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Notes to Accounts of Swadeshi Polytex Ltd.
Mar 31, 2025
19.2 The rights, preferences and restrictions attached to each class of shares:
The Company has issued only one class of equity shares having par face value of Rs 1/- per share. Each equity shareholder is eligible for one vote per fully paid share held. Any dividend, if proposed by the Board of Directors, is subject to the approval of shareholders. Dividend declared and paid would be in Indian rupees. In the event of liquidation of the Company, the holders of equity share will be entitled to receive 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 the shareholders or in case of partly paid shares the paid-up amount.
20.1 Description of nature and purpose of each reserve a General Reserve
Under the erstwhile Companies Act, 1956, it was mandatory to transfer a requisite amount to a general reserve before a company can declare dividend. This mandatory requirement has been withdrawn under Companies Act, 2013.The amounts previously transferred to the general reserve whether relating to declaration of dividend or otherwise is a free reserve available to the Compan
b Capital Redemption Reserve
As per provisions of Companies Act, 2013, capital redemption reserve is created when the company purchases its own shares out of free reserve or security premium or redeems its preference shares out of profits. A sum equal to the nominal value of shares so purchased or redeemed is transferred to Capital Redemption Reserve. The reserve is utilized in accordance with the provisions of Section 69 of Companies Act, 2013. It is very old reserve.
c Retained Earnings
This reserve represents undistributed accumlated earnings of the company as on the balance sheet date. Retained Earnings is a free reserve available to the Company.
In view of the Economic/Financial non-viability and on-going labor problems etc., the Company had discontinued its operations of manufacturing of Polyester Fibers and Chips in 1998. In earlier years the company had disposed off all assets related to discontinued business, however disputed financial liabilities are still pending as per details given below.
35.1 The carrying amount of total assets and liabilities to be disposed off at the year end are as follows. Comparative information for the discontinuing operations is included in accordance with Ind AS-105, Discontinuing Operations:
35.2 Other payable, Note 21, includes alleged dues being contested before the Honourable Jurisdictional High Court and other Authorities at Rs. 21642 Thousand (P.Y. Rs. 21642 Thousand). These dues pertain to erstwhile employees of the Company and the matter is subjudice. These will be paid when finally settle by the Honourable Court/ Authorities concerned. Hence it has not been fair valued.
37. Contingent Liabilities & Commitments (To the extent not provided for)
Claims against the Company not acknowledged as debts including excise, Income Tax, Labour Disputes, Legal and other Disputes: (Rs. â000)
|
(Amount in Rs. Thousands) |
||
|
Particulars |
As at 31-03-2025 |
As at 31-03-2024 |
|
(a) PF Cases pending at various forums |
5,895 |
5,895 |
|
(b) Labor Matters relating settlement pending at various forums |
4,742 |
4,742 |
|
(c) Custom Matters |
1,711 |
1,711 |
|
(d) Excise Matters being refund claim and Interest thereon |
13,831 |
32,360 |
|
(e) Income Tax Matters |
2,217 |
2,217 |
|
(f) FEMA Matters |
12,600 |
12,600 |
|
(g) Legal cases against company u/s 138 of Negotiable Instrument Act |
9,246 |
9,246 |
Notes:
a) Interest and penalty, if any, is not computable at this point of time hence not considered in the above statement of contingent liability.
b) The Company had received a notice from Commissioner of Customs (Export-1), Mumbai relating to submission of Export Obligation Discharge Certificate for fulfilment of export obligations during export obligation period prior to the year 2000. The Company has filed a writ petition against the said notice before Honâble Allahabad High Court and the Management believes that no material liability will arise in this matter.
38. Corporate Social Responsibilities (CSR) :
As per section 135 of the Companies Act, 2013, a CSR Committee has been formed to assist the Board of Directors to formulate the CSR Policy and review the implementation and progress of the same. The Company is required to spend, in every financial year, at least two per cent of the average net profits of the company made during the three immediately preceding financial years on Corporate Social Responsibility (CSR) activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education, art & culture, healthcare, disaster management etc.
Note 1: The company has decided to set up a fire station at the Kavi Nagar Industrial Area, Ghaziabad requiring time to complete. The company has given advance for purchase of a Fire Tender. The unspent amount has been transferred to a special account with the Bank in accordance with provisions of Section 135(6) of the Companies Act, 2013.
Note 2: During the year the company had created a provision for unspent CSR amount of Rs. 11723 (thousands) as at March 31,2025 out of which a sum of Rs. 3652 (thousands) was spent upto the month of April 2025. The unspent amount transferred to the special account shall be utilized on setting up Fire Station.
39. In the opinion of the Board and to the best of their knowledge and belief the value on realization of all assets other than property, plant and equipment, intangible assets and non-current investments, in the ordinary course of business will not be less than the amount at which they are stated in Balance Sheet and that provision for all know liabilities has been made.
41. Disclosure under Ind AS 108 - âOperating Segmentsâ is not given as, in the opinion of the Chief Operating Decision Maker, the entire business activity falls under one segment, viz ,primarily engaged as real estates. The Company conducts its business only in one Geographical Segment, viz., India. Customers contributing more than 10% of revenue and all non current assets of the Company are located in India.
42. Previous year figures have been regrouped, rearranged or reclassified where ever necessary.
43. Risk Management Framework
The Companyâs business is subject to various risk and uncertainties including financial risks. The Companyâs documented risk management polices act as an effective tool in mitigating the various financial risks to which the business is exposed to in the course of their daily operations. The risk management policies cover areas such as liquidity risk, market risk, interest rate risk, and capital management. Risks are identified through a formal risk management programme with active involvement of senior management personnel and business managers. The Company has in place risk management processes in line with the Companyâs policy. Each significant risk has a designated âownerâ within the Company at an appropriate senior level. The potential financial impact of the risk and its likelihood of a negative outcome are regularly updated.
43.1 Financial Risk
The Companyâs principal financial liabilities comprise of trade payables and other payables. The Companyâs principal financial assets include Investments, Cash and Cash Equivalents, Bank Deposits, Interest accrued on Bank Deposits that are derived directly from its operations.
