15 days salary (last drawn salary) for each completed year of service. The Company has formed a Gratuity Trust to which contribution is made and an insurance policy is taken by the trust, which is a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance Company, as part of the policy rules, makes payment of all gratuity outgoes happening during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate, particularly, the significant fall in interest rates, which should result in a increase in liability without corresponding increase in the asset.
NOTE:
i. Leave Encashment liability is determined by an independent actuary and relevant provisions are made in the books of account. The payment towards the liabilty is made by the company as and when the employee becomes eligible to claim the encashment.
ii. The liability towards gratuity is determined by an independent actuary and the relevant amounts towards gratuity liability is paid by the company to the "Suditi Employees Group Gratuity Trust". The said Trust administers the scheme.
50 Leases
The company recognizes all the Lease agreements including Leave & License Agreements executed for tenue which is more than one year as per the requirements under Ind AS 116 - Leases.
In terms of the provisions of Ind AS 116, the Lease Liability is determined as the present value of lease rentals over the period discounted at the effective interest rate applicable to the Company. An equal amount has been recognised under the head "Property, Plant and Equipment" as a ''Right to Use Asset''. This Right to Use Asset will be depreciated over the period of lease and the lease liability is reduced by accounting the monthly lease payments.
51 Earnings per Share
Basic earnings per share has been calculated by dividing profit for the year attributable to equity shareholders, by the weighted average number of equity shares outstanding during the year. Diluted earnings per share has been calculated by dividing profit for the year attributable to equity shareholders, by the weighted average number of equity shares outstanding during the year and also the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the year, unless they have been issued at a later date. Dilutive potential equity shares that have been converted in to equity shares during the year are included in the calculation of diluted earnings per share from the beginning of the year to the date of conversion and from the date of conversion, the resulting equity shares are included in computing both basic and diluted earnings per share. Earnings per Share has been computed as under:
Note:
(i) Future cash outflows in respect of (a)(i) and a(ii) above is determinable only on receipt of judgments/decisions pending with various authorities/forums and/or final outcome of the matters. Accordingly, no provision in the accounts has been made as management is confident that these matters would be decided in the company''s favour.
(ii) The aforesaid amount referred to in (a)(i) above is inclusive of interest and other penalties/levies.
Capital Commitments
Estimated amount of contracts remaining to be executed on capital account and not
provided for (net of advances) Rs. Nil (Previous year Rs. Nil).
53 Segment Reporting
The Company is primarily in the business of manufacturing and sales of textile products (i.e., Fabrics and Garments). The Chief Operating Decision Maker (CODM), the Chairman & Managing Director, performs a detailed review of the operating results, takes decisions about the allocation of resources based on the analysis of the various performance indicators of the Company as a whole. Therefore, there is only one operating segment in accordance with Ind AS 108 "Operating Segments" namely, "Textiles".
54 The Company has exercised the option permitted under Section 115 BAA of the Income Tax Act, 1961 as promulgated by the Taxation Laws (Amendment) Ordinance, 2019. Section 115BAA states that domestic companies have the option to pay tax at a rate of 22% plus sc of 10% and cess of 4%. The Effective Tax rate being 25.17% from the FY 2020-21 (AY 2021-22) onwards if such domestic companies adhere to certain condition and do not avail any exemptions/incentives under different provisions of income tax like Claiming a set-off of any loss carried forward or depreciation from earlier years, if such losses were incurred in respect of the aforementioned deductions. Since the Company has incurred losses the need for making any provision for Income Tax does not arise for F.Y. 2023-24.
55 As per provisions of Section 135 of the Companies Act 2013, the company needs to compute its obligations under Corporate Social Responsibility (CSR).Due to the continued lossed made by the company in the last 2 years, there is no obligation towards CSR.The matters pertaining to the prior years are stated below :
i) The obligation towards CSR for FY 2018-19 was determined at Rs.9.51 lakhs which has remained unspent. In terms of the regulatory provisions prevailing at that time, the said amount was not required to be deposited in a specified bank account & was allowed to be utilised at a future date.
ii) The obligation towards CSR for FY 2019-20 was determined at Rs.7.19 lakhs. The company spent an amount of Rs.9.75 lakhs through donation to a specified organisation.The excess amount of Rs.2.56 lakhs has been carried forward to be set off against future obligations.
56 During the year 2019-20, the Company had received a cash refund of Rs.30,83,919/-from the Central Excise Department consequent upon receiving a favorable judgement from the Appellate Tribunal. Subsequently, the Excise Assistant Commissioner (Refund) Central Excise - Belapur division had issued an order directing the Holding Company to refund the Cash amount and to receive equivalent CENVAT credit for future setoff. The Holding Company had filed an appeal against the said order with the Commissioner (Appeals). The Excise Commissioner passed an Order in favour of the Department against which the Holding Company has filed an appeal with the Appellate authorities. There is no further development in the matter. The Management of the Holding Company strongly believes that the final outcome of the Tribunal will be in it''s favour.
57 Physical verification of inventory was conducted by the Internal Auditor (an external Chartered Accountant firm appointed by the company) alongwith a team member of the Statutory Auditors on a periodically basis. Each item was physically examined in the presence of the company''s team and any difference or variation was rectified on the spot. Only unresolved items are listed out and discussed separately with the Chief Executive Officer of the company. The report was presented before the Audit committee and also commended to the Board for noting.
58 a) During the year the company has valued the remaining slow moving/unsaleable inventory at the best realizable value and accordingly has written down the value of the retail division finished goods inventory by Rs.22.58 lakhs. Accordingly, the company has passed necessary entries in the books. b) The Company has written off bad debts/un-realisable amounts amounting to Rs.292.15 lakhs. c) The Company has made a provision for probable estimated credit loss of Rs.144.85 lakhs as required under Ind AS 109. Further, the company had provided Rs.90.26 lakhs for the bad and doubtful debts till the year 2022-23 which has now been written off during the year.
59 Credit loss is calculated on the basis of actual outstanding receivables based on the age wise analysis and also based on the past three year''s average. Accordingly a certain specified percentage of the amount arrived based on the three years average is computed post which some adjustments are made as per the Holding Company''s estimates & judgements and provided in the books. As per the prevailing trend and past experience the computed amount of Rs.144.85 lakhs has been provided in the books during the current year.
60 Additional regulatory information not disclosed elsewhere in the financial information
(a) The Company has disclosed the contingent liabilities in its financial statements in Note 52. The Company does not expect the outcome of these proceedings to have a material impact on its financial position.
(b) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
(c) There has been no delay in transferring amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
(d) The Company did not hold any benami property during the year.
(e) The Company has not been declared as a wilful defaulter by any bank or financial Institution or other lender.
(f) The Company did not have any transactions with struck off companies during the year under Section 248 or 560 of the Companies Act, 2013.
(g) No loans/advances were given to promoters, directors, KMPs & other related parties that were payable on demand or without specifying any terms & conditions.
(h) Neither any charges were created on the assets of the company during the year with the Registrar of companies nor was satisfaction of any charge pending beyond the stipulated period.
(i) The Company did not deal in any manner whatsoever with crypto currency/virtual currency during the year.
(j) The Company has not advanced/loaned/invested 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
(k) The Company has not received funds from any other 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 to or on behalf of the Ultimate Beneficiaries
(l) The Company neither declared nor paid any Dividend during the financial year.Hence, disclosure under provisions of Section 123 are not applicable.
(m) The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961 such as search, survey or any other provisions of the Income Tax Act, 1961.
(n) The Company has used borrowings from Banks and Financial Institutions for the specific purpose for which it was obtained.
(o) Quarterly returns or statements of current assets filed by the Companywith Banks or Financial Institutions are in agreement with the books of accounts.
