b) Terms/ rights attached to ordinary shares :
The Company has only one class of ordinary shares having a par value of ? 10/- per share. Each holder of ordinary shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupee. The dividend proposed by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of ordinary shares will be entitled to receive remaining assets of the Company . The distribution will be in proportion to the number of ordinary shares held by the shareholders.
There is no change in promoters' shareholding during the year.
As per records of the Company, including its register of shareholders/members as on 31st March, 2024, the above
shareholding represents legal ownership of shares.
f) The Company had bought back 2,00,000 ordinary shares of face value of ? 10/- each during the financial year 2020-21 and 2,50,000 ordinary shares of face value of ? 10/- each during the financial year 2021-22.
g) The Board of Directors of the Company at their meeting held on Friday, 24th May, 2024 have approved to Buy-Back of up to 1,75,000 fully paid-up Ordinary Shares of the Company of face value of ? 10/- each, representing 2.91% of the present total number of fully paid-up Ordinary Share Capital of the Company, at a price of ? 1,800/- per Ordinary Share payable in cash for an aggregate maximum amount of ? 3,150.
h) The Company had issued and allotted 21,55,625 bonus ordinary shares of face value of ? 10/- each during the financial year 2018-19.
i) No ordinary shares have been reserved for issue under options and contracts/commitments for the sale of shares disinvestment as at the Balance Sheet date.
j) No securities convertible into equity/preference shares have been issued by the Company during the year.
k) No calls are unpaid by any director or officer of the Company during the year.
Nature and purpose of other equity Capital reserve
Capital reserve represents capital profits appropriated as per erstwhile Companies Act, 1956 arising on sale of fixed assets during the year ended 30th November, 1985 and 31st March, 1992. This reserve can be utilised in accordance with the provisions of the Companies Act, 2013.
General reserve
General Reserve represents the reserve created through annual transfer of net profit at a specified percentage in accordance with the provisions of the erstwhile Companies Act, 1956. Consequent to the introduction of the Companies Act, 2013, the requirement to mandatory transfer a specified percentage of net profit to general reserve has been withdrawn, though the Company may voluntarily transfer such percentage of its profits for the financial year, as it may consider appropriate. This reserve can be utilised in accordance with the provisions of the Companies Act, 2013.
Capital redemption reserve
Capital redemption reserve represents the reserve created during the year ended 30th November, 1981 as a result of redemption of cumulative preference share capital of the Company. Further, the Company has recognised capital redemption reserve on Buy-back of ordinary shares from the General reserve during financial year ended 31st March, 2018, 31st March, 2021 and 31st March, 2022 with the nominal amount of the ordinary shares bought back as per the applicable provisions of the Companies Act, 2013. This reserve can be utilised in accordance with the provisions of the Companies Act, 2013.
Retained earnings
Retained earnings represents the cumulative profits of the Company after appropriation. Retained earnings can be utilised in accordance with the provisions of the Companies Act, 2013.
Other comprehensive income reserve Revaluation surplus
Revaluation surplus represents the gain/(loss), net of deferred tax, on revaluation of freehold land. The same is not available for distribution to the shareholders.
Remeasurements of the defined benefit plans
Remeasurements of the defined benefit plans comprises actuarial gains and losses and remeasurements of return on plan asset (excluding interest income) which are recognised in other comprehensive income and then immediately transferred to retained earnings.
Terms and conditions :
a) Cash Credit is secured by hypothecation of entire current assets of the Company on first charge basis and all movable fixed assets located at Budge Budge on second charge basis, both present and future. The loan is further secured by mortgage of immovable properties located at Budge Budge on second charge basis.
b) Cash credit is repayable on demand and carries interest @ 3 month MCLR plus 0.15 % p.a., present effective rate 9.35 % p.a. ( 31st March, 2023 : 8.95 % p.a)
c) No loans have been guaranteed by the directors of the Company.
d) There is no default as on the balance sheet date in the repayment of borrowings and interest thereon.
e) The quarterly returns or statements of current assets filed by the Company with bank are in agreement with the books of account.
45. DIVIDEND In Lakhs)
The Board of Directors at its meeting held on 24th May, 2024 have recommended a payment of dividend of ? 5/-(F.Y. 2022-23 ? 27/-) per ordinary share on 60,16,875 ordinary shares of face value of ? 10/- each amounting to ? 300.84 for the financial year ended 31st March, 2024.
The above is subject to approval at the ensuing Annual General Meeting of the Company and hence is not recognised as a liability.
