(b) Terms/Rights attached to equity shares
The company has only one class of equity shares having par value of Rs. 10.00 per share. Each holder of Equity shares is entitlled to one vote per share.
In the event of liquidation of the company, the holders of the equity shares 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.
Nature and purpose of reserves :
Securities Premium : At the time of Initial Public Offer, the excess of issue price of shares over the face value of shares issued, minus expenditure incurred on issuance of shares is treated as Securities Premium. It is utilised in accordance with the provisions of the Act, to issue bonus shares, to provide for premium on redemption of shares, write off equity related expenses etc.
General Reserve : The company had transferred a portion of the net profit of the company before declaring dividend to general reserve pursuant to the earlier provisions of the Companies Act, 1956.
Retained Earnings : Retained Earnings are the profits that the company has earned till date, less any transfers to general reserve, dividends or other distributions paid to the the shareholders of the company.
The company has not declared or paid any dividend during the year.
(i) Term Loan raised during the year have been used for the same purpose for it was drawn.
(ii) Outstanding Rupee Term Loans (RTL) of Rs. 1,133.35 Lacs (Last year : Rs. 1,400.01 Lacs) out of the sanctioned loan of Rs. 1,600.00 Lacs was taken from a financial institution which is repayable from August’ 2022 in monthly installment of Rs. 22.22 Lacs till July’ 2028. The loan is secured by first charge on land, building including civil structure of the company’s assets and extension of first charge on plant and machinery, fixed and immovable assets of the company on pari -passu basis with IDBI Bank. The loans has also been guaranteed by personal guarantees of some of the Directors of the Company. Amother term Loan of Rs. 800.00 Lacs (Outstanding balance of Rs. 215.36 Lacs as on 31.03.2023) was fully repaid during the year.
(iii) WCTL Loan of Rs. 535.70 Lacs ( Last year : Rs.734.50 Lacs) under GECL Scheme is secured by way of Second charge on all the current assets of the company, which were extended for taking existing credit facility of Rs. 2500.00 Lacs.
(iv) Term Loans from related parties are unsecured and due for repayment after 12 months as on the reporting date. The company does not have any existing default as at the date of balance sheet.
(v) Hire Purchase Finance is secured by hypothecation of vehicles / equipments and is repayable within three to four years.
Notes-
(a) Working Capital facilities of Rs. 2,374.37 lacs (Last year : Rs. 2,405.65 Lacs) from banks (sanctioned amount : Rs. 2,500.00 Lacs) are secured by first charge on current assets of the company and first charge on the fixed assets of the company pari-passu basis with NEDFi, both present and future including mortgage of immovable assets. Working Capital facilities from banks have also been guaranteed by some of the Directors of the company.
(37) Capital Commitments
The estimated amount of Contracts remaining to be executed on Capital Account and other capital commitment not provided for Rs. - Nil - (Nil as at 31st March’ 2023)
(38) Contingent liabilities not provided for:
(a) Corporate Guarantee’s given to Financial Institutions/ Banks on behalf of wholly owned subsidiary company : Rs. 300.00 Lacs (Rs. 300.00 Lacs as at 31st March’ 2023).
(b) Claims against the company not acknowledged as debts: Disputed demands of Entry - tax/ Income- Tax / Central Excise duty refund matters pending before the Appellate Authorities: Rs. 539.93 Lacs (Rs. 537.21 lacs as at 31st March’ 2023)
(c) Fixed Deposit Receipts pledged with the banks / others: Rs. 149.57 Lacs (Rs. 49.71 Lacs as at 31st March’ 2023)
There is no principal and interest overdue to Micro and Small enterprises. During the year no interest has been paid to such parties. This information has been determined to the extent such parties have been identified on the basis of information available with the company and the same has relied upon by the auditors.