The Company is exposed to primarily credit risk and liquidity risk. The Companyâs senior management oversees the management of these risks. The Companyâs senior management is supported by Finance department that advises on financial risks and the appropriate financial risk governance framework for the Company. The Finance department provides assurance to the Companyâs senior management that the Companyâs financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Companyâs policies and risk objectives. It is the companyâs policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks.
Liquidity risk is the risk that the Company will not be able to meet its financial obligations when they become due. The company does not foresee any liquidity problem as it has sufficient surplus funds to meet all its financial obligations as and when they become due.
Market Risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables, and loans and borrowings.
Company has no international operations, nor any derivatives. However it manages market risk through the corporate finance department, which evaluates and exercises independent control over the entire process of market risk management. The corporate finance department recommends risk management objectives and policies, which are approved by Board of Directors. The activities of this department include management of cash resources, borrowing strategies, and ensuring compliance with market risk limits and policies.
Foreign exchange risk is the risk of impact related to fair value or future cash flows of an exposure in foreign currency, which fluctuate due to changes in foreign exchange rates. The Company has no exposure to foreign exchange risk as there are no international operations.
The primary goal of the company to invest its surplus funds in Mutual Funds is to maintain liquidity along with deriving better returns. Depending upon the investment strategy the Management has classified its investments as Fair Value through Profit and (Loss). The following tables details the Companies sensitivity to a 1% increase and decrease in the price of related instruments.
Credit Risk arises from the possibility that counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly. The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the company compares the risk of default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. The principal credit risk that the company exposed to is non collection of trade receivables leading to credit loss. This risk is mitigated by reviewing credit worthiness of the prospective customers prior to entering into contract and post contracting, through continuous monitoring of collections by the finance team. The Company has not suffered any default by its customers.
Financial Assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Company. The company categorises a loan or receivable for write off when a debtor fails to make contractual payments in normal course of business. Where loans or receivables have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognised in statement of profit and loss.
The Companyâs policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence and to sustain future development of the business. For the purpose of the Companyâs capital management, capital includes issued equity capital, and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Companyâs capital management is to maximize the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, if any, return capital to shareholders or issue new shares.
44. Fair value measurement44.1 Valuation Principles
At initial recognition, transaction price is the best evidence of fair value. However, when the Company determines that transaction price does not represent the fair value, it uses inter-alia valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions (i.e., an exit price), regardless of whether that price is directly observable or estimated using a valuation technique.
In order to show how fair values have been derived, financial instruments are classified based on a hierarchy of valuation techniques, as explained in Note below
Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels:
Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities.
Level 2: Inputs other than quoted price included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
The fair value of financial instruments that are not traded in an active market is determined using market approach and valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.
Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
If one or more of the significant inputs is not based on observable market data, the fair value is determined using generally accepted pricing models based on a analysis, with the most significant inputs being the discount rate that reflects the credit risk of counterparty.
The fair value of trade payables and other Current financial assets and liabilities is considered to be equal to the carrying amounts of these items due to their short-term nature. Where such items are Non-current in nature, the same has been classified as Level 3 and fair value determined. Similarly, unquoted equity instruments, if any, where most recent information to measure fair value is insufficient, or if there is a wide range of possible fair value measurements, cost has been considered as the best estimate of fair value.
There has been no change in the valuation methodology for Level 3 inputs during the year. There were no transfers between Level 1, Level 2 and Level 3 during the year ended 31-03-2025 & 31-032024.
The management assessed that trade receivables, cash and cash equivalents, bank balances other than cash and cash equivalents, other financial assets, trade payables, and other current liabilities are considered to be equal to the carrying amounts of these items largely due to the short-term maturities of these instruments. Difference between carrying amount and fair value of bank deposits, other financial assets, other financial liabilities subsequently measured at amortized cost is not significant in each of the year presented.
45. Additional Regulatory Information (to the extent applicable)
45.1 The title deeds of the immovable property are held in the name of the Company.
45.2 There is no revaluation of any of the items of Property, Plant & Equipments & Right to use assets during the year.
45.3 The Company does not hold any benami property and accordingly no proceeding has been initiated or pending against it for holding any benami property.
45.4 The Company has no borrowing from banks and financial institutions . It has not been declared wilful defaulter by any bank or financial institution or Governmentor any Government authority.
45.5 As per information available with the Company, it had no dealings with any company struck off u/s 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
45.6 Other than loan given in the normal and ordinary course of business, the Company has not advanced or loaned or invested funds (either from borrowed funds or any other sources or kind of funds) to or in any other persons or entities, including foreign entities (âIntermediariesâ), with the understanding, (whether recorded in writing or otherwise), that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (âUltimate Beneficiariesâ) by or on behalf of the Company; or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
45.7 The Company has not received any funds from any persons or entities, including foreign entities (âFunding Partyâ), with the understanding (whether recorded in writing or otherwise) that the Company shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
45.8 The Company has not dealt in or invested in any crypto currency or virtual currency.
45.9 The Company does not have any transaction which is not recorded in the Books of accounts that has been surrendered or disclosed as income during the year in the tax assessment under the Income Tax Act (such as search or survey or any other relevant provisions of the Income Tax Act, 1961. Further, there were no previously unrecorded income and related assets.
Mar 31, 2024
4.9 Contract Liabilities
A contract liability is the obligation to transfer of goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognized when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognized as revenue when the Company performs under the contract.
4.10 Cash Flow Statement
Cash flows are reported using indirect method as per Ind AS 7, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from regular revenue generating, financing and investing activities of the Company is segregated.
4.11 Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The Chief Operating Officer has decided that the company has only one segment i.e. real estate.
4.12 Fair Value Measurement
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participantâs ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
For the purpose of fair value disclosures, the Company has determined classes of assets & liabilities on the basis of the nature, characteristics and the risks of the asset or liability and the level of the fair value hierarchy as explained above.
Notes:
a) Interest and penalty, if any, is not computable at this point of time hence not considered in the above statement of contingent liability.
b) The Company had received a notice from Commissioner of Customs (Export-1), Mumbai relating to submission of Export Obligation Discharge Certificate for fulfilment of export obligations during export obligation period prior to the year 2000. The Company has filed a writ petition against the said notice before Honâble High Court and the Management believes that no material liability will arise in this matter.
35. The Company had incurred expenses on developing the Plots as per the approved plan of Uttar Pradesh State Industrial Development Authority (UPSIDA) which had been allocated proportionately on the saleable area and unallocated portion has been charged to Pranjal Vyapar Private Limited as agreed.
