2.11 Provisions and contingencies
Provisions:
Provisions are recognised when there is a present obligation as a result of a past event and it is probable that an outflow of
resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount
of the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current
market assessment of the time value of money and the risks specific to the liability.
Contingent Liabilities:
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of
the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources
will be required to settle or a reliable estimate of the amount cannot be made.
2.12 Financial instruments
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to
the acquisition or issue of financial instruments (other than financial assets and financial liabilities at fair value through profit
or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial
recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value
through profit or loss are recognised immediately in profit or loss. Subsequently, financial instruments are measured according
to the category in which they are classified.
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on
the classification of the financial assets.
Classification of financial assets
Classification of financial assets depends on the nature and purpose of the financial assets and is determined at the time of
initial recognition.The Company classifies its financial assets in the following measurement categories:
• those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and
• those measured at amortised cost
A financial asset that meets the following two conditions is measured at amortised cost unless the asset is designated at fair
value through profit or loss under the fair value option:
• The objective of the Company's business model is to hold the financial asset to collect the contractual cash flows.
• Cash flow characteristic test : the contractual term of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
A financial asset that meets the following two conditions is measured at fair value through other comprehensive income unless
the asset is designated at fair value through profit or loss under the fair value option:
• Business model test : the financial asset is held within a business model whose objective is achieved by both collecting cash
flows and selling financial assets.
• Cash flow characteristic test : the contractual term of the financial asset gives rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
All other financial assets are measured at fair value through profit or loss.
Financial assets carried at amortised cost
A financial asset is subsequently measured at amortised cost if it is held in order to collect contractual cash flows and the
contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
Financial assets carried at fair value through other comprehensive income (FVTOCI): The Company
has equity investments in certain entities which are not held for trading. The Company has elected the fair value through other
comprehensive income irrevocable option for all such investments. Dividend on these investments are recognised in profit or
loss.
Financial assets carried at fair value through profit or loss (FVTPL): Investment in equity instrument are classified at fair
value through profit or loss, unless the Company irrevocably elects on initial recognition to present subsequent changes in fair
value in other Comprehensive Income for investments in equity instruments which are not held for trading.
Financial assets that do not meet the amortised cost criteria or fair value through other comprehensive income criteria are
measured at fair value through profit or loss. A financial asset that meets the amortised cost criteria or fair value through other
comprehensive income criteria may be designated as at fair value through profit or loss upon initial recognition if such
designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring
assets and liabilities or recognising the gains or losses on them on different bases.
Financial assets which are fair valued through profit or loss are measured at fair value at the end of each reporting period, with
any gains or losses arising on re-measurement recognised in profit or loss.
FINANCIAL LIABILITIES
Financial liabilities are classified at initial recognition as financial liabilities at fair value through profit or loss, loans and
borrowings, and payables, net of directly attributable transaction costs. The Company’s financial liabilities include loans and
borrowings including bank overdraft, security deposit received, trade payable, liabilities towards services and other payables.
All Financial Liabilities are recognised initially at fair value and transaction cost that is attributable to the acquisition of the
Financial Liabilities is also adjusted. Financial Liabilities are classified as amortised cost.
A Financial Liability is de-recognised when the obligation under the liability is discharged or cancelled or expired.
Consequently write back of unsettled credit balances is done on the previous experience of the management and actual facts of
each case and recognised in Other Income. When an existing Financial Liability is replaced by another, from the same lender
on substantially different terms, or the terms of an existing liability are substantially modified, such as exchange or modification
is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective
carrying amounts is recognised in the Statement of Profit and Loss.
Offsetting of Financial Instruments
Financial Assets and Financial Liabilities are offset and the net amount is reported in the balance sheet if there is a currently
enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets
and settle the liabilities simultaneously.
2.13 Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost less provision for
impairment. The Company follows ‘Simplified Approach’ for recognition of impairment loss allowance on trade receivables.
The application of simplified recognises impairment loss allowance based on lifetime ECL at each reporting date, right from
its initial recognition.
2.14 Cash and cash equivalents
Cash and cash equivalents includes cash in hand, cheques and drafts in hand, balances with bank and deposits with an original
maturity of three months or less, which are subject to an insignificant risk of changes in value.