(p) The title deeds of all immovable properties (other than immovable properties where the Company is the lessee and the lease agreements are duly executed in favour of the Company) disclosed in the financial statements included in property, plant and equipment and capital work in process are held in the name of the Company as at the Balance Sheet date.
(q) The company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.
(r) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.
(s) The Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operate throughout the year for all relevant transactions recorded in the software. Further, there are no instance of audit trail feature being tampered. However, in respect of the software being used for recording transactions of items of inventory, the edit log faciliity is in the process of being configured and would become available from the next financial year.
62 The Financial results have been presented in accordance with the Division II of Schedule III to the Companies Act, 2013. Certain Balances of assets and liabilities as at March 31, 2024 have been regrouped/reclassified, wherever necessary, to comply with the amended Division II of Schedule III. Such reclassifications did not have a material impact on the financial results.
63 Events after the reporting date
No other adjusting or significant non-adjusting events has occurred between the reporting date (31st March, 2024) and the report release date (30th May, 2024).
64 The previous period figures have been regrouped / reclassified, wherever necessary to conform to the current period presentation.
Signatures to Notes 1 to 64
The accompanying notes are an intergral part of the standalone financial statements.
As per our report of even date attached For and on behalf of the Board of Directors
Pawan Agarwal Vivek Gangwal
For Chaturvedi & Partners Chairman Director
Chartered Accountants DIN: 00808731 DIN: 01079807
(Firm Registration No.307068E)
Rajagopal Raja Chinraj Krina Gala
Executive Director & CEO Director
Siddharth P Punamiya DIN: 00158832 DIN: 07040989
Partner
(Membership No.148540)
Mumbai, 30th May, 2024
Shweta Gupta
Company Secretary
Navi Mumbai, 30th May, 2024
Mar 31, 2018
1. Offsetting of Financial Instruments.
Financial Assets and Financial Liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
2. Derivative Financial Instruments.
The Company uses derivative financial instruments, such as forward currency contracts and interest rate swaps to hedge its foreign currency risks and interest rate risks. Derivative financial instruments are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value at the end of each period. The method of recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, on the nature of the item being hedged. Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit and loss.
Fair value Hierarchy
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level 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 Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
o) Earnings per share
The basic earnings per share is computed by dividing the net profit attributable to equity shareholders for the period by the weighted average number of equity shares outstanding during the period. The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share, and also the weighted average number of equity shares which could be issued on the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless they have been issued at a later date. The diluted potential equity shares have been arrived at, assuming that the proceeds receivable were based on shares having been issued at the average market value of the outstanding shares. In computing dilutive earnings per share, only potential equity shares that are dilutive and that would, if issued, either reduce future earnings per share or increase loss per share, are included. p) Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value. q) Dividend distribution to equity holders
The Company recognizes a liability to make cash distributions to equity holders of the Company when the distribution is authorized 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 Companyâs Board of Directors. r) Cash Flow
The cash flow statement is prepared by the âIndirect Methodâ set out in Accounting Standard (AS) -3 on âCash Flow Statementsâ and presents the cash flows by operating, investing and financing activities of the company. Cash and cash equivalents presented in the Cash Flow Statement consists of cash on hand and deposits with banks. s) Custom duty
Custom duty payable on imported Raw materials, components, stores/spares etc is recognized to the extent assessed and charged by the custom department.
t) Service tax input credit
Service tax on input service is expensed out since the Company does not have any output liability.
u) Goods & Service Tax
The Government of India introduced the Goods and Service Tax (GST) with effect from 01/07/2017. Accordingly, in compliance with Indian Accounting Standard (Ind AS) 18 - Revenue, Revenue from operations for the period beginning 01/07/ 2017 to 31/03/2018 is presented net of GST. Revenue from operations of earlier periods include Excise Duty which now is subsumed with GST. Accordingly, the Revenue from operations for the quarter ended and year ended 31/03/2018 are not comparable with corresponding previous periods presented in the Financial Results which are reported inclusive of Excise Duty.
v) Segment Reporting
In accordance with Ind AS 108 âOperating Segmentsâ, the Company has only one reportable Primary Business segment viz. Hosiery Fabrics and Garments. The Geographical segment reported earlier under Export as well as Domestic are now not reported as the exports are insignificant. Further, the Company does not have separate identifiable bifurcation of Assets as the entire operations are undertaken for Hosiery Fabric only. w/) Investment in subsidiaries and associates
An investor, regardless of the nature of its involvement with an entity (the investee), shall determine whether it is a parent by assessing whether it controls the investee. An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Thus, an investor controls an investee if and only if the investor has all the following:
a) power over the investee;
b) exposure, or rights, to variable returns from its involvement with the investee; and
c) the ability to use its power over the investee to affect the amount of the investorâs returns.
An associate is an entity over which the Company has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but not control or joint control over those policies. The considerations made in determining significant influence are similar to those necessary to determine control over subsidiaries.
The Company has elected to recognize its investments in subsidiary and associate companies at cost in accordance with the option available in Ind AS 27, âSeparate Financial Statementsâ. Except where investments accounted for at cost shall be accounted for in accordance with Ind AS 105, âNon-current Assets Held for Sale and Discontinued Operationsâ, when they are classified as held for sale.
Investment carried at cost is tested for impairment as per Ind-AS 36. x) Share-based payments
Employees (including senior executives) of the Company receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments which are classified as equity-settled transactions.
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model. That cost is recognized as an employee benefit expense with a corresponding increase in âShare- Based Payment Reservesâ in other equity, over the period in which the performance and/or service conditions are fulfilled. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Companyâs best estimate of the number of equity instruments that will ultimately vest.
Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Companyâs best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are considered to be non-vesting conditions.
Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service and/or performance conditions.
No expense is recognized for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.
When the terms of an equity-settled award are modified, the minimum expense recognized is the expense had the terms had not been modified, if the original terms of the award are met. An additional expense is recognized for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee as measured at the date of modification. Where an award is cancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately through the Statement of Profit and Loss. y) Significant management judgment in applying accounting policies and estimation uncertainty
The preparation of the Companyâs financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities at the date of the financial statements. Estimates and assumptions are continuously evaluated and are based on managementâs experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
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.
In particular, the Company has identified the following areas where significant judgments, estimates and assumptions are required. Further information on each of these areas and how they impact the various accounting policies are described below and also in the relevant notes to the financial statements. Changes in estimates are accounted for prospectively.
i) Judgments
In the process of applying the Companyâs accounting policies, management has made the following judgments, which have the most significant effect on the amounts recognized in the financial statements:
a) Contingencies
Contingent liabilities may arise from the ordinary course of business in relation to claims against the Company, including legal, contractor, land access and other claims. By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgments and the use of estimates regarding the outcome of future events.
b) Recognition of deferred tax assets
The extent to which deferred tax assets can be recognized is based on an assessment of the probability that future taxable income will be available against which the deductible temporary differences and tax loss carry- forward can be utilized. In addition, significant judgment is required in assessing the impact of any legal or economic limits or uncertainties in various tax jurisdictions.
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 change or circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
a) Useful lives of depreciable assets
The Company reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets.
b) Defined benefit obligation
The cost of the defined benefit plan and other post-employment benefits and the present value of such 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, mortality rates and future pension increases. In view of 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.
c) Inventories
The Company estimates the net realizable values of inventories, taking into account the most reliable evidence available at each reporting date. The future realization of these inventories may be affected by future technology or other market-driven changes that may reduce future selling prices.
d) Business combinations
The Company uses valuation techniques when determining the fair values of certain assets and liabilities acquired in a business combination. In particular, the fair value of contingent consideration is dependent on the outcome of many variables including the acquiresâ future profitability
e) Impairment of non-financial assets and goodwill
In assessing impairment, Company estimates the recoverable amount of each asset or cash-generating units based on expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates to assumptions about future operating results and the determination of a suitable discount rate.
f) 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 judgment is required in establishing fair values. Judgments 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.