36. During the year the Company has completely implemented the terms and conditions of the Development Agreement dated 22nd July, 2011 and related MOU alongwith Addendums and Clarificatory Addendums thereto related to relinquishment of lease rights in respect of its entire saleable inventory of Leasehold Land. Confirmation for the closure of Agreements and related documents is in process. Further, the management is in the process to start a new plant to carry out manufacturing activities.
40. Disclosure under Ind AS 108 - âOperating Segmentsâ is not given as, in the opinion of the Chief Operating Decision Maker, the entire business activity falls under one segment, viz ,primarily engaged as real estates. The Company conducts its business only in one Geographical Segment, viz., India.
41. Previous year figures have been regrouped, rearranged or reclassified where ever necessary.
42. Risk Management Framework
The Companyâs business is subject to various risk and uncertainties including financial risks. The Companyâs documented risk management polices act as an effective tool in mitigating the various financial risks to which the business is exposed to in the course of their daily operations. The risk management policies cover areas such as liquidity risk, market risk, interest rate risk, and capital management. Risks are identified through a formal risk management programme with active involvement of senior management personnel and business managers. The Company has in place risk management processes in line with the Companyâs policy. Each significant risk has a designated âownerâ within the Company at an appropriate senior level. The potential financial impact of the risk and its likelihood of a negative outcome are regularly updated.
42.1 Financial Risk
The Companyâs principal financial liabilities comprise of trade payables and other payables. The main purpose of these financial liabilities is to finance the Companyâs operations. The Companyâs
principal financial assets include cash, cheques / draft in hand, fixed deposits, interest accrued on fixed deposits and loan advanced that derive directly from its operations.
The Company is exposed to primarily credit risk and liquidity risk. The Companyâs senior management oversees the management of these risks. The Companyâs senior management is supported by Finance department that advises on financial risks and the appropriate financial risk governance framework for the Company. The Finance department provides assurance to the Companyâs senior management that the Companyâs financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Companyâs policies and risk objectives. It is the companyâs policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks.
42.2 Liquidity Risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company has received advance from customers âââOther Current Liabilities-Note 23ââ amounting to Rs. 42.71 Lakh (P.Y. Rs. 3510.37 Lakh) which is payable to them. The company does not foresee any liquidity problem in this regard.
The below table summarized the maturity profiles of the Companies financial liabilities based on the contractual undiscounted payments:
42.3 Maturity profile of financial liabilities
The table below summarizes the maturity profile of the companyâs financial liabilities based on contractual undiscounted payments.
42.4 Market Risk
Market Risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables, and loans and borrowings.
Company has no international operations, neither having any investments nor any derivatives. However it manages market risk through the corporate finance department, which evaluates and exercises independent control over the entire process of market risk management. The corporate finance department recommends risk management objectives and policies, which are approved by Board of Directors. The activities of this department include management of cash resources, borrowing strategies, and ensuring compliance with market risk limits and policies.
42.5 Foreign Exchange Risk
Foreign exchange risk is the risk of impact related to fair value or future cash flows of an exposure in foreign currency, which fluctuate due to changes in foreign exchange rates. The Company has no exposure to foreign exchange risk as there are no international operations.
42.6 Equity Price Risk
The Company doesnât have any Investment in equity. Therefore, the Company is not exposed to equity price risk arising from Equity Investments.
42.7 Credit risk
Credit Risk arises from the possibility that counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly. The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the company compares the risk of default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. Trade Receivables are impaired using the Life time Expected Credit Losses (ECL) Model. The company uses a provision matrix to determine the impairment loss allowance based on its historically observed default rates over expected life of trade receivables and is adjusted for forward looking estimates.
Financial Assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Company. The company categorises a loan or receivable for write off when a debtor fails to make contractual payments in normal course of business. Where loans or receivables have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognised in statement of profit and loss.
During the year Company is not having any Trade Receivables however it has a contractual arrangement with a customer against which it receives the advances for future commitments. Company has a periodic system of reviewing the performance of contractual obligations which addresses the risk of non performance.
42.8 Capital Management
For the purpose of the Companyâs capital management, capital includes issued equity capital, and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Companyâs capital management is to maximize the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, if any, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total equity.
In order to achieve this overall objective, the Companyâs capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the lenders to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing during the period when they availed facilities from bank and others.
43. Fair value measurement
43.1 Valuation Principles
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions (i.e., an exit price), regardless of whether that price is directly observable or estimated using a valuation technique.
In order to show how fair values have been derived, financial instruments are classified based on a hierarchy of valuation techniques, as explained in Note below
43.2 Fair value hierarchy
Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels:
Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities.
Level 2: Inputs other than quoted price included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
The fair value of financial instruments that are not traded in an active market is determined using market approach and valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.
Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
If one or more of the significant inputs is not based on observable market data, the fair value is determined using generally accepted pricing models based on a analysis, with the most significant inputs being the discount rate that reflects the credit risk of counterparty.
The fair value of trade payables and other Current financial assets and liabilities is considered to be equal to the carrying amounts of these items due to their short-term nature. Where such items are Non-current in nature, the same has been classified as Level 3 and fair value determined. Similarly, unquoted equity instruments, if any, where most recent information to measure fair value is insufficient, or if there is a wide range of possible fair value measurements, cost has been considered as the best estimate of fair value.
There has been no change in the valuation methodology for Level 3 inputs during the year. There were no transfers between Level 1 and Level 2 during the year.
44.3 The Company does not hold any benami property and accordingly no proceeding has been initiated or pending against it for holding any benami property.
44.4 As per information available with the Company, it had no dealings with any company struck off u/s 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
44.5 Other than loan given in the normal and ordinary course of business, the Company has not advanced or loaned or invested funds (either from borrowed funds or any other sources or kind of funds) to or in any other persons or entities, including foreign entities (âIntermediariesâ), with the understanding, (whether recorded in writing or otherwise), that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (âUltimate Beneficiariesâ) by or on behalf of the Company; or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
44.6 The Company has not received any funds from any persons or entities, including foreign entities (âFunding Partyâ), with the understanding (whether recorded in writing or otherwise) that the Company shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
44.7 The Company has not dealt in or invested in any crypto currency or virtual currency.
44.8 The Company does not have any transaction which is not recorded in the Books of accounts that has been surrendered or disclosed as income during the year in the tax assessment under the Income Tax Act (such as search or survey or any other relevant provisions of the Income Tax Act, 1961. Further, there were no previously unrecorded income and related assets.
