18.2 Rights, preferences and restrictions to the shareholders : Equity Shares
All equity shareholders are having right to get dividend in proportion to paid up value of each equity share as and when declared.
The Company has equity shares having at face value of ? 5 each. Each shareholder is entitled to one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
Nature & Purpose of the Reserve:
(A) Capital reserve: Capital reserve created on account of merger/amalgamation. The reserve will be utilised in accordance with the provisions of the Companies Act, 2013.
(B) Capital redemption reserve: Capital redemption reserve is being created by transfer from Retained earnings at the time of buy back of equity shares in accordance with the Act. The reserve will be utilised in accordance with the provisions of the Companies Act, 2013.
(C ) Securities premium: Securities premium is credited when shares are issued at premium. This will be utilised in accordance with the provisions of the Companies Act, 2013.
(D) General reserve: The General reserve is created by way of transfer of profits from retained earnings for appropriation purposes This reserve is utilised in accordance with the provisions of the Companies Act, 2013.
(E) Retained earnings: The balance consists of surplus retained from earned profits after payment of dividend and tax thereon. Acturial gains and losses for defined benefit plans are recognized through OCI in the period in which they occur. Re-measurement are not re-classified to the statement of profit and loss in subsequent period.
A. Securities for Term Loan from Banks:
(i) Terms Loans from Banks are secured by a joint equitable mortgage and /or hypothecation charges ranking pari-passu on immovable/movable properties situated at Banswara, Daman and Surat, both present and future of the Company and are also secured by second charge on current assets of the Company ranking pari-passu.
(ii) Term Loans from Banks amounting to ? 2,694.68 Lakhs (Previous Year ? 4,048.35 Lakhs) are guaranteed by Shri Ravindra Kumar Toshniwal (Managing Director) and Shri Shaleen Toshniwal (Jt. Managing Director) in their personal capacities as per sanctions of the respective Financial Institutions and Banks."
B. For Fixed deposits
(i) Fixed Deposits accepted by the Company are in accordance with the provisions of section 73(2)(a) and section 76 of the Companies Act, 2013 and rule 4(1) and 4(2) of the Companies (Acceptance of Deposits) Rules, 2014 are un-secured. Fixed Deposits are repayable within 1 to 3 years depending upon the terms of deposits.
(ii) Fixed Deposits Interest rate ranging from 8.50% to 9.00% (Previous Year 8.50 % to 9.50%).
(iii) In accordance with provision of section 73(2) of the Companies Act, 2013 the Company has deposited adequate amount in Deposit Repayment reserve Account with Schedule Bank.
25.1 Securities and Guarantees
(i) Cash Credit Facility and Export Packing Credit Facility from banks are secured by way of hypothecation (Floating charges)
of Raw material, Dyes-Chemicals, Packing Materials, Stores & Spares, Stock-in-process, Finished goods, Book debts, Export Incentives and second charge on all the Property , Plant and Equipments (situated at Banswara, Daman & Surat) of the Company and also guaranteed by Shri Ravindra Kumar Toshniwal (Managing Director) and Shri Shaleen Toshniwal (Jt. Managing Director) in their personal capacities.
(ii) Cash Credit Facility and Export Packing Credit Facility Interest rate ranging from 7.50% to 9.15% (Previous Year from 5.50% to 8.70%).”
“*The company has deposited ? 4.30 Lakhs representing unpaid dividend for the Financial Year 2011-12 to the Investor Education and Protection Fund (“”IEPF””) vide Challan No.U56885791 dated 4th December, 2019. The company also filed a Statement in Form IEPF on 22 October 2019. The said amount was erroneously returned by IEPF authority with out any reason and credited to our Bank account. The company have lodged a complaint to IEPF authority in this regard and awaiting clearance from their side. Except the amount stated as above, there are no amounts due and outstanding to be credited to the Investor Education and Protection Fund at the year end.”
The Company has recognised an expenses of ? 2,228.91 Lakhs (Previous Year ? 2,136.11 Lakhs) towards the defined contribution plan.
In accordance with the Employees Provident Fund & Miscellaneous Provisions Act, 1952, employees are entitled to receive benefits under the Provident Fund. Both the employees and the employer make monthly contributions to the plan at a predetermined rate of an employee's basic salary.These contributions are made to the regional fund administered and managed by the Employees Provident Fund Organisation (EPFO). The Company has no further obligations under the fund managed by the EPFO beyond its monthly contributions which are charged to the statement of profit and loss in the period they are incurred.
B) Defined benefits plan
The Company has following post employment benefits which are in the nature of defined benefit plans:
Gratuity
The Company provides for gratuity payable to employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary divided by 26 days multiplied for the number of years of service. The gratuity plan is a funded plan administered by a Trust and the Company makes contributions to Life Insurance Corporation of India (LIC).
