15 (b)Company has only one class of equity shares having par value of Rs. 10 per share. Each holder of the equity share is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
a. Vehicle Loans are secured by hypothecation of vehicles in favor of the Bank. Similarly, machinery term loans are secured by hypothecation of machinery in favor of the Bank.
b. Cash Credit, Term Loan, Pre-shipment, Post Shipment, FLC, PSL, PCFC and BG are secured by hypothecation of all types of stocks and other material at factory/godown or at other places as approved by the bank from time to time including goods in transit and receivables, i.e. stock and book debts; hypothecation of plant and machinery and FDR margin.
c. All the Loans and Advances from the bank, including Working Capital limits and other credit facilities from the Bank are collaterally secured by Equitable mortgage of the following properties:
i. Industrial Property bearing killa no. 152/5 (6-17), 152 (8-0), Khewat Khatoni No. 368/435, 581/761, Rakba 14K, 17M situated at Nag Kalan Amritsar, owned by Mr. Ramesh Arora and Mr. Ajay Arora, directors of the Company
ii. Industrial Property at Wakia 6 Mile Stone Village Nag Kalan, Majitha Road, Amritsar -143001 owned by the Company.
iii. Industrial Property at Plot No. 1A, Raja Ka Bagh, Kangra, Himachal Pradesh on long term lease from government of Himachal Pradesh.
iv. Industrial property at Hadbast No. 334, Situated at Rakba Village Nag-2, Tehsil Majitha, Near Kwality Pharmaceuticals, Amritsar, Punjab, 143601.
v. Residential Property situated at House No. 32, Opposite Police line, R.B. Parkash Chand Road, Amritsar, Panjab owned by Mr. Ramesh Arora and Mr. Ajay Arora.
vi. Immovable property at Bal Kalan, Majitha Road, Amritsar, Punjab-143001.
(i) Details of security for the secured short-term borrowings:
Cash Credit, Pre-shipment, Post Shipment, FLC, PSL, PCFC and BG are secured by hypothecation of all types of stocks and other material at factory/godown or at other places as approved by the bank from time to time including goods in transit and receivables, i.e., stock and book debts; hypothecation of plant and machinery and FDR margin and collaterally secured by equitable mortgage of the properties.
According to the information and explanations given to us, details of Income tax, Goods and Service tax, Customs Duty, Excise Duty and Value Added Tax, the amounts that may be required to be deposited on account of show cause notice or demands raised and pending. The Details are as under:
1. As informed to us and based on the records examined, an order bearing No. 14/GST/ADC/JAL/2024-2025 has been received by the Company under Section 74(9) of the Central Goods and Services Tax Act, 2017, read with Section 20 of the Integrated Goods and Services Tax Act, 2017, raising a demand of ^3,15,02,758/- towards alleged erroneous refund of IGST for the financial years 201718 to 2022-23. Further, a penalty of an equivalent amount of ^3,15,02,758/- has also been levied under the same provisions. Interest under Section 74(9) read with Section 50 of the CGST Act, 2017 and Section 20 of the IGST Act, 2017 has also been levied, though not quantified in the said order.
As represented to us, the Company had filed an appeal before the Commissioner of Appeals CGST under CGST Act, 2017 challenging the said order. Commissioner of Appeals has dismissed the said Appeal in favour of revenue and further the company has filed civil writ petition against the said order with Punjab and Haryana high court for stay of order (Appeal No. CWP-12033-2026) Accordingly, the total disputed amount of ^6,30,05,516/- (comprising tax and penalty) is under litigation and remains pending as on the reporting date.
2. The Company has received a Show Cause Notice bearing no. AE/51/2024-25 for the financial years 2017-18 to 2022-23 under Section 74& 122 of the Central Goods and Services Tax Act, 2017. The notice alleges wrongful availment and utilization of Input Tax Credit (ITC) amounting to
^15,13,03,420/- (Rupees Fifteen Crores Thirteen Lakhs Three Thousand Four Hundred Twenty only). Further, a penalty of ^15,13,03,420/- has been proposed under Section 74(1) read with Section 122(2)(b). Accordingly, the total disputed amount proposed in the Show Cause Notice is Rs. 30,26,06,840/- (Demand &Penalty)
The company has filed a civil writ petition in the Punjab and Haryana high court bearing no CWP-34165-2024 against the said show cause notice. Hon’ble Punjab and Haryana high court has stayed the passing of adjudication order in pursuance to the show cause notice and the show cause notice is thus under litigation and remains pending as on the reporting date.
