Note: Expected credit loss (ECL):
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. Before accepting any new customer, the Company uses an internal credit scoring system to assess the potential customer's credit quality and defines credit limits for each customer. Limits and scoring attributed to customers are reviewed once a year.
As a practical expedient, the Company uses a provision matrix to determine impairment loss of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward looking estimates. The ECL allowance (or reversal) during the year is recognized in the statement of profit and loss.
10.2 a) The Board of Directors at their Meeting held on June 29, 2021 approved the sub-division of each equity share of face value of Rs. 10/- fully paid up into 5 equity shares of face value of Rs. 2/- each fully paid up. The same had been approved by the Members at the Annual General Meeting held on September 30, 2021. Equity shares of the Company have been sub-divided from record date 12th November, 2021.
b) The Company has one class of Shares referred to as Equity Shares having a par value of Rs. 2 each. Each shareholder is entitled to one vote per Share held. The Dividend as and when proposed by the Board of Directors is subject to the approval of the shareholders at the Annual General Meeting.
a) Term Loans facilities from The Cosmos Co-op. Bank Ltd. is secured by Hypothecation of Raw Materials, Stock-in-Process, Finished Goods, Book Debts, Plant and Machinery, 1.25 MW Windmill situated at Village: Bhogat, Taluka: Kalyanpur, Dist: Jamnagar, 0.6 MW Windmill situated at Village: Suthari, Taluka: Abdasa, Dist.: Kutch, 2.10 MW Windmill situated at Village: Valsara, Taluka: Abdasa, Dist.: Kutch AND Equitable Mortgage of Factory Land & Building situated at Block No. 297 & 298, Limodara Patiya, Village: Karanj, Taluka: Mandvi, Dist.:Surat and Leasehold rights over Land & Building situated at Plot No. 72 to 86, Apparel Park, Sachin (SEZ), Dist.: Surat and at Composite Unit 2, Plot No. 3, Plot No. 4, Plot No. 5/A and Plot No. 15 at Fairdeal Textile Park, Village: Mahuvej, Taluka: Mangrol, Dist.: Surat, Office Premises at T.P. Scheme No.: 6, F.P. No. 233/A, western side of Third Floor, Dawer Chambers, Ring Road, Surat, Property situated at 91, G.I.D.C., Khatodara, B/h. Sub Jail, Ring Road, Surat , Property situated at City survey Nondh No.: 451/A of Ward Khatodara, Final Plot No.: 300, T.P. Scheme No. 6, Majura-Khatodara, Taluka/Dist.: Surat.
b) Vehicle Loans are Secured by Hypothecation of Vehicles
c) Term Loan and Corporate Loan facilities from Bank of Baroda is secured by Hypothecation of Raw Materials, Stock-in-Process, Finished Goods, Book Debts, Plant and Machinery and equitable mortgage of factory land and building situated at Block no. 298, Plot no. 2, Block no. 76, Plot no. 2 at Village: Karanj, Taluka: Mandvi, Dist.: Surat and Block no. 141, Plot no. 3, Block no. 146, Plot no. 3/A & 13, Block no. 149, Plot no. 12/A & 12/B at Village: Mota Borasara, Taluka: Mangrol, Dist. Surat, open Industrial land situated at Plot no.: Composite unit-1, Fairdeal Textile Park, Village: Mahuvej, Taluka: Mangrol, Dist.: Surat and office premises situated at eastern side of third floor, Dawer Chambers, Ring Road, Surat and hypothecation of 0.6MW Wind mill situated at Village: Suthari, Taluka: Abdasa, Dist: Kutch.
a) Working capital (Cash credit) facilities from The Cosmos Co-op. Bank Ltd. is secured by Hypothecation of Raw Materials, Stock-in-Process, Finished Goods, Book Debts, Plant and Machinery, 1.25 MW Windmill situated at Village: Bhogat, Taluka: Kalyanpur, Dist: Jamnagar, 0.6 MW Windmill situated at Village: Suthari, Taluka: Abdasa, Dist.: Kutch, 2.10 MW Windmill situated at Village: Valsara, Taluka: Abdasa, Dist.: Kutch AND Equitable Mortgage of Factory Land & Building situated at Block No. 297 & 298, Limodara Patiya, Village: Karanj, Taluka: Mandvi, Dist.:Surat and Leasehold rights over Land & Building situated at Plot No. 72 to 86, Apparel Park, Sachin (SEZ), Dist.: Surat and at Composite Unit 2, Plot No. 3, Plot No. 4, Plot No. 5/A and Plot No. 15 at Fairdeal Textile Park, Village: Mahuvej, Taluka: Mangrol, Dist.: Surat, Office Premises at T.P. Scheme
No.: 6, F.P. No. 233/A, western side of Third Floor, Dawer Chambers, Ring Road, Surat, Property situated at 91, G.I.D.C., Khatodara, B/h. Sub Jail, Ring Road, Surat , Property situated at City survey Nondh No.: 451/A of Ward Khatodara, Final Plot No.: 300, T.P. Scheme No. 6, Majura-Khatodara, Taluka/Dist.: Surat.