As per our Report of even date attached
For SANMARK & ASSOCIATES For and on behalf of the Board of Directors
CHARTERED ACCOUNTANTS
(S.K. Bansal) (Hartaj Sewa Singh) (Gaurav Lodha)
Partner Director Director
FRN : 003343N, M.No. : 082242 DIN : 00173286 DIN : 03414211
Place : Faridabad (Ankit Garg) (Anuradha Sharma)
Date : 16 May, 2024 Chief Financial Officer Company Secretary
(Bhuwan Chaturvedi)
Chief Executive Officer
Mar 31, 2023
4.8 Provisions, Contingent Liabilities and Contingent Assets
Disclosure of contingencies as required by the Indian accounting standard is furnished in the Notes to accounts.
(a) Provisions are made when (a) the Company has a present obligation as a result of past events; (b) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and (c) a reliable estimate is made of the amount of the obligation.
(b) Contingent Liability is disclosed after careful evaluation of facts, uncertainties and possibility of reimbursement, unless the possibility of an outflow of resources embodying economic benefits is remote. Contingent liabilities are not recognized but are disclosed in notes. Contingent assets are not recognized. However, when the realization of income is virtually certain, then the related asset is no longer a contingent asset, and is recognized as an asset. Information on contingent liabilities is disclosed in the notes to the financial statement. A contingent asset is disclosed where an inflow of economic benefits is probable.
4.9 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. Financial instruments also include derivative contract such as foreign currency exchange forward contracts.
A Financial Assets
(a) Initial recognition and measurement
The company recognizes financial assets and liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities that are not at fair value through profit or loss are added to the fair value on initial recognition. Purchase and sale of financial assets are accounted for at trade date.
(b) Subsequent Measurement : Non-derivative financial instruments
(i) Financial assets carried at amortized cost (AC)
A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
(ii) Financial assets at fair value through other comprehensive income (FVTOCI)
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
(iii) Financial assets at fair value through profit or loss (FVTPL)
A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss.
(c) Other Equity Investments
All other equity investments are measured at fair value, with value changes recognized in Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in âOther Comprehensive Incomeâ.
(d) Reclassification of financial assets
The company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The companyâs senior management determines change in the business model as a result of external or internal changes which are significant to the Companyâs operations. Such changes are evident to external parties. A change in the business model occurs when the company either begins or ceases to perform an activity that is significant to its operations. If the company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The company does not restate any previously recognized gains, losses (including impairment gains or losses) or interest.
B Financial liabilities
(a) Initial recognition and measurement
The Companyâs financial liabilities include trade and other payables, loans and borrowings etc. 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, if any.
(b) Subsequent Measurement : Non-derivative financial instruments
Financial liabilities are subsequently carried at amortized cost using the effective interest method, For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
(c) 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.
C Derecognition of financial instruments
The company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the companyâs balance sheet when the obligation specified in the contract is discharged or cancelled or expires.
4.10 Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
4.11 Leases
4.11.1 The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.
4.11.2 At the date of commencement of the lease, the Company recognizes a right-of-use asset (âROUâ) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
4.11.3 The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses. Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset.
4.11.4 The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
4.11.5 During the year the Company has not entered into any lease transaction.
4.12 Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and cheques/drafts 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. For the purpose of the statement of cash flows, cash and cash equivalents includes cash in hand, cheques and drafts in hand, balances with bank, short-term highly liquid fixed deposits with bank with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
4.13 Contract Liabilities
A contract liability is the obligation to transfer of goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognized when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognized as revenue when the Company performs under the contract.
4.14 Cash Flow Statement
Cash flows are reported using indirect method as per Ind AS 7, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from regular revenue generating, financing and investing activities of the Company is segregated.
4.15 Earning Per Share
Basic earnings (loss) per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
4.16 Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The Chief Operating Officer has decided that the company has only one segment i.e. real estate.
4.17 Fair Value Measurement
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participantâs ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
For the purpose of fair value disclosures, the Company has determined classes of assets & liabilities on the basis of the nature, characteristics and the risks of the asset or liability and the level of the fair value hierarchy as explained above.
Notes:
a) Interest and penalty, if any, is not computable at this point of time hence not considered in the above statement of contingent liability.
b) The Company has received a notice from Commissioner of Customs (Export-1), Mumbai relating to submission of Export Obligation Discharge Certificate for fulfilment of export obligations during export obligation period prior to the year2000. The Company has filed a wirt petition against the said notice before Honâble High Court and the Management believes that no material liability will arise in this matter.
34. The Company had incurred expenses on developing the Plots as per the approved plan of Uttar Pradesh State Industrial Development Authority (UPSIDA) which had been allocated proportionately on the saleable area and unallocated portion has been charged to Pranjal Vyapar Private Limited as agreed.
35. Corporate Social Responsibilities (CSR) :
As per section 135 of the Companies Act, 2013, a CSR Committee has been formed to assist the Board of Directors to formulate the CSR Policy and review the implementation and progress of
initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognizing impairment loss allowance based on 12-month ECL.
42. Risk Management Framework
The Companyâs business is subject to various risk and uncertainties including financial risks. The Companyâs documented risk management polices act as an effective tool in mitigating the various financial risks to which the business is exposed to in the course of their daily operations. The risk management policies cover areas such as liquidity risk, market risk, interest rate risk, and capital management. Risks are identified through a formal risk management programme with active involvement of senior management personnel and business managers. The Company has in place risk management processes in line with the Companyâs policy. Each significant risk has a designated âownerâ within the Company at an appropriate senior level. The potential financial impact of the risk and its likelihood of a negative outcome are regularly updated.
42.1 Financial Risk
The Companyâs principal financial liabilities comprise of trade payables and other payables. The main purpose of these financial liabilities is to finance the Companyâs operations. The Companyâs principal financial assets include cash, cheques / draft in hand, fixed deposits, interest accrued on fixed deposits and loan advanced that derive directly from its operations.
