General Reserve
General Reserve was created in accordance with erstwhile Companies Act, 1956 & Rules thereunder by transferring the Surplus in the Statement of Profit & Loss to the General Reserve, as per the limits laid down thereunder on distribution of Profits to Shareholders, as dividend. This is a part of free reserve and can be used for the purpose of distribution to Shareholders.
C Restriction on Voting Rights
The Company has only one class of issued equity share capital as on the date of the balance sheet and each holder of equity share is entitled for one vote per share and right to receive the dividend, if any, declared on the equity shares.
D Dividend
The Board of Directors of the Company has recommended a final dividend of Rs.3.00 (Previous Year Rs.1.00) per share, aggregating to Rs.2166.34 Lacs (Previous Year Rs. 722.11 Lacs) for the financial year ended 31st March 2025, subject to the approval of the Shareholders in their ensuring Annual General Meeting.
Description of Reserves Capital Reserve
This includes Rs. 10,288.18 Lacs towards amount of warrant application money forfeited by the Company in the past on non exercise of option by the warrant holders to convert the warrants into Equity Shares and Rs. 89.58 Lacs towards amount received on Equity Shares Forfeited by the Company in the past.
Securities Premium
Securities Premium was created consequent to issuance of shares at Premium. These reserves can be utilized in accordance with the provisions of Section 52 of the Companies Act, 2013.
Working capital facilities from banks are secured a) on first pari passu basis, by way of hypothecation of stock of raw materials, semi-finished goods, finished goods and book debts of the Company, both present and future, b) by way of second pari passu charge on specific fixed assets of the Company, situated at Malanpur (M.P.), Jammu (J & K), Noida (U.P.), Sanand (Gujarat) and Panipat (Haryana), and c) by guarantee of Chairman & Managing Director of the Company.
The Company has filed the returns/ statements of current assets, as per the requirement of the banks, which are in agreement with the books of accounts.
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33:
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Contingent liabilities not provided for in respect of :
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Current Year
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(Rs. in lacs)
Previous Year
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A
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i) Show cause notice / demands of Excise Authorities in respect of Excise Duty & Service Tax not acknowledged by the Company and are contested / appealed / replied.
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4,684.53
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4,759.91
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ii) Show cause notice / demands of Goods & Services Tax (GST) Authorities in respect of GST not acknowledged by the Company and are contested / appealed / replied.
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959.13
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960.59
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iii) Additional demands raised by the Income Tax Department, which are under rectification & appeal including amount deposited Rs 7762.63 Lakh (Previous Year Rs 4891.04 Lakh)
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32,924.44
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20,005.04
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iv) Additional demands raised by the Sales Tax Department, which are under rectification & appeal
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948.35
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979.78
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v) Amount demanded by the erstwhile workers of the Company and are pending in labour Court
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17.92
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17.92
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vi) Claims against the Company/disputed liabilities not acknowledged as debt.
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1,285.55
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1,285.55
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vii) Demand for refund/ non admission of claim of export incentive/ GST by authorities which are protested or under appeal
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231.72
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108.68
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| |
viii) Demand raised by the Concerned Development corporation on surrender of unutilised Industrial Leasehold Land.
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62.69
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62.69
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ix) Demands raised by the Electricity Departments, which are protested or under appeal
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1,306.61
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1,028.89
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B
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i) Guarantees issued by Banks
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5,415.30
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6,012.99
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ii) Corporate Guarantees issued for facilities taken by subsidiaries from Banks
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26,933.57
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34,734.70
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iii) Import duty obligations on outstanding export commitment under Advance Licence / EPCG Schemes
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19,846.68
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25,242.74
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iv) Letters of Credit (Unexpired) issued by Banks (Net of Margin)
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28,094.24
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25,579.07
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C
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Liability in respect of Bonus for the FY 2014-15 arising due to retrospective amendment in the Payment of Bonus (Amendment) Act, 2015; which is contested by the Company.
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429.85
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429.85
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| |
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(Rs. in lacs)
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34: Capital Commitments :
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Current Year
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Previous Year
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The estimated amount of contracts remaining to be executed on capital account (Net of advances) and not provided for
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31,548.98
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18,113.65
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h Reason for Shortfall / Unspent amount
There is no shortfall in the amount to be incurred for CSR, as the unspent amount in respect of ongoing project identified by the Company is deposited into "unspent CSR Account" within the time period prscribed under Section 135(6) of the Companies Act, 2013.