b) Foreign Bills under LC Discounting limit is secured by irrevocable letter of credit issued by bank.
c) Channel Finance Limit from ICICI Bank is secured by Lien marked over Fixed Deposit of Rs. 100 Lakhs with the Bank. In the current FY 2022-23, the Bank has removed its Lien and released its charge over Fixed Deposit of Rs. 100 Lakhs with the Bank.
d) Working capital (Cash credit) facilities from Bank of Baroda is secured by Hypothecation of Raw Materials, Stock-in-Process, Finished Goods, Book Debts, Plant and Machinery and equitable mortgage of factory land and building situated at Block no. 298, Plot no. 2, Block no. 76, Plot no. 2 at Village: Karanj, Taluka: Mandvi, Dist.: Surat and Block no. 141, Plot no. 3, Block no. 146, Plot no. 3/A & 13, Block no. 149, Plot no. 12/A & 12/B at Village: Mota Borasara, Taluka: Mangrol, Dist. Surat, open Industrial land situated at Plot no.: Composite unit-1, Fairdeal Textile Park, Village: Mahuvej, Taluka: Mangrol, Dist.: Surat and office premises situated at eastern side of third floor, Dawer Chambers, Ring Road, Surat and hypothecation of 0.6MW Wind mill situated at Village: Suthari, Taluka: Abdasa, Dist: Kutch.
(I) The amount due to Micro and Small Enterprises as defined in the "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 collected by the Management.
* Till the previous year premium paid for key man insurance policy was shown under the head "Other NonCurrent Asset" in the balance sheet but during the year maturity amount received from insurance company in the respective employees' account and the same was transferred to "Ex Gratia Payment of Key Man Insurance" in the Profit & Loss Account.
Gratuity:
The employee gratuity fund is managed by "Life Insurance Corporation of India" & "SBI Life Insurance Company Ltd". The present value of obligation is determined based on actuarial valuation. The liability is fully funded.
27 Other Statutory Information
1 The title deeds of all the immovable properties classified as property, plant and equipment (PPE) including investment properties held by the Company (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) are held in the name of the Company.
2 The Company has not revalued its property, plant and equipment (including right of use assets) or intangible assets during the year.
3 The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
4 The company has obtained borrowings from the banks against the security of the current assets. The quarterly statements of the current assets filed by the company with the bank are in agreement with the books of accounts.
5 The Company has not been declared as a willful defaulter by any lender who has powers to declare a company as a willful defaulter at any time during the financial year or after the end of reporting period but before the date when the financial statements are approved.
6 The Company does not have any material transactions with companies struck-off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.
7 The Company does not have any charges or satisfaction which is yet to be registered with the Registrar of Companies (ROC) beyond the statutory period.
8 The Company does not have any subsidiary company. Hence, there is no Compliance required in respect of number of layers of companies.
9 The company has not advanced or loaned or invested 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 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.
10 The Company has not received any funds 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; i. 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 ii. Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
11 The Company does not have any transactions which is not recorded in the books of accounts but 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).
12 The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
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Contingent Liabilities:
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Sr.
No.
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Particulars
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As at 31st March, 2023
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As at 31st March, 2022
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(I)
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Contingent Liabilities
(A) Claims against the company/disputed liabilities not acknowledged as debts:
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|
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(i) Demand under Rule 16A of the Drawback, 1995 for A.Y. 2015-16
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2.58
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2.58
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(ii) Demand u/s. 143(3) r.w.s. 147 of the IT Act, 1961 for A.Y. 2012-13
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23.59
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23.59
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(iii) Demand u/s. 143(1) of the IT Act, 1961 for A.Y. 2020-21
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NIL
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116.51
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(iv) Demand u/s.74 of the GST Act, 2017 for A.Y. 2018-19
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424.32
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NIL
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(v) Excise demand of duty amounting of Rs.8.06 Lakhs under section 11A(10) of Central Excise Act, 1944 and interest on such duty under section 11 AA of Central Excise Act, 1944; and imposed penalty of 1.55 Lakhs upon appellant under Section 11AC(1) (a) of Central Excise Act, 1944 which is under litigation Company has filed appeal with CESAT on account of dispute.
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9.61
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9.61
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(vi) Excise demand of duty amounting of Rs.31.07 Lakhs under section 11A(10) of Central Excise Act, 1944 and interest on such duty under section 11 AA of Central Excise Act, 1944; and imposed penalty of Rs.2.25 Lakhs upon appellant under Section 11AC(1) (a) of Central Excise Act, 1944 which is under litigation Company has filed appeal with CESAT on account of dispute.