The Company is exposed to primarily credit risk and liquidity risk. The Companyâs senior management oversees the management of these risks. The Companyâs senior management is supported by Finance department that advises on financial risks and the appropriate financial risk governance framework for the Company. The Finance department provides assurance to the Companyâs senior management that the Companyâs financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Companyâs policies and risk objectives. It is the companyâs policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks.
42.2 Liquidity Risk
âLiquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company has received advance from customers âââOther Current Liabilities-Note 21 amounting to Rs. 3510 Lakh (P.Y. Rs. 3969 Lakh) which is adjustable against future sales proceeds in accordance with terms of addendeum dated 24.02.2022 with the customer. The company does not foresee any liquidity problem in this regard.
The below table summarized the maturity profiles of the Companies financial liabilities based on the contractual undiscounted payments:
42.4 Market Risk
Market Risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables, and loans and borrowings.
Company has no international operations, neither having any investments nor any derivatives. However it manages market risk through the corporate finance department, which evaluates and exercises independent control over the entire process of market risk management. The corporate finance department recommends risk management objectives and policies, which are approved by Board of Directors. The activities of this department include management of cash resources, borrowing strategies, and ensuring compliance with market risk limits and policies.
42.5 Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument fluctuates because of changes in prevailing market interest rates. The Company has no exposure to the risk due to the fact that it does not have any borrowing at the year end. The Company constantly monitors the credit markets and revisits its financing strategies to achieve an optimal maturity profile and financing cost.
42.6 Foreign Exchange Risk
Foreign exchange risk is the risk of impact related to fair value or future cash flows of an exposure in foreign currency, which fluctuate due to changes in foreign exchange rates. The Company has no exposure to foreign exchange risk as there are no international operations.
42.7 Equity Price Risk
The Company doesnât have any Investment in equity. Therefore, the Company is not exposed to equity price risk arising from Equity Investments.
42.8 Credit risk
âCredit Risk arises from the possibility that counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly. The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the company compares the risk of default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. Trade Receivables are impaired using the Life time Expected Credit Losses (ECL) Model. The company uses a provision matrix to determine the impairment loss allowance based on its historically observed default rates over expected life of trade receivables and is adjusted for forward looking estimates.
Financial Assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Company. The company categorises a loan or receivable for write off when a debtor fails to make contractual payments in normal course of business. Where loans or receivables have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognised in statement of profit and loss.
During the year Company is not having any Trade Receivables however it has a contractual arrangement with a customer against which it receives the advances for future commitments. Company has a periodic system of reviewing the performance of contractual obligations which addresses the risk of non performance.
42.9 Capital Management
For the purpose of the Companyâs capital management, capital includes issued equity capital, and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Companyâs capital management is to maximize the shareholder value.
current market conditions (i.e., an exit price), regardless of whether that price is directly observable or estimated using a valuation technique.
In order to show how fair values have been derived, financial instruments are classified based on a hierarchy of valuation techniques, as explained in Note below:
43.2 Fair value hierarchy
Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels:
Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities.
Level 2: Inputs other than quoted price included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
The fair value of financial instruments that are not traded in an active market is determined using market approach and valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.
Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
If one or more of the significant inputs is not based on observable market data, the fair value is determined using generally accepted pricing models based on a analysis, with the most significant inputs being the discount rate that reflects the credit risk of counterparty.
The fair value of trade receivables, trade payables and other Current financial assets and liabilities is considered to be equal to the carrying amounts of these items due to their short-term nature. Where such items are Non-current in nature, the same has been classified as Level 3 and fair value determined using basis. Similarly, unquoted equity instruments where most recent information to measure fair value is insufficient, or if there is a wide range of possible fair value measurements, cost has been considered as the best estimate of fair value.
There has been no change in the valuation methodology for Level 3 inputs during the year. There were no transfers between Level 1 and Level 2 during the year.
44. Recent Accounting Pronouncements
Ministry of Corporate Affairs (MCA) notified Companies (Indian Accounting Standards) Amendment Rules, 2023 vide Notification dated 31st March 2023. Following major amendments to Ind AS are applicable from 1 April 2023.
44.1 Ind AS 1 - Presentation of Financial Statements
This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies.The effective date for adoption of this amendment is annual periods beginning on or after April 1,2023.
44.2 Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors
This amendment has introduced a definition of âaccounting estimatesâ and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023.
44.3 Ind AS12 - Income Taxes
This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and off setting temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after April 1,2023.
The Impact, if any, of above changes will be incorporated in the financial statements for the year ended 31st March, 2024.
45. Additional Regulatory Information (to the extent applicable)
45.1 Title Deeds in respect of Flat owned by the Company are held by it in its own name.
45.2 There is no revaluation of any of the items of Property, Plant & Equipments during the year.
45.3 The Company does not hold any benami property and accordingly no proceeding has been initiated or pending against it for holding any benami property.
45.4 As per information available with the Company, it had no dealings with any company struck off u/s 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
45.5 Other than loan given in the normal and ordinary course of business, the Company has not advanced or loaned or invested funds (either from borrowed funds or any other sources or kind of funds) to or in any other persons or entities, including foreign entities (âIntermediariesâ), with the understanding, (whether recorded in writing or otherwise), that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (âUltimate Beneficiariesâ) by or on behalf of the Company; or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
45.6 The Company has not received any funds from any persons or entities, including foreign entities (âFunding Partyâ), with the understanding (whether recorded in writing or otherwise) that the Company shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
45.7 The Company has not dealt in or invested in any crypto currency or virtual currency.
45.8 The Company does not have any transaction which is not recorded in the Books of accounts that has been surrendered or disclosed as income during the year in the tax assessment under the Income Tax Act (such as search or survey or any other relevant provisions of the Income Tax Act, 1961. Further, there were no previously unrecorded income and related assets.
Mar 31, 2014
1 Contingent Liabilities & Commitments (To the extent not provided
for)
Claims against the Company not acknowledged as debts including excise,
sales tax, Income Tax, Labour Disputes, Legal and other Disputes Rs.
8,42,21,964 Previous year Rs. 8,72,25,982).
