13.2:- Rights, preferences and restrictions attached to equity shares
The Company has a single class of equity shares havng par value of ? 1 per share. Each shareholder is eligible for one vote per share held. The divdend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. 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 to their shareholding.
13.5:- There are no bonus shares issued during the period of five years immediately preceding the reporting date.
13.6:- There are no shares reserved for issue under options and contracts / commitments for the sale of shares / disin^stment.
13.7:- There are no shares allotted as fully paid up pursuant to contract without payment being received in cash during the period of five years immediately preceding the date of balance
Nature and purpose of reserve
1. Retained Earnings
Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings includes re-measurement loss / (gain) on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss. Retained earnings is a free reserve available to the Company.
2. Capital Reserve
Reser^ is primarily created on amalgamation as per statutory requirement. This reser^ is utilised in accordance with the specific provsions of the Companies Act 2013.
3. Security Premium
Securities Premium is credited when shares are issued at premium including non-cash transaction. This reserve is utilised in accordance with the specific provisions of the Companies Act
4. Revaluation Reserve
It is created through the re^luation of assests as per the Companies Act, 2013 and Indian Accounting Standard notified by Ministry of Corporate Affirs (MCA) .
5. General reserve
Under the erstwhile Indian Companies Act 1956, a general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a divdend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then the total divdend distribution is less than the total distributable reserves for that year.
Consequent to introduction of Companies Act 2013, the requirement of mandatory transfer of a specified percentage of the net profit to general reserve has been withdrawn and the Company can optionally transfer any amount from the surplus of profit and loss to the General reserves. This reser^ is utilised in accordance with the specific provsions of the Companies Act 2013.
Note 28:- Current tax
Indian companies are subject to Indian income tax on a standalone basis. For each fiscal year, the entity profit and loss is subject to the higher ofthe regular income tax payable or the Minimum Alternative Tax (“MAT’).
Statutory income taxes are assessed based on book profits prepared under generally accepted accounting principles in India adjusted in accordance with the provisions of the (Indian) Income Tax Act, 1961. Statutory income tax is charged at 30% plus a surcharge and education cess.
MAT is assessed on book profits adjusted for certain items as compared to the adjustments followed for assessing regular income tax under normal provisions. MAT for the fiscal year 2022-23 is charged at 15% plus a surcharge and education cess. MAT paid in excess of regular income tax during a year can be set off against regular income taxes within a period of fifteen years succeeding the fiscal year in which MAT credit arises subject to the
The Company has elected to exercise the option permitted under Section 115BAA ofthe Income Tax Act, 1961 to pay corporate income tax at 22% plus surcharge and cess (aggregating to tax rate of 25.17%) from the financial year 2023-24.
In view of this exercise of the option to transition to the new regime, the Company has recognised provision for current tax and deferred tax for the year ended
Where^r the Company has a present obligation and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made ofthe amount of the obligation, such amounts have been adequately provided for, and the Company does not currently estimate any probable material incremental tax liabilities in respect of these matters (refer note 33).
Note 31:- Segment Reporting
In accordance with the principles given in Ind-AS 108 notified by Companies (Indian Accounting Standards) Rules 2015, the Company has determined its primary business segment as “Manufacturing and Trading of Gems and Jewelery”.
Note 32:32.1:- As per IndAS 115 - ‘Revenue from Contracts with Customers’, income is defined as a transaction which increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in an increase in equity, other than those relating to contributions from equity participants.
Interest incomefortheyearended March 31, 2024 has not been accruedforloan given to Minal Infojewels Limited (‘Subsidiary’) and Minal International FZE ('Subsidiary') since uncertainty exists for interest already accrued and pending realisation till March 31, 2024 due to accumulated losses ofthe Subsidiary. However, the management is in the process of identification of growth opportunities for the Subsidiary which will ultimately allow to realise the aggregate interest and loan amount outstanding as at March 31, 2024.
