2.1 Depreciation and Amortisation :
The aggregate depreciation charge for the year has been included under depreciation and amortisation expense in
2.2 Impairment of Assets :
The Company has carried out the exercise of assessment of any indications of impairment to its property, plant and equipment as on the Balance Sheet date. Pursuant to such exercise it is determined that there has been no
2.3 Contractual obligations:
Refer Note no. 32 for disclosure of contractual commitments for the acquisition of property, plant and equipment,
2.4 Title deeds of immovable properties not held in name of the company :
2. Property, Plant and Equipment (Including Right of Use Assets) & Intangible Assets
The title deeds of all the immovable properties (other than properties where the company is the lessee and the lease agreements are duly executed in favour of the lessee), as disclosed in Note no. 2 to the financial statements,
2.5 Revaluation of Property, Plant and Equipment:
The Company has not revalued its property, plant and equipment (including Right-of-Use Assets) and intangible
2.6 Effect of Transition from AS to Ind AS
The Company has elected to continue with the carrying value of its Property Plant & Equipment (PPE) & Intangible assets recognised as of April 1, 2022 (transition date) measured as per the Previous GAAP and used that carrying
2.7 The company has found that some employees have taken up unauthorized residence on the company's land or factory premises, setting up huts, makeshift shelters, rooms, or quarters. Despite requests to vacate, these individuals have refused to leave. As part of the settlement between the Company and the Textile Labour Union, and in compliance with the order of the Honorable High Court of Gujarat, it is mandated that resigning employees must first vacate any such occupied hut / chhapra / room/ quarter within the mill premises. They are required to hand over possession of these spaces to the Mill Management. Subsequently, within a sixty-day period, the Mill
1) The Company has an investment of Rs. 25.00 Lakhs in 25,000 equity shares of Murbad Alloy Castings Private Limited (MACPL). The Company assesses the indicators of
2) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
3) The Company has complied with the number of layers for its holding in downstream companies prescribed under clause (87) of section 2 of the Companies Act, 2013
read with the Companies (Restriction on number of Layers) Rules, 2017.
1) Inventories as on March 31, 2024 are physically verified and the amount is adjusted for any discrepancies.
2) Valued at lower of cost and Net Realisable value unless otherwise stated (Refer accounting policies) and derived on the basis of weighted average cost.
12.1 Right, Preferences and restrictions attached to Equity Shares :
The company has only one class of equity shares having a per value of Rs. 10 per share. Each shareholder is eligible for one vote per share held. The final dividend, whenever proposed by the Board of Directors is subject to approval of the shareholders in ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation of the Company, the equity share holders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
12.2 Issue of Bonus Shares
The Authorised Share Capital of the company is ^ 25,00,00,000 (divided into 2,50,00,000 Equity Shares with of Rs. 10/-each). Paid up & Subscribed Capital of the Company was ^ 3,11,28,750 (divided into 31,12,875 Equity Shares with of Rs. 10/-each) as on April 01, 2022. The Company has capitalized its profit into Shares and issued Bonus Shares to its shareholders on the basis of 1:1 (one (1) bonus shares for every one (1) equity share held) on the entitlement date being October 13, 2023. During the FY 202223, the Company has issued Bonus Shares and hence, the numbers of the Company's Share Capital and Number of Equity Shares has been increased. The calculation of basic and diluted earnings per share is adjusted for all the periods presented.
3) During the Year 2021-22, Ex-promoters named Mr. Phulchand Agarwal and M/s. Phulchand Exports Pvt Ltd. has transferred their shares via off-market transaction InterSe to the Promoter Ms. Prerna Agarwal and Mr. Pradeep Agarwal has transferred their shares via gift to the Promoter Ms. Prerna Agarwal. However, the same shares were credited into the demat account of Ms. Prerna Agarwal during the first week of April, 2022.
4) There is no change in shares held by promoters' For the Year 2023-24
1) Retained Earnings: Retained earnings are the profits thattheCompany hasearnedtill date less any transfersto general reserve, dividends, utilisations or other distributions paid to shareholders.