2.15 Impairment of financial assets
The Company recognizes loss allowances using the expected credit loss for the financial assets which are not measured at
fairvalue through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at
an amount equal to lifetime expected credit loss.
2.16 Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision
Maker (CODM).
In accordance with Ind AS 108 - Operating Segments , the operating segments used to present segment information are
identified on the basis of internal reports used by the Company’s Management to allocate resources to the segments and assess
their performance. The Managing Director of the Company is the Company’s ‘Chief Operating Decision Maker’ or ‘CODM’
within the meaning of Ind AS 108. Based on CODM evaluation, the Company is engaged in the single primary business of
manufacturing and sale of ‘Coated Abrasives’.
2.17 Earning Per Share
Basic earning per share is computed by dividing the net income by the weighted average number of shares outstanding during
the year. Diluted earning per share is computed using the weighted average number of shares and diluted potential shares,
except where the result would be anti-dilutive.
2.18 Exceptional Items
Exceptional items are transactions which due to their size or incidence are separately disclosed to enable a full understanding
of the Company’s financial performance. Items which may be considered exceptional are significant restructuring charges and
significant disposal of fixed assets.
i. Capital reserve is Subscribed capital forfeited due to non- receipt of call money treated as Capital reserve.
ii. Securities Premium Reserve
Amount received in excess of face value of the equity & preference shares is recognized in Securities
Premium.
iii. Retained Earning
Retained earnings are the profits of the company earned till date less any transfers to general reserve,
dividends or any other distributions to shareholder.
iv. Other Comprehensive income
Other components of Equity includes Other Comprehensive Income arising due to investments valued
through Other Comprehensive income.
v. Preference Shares
The 6% Non- Cumulative Convertible Preference Shares have :
-The right to receive a fixed preferential dividend at specified rate on the paid up capital.
-The right in a winding up to have the capital paid up on such shares and the arrears, if any, of the said
preferential
dividend, whether earned or declared, be paid off in priority to any payment of capital on equity shares.
However, it shall
not confer the right to any further participation in the profits or assets of the Company.
Terms of Redemption:- The company has preference shares having a par value of Rs. 100 per share.
Resolution passed
by the shareholders of the company at their annual general meeting held on 08.09.2009 to convert the
Preference Shares
into Equity Shares could not be given effect in absence of in-principle approval from Bombay Stock
Exchange, which has
been kept in abeyance due to earlier listing issues yet to resolved in SEBI for conversion of equity share
application money
into equity share capital.
The Companyhas failed to convert Preference Shares as per the approval of shareholders in the AGM held on
08.09.2009. After elapse of 20 years of issue of Preference shares from the date of first allotment, the
company is in process of making application to relevent authority in terms of section 55(3) of the Companies
Act, 2013. In view of Losses no prefrence dividend is declared by the company.
The 14% cumulative redeemable preference shareholders have:-
The right to receive a fixed cumulative preferential dividend at specified rate on the paid up capital. In view
of Losses no prefrence dividend is declared by the company.
-The right to receive arrears of cumulative dividend, if any, whether earned or declared, at the time of
redemption of the
said shares, and
-The right in a winding up to have the capital paid up on such shares and the arrears, if any, of the said
preferential
dividend, whether earned or declared, be paid off in priority to any payment of capital on equity shares.
However, it shall
not confer the right to any further participation in the profits or assets of the Company.
Terms of Redemption:- Preference Shares shall be redeemable at the option of the Board any time not later
than five years from the date of allotment and such redemption shall be in accordance to the provisions of
the Companies Act 2013. The redemption was due in the year 2019. However, due to inadequancy of profits
in the Company, the Company has not been able to redeem the preference shares till date. The Preferece
Shareholder has filed case under section 138 of Negotiable Instruments Act. The matter is pending before
the court.
From banks:
* Term loan from a bank are repayable originally in monthly installments and secured by hypothecation
of vehicles acquired out of the loan.
Secured ICDs from lenders are carrying interest @ 12% p.a and are secured by way of Equitable
Mortgage on Free Hold Land of the Company and Hypothecation of Factory Building, Incl. Power
Plant, Turbine and Boiler and Plant and Machinery, Inventories and Book Debts.