46 DISCLOSURE PURSUANT TO INDIAN ACCOUNTING STANDARD - 19 'EMPLOYEE BENEFITS' AS NOTIFIED U/S 133 OF THE COMPANIES ACT, 2013
46.1 Defined Contribution Plans:
The Company has during the year recognised an expense of ? 641.11 (F.Y 2022-23 ? 639.02) towards defined contribution plans. Out of the total contribution, made for employees' provident fund, a sum of ? 101.09 (F.Y. 2022-23 ? 98.01) has been made to Cheviot Company Limited Employees' Provident Fund while the remaining contribution has been made to the provident fund plan operated by the Regional Provident Fund Commissioner. Further, considering the past track and fair value of the plan assets of the Trust, the Company does not envisage any shortfall in liability towards the interest payable by the Trust at the notified interest rate.
46.2 Defined Benefit Plans:
Gratuity Plan
This is a funded defined benefit plans for qualifying employees. The Company makes contributions to the Cheviot Company Limited Employees' Gratuity Trust Fund. Gratuity is payable to all eligible employees of the Company on superannuation, death, permanent disablement and on resignation/termination of employment in terms of the provisions of the Payment of Gratuity Act or as per the Company's rule, whichever is more beneficial to the employee. a) Risk Exposure
Defined benefit plans expose the Company to actuarial risks such as: Interest rate risk, Salary risk and Demographic risk.
i) Interest rate risk: The defined benefit obligation calculated uses a discount rate based on government bonds. If the bond yield falls, the defined benefit obligation will tend to increase.
ii) Salary risk: Higher than expected increase in salary will increase the defined benefit obligation.
iii) Demographic risk: This is the risk of variability of results due to unsystematic nature of decrements that includes mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefits obligations is not straight forward and depends on the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis, the retirement benefit of the short service employee typically costs less per year as compared to a long service employee.
i) The estimates of future salary increase considered in actuarial valuation take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
k) The Company expects to contribute ? 87.10 to its gratuity fund in F.Y. 2024-25.
l) Sensitivity Analysis
The sensitivity analysis below have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation to the amounts shown below:
47. SEGMENT REPORTING
47.1 Segment information
Operating segments are reported in a manner consistent with the internal reporting to the chief operating decision maker (CODM). The Chief Executive Officer of the Company being the CODM, assesses the financial performance and position of the Company and makes strategic decisions. The CODM primarily uses earnings before interest, tax, depreciation and amortisation (EBITDA) as performance measure to assess the performance of the operating segments. However, the CODM also receives information about the segment revenues, segment assets and segment liabilities on regular basis.
47.2 Description of Segment
The Company is engaged in a single business segment i.e. manufacturing and sale of jute goods. Hence, disclosure requirements as required by Ind AS -108 are not applicable in respect of business segment.
47.4 Extent of reliance on major customer
Revenue from government agencies amounting to ? 21,781.90 (47.40% of total revenue); F.Y. 2022-23 ? 31,570.69 (56.38% of total revenue) has arisen on sale of jute bags within India.
48 DISCLOSURES PURSUANT TO IND AS - 115
48.1 Nature of goods and services : The Company is engaged in the manufacturing and sale of jute products and the same is only reportable segment of the Company.
48.2 Disaggregation of revenue : In the following table, revenue is disaggregated by primary geographical market, major products lines and timing of revenue recognition, etc:
50 LEASES
I. The Company has factory land located at Falta SEZ on operating lease which was renewed for a period of five years commencing from August, 2019 on fixed rental basis with an option to further renew at the end of lease period. In addition to the above, the Company has another leasehold land under finance lease arrangements for term of 99 years which was reclassified from property, plant and equipment to right of use assets in earlier year.
Total cash outflow for leases of right of use (ROU) assets for the year ended 31st March, 2024 is ? 41.36 ( 31st March, 2023 ? 41.36 ) III. Contractual maturities of lease liabilities
As per the requirement of Ind AS-107, maturity analysis of lease liabilities have been shown under maturity analysis for financial liabilities under Liquidity risk (Refer Note 53.3(b)(i)). The below table provides details regarding the contractual maturities of lease liabilities on undiscounted basis:
52 CAPITAL MANAGEMENT
For the purpose of the Company's capital management, capital includes issued capital and all other equity reserves attributable to the ordinary shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximise shareholder value. As at 31st March, 2024 and 31st March, 2023, the Company has only one class of ordinary shares and has low debt. Consequent to such capital structure, there are no externally imposed capital requirements. In order to maintain or achieve an optimal capital structure, the Company allocates its capital for distribution as dividend or re-investment into business based on its long term financial plans.
53 DISCLOSURE ON FINANCIAL INSTRUMENTS
This section gives an overview of the significance of financial instruments for the Company and provides additional information on balance sheet items that contain financial instruments.
The details of material accounting policies including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised in respect of each class of financial assets, financial liabilities and derivative financial instruments are disclosed in Note 3.10 to the financial statements.
The management has assessed that the fair values of cash and cash equivalents, trade receivables, trade payables, short term borrowings and other current financial assets and financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. The management has assessed that the fair value of floating rate instruments approximate their carrying value.
