1) Term loans from banks are secured by way of equitable mortgage created or to be created on all the present and future immovable properties including all land, buildings, structures, all plant and equipment attached thereon of the Company and hypothecation of all the movable properties including movable machinery, spares, tools and accessories, etc., present and future, subject to prior charges created and / or to be created in favour of the Company's bankers on stocks of raw materials, semi finished and finished goods, consumable stores and other movable assets excluding vehicles specifically hypothecated against vehicle loans, as may be required for working capital requirements in the ordinary course of business.
2) The interest rates range from 7% to 8% per annum. For term loan and interest rate for OCC is from 9 to 11%.
1) Cash credits/working capital loans are secured by hypothecation of raw materials, semi finished and finished goods, other movable assets excluding vehicles specifically hypothecated against loans and book debts, present and future of the Company.
2) The interest rates for Cash credits/working capital loans from banks range from 9% to 11% per annum before subvention.
3) The Company has been sanctioned working capital limits from banks during the year on the basis of security of current assets of the Company.
31 Employee Benefit Obligationsa. Short-term Employee Benefits
These benefits include wages and salaries, including other monetary and non-monetary benefits, compensated absences which are either non-accumulating or accumulated and expected to be availed within twelve months after the end of the reporting period.
b. Long-term Employee Benefitsi) Defined Contribution Plans
The Company makes Provident Fund contributions, which are defined contribution plans, for qualifying employees. Company has no further payment obligations once the contributions have been paid. Under the Provident Fund Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions payable to these plans by the Company are in compliance with the rates specified in the rules of the schemes. The Company recognised ' 37.01 Lakh (previous year ' 39.03 Lakh) as an expense and included in Note 28 - Employee Benefit Expenses 'Contribution to Provident Fund and Other Funds' in the Statement of Profit and Loss for the year ended 31st March 2024.
ii) Defined Benefit Plans
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on retirement / resignation or retirement under VRS at 15 days salary (last drawn salary) for each completed year of service. The present value of gratuity obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.
The following table sets out the unfunded status of the defined benefit schemes and the amount recognised in the financial statements:
b) Fair Value Hierarchy of Financial Assets and Liabilities
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (i) recognised and measured at fair value and (ii) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, Company has classified its financial instruments into three levels prescribed under the accounting standards below:
Level 1: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
Level 2: Level 2 inputs are inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Level 3 inputs are unobservable inputs for the asset or liability.
Company's policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period. Measured at Fair Value Through Profit or Loss (FVTPL)
Measured at Amortised Cost for which Fair Value is disclosed
The fair values of all current financial assets and liabilities including trade receivables, cash and cash equivalents, bank balances, trade payables and other current financial assets and liabilities are considered to be the same as their carrying values, due to their short term nature. The fair values of all non-current financial assets and liabilities including are considered to be the same as their carrying values, as the impact of fair valuation is not material.
c) Capital Management
Total equity as shown in the balance sheet includes equity share capital, securities premium and retained earnings.
The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimise returns to its shareholders.
The Company's policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditors and market confidence and to sustain future development and growth of its business. The Company will take appropriate steps in order to maintain, or if necessary adjust, its capital structure. The management monitors the return on capital as well as the level of dividends to shareholders.
d) Financial risk management
Company's activities expose it to credit risk, liquidity risk and market risk. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and its impact on the financial statements
(i) Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk - interest rate risk, foreign currency risk and other price risk such as equity price risk. Financial instruments affected by market risk include loans and borrowings, deposits, other financial instruments.
(ii) Liquidity risk
Liquidity risk is the risk that the Company will find it difficult in meeting its obligations associated with its financial liabilities in time. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying business, Company's treasury maintains flexibility in funding by maintaining availability under cash and cash equivalents, bank deposits and mutual funds.
Management monitors rolling forecasts of the Company's liquidity position and cash and cash equivalents on the basis of expected cash flows. The tables below analyses the Company's financial liabilities into relevant maturity groupings based on their contractual maturities.
