Note 8.1
The Company has not currently recognised deferred tax assets in respect of deductible temporary difference arising during the quarter and year ended 31st March, 2023, however the Company may reasses the unrecognised deferred tax assets at the end of the each reporting period and recognise previously unrecognised deferred tax assets to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be recovered.
b) Nature and purpose of the reserve Securities Premium
Securities premium is used to record the premium received on issue of shares. It shall be utilised in accordance with the provisions of the Companies Act, 2013.
General Reserve
General reserve forms part of the retained earnings and is permitted to be distributed to shareholders as part of dividend.
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.
Other Comprehensive Income - Remeasurements of defined benefit plans
It represents Remeasurements of defined benefit plan i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit and loss.
Additional Information to Secured Long Term Borrowings
The long term portion of term loans are shown under long term borrowings and the current maturities of the long term borrowings are shown under other Current Liabilities as per disclosure requirements of the Schedule III of the companies Act,2013
Details Relating to Term Loans
Secured by way of :-
1. First charge on pari-passu basis on entire fixed assets both present and future of the Company.
2. Second charge on pari-passu basis on current assets of the Company.
3. Personal Guarantee of Mr. Sanjeev A. Aggarwal - Chairman & Managing Director, Mr. Ashok J. Aggarwal, Mr. Satish J. Aggarwal and Mr. Vijay J. Aggarwal.
4. pledge of 1,39,76,265 Lakhs equity shares held by the following directors/promoter & promoter group/their relative of the Company on parri-passu basis with working capital bankers.
23.1. The Company has defaulted in repayment of loans and interest in respect of Term Loan and Cash Credit of Punjab National Bank, Union Bank of India, IDBI Bank and Shamrao Vithal Co-operative Bank.
23.2. In light of the overdues to Financial Creditors, the Company has submitted a Comprehensive Debt Resolution plan to the banks, and the same is under consideration.
Note 37 Leases As Lessee:a) Operating Lease:-
The Company has taken office premises on lease which are cancellable by either parties and there is no lock in period. These leave and license agreements for the office premises are generally for a period not exceeding one year and are in most cases renewable by mutual consent, on mutually agreeable terms. there are no restrictions imposed by lease arrangements or any contingent rents payable. there are no subleases. therefore for the purposes of Ind AS 116 - Leases, there are no leases which required specific disclosures.
b) Finance lease:
the Company has entered into long-term leasing arrangements for land with government authorities which are in the nature of long term leases. these arrangements do not involve any material recurring payments, hence other disclosures are not given. these long term land leases are accounted as per Ind AS 16 -property, plant & Equipments.
Note 39
Employee benefits
(A) Defined benefit plans
Gratuity liability is provided in accordance with the provisions of the Payment of Gratuity Act, 1972 based on actuarial valuation. The plan provides a lump sum gratuity payment to eligible employee at retirement or termination of their employment. the amounts are based on the respective employee's last drawn salary and the years of employment with the Company.
the most recent actuarial valuation of the defined benefit obligation was carried out at the balance sheet date. the present value of the defined benefit obligations and the related current service cost and past service cost were measured using the projected unit Credit Method.
a) Amount recognised as an expense in the Statement of Profit and Loss and included in Note - 33 under “Employee benefit expenses” : Gratuity ' 58.97 lakhs (previous year - ' 72.79 lakhs).
b) The estimates of future salary increases considered in the actuarial valuation take account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.
c) The plan above is typically exposed to actuarial risk such as interest risk, mortality risk and salary risk
a) Interest risk: the decrease in the bond interest rate will increase the liability.
b) Mortality risk: the present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan's liability.
c) Salary risk: the present value of the 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.
B) Defined contribution plan -
the Company makes contributions towards provident fund and other funds which are in the nature of defined contribution post employment benefit plans. under the plan, the Company is required to contribute a specified percentage of payroll cost to fund the benefits.
Amount recognised as an expense in the Statement of profit and Loss - included in note 33 - “Contribution to provident and other funds” ' 40.78 lakhs (previous year - ' 48.64 lakhs).
the contributions payable to these plans by the Company are at rates specified in the rules of the schemes. Note 40
Financial Instruments - Fair Value
- Carrying value of financial assets and financial liabilities, are presented below.
- It does not include the fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.
