16.2 Preference Share Capital issued by the company are treated as Compound Financial Instruments in terms of Ind AS 32-Financial Instrument: Presentation. Accordingly same is classified as other equity and borrowings. Necessary disclosures are given in note no. 17 & 18
16.3 The Company has only one class of equity shares having a par value of Rs. 5 per share. Each Shareholder is eligible for one vote per share. The dividend proposed by the Board of Directors is subject to the approval of shareholders, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion of their shareholding.
17.6 The Company has elected to recognise changes in the fair value of equity investments in other comprehensive income. These changes are accumulated within FVTOCI reserve. The Company transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognised/sold out.
Terms/rights attached to preference shares :
17.7 That above shares are to be redeemed within ten years from the date of issue of same at the par value.
18.1 Nature of Security
All Term loan excluding GECL loan are secured by first charge on specific assets of the Company to banks and the personal guarantees of two Director's of the Company & Corporate guarantee of two group companies M/s Ganga Projects Pvt Ltd & M/s B.S. Traders Pvt Ltd. GECL Term loans are secured by way of extension of charge on existing primary and collateral security.
Vehicle loans are secured by hypothecation of vehicles.
18.2 Terms of Repayment
Term Loan amounting to Rs.1,570 lakhs repayable in 120 equal monthly instalments. Unsecured Term loan amounting to Rs. 2000.00 lakhs repayable in 120 equal monthly instalments. GECL loans to be repaid in 48 equal instalments after one year moratorium, GECL 2.0
Extension scheme loans to be repaid in 48 equal instalments after two year moratorium Vehicle loans are repayable over a period of 1 to 5 years.
18.3. The Company has used the borrowings from banks and Financial institution for the specific purpose for which it was taken.
24.1 Working capital loans from banks:
Primary Security:
I. First charge by way of hypothecation of raw material, stock-in-progress, finished goods, semi-finished goods, stores, spares and book-debts and other current assets of the company on Pari-Passu basis among consortium banks and the personal guarantees of Two Director's of the Company and Corporate Guarantee of Two Group Companies M/s Ganga Project Private Limited and M/s B.S. Traders Private Limited (i.e. With SBI/BOB/BOM).
Collateral Security:
I. First charge by way of equitable mortgage of lease hold factory Land and Building admeasuring 82 Bigha 4 Biswa situated at Village-Ojhada,Hamirgarh, Bhilwara on pari-passu basis among consortium member bank (i.e. With SBI/BOB/BOM)
II. First charge on the entire assets of the company except two flats purchased by the company bearing no. A-5901 and A-5902 in Trump Tower, Mumbai by availing term loan from Kotak Mahindra bank. However, consortium will get the original property documents after repayment of the said Loan.
(ii) Dividend not recognised at the end of reporting period
In addition to the above dividends, at the year end the company's Board of Directors have proposed the payment of final dividend of Rs. 0.05 per fully paid equity shares (31st March, 2023 Rs. 0.05) per fully paid equity share. This proposed is subject to the approval of the share holders in Annual General Meeting.
The amount recognized as expenses for this defined contribution plan in the financial statement is Rs. 231.04 lakhs (RY.-Rs.211.52 Lakhs) which includes Rs. 7.83 Lakhs (P.Y.- Rs. 6.56 Lakhs ) towards contribution for key managerial personnel.
B) Defined Benefits Plan Gratuity
The company has a defined benefit gratuity plan. Every employee who has rendered continuous service of 5 years or more is entitled to gratuity at 15 days salary (15/26 * last drawn basis salary plus dearness allowances) for each completed year of five years or more (service of 6 Months and above is rounded off as 1 completed year) subject to maximum of Rs. 20 lakhs as per rules/policy of the Company.
Leave Encashment
The company is offering an Other Long term benefits to all its permanent employees through a scheme of compensated absence plan. Under this plan, an employee can accumulate and carry forward his leaves balance in future periods which he can either avail in future or encash the same as per rules/policy of the Company.
* The discount rate of 7.09% p.a compound is assumed which is determined by reference to the market yield at the Balance Sheet Date on Government Bonds.
** The expected rate of return on plan assets is determine considering several applicable factor mainly the composition of plan assets held, assessed risk of assets management and historical return from plan assets.
