Deferred Taxation
In view of accumulated losses and the absence of the virtual certainty supported by convincing evidence required under Indian Accounting Standard 12 “Income Taxes’", on unabsorbed depreciation, carried forward losses and other temporary' differences (after considering the deferred tax liability' on fixed assets) have not been recognised as there are no timing differences, the reversal of which, will result in sufficient taxable income.
SEGMENT REPORTING
The Company is predominantly engaged in Manufacturing. The Company is operating in India hence there is no reportable geographic segment. Accordingly no disclosure is required under Indian Accounting Standard 108
(A) FINANCIAL RISK MANAGEMENT
The Company’s financial liabilities comprise mainly of borrowings, trade payables and other payables. The Companys financial assets comprise mainly of investments, cash and cash equiv alents, balances with banks loans, trade receiv ables and other receiv ables. The Company is therefore exposed to Market risk, credit risk. Liquidity risk.
The following disclosures summarize the Company's exposure to financial risks and information regarding measures to manage exposure to such risks.
1) 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 interest rates. Market risks comprises three types : interest rate risk currency and other price risk. Financial instruments affected by market risk includes borrowings, investments, trade payables, trade receivables, loans.
a) Interest rate risk
Interest rate is the risk that the fair value or future cash flows of a financial instrument will fluctutate because of changes in market interest
rates.
I>) Other price Risk
Other price risk is the risk that the fair value of a financial instrument will fluctutate due to changes in market traded price. Other price risk arises from financial assets such as investments in equity instruments. The company is exposed to price risk arising mainly from investments in equity instruments recognized at FVTOCI. As at 31st March 2023. the carrying value of such investments is Rs 3.97 Lacs ( Previous year Rs 5.43 Lacs ). The details of such investment in equity instruments are given in Schedule 5.
2) Credit Risk
Credit risk refers to risk that the counterparty will default on its contractual obligations resuting in financial loss to the Company. Credit risk arises primarily from financial assets such as trade receivables investments, cash and cash equivalents, balances with banks, loans and other receivables.
The average credit period on sales of products is 30 days. Credit risk arising from trade receivables is managed in accordance with the Company's established policy, procedures and control relating to customer credit risk management.
3) Liquidity Risk
Liquidity' risk is the risk that the Company will encounter difficulty in raising hinds to meet commitments associated with financial instruments that are settled by delivering cash or another financial instruments. Liquidity risk may result from an inability' to sell a financial asset quickly at close to its fair value.
The table below analysis financial liabilities of the Company into relevant maturity groupings based on the remaning period from the reposrting date to the contractual maturity date. The amounts disclosed in the table are contractual undiscounted cash flows .
34 (B) CAPITAL MANAGEMENT
For the purpose of the Company's Capital Management, capital includes issued capital and all other equity reserves attributable to equity 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 maximize shareholder value.
35 Impact of claims received by the IRP/RP
As per NCLT order dated 02.05.2023 the amount Payable to Financial Creditor & Operational Creditor & Employees is Rs. 509.19 lacs. Out of this Rs. 5.45 lacs is payable to operational creditor & Rs. 8.54 lacs is payable to Employees and also amount payable to Financial Creditor is Rs. 486.00 lacs & balalance of Rs. 9.20 lacs is payable to COC. The effect of the same will be given in next year after payments are made.
36 RECLASSIFICATION
Previous year’s figures have been regrouped/ reclassified wherever necessary to correspond with the current year's classification disclosures
37 PROVISION OF INTEREST
Pursuant to commencement of CIRP process and filings of claims by financial creditors as mentioned in point no. 35 above. NCLT has crystalised the amount to be paid to Financial Creditor without interest. So the provision of interest lias not been made The effect of the NCLT order will be affected after the payment made as per tiie Order.
38 GOING CONCERN
As per the code, it is required that the company the managed as a “going concern" during the CIRP The future process of the company would be detenmne on the completion of CIRP. In view of these facts the financial statements have been prepared on “going concern basis"
39 NOTES ON ACCOUNTS
a) The company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holdup any Benanu Property
b) The company do not have any transactions with companies struck off
c) The Company do not have any charges or satisfaction winch is yet to be registered with ROC beyond the statutory period
d) The Company have not traded or invested in Crypto currency or Virtual Currency' during the financial year.
e) The company have not advanced or loaned or invested fluids to any other persons) or entity (tes). including foreign entities (intermediaries) with tlie understanding that tire Intermediary shall.
Directly or indirectly lend or invest in otlier persons or entities idenufied m any' maiuier whatsoever by or on behalf of the Company1 (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on beltalf of the Ultimate Beneficiaries
f) The company have not received any fund from any persons) or entity(ies ), including foreign entities (Fundmg Party') with the understanding (whether recorded in wilting or Otherwise) tiiat the Company' shall
(i) Directly or indirectly lend or invest ui otlier persons or entities identified in any maimer whatsoever by or on behalf of tlie Funding Party (Ultimate Beneficiaries) or
(ii) provide any guarantee, security or the like on behalf of tlie Ultimate Beneficiaries
g) Tlie company have no such transaction which is not recorded m tlie books of accounts that lias been surrendered or disclosed as uicome eluting tlie year m the tax assessment under tlie Income Tax Act. 1961 (such as. search or survey or any otlier relevant provisions of the Income Tax Act. 1961)
h) Tlie Company lias complied with tlie number of layers prescribed under clause (87) of section 2 of tlie Act read with the Companies (Restriction on number of Layers) Rules,2017
Vide email dated 17.04.2023, YCL and VPL have informed the Company that they have reversed the above transaction of Rs. 89,73,000/- w.e.f. 30.03.2023, however, necessary entries in the books of PCL are yet to made because the Order dated 21.03.2023 is not complied in its entirety. As on date, no amount has been received from any of the above parties.
j) Tire Hon’ble NCLT, Mumbai Bench has approved the Resolution Plan for the Company submitted by East India Drums and Barrels Manufacturing Private Limited vide order dated 02.05.2023 (received on 04.05.2023). The eligibility' of East India Drums and Barrels Manufacturing Private Limited as the Successful Resolution Applicant is contingent upon compliance of NCLT Order dated 21.03.2023.
1
The Hoifble NCLT. Mumbai Bench vide its order dated 21 03.2023 m IA-2116/2022 inC P (IB)-2146(MB)/2019. lias declared the following transactions as preferential u/s 43 of tlie Insolvency' and Bankruptcy Code 2016 (“Code”) and accordingly, the respective parties were directed to pay back tlie amount so transferred or reverse such impugned entries as per tlie provisions of Section 44 (1) of tlie Code
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