a. The aggregate depreciation has been included under depreciation and amortisation expense in the Statement of Profit and Loss.
b. The Company determines that a contract is or contains a lease, if the contract conveys right to control the use of an identified asset for a period of time in exchange for a consideration. At the inception of a contract which is or contains a lease, the Company recognizes lease liability at the present value of the future lease payments for non-cancellable period of a lease which is not short term in nature except for lease of low value items. The future lease payments for such non-cancellable period is discounted using the Company’s incremental borrowing rate. Lease payments include fixed payments. The Company also recognizes a right of use asset which comprises of amount of initial measurement of the lease liability. Right of use assets is amortized over the period of lease.
c The Company has not revalued any of its Property, plant and equipments during the year.
9.1 Inventory consists of stock-in-trade and is measured at the lower of cost and net realisable value. The cost of inventories of items that are not ordinarily interchangeableare assigned by using specific identification of their individual costs. The cost of other inventories is based on the first-in-first out method.
Cost of stock-in-trade includes cost of purchases and other costs incurred in bringing the inventories to its present location and condition.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and costs necessary to make the sale.
9.2 Carrying amount of inventroy hypothecated to secure working capital facilities of H 3500 Lacs (previous year H2500 Lacs).
9.3 The details of charge created on stocks, book debts and other current assets are as per Note 18.1 and 22.1
16.2 Terms/rights attached to Equity Shares
The Company has only one class of equity shares having a par value of H10 per share. Each holder of equity shares is entitled to one vote per share.
Each equity shareholder is entitled to dividends as and when the Company declares and pays dividend after obtaining shareholders’ approval.
In the event of liquidation of the Company, the holders of equity shares are entitled to receive the remaining assets of the Company, after meeting all liabilities and distribution of all preferential amounts, in proportion to their shareholding.
Nature and purpose of each reserve
17.1 Securities premium - The amount received in excess of face value of the equity shares is recognised in securities premium. In case of equity-settled share based payment transactions, the difference between fair value on grant date and nominal value of share is accounted as securities premium. It is utilised in accordance with the provisions of the Companies Act, 2013.
17.2 General reserve: The reserve arises on transfer portion of the net profit pursuant to the earlier provisions of Companies Act, 1956. Mandatory transfer to general reserve is not required under the Companies Act, 2013. The retained earnings represent the net surplus of income over expenses. It is part of free reserves of the Company.
17.3 Share Based Payment Reserve: The reserve is created on account of equity share settled options granted to the employees of the Company.
18.1 Security:
A. Term loan from Axis Bank Ltd. Indore under Union Emergency Credit Line Guarantee Scheme is secured by way of Extension of Second Charge on Primary as well as Collateral Security available with the bank for Working Capital Limits.
Primary Security : Second charge on entire current assets including stocks comprising raw materials, stocks in progress, finished goods, consumable stores and spares and receivables in the name of company with HDFC Bank both present and future.
Collateral Security : Second charge on following collateral securities
1. Commercial Property- Survey No 140/2, PHN 15/2, (New), 26 old, Gram Musakhedi, Indore - 452001. Owned by IFF Overseas Private Limited.
2. Industrial Property - Survey No. 140/2/2 Patwari Halka No. 26, Village Musakhedi Tehsil and Dist. Indore- 452001 owned by M/s IFF Overseas Pvt Ltd.
3. Residential Property -Flat No. 202 Arms Majestic Plot no. 34-C, Sector F, Slice-3, Shahid Bhagat Singh Ward, Indore Owned by Mr. Prateek Maheshwari & Mrs. Sakshi Rathi Maheshwari.
4. Residential Property- No. 301 Arms Majestic Plot no. 34-C, Sector F, Slice-334, Shahid Bhagat Singh Ward, Indore Owned by Mr. Prateek Maheshwari & Mrs. Sakshi Rathi Maheshwari.
