Terms/rights attached to Equity shares :
The Company has only one class of issued Equity Shares having a par value of Rs.10 per share. Each Shareholder is eligible for one vote per share held.
The Dividend proposed by the Board of Directors if any, is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of Interim Dividend. In the event of liquidation, the equity shareholders are eligible to receive the residual assets of the Company after distribution of all preferential amounts in proportion to their shareholding.However, no preferential amount exist currently.
In the Period of five years immediately preceding March, 2024:
The Company has not allotted any equity shares as fully paid up without payment being received in cash or as Bonus Shares or Bought back any equity shares.
The Company will exercise the option of lower tax rate permitted under section 115BAA of the Income-tax Act,1961 for the current financial year before filing of the Income Tax return and therefore, is not liable for Minimum Alternate Tax (MAT) on book profits. Considering brought forward unabsorbed losses/depreciation and opting for aforesaid option, no current tax liability needs to be provided for.
Note 33 : FINANCIAL INSTRUMENTS
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
Financial risk management objectives and policies
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 policy is set by the Managing Board.
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits , foreign currency receivables, payables and loans and borrowings.
The Company manages market risk through a treasury departments, which evaluates and exercises independent control over the entire process of market risk management. The treasury department recommend risk management objectives and policies, which are approved by Senior Management and the Audit Committee. The activities of this department include management of cash resources, implementing hedging strategies for foreign currency exposures, borrowing strategies and ensuring compliance with market risk limits and policies.
(i) Market Risk- Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. 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.
(ii) Market Risk- Foreign currency risk.
The Company does not operate internationally and no portion of the business is transacted in foreign currencies and consequently the Company is not exposed to foreign exchange risk.
(iii) 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 assess 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 each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occuring 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:
i) Actual or expected significant adverse changes in business,
ii) Actual or expected significant changes in the operating results of the counterparty,
iii) Financial or economic conditions that are expected to cause a significant change to the counterparty's
ability to meet its obligations,
iv) Significant increase in credit risk on other financial instruments of the same counterparty,
v) Significant changes in the value of the collateral supporting the obligation or in the quality of the third-
party guarantees or credit enhancements .
Financial assists are written off when there is no reasonable expectations of recovery, such as a debtor failing to engage in a repayment plan with the Company. The Company categorises receivables for write off when a debtor fails to make contractual payments greater than 3 years past due. Where loans or receivables have been written off, the Company continues engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized in profit or loss.
For Trade receivable ageing-Please refer note no. 10.1
(iv) Liquidity Risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time, or at a reasonable price. The Company's operational department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related such risk are overseen by senior management. Management monitors the Company's net liquidity position through rolling forecasts on the basis of expected cash flows.
The Company's objectives when managing capital are to Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and Maintain an optimal capital structure to reduce the cost of capital
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt
The Company's strategy is to maintain a gearing ratio within the industry average. The gearing ratios were as follows:
Note 36 : DISCLOSURE PURSUANT TO IND AS - 19 "EMPLOYEE BENEFITS" (Post retirement benefit plans)
i) Gratuity: In accordance with the applicable laws, the Company provides for gratuity, a defined benefit retirement plan ("The Gratuity Plan") covering eligible employees. The Gratuity Plan provides for a lump sum payment to vested employees on retirement (subject to completion of five years of continuous employment), death, incapacitation or termination of employment that are based on last drawn salary and tenure of employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation on the reporting date.
With the objective of presenting the plan assets and plan liabilities of the defined benefits plans at their fair value on the balance sheet, assumptions under Ind AS 19 are set by reference to market conditions at the valuation date.
The sensitivity analyses above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the same method used to calculate the liability recognised in the balance sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous period.
The weighted average duration of the defined benefit obligation is 6.47 years (2022-23- 6.61 years)
ii) Compensated Absences:
The Company permits encashment of compensated absence accumulated by their employees on retirement, separation and during the course of service. The liability in respect of the Company, for outstanding balance of leave at the balance sheet date is determined and provided on the basis of actuarial valuation as at the balance sheet date performed by an independent actuary. The Company doesn't maintain any plan assets to fund its obligation towards compensated absences.
iii) The Code on Social Security :
The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and post-employment benefits has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code and recognise the same when the Code becomes effective.
(b) During the year ended March 31, 2024, the Company has received show cause notices from Goods and Service Tax Department for aggregate tax impact of Rs.3,305.93 lakhs (including penalty and interest thereon upto date of notice), in respect of disallowance of input credits, mis-match in the GST returns filed etc. for the financial year from 2017-18 to 2021-22. These show cause notices have been suitably replied by the Company and no further communication received from the department thereafter. In the opinion of the management, no liability will arise in this regard.