Description of Risk Exposure
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
a) Asset volatility
“The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. Most of the plan asset investments are in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimize risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. the Company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. the Company intends to maintain the above investment mix i n the continuing years.”
b) Discount rate
A decrease in discount rate will increase plan liabilities, although this will be partially offset by an increase in the value of the plans' bond holdings.
c) Inflation risks
In the pension plans, the pensions in payment are not linked to inflation, so this is a less material risk.
d) Life expectancy
The pension plan obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plans’ liabilities. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy.
(e) Investment Risk
If Plan is funded then assets liabilities mismatch and actual investment return on assets lower than the discount rate assumed at the last valuation date can impact the liability.
(f) Salary Increases
Actual salary increases will increase the Plan’s liability. Increase in salary increase rate assumption in future valuations will also increase the l iability.
(g) Mortality & disability - Actual deaths and disability cases proving lower or higher than assumed in the valuation can impact the liabilities.
(h) Withdrawals - Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent valuations can impact Plan’s liability.
The Company ensures that the investment positions are managed within an asset-liability matching (ALM) framework that has been developed to achieve long-term investments that are in line with the obligations under the employee benefit plans. Within this framework, the Company’s ALM objective is to match assets to the pension obligations by investing in long-term fixed interest securities with maturities that match the benefit payments as they fall due and in the appropriate currency.
the Company actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising from the employee benefit obligations. the Company has not changed the processes used to manage its risks from previous periods. the Company uses derivatives to manage some of its risk. Investments are well diversified, such that the failure of any single investment would not have a material impact on the overall level of assets.
C) Other Long Term Employee Benefit
Leave Policy
Other long term employee benefit includes earned leave to the employees of the Company which accrue annually for 24 days. Earned leave can be accumulated up to 90 days while in service. These accumulated earned leave are encashable at the time of retirment or leaving the services of the Company. The scheme is unfunded and liability for the same is recognised on the basis of actuarial valuation. A provision of ? 98.42 Lakhs (Previous Year: ? 140.55 Lakhs) have been made on the basis of actuarial valuation and debited to the Statement of Profit and Loss.
Amount of ? 188.64 Lakhs (Previous Year; ? 204.33 Lakhs) is recognised as expenses and included in Note No 36 “Employee benefit expenses11
As Lessor
(A) Operating Lease
The Company has entered into operating leases on its office buildings. These leases have terms of 10 to 15 years. All leases include a clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions. The total rents recognised as income during the year is ? 14.58 Lakhs (Previous Year: ? 14.41 Lakhs). Future minimum rentals receivable under non-cancellable operating leases as follows:
Note No. 45.
Disclosure as per Ind AS 21 ‘The Effects of Changes in Foreign Exchange Rates
The amount of exchange differences (net) credited to the Statement of Profit & Loss is ? 643.33 Lakhs (Previous Year : ? 727.39 Lakhs).
Note No. 46. Disclosure of Corporate social responsibility (CSR)
As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education, art and culture, healthcare, environment sustainability, disaster relief, and rural development projects. A CSR committee has been formed by the Company as per the Act. The funds were primarily allocated to a corpus and utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013:
A. Gross amount required to be spent by the Company during the Current Year ? 187.50 Lakhs (Previous Year ? 168.00 Lakhs)
Note No. 50. Disclosure as Per Ind AS 115 Revenue from Contracts with Customers A. Applicability of Ind AS 115
The Company has followed the IND AS 115 during the year. All service contracts have an original duration of one year or less and therefore the company uses practical expedient to not disclose unsatisfied performance obligations
Performance obligation
Information about the Company's performance obligations are summarised below:
a) Income from Sale of Goods
Revenue from sale of products are recognized at a point in time on transfer of promised product to customer upon transfer of control in an amount that reflects the consideration that the company expects to receive in exchange for those product. The performance obligation is satisfied upon delivery of goods and payment is generally due within 30 to 180 days from delivery. The contract generally provide customers with a right to early payment rebate which give rise to variable consideration subject to constraint.
b) Income from Rendering of Services
Income from sale of services is recognised when the company satisfies performance obligation by transferring promised services to the customer i.e. at a point in time.
Note No. 51. Disclosure as per Ind AS 108 ‘ Operating segment'
(a) The Company is engaged in production of textile products having integrated working and captive power generation. For management purpose, Company is organized into major operating activity of the textile products. The Company has no activity outside India except export of textile products manufactured in India. Thereby, no geographical segment and no segment wise information is reported.