2) Other Comprehensive Income:
The fair value change of the investments measured at fair value through other comprehensive income recognised through Other Comprehensive Income. Upon derecognition the cumulative fair value changes on the said investments except equity investments are reclassified to the Statement of Profit and Loss. Accumulated gain or loss on employee benefits also recognised through other comprehensive income.
1) Refer provision for employee benefits note no. 33
2) The Company's liability towards gratuity, retrenchment compensation and other employees'benefits have been considered as a current liability since the provision for the same has been made in past and are payable immediately on receipt of the resignations from the employees of the Textile Mill.
3) Consequent to the Honorable High Court's order dated February 15, 2008, the company has already made the provision for gratuity relating to all employees in earlier
years of the closure of the years April, 1997 to March, 2007. The liability (other than gratuity) in respect of retrenchment compensation and salary, the company has made the payment to the workers on the basis of resignation received from the employees and accounted for in the books in earlier years. Similarly, the company had also made the provisions for all unresigned employees including employees from whom resignations are yet to be received in terms of the order of High Court dated February 15, 2008, which isamounting to Rs.1,58,91,229/- as on 31/03/2023 (Rs.1,60,41,229/- as on 31/03/2022).
4) Provision for other Employee Benefits', which include worker's dues have been ascertained on the basis of available records with the Company and are subject to
adjustments. Pending final settlement of dues, the payments to workers included in advance to employees, as per court order amounting to Rs.7,62,506/- (Previous
period Rs.7,62,506/-) made in earlier years has been adjusted against liability provided/paid in pursuance of the Order.
1) Employee Benefits:
The Company's contribution paid/payable during the year to the Provident Fund/ Gratuity Fund is charged to the Statement of Profit and Loss. The gratuity liability, as per the payment of Gratuity Act is payable up to March 13, 1995 to all eligible workers. In terms of the Order dated January 23, 2004 of the Honorable BIFR, and order dated February 15, 2008 of the Honorable High Court ofGujarat, provisions for Gratuity to all the eligible workers have been provided for on an arithmetic calculation basis.
1) Retrenchment Expenses:
Retrenchment compensation and salary for the closure period is required to be paid on receipt of resignation from the employees and vacating the hut/ chhapra/ room/ quarter in the mill premises occupied by them in terms of Order dated February 15, 2008 passed by the Honorable Gujarat High Court. Accordingly, the company has already made provisions for retrenchment compensation and salary for the closure period in past.
It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above, pending resolution of the respective proceedings as it is determinable only on receipt of judgments/decisions pending with various forums/ authorities.
The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial results.
At officer level the decision was not in favour of the company, therefore, thecompany hasappealed in Commisioner of appeal. Therefore,the company has recognised it as contingent liabilities.
B. Commitments:
Estimated amount of contracts remaining to be executed on capital account and not provided for net of advances, Rs. NIL Lakhs (previous year Rs. NIL Lakhs). 33 Disclosures Regarding Employee Benefits
As per Indian Accounting Standard 19 "Employee Benefits" the disclosures are given below:
1). Defined Contribution Plan:
Contribution to defined contribution plan, recognised as expense for the year is as under:
1) Defined Contribution Plan: Employee benefits in the form of Provident Fund are considered as defined contribution plan and the contributions to Employees Provident Fund Organisation established under The Employees Provident Fund and Miscellaneous Provisions Act 1952 and Employees State Insurance Act, 1948, respectively, are charged to the profit and loss account of the year when the contributions to the respective funds are due.
2) Defined Benefit Plan: Retirement benefits in the form of Gratuity are considered as defined benefit obligation and are provided for on the basis of third party actuarial valuation, using the projected unit credit method, as at the date ofthe Balance Sheet.
Every Employee who has completed five years or more ofservice is entitled to Gratuity on terms not less favorable than the provisions ofThe Payment of Gratuity Act,
1972.
As the Company has not funded its liability, it has nothing to disclose regarding plan assets and its reconciliation.