*** The estimates of future salary increase considered in actuarial valuation, taking account of inflation, seniority promotion and other relevant factors, such as supply and demand in the employment market
III) Risk exposure
Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such company is exposed to various risks
as follow -
A) Salary Increases - Actual salary increases will increase the Plan's liability. Increase in salary increase rate assumption in future valuations will also increase the liability.
B) Investment Risk - If 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.
C) Discount Rate - Reduction in discount rate in subsequent valuations can increase the plan's liability.
D) Mortality & disability - Actual deaths & disability cases proving lower or higher than assumed in the valuation can impact the liabilities.
E) Withdrawals - Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent valuations can impact Plan's liability.
Note No. 48 - Disclosure as per Ind AS 37 ‘Provisions, Contingent Liabilities and Contingent Assets'
(i) Contingent liabilities :
Claims against the company not acknowledged as debts :
Excise duty, Sales tax and Income Tax demand (Net of amount charged to Statement of Profit & Loss- Rs. Nil) (Previous Year- Rs. Nil) under appeal Rs. 1236.95 Lakhs (31st March, 2023- Rs. 1366.82 Lakhs)
(ii) Commitments
Estimated amount of contract remaining to be executed on capital account and not provided for amounting to Rs. 24.16 Lakhs (31st March, 2023 - Rs. 10.60 Lakhs )
Note No. 49 - Disclosure as per Ind AS 107 ‘Financial Instrument Disclosures'
A) Capital management
"The capital structure of the Company is based on management's judgement of its strategic and day-to-day needs with a focus on total equity so as to maintain investor, creditors and market confidence. The management and the Board of Directors monitors the return on capital as well as the level of dividends to shareholders. The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to shareholders. The Company may take appropriate steps in order to maintain, or if necessary adjust, its capital structure. The primary objective of Company's capital management is to maximize shareholder’s value and to maintain an appropriate level of debt and equity. The company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of financial covenants. The company manages its capital using the Capital Gearing Ratio which is Net debt divided by total equity. For the purpose of Company's Capital Management , capital includes issued equity share capital and other equity (excluding preference share capital) and net debt comprises of long term and short term borrowings less cash and cash equivalent."
B) Financial risk management
The Company's Financial Risk Management is an integral part of how to plan and execute its business strategies. The Company’s financial risk management is set by the Managing Board. The Company's principal financial liabilities comprise loans and borrowings, trade payables and other payables. The main purpose of these financial liabilities is to finance the company's operations. The company's principal financial assets include trade & other receivables and cash and short term deposits.
i) Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Company's income. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
The Board of Directors is responsible for setting up of policies and procedures to manage market risks of the Company. All such transactions are carried out within the guidelines set by the risk management committee.
a) Foreign Currency Risk
Majorly the company is operating their business in its functional currency, therefore the company is not exposed to any significant risk with regards to fluctuation in foreign currency rates.
b) Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rate. In order to optimize the Company's position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.
c) Price risk
The company's exposure towards price risk arises from investments held in equity shares and classified in Balance Sheet as fair value through Other Comprehensive Income or Fair Value through Profit & Loss. To manage its price risks arising from investments in equity securities, the company diversifies its portfolio. Diversification of portfolio is done in accordance with the limits set by the company except one as stated in Note No.5. All of the company's equity investments are publicly traded and are listed in the BSE respective stock exchanges.
ii) Credit risk
Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. It encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. To manage this, the Company periodically assesses the financial reliability of customers, taking into account financial conditions, current economic trends, analysis of historical bad debts and ageing of accounts receivable and based upon that categories the same for write off. Where loans or receivables have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized in Statement of Profit and Loss.
A. Provision for Expected Credit or Loss
(a) Financial assets for which loss allowance is measured using 12 month expected credit losses:
The Company has assets where the counter-parties have sufficient capacity to meet the obligations and where the risk of default is very low. Accordingly, no loss allowance for impairment has been recognized.
(b) Financial assets for which loss allowance is measured using life time expected credit losses:
The Company provides loss allowance on trade receivables using life time expected credit loss and as per simplified approach.
B. Exposure to Credit Risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was Rs. 5386.92 Lakhs as at 31st March, 2024 and Rs. 5906.38 Lakhs as at 31st March, 2023 being the total of the carrying amount of balances with banks, short term deposits with banks, trade receivables, margin money, loans & advances and other financial assets excluding equity investments.
iii) Liquidity Risk
Liquidity risk is defined as the risk that the Company will not be able to settle of meet its obligations on time or at a reasonable price. The Company's treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company’s net liquidity position through rolling forecasts on the basis of expected cash flows.
