2.12. Provisions, Contingent Liabilities & Contingent
Assets
Provisions are recognised for present obligation (legal
or constructive) of certain timing or amount arising as
a result of past event where a reliable estimate can be
made and it is probable that an outflow of resources
embodying economic benefits will be required to settle
the obligation.
When it is not probable that an outflow of resources
embodying economic benefits will be required or the
amount cannot be estimated reliably the obligation
is disclosed as a contingent liability unless the
possibility of outflow of resources embodying
economic benefit is remote.
Possible obligations, whose existence will only be
confirmed by the occurrence or nonoccurrence of
one or more uncertain future events, not wholly
with in the control of entity are also disclosed as
contingent liabilities.
Contingent liabilities are not recognized but are
disclosed in notes.
Contingent assets are not recognised. However, when
the realization of income is virtually certain, then the
related asset is no longer a contingent asset, but it is
recognised as an asset.
2.13. Segment reporting
The Company's operating segments are established
on the basis of those components of the company
that are evaluated regularly by the Board of Directors
(the 'Chief Operating Decision Maker' as defined in
Ind AS 108 - 'Operating Segments'), in deciding how
to allocate resources and in assessing performance.
Segment performance is evaluated based on profit or
loss and is measured consistently with the profit or
loss in the financial statements.
The Operating Segments have been identified on the
basis of the nature of products/services.
a) Segment revenue includes sales and other
income directly identifiable with/allocable to the
segment including inter segment revenue.
b) Expenses that are directly identifiable with/
allocable to segments are considered
for determining the segment results.
Expenses which relate to the Company as a whole
and not allocable to segments are included under
unallocable expenditure.
c) Income which relates to the Company as a whole
and not allocable to segments are included under
unallocable income.
d) Segment result includes margin on inter segment
sales which are reduced in arriving at the profit
before tax of the Company.
e) Segment assets & liabilities include those
directly identifiable with the respective segments.
Unallocable assets & liabilities represent the
assets and liabilities that relate to the Company
as a whole and not allocable to any segment.
Inter-Segment transfer pricing
Segment revenue resulting from transactions with
other business segments is accounted on the basis
of transfer price agreed between the segments.
Such transfer prices are either determined to yield a
desired margin or agreed on a negotiated basis and
are on an arm's length basis in a manner similar to
transactions with third parties.
2.14. Earnings per share
Basic earnings per share are calculated by dividing the
net profit or loss for the period attributable to the equity
shareholders by the weighted average number of equity
shares outstanding during the period. The weighted
average number of equity shares outstanding during
the period and for all periods presented is adjusted for
events, such as bonus issue, bonus element in a rights
issue and shares split that have changed the number
of equity shares outstanding, without a corresponding
change in resources. For the purpose of calculating
Diluted Earnings per share, the net profit or loss for
the period attributable to the equity shareholders and
the weighted average number of shares outstanding
during the period is adjusted for the effects of all
dilutive potential equity shares.
2.15. Cash flow statement
Cash flows are reported using the indirect method,
whereby profit for the year is adjusted for the effects
of transactions of a non-cash nature, any deferrals or
accruals of past or future operating cash receipts or
payments and item of income or expenses associated
with investing or financing cash flows. The cash flows
from operating, investing and financing activities of the
Company are segregated. The Company considers all
highly liquid investments that are readily convertible to
known amounts of cash to be cash equivalents.
2.16. Borrowing
Borrowings are initially recognised at net of
transaction costs incurred and measured at amortised
cost. Any difference between the proceeds (net of
transaction costs) and the redemption amount is
recognised in the Statement of Profit and Loss over
the period of the borrowings using the effective
interest method.
Preference shares, which are mandatorily redeemable
on a specific date are classified as liabilities.
The dividend on these preference shares is recognised
in Statement of Profit and Loss as finance costs.
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which
are assets that necessarily take a substantial period
of time to get ready for their intended use or sale, are
added to the cost of the assets, until such time as
the assets are substantially ready for their intended
use or sale. Borrowing costs consist of interest and
other costs that an entity incurs in connection with
the borrowing of funds. Borrowing cost also includes
exchange differences to the extent regarded as an
adjustment to the borrowing costs.
All other borrowing costs are recognised in Statement
of profit and loss in the period in which they are incurred.
