(1) Trade receivables are due neither from directors or other officers of the company either severally or jointly with any other person nor from firms or private companies respectively in which any director is a partner, a director or a member except company's partnership firm/Subsidiary entity.
(2) Trade receivables include debt due from partnership firm(Subsidiary Entity) of Rs. 65.48 Lakhs (Previous year Rs. 150.53 Lakhs) in the ordinary course of business.
(3) Trade receivables are non-interest bearing and are generally on terms of 30 to 180 days.
* Term Loan(s) availed by the Company from Schedule Banks under Multiple Banking arrangements.
Term Loan(s) from The Cosmos Co-op Bank Ltd are secured by way of:
a) Hypothecation of existing plant and machineries.
b) Factory Land (lease hold), along with construction thereon made by the company, situated at Revenue Survey 446, Block No. 467, at Sachin-Palsana Highway Road, at Village Palsana, Dist. Surat, given as collateral security.
c) Personal gaurantee by the Directors - Mr. Amitkumar Dalmia, Mr. Deepakkumar Dalmia, Mr. Rajkumar Borana and Mr. Ankur Borana.
Term Loan(s) from Kotak Mahindra Bank Ltd is having NIL outstanding as on date with respect to LAP Loan. No Objection Certificate for Closure of LAP Loan with Kotak Mahindra Bank Ltd is received from bank.
** Cash Credit facility
From The Cosmos Co-op Bank Ltd & Axis Bank Ltd are secured by,
a) charge on all Current Assets of the Company & Pari Passu charges on the Facory Land & Building, in the name of Director's of the Company namely Mr. Amitkumar Dalmia, Mr. Deepak Dalmia, Mr. Rajkumar Borana & Mr. Ankur Borana and also their respective Personal Guarantee.
Current maturities of term loans amounting to Rs. 847.65 on March 31, 2024 (Rs. 716.15 on March 31, 2023, March 31, 2022 and March 31, 2021 Rs 672.42 and 739.12 respectively) is classified under "Other Current Financial Liabilities". .
The discount rate is based on the prevailing market yields of Indian government securities for the estimated term of the obligations. The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors. Salary escalation and attrition rate are considered as advised by the the company; they appear to be line with the industry practice considering promotion and demand & supply of the employees.
The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
The sensitivity analysis presented above may not be representative of the actual change in the projected benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the projected benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the projected benefit obligation as recognised in the balance sheet.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
Risks associated with defined benefit plan
Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan's liability.
Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision.
Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Company has to manage pay- out based on pay as you go basis from own funds.
Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
(i) Investment in Subsidiary:
The Company has invested in a partnership firm, "Rican Industries" on 1st September, 2023. The Company is holding 20% share of profit in partnership firm. As per the provision of Ind AS, Rican Industries is considered as subsidiary Partnership Firm of the company.
(ii) Issue of Equity Shares:
During the FY 2023-24, the company has issued 2,00,00,000 nos. of equity shares of face value of INR 2/- each fully paid-up.
R & B Denims Limited allotted 2,00,00,000 equity shares of Rs. 2/- each pursuant to conversion of warrants on 12th March, 2024.These shares were not credited in the demat accounts on shareholders on 31.03.2024 pursuant to pending corporate action, hence, not included in the shareholding pattern as on 31.03.2024.
(v) Financial Instruments
, All assets and liabilities for which fair value is measured or disclosed in the
i financial statements are categorized within the fair value hierarchy, described
as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
• Level 1 - Quoted (unadjusted) prices in active market for identical assets or liabilities.
• Level 2 (if level 1 feed is not available/appropriate) - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
• Level 3 (if level 1 and 2 feed is not available/appropriate) - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
| For financial assets and liabilities maturing within one year from the Balance
i Sheet date and which are not carried at fair value, the carrying amount
j approximates fair value due to the short maturity of these instruments. "
#Exclude Group Company investments 61, 72, 94,450 (Previous Year 22, 54, 27,457) measured at cost
The fair value of cash and cash equivalents, trade receivables, borrowings, trade payables, other current financial assets and liabilities approximate their carrying amount largely due to the short-term nature of these instruments. The Company's long term debt and investment in fixed deposit have been contracted at market rates of interest. Accordingly, the carrying value of such instruments approximates their fair value.
The fair value of investment in shares of The Cosmos Co-operative Bank Ltd. and TJSB Sahkari bank Ltd. has been valued using cost approach and fair value of investment in shares of Shanti Spintex Ltd has been valued using Fair Market Value approach.
B. Financial Risk Management
The Company's activities expose it to variety of financial risks: market risk, credit risk, interest rate risk and liquidity risk. Within the boundaries of approved Risk Management Policy framework The Company uses derivative instruments to manage the volatility of financial markets and minimize the adverse impact on its financial performance.
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 three
types of risk: interest rate risk, currency risk and other price risk, such as equity price risk.
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 currency rates. Exposures can arise on account of the various assets and liabilities which are denominated in currencies other than Indian Rupee.