53.2 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. The mutual fund / alternative investment fund are valued using the quoted price/closing net asset value.
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 maximise 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. The fair value of all debentures or bonds which are not actively traded in the stock exchanges is valued using the closing price or dealer quotations as at the reporting date. Derivatives are valued using valuation techniques with market observable inputs such as foreign exchange spot rates and forward rates at the end of the reporting period.
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 discounted cash flow analysis, with the most significant inputs being the discount rate that reflects the credit risk of counterparty. The fair value of short-term financial assets and liabilities is considered to be approximately equal to its carrying value due to their short term nature. Costs of unquoted equity instruments has been considered as an appropriate estimate of fair value where most recent information to measure fair value is insufficient or if there is a wide range of possible fair value measurements.
53.3 Financial Risk Management
The Company has a risk management policy which covers risk associated with the financial assets and liabilities. The risk management policy is approved by the Directors. The different types of risk impacting the fair value of financial instruments are as below:
a) Credit Risk
The credit risk is the risk of financial loss arising from counter party failing to discharge an obligation. The credit risk is controlled by analysing credit limits and credit worthiness of customers on continuous basis to whom the credit has been granted, after obtaining necessary approvals for credit.
i) Trade Receivable
Customer credit risk is managed by the Company subject to Company's established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored and major customers are generally from government agencies and in respect of export debtors, terms of shipment is either cash against document or 100% advance against proof of shipments or backed by letter of credit / ECGC coverage. Thus, based on past trends, the Company does not foresee any losses in expected credit loss (ECL). The maximum exposure to credit risk at the reporting date is the carrying value of trade receivable disclosed in Note - 15.
ii) Financial instruments and cash deposit
Credit risk is limited as the Company generally invest in deposits with banks and in bonds of companies having high credit ratings assigned by international and domestic credit rating agencies. Investments primarily include investments in debentures or bonds, preference shares, mutual fund units, real estate investment trust and alternative investment funds. Counterparty credit limits are reviewed by the Company periodically and the limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty's potential failure to make payments.
b) Liquidity risk
Liquidity risk is the risk that the Company may not be able to meet its financial obligations as they become due. The Company monitors its risk by determining its liquidity requirement in the short, medium and long term. This is done by drawing up cash forecast for short term and long term needs. The Company manages its liquidity risk in a manner so as to meet its normal financial obligations without any significant delay or stress. Such risk is managed through ensuring operational cash flow while at the same time maintaining adequate cash and cash equivalent position. The management has arranged for diversified funding sources and adopted a policy of managing assets with liquidity monitoring future cash flow and liquidity on a regular basis. Surplus funds not immediately required are invested in certain mutual funds and fixed deposit which provide flexibility to liquidate. Besides, it generally has certain undrawn credit facilities which can be used as and when required, such credit facilities are reviewed at regular basis.
c) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of following risk: interest rate risk, foreign currency risk, other price risk. Financial instruments affected by market risk include investments, trade receivable, borrowings and trade payable. i) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of the Company's financial instruments will fluctuate because of changes in market interest rates.
The Company is exposed to risk due to interest rate fluctuation on its non-current and current borrowings with floating interest rate. Interest rate risk is determined by current market interest rates, projected debt servicing capability and view on future interest rate. Such interest rate risk is actively evaluated and is managed through portfolio diversification and exercise of prepayment/refinancing options, where considered necessary.
Interest rate sensitivity has been calculated assuming the borrowings outstanding at the reporting date have been outstanding for the entire reporting period and all other variables remain constant.
ii) 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 has significant foreign currency exposure. To mitigate this risk, foreign exchange exposure against exports are partly hedged by entering into forward contract. a) Exposure to foreign currency risk
The Company's exposure to foreign currency risk at the end of the reporting period are as follows:
iii) Other price risk
The Company's exposure to securities price risk arises from investments held by the Company and classified in the balance sheet either at fair value through OCI or at fair value through profit and loss. Having regard to the nature of securities, intrinsic worth, intent and long term nature of securities held by the Company, fluctuation in their prices are considered acceptable and do not warrant any management.
55 OTHER REGULATORY INFORMATION
i) The Company does not have any Benami property. Further, there are no proceedings initiated or are pending against the Company for holding any Benami property under the Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder.
ii) The Company has not granted any loans or advances in the nature of loans either repayable on demand or without specifying any terms or period of repayment to promoters, directors, KMPs and the related parties.
iv) The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.
v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall:
(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 has 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 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.
vii) 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 assessments under the Income Tax Act, 1961.
viii) The Company has not been declared as a wilful defaulter by any bank or financial institution or other lender.
ix) The Company has complied with the number of layers prescribed under clause (87) of Section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017.
x) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period. 56 Previous year's figures have been re-grouped/re-classified, wherever necessary, to make them comparable to the
current year's presentation.
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