The company has only one class of shares i.e. Equity Shares having a face value of Rs. 10 each. The equity shareholders are entitled to dividend only if dividend in a particular financial year is recommended by the Board of Directors and approved by the members at the annual general meeting of that year. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by shareholders.
Shares reserved for issue under options
960000 shares were reserved for issue under the Employees Stock Option Plan pursuant to a special resolution passed in 20th Annual General Meeting held on 2nd September, 2011. In the year 2013, the Company has granted options to 48 employees aggregating to 278700 options. Out of this, 18 employees accepted the grant aggregating to 219500 options. Thirty employees did not accept 59200 options granted to them. The unaccepted options are ploughed back in the pool for further allocation. During 201718, another 30% of the options so granted have been vested which is in line with the Company''s ESOP scheme. No options are exercised in the current year.
Further the Compensation Committee had further granted 13000 options to 20 Employees in their meeting held in the month of February 2017. In addition to this the Company on the successful completion of 25 years of its operations decided to reward its Employees additional option to mark the Silver Jubilee celebrations of the Company. Accordingly the Compensation Committee has granted additional 1,11,605 options to 38 Employees both Senior and Junior level Employees. In total in the month of February 2017, the Company has granted additional 1,24,605 options to 38 Employees and all Employees have accepted their grant. In view of Special Resolution passed by members in their 25th Annual General Meeting, all the options granted shall vest after one year from the grant date. During the year, all the options granted under the above scheme were vested ; however no options were exercised in the current year.
There has been no allotment of shares pursuant to contract(s) without payment being received in (cash during 5 years immediately preceding 31st March, 2018).
Description of nature & purpose of each reserve:
Securities Premium Reserve: Created to record the premium on issue of shares. The reserve is utilized in accordance with the provisions of the Act.
Retained Earnings: Created from Profit/loss of the Company, as adjusted for distribution to owners, transfers to other reserves etc.
Share based Payment reserve: Created for recording the grant date fair value of options issued to employees under the Employees stock option schemes & is adjusted on exercise/forfeiture of options.
Other items of other comprehensive income : Created for transferring the re-measurements gains & losses on defined benefit plans & deferred revenue of Fully convertible debentures.
The Board of Directors has recommended a dividend of Rs.0.20 per share exclusively on the portion of the share capital held by the public as on the record date to be announced. The promoters have waived their entitlement of receiving the dividend in order to support the business activities of the company. The proposed dividend is subject to the approval by Shareholders at the ensuing Annual General Meeting and has not been recorded as a liability as at 31st March 2018 in accordance with Indian Accounting Standard (Ind AS)-10 âEvents after the Reporting Period â.
Summary of borrowing arrangements
(i) Fully Convertible debentures:
During the year 2017-18, Company has issued 3 Fully Convertible debentures of Face value of Rs. 1,50,00,000/- each to H.T. Media Limited. The terms of the issue are :
1. The Equity shares issued on conversion shall rank pari passu with the Existing Equity Shares of the company.
2. The FCDs shall be converted into Equity shares at the end of 18 months from date of such allotment.
3. The FCDs shall be unsecured.
4. Pricing of Equity shares - Frequently Trade Shares: The FCDs shall be converted into Equity shares of face value of Rs. 10/- each at a price which is higher of the following:
(a) Rs. 80/- per Equity share.
(b) Price arrived at in accordance with the ICDR Regulations. (âConversion Priceâ)
The objects of the Preferential issue:
(i) The object of the issue is to meet funding requirements towards brand building through advertising in the print & non-print media.
(ii) To meet issue expenses
(iii) General Corporate Purposes
As per IND AS 109 - Financial Instruments, Fully convertible debentures issued during the year are convertible into Equity shares as stated above. The same are reflected at fair value calculated on the basis of present value of the instrument as on the date of Balance Sheet.
Note: There are no delayed payments to Micro and Small Enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006 during the year. Further, there are no dues to such parties which are outstanding for more than the terms of the Contract agreed between the parties at the Balance Sheet date. This information has been determined on the basis of information available with the company.
1) Market Risk
Market risk is the risk of loss of future earnings, fair values or future cash flows that may results from change in the price of a financial instrument. The value of a financial instrument may change as result of change in the interest rates, foreign currency exchange rates, equity prices and other market changes may affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments and deposits, foreign currency receivables, payables and loans and borrowings. Market risk comprises mainly two types of risk: Interest rate risk & currency risk. The Company has an elaborate risk management system to inform Board Members about risk management and minimization procedures.
a) Foreign Currency Risk
The Company is not having any significant foreign transactions; hence the company is not prone to foreign currency risks as on the date of balance sheet.
b) Interest Rate Risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Any changes in the interest rates environment may impact future rates of borrowing. The following Table shows the blend of Companyâs Fixed & Floating Rate borrowings in Indian Rupee:
2) Credit Risk
Credit Risk arises from the possibility that counter party may not be able to settle their obligations as agreed. The Company is exposed to credit risk from its operating activities (primarily trade receivables).
Trade Receivable:-Customer Credit Risk is managed based on Companyâs established policy, procedures and controls. The Company periodically assesses the financial reliability of customers, taking into account the financial conditions, current economic trends, and analysis of historical bad debts and aging of trade receivables. Individual credit risk limits are set accordingly.
The credit risk from the organized and bigger buyers is reduced by securing Bank Guarantees/Letter of Credits/part advance payments/postdated cheques. The Outstandingâs of different parties are reviewed periodically at different level of organization. The outstanding from the trade segment is secured by two tier security - security deposit from the dealer himself, and our business associates who manage the dealers are also responsible for the outstanding from any of the dealers in their respective region. Impairment analysis is performed based on historical data at each reporting period on an individual basis.
Financial Instruments and Deposits with Banks:
The Company considers factors such as track record, size of institution, market reputation and service standards to select the bank with which balances and deposits are maintained. Generally, balances are maintained with the institutions with which the Company has also availed borrowings. The Company does not maintain significant cash and deposit balances other than those required for its day to day operation.
3) 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 is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due.
The Company relies on a mix of borrowings, and excess operating cash flows to meet its needs for funds. The current committed lines of credit are sufficient to meet its short to medium term expansion needs. The Company monitors rolling forecasts of its liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowings facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.
* Includes Government dues
31 Capital Risk Management
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Companyâs primary objective when managing capital is to ensure that it maintains an efficient capital structure and healthy capital ratios and safeguard the Companyâs ability to continue as a going concern in order to support its business and provide maximum returns for shareholders. The Company also proposes to maintain an optimal structure to reduce the cost of capital.
For the purpose of the Companyâs capital management, capital includes issued capital, securities premium and all other equity reserves. Net debt includes, interest bearing loans and borrowings, less cash & cash Equivalents.
The Company monitors capital using a gearing ratio, which is Net Debt divided by Total Capital plus Net Debt. Net Debt is calculated as total borrowings including short term and current maturities of long term debt.
Fair Valuation Techniques
1. Fair Value of Investments in quoted shares are based on the quoted market price at the reporting date.
2. Fair Value of Trade receivables is derived after considering the expected credit losses of these receivables.
3. As per Ind AS 109 - Financial Instruments, Fully Convertible Debentures issued for Rs.4,50,00,000/- during the year are convertible into Equity Shares. The same are reflected at fair value calculated on the basis of persent value of instrument using RBI rate as on the reporting date.