The Company mainly deals in USD and hedge its risk with Futures contract.
b) Interest Rate Risk
The Company is also exposed to interest rate risk, changes in interest rates will affect future cash flows or the fair values of its financial instruments, principally debt. The Company issues debt in a variety of currencies based on market opportunities and it uses derivatives to hedge interest rate exposures.
c) Credit Risk
Credit risk is the risk that a customer or counterparty to a financial instrument fails to perform or pay the amounts due causing financial loss to the Company. Credit risk arises from company's activities in investments, dealing in derivatives and receivables from customers. The Company ensure that sales of products are made to customers with appropriate creditworthiness. Investment and other market exposures are managed against counterparty exposure limits. Credit information is regularly shared between businesses and finance function, with a framework in place to quickly identify and respond to cases of credit deterioration.
d) Liquidity Risk
Liquidity risk arises from the Company's inability to meet its cash flow commitments on the due date. The Company maintains sufficient stock of cash, marketable securities and committed credit facilities. The Company accesses global and local financial markets to meet its liquidity requirements. It uses a range of products and a mix of currencies to ensure efficient funding from across well-diversified markets and investor pools. Treasury monitors rolling forecasts of the Company's cash flow position and ensures that the Company is able to meet its financial obligation at all times including contingencies.
The case of the Company stands pending before Customs Excise & Servive Tax Appellate Tribunal (CESTAT) for payment of custom duty. The amount of custom duty involved is Rs. 1,93,179/- which is contingent in nature.
The Appeal of the Company stands pending before Commissioner of Appeals (Income Tax) for F.Y. 2017-18. The amount of tax liability reflected on e-filling portal as outstanding demand after adjusting refunds is Rs. 21,19,496 (And accrued' interest Rs. 8,37,513) which is contingent in nature.
The Appeal of the Company stands pending before Commissioner of Appeals (Income Tax) for F.Y. 2015-16. The amount of tax liability reflected on e-filling portal as outstanding demand is is Rs. 2,93,508 which is contingent in nature.
Under the scheme of Vivaad se Vishwas, form 5 have been issued by authorities and it is closed. However, the effect of Rs. 6,64,13,710/- for F.Y. 2015-16, and the effect of Rs. 89,88,832/- for F.Y. 2013-14 in the same scheme were pending to get cleared from the Income Tax Department.
The Company has Finalised GST Audit Notice (ADT-01) Conducted by the GST Departmental Audit Authority U/s 65 of CGST 2017 for the period of July, 2017 to March 2022. The Company has Received Demand of Rs. 47, 57,046. In the said GST Audit Notice the Company has Received Final Audit report (ADT-02) from the GST Department vide Reference no GST/300/2023-24 Dated 15.03.2024. Moreover, in respect of availed of Input Tax credit Service of effluent treatment and waste water treatment Input of Service (CGST and SGST) for Rs.43, 66,118/- has not been agreed by company and appeal for the same is done before the Deputy/Assistant Commissioner, CGST & Central Excise, Division-V, Surat .
(ix) Operating Segment:
Ind AS 108, Operating segments, establishes standards for the way that public business enterprises report information about operating segments and related disclosures about products and services, geographic areas, and major customers. The Chief Operating Decision Maker evaluates the Group's performance and allocates resources based on analysis of various performance indicators by business segments. Accordingly, information has been presented along business segments. The accounting principles used in the preparation of the financial statements are consistently applied to record revenue and expenditure in individual segments, and are as set out in the accounting policies.
Revenue and identifiable operating expenses in relation to segments are categorized based on items that are individually identifiable to that segment.
The Management believes that it is not practical to provide segment disclosures relating to few costs and expenses, and accordingly these expenses are separately disclosed as "unallocated" and adjusted against the total income of the Group.
The Company has three segments. Denims manufacturing, Solar and Windmill. Operating segments are defined as components of a company for which discrete financial information is available that is evaluated regularly by Chief Operating Decision Maker ("CODM"), in deciding how to allocate resources and assessing performance.
(x) There was no employee in receipt of remuneration aggregating to Rs. 102,00,000/-or more per year or Rs 8,50,000/- or more per month for the part or whole of the year. Previous year also there was no such employee.
(xi) The quantity and value of closing stock is certified by the management as true and
: correct.
(xii) The Company has certain dues to suppliers registered under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act). The disclosures are required by the said notification under the Chapter on Delayed Payments to Micro and Small Enterprises):
1 On the basis of information collected by the Management payment to suppliers registered under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) is made within due date for F.Y. 2023-24 and 2022-23. Hence no reporting is required.
(xiii) Managerial remuneration paid/ payable to the Managing Director/ Directors for the period from 1st April 2023 to 31st March 2024 Rs. 30 Lacs (Previous Year Rs. 30 Lacs)
(xiv) Previous year's figures have been regrouped / recast wherever necessary to conform to current period's presentation.