Note No. 50 - Disclosure as per Ind AS 108 ‘Operating Segments'
The Company's engaged in the business of manufacturing and laying the jointing of Asbestos Cement Products, which as per Indian Accounting Standard - 108 'Operating Segments’ and in the opinion of the management, is considered to be the only reportable operating segment.
Note No. 51 - Disclosure as per Ind AS 113 ‘Fair Value Measurement'
Fair Value Hierarchy
This section explains the judgements 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 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 three levels prescribed under the accounting standard.
Fair value are categorised into different level in a fair value hierarchy which are as follows:
Level 1 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
Level 3 If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.
Valuation Techniques used to determine fair values:
Specific valuation technique is used to determine the fair value of the financial instruments which include:
i) For Investments in Equity Investments- Quoted Market prices are used
ii) For financial liabilities (domestic currency loans) :- appropriate market borrowing rate of the entity as of each balance sheet date used.
Note No. 53 - Tax Assessment
Liability, if any, arises on completion of pending assessment in respect of GST, VAT, Service Tax, Income Tax, etc. will be provided in the year of completion of such assessment.
Note No. 54 - Interest Income
Interest expenses are net of Income of Interest Rs. 41.28 Lakhs (Previous year Rs. 12.46 Lakhs)
Note No. 55 - Details of Dues to the Micro and Small Enterprises as defined under the Micro, Small and Medium Enterprises Development Act, 2006*
*The Company has initiated the process of identification of suppliers registered under Micro and Small Enterprise Development Act, 2006, by obtaining confirmations from all suppliers. Information has been collated only to the extent of information received.
Note No. 56 - Licensing agreement with Gujarat Composite Ltd.
The Company has entered into License Agreement with Gujarat Composite Limited (GCL-Licensor) on 07.04.2005 for running their unit for manufacturing of AC Sheet and Cement manufacturing units at Digvijay Nagar, Ranip, Ahmedabad for a period of 84 month on license basis, extendable to further period of 84 months on mutual consent. As per the License Agreement upon expiry of license period, the GCL would be under obligation to take over all the current assets of Kanoria Energy & Infrastructure Ltd. (Licensee) pertaining to or in connection with the operation of AC Sheet and Cement manufacturing units at their book value and make the payment if any due to be received for this to the Licensee forthwith.
Further, after expiry of the license period or the extended period, the Licensee shall vacate and handover the possession of AC Sheet and Cement manufacturing units to the Licensor upon receipt of payment if any due to be received from the Licensor under this agreement. The company served notice in March, 2012 to GCL to pay all dues including book value of current assets pertaining to or in connection with the operation of AC sheet and Cement manufacturing unit as per the license agreement. However, the Licensor has failed to take over the possession of Unit by making payment of dues on expiry of the license period.
Subsequently an application dated 23.05.12 was filed by Labour Union viz Gujarat Mazdoor Panchayat, before the Hon'ble Industrial Tribunal Ahmedabad, wherein Industrial Tribunal vide its order dated 07.06.2012 directed to Kanoria Energy & Infrastructure Ltd. to run the Production activities & continue to pay wages, in the same manner to all those workers who are employed and utilized by Kanoria Energy & Infrastructure Ltd for the production activities at the factory situated at Digvijay Nagar, Ranip, Ahmedabad provided that no hindrance, obstructions and the like is caused by GCL and/or other authorities. GCL is party in the said proceeding and had given an undertaking to the Industrial Tribunal to this effect. In spite of notices being served to Licensor from time to time, possession of the unit has not been taken back by GCL. Based on the above facts, circumstances and uncertainty of time regarding taking back of the possession of the Unit by making payment of dues in terms of licence agreement, the company has decided not to charge interest on balance recoverable from GCL from Financial Year 2014-15 onwards. Further Bonus in addition to leave and license fees recoverable from GCL has also not been provided in the books since Financial Year 2014-15 onwards. Year wise amount not provided in the books since financial year 2014-15 are as under: -
These will be provided in the books upon its receipt from GCL. Therefore, total amount recoverable from GCL as on 31.03.2024 is Rs.9183.79 Lakhs including amount already provided in the books Rs.1748.27 lakhs shown under Current Assets sub heading financial assets sub heading loans as per accounting policies consistently following by the company (Previous year Rs.7917.88 Lakhs including amount provided in the books Rs. 1766.57 Lakhs). The company has filed civil suit for recovery of the amount and other reliefs in the Commercial Court, Ahmedabad (now heard by small cases court, Ahmedabad). GCL has filed an appeal application u/s 11 of Arbitration Act, 1996, the Commercial Court vide its order dated 13th Dec, 2017 have rejected said application. GCL, though challenged the said order dated 13 Dec., 2017 in the High Court of Gujarat at Ahmedabad High Court vide order dated 23rd April, 2018 have dismissed said appeal. Appeal against the said order filed by GCL (Licensor) before the Hon'ble Supreme Court, the Hon’ble Supreme Court vide order dated 1st May 2023 has dismissed the said Appeal.