3 Other Comprehensive Income (OCI )
The disaggregation of changes to OCI by each type of reserves in equity is shown below
4 Share-based payments
Description of share based payments arrangements
The Company instituted the Employee Stock Option Plan - ESOP 2011 to grant equity based incentives to its eligible employees in accordance with the SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. The ESOP-2011 (âThe Schemeâ) had been approved by the Board of Directors of the Company at their meeting held on 30th Sept, 2011 and by the shareholders of the Company by way of special resolution passed at their Annual General Meeting held on 2nd Sept 2011, to grant 9,60,000 options, representing one share at par for each option upon exercise by the employee of the Company determined by the Board/Compensation Committee. The Scheme covers grant of options to the specified permanent eligible employees of the Company and also to non-executive directors of the Company including independent directors. During the year ended 31 January, 2013, the Company granted stock options to certain employees of the Company.
A. Suditi Employee Stock Option Plan 2011 (SUDITI ESOP 2011)
Pursuant to the Scheme, the Compensation Committee had given its approval to grant 350800 options at par to specified eligible employees of the Company in the year January 2013. Further the Company has also granted another 124605 options to the eligible Employees in 15th February 2017. The Company has the following share-based payment arrangements for employees. Movements during the year
The following table illustrates the number and fair price of, and changes in, share options during the year. Excise price is fixed at face value of ''10/- each.
B. Amendments to Suditi Employee Stock Option Plan 2011 (SUDITI ESOP 2011)
a) The Board has modified the SUDITI ESOP plan vide special resolution in the 25th Annual General Meeting by discounting the bifurcation of the vesting of the plan from 5 years to 1 year.
b) The lock-in-period of 1 year from the allotment is now modified and the same will be decided at the time of allotment of shares against exercise of options.
c) Further the total number of options, quantitative restricted to 85200 shares is now modified to 1% of the paid-up capital as on the date of allotment.
d) The Employee as defined in the plan now covers Employees of the Subsidiaries also.
Notes:
(a) The above details of consumption consists of Raw materials which are consumed directly for manufacture of finished products and also other items which are indirectly related to manufacture of finished products, i.e. stores, spares and packing materials.
# There is no amount payable in foreign currency outstanding as on 31st March, 2018.
5 Employee Benefits Gratuity:
The Company has a defined benefit gratuity plan governed by the Payments of Gratuity Act, 1972. Every employee who has completed five years or more of services is eligible for gratuity on separation at 15 days salary (last drawn salary) for each completed year of service. The Company has formed a Gratuity Trust to which contribution is made and an insurance policy is taken by the trust, which is a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance Company, as part of the policy rules, makes payment of all gratuity outgoes happening during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate ( particular, the significant fall in interest rates, which should result in a increase in liability without corresponding increase in the asset. The Company makes a provision of unfunded liability based on actuarial valuation in the Balance Sheet as part of employee cost.
The company has classified various employee benefits as under:
NOTE:
i. Leave Encashment liability is determined by an independent actuary and relevant provisions are made in the books of account. The payment towards the liability is made by the company as and when the employee becomes eligible to claim the encashment.
ii. The liability towards gratuity is determined by an independent actuary and the relevant amounts towards gratuity liability is paid by the company to the âSuditi Employees Group Gratuity Trustâ. The said Trust administers the scheme.
45 Related Party Disclosures
Related parties with whom the company had transactions during the year
a) Key Management Personnel
1. Mr.Pawan Agarwal - Chairman and Managing Director
2. Relatives of Key Management Personnel:
1. Mr.Anand Agarwal (Brother)
2. Mr.Rajendra Agarwal (Brother)
3. Mrs.Pramila Agarwal (Wife of Anand Agarwal)
4. Mrs.Shalini Agarwal (Wife of Pawan Agarwal)
b) Enterprises under Common control of the Promoters
1. BLR Knits Pvt. Ltd.
2. Intime Knits Pvt. Ltd.
3. Black Gold Leasing Pvt. Ltd.
4. R. Piyarellal Pvt. Ltd.
5. Suditi Design Studio Ltd.
6. Suditi Sports Apparels Ltd.
7. SAA & Suditi Retail Pvt. Ltd.
Note:
(i) Future cash outflows in respect of (a)(i) above is determinable only on receipt of judgments/decisions pending with various authorities/forums and/or final outcome of the matters. Accordingly, no provision in the accounts has been made as management is confident that these matters would be decided in the companyâs favour.
(ii) The aforesaid amount referred to in (a)(i) above is inclusive of interest and other penalties/levies.
(iii) Similarly in respect of Item (b)(I) the Liability may vary depending up to the scheme if any allowed or permitted at the time of redemption or settlement of the licence which may include interest and other penalties/levies.
Capital Commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. Nil (Previous year Rs. Nil).
6. The previous period figures have been regrouped / reclassified, wherever necessary to conform to the current period presentation. Signatures to Notes 1 to 50
The accompanying notes are an integral part of the standalone financial statements.
Mar 31, 2016
(d) Shares reserved for issue under options
960000 shares were issued under the Employees Stock Option Plan pursuant to a special resolution passed in 20th Annual General Meeting held on 2nd September, 2011. Till date, the Company has granted options to 48 employees aggregating to 278700 options. Out of this, 18 employees accepted the grant aggregating to 219500 options. Thirty employees did not accept 59200 options granted to them. The unaccepted options are ploughed back in the pool for further allocation. During the current year, another 25% of the options so granted have been vested which is in line with the Companyâs ESOP scheme. However, options so vested has not been exercised by the employees.
(e) Rights Issue
Consequent to the Issue of Equity Shares on Right Basis to the existing shareholders in the year 2012-13, the Share Capital of the Company increased from Rs.852.00 lakhs to Rs.1667.45 lakhs. Out of the net Rights Issue proceeds an aggregate sum of Rs. 815.45 lakhs(Previous year Rs.718.98) has been utilised towards the objectives stated in the Rights Issue document Up to 31st March, 2016. With this the Company has utilised the entire net Rights Issue proceeds.
(f) Shares allotted as fully paid-up pursuant to contract(s) without payment being received in cash (during 5 years immediately preceding 31st March, 2016)
There has been no allotment of shares pursuant to contract(s) without payment being received in (cash during 5 years immediately preceding 31st March, 2016)
The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. The Board of Directors has recommended a Dividend of Rs.0.70 per share exclusively on the share capital held by the public for the year ended 31st March, 2016. The promoters have waived their entitlement of receiving dividend in order to support the business activities of the company.
1. Employeesâ Stock Option Plan 2011
The Company instituted the Employee Stock Option Plan - ESOP 2011 to grant equity based incentives to its eligible employees in accordance with the SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. The ESOP-2011 (âThe Schemeâ) had been approved by the Board of Directors of the Company at their meeting held on 30th Sept, 2011 and by the shareholders of the Company by way of special resolution passed at their Annual General Meeting held on 2nd Sept 2011, to grant 9,60,000 options, representing one share at par for each option upon exercise by the employee of the Company determined by the Board/Compensation Committee. The Scheme covers grant of options to the specified permanent eligible employees of the Company and also to non-executive directors of the Company including independent directors. Pursuant to the Scheme, the Compensation Committee had given its approval to grant 350800 options at par to specified eligible employees of the Company. Out of this, 97600 options were not accepted.
The options granted under the Scheme shall vest not less than one year and not more than five years from the date of grant of options. Under the terms of the Scheme, the total options are divided on certain prescribed basis spread over a period of 5 years and accordingly the same will vest in the employee every year. The Option grantee must exercise all vested options within a period of five years from the date of granting. Once the options vest as per the Scheme, they would be exercisable by the Option Grantee at any time within the staid period of five years and the shares arising on exercise of such options shall be subject to a lock-in period of 1 year from the date of allotment. There has been no exercise of the options vested in the employees as at year end.