B. Term loan from HDFC Bank, Indore under Union Guaranteed Emergency Line Scheme is secured by way of Extension of Charge on Primary as well as Collateral Security available with the bank for Working Capital Limits.
Primary Security : Second charge on entire current assets including stocks comprising raw materials, stocks in progress, finished goods, consumable stores and spares and receivables in the name of company with Axis Bank both present and future.
Collateral Security : Second charge on following collateral securities
1. Commercial Property- Survey No 140/2, PHN 15/2, (New), 26 old, Gram Musakhedi, Indore - 452001. Owned by IFF Overseas Private Limited
2. Residential Property -Flat No. 202 Arms Majestic Plot no. 34-C, Sector F, Slice-334, Shahid Bhagat Singh Ward, Indore Owned by Mr. Prateek Maheshwari & Mrs. Sakshi Rathi Maheshwari.
3. Residential Property - Flat no. G-2, Ground Floor, Plot no. 14, RK Puram Colony, Gurukripa Apartment, Near Industry House Indore - 452001. owned by Mrs. Annapurna Maheshwari.
4. Residential Property - Flat no. G-1, Ground Floor, Plot no. 14, RK Puram Colony, Gurukripa Apartment, Near Industry House Indore - 452001. owned by Mrs. Pradeep Maheshwari.
5. Residential Property- No. 301 Arms Majestic Plot no. 34-C, Sector F, Slice-334, Shahid Bhagat Singh Ward, Indore Owned by Mr. Prateek Maheshwari & Mrs. Sakshi Rathi Maheshwari.
Personal Guarantee of Prateek Maheshwari, Annapurna Maheshwari, Pradeep Maheshwari, Sakshi Rathi Maheshwari & Abhinav Kumar.
Corporate Guarantee of IFF Overseas Pvt. Ltd.
C. All Vehicle Loans from Kotak Mahindra Bank,ICICI Bank and Bank of Baroda are secured against hypothication of respective vehicles
22.1 Security Details
A. Loans repayable on demand from Axis Bank Ltd. Indore is secured by First Parri Passu Charge on Primary as well as Collateral Security.
Primary Security : First Parri Passu charge on entire current assets including stocks comprising raw materials, stocks in progress, finished goods, consumable stores and spares and receivables in the name of company with HDFC Bank both present and future.
Collateral Security : First Parri Passu charge on following collateral securities
1. Commercial Property- Survey No 140/2, PHN 15/2, (New), 26 old, Gram Musakhedi, Indore - 452001. Owned by IFF Overseas Private Limited.
2. Industrial Property - Survey No. 140/2/2 Patwari Halka No. 26, Village Musakhedi Tehsil and Dist. Indore- 452001 owned by M/s IFF Overseas Pvt Ltd.
3. Residential Property -Flat No. 202 Arms Majestic Plot no. 34-C, Sector F, Slice-3, Shahid Bhagat Singh Ward, Indore Owned by Mr. Prateek Maheshwari & Mrs. Sakshi Rathi Maheshwari.
4. Residential Property- No. 301 Arms Majestic Plot no. 34-C, Sector F, Slice-334, Shahid Bhagat Singh Ward, Indore Owned by Mr. Prateek Maheshwari & Mrs. Sakshi Rathi Maheshwari.
B. Loans repayable on demand from HDFC Bank, Indore are secured by First Parri Passu charge on Primary as well as
Collateral Securities.
Primary Security : First Parri Passu charge on entire current assets including stocks comprising raw materials, stocks in
progress, finished goods, consumable stores and spares and receivables in the name of company with Axis Bank both
present and future.
Collateral Security : First Parri Passu charge on following collateral securities
1. Commercial Property- Survey No 140/2, PHN 15/2, (New), 26 old, Gram Musakhedi, Indore - 452001. Owned by IFF Overseas Private Limited
2. Residential Property -Flat No. 202 Arms Majestic Plot no. 34-C, Sector F, Slice-334, Shahid Bhagat Singh Ward, Indore Owned by Mr. Prateek Maheshwari & Mrs. Sakshi Rathi Maheshwari.
