(a) As per the Management, Investments in National Saving Certificates(NSC) is held in the name of Managing Director of the company and the same has been pledged with sales tax authority at Rudrapur (Uttaranchal) on behalf of the Company. However there is not document available in the company to verify it also there is not reasonable certanity to recover it in future therefore it has been written off in the books of accounts on 31/03/2023.
(b) Security Deposits affirmation from party is not recieved.
(a) A case filed against customer Maharashtra Bio Fertilizers India Private Limited amounting to Rs 1,41,20,828 in National Company Law Tribunal on 07.01.2020. Consent Letter has been signed with Customer in March’ 2022, where he is agree to pay Amount of Rs. 169.00 Lakhs (Including Interest) during the period of March’2022 to Sep’2022 as per consent terms. However The customer only repaid amount of Rs. 35 Lakh out of Rs. 169.00 Lakhs and again defaulted in balance payment. The company has again filed the case to NCLT for further action against the party and the company is certain to recover full amount through process of Law hence no provision of ECL has been created by the Company.
(b) Balance from Debtors are subject to confirmation and reconciliation as as on 31st March’2024.
Confirmations for FDR with Sales tax ETO Nalagarh amounting ' 25,000 and FDR With IOB amounting ' 100,000 are not available with the company. Hence it has been written off during FY 2022-23
**Bank has charged some charges in Dividend Account-AXIS BANK LTD A/C NO. 917020067706115(DIVIDEND A/ C FY16-17) which is against the law and for rectification the communication with the bank personal is in process by the company on the date of financials. Also the Total Unpaid dividend as on 31st march in Books is amounting to ' 12,68,043/- for with shareholder wise and amount wise records are not available in the Company for verificaiton of the same.
(a) Sales Tax Recoverable (Rudrapur ) amounting ' 263,146 is pending with government authorities for which status report not ascertained. As per the management the Recovery of Sale Tax Amounting to Rs. 2,63,146/- is reasonably certain and has not impaired by the company however for verification of same no documents are available within the company.
* Company has provided prepaid expenses , towards adavnce processing charging paid for facilities under process
** A case filed against Majestic Engineering Industries amounting to Rs 6,51,47,361 in National Company Law Tribunal on 07.01.2020. The status of the case as on the date of financials is that the Majestic Engineering Industries will go into the liquidation processing and claim will be settled as per the distribution ranking prescribed under IBC. In view of management, there is high probability of recovery of dues from creditors. Hence, no provision is recorded in Books of accounts.
(a) Rights, preferences and restrictions attached to Equity Shares
The company has only one class of equity shares . Each Holder of equity share is entitled to one vote per share .In the event of liquidation of the company, the holders of the equity shares shall be entitled to receive remaining assets of the company , after adjustment of all the preferential payments. The distribution will be made in the proportion of holding of equity shares. The Dividend proposed ( if any)by the board is subject to approval of shareholders in the following Annual General Meeting
* Term Loan from Axis Bank Ltd. is secured by way of first charge on currents assets (Present and future) & moveable fixed assets (Excluding Machineries and vehicles is specifically charged with respective lenders) of the company and having equitable mortgage on Factory Land and Buildings situated at Plot No. 32, Sector-4, Pantnagar ,Uttarkhand & situated at 51, Roz ka Meo, Sohna, Gurgaon. The Credit Facility is further having equitable mortgage on commercial office space situated at 803-805, 8th Floor, Tower 2, Assochem Business Cresterra, Sector-135, Noida in the name of Mr. K. Sayaji Rao & on residential property situated at 20/27, Prakasam Road, Vijaywada in the name of Mrs. K. Pratibha Rao. The Credit Facility is further secured by Personal guarantees of Mr. K. Sayaji Rao, Mr. K. Satish Rao & Mrs. K. Pratibha Rao, Directors of the company. The Rate of interest is MCLR 2.75% i.e 11.00% p.a
In Management view, there is not any Reasonable Certainty for Future Profits that’s why Deferred Tax is Not Recognised in Statement of profit & Loss during the FY 2023-24 also the MAT Credit Entitlement as per ITR was Rs. 4.02 crore from which only 1 crore is recongized earlier and no MAT Credit is recognized during the year as there is not any reasonable certainity for future profits.
Negative balance represents Deferred Tax Asset as at 31.03.2024.
* Working Capital loan from Axis Bank Ltd. is secured by way of first charge on currents assets(Present and future) & moveable fixed assets (Excluding Machineries and vehicles is specifically charged with respective lenders) of the company and having equitable mortgage on Factory Land and Buildings situated at Plot No. 32, Sector-4, Pantnagar ,Uttarkhand & situated at 51, Roz ka Meo, Sohna, Gurgaon. The Credit Facility is further having equitable mortgage on commercial office space situated at 803-805, 8th Floor, Tower 2, Assochem Business Cresterra, Sector-135, Noida in the name of Mr. K. Sayaji Rao & on residential property situated at 20/27, Prakasam Road, Vijaywada in the name of Mrs. K. Pratibha Rao. The Credit Facility is further secured by Personal guarantees of Mr. K. Sayaji Rao, Mr. K. Satish Rao & Mrs. K. Pratibha Rao, Directors of the company.
