m) Provisions, contingent liabilities and contingent asset Provisions
Provisions are recognized when the Company has a present obligation from a past event, and it's likely that resources will be needed to settle it, with a reliable estimate.
If time value of money is material, provisions are discounted using pre-tax rates reflecting risks. The increase due to time passage is recognized as finance cost. Provisions are reviewed at each balance sheet date and adjusted.
Provision for doubtful debts, claims, etc., is made if realization is doubtful per management judgment.
Contingent liability
A contingent liability is a possible obligation arising from past events, confirmed by uncertain future events. It's not recognized if unlikely to require resource outflow to settle the obligation or if the measurement is unreliable. They are disclosed separately. Show Cause notices are considered contingent liabilities only upon conversion to demands.
Contingent assets
Where an inflow of economic benefits is probable, the Company discloses a brief description of the nature of the contingent assets at the end of the reporting period, and, where practicable, an estimate of their financial effect. Contingent assets are disclosed but not recognised in the financial statements.
n) Cash and cash equivalents
Cash comprises cash in hand and demand deposits with banks. Cash equivalents are short term balances with original maturity of less than 3 months, highly liquid investments that are readily convertible into cash, which are subject to insignificant risk of changes in value.
o) Cash Flow Statement
Cash flows are presented using indirect method, whereby profit / (loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments.
Bank borrowings are generally considered to be financing activities. However, where bank overdrafts which are repayable on demand form an integral part of an entity's cash management, bank overdrafts are included as a component of cash and cash equivalents for the purpose of Cash flow statement.
p) Earnings per share
Basic earnings per share is calculated by dividing the net profit after tax by the weighted average number of equity shares outstanding during the year adjusted for bonus element in equity share. Diluted earnings per share adjusts the figures used in determination of basic earnings per share to consider the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as at the beginning of the period unless issued at a later date.
c) Rights, preferences and restrictions in respect of equity shares issued by the Company
1 The company has only one class of equity shares having a par value of Rs.10 each. The equity shares of the company having par value of Rs.10/- rank pari-passu in all respects including voting rights and entitlement to dividend. The dividend proposed if any, by the Board of Directors, is subject to the approval of the shareholders in the ensuing Annual General Meeting. During the year, the Company has not declared any dividend.
2 In the event of liquidation, shareholders will be entitled to receive the remaining assets of the company after distribution of all preferential amounts. The distribution will be proportionate to the number of equity shares held by the shareholder.
(a) **The Company had a pending litigation in the Court of City Civil Judge of Bengaluru, in the form of rent payable by the Company to M/s Square Projects Associates for the Company's show Room at M.G. Road, Bengaluru. The case is decided during the year in favour of the Company and the claim for arrears of rent has been rejected by the Honourable Court. However the Company has created provision for possible liability of rent and damages amounting to Rs.25.65 lakhs in the books of accounts in the respective years itself. The Company is paying property tax for the Show Room at M.G. Road, Bengaluru for the period under litigation and the amount so paid is shown as receivable from M/s Square Projects Associates in the Balance Sheet. Though the case has been decided in Company's favour and in expectation of further litigations, the liability for rent and damages is retained in the books.
(b) The Company is a Resulting Company of the Demerger Scheme of erstwhile Binny Ltd. Subsequent to the Demerger, the Company was not provided with the list of litigations that are pending and for which the Company may become liable. Hence, the liability of the Company, if any, arising out of the settlement of the pending litigations, will be provided for and settled as and when the liability arises.
(c) The Company along with management of Binny Ltd and B&C Mill Ltd had a pending litigation in the Additional Labour Court, Chennai regarding various demands raised by Chennai Perunagar Jananayaka Thozhilalar Sangam (Union) in respect of 22 employees. The case is decided in favour of union for 6 out of 10 demands raised. The liability of the Company is not ascertained and the Company along with other respondents is prefering an appeal before higher forum and hence no provision is made in the books
35 The Company being the resulting company of demerger scheme of erstwhile Binny Limited, An asset amounting to Rs. 3.29 Crores (Advance made to Ravikumar properties ) was transferred to Binny mills Limited during the scheme of demerger via Court order. The company has received an enquiry relating to above advance from Prevention of money laundering Act. As the said asset is received Via court order, hence the possibility of contravening the provisions of PMLA act does not arise. Further the amount has been received during the current Financial Year ended 31/03/2024.
36 The company being the resulting company of demerger scheme of erstwhile Binny Limited, has met the liabilities of the scheme of demerger to fast track the demerger on behalf of binny limited amount to Rs. 9.73 Crores and the same is recoverable from parent Company (Binny limited ). The management has created a provision amounting to Rs.4.63 Crores during the year in the books of accounts.
37 Operating Segments
The company is engaged in the business of Trading goods and providing services and therefore, has only one reportable segment in accordance with Ind AS 108 'Operating Segments'. The operations of the Company is only within India and accordingly, no disclosure based on geographical location is applicable.
Financial risk management objectives
The treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.
Market risk
Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the price of a financial instrument. The Company's activities are exposed to such risk
Foreign currency risk management
The Company's operations does not involve transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations does not arise. Accordingly, the Company does not have any exposure to such risks.
There are no hedged or unhedged foreign currency exposures outstanding at as March 31, 2024 and March 31, 2023
Disclosure of hedged and unhedged foreign currency exposure
The Company does not have any exposure relating to hedged and unhedged foreign currency transactions/ balances.
Foreign currency sensitivity analysis
The Company's operations does not involve transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations does not arise. Accordingly, the Company does not have any exposure to such risks.