(42). Employees benefit obligations:
a) Defined contribution plans:
The Company makes contribution towards Employees recognized provident fund, Employees State Insurance and labour welfare fund schemes. Under these schemes, the Company is required to contribute a specified percentage of payroll cost, as specified in the rules of these schemes, to these defined contribution schemes. During the year, the Company recognised Rs. 63.87 Lacs (Rs. 50.72 Lacs as at 31st March, 2023) as expense towards contribution to these plans and included in “Employee benefit expenses” in Note 31 to the financial statements.
b) Defined benefit plans:(i) Leave encashment:
Under leave encashment scheme, the company allows its employees to en-cash accumulated leave over and above thirty days at any time during the year. So, accumulated leave encashment liability for up to 30 days period is classified as non -current liability and over the period of 30 days is covered under current liability. Earned Leave liability at year end are as follows :
(ii) Gratuity:
The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. The Gratuity plan provides a lump sum payment to vested employees at retirement, death or termination of employment as per the Company’s policy. The gratuity payable to employees is based on the employee’s tenure of service and last drawn salary at the time of leaving the services of the company. The gratuity benefits are payable after five years of continuous service by the employee and are valued in accordance with the Payment of Gratuity Act, 1972.
(iii) Risk Exposure:
Through its defined benefit plans the Company is exposed to a number of risks, significant of which are as follows:
(a) Investment risk: If the plan is funded then assets liabilities mismatch & actual investment return on assets lower than the discount rate assumed at the last valuation date can impact the liability.
(b) Discount Rate: Reduction in discount rate in subsequent valuations can increase the plan’s liability.
(c) Mortality and disability: Actual deaths and disabilities cases proving lower or higher than assumed in the valuation can impact the liabilities.
(d) Salary growth risk : The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. An increase in the salary of the plan participants will increase the plan liability. Any variation in salary increase rate assumption in future valuations will also increase the liability.
(e) Withdrawals : Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawals rates at subsequent valuations can impact Plan’s liability.
i) Fair value hierarchy
This section explains the judgments and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard.
Level 1: hierarchy includes financial instruments measured using quoted prices.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
ii) Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
• The use of quoted market prices or dealer quotes for similar instruments
• The fair value of the financial instruments is determined using Net Worth method.
iv) Fair value of financial assets and liabilities measured at amortized cost :
The carrying amounts of all other financial assets i.e. term deposits and interest there on, trade receivables, cash and cash equivalents, other financial assets and financial liabilities i.e. borrowings, trade payables and other current financial liabilities are considered to be the same as their fair values due to their short -term nature.
(44) - Capital Risk management
(a) 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 objective when managing capital are to Safeguard the company’s ability to continue as a going concern in order to provide returns for shareholders and maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the company may adjust the amount of dividend to shareholders, return capital to shareholders or issue new shares. The company monitors capital using debt -equity ratio, which is total debt less liquid investments and bank deposits divided by total equity.
(46) No Loans are due from directors or other officers of the company or any of them either severally or jointly with any other person, that are repayable on demand; or without specifying any terms or period of repayment. Further, No loans are due from firms or private companies in which any director is a partner, a director or a member. Details of Loans or advances to Subsidiary companies are as under :
(47) The company has given Corporate Guarantee to the bankers of Meghalaya Minerals & Mines Ltd., a 100% subsidiary of the company for collaterally securing their Working Capital limit and WCTL facility (under GECL) amounting Rs. 354.26 Lacs (Outstanding Rs. 133.84 Lacs as at 31.03.2024 and Rs. 320.18 Lacs as at 31.03.2023)
(48) Segment Information :
The Company is exclusively engaged in the business of cement and cement related products. As per Ind AS 108 “Operating Segments”, specified under Section 133 of the Companies Act, 2013, there are no reportable business and geographical segment applicable to the Company. The company does not hold any non-current assets in foreign countries.
(49) Financial risk management objective and policies:
The Company realizes that risks are inherent & integral part of any business. The primary focus is to foresee the unpredictability of financial market & seek to minimize potential adverse effect on its financial performance. The Company’s activities are exposed to a variety of financial risks from its operations. The Company’s principal financial liabilities includes borrowings, trade payable and other financial liabilities. The main purpose of these financial liabilities is to finance the Company’s assets and operations. The Company’s principal financial assets include trade receivables, cash and cash equivalents and other financial assets that are derived directly from its operations.