A) Capital management
For the purpose of the Company’s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to ensure that it maintains an efficient capital structure and healthy capital ratios in order to support its business and maximise shareholder value.
The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions or its business requirements. 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 Company monitors capital using a gearing ratio and includes within net debt, interest bearing loans and borrowings less cash and short-term deposits (including other bank balance).
B) Financial risk management Financial Risk Management
The Company’s principal financial liabilities comprise Borrowings, trade payables, Lease Liabilities and other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include trade & other receivables, cash & cash Equivalent, Investment, deposits & other assets.
(a) Credit Risk
(b) Liquidity Risk
(c) Market Risk
(i) Foreigen Currency Risk
(ii) Interest Rate Risk
The Company's Financial Risk Management is an integral part of how to plan and execute its business strategies. The Company's financial risk management is set by the Managing Board.
(a) 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 resulting in a financial loss to the Company. Credit risk arises principally from trade receivables, loans & advances, cash & cash equivalents and deposits with banks and financial institutions.
Trade Receivable
Customer credit risk is managed by each business unit subject to the Company's established policy, procedures and control relating to customer credit risk management. Trade receivables are non-interest bearing and are generally on 30 days to 180 days credit term (Payment Terms). Credit limits are established for all customers based on internal rating criteria. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit. The Company has no concentration of credit risk at the customer base is widely distributed both economically and geographically. An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account available external and internal credit risk factors such as financial condition, ageing of outstanding and the Company's historical experience of customers. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 12. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets. The requirement of impairment is analysed at each reporting date.
Other Financial Instruments and Cash & Cash Equivalent
The Company maintain its cash & cash equivalent in current account to meet the day to day requirements, in fixed deposits for bank margin & to meet regulatory requirements for repayment of deposits and other term deposits. The credit risk of these instruments are limited as the counter part of these financial instruments are banks with high credit rating assigned by international credit rating agencies. Other financial instruments are loan given to employee. The Company's maximum exposure to credit risk for the component of the Balance Sheet as of 31 March 2025 & 31 March 2024 is the carrying amount as disclosed in Note 11,12,15 & 16.
Provision for Expected Credit or Loss
(i) Financial assets for which loss allowance is measured using 12 month expected credit losses.
The Company has assets where the counter-parties have sufficient capacity to meet the obligations and where the risk of default is very low. Accordingly, no loss allowance for impairment has been recognised.
(ii) Financial assets for which loss allowance is measured using life time expected credit losses
The Company provides loss allowance on trade receivables using life time expected credit loss and as per simplified approach. Ageing of trade receivables
(b) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation.
c) Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Company’s income. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
The Board of Directors is responsible for setting up of policies and procedures to manage market risks of the Company. All such transactions are carried out within the guidelines set by the Managing Board.
(i) Foreign Currency Risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company is exposed to foreign currency risk on certain transactions that are denominated in a currency other than entity’s functional currency, hence exposure to exchange rate fluctuations arises. The risk is that the functional currency value of cash flows will vary as a result of movements in exchange rates. The company uses forward contracts to mitigate its risk from foreign currency fluctuations.
Derivative instruments and unhedged foreign currency exposure
The Company’s investment consists of investments in publicly traded companies held for purposes other than trading. Such investments held in connection with non-consolidated investments represent a low exposure risk for the Company and are not hedged.
As at 31 March 2025 the Company does not have material exposure to listed or unlisted equity price risk.
(ii) Interest Rate Risk
Interest rate risk arises from the sensitivity of financial assets and liabilities to changes in market rates of interest.
The Company is exposed to interest rate risk arising mainly from long term borrowings with floating interest rates. The Company is exposed to interest rate risk because the cash flows associated with floating rate borrowings will fluctuate with changes in interest rates. The Company manages the interest rate risks by entering into different kinds of loan arrangements with varied terms.
Fair Value Hierarchy
This section explains the judgments and estimates made in determining the fair values of the financial instruments that are:-
(a) recognised and measured at fair value and ;
(b) measured at amortised cost and for which fair values are disclosed in financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into three levels prescribed under the accounting standard.
Fair value are categorised into different level in a fair value hierarchy which are as follows:
Level 1 : Level 1 hierarchy includes financial instruments measured using quoted prices.
Level 2 : The fair value of financial instruments that are not traded in an active market is determined using valuation
techniques which maximize the use of observable market data and rely as little as possible on entity specific estimates.
Level 3 : If one or more of the significant inputs is not based on observable market data, the instrument is included in
Level 3 is determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable market transactions and dealer quotes of similar instruments.