2.17. Fair Value Measurement
The Company measures financial instruments, such
as, derivatives at fair value at each balance sheet date.
Fair value is the price 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 fair value measurement is
based on the presumption that the transaction to sell
the asset or transfer the liability takes place either:
• In the principal market for the asset or liability, or
• In the absence of a principal market, in most
advantageous market for the asset or liability and
the Company has access to the principal or the
most advantageous market.
The fair value of an asset or a liability is measured
using the assumptions that market participants would
use when pricing the asset or liability, assuming that
market participants act in their economic best interest.
A fair value measurement of a non-financial asset
takes into account a market participant's ability to
generate economic benefits by using the asset in
its highest and best use or by selling it to another
market participant that would use the asset in its
highest and best use.
The Company uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data are available to measure fair value,
maximizing the use of relevant observable inputs and
minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is
measured or disclosed in the financial statements 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) market prices in active
markets for identical assets or liabilities
Level 2 - Valuation techniques for which the lowest
level input that is significant to the fair value
measurement is directly or indirectly observable.
Level 3 - Valuation techniques for which the lowest
level input that is significant to the fair value
measurement is unobservable.
For assets and liabilities that are recognised in the
financial statements on a recurring basis, the Company
determines whether transfers have occurred between
levels in the hierarchy by reassessing categorisation
(based on the lowest level input that is significant to
the fair value measurement as a whole) at the end of
each reporting period.
For the purpose of fair value disclosures, the Company
has determined classes of assets & liabilities on the
basis of the nature, characteristics and the risks of
the asset or liability and the level of the fair value
hierarchy as explained above. This note summarizes
accounting policy for fair value. Other fair value related
disclosures are given in the relevant notes.
2.18. Cash and cash equivalents
The Company considers all highly liquid financial
instruments, which are readily convertible into known
amounts of cash that are subject to an insignificant
risk of change in value and having original maturities
of three months or less from the date of purchase,
to be cash equivalents. Cash and cash equivalents
consist of balances with banks which are unrestricted
for withdrawal and usage.
For the purposes of the presentation of cash flow
statement, cash and cash equivalents include
cash on hand, in banks and demand deposits with
banks, net of outstanding bank overdrafts that are
repayable on demand, book overdraft as they being
considered as integral part of the Company's cash
management system.
2.19. Financial Instruments
A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability
or equity instrument of another entity.
A. Financial assets
Initial recognition and measurement
All financial assets and liabilities are initially
measured at fair value except for trade receivables
which are initially measured at transaction price.
Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial
liabilities, which are not classified as subsequently
measured at fair value through profit or loss, are
adjusted to the fair value on initial measurement.
Subsequent measurement
For purposes of subsequent measurement, financial
assets are classified in following categories:
a) Financial assets carried at amortised cost (AC)
A financial asset is measured at amortised cost if
it is held within a business model whose objective
is to hold the asset in order to collect contractual
cash flows and the contractual terms of the
financial asset give rise on specified dates to
cash flows that are solely payments of principal
and interest on the principal amount outstanding.
b) Financial assets at fair value through other
comprehensive income (FVTOCI)
A financial asset is measured at FVTOCI if it is
held within a business model whose objective
is achieved by both collecting contractual
cash flows and selling financial assets and the
contractual terms of the financial asset give
rise on specified dates to cash flows that are
solely payments of principal and interest on the
principal amount outstanding. Interest income
for these financial assets is included in other
income using the effective interest rate method.
c) Financial assets at fair value through profit or
loss (FVTPL)
A financial asset which is not classified in any of
the above categories are measured at FVTPL.
B. Equity investments
All equity investments in scope of Ind AS 109 are
measured at fair value. Where the company decided to
make an irrevocable election to present the fair value
gain and loss (excluding dividend) on non-current
equity investments in other comprehensive income,
there is no subsequent reclassification of fair value gain
and loss to profit and loss even on sale of investments.
However, the group may transfer the cumulative gain
or loss within equity. The group makes such election
on an instrument-by-instrument basis.
The company elected to measure the investment in
subsidiary, associate and joint venture at cost.