(a) The primary reporting of the company is based on the business segment. The company has no substantial amount of business in other segment except manufacturing of knitted hosiery fabrics and readymade garments.
(b) Secondary segment reporting is based on the geographical location of customers. Revenue is segregated in to two segments namely India and Other Countries for the purpose of reporting geographical segments.
(c) The accounting policies adopted for segment reporting are in line with the accounting policies adopted for the preparation of financial statements as disclosed in Note 2.
(d) In the opinion of the Company it is not practicable to provide segment wise disclosure relating to the Capital Employed as it cannot be bifurcated between segments considering the nature of production facilities which are common and combined for all the segments.
2. Related Party Disclosures
Related parties with whom the company had transactions during the year
a) Key Management Personnel
1. Mr.Pawan Agarwal - Chairman and Managing Director
2. Relatives of Key Management Personnel:
1. Mr.Kishorilal Agarwal (Father - Late)
2. Mr.Anand Agarwal (Brother)
3. Mr.Rajendra Agarwal (Brother)
4. Mrs.Pramila Agarwal (Wife of Anand Agarwal)
5. Mrs.Shalini Agarwal (Wife of Pawan Agarwal)
b) Enterprises under Common control of the Promoters
1. BLR Knits Pvt. Ltd.
2. Intime Knits Pvt. Ltd.
3. Black Gold Leasing Pvt. Ltd.
4. R. Piyarellal Pvt. Ltd.
5. Suditi Design Studio Ltd
6. Suditi Sports Apparels Ltd
3. Earnings per Share
Basic earnings per share has been calculated by dividing profit for the year attributable to equity shareholders, by the weighted average number of equity shares outstanding during the year. Diluted earnings per share has been calculated by dividing profit for the year attributable to equity shareholders, by the weighted average number of equity shares outstanding during the year and also the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the year, unless they have been issued at a later date. Dilutive potential equity shares that have been converted in to equity shares during the year are included in the calculation of diluted earnings per share from the beginning of the year to the date of conversion and from the date of conversion, the resulting equity shares are included in computing both basic and diluted earnings per share. Earnings per Share has been computed as under:
4. The previous period figures have been regrouped / reclassified, wherever necessary to conform to the current period presentation.
Mar 31, 2015
1. Employees' Stock Option Plan 2011
"The Company instituted the Employee Stock Option Plan  ESOP 2011 to
grant equity based incentives to its eligible employees in accordance
with the SEBI (Employees Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999. The ESOP-2011 ("The Scheme") had
been approved by the Board of Directors of the Company at their meeting
held on 30th Sept, 2011 and by the shareholders of the Company by way
of special resolution passed at their Annual General Meeting held on
2nd Sept 2011, to grant 9,60,000 options, representing one share at par
for each option upon exercise by the employee of the Company determined
by the Board/Compensation Committee. The Scheme covers grant of options
to the specified permanent eligible employees of the Company and also
to non-executive directors of the Company including independent
directors. Pursuant to the Scheme, the Compensation Committee had on
31st December, 2012 given its approval to grant 278700 options at par
to specified eligible employees of the Company. Out of this, 59200
options were not accepted."The options granted under the Scheme shall
vest not less than one year and not more than five years from the date
of grant of options. Under the terms of the Scheme, the total options
are divided on certain prescribed basis spread over a period of 5 years
and accordingly the same will vest in the employee every year. The
Option grantee must exercise all vested options within a period of five
years from the date of granting. Once the options vest as per the
Scheme, they would be exercisable by the Option Grantee at any time
within the said period of five years and the shares arising on exercise
of such options shall be subject to a lock-in period of 1 year from the
date of allotment. There has been no exercise of the options vested in
the employees as at year end.
2. Forward Contracts and Unhedged Foreign Currency Outstanding Balances
The company has not executed any forward contract for hedging exchange
rate risk; the outstanding unhedged foreign currency balances as on
31st March, 2015 are as under:
NOTE:
i. Leave Encashment liability is determined by an independent actuary
and relevant provisions are made in the books of account. The payment
towards the liabilty is made by the company as and when the employee
becomes eligible to claim the encashment.
ii. The liability towards gratuity is determined by an independent
actuary and the relevant amounts towards gratuity liability is paid by
the company to the "Suditi Employees Group Gratuity Trust". The said
Trust administers the scheme.
Notes:
(a) The primary reporting of the company is based on the business
segment. The company has no substantial amount of business in other
segment except manufacturing of knitted hosiery fabrics and readymade
garments.
(b) Secondary segment reporting is based on the geographical location
of customers. Revenue is segregated in to two segments namely India and
Other Countries for the purpose of reporting geographical segments.
(c) The accounting policies adopted for segment reporting are in line
with the accounting policies adopted for the preparation of financial
statements as disclosed in Note 2.
(d) In the opinion of the Company it is not practicable to provide
segmentwise disclosure relating to the Capital Employed as it cannot be
bifurcated between segments considering the nature of production
facilities which are common and combined for all the segments.
3. Related Party Disclosures
Related parties with whom the company had transactions during the year
a) Key Management Personnel
1. Mr. Pawan Agarwal - Chairman and Managing Director
2. Relatives of Key Management Personnel:
1. Mr. Kishorilal Agarwal (Father - Late)
2. Mr. Anand Agarwal (Brother)
3. Mr. Rajendra Agarwal (Brother)
4. Mrs. Pramila Agarwal (Wife of Anand Agarwal)
5. Mrs. Shalini Agarwal (Wife of Pawan Agarwal)
b) Enterprises under Common control of the Promoters
1. BLR Knits Pvt. Ltd.
2. Intime Knits Pvt. Ltd.
3. Black Gold Leasing Pvt. Ltd.
4. R. Piyarellal Pvt. Ltd.
Disclosure of transactions between the company and related parties
Note:
(i) Future cash outflows in respect of (a)(i) above is determinable
only on receipt of judgments/decisions pending with various
authorities/forums and/or final outcome of the matters. Accordingly, no
provision in the accounts has been made as management is confident that
these matters would be decided in the company's favour.
Capital Commitments
Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) Rs. Nil (Previous year
Rs. Nil).
4. The previous period figures have been regrouped / reclassified,
wherever necessary to conform to the current period presentation.
Complied by: Dion Global Solutions Limited
SUDITI INDUSTRIES LTD
FACTORY & ADMK OFF. : C-253/254, M.I.D.C., T.T.C.
INDUSTRIAL AREA, VILLAGE PAWNE, NAVI MUMBA1 - 4U0 703
TEL,: (91) 22 6736 Xf>0<]/I0, FAX : (91) 22 276X 3465
E-MAIL : admm@sudiri.in WEBSITE : www.suditi.inpt
Mar 31, 2014
1. Employees'' Stock Option Plan 2011
The Company instituted the Employee Stock Option Plan - ESOP 2011 to
grant equity based incentives to its eligible employees in accordance
with the SEBI (Employees Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999. The ESOP-2011 ("The Scheme") had
been approved by the Board of Directors of the Company at their meeting
held on 30th June, 2011 and by the shareholders of the Company by way
of special resolution passed at their Annual General Meeting held on
2nd Sept 2011, to grant 9,60,000 options, representing one share at par
for each option upon exercise by the employee of the Company determined
by the Board/Compensation Committee. The Scheme covers grant of options
to the specified permanent eligible employees of the Company and also
to non-executive directors of the Company including independent
directors. Pursuant to the Scheme, the Compensation Committee had on
31st December, 2012 given its approval to grant 278700 options at par
to specified eligible employees of the Company. Out of this, 59200
options were not accepted.