34 The Company had suspended its operations at Ahmedabad since March 13, 1995 due to financial constraints and labour unrest. The Company was declared as a Sick Unit
within the meaning of Section 3(1)(o) of the Sick Industrial (Special Provisions) Act, 1985 (SICA). The Board for Industrial and Financial Reconstruction (BIFR) vide its Order
dated August 22, 2006 has discharged the Company from the purview of SICA. The net worth of the Company has been represented by positive signs and recovered from the huge erosion as compared to past years financial results.
35 The company had vide its letter dated September 19,2005 applied to the Income tax Department for granting relief and concessions in accordance with the sanctioned
Revival Scheme of BIFR vide their Order dated January 23, 2004. Further, the BIFR vide its discharge Order dated August 22, 2006, issued directives to the Income tax department to exempt the Company from payment of capital gain tax and permit the Company to set off the capital gains, if any, against accumulated losses of the Company. However, the Income tax department filed an appeal before the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) against the said directives of BIFR which was rejected by AAIFR vide its order dated 10th June 2008. In the financial year 2006-07 relevant to A.Y. 2007-08 the Assessing Officer has interpreted the order of BIFR and AAIFR that set-off of accumulated business loss against the Capital Gain beyond 8 years is not allowable and accordingly the demand was raised by the Income Tax Department. The said demand was challenged by the company by filing an appeal before the CIT (Appeal). The CIT(Appeal) has decided the appeal in favour of the company. The Income Tax Department preferred an appeal before the ITAT and the ITAT has given the judgment in favour of the company.
36 The Company and the Textile Labour Union arrived at a settlement in respect of employees' dues on February 11, 2008 and the same has been modified by the
Honorable High Court of Gujarat on February 15, 2008 as a result of which the Company is liable to pay in respect of such settlement, an amount aggregating Rs. 15 crores (approx.) to 848 employees on the condition precedent, that the payment will be made to the concerned employee within sixty days after his resignation is received and in respect of the employees concerned having hut/chhapra/room/quarter in the mill premises and he is a beneficiary of the settlement/ order, he shall have to first vacate the hut/chhapra/room/quarter occupied by him in the mill premises and shall have to first handover possession thereof to the Mill Management and thereafter, within sixty days period, the Mill Management will pay the amount to the concerned employee as per the consent terms. The Honorable High Court further held that the closure declared by the Mill Management is legal and valid.
37 Consequent to the Honorable High Court's order dated February 15, 2008, the company has already made the provision for gratuity relating to all employees in earlier years of the closure of the years April, 1997 to March, 2007. The liability (other than gratuity) in respect of retrenchment compensation and salary, the company has made the payment to the workers on the basis of resignation received from the employees and accounted for in the books in earlier years. Similarly, the company had also made the provisions for all unresigned employees including employees from whom resignations are yet to be received in terms of the order of High Court dated February 15, 2008, which isamounting to Rs.1,58,91,229/- as on 31/03/2023 (Rs.1,60,41,229/- as on 31/03/2022).
38 First time adoption of Ind AS Transition to Ind AS
These are the Company's first financial statement prepared in accordance with Ind AS.
38.1 Exemptions and exceptions availed
The accounting policies set out in Note 1, have been applied in preparing the financial statements for the period ended March 31, 2024, the comparative information presented in these financial statements for the year ended March 31, 2023 and in the preparation of opening Ind AS balance sheet as at April 1, 2022. In preparing its opening balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explaination of how the transition from from previous GAAP to Ind AS has affected the Company's financial position, financial performance and cash flows is set out in the following tables and notes.
Ind AS optional exemptions cost
Deemed cost:- Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment, Intangible Assets, Investment property, and Investment in subsidaries / joint venture / associates, as recognised in the financial statements as at the date of transition to Ind AS, measured as for the previous GAAP and use that as its deemed cost as at date of transition after making necessary adjustments for decommissioning liabilities. Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying values as at April 1, 2022.
38.2 Ind AS mandatory exeptions De-recognition of financial assets and liabilities:-
Ind As 101 requires a first time adopter to apply the de-reconginition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements in Ind AS 109 restrospectively from a date of the entity's choosing, provided that the information needed to apply AS 109 to financial assets and Financial liabilties de-recongnised as a result of past transactions was obtained at the time of initially accounting for those transactions. The Company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS, wherever applicable.
