1) In accordance with IND AS 109, the Company has assessed Its investments recorded at fair value through other comprehensive income (FVTOCI). The fair value of the investment in Shree Uttam Steel and Power Limited has been valued by independent valuer at Rs. 651 per share, reflecting a decrease from the previously recorded fair value of Rs. 1445.80 per share. As a result, an impairment loss of Rs. 630.35 lakhs has been recognized in the statement of comprehensive income for the period.
2) This impairment loss is recognized as an adjustment to the carrying value of the investment and is included in the determination of the net gain/loss recognized in other comprehensive income.
1. Trade receivables are non-interest bearing and are generally on terms of 30 to 180 days.
2. No trade or other receivable are due from directors or other officers of the company either severally or jointly with any other person. Trade receivables include due from firms or private companies in which any director is a partner or a member Rs. 9.11 Lakhs (31st March 2022: Rs. 32.07 Lakhs)
(b) Terms/rights attached to equity shares
The company has issued only one class of equity shares having par value of INR 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The 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, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
Notes:
a. Vehicle loans
Vehicle loans carry varies interest rate from 6.85% to 10.5% and repayable within 5 years. These loans are secured by hypothecation of vehicles purchased for which loan is received.
b. Foreign currency Term loan
The following Foreign Currency term loans are secured by pari-passu first charge on movable Fixed Assets of the company both present and future and Equitable Mortgage of immovable Murthal Properly being Land & Building in addition by second charge on all existing and future current assets of the company and guaranteed by Directors.
Foreign currency term loans from Kotak Bank Limited
i. Rs.358.30 lakhs loan is taken in FCTL carrying interest link to the LIBOR 5.55% in all repayable monthly installments upto May, 2024. The loan is secured by pari-passu first charge on movable Fixed Assets of the company both present and future and Equitable Mortgage of immovable Murthal Property in addition by second charge on current assets of the company and guaranteed by Directors namely S/Sh. Ashok Bhatia and Sanjay Bhatia.
ii. Rs.374.32 lakhs, Rs. 172.95 lakhs, Rs.209.74 lakhs and Rs.252.79 lakhs loans are taken in FCTL carrying interest link to the LIBOR 5.15%, 4.50%, 4.00% and 3.20% respectively.
c. Term Loan From Banks
i. Term Loan in INR Rs.141.37 lakhs carrying interest 8.95% in all repayable monthly installments upto Febuary, 2026. The loan is secured by pari-passu first charge on movable Fixed Assets of the company both present and future and Equitable Mortgage of immovable Murthal Property in addition by second charge on current assets of the company and guaranteed by Directors namely S/Sh. Ashok Bhatia and Sanjay Bhatia.
ii. Further Term Loan in INR Rs.1098.22 lakhs carrying interest 8.95% payable in monthly installment starting from Jan.2024 upto June 2029. The loan is secured by exclusive charge on purchase of Land & construction of Building for new unit at Panchi Gurjan, Ganaur, and first pari-passu charge on movable fixed assets and second pari-passu charge on current assets of the company and guaranteed by Directors namely S/Sh. Ashok Bhatia and Sanjay Bhatia.
iii. Further Term Loan in INR Rs.371.41 lakhs carrying interest 8.95% payable in monthly installment starting from July. 2024 upto Dec. 2029. The loan is secured by pari-pasu first charge on Equatable Mortgage of immovable Murthal unit property and first pari-passu charge on moveable fixed assets and second pari-passu charge on current assets of the company and guaranteed by Directors namely S/Sh. Ashok Bhatia and Sanjay Bhatia.
iv. Further Term Loan in INR Rs.129.78 lakhs carrying interest 8.95% payable in monthly installment starting from July. 2023 upto Dec. 2029. The loan is secured by pari-pasu first charge on Equatable Mortgage of immovable Murthal unit property and first pari-passu charge on moveable fixed assets and second pari-passu charge on current assets of the company and guaranteed by Directors namely S/Sh. Ashok Bhatia and Sanjay Bhatia.
v. Term loan from HDFC Bank - Rs. 48.84 lakhs - The loan carries interest rate @ one year MCLR 9.25% , repayable in quarterly installment upto June 2023. The term loan is secured by pari-passu first charge on movable Fixed Assets of the company both present and future and Equitable Mortgage of immovable Murthal Property in addition by second charge on current assets of the company and guaranteed by Directors namely S/Sh. Ashok Kumar Bhatia and Sanjay Bhatia.