* Company has not provided any Provision for Expenses against “Bill Discounting on Customer Invoices” and on acceptances of “Letter of Credits”. In view of the management, that there will be no material impact due to booking of such expenses..
* Bonus of Rs. 13.65 Lakhs pertaining to FY 2020-21 and FY 2021-22 is still pending to be paid as on 31st March 2024 though the exact breakup of employee wise financial year wise not bonus available. Further For the FY 2023-24 Bonus of Rs 14.68 Lakhs Is provided by the company though the detailed calculation is not available for the review.
*ESIC/PF/TDS paid by the company during the FY in aggrigate were in excess of Liabilities provided during the year by the company in books however for detailed reconciliation to check the correctness of the same, no supporting workings are available in the company record.
* GST Input claimed in Books of Accounts and GSTR-3B are not in agreement with each other. For which exact cause for the mismatch were provided by the company and it will be mitigated by the company in current year.
* Total Unpaid dividend as on 31st march in Books is amounting to ' 12,68,043/- for with shareholder wise and amount wise records are not available in the Company for verificaiton of the same.
** During the year ending March 31,2024, actuarial valuation certificate of Gratuity and Leave Encashment has been not taken by the management for the FY 2023-24. Disclosures have been made as per the actuarial valuation done for the year ended 31-03-2023.
* The individual wage payment of Contract Workers made by the company is above the limits specified in the respective laws governing Provident Fund (PF) and Employee State Insurance (ESI) and accordingly, no prima facie liability to pay PF & ESI arises on the company. Further on workers requests, the company pays wages in cash. All relevant process for due control has been exercised. During the F.Y 2023-24, company has paid Rs 223 Lakhs (FY 2022-23: Rs. 158 Lakhs) wages in cash.
30. Commitments and Contingencies
As per information available with the management there is a contingent liability of ' 242.02 Lakhs (Previous Year ' 281.33 Lakhs) as at 31st March, 2024.
31. Related Party Disclosures
a. Associates of the reporting enterprise and the investing party in respect of which the reporting enterprise is an associate or a joint venture
N.A.
b. Individual owning directly or indirectly an interest in the voting power of reporting enterprise that give them control or significant influence over the enterprises, And relative of any such individual
Mr. K Sayaji Rao Mr. K Satish Rao
c. Key management personnel and their relatives
Mr. K. S Rao (Director)
Mr. K Satish Rao (Managing Director)
Mrs. K. Pratibha Rao (Wife of MD)
Mrs. Rashi Chapperwal (Wife of WTD)
d. Enterprises over which any person described in (c) or (d) is able to exercise significant influence.
Innovative Datamatics Limited Jauss Polymers Limited Innovative Pet Containers Limited
35. Segment Reporting
The Company is engaged in manufacturing of Plastic Pet Jars, Containers, Creates, bottles and caps. Considering the nature of Company’s business and operations, there are no separate reportable segments (business or geographical) in accordance with the requirements of Indian Accounting Standard 108 ‘Segment Reporting’. The Chief Operational Decision Maker(CODM) monitors the operating results as one single segment for the purpose of making decisions about resource allocation and performance assessment and hence, there are no additional disclosures to be provided other than those already provided in the financial statements.
36. In the opinion of the Management and to the best of their knowledge and believe, the value on realization of current assets, Loan & Advances in the ordinary course of business would not be less than the amount at which they are stated in the Balance Sheet.
37. Financial Risk Management Objective And Policies
The company is exposed to market risk, credit risk and liquidity risk. The Group’s senior management oversees the management of these risks. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.
a) Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings. The company is exposed to interest rate risk on variable rate long term borrowings.
The company has elaborate risk management systems to inform Board members about risk management and minimization procedures.
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 as there are few transactions in foreign currency. Particulars of un-hedged foreign currency exposures as at the Balance Sheet date are NIL (previous year NIL). Hence, no further disclosure is required under this section.
ii. Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Any changes in the interest rates environment may impact future rates of borrowing. The Company mitigates this risk by maintaining a proper blend of Fixed & Floating Rate Borrowings. The following Table shows the blend of Company’s Fixed & Floating Rate Borrowings in Indian Rupee:
The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment.
iii. Price Risk
Commodity price fluctuation can have an impact on the demand of Plastic Pet Jars, Containers, Creates, bottles and capsfor particular product therefore, company continuously keep on track the commodity price movement very closely and take advance production decision accordingly.
In addition to the above company also maintain a strategic buffer inventory to ensure that such disruptions do not impact the business significantly.
b) Credit risk
Credit risk arises from the possibility that the counterparty will default on its contractual obligations resulting in financial loss to the company. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions and other financial instruments.
To manage this, the Company periodically assesses the financial reliability & credibility of customers, taking into account the financial conditions, current economic trends, and analysis of historical bad debts and ageing of accounts receivable.