C. Impairment of financial assets
The company assesses on a forward- looking basis
the expected credit losses associated with the
assets carried at amortised cost and FVOCI debt
instruments. The impairment methodology applied
depends on whether there has been a significant
increase in credit risk. If credit risk has increased
significantly, lifetime ECL is used. If, in a subsequent
period, credit quality of the instrument improves such
that there is no longer a significant increase in credit
risk since initial recognition, then the entity reverts
to recognising impairment loss allowance based on
12-month Expected Credit Loss (ECL) Note No.41.6
details how the group determines whether there has
been significant increase in credit risk.
For trade receivables, the company applies the
simplified approach permitted by Ind AS 109
"Financial Instruments" which requires expected life
time losses to be recognised from initial recognition
of receivables. The Company uses historical default
rates to determine impairment loss on the portfolio
of trade receivables. At every reporting date these
historical default rates are reviewed and changes in
the forward looking estimates are analysed
D. Financial liabilities
Initial recognition and measurement
All financial liabilities are recognized at fair value
and in case of loans, net of directly attributable cost.
Fees of recurring nature are directly recognised in the
Statement of Profit and Loss as finance cost.
Subsequent measurement
Financial liabilities are carried at amortized cost using
the effective interest method. For trade and other
payables maturing within one year from the balance
sheet date, the carrying amounts approximate fair
value due to the short maturity of these instruments.
E. Derecognition of financial instruments:
The Company derecognizes a financial asset when the
contractual rights to the cash flows from the financial
asset expire or it transfers the financial asset and the
transfer qualifies for derecognition under Ind AS 109.
A financial liability (or a part of a financial liability)
is derecognized from the Company's Balance Sheet
when the obligation specified in the contract is
discharged or cancelled or expires.
F. Reclassification of financial assets
The company determines classification of financial
assets and liabilities on initial recognition. After initial
recognition, no reclassification is made for financial
assets which are equity instruments and financial
liabilities. For financial assets which are debt
instruments, a reclassification is made only if there is
a change in the business model for managing those
assets. Changes to the business model are expected
to be infrequent. The company's senior management
determines change in the business model as a result
of external or internal changes which are significant
to the company's operations. Such changes are
evident to external parties. A change in the business
model occurs when the company either begins or
ceases to perform an activity that is significant to
its operations. If the company reclassifies financial
assets, it applies the reclassification prospectively
from the reclassification date which is the first day
of the immediately next reporting period following
the change in business model. The company does
not restate any previously recognised gains, losses
(including impairment gains or losses) or interest.
G. Offsetting of financial instruments
Financial assets and financial liabilities are offset
and the net amount is reported in the balance sheet
if there is a currently enforceable legal right to offset
the recognised amounts and there is an intention to
settle on a net basis, to realise the assets and settle
the liabilities simultaneously.
2.20. Use of estimates
The preparation of the financial statement in
conformity with Ind AS requires the Management to
make estimates and assumptions considered in the
reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and
expenses during the year. The Management believes
that the estimates used in preparation of the financial
statements are prudent and reasonable. Future results
could differ due to these estimates and the differences
between the actual results and the estimates are
recognised in the periods in which the results are
known / materialize.
Estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the
estimates are revised and current and / or future
periods are affected.
Defined benefit plans (gratuity benefits)
The cost of the defined benefit gratuity plan and other
post-employment medical benefits and the present
value of the gratuity obligation are determined using
actuarial valuations. An actuarial valuation involves
making various assumptions that may differ from
actual developments in the future. These include
the determination of the discount rate, future salary
increases and mortality rates. Due to the complexities
involved in the valuation and its long-term nature,
a defined benefit obligation is highly sensitive to
changes in these assumptions. All assumptions are
reviewed at each reporting date. (Refer note 2.10)
Fair value measurement of financial instruments
When the fair values of financial assets and financial
liabilities recorded in the balance sheet cannot be
measured based on quoted prices in active markets,
their fair value is measured using valuation techniques
including the DCF model. The inputs to these models
are taken from observable markets where possible, but
where this is not feasible, a degree of judgement is
required in establishing fair values. Judgements include
considerations of inputs such as liquidity risk, credit
risk and volatility. Changes in assumptions about
these factors could affect the reported fair value of
financial instruments. (Refer note 2.17)
2.21. Critical accounting judgements and key sources
of estimation uncertainty
The Preparation of the Company's financial statements
requires management to make judgments, estimates
and assumptions that affect the reported amounts
of revenues, expenses, assets and liabilities, and the
accompanying disclosures, and the disclosure of
contingent liabilities.