The Managing Director has also executed Demand and Promissory Note of Rs. 1250 Lacs along with
interested thereon in favour of the Secured ICD Lenders.
For Related Party transactions, refer Note No. 33
Secured inter corporate deposits were due for repayments along with interest on 31/03/2024.
Company has not been able to make the repayment Refer Note No. 42 for Events after Balance Sheet
date
Matters are subject to legal proceedings in the ordinary course of business. The legal proceedings,
when ultimately conluded will not, in the opinion of the management, have a material effect on the
results of the operations or financial position.
B. Commitments
a. Capital commitments: Estimated amount of contracts remaining to be executed on capital account and
not provided for (net of advances) amounts to Rs. 566.32 (March 31, 2023: Rs. NIL).
b Guarantees
Guarantees: Rs. 300 Lakh (March 31, 2023: Rs. 300 Lakhs).
Note No. 30
Dislosure as required under IND AS 115 " Revenue from contract with Customers are given below:
A. Disaggregation of Revenue
Since the company operates in single segment of Paper & Paper Products all reported revenue is for that
segment only.
The Company has exposure to the following risks
arising from financial instruments:
- Credit risk ;
- Liquidity risk ; and
- Market risk - Interest rate
- Price risk - BSE / NSE Index
Risk management
framework
Financial risk management within the Company is governed by policies and guidelines approved by the senior
management and the Board of Directors. These policies and guidelines cover interest rate risk, credit risk and
liquidy risk. Company policies and guidelines also cover areas such as cash management, investment of
excess funds and the raising of short and long-term debt. Review of the financial risk is done regularly by the
senior management and the Board of Directors.
The maximum exposure to the credit risk at the reporting date is primarily from trade receivables.
Maximum Trade receivables are unsecured and are derived from revenue earned from customers
primarily located in India. The Company manages its credit risk through continuous monitoring
credit worthiness of customers to which the Company grants credit terms in the normal course of
business.
The Company establishes an allowance for impairment that represents its expected credit losses in
respect of trade receivable. The management uses a simplified approach (i.e. based on lifetime ECL)
for the purpose of impairment loss allowance. However the Company based upon historical
experience determines an impairment allowance for loss on receivables.
(iii) Market risk
Market risk is the risk that the future cash flows of a financial instrument will fluctuate
because of changes in market prices. Market risk comprises two types of risk: currency risk
and interest rate risk. The objective of market risk management is to manage and control
market risk exposures within acceptable parameters, while optimising the return.
The Company's operations are mainly in India and therefore rupee denominated, except
import of some raw materials and stores.
Currency risk
Currency risk is the risk that the future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates.
Exposure to currency risk
The Company did not have any exposure to currency risk, as expressed in Indian Rupees, as
at March 31, 2024 and March 31, 2023.
Note No 38
Financial instruments - Fair values and risk management -
continued
(iii) Market risk
Interest rate risk
Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of
changes in market interest rates.
Exposure to interest rate risk
The Company's interest rate risk arises majorly from the borrowings from banks carrying floating rate of
interest. The exposure of the Company's borrowing to interest rate changes as reported to the
management at the end of the reporting period are as follows:
(iv) Price Risk -
Senstivity
The company doesnot have any investment hence price risk senstivity is not applicable.
Note No 39
Capital management
For the purpose of the Company’s capital management, capital includes issued equity share capital and all other equity
reserves attributable to the equity holders of the company. The primary objective of the management of the Company’s
capital structure is to maintain an efficient mix of debt and equity in order to achieve a low cost of capital, while taking
into account the desirability of retaining financial flexibility to pursue business opportunities and adequate access to
liquidity to mitigate the effect of unforeseen events on cash flows.
The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions. To
maintain or adjust the capital structure, the Company may return capital to shareholders, raise new debt or issue new
shares.
The Company monitors capital on the basis of the debt to capital ratio, which is calculated as interest-bearing debts
divided by total capital (equity attributable to owners of the company plus interest-bearing debts).
DIVIDENDS
The Board of Directors of the Company have not recommended any dividend for the financial year 2023¬
2024 (Previous year : Nil)
Note No 40
The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and
postemployment benefits received Presidential assent in September 2020. The Code has been published
in the Gazette of India. However, the date on which the Code will come into effect has not been notified.