The options granted under the Scheme shall vest not less than one year
and not more than five years from the date of grant of options. Under
the terms of the Scheme, the total options are divided on certain
prescribed basis spread over a period of 5 years and accordingly the
same will vest in the employee every year. The Option grantee must
exercise all vested options within a period of five years from the date
of granting. Once the options vest as per the Scheme, they would be
exercisable by the Option Grantee at any time within the said period of
five years and the shares arising on exercise of such options shall be
subject to a lock-in period of 1 year from the date of allotment. There
has been no exercise of the options vested in the employees as at year
end.
The estimated fair value computed by an independent valuer on the basis
of Black Scholes pricing model for each stock option granted is within
the range of Rs.10.00 to Rs.15.47 per option. Accordingly, the
compensation cost and charge to the profit and loss account for the
year ended March 31,2014 would have been higher by Rs.3,39,567/- had
the Company followed the fair valuation method for accounting the
options issued. On proforma basis the Company''s basic and diluted
earnings per share would have been Rs. 0.44 and Rs. 0.44.
Notes:
(a) The above details of consumption consists of Raw materials which
are consumed directly for manufacture of finished product and other
items which are indirectly related to manufacture of finished products,
i.e. stores, spares and packing materials.
2. Forward Contracts and Unhedged Foreign Currency Outstanding
Balances
The company has not executed any forward contract for hedging exchange
rate risk; the outstanding unhedged foreign currency balances as on
31st March, 2014 are as under:
(a) The foreign currency outstanding balances that have not been hedged
by any derivative instrument or otherwise as at the Balance Sheet date
are as follows:
NOTE:
i. Leave Encashment liability is determined by an independent actuary
and relevant provisions are made in the books of account. The payment
towards the liabilty is made by the company as and when the employee
becomes eligible to claim the encashment.
ii. The liability towards gratuity is determined by an independent
actuary and the relevant amounts towards gratuity liability is paid by
the company to the "Suditi Employees Group Gratuity Trust". The
said Trust administers the scheme.
(a) The primary reporting of the company is based on the business
segment. The company has no substantial amount of business in other
segment except manufacturing of knitted hosiery fabrics and readymade
garments. During the year the company has provided service through
buying house agency and received commission of Rs.129462 only.
(b) Secondary segment reporting is based on the geographical location
of customers. Revenue is segregated in to two segments namely India and
Other Countries for the purpose of reporting geographical segments.
(c) The accounting policies adopted for segment reporting are in line
with the accounting policies adopted for the preparation of financial
statements as disclosed in Note 2.
(d) In the opinion of the Company it is not practicable to provide
segmentwise disclosure relating to the Capital Employed as it cannot be
bifurcated between segments considering the nature of production
facilities which are common and combined for all the segments.
3. Related Party Disclosures
Related parties with whom the company had transactions during the year
a) Key Management Personnel
1. Mr.Pawan Agarwal - Chairman and Managing Director
2. Relatives of Key Management Personnel:
1. Mr.Kishorilal Agarwal (Father - Late)
2. Mr.Anand Agarwal (Brother)
3. Mr.Rajendra Agarwal (Brother)
4. Mrs.Pramila Agarwal (Wife of Anand Agarwal)
5. Mrs.Shalini Agarwal (Wife of Pawan Agarwal)
b) Enterprises under Common control of the Promoters
1. BLR Knits Pvt. Ltd.
2. Intime Knits Pvt. Ltd.
3. Black Gold Leasing Pvt. Ltd.
4. R. Piyarellal Pvt. Ltd.
4. Earnings per Share
Basic earnings per share has been calculated by dividing profit for the
year attributable to equity shareholders, by the weighted average
number of equity shares outstanding during the year. Diluted earnings
per share has been calculated by dividing profit for the year
attributable to equity shareholders, by the weighted average number of
equity shares outstanding during the year and also the weighted average
number of equity shares which could have been issued on the conversion
of all dilutive potential equity shares. Dilutive potential equity
shares are deemed converted as of the beginning of the year, unless
they have been issued at a later date. Dilutive potential equity shares
that have been converted in to equity shares during the year are included
in the calculation of diluted earnings per share from the beginning of
the year to the date of conversion and from the date of conversion, the resulting equity shares are included in computing both basic and diluted earnings per share. Earnings per Share has been computed as under:
5. Contingent Liabilities
(a) Claims against the company not
acknowledged as debts
(i) Sales tax matters 16,029,051 16,029,051
(ii) Excise matters - -
(iii) Income tax matters - 61,516,831
16,029,051 77,545,882
(b) Guarantee given to any
Government Department or
Corporation (i) Asstt.
Commissioner of Customs under
EPCG Scheme towards export obligations 16,910,924 16,910,924
16,910,924 16,910,924
Note:
(i) Future cash outflows in respect of (a)(i) above is determinable
only on receipt of judgments/decisions pending with various
authorities/forums and/or final outcome of the matters.
Capital Commitments
Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) Rs. Nil (Previous year
Rs. Nil).
5. Previous year''s figures have been recast / restated, wherever
necessary.
1. The above Cash Flow Statement has been prepared under the
''Indirect Method'' as set out in the Accounting Standard - 3 on Cash
Flow Statements, notified under sub-section (3C) of Section 211 of the
Companies Act, 1956 (the ''Act'') which as per a clarification issued
by Ministry of Corporate Affairs continue to apply under section 133 of
the Companies Act, 2013 (which has superseded section 211(3C) of the
Companies Act, 1956 with effect from September 12, 2013).
2. Previous year figures have been regrouped where necessary.
Mar 31, 2013
1. Corporate information
Suditi Industries Limited (the ''company'') was incorporated on 12th
September, 1991 as Suditi Hosiery Processors Limited. The name of the
company was subsequently changed to Suditi Industries Limited on 21 st
October, 1994. The company is in the business of processing and
manufacturing of knitted hosiery fabrics and readymade garments. The
company has also started business in retail sector.
2. Employees'' Stock Option Plan 2011
The Company instituted the Employee Stock Option P lan - ESOP2011 to
grant equity based incentives to its eligible employees. The ESOP- 2011
(The Scheme") had been approved by the Board of Directors of the
Company at their meeting hold on 30lh June 2011 and by the shareholders
of the Company by way of special resolution passed at their Annual
General Meeting held on 2nd Sept2011, to grant 9,60,000/ - options,
representing one share at par for each option upon exercise by the
employee of the Companydeterrnined by the BoardCompensation Committee
The Scheme covers grant of options to the specified permanent eligible
employees of the Company and also to non-executive directors of the
Company including independent directors. Pursuant to the Sche m e , the
Compensation Committee has on 31 st December, 2012 granted 278700
options at par to specified eligible employees of the Company as per
SEBI Guidelines.
The options granted under the Scheme shall vest not less than one year
and not more than five years from the date of grant of options. Under
the terms of the Scheme, the total options are dividend on certain
prescribed basis spread over a period of 5 years and accordingly the
same will vest in the employee every year. The Option grantee must
exercise all vested options within a period of fiveyears from the date
of granting. Once the options vest as per the Scheme, they would be
exercisable by the Option Grantee at any time and the shares arising on
exercise of such options shall be subject to a lock-in period of 1 year
from the date of allotment.