Disclosure of Corporate social responsibility (CSR)
As per section 135 of Companies Act the company is required to spend in every financial year , at least 2% of the average net profits of the Company made during the three immediately preceding financial year in accordance with its CSR policy.
A. Gross amount required to be spent by the Company during the year 2023-24 Rs. 20.37 Lakhs ( Year 2022-23 Rs. 14.19 Lakhs )
Total amount unspent till 31.03.2024 was Rs Nil ( Rs. Nil for 2022-2023).
Total amount of Rs. 0.18 Lakh is spend in excess by the Company during the year 2023-2024
Note 59 : Disclosure of Transaction with Companies Struck Off
There is no list available on MCA portal about companies struck off under The Companies Act. So it is not feasible to determine the transaction with struck off companies.
Note 60 : Disclosure of Borrowings on Security of Current Assets
The Company has borrowed funds from banks on the basis of security of current assets. The quarterly returns filed by the company to bank or financial institution are in line with books of accounts.
Note 61 : Disclosure of Benami Property
The company does not hold any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
Note 62 : Disclosure of Undisclosed Income
There are no transaction which is not recorded in the books of accounts and 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. Note 63 : Disclosure of Crypto Currency or Virtual Currency
The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year Note 64 : Disclosure of Wilful Defaulter
The company has not declared as a wilful defaulter by any bank or financial institution or any other lender during the financial year.
Note 65 : Disclosure of Registration of Charge with ROC
The Company has filed all type of applicable charges or satisfaction with Registrar of Companies (ROC) in time, So there no charges of satisfaction is pending for registration with ROC as on balance sheet date.
Note 66 : Disclosure of Compliance with Number of Layer Companies
The company is neither a holding company of any subsidiaries companies not a subsidiary company of any holding company, hence The company is not covered under clause (87) of section 2 of the Companies Act along with the Companies (Restriction on number of Layers) Rules, 2017.
Note 67 : Disclosure of Scheme of Arrangement
The Company has not entered in any Scheme of Arrangements which has been approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013.
Note 68 : Disclosure of Title Deeds of Immovable Property
The title deeds of all immovable properties are in the name of Company.
Note 69 :
During the year, the Company has not granted any loans or advances in the nature of loans which are either repayable on demand or without specifying any terms or period of repayment to promoters, directors, KMPs and the related parties ( as defined under Companies Act,2013) either severally or jointly with any other person.
During the year Company has not advances or loaned or invested funds ( either borrowed funds or share premium or any other sources or kind of 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:
(i) 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
(ii) Provide any guarantee, security or the like to or on behalf of the ultimate Beneficiaries Note 71 :
During the year 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 intermediary shall:
(i) 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
(ii) Provide any guarantee, security or the like to or on behalf of the ultimate Beneficiaries Note 72 :
The Company has not revalued its property, Plant and Equipment accordingly disclosure as whether the revaluation is based on the valuation by a registered valuer as defined under rule 2 of the Companies (Registered valuers and Valuation) Rules, 2017 is not applicable to the Company
Note 73:
The Board of the company opined that Assets other than Property, Plant and Equipment, Intangible Assets and non current investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.
Note 74:
The Company has not revalued its Property, Plant and Equipment during the Financial Year.
Note 75 :
Comparative Financial Information ( i.e. amounts and other disclosures of preceding year ) presented above, is included as an integral part of the current year's financial statements and is to be read in relation to the amounts and other disclosures relating to current year. Figures of Previous Year are regrouped/ reclassified wherever necessary to correspond to figures of current year.
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