1. Working Capital limits from banks are secured by pari-passu first charge on Current Assets of the company both present and future and in addition by second charge on moveable fixed assets and Equitable Mortgage of immoveable Murthal property of the company The above working capital limits are guaranteed by Directors namely S/ Sh. Ashok Kumar Bhatia and Sanjay Bhatia.
2. The above loan is against bill discounting of suppliers / customers and gauranteed by Directors namely S/ Sh. Ashok Kumar Bhatia and Sanjay Bhatia.
Details of dues to micro, small and medium enterprises as defined under MSMED Act, 2006.
There are no micro, small and medium enterprises, to whom the Company owes dues, which are outstanding for more than 45 days during the year and also as at March 31, 2023. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006, has been determined to the extent such parties have been identified on the basis of information available.
30. Post employment benefit plans: Gratuity and Leave encashment
The Company has a funded defined benefit gratuity and leave encashment plan.
The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit.
The following tables summarise the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:
Due to its defined benefit plans, the Company is exposed to the following significant risks:
Changes in return on plan assets - A decrease in return on plan assets will increase plan liability.
Salary risk - The present value of the defined benefit plans liability is calculated by reference to the future salaries of the plan participants. As such, an increase in the salary of the plan participants will increase the plan's liability.
31. Segment reporting
The primary segment reporting format is determined to be business segments as the company's risks and rates of return are affected predominantly by differences in the nature of services rendered. Secondary information is reported geographically. The operating businesses are organized and managed separately according to the nature of the services provided, with each segment representing a strategic business unit that offers different services and serves different markets.
(i) The Company has identified Business segment as its primary segment and geographical segment as its secondary segment. The products of the company have been grouped under 'Manufacturing' and 'Trading' segments (primary segment) depending upon the sector to which they are predominantly identified in the market.
(ii) Products manufactured includes metal containers, components and printed / lacquered sheets.
(iii) Trading includes purchases and sales of tinplates
*Note: The remuneration to key managerial personnel does not include the provisions made for gratuity and leave benefits, as they are determined on actuarial basis for the Company as a whole.
33. Significant accounting judgements, estimates and assumptions
The preparation of the Company's financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Judgements
In the process of applying the Company's accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements:
Taxes
Significant judgements are involved in determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions.
The Company reviews the carrying amount of deferred tax assets at the end of each reporting period. The policy for the same is explained in Note 2.2.15
Useful life of property, plant and equipment
The Company reviews the useful life of property, plant and equipment at the end of each reporting period. This reassessment may result in change in depreciation expense in future periods.
Provisions and contingent liabilities
A provision is recognised when the Company has a present obligation as a result of past event if it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits and leave encashment) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance sheet date. These are reviewed at each Balance sheet date and adjusted to reflect the current best esitmates. Contingent liabilities are not recognised in financial statements. A contingent asset is neither recognised nor disclosed in the financial statements.
Defined benefit plans (gratuity benefits)
The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.
The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries.
Further details about gratuity obligations are given in Note 30.
Defined benefit plans (Leave encahment)
Leave Encashment/ Compensated Absence. : The company has a defined benefit leave encashment plan for its employees. Under this plan, they are entitled to encashment of earned leaves subject to certain limits and other conditions specified for the same. The liabilities towards leave encashment have been provided on the basis of actuarial valuation.
Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Carrying value and approximate fair values of financial instruments are same.
34. Financial risk management objectives and policies
The Company's activities expose it to a variety of financial risks : market risk, credit risk and liquidity risk. The primary market risk to the Company is foreign exchange risk. The Company's exposure to credit risk is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers.
Market risk
The Company is exposed to foreign exchange risk through its sales and services outside India, and purchases and services from overseas suppliers in various foreign currencies. The exchange rate between the rupee
and foreign currencies may fluctuate substantially in the future. Consequently, the results of the Company's operations may affected as the rupee appreciates / depreciates against these currencies.
Credit risk
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. Trade receivables are typically unsecured and are derived from revenue earned from customers located primarily in India. Credit risk has always been managed by the Company 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.
Credit risk on cash and cash equivalents is limited as the Company generally invest in deposits with banks. Liquidity risk
The Company's principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The Company believes that the working capital is sufficient to meet its current requirements.