Interest rate risk management
The Company does not have any borrowings and accordingly is not exposed to interest rate risk which arises, if it borrow's funds at both fixed and floating interest rates.
Interest rate sensitivity analysis
The Company does not have any borrowings and accordingly there is no disclosure made in respect of interest rate sensitivity analysis.
Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company is not subject to major credit risk as the majority of its trade receivables are covered by means of interest free security deposit taken at the inception of the agreement.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure is the total of the carrying amount of balances with banks, short term deposits with banks, trade receivables, margin money and other financial assets excluding equity investments.
(a) Trade Receivables
Trade receivables are consisting of a large number of customers. The Company has credit evaluation policy for each customer and, based on the evaluation, credit limit of each customer is defined.Wherever the Company assesses the credit risk as high, the exposure is backed by either bank guarantee/letter of credit or security deposits.The Company does not have higher concentration of credit risks to a single customer. As per simplified approach, the Company makes provision of expected credit losses on trade receivables using a provision matrix to mitigate the risk of default in payments and makes appropriate provision at each reporting date wherever outstanding is for longer period and involves higher risk.
(b) Cash and Cash Equivalents and Bank Deposits
Credit Risk on cash and cash equivalents, deposits with the banks/financial institutions is generally low as the said deposits have been made with the banks/financial institutions, who have been assigned high credit rating by international and domestic rating agencies.Investments of surplus funds are made only with approved Financial Institutions/Counterparty. Investments primarily include investment in units of quoted Mutual Funds,etc. These Mutual Funds and Counterparties have low credit risk.
Liquidity risk management
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company invests its surplus funds in bank fixed deposit and mutual funds, which carry minimal mark to market risks. The Company also constantly monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility.
41 Retirement benefit plans Defined contribution plans Employees Provident Fund
In accordance with Indian law, eligible employees of the Company are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employees' salary. The contributions, as specified under the law, are made to the Provident fund as well as Employee State Insurance Fund.
The total expense recognised in profit or loss of Rs.1.77 lakhs (for the year ended March 31, 2023: Rs. 1.96 lakhs) represents contribution payable to these plans by the Company at rates specified in the rules of the plan.
Defined benefit plans
Gratuity
Gratuity is payable as per Payment of Gratuity Act, 1972. In terms of the same, gratuity is computed by multiplying last drawn salary (basic salary including dearness Allowance, if any) by completed years of continuous service with part thereof in excess of six months and again by 15/26. The Act provides for a vesting period of 5 years for withdrawal and retirement and a monetary ceiling on gratuity payable to an employee on separation, as may be prescribed under the Payment of Gratuity Act, 1972, from time to time. However, in cases where an enterprise has more favourable terms in this regard the same has been adopted.
These plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk and salary risk.
* due to Redemption of Fixed deposit
*** due to finance cost charged during the year
# Earnings available for Debt Service = Net profit after tax non cash operating expenses Interest other adjustments
Note 1: Cummulative Redeemable preference shares of the company is classified as Financial liability as per IND AS and hence the same is considered as debt for computing the ratios.. Since the preference shares is a financial liability, preference dividend payable is treated as finance cost and the ratios has been computed accordingly.
Note 2: Preference dividend payable is grouped under current liabilities based on the definition in Schedule III to the Act, which inter alia requires the company to mandatorily classify liability as current liability if the company does not have an unconditional right to defer settlement of the liability . Accordingly while calculating current ratio, the said preference dividend payable grouped under current liabilties is excluded since the same is not expected to be settled within one year from the balance sheet date.
Note 3: Reason for differences
a. Debt Service coverage ratio increased due to increase in Earnings available for Debt service.
b. Trade Receivable Turnover Ratio increased due to decrease in average trade receivables.
c. Trade Payables Turnover Ratio increased due to decrease in average trade payables.
d. Netcapital Turnover Ratio decreased due to increase in working capital.
e. Netprofit Ratio decresed due to increase in loss on account of provision for Impairment on Financial Assets.
f. Return on capital employed decresed due to increase in loss on account of provision for Impairment on Financial Assets.
44 The Company has advanced monies to Ravikumar Properties Private Ltd in the earlier years towards purchase of property. Since the said transaction did not materialise the said advance is treated as advance - others in the financial statements and agreement has been entered into by the company with Ravikumar Properties Private Ltd to this effect. The company has recovered the amount during the financial year.
45 Pursuant to the Demerger Order dated 22.04.2010 of the Honourable Madras High Court, the Company had received its share of land from M/s Binny Limited to the extent of 27.76 acres. However the title deed in the name of the Company is yet to be registered. The property tax and other taxes pertaining to the land belonging to the Company are being assessed in the name of Binny Mills Limited and the same has been duly paid by the Company
46 Acknowledgement of Balances
The Company has obtained confirmation of balances from all the banks. In respect of Advances, Debtors and Creditors, the confirmation of balances were sought for by the Company and has been obtained in few cases.
47 Other Statutory Information
(i) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
(ii) The Company do not have any transactions with companies struck off.
(iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period,
(iv) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company have 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
(vi) The Company have 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,
(vii) The Company have not 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
48 Previous year figures have been regrouped/reclassified wherever necessary to conform to current year figures
As per our report of even date attached
For and on behalf of the board For Ramesh and Ramachandran
Chartered Accountants (Firm Registration No.002981S)
Sd/- Sd/- Sd/- Sd/-
V.R.Venkataachalam R. Kannan K. Aarthi G. Suresh
Chairman Chief Financial Officer Company Secretary Partner
DIN: 00037524 Membership No. 70915 Membership No. 029366
UDIN: 24029366BKEJQD4505
Place : Chennai Date : 30.05.2024
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