3. Forward Contracts and Unhedged Foreign Currency Outstanding
Balances
The company has not executed any forward contract for hedging exchange
rate risk; the outstanding unhedged foreign currency bal ances as on
31st March, 2013 are as under:
(a) The foreign currency outstanding balances that have not been hedged
by any derivative instrument or otherwise as at the Balance Sheet date
are as follows:
4. Related Party Disclosures
Related parties with whom the company had transactions during the year
a) Key Management Personnel
1. MrPawan Agarwal - Chairman and Managing Director
2. Relatives of Key Management Personnel:
1. Mr.KishorilalAgarwal (Father)
2. Mr.AnandAgarwal (Brother)
3. Mr.Rajendra Agarwal (Brother)
4. Mrs.Pramila Agarwal (Wife of Anand Agarwal)
5. MrsShalini Agawal (We of Pawan Agawal)
b) Enterprises under Common control of the Promoters
1. BLRKnitsPvt.Ltd.
2. lntimeKnitsPvt.Ltd.
3. Black Gold Leasing Pvt. Ltd.
Disclosure of transactions between the company and related parties
5. Earnings per Share
Basic earnings per share has been calculated by dividing profit for the
year attributable to equity shareholders, by the weighted average
number of equty snares outstanding during the year. Diluted earnings
per share has been calculated by di v i ding profit for the year
attributable to equity shareholders, by the weighted average number of
equty shares outstanding during the year and also the weighted average
number of equity shares which could have been issued on the conversion
of all dilutive potential equity shares. Dilutive potential equity
shares are deemed converted as of the beginning of the year, unless
they have been issued at a later date. Dilutive potential equity shares
that have been converted in to equity shares during the year are
included in the calculation of diluted earnings per share from the
beginning of the year to the date of conversion and from the date of
conversion, the resulting equity shares are included in computing both
basic and diluted earnings per share.
6. Previous year''s figures have been recast / restated, wherever
necessary.
Mar 31, 2012
1. Corporate information
Suditi Industries Limited (the 'company') was incorporated on 12th
September, 1991 as Suditi Hosiery Processors Limited. The name of the
company was subsequently changed to Suditi Industries Limited on 21 st
October, 1994.
The company is in the business of processing and manufacturing of
knitted hosiery fabrics and readymade garments. The company a Iso has
started business in retail sector.
(a) Shares reserved (or issue under options 960000 shares are to be
issued under the Employees Stock Option Plan pursuant to a special
resolution passed in 20th Annual General Meeting held on 2nd,
September, 2011.
(f) The company has decided to implement its proposal for rights issue
of equity shares pursuant to a resolution passed in its Board of
Directors' meeting held on 19r May, 2011.
(g) Shares allotted as fully paid-up pursuant to contract(s) without
payment being received in cash (during 5 years immediately preceding
3111 March, 2012) There has been no allotment of shares pursuant to
contract(s) without payment being received in (cash during 5 years
immediately preceding 31st March, 2012)
(a) Nature of security and terms of repayment for secured borrowings
(i) Terms Loans from Banks are secured by hypothecation of specific
assets purchased under loans. The loan is collaterally secured by Land
and Building and Plant and machinery located at Turbhe-Mahape Plant,
Navi Mumbai.
(ii) Repayable is in 57 Monthly Installments beginning after three
months from the time loan is taken along with interest @ rate of 13.75%
P.A.
The total term loan of Rs. 113.00 lakhs is sanctioned by the bank out
of which the company has availed the loan amounting to Rs.21.36 lakhs
on 29,March, 2012 and bank has debited interest of Rs.0.02 lakhs till
31 st March, 2012.
2. Employees' Stock Option Plan 2011
Pursuant to a special resolution passed by the Shareholders at the 20th
Annual General Meeting held on 2nd September, 2011 the company adopted
the Employee Stock Option Scheme titled 'SUDITI EMPLOYEES' STOCK
OPTION PLAN, 2011(SUDfTI ESOP 2011) for employees and directors of the
company. The said Issue has been approved by Bombay Stock Exchange
Limited on 13th March, 2012 in pursuance to guidelines issued by SEBI
(ESOS and ESPS) Guidelines, 1999 with maximum issue and allotment of
9,60,000 Equity Shares and the company is required to complete and
comply with all related terms and conditions stipulated in the sanction
letter.
3. Proposed Rights Issue
The proposal of Rights Issue is presented and approved by the Board of
Directors of the Company in its meeting held on 19th May, 2011. The
said proposal has also been sanctioned by the Bombay Stock Exchange
Limited vide their letter dt.17th June, 2011. The draft Offer Document
prepared by the Lead Manager to the Rights Issue had been filed with
SEBI and their observations are in the process of being responded.
4. Forward Contracts and Unhedged Foreign Currency Outstanding
Balances
The company has not executed any forward contract (or hedging exchange
rate risk, the outstanding unheeded foreign currency balances as on 31st
March, 2012 are as under:
(a) The foreign currency outstanding balances that have not been hedged
by any derivative instrument or otherwise as at the Balance Sheet date
are as follows:
i. Leave Encashment inability is determined by an independent actuary
and relevant provisions are made in the books of account. The payment
towards the liability is made by the company as and when the employee
becomes eligible to claim the encashment.
ii. The liability towards gratuity is determined by an independent
actuary and the relevant amounts towards gratuity liability is paid by
the company to the "Suditi Employees Group Gratuity Trust". The said
Trust administers the scheme.
Notes:
(a) The primary reporting of the company is based on the business
segment. The company has no substantial amount of business in other
segment except manufacturing of knitted hosiery fabrics and readymade
garments. During the year the company has provided service through
buying house agency and received commission of Rs. 32696 only.
(b) Secondary segment reporting is based on the geographical location
of customers. Revenue is segregated in to two segments namely India and
Other Countries for the purpose of reporting geographical segments.
(c) The accounting policies adopted for segment reporting are in line
with the accounting policies adopted for the preparation of Financial
statements as disclosed in Note 2.
((} In the opinion of the Company it is not practicable to provide
segment wise disclosure relating to the Capital Employed as it cannot be
bifurcated between segments considering the nature of production
facilities which are common and combined for all the segments.
5. Related Party Disclosures
Related parties with whom the company had transactions during the year
a) Key Management Personnel
1. Mr.Pawan Agarwal Chairman and Managing Director
2. Relatives of Key Management Personnel:
1. Mr.Kishorilal Agarwal (Father)
2. Mr .Anand Agarwal (Brother)
3. Mr.Rajendra Agarwal (Brother)
4. Mrs.Pramila Agarwal (Wife of Anand Agarwal)
5. Mrs.Shalini Agarwal (Wife of Pawan Agarwal)
b) Enterprises under Common control ol the Promoters
1. BLR Knits Pvt. Ltd.
2. Intime Knits Pvt. Ltd.
3. Black Gold Leasing Pvt. Ltd.
6. Earnings per Share
Basic earnings per share has been calculated by dividing profit for the
year attributable to equity shareholders, by the weighted average
number of equity shares outstanding during the year. Diluted earnings
per share has been calculated by dividing profit for the year
attributable to equity shareholders, by the weighted average number of
equity shares outstanding during the year and also the weighted average
number of equity shares which could have been issued on the conversion
of all dilutive potential equity shares. Dilutive potential equity
shares are deemed converted as of the beginning of the year, un less
they have been issued at a later date. Dilutive potential equity shares
that have been converted in to equity shares during the year are
included in the calculation of diluted earnings per share from the
beginning of the year to the date of conversion and from the date of
conversion, the resulting equity shares are included in computing both
basic and diluted earnings per share. Earnings per Share has been
computed as under:
7. The financial statements for the year ended 31st March, 2011 were
prepared as per the applicable, pre-revised Schedule VI to the Act.
Consequent to the notification of Revised Schedule VI under the Act,
the financial statements for the year ended 31a 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.