The Company has well defined sales policy to minimize its risk of credit defaults. Outstanding customer receivables are regularly monitored and assessed. Impairment analysis is performed based on historical data at each reporting date on an individual basis. However a large number of minor receivables are regularly monitored and assessed.
c) Liquidity Risk
Liquidity risk is defined as the risk that company will not be able to settle or meet its obligation on time or at a reasonable price. The company’s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risk are overseen by senior management. Management monitors the company’s net liquidity position through rolling, forecast on the basis of expected cash flows.
The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date basedon contractual undiscounted payments:
39. Information on lease transactions pursuant to Ind AS 116 - Leases
Until March 31, 2019, the Company recognized leases in accordance with Ind AS 17. A lease was defined as an agreement whereby the lessor conveys to the lessee in return for a series of payments the right to use an asset for an agreed period of time. The lessor and lessee accounted for the lease on the basis of the distribution of the risks and rewards associated with the leased asset.
In so far as all the substantial risks and rewards were transferred to the Company as lessee, the respective leased assets were capitalized at fair value or the lower present value of the minimum lease payments and depreciated using the straight-line method on the basis of the useful life of the underlying asset or the lease term, if this was shorter. The payment obligations resulting from future lease payments were discounted and recognized as a liability.Where the Company was the lessee in operating leases, in other words, if not all material risks and rewards were transferred, the lease or rental payments were recognized directly as expenses in the statement of Profit and Loss. Since April 1,2019, the Company has recognized leases in accordance with Ind AS 116. This defi nes a lease as a contract, or part of a contract, whereby the lessor conveys to the lessee the right to use an asset for an agreed period of time in exchange for consideration.
On application of Ind AS 116, the nature of expenses has changed from lease rent in previous periods to depreciation cost for the right-of-use asset, and fi nance cost for interest accrued on lease liability. Some practical expedients permitted by the standard are used, notably:
• To not reassess upon transition whether an existing contract contains a lease. The definition of a lease under Ind AS 116 has been applied only to contracts entered into or changed on or after April 01, 2019.
• For transition, the Company has elected not to apply the requirements of Ind AS 116 to leases which are expiring within 12 months from the date of transition by class of asset
• The recognition exemptions for short-term leases and leases of low-value assets.
• To apply Ind AS 37 for onerous leases instead of performing an impairment review.On application of Ind AS 116, the nature of expenses has changed from lease rent in previous periods to depreciation cost for the right-of-use asset, and finance cost for interest accrued on lease liability.
Company as a Lessor:
The Company is not required to make any adjustments on transition to Ind AS 116 for leases in which it acts as a lessor. The Company accounted for its leases in accordance with Ind AS 116 from the date of initial application. The Company does not have any signifi cant impact on account of sub-lease on the application of this standard.The Company has given its building space, lying under property, plant and equipments, on operating lease through operating lease arrangements. Income from operating leases is recognised as revenue on a straight-line basis over the lease term.
40. Capital Management a. Risk Management
The group’s objectives when managing capital are:
i) safeguard their ability to continue as a going concern , so that they can continue to provide returns for shareholders and benefits for other stakeholders, and
ii) maintain an optimal capital structure to reduce the cost of capital
In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares.
Fair value hierarchy
The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available. The fair values of the financial assets and liabilities are included at 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.
The Company uses the following hierarchy for determining and disclosing the fair value of the financial instruments by valuation techniques,
Level 1: Quoted prices (unadjusted) in the active markets for identical assets or liabilities.
Level 2: Other techniques for which all the inputs which have a significant effect on the recorded fair values are observable, either directly or indirectly
Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data
Assumptions and valuation technique used to determine fair value
The following methods and assumptions were used to estimate the fair values
i. Fair value of cash and deposits, trade receivables, trade payables, and other current financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
ii. Long-term variable-rate borrowings are evaluated by the Company based on parameters such as interest rates, specific country risk factors, credit risk and other risk characteristics. Fair value of variable interest rate borrowings approximates their carrying values.
42. GST Input claimed in Books of Accounts and GSTR-3B are not in agreement with each other. For which exact cause for the mismatch were provided by the company and it will be mitigated by the company in current year.
43. Due Date of Last Quarter of TDS return submission is 31st May 2024 due to which TDS receivable pertaining to last quarter are not appearing in the Form 26AS due to which TDS receivable reconciliation as on 31st March’2024 has not been done.
44. Internal Controls
Company does not have any mechanism to close year wise books in its reporting software SAP. Further, management do not possess internal audit report for the period 2023-24.
45. Balance Confirmations
In the process of obtaining balance confirmation and periodic account reconciliation with trade receivables and trade payables as at March 31,2024, the balances of certain parties under aforesaid heads are subject to reconciliation and Confirmation. The impact, if any that may result on reconciliation and confirmaiton of the balances could not be ascertained.
*# Remarks on net capital Turnover Ratio:- working capital was positive in FY 22-23 and FY 23-24 though there is no major changes in turnover in both the years however there is slighly downfall in working capital, that’s why ratio showing highly positive to 28.63. Because of this variance is showing -27.76%. As such there is not any major change in working capital.
48. Previous year’s figures
These have been regrouped / reclassified where necessary, to confirm to current year’s classification.
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