Classification and measurement of financial assets:-
Ind AS 101 requires an entity to assess classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exist at the date transition to Ind AS.
Impairment of financial assets:-
An entity shall determine the approximate credit risk at the date that financial instruments were initially recognized and compare that to the credit risk at the date of transition to Ind AS. This should be based on reasonable and supportable information that is available without undue cost or efforts. If any entity is unable to make this determination without undue cost or effort, it shall recognise a loss allowance at an amount equual to lifetime expected credit losses at each reporting date untill that financial instrument is de-recognised. The Company has this exception to analyse credit risk of the financial assets as the date of transition insteated ofthe date of initial recognition.
39 Financial Instruments and Risk Review
i) Capital Management
The company's objective when managing capital is to:
Safeguard its ability to continue as a going concern so that the Company is able to provide maximum return to stakeholders and benefits for other stakeholders and maintain an optimal capital structure to reduce the cost of capital.
The company's Board of directors reviews the capital structure on a regular basis. As part of this review, the board considers the cost of capital risk associated with each class of capital requirements and the maintenance of adequate liquidity. Consistent with others in the industry, The Company monitors capital based on the following gearing ratio:
Net debt (total borrowings and lease liabilities net of cash and cash equivalents and deposits with Banks and Financial Institutions) divided by Total 'equity' (as shown in the balance sheet).
Disclosures
This section givesanoverviewofthe significanceof financialinstrumentsfor theCompanyandprovidesadditionalinformation onbalance sheet items that contain financial instruments.
The details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognized in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note provided hereunder:
The management assessed that the fair values of short term financial assets and liabilities significantly approximate their carrying amounts largely due to the short term maturities of these instruments. The fair value of financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction among willing parties, other than in a forced or liquidation sale. The Company determines fair values of financial assets and financial liabilities by discounting contractual cash inflows/ outflows using prevailing interest rates of financial instruments with similer terms. The fair value of investment is determined using quoted net assets value. Further, the subsequent measurement of all finance assets and liabilities (other than investment) is at amortized cost, using the effective interest method.
2) Discount rates used in determining fair value
The interest rate used to discount estimated future cash flows, where applicable, are based on the incremental borrowing rate of the borrower which in case of financial liabilities is the weighted average cost of borrowing of the Company and in case of financial assets is the average market rate of similar credits rated instrument. The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available. In addition, the Company internally reviews valuation, including independent price validation for certain instruments. Fair value of financial assets and liabilities is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique.
3) The following methods and assumptions were used to estimate fair value:-
a) Fair value of short term financial assets and liabilities significantly approximate their carrying amounts largely due to the short term maturities of these instruments.
b) The fair value of the Company's interest borrowing received are determined using discount rate reflects the entity's borrowing rate as at the end of the reporting period. The own non performance risk as at the end of reporting period was assessed to be insignificant.
4) Fair value hierarchy:
All financial instruments for which fair value is recognized or disclosed are categorized within the fair value hierarchy described as follows, based on the lowest level input that is significant to the fair value measurement as a whole.
Level: 1 - Quoted (unadjusted) price is active market for identical assets or liabilities.
Level: 2 - Valuation technique for which the lowest level input that has a significant effect on the fair value measurement are observed, either directly or indirectly.
Level: 3 - Valuation technique for which the lowest level input has a significant effect on the fair value measurement is not based on observation market data.
5) Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
a) the fair value of the remaining financial instruments is determined using discounted cash flow analysis.
b) the use of quoted market prices or dealer quotes for similar instruments
6) The carrying amounts of trade receivables, trade payables, dealer deposits, cash and bank balances, deposits, loans, borrowings and other current financial liabilities and financial assets are considered to be the same as their fair values, due to their short-term nature. The fair values for long term loans to others and long term borrowings were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counter party credit risk. The security deposits are receivable on demand and hence their carrying amount is considered as fair value.
For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.
41 Financial Risk Management Objectives
While ensuring liquidity is sufficient to meet Company's operational requirements, the Company's financial management committee also monitors and manages key financial risks relating to the operations of the Company by analysing exposures by degree and magnitude of risks. These risks include market risk (including currency risk and price risk), credit riskand liquidity risk.