The company is exposed to Credit risk, Liquidity risk and Market risk. The Company’s senior management oversees the management of these risks and the appropriate financial risk governance framework for the Company is in place. The senior management provides assurance that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. The Audit Committee and the Board are regularly apprised of these risks every quarter and each such risk and mitigation measures are extensively discussed and the same are summarized below:
(a) Credit Risk: Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, thereby leading to a financial loss. The company is exposed to credit risk from its operating activities primarily from trade receivables including deposits with banks and financial institutions and other financial instruments.
(i) Trade receivables: Customer credit risk is managed by the company through its established policy, procedures and control relating to customer credit risk management. Trade receivables are non interest bearing and are generally carrying 30-45 days credit term. Outstanding debtors are regularly monitored by the sales and collection team of the company. Further the company receives security deposits from its customers which mitigate the credit risk. The ageing of trade receivables as of balance sheet date is as below:
(ii) Financial instruments and deposits: Credit risk from balance with banks and financial institutions is managed by the finance department of the company. Credit risk on cash and cash equivalents and bank deposits is generally low as the said deposits have been made with banks having good reputation, good past track record and high quality credit rating and the company also reviews their credit worthiness on an on-going basis. Other financial assets are considered to be of good quality and there is no significant risk.
(b) Liquidity Risk : Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or other financial asset. Due to the nature of the underlying business, the company maintains sufficient cash and liquid investments available to meet its obligation. Management of the company regularly monitors rolling forecast of the company’s liquidity position and cash and cash equivalents on the basis of expected cash flows.
The liquidity risk is managed by Company’s financial policy, which aims to ensure the availability of sufficient net funds to meet the company’s financial commitments with minimal additional cost.
(i) Financial arrangements : The company had access to the working capital facilities from the bank amounting Rs. 2,500.00 Lacs (Outstanding balance Rs. 2,374.38 Lacs as at 31st March’2024) which are expiring in one year, subject to the renewal of the same by the banking authorities. A part from the working capital facility, company has also following outstanding financial liabilities :
(ii) Maturities of financial liabilities : The following tables shows the maturity analysis of the Company’s financial liabilities based on the contractually agreed undiscounted cash flows as at the balance sheet date :
(c ) Market Risk :
Market risk is the risk of loss of future earnings, fair value of future cash flows of a financial instrument that may fluctuate consequent up on changes in market prices. It mainly comprises of interest rate risk.
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will be impacted because of changes in market interest rate. As the company’s borrowings except borrowing from market are fixed rate borrowings; they are carried out at amortised cost and are not subject to interest rate risk as defined in Ind AS 107.
(50) Corporate Social Responsibility (CSR) activities :
As per Section 135 of the Companies Act, 2013, a Corporate Social Responsibility (CSR) committee has been formed by the Company and the amount needs to be spent by the Company for the year is 2% of average net profits for previous three financial years, calculated as per Section 198 of the Companies Act, 2013. The nature of CSR activities identified by company are promoting education, sports, Rural development, medical and health facility, water sanitation and social projects. All these activities are covered under Schedule VII to the Companies Act, 2013. The details of amount spent are:
(52) Other Statutory information :
i) The Company do not have any benami property, and no proceeding has been initiated against the Company for holding any benami property.
ii) The Company do not have any transactions with companies struck off.
iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
iv) The Company have not traded or invested in crypto currency or virtual currency during the financial year.
v) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (ultimate beneficiaries) or
b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
vi) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Group shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or
b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
vii) The Company have not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961”.
viii) The Company have not declared willful defaulter by any banks or any other financial institution at any time during the financial year.
ix) The Company had made the assessment for books of accounts as per definition in the Act and identified SAP as accounting Software used for the Creation and maintenance of books of accounts which have a feature of recording audit trail (Edit Log) facility and the same has operated throughout the year for all relevant transactions recorded. Further, in case of the Company, audit trail (edit log) facility was enabled and operated throughout the year, we did not come across any instance of the audit trail feature being tempered with. However, the audit trail feature facility was not enabled at the database level to log any data changes for the accounting software used for maintaining the books of accounts.
(53) Previous year’s figures have been regrouped and/ or re-arranged wherever necessary, to confirm to current year’s classification.
(54) The financial statements are approved by the Audit Committee at its meeting held on 30th May’ 2024 and by the Board of Directors on the same date.
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