2.21.1. Critical accounting judgements in applying
accounting policies
The following are the critical judgements, apart from
those involving estimations that the Management
have made in the process of applying the
Company's accounting policies and that have most
significant effect on the amounts recognised in the
financial statements.
Valuation of Deferred tax assets
Deferred tax assets are recognised only to the extent
it is considered probable that those assets will be
recoverable. This involves an assessment of when
those deferred tax assets are likely to reverse and a
judgment as to whether or not there will be sufficient
taxable profits available to offset the tax assets when
they do reverse. The Company reviews the carrying
amount of deferred tax assets at the end of each
reporting period. Any change in the estimates of
future taxable income may impact the recoverability
of deferred tax assets (Refer note 2.11.).
Key Source of estimation uncertainty
Key source of estimation uncertainty at the date of
the financial statements, which may cause a material
adjustment to the carrying amounts of assets and
liabilities within the next financial year, is in respect
of impairment of investments, provisions and
contingent liabilities.
The areas involving critical estimates are:
Useful lives and residual values of property, plant
and equipment
Useful life and residual value of property, plant and
equipment are based on management's estimate of
the expected life and residual value of those assets.
These estimates are reviewed at the end of each
reporting period. Any reassessment of these may
result in change in depreciation expense for future
years (Refer note no 2.5).
Impairment of Property Plant and Equipment
The recoverable amount of the assets has been
determined on the basis of their value in use.
For estimating the value in use it is necessary to project
the future cash flow of assets over its estimated useful
life. If the recoverable amount is less than its carrying
amount, the impairment loss is accounted for in
statement of profit or loss. (Refer note no 2.5).
Provisions and contingencies
Provisions and liabilities are recognized in the period
when it becomes probable that there will be a future
outflow of funds resulting from past operations or
events and the amount of cash outflow can be reliably
estimated. The timing of recognition and quantification
of the liability requires the application of judgement
to existing facts and circumstances, which can be
subject to change. The carrying amounts of provisions
and liabilities are reviewed regularly and revised to
take account of changing facts and circumstances.
(ii) Rights, Preferences and restriction attached to equity shares
Company has only one class of Equity shares having a face value of C10/-. Each holder of Equity shares is entitled to one
vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors
is subject to approval of shareholders in the ensuing Annual General Meeting. The holder of equity shares is entitled to
receive dividend only after distribution of dividend to the holders of Preference Shares, if any.
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 shares held
by the equity shareholders.
Note 17.7 Nature and Purpose of Reserves
Retained earnings
This reserve represents undistributed accumulated earnings of the Company as on the balance sheet date.
General reserve
This represents appropriation of profit after tax by the company.
Securities premium reserve
Amount received on issue of shares in excess of the par value has been classified as securities premium. The reserve is
utilised in accordance with the provision of the companies Act, 2013.
Preference share capital redemption reserve
Preference Share Capital Redemption reserve is created against the redemption of Cumulative Preference Shares.
Capital reserve
Capital reserve arises from erstwhile amalgamation of Asian Knitwear's Limited with the Company.
Cash flow hedge reserve
This reserve represents the cumulative effective portion of changes in Fair Value of derivatives that are designated as
Cash Flow Hedges. It will be reclassified to profit or loss or included in the carrying amount of the non-financial asset in
accordance with the Company's accounting policy.
(iii) All secured loans are repayable in quarterly installments except ECLGS 1,2 and 2 (extention) which are repayable on
monthly installments basis.
(iv) Unsecured loan from related party, carries a rate of interest of 9.25% per annum on mutually agreed terms between
both the parties, repayable in 6 years by way of twelve(12) equal quarterly installments after a moratorium period of
3 years (previous year loan is repayable in 5 years by way of eight (8) equal quarterly installments after a moratorium
period of 3 years).
(v) Some of the lenders follow the practice to recover suo motto, payment of both principal as well as interest repayable
on credit facilities from the working capital facilities availed by the company, under instructions from the Company. It is
regarded as accepted practice that the due date for payment shall be the date next following the date when interest
is charged. Any delay on part of the lender to recover payment, either in line with past practice or specific instructions
given in this regard by the Company, is not attributable to default on part of the Company Accordingly, there is no
default in repayment of the principal and interest repayable on credit facilities.
