c. Terms / Rights attached to equity shares
The Company has Equity Shares having a par value of Rs. 10 per share. Each holder of Equity Share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees.
In the event of liquidation of the company, the holders of equity share will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
Note : - (Working Capital Advances from SBI Mumbai are secured by HYPOTHECATION / PLEDE OF Companies entire Goods. Movable & other Assets Such as book Debts Oustanding Monies, Receivable, claims. Bills. Invoice, Documetns, Contracts, Securities, Investments, & Rights all presents and future secured by : 1.Equitable Mortgage of Company’s factory, C & B at block No. 33, Village Mahiyal. Talod (2) Hypothecation of Entire movable Machinery of the Company ). Mr. S.K.Shah & Mrs. C.S.Shah, directors of Company gave personal Guarantee.
Note -28:- Point (h) (I) of independent Auditors’ Report
In the ordinary course of business, the Company faces claims and assertions by various parties. The Company assesses such claims and assertions and monitors the legal environment on an on-going basis with the assistance of external legal counsel, wherever necessary.
The Company records a liability for any claims where a potential loss is probable and capable of being estimated and discloses such matters in its financial statements, if material. For potential losses that are considered possible, but not probable, the Company provides disclosure in the financial statements but does not record a liability in its accounts unless the loss becomes probable.
The following is a description of claims and assertions where a potential loss is possible, but not probable. The Company believes that none of the contingencies described below would have a material adverse effect on the Company’s financial condition, results of operations or cash flows.
It is not practicable for the Company to estimate the timings of the cash outflows, if any, pending resolution of the respective proceedings.
Litigations
1. The Company was trading with the Metropolitan Stock Exchange of India Limited (Formerly known as Multi Commodity Exchange of India Limited) since 2012 through Sacheta Commodity and Finance wherein Mr. Satishkumar K. Shah a director of the Company was a proprietor of the said firm and the company has traded various number of transactions of commodity hedging in regular course of business. For one of the transaction for which petition is filed was purchase of aluminium contract in lots containing 5000kg per lots. The concern had an open position of total 306 lots and 243 lots of said aluminium contracts of September and October 2013 respectively. On August 28, 2013 when the market was allegedly volatile, the Metropolitan Stock Exchange of India Limited (Formerly known as Multi Commodity Exchange of India Limited) got panic and has squared off the open positions at maximum higher rate, in clear contravention of the obligations and contracts. Because of the contravention the concern causing aggregate loss of Rs. 6,54,01,200/-.
Mr. Satishkumar K Shah, Proprietor of Sacheta Commodity and Finance through which the company has undertaken the transactions of commodity hedging in regular course of business has preferred an appeal against the Metropolitan Stock Exchange of India Limited (Formerly known as Multi Commodity Exchange of India Limited) on 13th July, 2016 in High Court of Bombay for recovery of principal sum of Rs. 6,54,01,200/- along with interest at the rate of 16% p.a. towards loss and/or damages suffered due to malafide action. The petition is pending before the Hon’ble High Court of Bombay as at end of the financial year.
It may probable that approximately Rs. 4.12 crore rupees loss from Rs. 6.54 crore to be borne by the company.
2. The Company has preferred an appeal against order of VAT Department for Financial Year 2008-09 for demand of Rs. 17,15,961/-. Against this demand the company has deposited entire VAT /CST of Rs. 17,15,961/-and preferred an appeal. The Company has preferred an appeal against Assessment order of Income Tax Department for A.Y. 2014-15 (F.Y. 2013-14) for demand of Rs. 1,72,52,604/-. Against this demand the company has deposited income tax of Rs. 85,94,548/-
Defined Benefit Plan
The Company provides for gratuity, a defined benefit retirement plan ("the Gratuity Plan") covering eligible Indian employees of Sacheta Metals Ltd. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee’s salary and the tenure of employment with the Company. The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to 15 days/one month salary last drawn for each completed year of service depending on the date of joining. The benefit vests after 5 years of continuous service. As there are frequent changes in workers/employees, the company record retirement benefits on cash basis.
Note- 32 :Disclosure as per Ind AS-108 Operating segments:
The Company operates mainly in manufacturing of Aluminium Products and all other activities are incidental thereto, which have similar risk and return. Accordingly, there are no separate reportable Segment as required under Ind AS 108 “Operating Segment. The Company has identified geographical segments based on location of customers as reportable segments in accordance with Ind AS 108.
1) Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or Liabilities.
2) Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
3) Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
b. Capital Management
The Company’s objectives for managing capital is to safeguard continuity and healthy capital ratios in order to support its business and provide adequate return to shareholders through continuing growth. The Company’s overall strategy remains unchanged from previous year. The Company sets the amount of capital required on the basis of annual business and longterm operating plans which include capital and other strategic investments.
d. Financial risk management
The Company's principal financial liabilities, other than derivatives, comprise borrowings, lease liabilities, trade and other payables. The main purpose of these financial liabilities is to finance company's operations. The Company's Principal financial assets include trade and other receivable, and cash and cash equivalents that derive directly from its operations. The company also holds investments.
The company is exposed to -Market Risk -Credit Risk and
Company's senior management oversees the management of these risks. It is company's policy that no trading in derivatives for speculative purpose may be undertaken. The Board of Directors review and agree policies for managing each of these risks, which are summarized below.
a) Market Risk
Market Risk is the risk of any loss in future earnings, in realisable fair value or in future cash flows that may a change in the price of a financial instrument.
The value of Financial Instrument may change as a result of change in Interest Rates, Foreign Currency Exchange Rates, Liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.
i. Interest Rate Risk:-
The company is exposed to interest rate risk because it borrows funds at both fixed and floating interest rates.
The sensitivity analyses below have been determined based on the exposure to interest rates for borrowings at the end of the reporting period. For floating rate borrowings the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year and the rates are reset as per the applicable reset dates. The basis risk between various benchmarks used to reset the floating rate borrowings has been considered to be insignificant.
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. However the Company is not exposed to foreign currency risk since it has no unhedged exposure as at reporting date.
(b)Liquidity Risk
Liquidity risk is the risk that the company will face in meeting its obligation associated with its financial liabilities. The Company’s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses. In doing this management considers both normal and stressed conditions.
Due to dynamic nature of the underlying businesses, company maintains flexibility in funding by maintaining availability of under committed credit lines. Management monitors rolling forecasts of the company’s liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows.
The following table shows the maturity analysis of the company’s financial liabilities based on the contractually agreed undiscounted cash flows along with its carrying value as at the Balance sheet date.
(c) Credit Risk
Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.
The company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through out each reporting period. To assess whether there is a significant increase in credit risk, the company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:
Actual or expected significant adverse changes in business, Actual or expected significant changes in the operating results of the counterparty, Financial or economic conditions that are expected to cause a significant change to the counterparty’s ability to meet its obligations, Significant increase in credit risk on other financial instruments of the same counterparty, Significant changes in the
value of the collateral supporting the obligation or in the quality of the third-party guarantees or credit enhancements.
The Company measures the expected credit loss of trade receivables and loan from individual customers based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, loss on collection of receivable is not material hence no additional provision considered.
Note -38 :Title Deeds of Immovable Property
The title deeds of all the immovable properties, as disclosed in note 4 to the financial statements, are held in the name of the company.
Note -39 :Valuation of Property, Plant & Equipment, Intangible Asset
The Company has not revalued its property, plant and equipment or intangible assets or both during the current or previous year.
Note -40 :Loans or Advances to Specified Person
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, that are repayable on demand or without specifying any terms or period of repayment.
Note -41 : 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.
Note -42: Borrowing secured against current assets
The Company has borrowings from banks on the basis of security of current assets. The quarterly returns or statements of current assets filed by the Company with banks are in agreement with the books of accounts.
Note -43: Wilful defaulter
The Company has not been declared wilful defaulter by any bank or financial institution or other lender.
Note 44-: Relationship with struck off companies
The Company has no transactions with the companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of the Companies Act, 1956.
Note 45-: Registration of charges or satisfaction with Registrar of Companies (ROC)
There are no charges or satisfaction yet to be registered with Registrar of Companies (ROC) beyond the statutory period
Note 46-: Compliance with number of layers of companies
The Company has no any subsidiary or holding company so reporting under this clause is not applicable to company.
Note 47-: 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.
Note 48-: Utilisation of borrowed funds and share premium
No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entities (“Intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries).
The Company has not received any fund from any party(Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
Note 49-: 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 previously in the books of account.
Note 50-: Details of crypto currency or virtual currency
The Company has not traded or invested in crypto currency or virtual currency during the current or previous year
Note -51 :Previous year figures have been regrouped / re arranged / reclassified wherever considered necessary to conform to the classifications / disclosures of the current year
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