r. Provisions (other than employee benefits)
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are discounted at a current pre-tax rate that reflects the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
The amortisation or “unwinding” of the discount applied in establishing the provision is charged to the income statement in each accounting period. The amortisation of the discount is shown within finance costs in profit or loss.
s. Contingent Liabilities
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made. The material accounting policies adopted in preparation of standalone financial statements has been disclosed as below. All accounting policies has been consistently applied to all the period presented in the standalone financial statements unless otherwise stated.
2.4 Use of Estimates and Management Judgements
The preparation of financial statements in conformity with the recognition and measurement principles of Ind AS requires management of the Company to make estimates and judgements that affect the reported balances of assets and liabilities, disclosures of contingent liabilities as at the date of financial statements and the reported amounts of income and expenses for the periods presented. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and future periods are affected.
The Company uses the following critical accounting judgements, estimates and assumptions in preparation of its financial statements:
a. Defined Benefit Plans - The cost of the employment benefits such as gratuity and leave obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities, involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
Further details about gratuity obligations are given in note no. 32.
b. Useful lives of depreciable/ amortisable assets (tangible and intangible) - Management reviews its estimate of the useful lives of depreciable/ amortisable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utility of certain software, customer relationships, IT equipment and other plant and equipment (Refer Note No.3).
c. Significant judgments when applying Ind AS 115 - Revenue is recognised upon transfer of control of promised products or services to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those products or services. The application of revenue recognition accounting standards is complex and involves a number of key judgements and estimates. Revenue is measured based on the transaction price, which is the consideration, adjusted for volume discounts, price concessions and incentives, if any, as specified in the contract with the customer/dealer. The Company makes estimates related to customer performance and sales volume to determine the total amounts earned and incentive to be recorded as deductions (Refer Note No.24).
d. Recognition of current tax and deferred tax - The Company uses judgements based on the relevant rulings in the areas of allocation of revenue, costs, allowances, and disallowances which is exercised while determining the provision for income tax. Deferred income tax expense is calculated based on the differences between the carrying value of assets and liabilities for financial reporting purposes and their respective tax basis that are considered temporary in nature. Valuation of deferred tax assets is dependent on management's assessment of future recoverability of the deferred benefit. Expected recoverability may result from expected taxable income in the future, planned transactions or planned tax optimizing measures. Economic conditions may change and lead to a different conclusion regarding recoverability (Refer Note No.7 and 23).
2.5 Recent Pronouncements:
Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended 31st March, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.
e) Terms/Rights attached to the Equity Shares
The company has only one class of equity shares having par value of H1/- per share. Each holder of equity shares is entitled to one vote per share.
The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the Annual General Meeting, except in case of interim dividend.In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts in proportion to their shareholdings.
f) The Company does not have any Holding/ Ultimate Holding Company. As such, no shares are held by them or their Subsidiaries/ Associates
g) There are NIL (Previous year NIL) shares reserved for issue under option and contracts/commitment for the sale of shares/ disinvestment.
h) During the period of five years immediately preceding the reporting date:
i. No shares were issued for consideration other than cash
ii. No bonus shares were issued
iii. No shares were bought back
i) There are NIL (Previous year NIL) securities convertible into Equity/ Preference Shares.
j) There are NIL (Previous year NIL) calls unpaid including calls unpaid by Directors and Officers as on the balance sheet date.
k) No shares were forfeited during the year or during the previous year.1,38,000 equity shares of H10/-each (post split 13,80,000 equity shares of H1 each) on which H3.54 lacs had been paid up, were forfeited in the year 2001-2002
Capital Reserve:- The reserve was created on slump sale of Container Freight Station, being excess of consideration over net assets in financial year 2022-2023 (Refer Note no.47).
Amalgamation Reserve:- This reserve was created on amalgamation of Shyam Century Ferrous Limited with the company during the financial year 2005-2006
Securities Premium:- This Securities Premium had been created on issue of shares by way of public issue and right issue
General Reserve:- General reserve is created from time to time by way of transfer of profits from retained earnings for appropriation purpose. General reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income.
Capital Redemption Reserve:- This reserve was created upon redemption of preference shares by company in FY 2012-2013
Retained Earnings: Amount of retained earnings represents accumulated profit and losses of the Company as on reporting date. Such profits and losses are after adjustment of payment of dividend, transfer to any reserves as statutorily required and adjustment for remeasurement gain loss on defined benefit plan.