Valuation Techniques used to determine fair values:
A) Specific valuation technique is used to determine the fair value of the financial instruments which include:
i) For financial instruments other than (ii) and (iii)- the use of quoted market prices.
ii) For financial liabilities (domestic currency loans) :- appropriate market borrowing rate of the entity as of each balance sheet date used.
iii) For financial assets (employee loans) : appropriate market rate of the entity as of each balance sheet date used.
B) Financial Instruments By Category
Set out below categorised table of financial instruments measured at FVTPL and Amortised Cost, no such instument is measured at Fair value through Other Comprehensive Income (FVTOCI) :-
1. During the year profitbaility of the company was lower due to subbed demand and Pricing pressure has impacted profitability of
the Company
Note No. 55. Some of the balances shown under Trade Receivables, Advances and Trade Payables are subject to confirmation
and reconciliation. The Company has been sending letter for confirmation to parties and does not expect any material dispute w.r.t.
the recoverability/payment of the same.
Note No. 56.
Additional Regulatory Information in Schedule III:
a) All the Title deeds of Immovable properties (other than properties where the Company is the lessee and the lease agreement are duly executed in favour of the lessee) are in the name of the Company.
b) The Company does not have any investment property, hence the question of disclosure and valuation by a registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 does not arise.
c) The Company has not revalued its Property, Plant and Equipment (including Right of Use assets) or intangible assets or both during the year.
d) During the year the Company has not given Loan.
e) Benami property : There are no proceedings being initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
f) The Company had Borrowed secured Loan from Banks against current assets
i) Quarterly returns or statements of current assets filed by the company with banks or financial institutions are in agreement with the books of accounts.
ii) As returns/ statements of current assets are in agreement with the books of account, summary of reconciliation and reasons of material discrepancies, if any to be adequately disclosed does not arise.
(g) Wilful Defaulter : the Company has not been declared as wilful defaulter by any bank or financial institution or other lender.
(i) Registration of charges or satisfaction with Registrar of Companies:- There are currently no outstanding charges or satisfactions pending registration with the Registrar of Companies beyond the stipulated statutory period, except for two instances where charge pending to satisfied:
1. The Industrial Credit & Investment Corporation of India Ltd. (? 10 Lakhs), and
2. Rajasthan State Industrial Development & Investment Corporation Ltd. (? 45 Lakhs).
These charges were created on 26-02-1982 and 30-10-1981, respectively, with the Registrar of Companies in Jaipur. The Company is in process for satisfication for these charges.
(j) The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act read with the Companies (Restriction on number of Layers) Rules, 2017.
(k) Detailed Ratio analysis given in note number 54.
(l) There are no Scheme of Arrangements as on March 31,2025
(m) Utilisation of borrowings availed from banks :-The borrowings obtained by the company from banks have been applied for the purposes for which such loans were was taken and funds raised on short term basis have not been utilised for long term purposes.
(n) Additional information to be disclosed by way of Notes to Statement of Profit and Loss
i) The Company does not have any undisclosed income as on March 31,2025.
ii) The Company does not have any details of Crypto Currency or Virtual Currency as on March 31,2025.
(o) Utilisation of borrowed funds and share premium
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 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:
i. 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
ii. provide any guarantee, security or the like on behalf of the ultimate beneficiaries Note No. 57. Events occurring after the Balance Sheet Date : - Proposed Dividend
The Board of Directors of the Company have recommended payment of final dividend of ? 1/- per equity share of face value of ? 5/- each for the financial year ended 31st March 2025, subject to the approval of shareholders at the ensuing Annual General Meeting and if approved, would result in a cash outflow of ? 342.32 lakhs.
The details of loans, gurantees and investment under section 186 of the Companies Act, 2013 read with Companies (Meeting of Board and its Powers) Rules, 2014 are as follows:
(i) Details of Investment made are given in Notes 6 of the financial statement.
(ii) There are no guaranatees issued by the Company as at 31 March 2025 and 31 March 2024
(iii) Loan given to wholly owned subsidiary Current year ? Nil (Previous Year ?. Nil Lakhs)
Note No 59 Other Receivables
During the year cash embezzlement was done by an employee of the Company for ? 42.66 Lakhs. An FIR has been lodged with the police, and appropriate legal proceedings are currently underway. Management views this as an isolated case of misconduct, and no significant changes to internal controls are deemed necessary.
Note No. 60. Disclosure as required by Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015
A. Loans and advances in the nature of loans To Joint Venture : Nil
To Wholly Owned Subsidiary : ? Nil (Previous Year ? Nil Lakhs)
B. Investment by the loanee : Nil
Note No. 61. Certain Prior year amounts have been reclassified for consistency with the current period presentation. These reclassification have no effect on the reported results of operations.
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