In terms of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has identified an ongoing project for Building a School at Greater Noida, Uttar Pradesh and has spent part of the CSR amount during the financial year 2024-25 and balance commitment for project amounting to Rs. 254.50 lacs (including excess of Rs 0.08 lacs), outstanding as at year end, and shall be spent in the coming financial year i.e. 2025-26, has been transferred to Unspent Corporate Social Responsibility Account with the Scheduled Bank within 30 days from the end of Current Financial Year as per provision of Section 135(6) of Companies Act, 2013.
i Nature of CSR Activities
As covered under Item No (i) & (iv) of Schedule VII of the Companies Act, 2013
The expected benefits increases are based on the same assumptions as are used to measure the Company's defined benefit plan obligations as at 31st March 2025. The Company is expected to contribute Rs.1321.54 lacs to defined benefits plan obligations fund for the year ending 31st March 2026.
The significant accounting assumptions are the discount rate and expected salary increases. The sensitivity analysis below have been determined based on reasonable possible changes of the respective assumptions occurring at the end of the reporting period while other assumptions are constant.
If the discount rate increases /(decreases) by 0.5%, the defined benefit plan obligations would decrease by Rs.325.57 Lacs (increase by Rs.348.51 Lacs) as at 31st March 2025.
If the expected salary growth increases /(decreases) by 0.5%, the defined benefit plan obligations would increase by Rs.345.89 Lacs (decrease by Rs.325.58 Lacs) as at 31st March 2025.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Further in presenting the above sensitivity analysis, the present value of the defined benefit obligations has been calculated using the Projected Unit Credit Method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the Balance Sheet.
The Company is examining and reviewing details of the pending matters in consultation with experts and will take appropriate actions, if and when they occur. Company after considering all available information on records, legal position and opinion of experts as on date, is confident that no material tax liabilities will devolve on the Company in respect of above stated matter.
39: Previous Year figures have been recasted / regrouped/ reclassified, wherever considered necessary.
40: The Income Tax Department ("the Department") had conducted a Search activity ("the Search") under Section 132 of the Income Tax Act,1961 on the Company in February 2023 and subsequently has raised demand orders of Rs.28890.15 lacs for the assessment year 2020-21 & 2021-2022 and further proceedings are going on. Company has already filed appeals against the demand orders received by the Company.
1A The Company has extended Corporate Guarantee to the lenders of its Fellow Subsidiary. During the year, Company has issued Corporate Guarantee for Term Loan Facilities from Banks availed by the Step down subsidiary Uflex Wooven Bags S.A. de C.V, Mexico amounting to Rs 15,325.10 Lakhs The outstanding amount of Corporate Guarantees extended by the Company to its step down subsidiaries as on the balance sheet date has been disclosed in Note No 33(B).
1B Chairman & Managing Director of the Company has given personal guarantee against loan facilities and the same has been disclosed in Note no 15&19.
viii) There's no transaction which has not been recorded in the books of accounts and disclosed or surrendered as income during the year in the tax assessments under the Income Tax Act, 1961.
ix) The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.
(i) The Revenues and profits of the company have increased during the year, which has resulted into the improvements in the ratios.
(ii) Income from the investment is from the dividend on the 7.5% Cumulative, Non-Participative Redeemable Preference Shares. Some part of the amount is redeemed during the last year and current year as well, which has resulted into lower investement income.
50: Additional Disclosure required under Schedule-III of the Companies Act, 2013
i) No proceeding has been initiated or pending against the Company for holding any benami property under the Benami Transaction (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.
ii) The Company has not been declared as wilful defaulter by any bank or financial institution or other lender.
iii) As per information available with the Management, the Company does not have any transaction with companies struck off under Section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956. Further the Company has no relationship with the struck off company.
iv) There was no charge or satisfaction, which is yet to be registered with concerned Registrar of Companies, beyond the period permitted under the Companies Act,2013.
v) The Company is in compliance with the regulation as to the number of layers of companies prescribed under clause (87) of section 2 of the Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017.