3. As per the information and explanations given to us and based on the records examined, the Company has received orders dated 30/12/2024 in Form DRC-07 from the Goods and Services Tax (GST) Department under Section 74 of the Central Goods and Services Tax Act, 2017, in respect of wrongly availed and passed on Input Tax Credit (ITC). The summary of the demands raised is as follows:
• For the financial year 2017-18, no tax was levied; however, a penalty of ^2,80,695 /-was imposed.
• For the financial year 2019-20, a demand of ?6,74,856/-each towards tax and penalty was raised.
• For the financial year 2020-21, a demand of ^12,62,160 /-towards tax and ^12,70,485/- towards penalty was raised.
The Company has filed appeals before the appropriate appellate authority under the GST Commissionerate in all the above cases, and the proceedings are pending as on the date of this report. The matter is currently under dispute and remains pending as on the reporting date..
38. Financial Risk Management:
The Company’s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Company’s risk management assessment and policies and processes are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company’s activities.
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, and arises principally from the Company’s receivables from customers, loans and investments. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of counterparty to which the Company grants credit terms in the normal course of business.
It is evident from the Note No. 10 of Notes forming Part of Standalone Financial Statements that company is managing its credit risk efficiently.
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, 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 risk to the Company’s reputation. The Current ratio of the company calculated later in the report is the true indicator of the management of the Liquidity risk by the company.
Foreign Exchange Risk
The Company’s foreign exchange risk arises from its foreign operations, foreign currency revenues and expenses.
In the Current year, Company has charged loss due to Foreign Exchafnge Fluctuations of Rs 4.37 whereas there was income of Rs. 7.73 Lacs in the previous year.
39. Employee Benefits
a) Defined Contribution Plans
The Company is regular in making contributions to Recognised Provident Fund (RPF), Employees State Insurance Scheme (ESIC) and other funds including Labour Welfare Fund for all regular employees or workers.
The amount of contributions to these funds are recognised as expense under the head “Employee Benefit Expenses” in the Statement of Profit and Loss as under:
b) Defined Benefit Plans Gratuity
The company made contributions to Life insurance Company in respect of the Gratuity. Under Gratuity Act, Employees are entitled to specific benefit at the time of retirement or termination of the employment on completion of five years or death while in employment.
Gratuity is classified as Defined Benefit plan as enterprise's obligation is to provide agreed benefits, subject to minimum benefits as subscribed by the Payment of Gratuity Act, to plan members. Actuarial & Investment risks are borne by the enterprise.
The Net Defined Benefit Liability/(Asset) is the Net (Surplus)/Deficit in the plan netted off by effect of Asset Ceiling, if any. It is arrived by deducting Fair Value of Plan Assets from the Defined Benefit Obligation as on the date of valuation.
As required under Para 67 of Ind AS 19 actuarial valuation is done using Projected Unit Credit Method. Under this method, only benefits accrued till the date of valuation (i.e. based on service upto date of valuation) are to be considered for valuation. Present value of Defined Benefit Obligation is calculated by projecting salaries, exits due to death, resignation and other decrements, if any, and project the benefit till the time of retirement of each active member using assumed rates of salary escalation, mortality &
employee turnover rates. The expected benefit payments are then discounted back from the future date of payment to the date of valuation using the assumed discount rate.
'Service Cost' is calculated separately in respect of benefit accrued during the current period using the same method as described above. However, instead of all accrued benefits, benefit accrued over the current reporting period is considered.
42.ADDITIONAL REGULATORY INFORMATION REQUIRED BY SCHEDULE III OF COMPANIES ACT, 2013:
a) The Company has complied with the number of layers prescribed under the Companies Act, 2013.
b) Details of Benami Property held - No proceeding has been initiated or pending against the company for holding any Benami property under the Benami Transactions (Prohibition) Act,1988 (45 of 1988) and the rules made thereunder.
c) There has been 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.
d) Utilisation of Borrowed funds: The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall (i) 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 (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
e) Willful Defaulter - The Company is not declared willful defaulter by any bank or financial Institution or other lender during the year.
f) Registration of charges or satisfaction with Registrar of Companies - During the year, the Company has complied with the requirements for registration of charges on the assets of the company with the Registrar of Companies.
** Promoting Education & Healthcare, Eradication of Hunger & Poverty, Special education and enhancing skills among differently abled children, Construction of school building for special children, Promoting Education ofPoor Children, protection offlora & fauna, animal welfare and skill development & enhancing employment.
During FY 2025-26, the Company also utilized ^30.93 lakh from the Unspent CSR Account pertaining to FY 2023-24 towards ongoing projects in accordance with Section 135 of the Companies Act, 2013.
h) The Company does not have any transactions with struck-off companies.
i) The Company has not traded or invested in crypto-currency or virtual currency during the current or previous year.
j) The previous year’s figures have been regrouped wherever necessary to make them comparable to the current year's figures.
|