(vi) Working capital loan from banks, repayable on demand, are secured by way of hypothecation through first charge,
ranking pari-passu, on stocks of raw material, stock in process, finished goods, book debts / receivables and all current
assets stored in the company's factory premises, at all plants and / or elsewhere including those in transit covered by
documents of title thereto, local and export usance bills and second charge on pari-passu basis on the entire movable
and immovable assets of the Company (fixed assets), both present and future.
(vii) Working capital facilities from banks, are secured by pledge of stipulated promoter's equity shareholding, constituting
36% of the issued equity capital, in favour of lenders on pari-passu basis.
(viii) Due to Covid-19 pandemic, Govt. notified the scheme of ECLGS 1, 2 & 2 (extension) to mitigate the working capital
crisis and as per scheme, during the year company have been sanctioned and received a Loan of C NIL. (previous year
C337.00 Lakh )
Basic earnings per equity share has been computed by dividing net profit after tax by the weighted average number of
equity shares outstanding for the year.
Note 35: Segment Reporting
The Company is currently operating into three business segments i.e., Yarn, Fabric and Garment. These segments offer
different products and require different technology and marketing strategies.
Identification of Segments
The Board of Directors has been identified as Chief Operation Decision Maker who monitors the operating results of its
business segments separately for the purpose of making decisions about resource allocation and performance assessment.
Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial
statements. Accounting policy in respect of segments is in conformity with accounting policy of the company as a whole.
Inter segment Transfer
Segment revenue resulting from transactions with other business segments is accounted for on the basis of transfer
price agreed between the segments. Transfer prices between operating segments are on arm's length basis in a manner
similar to transactions with third parties.
Segment Revenue & Results
The Revenue and Expenditures in relation to the respective segments have been identified and allocated to the extent
possible. Other revenue and expenditures non allocable to specific segments are disclosed separately as unallocated and
adjusted directly against total income of the Company.
Segment Assets & Liabilities
Segment Assets includes all operating assets used by the operating segment and mainly consists of property, plant &
equipment, trade receivables, inventory and cash & cash equivalents etc. Segment Liabilities primarily include trade payables
and other liabilities. Common assets & liabilities which can not be allocated to specific segments are shown as a part of
net unallocable assets/liabilities.
Note 39: Employee Benefits
A Defined Contribution plans
The Company makes contributions towards provident fund and superannuation fund, to defined contribution retirement
benefit plans for qualifying employees. The provident fund plan is operated by the Regional Provident Fund Commissioner
and the Superannuation fund is administered by Trustees of 'Maral Overseas Limited Senior Executive Superannuation
Fund'. Under the schemes, the Company is required to contribute a specified percentage of payroll cost to the retirement
benefit schemes to fund the employee benefits.
B Defined Benefit Plans
The Company makes annual contributions towards funding the defined benefit plans for qualifying employees and also
contributes towards the insurance scheme of ICICI Prudential Life Insurance Co. Ltd. The scheme provides for lump sum
payment to vested employees on retirement, death while in employment or on termination of employment, an amount
equivalent to 15 days salary (last drawn monthly salary) payable for each completed year of service or part thereof in excess
of six months. Vesting occurs upon completion of five years of service.
Note 41.3.2 Valuation techniques used to determine Fair value
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 recognised 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 following methods and assumptions were used to estimate the fair values:
1) Fair value of cash and deposits, trade receivables, trade payables, and other current financial assets and liabilities
measured at amortised cost is approximate to their carrying amounts largely due to the short-term maturities of
these instruments. The fair value of other non-current financial assets and liabilities (security deposit taken/given
and advance to employees) carried at amortized cost is approximately equal to fair value. Hence carrying value and
fair value is taken same.
2) Long-term fixed-rate and variable-rate receivables / 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. For fixed interest rate borrowing fair value is determined
by using the discounted cash flow (DCF) method using discount rate that reflects the issuer's borrowings rate. Risk of
non-performance for the company is considered to be insignificant in valuation.
3) The fair values of derivatives are estimated by using pricing models, where the inputs to those models are based
on readily observable market parameters basis contractual terms, period to maturity, and market parameters such
as interest rates, foreign exchange rates, and volatility. These models do not contain a high level of subjectivity as
the valuation techniques used do not require significant judgement, and inputs thereto are readily observable from
actively quoted market prices. Management has evaluated the credit and non-performance risks associated with its
derivative counterparties and believe them to be insignificant and not warranting a credit adjustment.