Financial risk management
The Company has exposure to the following risks arising from financial instruments:
• Credit risk;
• Liquidity risk ; and
• Market risk
Risk management framework
the Company's Risk Management Framework encompasses practices relating to the identification, analysis, evaluation, treatment, mitigation and monitoring of the strategic, external and operational controls risks in achieving key business objectives.
The Company has laid down the procedure for risk assessment and their mitigation through audit Committee. Key risks and their mitigation arising out of periodic reviews by the Committee are assessed and reported to the Board of Directors of the Company, on a periodic basis.
the Company's risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to policies and procedures.
the Company has an independent Internal Audit and assurance team. there is a practice of reviewing various key select risks and report to Audit Committee from time to time. the Company, has also, during the year, has adopted a co-sourced model for internal audit. the internal audit team carry out internal audit reviews in accordance with the approved internal audit plan. Internal audit team reviews the status of implementation of internal audit recommendations. Summary of Critical observations if any and recommendations under implementation are reported to the Audit Committee.
i. Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company's receivables from customers, deposits and cash and cash equivalents. the Company makes provision on trade receivables based on Expected Credit loss (ECL) method based on provision matrix.
Trade and other receivables
the Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. the Company has a detailed review mechanism of overdue trade receivables at various levels in the organisation to ensure proper attention and focus on realisation.
Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Management believes that the unimpaired amounts that are past due are still collectible in full, based on historical payment behaviour and extensive analysis of customer credit risk.
Cash and cash equivalents
The Company held cash and cash equivalents and bank deposits with banks. The credit worthiness of such banks are evaluated by the management on an on-going basis and is considered to be good.
Others
other than trade receivables reported above, the Company has no other financial assets that is past due but not impaired.
ii. Liquidity risk
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 that it will have sufficient liquidity to meet its liabilities. the Company monitors the net liquidity position through forecasts on the basis of expected cash flows. the Company has obtained fund and non-fund based working capital lines from various banks. the following are the remaining contractual maturities of financial liabilities at the reporting date. the amounts are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements.
iii. Interest rate risk
Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing instruments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing instruments will fluctuate because of fluctuations in the interest rates.
Interest rate sensitivity - fixed rate instruments.
The Company does not account for any fixed-rate financial assets or financial liabilities at fair value through profit or loss. therefore, a change in interest rates at the reporting date would not affect profit or loss for any of these fixed interest bearing financial instruments.
Interest rate sensitivity - variable rate instruments.
A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased / (decreased) equity and profit or loss by the amounts shown below. this analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.
iv. Market risk :-
Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and other prices such as equity price. These will affect the Company's income or the value of its holdings of financial instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. Financial instruments affected by market risk include loans, borrowings and deposits. The Market risk which the Company is exposed can be classified as Currency risk and Interest rate risk.
v. Currency risk :-
The Company is exposed to currency risk on account of its operations in other countries. The functional currency of the Company is Indian Rupee. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies.
Note 42
Capital Management
The Company's capital management is intended to create value for shareholders by facilitating the meeting of long-term and short-term goals of the Company.
The Company determines the amount of capital required on the basis of annual and long-term strategic plans. The Company's policy is aimed at combination of short-term and long-term borrowings.
the Company monitors the capital structure on the basis of 'adjusted net debt' to 'adjusted equity'. For this purpose adjusted net debt is defined as total liabilities comprising interest bearing loans and borrowings and obligations under finance lease, less cash and cash equivalents, Bank balance and current investments. Adjusted equity comprises Equity attributable to the shareholders of the Company (other than amounts accumulated in the hedging reserve, if any.)
(i) To the best of its knowledge and behalf, No Fund have been advance and loaned or invested (either from borrowed fund or share premium or any other source or kind of funds) by the company to or in any other person(s) or entity(ies), including foreign entity (intermediaries), with the understanding, whether recorded in writing or otherwise, that the intermediary sell , whether , directly or indirectly land or invest in other persons or entities identified in any manner whatsoever by or on behalf of company (ultimate benificaries or provide any gurantee, security, or the like on behalf of ultimate beneficiaries.
(ii) To the best of its knowledge and behalf, No fund have been received by the company from any person(s) or entitiy(ies), including foreign entities(“funding parties”) with the understanding, whether recorded in writing or otherwise, that the company shall, whether,directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of company (ultimate benificaries or provide any gurantee, security, or the like on behalf of ultimate beneficiaries.
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