3. Residential Property - Flat no. G-2, Ground Floor, Plot no. 14, RK Puram Colony, Gurukripa Apartment, Near Industry House Indore - 452001. owned by Mrs. Annapurna Maheshwari.
4. Residential Property - Flat no. G-1, Ground Floor, Plot no. 14, RK Puram Colony, Gurukripa Apartment, Near Industry House Indore - 452001. owned by Mrs. Pradeep Maheshwari.
5. Residential Property- No. 301 Arms Majestic Plot no. 34-C, Sector F, Slice-334, Shahid Bhagat Singh Ward, Indore Owned by Mr. Prateek Maheshwari & Mrs. Sakshi Rathi Maheshwari.
Personal Guarantee of Prateek Maheshwari, Annapurna Maheshwari, Pradeep Maheshwari, Sakshi Rathi Maheshwari
& Abhinav Kumar.
Corporate Guarantee of IFF Overseas Pvt. Ltd.
Company had received an order from Commissioner of Customs, NS-V/CAC/JNCH against the demand cum show cause notice under Section 28(4) read with section 124 of the Custom Act, 1962 served from the Directorate of Revenue Intelligence (DRI) for short payment of duty due to non-inclusion of certain payments to vendors for determining assessable value for payment of Custom Duty. The Company is confident that its position will likely be upheld in the appellate process against the above demand.
Note 41 Capital Management
The Company’s capital management objectives are:
(a) to ensure the Company’s ability to continue as a going concern; and
(b) to provide an adequate return to shareholders through optimization of debts and equity balance.
The Company monitors capital on the basis of the carrying amount of debt less cash and cash equivalents, bank balances (excluding earmarked balances with banks.
Ensure financial flexibility and diversify sources of financing and their maturities to minimize liquidity risk while meeting investment requirements.
Proactively manage group exposure in forex, interest and commodities to mitigate risk to earnings.
Leverage optimally in order to maximize shareholder returns while maintaining strength and flexibility of the Balance sheet.
This framework is adjusted based on underlying macro-economic factors affecting business environment, financial market conditions and interest rates environment.
Note 43 Financial Risk Management:
The Company’s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk.
The Company’s risk management assessment and policies and processes are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same.
Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company’s activities.
Credit Risk
Credit risk is the risk that a customer or counterparty to a financial instrument fails to meet its contractual obligations causing financial loss to the company. Credit risk arises mainly from the outstanding receivables from customers. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of counterparty to which the Company grants credit terms in the normal course of business.
The Company has used expected credit loss (ECL) model for assessing the impairment loss. For the purpose, the Company uses a provision matrix to compute the expected credit loss amount. The provision matrix takes into account external and internal risk factors and historical data of credit losses from various customers.
Liquidity Risk
Liquidity risk arises from the Company’s inability to meet its financial obligation as it becomes due.
The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company’s reputation.
Market risk
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates and prices (such as interest rates and foreign currency exchange rates) or in the price of market risk-sensitive instruments as a result of such adverse changes in market rates and prices.
Market risk is attributable to all market risk-sensitive financial instruments, all foreign currency receivables and payables and all short term and long term debt.
The Company is exposed to market risk primarily related to foreign exchange rate risk.
Thus, the Company’s exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currencies.
Foreign exchange risk:
Import made by company during the year is not significant, however company monitors foreign exchange fluctuation and do forward booking whenever there is volatility in forex.
Sensitivity:
Effect of fluctuation of foreign currency in the Company for the years ended March 31, 2024 is H 2.87 Lacs ; March 31, 2023 is H10.66 Lacs.
Hedge Accounting:
The Company does not have any financial instruments which are subject to benchmark reforms. Consequentially, the Company does not have any risk of being exposed to such interest rate benchmark reforms.