Mar 31, 2011
1) I) Contingent Liabilities not provided for:
a) In respect of Bonds executed in favour of:
i Asst. Commissioner of Customs under EPCG scheme towards export
obligation-Rs. 169.07 lacs. (Previous Year Rs. 169.07 lacs)
b) Disputed matters in appeal
Contested in Current year Previous year
respect of 31.03.2011 31.03.2010
(Rs. in lacs) (Rs. in lacs)
Excise Duty 40.85 40.85
including penalties
Sales Tax 156.25 156.25
Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) Rs.Nil (Previous year
Rs.2.50 lakhs)
2) The Company's Sales Tax assessment is completed upto the accounting
year 2004-2005 and the disputed demand outstanding upto the said
assessment year is Rs.156.25 lacs. Based on the opinion received by the
company, the demands made are likely to be either deleted or
substantially reduced and accordingly no provision has been made in the
accounts.
3) Some of the Balances in the customers and suppliers, deposit
accounts are taken as per books and are subject to
confirmation/reconciliation and consequent adjustments.
4) In terms of Accounting Standard 22 "Accounting for Taxes on Income"
issued by the Institute of Chartered Accountants of India, the Company
has computed Net Deferred Tax Asset for the F.Y. 2010-2011 amounting to
Rs.327.39 lakhs (previous year Rs.579.17 lakhs). The Management does
not consider it appropriate to account for the Net Deferred Tax Asset
due to uncertainty of future profits.
5) a) The Company makes contribution towards Provident Fund
administered by the Central Government. The contribution towards the
Fund are made as per the Provident Fund Act and Rules amended from time
to time. The amount of contribution is directly charged to the Profit
and Loss account as revenue expense. Since the contribution is paid to
the Provident Fund authorities of the Central Government as per rules &
regulations, there are no further liabilities on the Company towards
this obligation.
b) The Company makes annual contribution to the Employees Group
Gratuity cum Life Assurance Scheme of Life Insurance Corporation of
India, a funded "Defined Benefit Plan" for qualifying employees. The
scheme provides for lump sum payment to vested employees at retirement,
death while in employment or on termination of employment as per the
Gratuity Scheme. Vesting occurs upon completion of five years of
service. There are no other schemes, apart from the above, that are
administrated by the company for the benefit of employees.
c) The Company has also computed and made necessary provisions on
account of leave encashment benefits based on actuarial valuation as
per Accounting Standard-15(Revised) "Employee Benefits". The total
service eligibility as per the Company's leave rules are estimated and
provided in the books as a revenue expenditure after making adjustment
towards the benefit paid on this account. The actuarial valuation of
plan assets and the present value of the defined benefit obligation
were carried out at 31 st March, 2011. The following tables setout the
funded status and amounts recognized in the Company's financial
statement as at 31st March, 2011 for the defined benefit plans.
i) Discount rate is based on the prevailing market yields of Indian
Government securities as at the Balance Sheet date for the estimated
term of the obligations.
ii) Expected rate of return on plan assets is based on the average
long-term rate of return expected on Investments of the fund during the
estimated term of the obligations.
iii)The estimates of future salary increases, considered in actuarial
valuation, take account the inflation, seniority, promotion and other
relevant factors.
6) There are no Micro, Small and Medium Enterprises, to whom the
Companies owes dues, which are outstanding for more than 45 days as at
the Balance Sheet date. Further, the company has neither paid nor is
any interest payable to any Micro, Small and Medium Enterprises on the
Balance Sheet date. The above information has been determined to the
extent such parties have been identified on the basis of information
available with the company. This has been relied upon by the auditors.
7) Name of Related Parties and nature of related party relationships
As per AS-18 issued by The Institute of Chartered Accountants of India,
the Companies related parties are disclosed below.
a) KEY MANAGEMENT PERSONNEL
1) Mr.Anand Agarwal - Chairman, Mr. Pavan Agarwal - Managing Director
2) Relatives of Key Management Personnel: Mr.Kishorilal Agarwal
(Father), Mr. Rajendra Agarwal (Brother), Mrs.Pramila Agarwal (Wife of
Anand Agarwal), Mrs.Shalini Agarwal (Wife of Pavan Agarwal)
b) Enterprises under Common Control of the Promoters
1. BLR Knits Pvt. Ltd.
2. Intime Knits Pvt. Ltd.
3. Black Gold Leasing Pvt. Ltd.
Mar 31, 2010
1) I) Contingent Liabilities not provided for:
a) In respect of Bonds executed in favour of:
i Asst. Commissioner of Customs under EPCG scheme towards export
obligation-Rs.169.07 lacs. (Previous Year Rs.169.07 lacs)
b) Disputed matters in appeal
Contested in Current year Previous year
respect of 31.03.2010 31.03.2009
(Rs. in lacs) (Rs. in lacs)
Excise Duty 40.85 40.85
including penalties
Sales Tax 156.25 156.25
Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) Rs. 2.50 lakhs (Previous
year Rs. Nil)
2) The Companys Sales Tax assessment is completed upto the accounting
year 2002-2003 and the disputed demand outstanding upto the said
assessment year is Rs.156.25 lacs. Based on the opinion received by the
company, the demands made are likely to be either deleted or
substantially reduced and accordingly no provision has been made in the
accounts.
3) Some of the Balances in the customers and suppliers, deposit
accounts are taken as per books and are subject to
confirmation/reconciliation and consequent adjustments.
4) The company has computed Net Deferred Tax Asset for the current
financial year F.Y. 2009-10. The management does not consider it
appropriate to account for the Net Deferred Ta x Asset due to the
uncertainty of future profits.
5) a) The Company makes contribution towards Provident
Fund administered by the Central Government. The
contribution towards the Fund are made as per the Provident Fund Act
and Rules amended from time to time. The amount of contribution is
directly charged to the Profit and Loss account as revenue expense.
Since the contribution is paid to the Provident Fund authorities of the
Central Government as per rules & regulations, there are no further
liabilities on the Company towards this obligation.
b) The Company makes annual contribution to the Employees Group Gratuity
cum Life Assurance Scheme of Life Insurance Corporation of India, a
funded "Defined Benefit Plan" for qualifying employees. The scheme
provides for lump sum payment to vested employees at retirement, death
while in employment or on termination of employment as per the Gratuity
Scheme. Vesting occurs upon completion of five years of service. There
are no other schemes, apart from the above, that are administrated by
the company for the benefit of employees.
i) Discount rate is based on the prevailing market yields of Indian
Government securities as at the Balance Sheet date for the estimated
term of the obligations.
ii) Expected rate of return on plan assets is based on the average
long-term rate of return expected on Investments of the fund during the
estimated term of the obligations.
6) There are no Micro, Small and Medium Enterprises, to whom the
Companies owes dues, which are outstanding for more than 45 days as at
the Balance Sheet date. Further, the company has neither paid nor is
any interest payable to any Micro, Small and Medium Enterprises on the
Balance Sheet date. The above information has been determined to the
extent such parties have been identified on the basis of information
available with the company. This has been relied upon by the auditors.
7) Name of Related Parties and nature of related party relationships
As per AS-18 issued by The Institute of Chartered Accountants of India,
the Companies related parties are disclosed below.
a) KEY MANAGEMENT PERSONNEL
1) Mr.Anand Agarwal - Chairman, Mr. Pavan Agarwal - Managing Director
2) Relatives of Key Management Personnel : Mr.Kishorilal Agarwal
(Father), Mr.Govind Agarwal (Brother), Mr. Rajendra Agarwal (Brother),
Mrs.Pramila Agarwal (Wife of Anand Agarwal), Mrs.Shalini Agarwal (Wife
of Pavan Agarwal)
b) Enterprises under Common Control of the Promoters
1. BLR Knits Pvt. Ltd.
2. Intime Knits Pvt. Ltd.
3. Black Gold Leasing Pvt. Ltd.
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