(xx) The financial statements for the year ended March 31, 2024 were approved by the Board of Directors and authorised for issue on 15-05-2024.
(29) ADDITIONAL REGULATORY INFORMATION REQUIRED BY SCHEDULE III TO THE COMPANIES ACT, 2013
(i) Details of benami property held
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) Borrowing secured against current assets
The Company have sanctioned borrowings/facilities from banks on the basis of security of current assets. The quarterly returns or statements of current assets filed by the Company with banks and financial institutions are in agreement with the books of accounts.
(iii) Wilful defaulter
The Company has not been declared wilful defaulter by any bank or financial institution or any lender.
(iv) Relationship with struck off companies
The Company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.Hence, no disclosure require in this clause.
(v) Compliance with number of layers of companies
The Company have Subsidiary Enterprise i.e RB Industries RICON Industries and the company do not have layers of subsidiaries beyond the prescribed number with respect to the Companies (Restriction on number of layers) Rules, 2017.The Company has complied with the number of layers prescribed under the Companies Act, 2013.
(vi) Compliance with approved scheme(s) of arrangements
The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.
(vii) Utilisation of borrowed funds and share premium
(i) 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 that the Intermediary shall:
a) Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries
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 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
(viii) Undisclosed Income
There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.
(ix) Details of crypto currency or virtual currency
The Company has not traded or invested in crypto currency or virtual currency during the year.
(x) Valuation of PP&E, intangible asset and investment property
The Company has not revalued its property, plant and equipment (including right-of-use assets) during the current or previous year.
The Title deeds of immovable properties are held in the name of the Company.
The Company has no Intangible assets under development as on 31.03.2024.
(xi) Registration of charges or satisfaction with Registrar of Companies
There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.
(xii) Loans to Promoters, directors, KMPs and Related parties
There are no Loans or Advances in the nature of loans are granted to promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013,) either severally or jointly with any other person.
(30)Figures for previous year have been regrouped wherever considered necessary.
b) Numerator and Denominator considered as under in above Ratios Calculation:
(i) Current Ratio :
(Total current assets/Current liabilities)
[Current liabilities: Total current liabilities - Current maturities of Long Term Debt]
(ii) Debt - Equity Ratio :
(Net debt/Average equity)
[Net debt: Current borrowings Non-current borrowings other than Unsecured Loan from Directors and their Relatives ]
[Equity: Equity share capital Other equity]
(iii) Debt Service Coverage Ratio (DSCR) :
(EBIT/Debt Service)
[EBIT: Net Profit After Taxes Non-Cash Operating Expenses Deferred Tax Expense Interest on Term Loan Other Adjustments like loss on Sale of Fixed Assets etc.]
[Debt Service : Interest on Term Loan Term Loan Principle Repayment]
(iv) Return on Equity (ROE) :
(Profit after tax (PAT)/Average Equity)
[Equity: Equity share capital Other equity ]
(iv) Inventory Turnover Ratio
(Net Sales/Average inventory)
(v) Trade receivables turnover Ratio :
(Turnover/Average trade receivables)
[Turnover: Revenue from operations]
(vi) Trade payables turnover Ratio
(Cost of Purchase of Goods/Average Trade Payables)
(vii) Net capital turnover Ratio (in days) :
(Turnover/Average working capital)
[Average Working capital: Current assets - Current liabilities] [Current liabilities: Total current liabilities - Current maturities of long-term debt] [Turnover: Revenue from operations]
(viii) Net profit Ratio :
(Net profit after tax/Turnover)
[Turnover: Revenue from operations]
(ix) Return on Capital Employed (ROCE) :
(EBIT/Average capital employed)
[EBIT: Profit before taxes Interest and Finance Charges]
[Capital Employed: Equity share capital Other equity Non-current borrowings Current maturities of long-term debt Deferred tax liabilities]
(x) Return on Investment(ROI) :
(FD Interest Income /Average Investment in Fixed Deposit)
c) Explanation for Change in the Ratio by more than 25% as compared to previous year:
@Repayment of Debt and Simultaneous increase in Shareholder's equity lead to decrease in Debt/Equity ratio.
*Due to decrease in earnings and increase in capital employed on account of issue of equity shares during the year.
#On account of increase in the revenue for the year and decrease in the net working capital.
**Increase is on account of decrease in operating expenses (majorly Finance Cost) as compared to increase in revenue.
(32) Events after the reporting period
The Company has evaluated all the subsequent events through 15 May, 2024 which is the date on which these standalone financial statements were issued, and no events have occurred from the balance sheet date through that date except for matters that have already been considered in the standalone financial statements.
(ii) Terms and rights attached to equity shares.
The company has only one class of equity shares having face value of Rs. 2 per share. Each holder of equity shares is entitled to one vote per share. The final dividend 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 of the company, the holders of equity shares will be entitled to receive remaining assets of the Company. The distribution will be in proportion to the number of equity shares held by the shareholder.
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