Notes:-
a) Cash Credit and Buyer's Credit for raw materials from banks amounting to H6700.75 lacs (31st March, 2023 : H10090.42 lacs) are secured by way of first charge on current assets (both present and future) of the company.
b) Buyer's Credit for Capex from banks amounting to H10865.29 lacs (31st March, 2023 : H7295.07 lacs) are secured by way of 1st (pari passu) charge on all the Property, Plant and Equipment of the Unit located at Bishnupur West Bengal on pari passu basis with other term lenders.These Buyers Credit are eligible for roll over for upto 3 years as per RBI guidelines.
c) The cash credit is repayable on demand and carries interest @ 8.10% to 10.35% (31st March,2023 : 6.05% to 9.65%) p.a.
d) Loan from Subsidiary Company is repayable on demand and carries interest @ 7.50% (31st March,2023 : N.A) p.a.
e) Buyers credit carries interest @ SOFR plus 0.65% to 0.95% (2022-23 : 0.25% to 0.65%) p.a. for raw-materials and @ SOFR plus 0.72% to 0.95% (2022-23 : 0.75% to 0.90%) p.a. for capital expenditure and is repayable in 90-180 days.
f) Rate of Interest for Packing Credit is 5.32% to 6.80% (2022-23 : 2.08% to 6.55%) p.a.
g) Working Capital demand loan is secured against Ist pari passu charge on current assets of all 6 units located at Joka (WB),Karnal (Haryana),Bacchau (Gujarat),Hoshiarpur (Punjab),Palasbari (Assam) and Gummidipoondi (Tamil Nadu).
34. Capital Management
The Company's objective to manage its capital is to ensure continuity of business while at the same time provide reasonable returns to its various shareholders but keep associated cost under control. In order to achieve this, requirement of capital is reviewed periodically with reference to operating and business plans that take into account capital expenditure and strategic investments. Apart from internal accrual, sourcing of capital is done through judicious combination of equity and borrowing, both the short term and long term. Net debt (total borrowing less current investment and cash & cash equivalent) to equity ratio is used to monitor capital. No changes were made to the objective, policies or process for managing capital during the year ended 31st March, 2024 and 31st March, 2023.
Notes:-
1) The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.
2) Finance income and finance cost by instrument category wise classification :-
i) Interest income of H2,603.28 Lacs (PY. H2,043.38 Lacs) on financial instrument at amortised cost.
ii) Interest expense of H2,031.14 Lacs (PY. H806.25 Lacs) on borrowing at amortised cost.
3) Investment in subsidiaries are being carried at cost hence not reported.
4) The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels.
Level 1: Hierarchy includes financial instruments valued using quoted market prices.
Level 2: Hierarchy includes financial instruments that are not traded in active market. These are valued using observable market data such as yield etc. of similar instruments traded in active market.
Level 3: If one or more significant inputs is not based on observable market data, the instrument is included in level 3. Investment through FVTPL is being valued at level 2 in current year as well as previous year.
40. Financial Risk Management-Objectives and Policies
The Company's financial liabilities comprise long term borrowings, short term borrowings, capital creditors, trade and other payables. The main purpose of these financial liabilities is to finance the Company's operations. The Company's financial assets include trade and other receivables, cash and cash equivalents, investment in subsidiaries at cost and deposits.
The Company is exposed to market risk and credit risk. The Company has a Risk management policy and its management is supported by a Risk management committee that advises on risks and the appropriate risk governance framework for the Company. The audit committee provides assurance to the Company's management that the Company's risk activities are governed by appropriate policies and procedures and that risks are identified, measured and managed in accordance with the Company's policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.
(i) Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises risk of interest rate, currency risk and other price risk, such as commodity price risk and equity price risk. Financial instruments affected by market risk include FVTPL investments.
a. Foreign Currency Risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates relates primarily to the Company's operating activities. The Company has a treasury department which monitors the foreign exchange fluctuations on the continuous basis and advises the management of any material adverse effect on the Company.
Foreign Currency sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in foreign currency exchange rates, with all other variables held constant. The impact on the Company's profit before tax is due to changes in the fair value of assets and liabilities.
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables).
The Company implements a credit risk management policy under which the Company only transacts business with counterparties that have a certain level of credit worthiness based on internal assessment of the parties, financial condition, historical experience, and other factors. The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Company has established a credit policy under which each new customer is analysed individually for creditworthiness.
Trade receivables
An impairment analysis is performed at each reporting date on an individual basis for all the customers. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based on credit losses historical data. The maximum exposure to credit risk at the reporting date is the carrying value of trade receivables disclosed in Note 10 as the Company does not hold collateral as security. The Company has evaluated the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries.
Refer Note No.10 for ageing of trade receivable as of 31st March, 2024 and 31st March, 2023.
No significant changes in estimation techniques or assumptions were made during the reporting period.
Credit risk also arises from transactions with financial institutions, and such transactions include transactions of cash and cash equivalents, various deposits, and financial instruments such as derivative contracts. The Company manages its exposure to this credit risk by only entering into transactions with banks that have high ratings. The Company's treasury department authorizes, manages, and oversees new transactions with parties with whom the Company has no previous relationship.