32.2 :-Company’s investments in Subsidiaries vz. Minal Infojewels Limited (‘MIJL’) is 49.40% amounting to Rs 1,235.00 lakhs and Minal International FZE ('MIF') is 100% amounting to Rs. 18.38
lakhs which is long term in nature and Company has made aggregate provsion for investments of Rs. 600 lakhs for MIJL and Rs. 18.38 lakhs for MIF in the books as on the March 31, 2024. The Company has alsogiven loans to MIJL aggregating to Rs. 2,387.97 lakhs and to MIF(including interest on loan) aggregating to Rs. 390.61 lakhs ofwhich aggregate provsion is made amountingto Rs. 1,200.00 lakhs for MIJL and aggregate provsion is made amounting to Rs. 390.61 lakhs for MIF in the books as on the March 31, 2024.
MIJL has earned a net profit of Rs 187.94 lakhs during the year ended 31st March, 2024. However, It has incurred losses for the past years and has accumulated negative reserves to the tune of Rs
1,037.89 lakhs as on 31st March, 2024 and, as of that date, MIJL current assets exceeded its current liabilities by Rs 4,635.37 lakhs.
These factors raise substantial doubt that the said Subsidiary Company will be able to continue as a going concern. However, as per management projections no further adjustment is necessary for impairing the carrying cost (net of provisions) of investments of Rs. 635 lakhs and loans amounting to Rs. 1187.96 lakhs which is outstanding as an 31st March, 2024.
Note 33A:- Commitments:
Commitments for the F.Y 2023-24 - Rs. Nil (P.Y 2022-23 - Rs. Nil)
Note 34: Disclosures as required by Indian Accounting Standards (Ind AS 24) Employee benefit 34.1:- Defined benefit plans:
The Company provdes for gratuity for employees as per the Payment of Gratuity Act, 1972. The amount of gratuity shall be payable to an employee on the termination of employment after rendering continuous service for not less than five years, or on their superannuation or resignation. However, in case of death of an employee, the minimum period of five years shall not be required. The amount of gratuity payable on retirement / termination is the employee’s last drawn basic salary per month computed proportionately for 15 days salary multiplied by the number ofyears of servce completed.
These plans typically expose the Company to the following actuarial risks:
Interest Risk:
A fall in the discount rate, which is linked, to the G-Sec rate will increase the present ^lue ofthe liability requiring higher provsion. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
Longevity risk:
The present ^lue ofthe defined benefit plan liability is calculated by reference tothe best estimate ofthe mortality ofplan participants both during and aftertheir employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.
Salary risk:
The present ^lue ofthe defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.
The most recent actuarial valuation ofthe plan assets and the present value ofthe defined benefit obligation were carried out at 31st March, 2024 by Independent actuarial Agency. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.
The following tables summarise the components of net benefit expenses recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the respective plans:
The discount rate Is based on the prevaling market yields of Government of India securities as at the Balance sheet date for the estimated term of the obligation.
In assessing the Company's post retirement liabilities, the Company monitors mortality assumptions and uses up-to-date mortality tables, the base being the Indian assured lives mortality (2012-14) ultimate.
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.
Sensitivity analysis:
The significant actuarial assumptions for the determination of the defined benefit obligation are the discount rate, the salary growth rate and the average life expectancy. The calculation of the net defined benefit liability is sensitive to these assumptions. The following table summarises the effects of changes in these actuarial assumptions on the defined benefit liability
Sensitivty due to mortality & withdrawls are not material & hence impact of change due to these not calculated.
The present value of the defined benefit obligation calculated with the same method (projected unit credit) as the defined benefit obligation recognised in the balance sheet. The sensitivity analysis is based on a change in one assumption while not changing all other assumptions. This analysis may not be representative ofthe actual change in the defined benefit obligation as it is unlikely that the change in the assumptions would occur in isolation of one another since some of the assumptions may be co-related.
Notes:
1. As the future liability for gratuity is provided on an actuarial basis for the Company as a whole, the amount pertaining to individual is not ascertainable and therefore not included above.
2. The Company pays sitting fees at the rate of 15,000 for meeting of the Board and Audit committees . The amount paid to them by way of sitting fees during current year is Rs. 0.60 lakhs (previous year Rs. 0.60 lakhs), which is not included above.