Fair Value hierarchy disclosures:
Level 1- Quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: Input other than quoted price included within Level 1 that are observable for the assets or liability; either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs)
vi) 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(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
vii) No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (Funding Parties), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other person(s) or entity(ies) identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
52: Financial Risks Management
In the course of business, amongst others, the Company is exposed to several financial risks such as Credit Risk, Liquidity Risk, Interest Rate Risk, Exchange Risk and Commodity Price Risk. These risks may be caused by the internal and external factors resulting into impairment of the assets of the Company causing adverse influence on the achievement of Company’s strategies, operational and financial objectives, earning capacity and financial position.
The Company has formulated an appropriate policy and established a risk management framework which encompass the following process.
- identify the major financial risks which may cause financial losses to the company
- assess the probability of occurrence and severity of financial losses
- mitigate and control them by formulation of appropriate policies, strategies, structures, systems and procedures
- Monitor and review periodically the adherence, adequacy and efficacy of the financial risk management system.
The Company enterprise risk management system is monitored and reviewed at all levels of management, Audit Committee and the Board of Directors from time to time.
Credit Risk
Credit Risk refers to the risks that arise on default by the counterparty on its contractual obligation resulting into financial loss to the company. The Company may carry this Risk on Trade and other receivables, liquid assets and some of the non current financial assets.
In case of Trade receivables, the Company has framed appropriate policy for extending credits period & limit to each customer based on their profile, financial position and their external rating etc. The collections of trade dues are strictly monitored . In case of Export customers, even credit guarantee insurance is also obtained wherever required.
Company’s exposure to Credit Risk is also influenced by the concentration of risk from top five customers. The details in respect of the % of sales generated from the top customer and top five customers are given hereunder.
Interest Rate Risk
Generally market linked financial instruments are subject to interest rate risk. The Company does not have any market linked financial instruments both on the asset side as well liability side. Hence there is no interest rate risk linked to market rates.
However the interest rate in respect major portion of borrowings by the Company from the banks and others are linked with the Benchmark / Base Prime lending rate of the respective lender and in case of foreign currency borrowings, the same is linked with the LIBOR. Any fluctuation in the same either on higher side or lower side will result into financial loss or gain to the company.
The amount which is subjected to the change in the interest rate is of Rs. 3,53,774.05 lacs out of the total debt of Rs. 3,59,433.88 Lacs.
Based on the Structure of the debt as at year end, one percentage point increase in the interest rate would cause an additional expense in the net financing cost of Rs. 3 537.74 Lacs.
Foreign Currency Risk
The Company is exposed to the foreign currency risk from transactions & translation. Transactional exposures are arising from the transactions entered into foreign currency. Management keeps a close watch of the maturity of the financial assets in foreign currency and payment obligations of the financial liabilities.
The credit risk on cash & cash equivalent, investment in fixed deposits, liquid funds and deposits are insignificant as counterparties are banks or mutual funds with high credit ratings assigned by the rating agencies of international repute.
Liquidity Risk
Liquidity Risk arises when the Company is unable to meet its short term financial obligations as and when they fall due.
The Company maintains adequate liquidity in the system so as to meet its all financial liabilities timely. In addition to this, the Company’s overall financial position is strong so as to meet any eventuality of liquidity tightness.
Commodity Price Risk
The main raw materials which the Company procures are global commodities and their prices are to a great extent linked to the movement of crude prices directly or indirectly.
The pricing policy of the Company final product is structured in such a way that any change in price of raw materials is passed on to the customers in the final product however, with a time lag which mitigates the raw material price risk.
With regard to the finished products, the Company has been operating in a global competitive environment which continues to keep downward pressure on the prices and the volumes of the products.
In order to combat this situation, the Company formulated manifold plans and strategies to develop new customers & focus on new innovative products. In addition, it has also been focusing on improvement in product quality and productivity. With these measures, Company counters the competition and consequently commodity price risk.
53: The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The primary objective of the Company’s capital management is to maximize the shareholder value. The Company’s primary objective when managing capital is to ensure that it maintains an efficient capital structure and healthy capital ratios and safeguard the Company’s ability to continue as a going concern in order to support its business and provide maximum returns for shareholders. The Company also proposes to maintain an optimal capital structure to reduce the cost of capital.
The management of the Company reviews the Capital structure of the Company on regular basis. As part of this review, the Board considers cost of capital and the risk associated with the movement in the working capital. No changes were made in the objectives, policies or processes for managing capital during the year ended March 31,2025 and March 31,2024.
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