4) The fair values of the quoted equity shares have been done on quoted price of stock exchange as on reporting date.
41.4 Financial risk management
The Company's activities expose it to a variety of financial risks which includes market risk (including currency risk, interest
rate risk and other price risk), credit risk and liquidity risk.
The Company's focus is to ensure liquidity which is sufficient to meet the Company's operational requirements.
The Company monitors and manages key financial risks so as to minimize potential adverse effects on its financial
performance. The Company has a risk management policy which covers the risks associated with the financial assets
and liabilities. The details for managing each of these risks are summarised ahead.
41.5 Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in market prices, which comprises of three types of risk: currency rate risk, interest rate risk and other price risks, such as
equity price risk and commodity price risk. Financial instruments affected by market risk include loans and borrowings,
deposits, investments, and derivative financial instruments.
The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks.
41.5.1 Foreign currency risk
Foreign exchange risk is the risk that the fair value of future cash flows of financial instruments will fluctuate because of
changes in foreign exchange rate.
The Company derives significant portion of its revenue in foreign currency, exposing it to fluctuations in currency
movements. The Company has laid down a foreign exchange risk policy as per which senior management team reviews
and manages the foreign exchange risks in a systematic manner, including regular monitoring of exposures, proper advice
from market experts, hedging of exposures, etc.
The Company uses derivative financial instruments, such as foreign exchange forward contracts, to mitigate foreign
exchange related risk exposures. Derivative financial instruments relating to a firm commitment or a highly probable
forecast transaction, are marked to market at every reporting date. The company does not use forward contracts for
speculative purposes.
In management's opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the
exposure at the end of the reporting period does not reflect the exposure during the year.
41.5.2 Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. In order to optimize the Company's position with regard to interest income and interest
expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management
by balancing the proportion of the fixed rate and floating rate financial instruments in its total portfolio .
41.5.3 Price risks
The company's exposure to price risk arises from the investment held by the company . To manage its price risk arising from
investments in marketable securities, the company has very limited exposure and is done in accordance with the company's
policy. The company's major investments are actively traded in markets. Therefore no sensivity is provided for the same.
41.6 Credit Risk
Credit risk arises from the possibility that the counterparty will default on its contractual obligations resulting in financial
loss to the company. To manage this, the Company periodically assesses the financial reliability of customers, taking
into account the financial conditions, current economic trends, and analysis of historical bad debts and ageing of
accounts receivable.
The Company considers the probability of default upon initial recognition of assets and whether there has been a significant
increase in credit risk on an ongoing basis through each reporting period. To assess whether there is significant increase
in credit risk, it considers reasonable and supportive forward looking information such as:
i) Actual or expected significant adverse changes in business;
ii) Actual or expected significant changes in the operating results of the counterparty;
iii) Financial or economic conditions that are expected to cause a significant change to the counterparty's ability to meet
its obligation;
iv) Significant increase in credit risk and other financial instruments of the same counterparty;
v) Significant changes in the value of collateral supporting the obligation or in the quality of third party guarantees or
credit enhancements.
41.7 Liquidity risk
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate
liquidity risk management framework for the management of the company's short, medium, and long-term funding and
liquidity management requirements. The company manages liquidity risk by maintaining adequate reserves, banking
facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching
the maturity profiles of financial assets and liabilities.
41.9 Derivative financial instruments
The Company holds derivative financial instruments such as foreign currency forward contracts to mitigate the risk of
changes in exchange rates on foreign currency exposures. The objective of hedges is to minimize the volatility of Ccash
flows of highly probable forecast transaction. The Company's risk management policy is to hedge around 70% to 90% of
net exposure with forward exchange contract, having a maturity up to 12 months.
Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness
assessments to ensure that an economic relationship exists between the hedged item and hedging instrument, including
whether the hedging instrument is expected to offset changes in cash flows of hedged items.
Note 43: Recent Accounting Pronouncements
The Ministry of Corporate Affairs (MCA), The MCA notified Ind AS 117 on 9 September 2024 to be applicable from 1
April 2024. However, the same was withdrawn vide notification dated 28 September2024 wherein the applicability of Ind
AS 117 was made subject to notification of IRDAI. IRDAI has not notified Ind AS 117. Therefore, as of now, Ind AS 117 has
been issued but from when it will be applicable is uncertain. The company is evaluating the impactof the standard on its
balance sheet, statement of profit and loss and statement of cash flows.