Current Year Previous Year
(a) PF Cases pending at 2,00,02,286 2,00,02,286
various forums
(b) Labour Matters relating 16,46,109 56,12,277
settlement pending at
various forums
(c) Revenue collection charges 2,09,46,436 1,99,84,286
by Tehsil & other authorities
pending at Hon''able High Court
(d) Sales tax demand pending at 1,49,37,402 1,49,37,402
various forums
(e) Excise demand for unauthorised 1,65,21,748 1,65,21,748
removal of goods pending with
CESTAT
(f) Other Matters 1,01,67,983 1,01,67,983
2 Based on the confirmations from the suppliers, who have registered
themselves under the Micro, Small and Medium Enterprises Development
Act, 2006, received so far with the company, no balance is due to Micro
& Small Enterprises as defined under the Micro, Small and Medium
Enterprises Development Act, 2006 as on 31st March 2014. Further during
the year no interest has been paid or payable under the terms of the
said Act.
3 Balances appearing for few inoperative bank accounts, Trade
Receivable and Payables, loans & advances and Short term unsecured
borrowing are subject to confirmation, reconciliation and adjustments,
if any.
4 During the year company has signed a Memorandum of Understanding
concluding the renegotiation proceedings with both the secured lenders
and necessary accounting effect arising out of the same has been shown
under the Interest on borrowings in the note 2.18 of financial cost.
Independent year end confirmations are awaited from the lenders.
5 Company has started developing the Plots as per the approved plan
of UPSIDC and accordingly has incurred an expediture of Rs. 19,70,444
(excluding write back of Rs. 31,37,718) (Previous year Rs. 57,44,738),
which is allocated proportionately on the saleable area and unallocated
portion made a part of stock in Trade.
6 Considering the development agreement and the provisions as
specified in the Accounting Standard-22 "Accounting for taxes on
Income" issued by the Institute of Chartered Accountants of India, the
company has recognised Deferred Tax assets (DTA) based on the principle
of virtual certainty.
7 The Company has claimed losses in the return filed for subsequent
years till Assessment years 2013 -2014 and is of the view that the same
will be available for set off against future profits. In view of the
losses and unabsorbed depreciation and based on the legal opinion
obtained by the company, no provision for tax has been considered
necessary in the accounts.
8 Segment Information
The primary segment reporting format is determined to be the business
segment as the company''s risks and rate of return are affected
predominantly by difference in business line. Based on these lines,
company has identified Trading of fabric, Sale of leasehold plots
rights and discontinued business as business segments. The details of
the segment revenue, expenses, assets, liabilities and capital employed
are given here under:
9 The figures reported in financial statements have been rounded off
to the nearest rupee and have been regrouped and rearranged where ever
necessary.
Mar 31, 2013
1.1 PROFIT/(LOSS) FROM DISCONTINUING OPERATIONS
In view of the Economic/Financial non-viability and on-going labour
problems etc., the Company had discontinued its operations of
manufacturing of Polyester Fibres and Chips in the earlier year. Last
year, company had entered into a binding sale agreement for disposal of
its entire Plant & Machinery and Building related to the discontinued
operations and sold the significant part thereof. Further, as part of
the closure process of the discontinued business, company had provided
for all the doubtful debtors, advances and other recoverables and
written back the unclaimed liabilities. The following statement shows
the revenue and expenses of the discontinuing operations:
(i) Provisions are made herein for medium risk oriented issues
including old assets as a measure of abundant precaution.
(ii) Company presumes remote risk possibility of further cash outflow
pertaining to contingent liabilities listed in note 2.21 above
1.2 Based on the confirmations from the suppliers, who have registered
themselves under the Micro, Small and Medium Enterprises Development
Act, 2006, received so far with the company, no balance is due to Micro
& Small Enterprises as defined under the Micro, Small and Medium
Enterprises Development Act, 2006 as on 31st March, 2013. Further
during the year no interest has been paid or payable under the terms of
the said Act.
1.3 The Company has claimed losses in the return filed for subsequent
years till Assessment years 2012 - 2013 and is of the view that the
same will be available for set off against future profits. In view of
the losses and unabsorbed depreciation and based on the legal opinion
obtained by the company, no provision for tax has been considered
necessary in the accounts.
1.4 Balances appearing for few inoperative bank accounts, Trade
Receivable and Payables, loans & advances are subject to confirmation,
reconciliation and adjustments, if any.
1.5 In view of the conditions beyond the control of the parties, Plot
booking got delayed, resulting into collapse of full & final settlement
with the secured lenders achieved in the previous year. Management of
the company is in process of renegotiation with the secured lenders.
However, pending any conclusion on the same, differential Interest of Rs.
10,57,86,111 to one of the lender, Paharpur Cooling Towers Limited
(PCTL) has been provided as per original sanctioned terms . With
respect to Interest to other Secured Lender, Pranajal
Vyapaar Private Limited (PVPL), no provision for interest has been made
in respect to outstanding loan due to fact that the management is under
re-negotiation with PVPL considering the corresponding delay in receipt
of assured sale consideration from PVPL, under the deed of assignment.
Differential interest amount, if any will be recognised on the
conclusion of negotiation process. However, independent confirmation
from respective lenders is yet to be received.
1.6 The Company has lost the appeal in Hon''able Supreme Court against
the order of Hon''able National Consumer Disputes Redressal Commission,
New Delhi (NCDRC) in respect of on-going case against a debtor in the
previous year. Accordingly, it has to refund the amount of Rs. 148.60
Lacs (including Interest Rs. 83.40 Lacs), which was received in the
previous years. The amount due from Debtor has since been written off
as Bad debts as shown in Discontinued operations.
1.7 Company has started developing the Plots as per the approved plan
of UPSIDC and accordingly has incurred an expediture of Rs. 57,44,738
(Previous year Rs. 7,05,33,542), which is allocated proportionately on
the saleable area and unallocated portion made a part of stock in
Trade.
1.8 Related Party disclosure in accordance with the Accounting
Standard-18, issued by the Institute of Chartered Accountants of India
is given below:
(1) Associates : National Textile Corporation Ltd. (Holding more than
20% shareholding in the company)
Nature of Transactions :
Unsecured Loan taken and outstanding : Rs. 2,30,21,497 (Previous Year Rs.
2,30,21,497) as on 31.03.2013
1.9 Considering the development agreement and the provisions as
specified in the Accounting Standard-22 "Accounting for taxes on
Income" issued by the Institute of Chartered Accountants of India, the
company has recognised Deferred Tax assets (DTA) based on the principle
of virtual certainty.