Furthermore, the Company limits its exposure to credit risk of financial guarantee contracts by strictly evaluating their necessity based on internal decision making processes, such as the approval of the board of directors.
Credit risk exposure
The carrying amount of financial assets represents the Company's maximum exposure to credit risk. The maximum exposure to credit risk as of 31st March, 2024 and 31st March, 2023 are as follows:
The Company's objective is to maintain optimum levels of liquidity to meet its cash and collateral requirements at all times. The Company relies on a mix of borrowings and excess operating cash flows to meet its needs for funds. The current committed lines of credit are sufficient to meet its short to medium/ long term expansion needs. The Company monitors rolling forecasts of its liquidity requirements to ensure it has sufficient cash to meet operational needs. Besides, it generally has certain undrawn credit facilities which can be accessed as and when required; such credit facilities are reviewed at regular intervals. Thus, no liquidity risk is perceived at present.
44. Leases
a) The Company has lease contracts for land. The Company's obligations under leases are secured by the lessor's title to the leased assets.
b) The Company has elected to apply IND AS 116 to its leases with modified retrospective approach. Under this approach, the company has recognised lease liabilities and corresponding right of use assets. In the statement of profit and loss for the year ended, depreciation expenses on right of use assets and finance cost for interest accrued on such lease liability has been recognized.
45. During the year, the Company has made a donation to Indian National Congress H500 lacs (previous year NIL) and All India Trinamool Congress H100 lacs (previous year H200 Lakhs) by cheque . The political donation made of H600 Lacs is within the limit specified under section 182(1) of the Companies Act 2013.
46. During the previous year the company had disposed of its entire investment in its wholly owned foreign subsidiary Centuryply Myanmar Private Limited and incurred a loss of H4,925.09 Lacs. The said subsidiary was running a unit in Myanmar for procuring timber from local sources and converting the same to veneer, which is raw material for manufacturing plywood. This unit was meant for ensuring quality raw-material supply for company's plywood units in India. However due to political disturbances and adverse business situation in Myanmar the subsidiary had to close down its operations and entire investment in subsidiary was disposed off.
47. During the year, the Scheme of Arrangement between the Company and Century Infra Limited (‘Transferee Company') a wholly owned subsidiary Company and their respective shareholders and creditors under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 and the rules framed thereunder was approved by the Hon'ble National Company Law Tribunal, Kolkata Bench on 31st January, 2024. As the scheme is effective from appointed date 1st April, 2022 the Company has transferred its Container Freight Station Division (CFS division) to “Transferee Company” with effect from 1st April, 2022, all together with the assets, liabilities and manpower comprised therein on a slump sale basis for a total consideration of H3271 lacs.As per the scheme, The Company has transferred Non current assets (including right of use assets) H4034.00,Current assets H1546.61, Non current liabilities H1738.97 and Current liabilities H1425.52. Consequently previous year figures have been restated by excluding CFS division balances in compliance with the approved scheme.
49. Additional disclosures relating to the requirement of revised Schedule III.
(i) No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
(ii) Century Plyboards (India) Limited has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
(iii) Century Plyboards (India) Limited has complied with the number of layers prescribed under the Companies Act, 2013.
(iv) There is no undisclosed income under the Income Tax Act, 1961 for the year ending 31st March, 2024 and 31st March, 2023 which needs to be recorded in the books of account.
(v) Century Plyboards (India) Limited has not traded or invested in crypto currency or virtual currency during the current or previous year.
(vi) The borrowings obtained by the company from banks and financial institutions have been applied for the purposes for which such loans were taken.
(vii) There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.
(xi) Utilisation of Borrowed Fund & Share Premium:
(i) The Company has not advanced or loaned or invested funds to any other person(s) or entities, 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.
(ii) The Company has not received any fund from any person(s) or entities, including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
50. Subsequent event
The Board of Holding Company has recommended a dividend of H1.00 per share (100% per share of face value of H1 each) for the financial year ended 31st March, 2024, subject to shareholders approval at annual general meeting.
51. Previous year's figures have been rearranged and/or regrouped, wherever necessary.
52 . The financial statements have been approved by the Audit Committee at its meeting held on 24th May, 2024 and by the Board of Directors on the same date.
As per our attached report of even date
For Singhi & Co. For and on behalf of the Board of Directors
Firm Registration No.- 302049E Chartered Accountants
Sajjan Bhajanka Sanjay Agarwal
Chairman & Managing Director CEO & Managing Director
DIN:00246043 DIN:00246132
Rajiv Singhi
Partner
Membership No. 053518
Place: Kolkata Arun Kumar Julasaria Sundeep Jhunjhunwala
Date: 24th May, 2024 Chief Financial Officer Company Secretary
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