Note 44 Employee benefit plans:
Risks
These plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.
i) Investment risk - The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to the market yields on government bonds denominated in Indian Rupees. If the actual return on plan asset is below this rate, it will create a plan deficit.
ii) Interest rate risk - A decrease in the bond interest rate will increase the plan liability. However, this will be partially offset by an increase in the return on the plan’s debt investments.
iii) Longevity risk - The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.
Note 45 Employee share based payment plans:
45.1 The Company has Employee Stock Option Scheme,i.e, ESOP Scheme - 2020 under which options have been granted. Total Number of options available that is available under this scheme is 5,29,140 (Previous Year 2,11,656) out of which compnay has offered 2,40,000 options with 4 different vesting periods this year.
45.3 Fair Value on the date of grant
The fair value at grant date is determined using “Black Scholes Model” which takes into account the exercise price, term of the option, share price at grant date and expected price volatility of the underlying shares, expected dividend yield and the risk free interest rate for the term of the option.
Reasons for material discrepancies : Generally, Debit note and Credit notes related to Purchase and sales are finalized post submission of monthly statement, Managment can’t hold submission of monthly statement more than 10 days of subsequent month so there will be difference. Reversal of Goods in transit is done on quarterly basis which will make difference in monthly statements. Variance in books include creditor for goods, Opex & Capex, where as in Stock statement only creditors for goods is considered.
2 The Company has not granted any loans or advances in the nature of loans to promoters, directors and KMPs, either severally or jointly with any other person.
3 No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
4 No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
5 No proceedings have been initiated or pending against Company for holding any Benami Property under Prohibitions of Benami Transactions Act,1988 (Earlier titled as Benami transactions (Prohibitions) Act,1988.
6 The Company is not declared a wilful defaulter by any Bank or Financial Institution or any other lender.
7 The Company has no transaction with struck off companies under section 248 of the Companies Act,2013 or under section 530 of Companies Act,1956.
8 No charges of satisfaction are pending for registration with the Registrar of Companies (ROC).
9 The Company has no Subsidiary therefore the clause (87) of section 2 of the Companies Act, 2013 read with the Companies (Restriction on Number of Layers) Rules, 2017 is not applicable.
10 The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.
11 There are no immovable properties (other than properties where the Company is the lessee, and the lease agreements are duly executed in favour of the lessee)
12 There are no investment in properties.
13 The Company has not revalued its Property, Plant and Equipment during the year.
14 The Company has not revalued its intangible assets during the year.
15 The Company has allotted 5,00,000 equity shares of face value 10/- each (‘Equity Shares”) at an issue price of H 309.24 per equity share on 6th September, 2023 in accordance with the provisions of Chapter V of the SEBI ICDR Regulations aggregating to H 1,546.05 Lakhs for cash consideration by way of preferential allotment. The listing of the said issue is approved by the both the Exchanges (NSE & BSE) on 25.10.2023. The fund raised have been used for the purpose for which they were received.
16 The amount borrowed from Banks and Financial Institution have been used for the specific purpose for which it was sanctioned.
17 The Board of Directors have approved Scheme of Amalgamation with M/s IFF Overseas Private Limited (Transferor Company). The Scheme of Amalgamation is approved by the Stock Exchanges. The management will submit the scheme to National Company Law Tribunal (NCLT) in due course of time for sanction. The appointed date proposed is 1st April, 2024. The transferor company is under the control of the promoters.
Note 47 Rounding off
The figures appearing in financial statements haves been rounded off to the nearest lakhs, as required by General Instructions for preparation of Financial Statements in Division II Schedule III to the Companies Act,. 2013.
Note 48 Approval of Financial Statements
The Financial Statements were approved for issue by Board of directors in its meeting held on 28th May, 2024.
Note 49 Operating Segments
The Group has only one reportable operating segment i.e. “Trading of Travel Bags and accessories”.
Customer contributing more than 10% of revenue :- Two customers revenue aggregating to H 10035 Lakhs (Previous Year 5424 Lakhs).
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