(c) The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, wherever required and disclosed the contingent liabilities, wherever applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material impact on its financial statements.
a) Related party relationship is as identified by the management and relied upon by the auditors.
b) No amounts in respect of related parties have been written off/ written back during the year and nor provision has been made for doubtful debts/ receivable.
c) The above figures do not include provisions for compensated expense and gratuity as separate actuarial valuation are not available.
d) Enterprises in which Key Managerial Personnel (KMP) having significance influence and one of the relative of the KMP has pledged their equity holding aggregating to 46,43,000 equity shares (previous year Nil) of the Company against unsecured borrowings from a body corporate
e) Shri Sudarshan Chokhani and Shri Shyantanu S. Chokhani both the directors are only partners in the firm and the said loan given to the Company is out of own funds and is not out of borrowed funds.
(a) The Company's Prepackage Insolvency Resolution Plan (PIRP) has been approved by Hon'ble NCLT, Mumbai vide its Order dated August 10, 2023. Pursuant to the said Order, total debt of Rs.15,765.35 lakhs being balance as on June 30, 2023 has been settled for Rs.3,224.38 lakhs. Out of total settlement amount, the Company has paid Rs.2,657.28 lakhs during the year ended March 31, 2024 (raised by way of issue of equity shares of Rs. 100 lakhs, borrowings aggregating to Rs. 2,142 lakhs and balance of Rs.165.28 lakhs from internal sources) and Rs 325 lakhs had already been paid in Financial year 2022-23; balance amount of Rs 250 lakhs is payble in balance two quarterly installments bearing interest rate of MCLR i.e. 8.75% per annum.Accordingly, the Company has written back liabilities agreegating to Rs.12540.97 lakhs and disclosed the same as exceptional items for the year ended March 31, 2024 .
(b) Aforesaid balance amount of Rs 250 lakhs payable to a bank is secured by way by way of hypothecation of all inventories at factory/ book debts and secured by 1st charge of mortgage of factory land and building and hypothecation of other fixed assets of the Company situated at unit MIDC, Ambad, Nashik and is also personally guaranteed by the two directors of the Company
(c) One of the unsecured lender of Rs.1243.39 lakhs ( as mentioned in the aforesaid NCLT Order) which has been settled for Rs. 2.46 lakhs as per NCLT Order filed an appeal before the Hon'ble National Company Law Appellate Tribunal (NCLAT), Delhi praying for reversal of the aforesaid Resolution Plan. Based on the expert opinion, the Company expects a favourable outcome in this regard.
Note 42 : Going Concern :
During the year ended March 31, 2024,the Company's Prepackage Insolvency Resolution Plan (PIRP) was approved by Hon'ble NCLT, Mumbai vide its Order dated August 10, 2023. Consequently, the Company has written back
liabilities in respect of principal and Interest aggregating to Rs.12540.97 lakhs (including interest of Rs.690.77 lakhs for the period from April 1, 2023 to June 30, 2023) and disclosed the same as exceptional items. The Company has been continuously incurring losses over last several years However, there was net profit of Rs.12,118.66 lakhs after comprehensive income (after write back of Rs.12,540.97 lakhs on settlement pursuant to Hon'ble National Company Law Tribunal Order dated August 10, 2023) for the year ended March 31, 2024. Being post settlement timely payment of the installments to the lender in compliance with aforesaid NCLT Order and expected better operational performance in future, the management believes that it is appropriate to prepare these financial statements on a going concern basis.
Note 45 : Registration of charges or satisfaction with Registrar of Companies (ROC) beyond statutory period
The Company is in the process of satisfaction of charges registered in earlier years aggregating to Rs. Nil lakhs (as at March 31, 2023 Rs.Nil lakhs)
Note 46 : Details of Benami Property held
No proceeding has been initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
The Company has been sanctioned working capital limit from banks in excess of Rs 5 crores which has become overdue for quite some time and hence quarterly returns or statements is not required to be filed with such banks.
Note 48 : Wilful Defaulter
The Company has not been declared wilful defaulter by any bank or financial Institution or other lender.
Note 49 : The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
Note 50 : There were no transactions relating to previously unrecorded income that have been surrendered and disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.
Note 51 :
The Company has not advanced or loaned to or invested in funds to any other person(s) or entity(is), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(i) directly or indirectly lend to 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 52 :
The Company has not received any fund from any person(s) or entity(is), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(i) directly or indirectly lend to 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 on behalf of the Ultimate Beneficiaries
The Company uses an accounting software and a payroll application for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the accounting software and the payroll application, except that audit trail feature is not enabled at the database level for the payroll application and HANA database. Further no instance of audit trail feature being tampered with was noted in respect of the accounting software and payroll application. Presently, the log has been activated at the application and the privileged access to HANA database continues to be restricted to limited set of users who necessarily require this access for maintenance and administration of the database.
Note 55 :
Previous year's figures have been regrouped/reclassified whenever necessary to conform to current year's classification.
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