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NIL
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33.32
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(B) Guarantees*
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|
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(i) Counter guarantees given to banks
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NIL
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NIL
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(ii) Bank guarantee provided to DGFT/Custom Authorities to secure machineries under EPCG Scheme
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32.23
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32.71
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(iii) Guarantee given and security (property) provided to The Surat People's Co-Operative Bank Ltd. for securing various credit facilities availed by Shahlon Enterprises LLP in which Company is one of the partner. W.E.F. 01/07/2022 the company has been retired as a partner from the Shahlon Enterprises LLP and during the year the Bank has released security (property) and discharged guarantee provided to it.
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NIL
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2914.63
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(C) Other Money for which the company is contingently liable
(i) Liability in respect of bills discounted with Banks (Including third party bills discounting)
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NIL
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NIL
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(II)
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Commitments
(A) Estimated amount of contracts remaining to be executed on capital account and not provided for the year
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NIL
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NIL
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Dakshin Gujarat VijCompany Ltd. has raised demand of cross subsidy surcharges for the financial year 2005-06 of ' 66.73 lakhs vide its show cause notice / letter no. DGVL/C&R/ CPP/ Cross-Sub.Surch/08/2821 dated 05-06-2008 to Shahlon Industrial Infrastructure Pvt. Ltd, which is merged with Shahlon Silk Industries Ltd. The amount payable is under Dispute. Shahlon Industrial Infrastructure Pvt. Ltd., one of the transferor Company which is merged with Shahlon Silk Industries Ltd. has received notice from collector of electricity duty demanding electricity duty @15% on supply of electricity to its members, whereas the said company has paid electricity duty 0.40 paisa per unit considering power generation is for captive purpose. The amount payable is under dispute.
Contingent assets
Contingent assets are neither recognized not disclosed in the financial statement.
Provisions, Contingent Liabilities and Contingent assets are reviewed at each balance sheet date.
(O) Government Grants: [Ind AS 20]
Grants and subsidies from the government are recognized at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all the attached conditions.
Government grants relating to purchase of property, plant and equipment are included in the non-current liabilities as deferred income and are credited to profit or loss on a straight-line basis over the expected lives of the related assets and presented within other income.
As per the Second Amendment Rules 2018 notified by MCA on 20th September, 2018 amending IND-AS 20 - Government Grants, an alternative is provided to reporting entities whereby government grant related to assets can be presented by deducting the value of grant from the carrying amount of asset. The said amendment is applicable effective from reporting period beginning on or after 1st April, 2018.
(P) Intangible assets (Excluding Goodwill): [Ind AS 38]
Intangible assets are recognized when it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the assets can be measured reliably.
Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebates less accumulated amortization/depletion and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets. Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably.
Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized.
(Q) Impairment of non-financial assets - property, plant and equipment and intangible assets: [Ind AS 36]
The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors.
An impairment loss is recognized in the Statement of Profit and Loss to the extent, asset's carrying amount exceeds its recoverable amount. The recoverable amount is higher of an asset's fair value less cost of disposal and value in use.
Value in use is based on the estimated future cash flows, discounted to their present value using pretax discount rate that reflects current market assessments of the time value of money and risk
specific to the assets. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
(R) Finance Cost: [Ind AS 23]
Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are capitalized as part of the cost of such asset. A Qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.
Interest income earned on the temporary investment of specific borrowing pending their expenditure on qualifying asset is deducted from the borrowing cost eligible for capitalization. All Other borrowing costs are charged to statement of profit and loss for the period in which they are incurred.
(S) Leases: [Ind AS 116]
Leases are classified as finance leases whenever the terms of the lease, transfers substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Leased assets:
The company has acquired 99 years leasehold right of Plot no.: Composite unit 1 and 2 & Plot No.
3, 4, 5A and 15, Fairdeal Textile Park, Village: Mahuvej, Taluka: Mangrol, Dist.: Surat, by subscribing to the shares of Fairdeal Textile Park Pvt. Ltd. All the risk and rewards of the leasehold land has been transferred to the Company. The life of leasehold land has been considered beyond estimate because of the period of lease being 99 years and renewable thereafter gives the Company ownership of the plot in perpetuity.
The leasehold land has been recognized at Nil value and the value by virtue of which the Company acquired the leasehold right has been recognized non-current at their historical cost.
Operating lease payments are recognized as an expense. Further, there is no outstanding lease contract which requires the treatment to recognize the right to lease asset and lease liability.
(T) Earning in foreign exchange: F.O.B. values of exports Rs. 2906.91 lakhs (Pre. Year Rs. 3367.27 lakhs)
(U) Sales/Purchase included inter-divisional transfers of NIL (Pre. Year NIL)
(V) Debtors of Rs. 11861.91 lakhs includes Rs. 10.08 lakhs (Pre. Year Rs. 9514.85 lakhs includes Rs. 6.45 lakhs) due from concern in which Directors are interested.
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