The Company will assess the impact of the Code when it comes into effect and will record any related
impact in the period the Code becomes effective.
Note No 41 : Additional regulatory information required by Schedule III for FY 2023-24 & 2022-23
(i) Details of Benami Property held :
No proceedings have been initiated on or are pending against the company for holding benami property under
the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
(ii) Wilful Defaulter
The Company has not been declared Willful defaulter by any bank or financial institution or government or
any government authority
(iii) Compliance with number of layers of companies
The company has complied with the number of layers prescribed under the Companies Act, 2013.
(iv) Compliance with approved scheme(s) of arrangements
The company has not entered into any scheme of arrangement which has an accounting impact on current or
previous financial year.
(v) Utilization of borrowed funds
A. 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
B. 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
(vi) Undisclosed income
There is no income surrendered or disclosed as income during the current or previous year in the tax
assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.
(vii) Details of Crypto currency or Virtual currency
The company has not traded or invested in crypto currency or virtual currency during the
current or previous year.
(viii) Valuation of PP&E, intangible asset and investment property
The company has not revalued its property, plant and equipment (including right-of-use assets) or intangible
assets or both during the current or previous year.
(ix) Registration of charges or satisfaction with Registrar of Companies:
There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond
the statutory period.
(x) Utilization of borrowings availed from banks and financial institutions:
No borrowings were availed during the year by the company from banks and financial institutions.
(xi) Relationship with Struck off companies
There are no transactions with companies struck off under section 248 of the Companies Act, 2013 or Section
560 of the Companies Act, 1956. There are no outstanding balances in respect of any such companies as at
March 31, 2024 or March 31, 2023.
Note 41.1
Due to technical reasons accounting software for maintaining company's books of account for the
financial year ended 31st March, 2024 did not have audit trail feature from 01st April'2023 to
07th August 2023. With effect from 08th August' 2023 accounting software has a feature of
recording audit trail (edit log) facility and the same has operated throughout the period from 08¬
08-2023 to 31-03-2024 for all relevant transactions recorded in the software.
Note No 42
Material Event After the Date of Balance Sheet
Two Secured Creditors who have given Secured Inter Corporate Deposits to the Company have
filed petition before National Company Law Tribunal (NCLT), Allahabad Bench under Section 7
of The Insolvency and Bankruptcy Code, 2016 to initiate Corporate Insolvency Resolution
Process, appointment of Insolvency Resolution Professional and declare a moratorium in
respect of all actions set forth in Section 14 of the Insolvency and Bankruptcy Code, 2016. NCLT
has issued Notice to the Company seeking response. The matter is pending before NCLT.
Note No 43
Material Uncertainty Related To Going Concern
As on 31st March, 2024, the company has accumulated losses of ^ 3,823.10 lakhs and incurred
Net Loss of ^ 1,948.32 lakhs year ended 31st March, 2024, and as of that date the company's
Current Liabilities exceeded its Current Assets by ^ 6,443.79 lakhs. The company has negative net
worth of ^. 1,856.63 lakhs as on 31st March, 2024. This indicates that a material uncertainly exists
that may cast significant doubt on the company's ability to continue as a Going Concern. The
management of the Company is taking steps to make company profitable and is also evalutating
methods to induct capital in the Company. Accordingly the Financial Results has been prepared on
Going Concern Basis.
Note No 44
Previous year figures have been regrouped/rearranged wherever, consi dered necessary.
As per our Report on even date
As per our Report on even date
For Jagdish Chand & Co For and on behalf of Board of Directors of
Chartered Accountants M/s Raama Paper Mills Limited
Firm Regn. No. 000129N
Pramod Agarwal Vandani Vohra
Managing Director Director
DIN: 00038838 DIN: 07848621
CA Abhinav Anand
(Partner)
Membership No. 529197
Place: Bijnor (UP) Himanshu Duggal Nirdesh Agarwal
Date: June, 04, 2024 Company Secretary CFO
UDIN: 24528197BKQFRK5157 PAN: ACDPH6376H PAN: AHDPA8176F
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