(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 value of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk investments because of fluctuations in the interest rates. Cash flow interest rate risk because of fluctuations in interest rates. The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's long-term debt obligations to its preference share holders.
(iv) Interest rate sensitivity
The borrowing of the Company includes vehicle loans which carries fixed coupon rate and hence the Company is not exposed to interest rate risk.
(v) 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 loans given, investments and balances at bank. The Company measures the expected credit loss of trade receivables based on historical trend, industry practices and the business enviornment in which the entity operates. Expected Credit Loss is based on actual credit loss experienced and past trends based on the historical data.
34 Segment
The Company is operating in single reportable segment of 'Technical textiles in terms of Ind AS 108. Accordingly, the segment revenue, segment results, segment assets and segment liabilities are reflected in the financial statements themselves as at and for the financial year ended 31st March 2024.
Entity wide disclosuresInformation about products and services:
The Company is in a single line of business of "Shade Net and Plastic woven sacks”
Information about major customers:
One customer during the year ended 31st March 2024 and 31st March 2023 contributed to more than 10% of the revenue individually. Revenue from this customer was ' 1122.64 lakh during the year ended 31st March 2024 and ' 1661.69 lakhs during the 31st March 2023.
Note: Enforcement Directorate vide provisional attachment order No. 01/2017/KZSZO (IN ECIR/KZSZO/4/2015) dated 15.03.2017 issued directions for freezing Bank accounts of the Company. The Company filed writ petition in the High Court of Kerala and the court vide order dated 12.05.2017 asked the Company to furnish the bank guarantee equivalent to the amount lying in the frozen bank accounts. The Company vide letter dated 23.05.2017 furnished the required bank guarantee of ' 20.33 Lakhs in favour of DIRECTORATE OF ENFORCEMENT, KOCHI. The Enforcement Directorate vide their letters dated 08.06.2017 released the frozen accounts of the Company. The said bank guarantee has been renewed further as requested by Enforcement Directorate from time to time.
Subsequently, ED vide O/C No.1063/2018 dated 09.11.2018 provisionally attached the immovable property of the Company at Daman with a gross liability of ' 66,88,822/- (Net of Bank Guarantee ' 46,56,026). The ED referred the matter to Adjudicating Authority, New Delhi. The Adjudicating Authority vide order dated 26.04.2019 confirmed the attachment giving Company 45 days time to appeal against this order to the Hon'ble Appellate Tribunal, New Delhi. Accordingly, Company has preferred an appeal on 23.05.2019, the appeal has been admitted by the honourable
appellate tribunal.
Appeal filed against adjudication order passed by the Adjudicating authority and the hearing date is 12th August 2024.
40 Micro, Small and Medium Enterprises
Pursuant to the Micro, Small and Medium Enterprise Development Act, 2006, the Company had asked for confirmation from its vendors reagrding their status under the said Act. The Company is yet to receive varifiable confirmation from all the vendors and hence the amounts unpaid as at the year end together with interest payable if any, under this Act have been given as under.
41 Immovable Property Not Held In Company's Name
The Company holds the title deeds of all immovable properties in their name.
42 Details Of Benami Property
The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
43 Registration Of Charges or Satisfaction with Registrar of Companies
The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
44 Undisclosed Income
The Company does not have any such 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).
45 Details of Crypto / Virtual Currency
The Company has not traded or invested in crypto currency.
46 Wllful defaulter
The Company has not been declared as wilful defaulter by any bank or financial institution or any other lender.
47 Number of layers
The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.
48 Quarterly return to financial institutions
The Monthly/ Quaterly returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts.
49 Transaction with Struck off Companies
The Company did not enter any transaction with struck off companies.
50 Data back up
As per MCA notification dated August 05, 2022, the Central Government has notified that Companies (Accounts) Fourth Amendment Rules, 2022. As per the amended rules, the companies are required to maintain back up of the books of account and other relevant books and papers in electronic mode that should be accessible in India at all the time. Also, the companies are required to create back up on servers physically located in India on a daily basis. To comply with this requirement, the Company takes the back up on daily basis.
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