Terms and conditions Sales:
The sales to related parties are made on terms equivalent to those that prevail in arm’s length transactions and in the ordinary Loans to subsidiaries:
The Company had given loans to subsidiaries for general corporate purposes. The loan balance as on 31st March 2024 was Rs. 1,230.58 lakhs
(As on 31 March 2023: Rs.1,465.27 lakhs). These loans are unsecured and carry an interest rate ranging from 5%-5.25% repayable within a period of one year.
Note 36:- FINANCIAL INSTRUMENT 36.1(a) Capital Risk Management
The Company's objective is to maintain a strong & healthy capital ratios and establish a capital structure that would maximise the return to stakeholders through optimum utilisation of its funds. The Company monitors its capital using gearing ratio, which is net debt divided to total equity. Net debt includes, interest bearing loans and borrowings less cash and cash equivalents, Bank balances other than cash and cash equivalents and current investments.
Note 37: FINANCIAL RISK MANAGEMENT
The Company's activities expose it to a variety of financial risks: market risk, credit risk, liquidity risk and foreign exchange risk. The Company's focus is to foresee the unpredictability of financial markets and seek to minimise potential adverse effects on its financial performance.
(i) Credit risk
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to ? 409.13 Lakhs and ? 344.79 Lakhs as of 31 st March, 2024 and 31st March, 2023, respectively. The Company has its entire revenue from group companies. Hence no credit risk is perceived. Credit risk on cash and cash equivalents is limited as the Company generally invest in deposits with banks.
(ii) 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 rates. The Company is exposed to interest rate risk because fjnds are borrowed at floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate.
(iii) Liquidity Risk management
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation.
The following table details the Company’s sensitivity to a 1% increase and decrease in the INR against the relevant foreign currencies. 1% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year-end for a 1% change in foreign currency rates, with all other variables held constant. A positive number below indicates an increase in profit or equity where INR strengthens 1% against the rele^nt currency. For a 1% weakening of INR against the relevant currency, there would be a comparable impact on profit or equity, and the balances below would be negative.
Note 40 The Company has loss of f 347.48 Lakhs during the year ended March 31, 2024 and Profit of f 100.04 Lakhs during year ended March 31, 2023. The net accumulated losses of the company being f 2035.91 Lakhs as on year ended March 31, 2024. Management continues to strengthen its strategy to expand its market in order for the Company to increase its sales and eventually generate profit. In spite of these events or conditions which may cast a doubt on the ability of the company to continue as a going concern, the management is of the opinion that going concern basis of accounting is appropriate in view of the continued financial support from its Promoters. Accordingly, the standalone financial statements of the Company have been prepared on a going concern basis.
Note 41 :- The company did not use accounting software with a feature for recording audit trails (edit logs) for maintaining its books of account.
Note 42 :- Exceptional Items:
During the year ended March 31, 2024, the Company has reassessed the recoverabily of the loans given to and interest receivable and investments ‘made in subsidiaries and recognised an impairment provision of Rs 408.99 lakhs which has been disclosed as an exceptional item,
Note 43: The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post employment benefits has received Presidential assent in September 2020. However, the effective date of the Code is yet to be notified and final rules for quantifying the financial impact are also yet to be issued. In view of this, the company will assess the impact of the Code when relevant provisions are notified and will record related impact, if any, in the period
Note 44:- Additional Regulatory Information Required by schedule III of the companies act, 2013
i) The Company does not have any benami property, where any proceeding has been initiated or pending against the Company for holding any benami property
ii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
iii) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the
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
b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.
iv) 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
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
b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
v) The Company does not have any such 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 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
vi) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Lii) Tire Company does not have any transactions with companies which are struck off.
viii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period
ix) The Company is not declared willful defaulter by any bank or financials institution or lender during the year
Note 45 : The company evaluates events and transactions that occur subsequent to the balance sheet date but prior to the approval of financial statements to determine the necessity for recognition and/or reporting of subsequent events and transactions in the financial statements. As of 20th July, 2024 there were no subsequent events and transactions to be recognized or reported that are not already disclosed.
Note 46: Previous year’s figures have been regrouped / reclassified wherever necessary, to conform to current period’s classification.
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