1.10 The figures reported in financial statements have been rounded off
to the nearest rupee.
Mar 31, 2012
* Rupee term loans are secured by way of pari-passu negative lien on
the land & building situated at Kavi Nagar, Ghaziabad, UP.
Details of the default amount is as follow :
(i) Loan from related Party - Principal Rs. Nil (Previous Year Rs.
12,42,76,100) , Interest Nil (Previous Year Rs. 3,10,50,000)
(ii) Loan from other Body Corporate - Principal Nil (Previous Year
14,00,00,000), Interest Nil (Previous Year Rs. 14,62,00,892)
1.1 Profit/(Loss) from discontinuing operations
In view of the Economic/Financial non-viability and on-going labour
problems etc., the Company had discontinued its operations of
manufacturing of Polyester Fibres and Chips in the earlier year.
However, during the year, the company has entered into a binding sale
agreement for disposal of its entire Plant & Machinery and Building
related to the discontinued operations and accordingly sold the
significant part thereof. Further, as part of the closure process of
the discontinued business, company has provided for ail the doubtful
debtors, advances and other recoverables and written back the unclaimed
liabilities. The following statement shows the revenue and expenses of
the discontinuing operations:
The carrying amount of total assets and liabilities to be disposed off
at 31st March are as follows. Comparative information for the
discontinuing operations is included in accordance with AS-24,
Discontinuing Operations:
1.2 Contingent Liabilities & Commitments (To the extent not provided
for)
Claims against the Company not acknowledged as debts including excise,
sales tax, Income Tax, Labour Disputes, Legal and other Disputes Rs.
8,61,73,840 (Previous year Rs. 13,88,20,328).
Particulars Current Year Previous Year
(a) PF Cases pending
at various forums 20,002,286 20,000,286
(b) Labour Matters
relating settlement pending
at various forums 5,409,813 6,471,566
(c) Revenue collection
charges by Tehsil & other
authorities pending at
HonÃable High Court 19,98.4,286 19,984,286
(d) Sales tax demand
pending at various forums 14,937,402 13,386,265
(e) Excise demand for
unauthorised removal of
goods pending with CESTAT 16,521,748 19,021,748
(f) Interest on the Secured
loan from Body corporate - 49,671,756
(g) Other Matters 9,318,305 10,284,421
(i) Provisions are made herein for medium risk oriented issues
including old assets as a measure of abundant precaution.
(ii) Company presumes remote risk possibility of further cash outflow
pertaining to contingent liabilities listed in note 2.21 above
1.3 The Company is in the process of obtaining confirmations from the
suppliers who have registered themselves under the Micro, Small and
Medium Enterprises Development Act, 2006. Based on the information
available with the Company, no balance is due to Micro & Small
Enterprises as defined under the Micro, Small and Medium Enterprises
Development Act, 2006 as on 31s1 March, 2012. Further during the year
no interest has been paid or payable under the terms of the said Act.
1.4 Based on the information available on records, excess provision
for Income Tax & FBT relating the past more than 5 years has been
reversed and disclosed as Income Tax provision no longer required, in
the Profit & Loss Statement. Further, the Company has claimed losses in
the return filed for subsequent years till Assessment years 2011 - 2012
and is of the view that majority of the losses will be available for
set off against future profits. In view of the losses and unabsorbed
depreciation and based on the legal opinion obtained by the company, no
provision for tax has been considered necessary in the accounts.
1.5 Balances appearing for few inoperative bank accounts, Trade
Receivable and Payables, loans & advances are subject to confirmation,
reconciliation and adjustments, if any.
1.6 During the year, company has entered into a Developer Agreement
with Adarsh Cement Products Private Limited (ACPPL) to develop the
requisite infrastructure at the leasehold land of the Company and to
sale the plots of the land, as per the subdivision letter received from
UPSIDC. for a undertaking consideration.
This agreement was subsequently assigned in favour of the secured
lender, Pranajal Vyapaar Private Limited (PVPL) through deed of
assignment and the Memorandum of Understanding entered between the
company and secured lenders.
1.7 During the year company has entered into a Memorandum of
Understanding with its secured lenders PVPL and Paharpur Cooling Towers
Limited (PCTL) for agreeing the full & final settlement of their claims
as on the cut-off date i.e. 1st Dec., 2011 for an amount of Rs.
34,13,12,614/- and Rs. 24,60,45,432/- respectively. Besides this,
Company, subject to the approval of the Shareholders in the general
meeting, has agreed to allot 1,50,000/-, 9.5% cumulative Redeemable
Preference Shares of Rs. 100/- each to be redeemed on or before 30m
Sept. 2012 along with one detachable warrant to each preference share,
which entitle them to get 15,00,000/- equity shares of Rs. 10/- each at
a price determined in accordance SEBI regulations. Accordingly, Company
has provided the differential interest of Rs. 12,23,92,821/- in the
current year. Further, the aforesaid agreed amount is payable out of
proceeds received from PVPL under the aforesaid Developer agreement and
deed of assignment. However, independent confirmation from respective
lenders is yet to be received.
1.8 The Company has lost the appeal in HonÃable Supreme Court
against the order of HonÃable National Consumer Disputes Redressal
Commission, New Delhi (NCDRC) in respect of on-going case against a
debtor in the previous year. Accordingly, it has to refund the amount
of Rs. 148.60 Lacs (including Interest Rs. 83.40 Lacs), which was
received in the previous years. The amount due from Debtor has since
been written off as Bad debts as shown in Discontinued operations.
1.9 Revaluation of Factory Building was carried out during the year
1986-87 and accordingly increase in values due to revaluation had been
credited to Revaluation Reserve. Since then, each yearÃs withdrawal
amount has been credited to Profit & Loss Account. During the year,
majority of the Building got dismantled and sold at a profit.
Accordingly the proportionate amount of Rs. 74,13,606/- has been
transferred to General Reserve from the Revaluation Reserve in
accordance with the Provisions of Accounting Standard, AS-10,
Accounting for Fixed Assets.
1.10 Company has started developing the Plots as per the approved plan
of UPSIDC and accordingly has incurred an expediture of Rs.