35. Commitments and contingencies a. Leases
Operating lease commitments — Group as lessee
The Company has entered into operating leases on immovable properties and plant and machinery, with lease terms upto six years.
The group has paid INR 21.91 Lakhs (31st March 2022: INR 28.61 Lakhs) during the year towards minimum lease payment.
d. Contingents Liabilities
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(Figures in S Lakhs)
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Particulars
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31-Mar-23
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31-Mar-22
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INR
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INR
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(i) Local area development tax
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21.34
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21.34
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(ii) Land acquisition notice
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189.84
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189.84
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211.18
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211.18
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(i) Rs 21.34 lakhs for the year 2008-09 to 2017-18 may be payable to Haryana Sales Tax Department towards L.A.D.T. The company has filed an appeal before the Hon'ble High Court Chandigarh for the relief and the Hon'ble High Court has granted stay against L.A.D.T. and declared L.A.D.T. unconstitutional. The department has filed Appeal before the Hon'ble Supreme Court for granting stay and the same is pending, however no demand has been raised by the Haryana Sales Tax Department.
(ii) The Company purchased 7.55 bigha land in Katha Baddi in 2006-07 for Rs. 189.84 lakhs setting up a new project.The company started its operations at Baddi before the expiry of the permission under 118 at a very low scale due to adverse marketing conditions.The company started trial production with hand tools on manual operations with DG sets.The District Collector (DC) of Solan issued a show-cause notice to acquire the land as per the provisions of the Act. In response, the company filed a reply to the notice and presented its case through its legal representative. However, the judgment issued by the District Collector was not favorable to the company.Subsequently, the company filed an appeal against the District Collector's order with the Divisional Commissioner (Appeal), which ruled in favor of the company. However, the state government has filed a revision petition against the said order before the Financial Commissioner (Appeals) in Shimla which was reverted by him to DC, Solan to look at the case afresh. DC Solan has filed a civil writ petition before the High Court HP at Shimla against the order of the Financial Commissioner and the same is sub judice.
c. Capital commitments
Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for in the books of account as at March 31, 2023 is Rs. 5.37 Lakhs (31st March 2022: Rs. 15.33 Lakhs).
38. Security of current assets against borrowings
The Company has been sanctioned working capital facilities from banks on the basis of security of current assets. The company has filed quarterly returns/ statements with such banks which are not in agreement with the audited books of account, however such differences between the amounts disclosed to the banks and those as per the books of accounts have been reconciled. The statement has been submitted to banks as per after bank format and no material discripency is found. Refer table below for summary of reconciliation and reasons of Variations.
Note 1: The variation is due to impact of related party debtors,exchange rate variance not considered in Inventory statements submitted to the bank as no DP is allowed thereagainst by bank Note 2: Variation is due to
1. Trade Payable only included Creditors related to Raw material and creditors for expenses related to Raw Material and other stocks as per requirement of bank for the purpose of calculation of DP. The remaining creditors are not part of bank Inventory Statement and not submitted to bank in Inventory statement whereas these are added in in Balance Sheet under the head Trade Payable .
2. Trade Payables included Bills Payable under LC but reduced from total stock in inventory statement as per bank format whereas in Balance Sheet, it is taken under Trade Payables head.
3. Purchase Bills Discounted from FIs are treated as Creditors for bank DP purpose as these are replacement of creditors paid through Purchase Bills Discounted from FIs and taken in Creditors list in Inventory statements submitted to the bank whereas in Balance Sheet, these are taken under the head ” Borrowing from Others"
Note 3: Old slow moving spares inventory are not considered in Inventory statement as no DP is allowed by bank thereagainst and shown seperately in Inventory statement to bank.
ii) The Company has no transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act.
iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
iv) All the title deeds of immovable property held in the name of company.
v) The Company has not traded or invested in Crypto currency or Virtual Currency during the respective financial years.
vi) 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) Directly or Indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
(b) Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
vii) 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) The Company does not have any 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).
ix) The Company has not been declared willful defaulter by any bank or financial Institution or other lender.
x) The Company does not have any Scheme of Arrangements which have been approved by the Competent Authority in terms of sections 230 to 237 of the Act.
xi) The company has complied the number of layers prescribed under section (87) of the Act read with the companies (Restriction on number of layers) Rules, 2017.
xii) Previous year figures have been regrouped/reclassified wherever necessary to correspond with the current period's classification/disclosure.
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