Market Risk
Market risk is the risk of uncertainty arising from possible market price movements and their impact on the future performance of a business. The major components of market risk are price risk and interest rate. Financial instruments affected by market risk include FVTPL investments, trade payables, trade receivables, etc.
Interest Rate Risk
It is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group's exposure to the risk of changes in market interest rates relates primarily to the Group's debt obligations with floating interest rates.
Liquidity Risk
The Company manages liquidity risk by maintaining sufficient cash and cash equivalents including bank deposits and availability of funding through an adequate amount of committed credit facilities to meet the obligations when due.
Management monitors rolling forecasts of liquidity position and cash and cash equivalents on the basis of expected cash flows. In addition, liquidity management also involves projecting cash flows considering level of liquid assets necessary to meet obligations by matching the maturity profiles of financial assets & liabilities and monitoring balance sheet liquidity ratios.
The following tables detail the Company's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The information included in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.
The contractual maturity is based on the earliest date on which the Company may be required to pay.
43 Certain Balance of Debtors, Creditors, Loans & Advances are non- moving / sticky . However in view of the management, the same is recoverable / payable. Hence no provision for the same is made in the books of accounts.
44 In the opinion of the Board of Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and the provisions for depreciation and all known and ascertained liabilities are adequate and not in excess of the amounts reasonably necessary.
45 The balance confirmation from the suppliers, customers as well as to various loans or advances given have been called for, but the same are awaited till the date of audit. Thus, the balances of receivables, trade payables as well as loans and advances have been taken as per the books of accounts submitted by the company and are subject to confirmation from the respective parties.
46 Previous year's figures have been regrouped and rearranged wherever necessary.
47 Segment Reporting
a) The Company operates in a single principal geographical area i.e. India and it has no reportable segments under Ind AS 108 "Operating Segments".
48 Benami Transactions
There is no proceedings has been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
49 Wilful Defaulter
The Company has not been declared wilful defaulter by any bank or financial institutions or other lender.
50 Transactions with Struck off Companies
Asstated& Confirmed bythe Board ofDirectors,TheCompanyhasnot undertaken any transactions nor has outstandingbalancewith theCompanyStruck Off either under section 248 ofthe Act or under Section 560 of Companies act 1956.
51 Satisfaction of Charge/Creation of Charge
There is no charges or satisfaction yet to be registered with ROC beyond the statutory period.
52 Number of Layers of Subsidiary
The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of layers) Rules, 2017.
53 Undisclosed Transactions
As stated & confirmed by the Board of Directors, 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.
54 Loan or Investment to Ultimate Beneficiaries
As stated & Confirmed by the Board of Directors, 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
55 Loan or Investment from Ultimate Beneficiaries
As stated & Confirmed by the Board of Directors ,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
56 Utilization of Term Loans
The Company has not availed term loans.
57 Working Capital
The company does not have any sanctioned loan from the Banks or financial institutions in excess of Rs. 5.00/- Crores, therefore disclosure related to security of current assets against borrowings, is not applicable.
58 Title deeds of Immovable Property
The title deeds of immovable properties are in the name of the company, except the lease hold premises, if any.
59 Intangible Assets under Development
The company do not have any intangible assets under development , therefore disclosure related to ageing, is not applicable.
60 AuditTrail
The company has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software.
61 Capital WIP Ageing
The company do not have any immovable property under construction. Therefore, disclosure related to ageing is not applicable.
62 Crypto Currency
The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
Notes referred to herein above form an integral part of the Financial Statements
Notes to the reconcilliations:
i) These financial statements of Company for the year ended March 31, 2024 have been prepared in accordance with Ind AS. For the purposes of transitions to the Ind AS, the company has followed the guidance prescribed in AS 101, First-time adoption of Indian Accounting Standards, with April 1, 2022 as the transition date and IGAAP as per previous GAAP.
ii) The Company has elected to measure its financial assets and liabilities at fair value at the date of transition to Ind AS. Income/ Expenses on such Gain on such fair valuation have been recognised in the opening retained earnings as at April 01, 2022.
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