7,05,33,542/- which is allocated proportionately on the saleable area
and unallocated portion made a part of stock in Trade.
1.11 Considering the development agreement as specified in note no.
2.28 here in above and the provisions as specified in the Accounting
Standard-22 "Accounting for taxes on Income" issued by the
Institute of Chartered Accountants of India, the company has recognised
Deferred Tax assets (DTA) based on the principle of reasonable
certainty. However, in the absence of virtual certainty with regards to
realisation of DTA in the foreseeable future, DTA has not been
recognised on carried forward losses and unabsorbed depreciation.
1.12 Till the year end 31st March, 2011, the company was using
pre-revised Schedule VI to the Companies Act, 1956, for preparation and
presentation of its financial statements. During the year ended 31st
March, 2012, the revised schedule VI notified under the Companies Act,
1956, has become applicable to the company. The Company has
reclassified previous year figures to conform to this yearÃs
classification. The adoption of Revised schedule VI does not impact
recognition and measurement principles followed for preparation of
financial statements.
1.13 Segment Information
The primary segment reporting format is determined to be the business
segment as the companyÃs risks and rate of return are affected
predominantly by difference in business line. Based on these lines,
company has identified Trading of fabric, Sale of leasehold plots
rights and discontinued business as business segments. The details of
the segment revenue, expenses, assets, liabilities and capital employed
are given here under:
1.14 The figures reported in financial statements have been rounded off
to the nearest rupee.
Mar 31, 2010
1. Contingent Liabilities not provided for in respect of:
Claims against the Company not acknowledged as debts including excise,
sales tax, Income Tax, Labour Disputes, Legal and other Disputes Rs.
2335 lacs (Previous year Rs. 1929 lacs). ( Rs. in Lacs)
Particulars Current Year Previous Year
(a) PF Cases pending at various forums 199.43 166.42
(b) Labour Matters relating settlement
pending 41.54 76.54
at various forums
(c) Revenue collection charges by
Tehsil & other 199.84 199.84
authorities pending at Honable High Court
(d) Sales tax demand pending at
various forums 133.74 147.46
(e) Excise demand for unauthorised
removal of goods 165.22 139.18
pending with Commissioner Central Exise
(f) Interest on the Secured loan
from Body corporate 1,526.86 896.60
(g) Other Matters 68.05 303.23
2. In view of the Economic/Financial non-viability and ongoing labour
problems etc., the Company had discontinued its operations of
manufacturing of Polyester Fibres and Chips, the resumption of which
seems to be very unlikely. The Management to the extent possible has
considered necessary provisions and do not anticipate any significant
change in the value of its current assets and liabilities which have
been shown in the Balance Sheet.
3. The Company is in the process of obtaining confirmations from the
suppliers who have registered themselves under the Micro, Small and
Medium Enterprises Development Act, 2006. Based on the information
available with the Company, no balance is due to Micro & Small
Enterprises as defined under the Micro, Small and Medium Enterprises
Development Act, 2006 as on 31st March 2010. Further during the year no
interest has been paid or payable under the terms of the said Act.
4. The Company had received Rs. 148.60 Lacs (including Interest Rs.
83.40 Lacs) based on the order of Honable National Consumer Disputes
Redressal Commission, New Delhi (NCDRC) in respect of ongoing case
against a debtor in the previous year. This amount was released on
furnishing of Bank Guarantee and security in the form of company flats
at Kavi Nagar. However the matter has since been remanded back by
Honable Supreme Court to NCDRC for reconsideration. Accordingly, the
Interest received has not been recognised and would be recognised on
its final disposal.
5. Income Tax and Wealth Tax assessments have been completed upto
Assessment year 1998-99 and against some of the orders, appeals are
still pending. The Company has claimed losses in the return filed for
subsequent years till Assessment years 2009 - 2010 and is of the view
that majority of the losses will be available for set off against
profits. In view of the losses and unabsorbed depreciation, no
provision for tax has been considered necessary in the accounts.
6. Balances appearing for certain inoperative bank accounts, debtors,
creditors, loans, advances and other parties are subject to
confirmation, reconciliation and adjustments, if any, by the respective
parties.
7. In respect of the secured loans taken from the bodies corporate,
further provision for interest has not been considered necessary due to
arbitration proceedings and ongoing discussions for one time settlement
with the respective body corporate. Further Liability, if any would be
provided for in the year of settlement.
8. Revaluation of fixed assets (Factory building & Plant and
Machinery) was carried out during the year 1986-87 and accordingly
increase in values due to revaluation had been credited to Revaluation
Reserve. Since then, each years withdrawal amount has been credited
to Profit & Loss Account. During the year Rs. 2.13 Lacs (Previous Year
Rs. 2.13 Lacs) has been withdrawn from the Revaluation Reserve and
credited to Profit & Loss Account.
9. Related Party disclosure in accordance with the Accounting
Standard-18, issued by the Institute of Chartered Accountants of India
is given below:
(1) Associates
National Textile Corporation Ltd.
(Holding more than 20% shareholding in the company)
Nature of Transactions
Unsecured Loan taken as on 31.03.2010 : Rs. 2,30,21,497 (Previous Year
Rs. 2,30,21,497)
(2) Associates
Paharpur Cooling Towers Ltd.
(Holding indirectly more than 20% shareholding in the company)
Nature of Transactions
Reimbursement for various expenses : Rs. 11,18,712 (Previous Year Rs.
8,96,748)
Unsecured Loan taken : Nil (Previous Year Rs. 1,69,72,831)
Unsecured Loan repaid : Nil ( Previous Year Rs. 39,58,170)
Outstanding Balance as on 31.03.2010
Secured Loan Taken : Rs. 13,50,00,000 (Previous Year Rs. 13,50,00,000)
Unsecured Loan Taken : Rs. 2,92,76,100 ( Previous Year Rs. 2,92,76,100)
10. In accordance with the Accounting Standard-22 "Accounting for
taxes on Income" issued by the Institute of Chartered Accountants of
India, the company has certain amounts eligible to create Deferred Tax
assets (DTA). However, in the absence of virtual certainty with regards
to realisation of DTA in the foreseeable future, DTA has not been
recognised.
11. Previous years figures have been regrouped/recast wherever
considered necessary
12. The figures reported in financial statements have been rounded off
to the nearest rupee.
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