Ministry of Corporate Affairs vide its notification no. G.S.R. 291(E) dated 7th May 2025 has issued an amendment to Ind
AS 21 providing guidance on determining exchange rate in case of lack of exchangeability. The amendment is effective
from 1 April 2025. In accordance with the amendment to Ind AS 21 - Lack of Exchangeability, the Company is required to
estimate the exchange rate using the most reliable inputs available in case there is lack of exchangeability. The currencies
in which the company has transacted during the current year or previous year were exchangeable into another currency
within a time frame that allows for a normal administrative delay and through a market or exchange mechanism.
Accordingly, the amendment to Ind AS 21 has no material impact on the financial position, financial performance and
cash flows of the company.
Note 44 :
1 In terms of the Master Restructuring Agreement under the CDR Scheme, if, in the opinion of the Lenders, the profitability
and cash flows of the Company so warrant, the Lenders shall be entitled to right of recompense (ROR) for the reliefs
and sacrifices extended by lenders within the CDR mechanism. Since the company has paid recompense amount to
the lenders now there is no recompense amount payable.
2 Rights, Preferences and restriction attached to Preference Shares
The Company had only one class of Cumulative Redeemable Preference Shares (CRPS) having a par value of C100/-.
There were two series of CRPS, carrying differential dividend coupon rates.
First series of Preference Shares carrying a dividend coupon rate of 8% per annum, allotted to lending banks and
financial institutions, pursuant to the Corporate Debt Restructuring ('CDR') Package, were redeemed in four equal
annual tranches during 2016-2019.
Second series of Preference Shares carrying a dividend coupon rate of 3% per annum, allotted to promoters, against
infusion of funds, pursuant to the Corporate Debt Restructuring ('CDR') Package were redeemable in March 2019.
The company has taken necessary approvals from board of directors and shareholders for redemption of aforesaid
Preference Shares in two equal tranches during 2019-2020. First tranche of C600 Lakh were redeemed in March 2019
and for second tranche which was becoming due in March 2020, approval for extension of one (1) year towards
redemption was taken, from the board of directors on 08th August 2019 and from shareholders in the annual general
meeting held on 19th September 2019. consequently the same were to be redeemed in March 2021. The maturity period
of redemption of second tranche of aforesaid CRPS was further extended for a period of one year i.e. from March 2021
to 31 March 2022 after approval was obtained from board of directors in their meeting held on 07th August 2020 and
shareholders accorded approval in the annual general meeting held on 29th September 2020. In the 2021-22, the
second tranche of aforesaid CRPS of C600.00 Lakh was redeemed.
The Company declares and pays dividend in Indian rupees only. The dividend proposed by the Board of Directors is
subject to the approval of shareholders in the ensuing Annual General Meeting. Each holder of Preference Shares is
entitled to one vote per share only on resolutions placed before the company which directly affect the rights attached
to Preference Shares. The holders of Preference Shares are entitled to a preferential right of repayment of capital
on winding up vis-a-vis the holders of equity shares. The distribution will be in proportion to the number of shares
held by the Preference shareholders.
The Board of Directors in meeting held on 28th October, 2021, had approved the accumulated Preference dividend on
Cumulative Redeemable Preference Shares amounting to C377.08 Lakh and C185.21 Lakh aggregating to C562.29
Lakh to the lenders and promoters & their associates respectively after setting off the accumulated losses of the
previous years. The aforesaid Preference dividend was paid within the stipulated time.
Note 45 : Dividend
In the Financial Year 2021-22, Board of Directors had recommended a dividend of C2/- per Equity share of the face value
of C10/- each amounting to C830.16 Lakh, which was subsequently approved by the Shareholders of the Company in the
Annual General Meeting. As on 31st March 2025 out of above declared dividend, C12.43 Lakh remained unpaid/unclaimed
and is lying in an account with scheduled bank under unpaid/unclaimed account.
Note 46 : Other Statutory Information
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the
Company for holding any Benami property.
(ii) The Company does not have any transactions with struck off companies.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period,
(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) Title Deeds of all the immovable properties disclosed in the financial statement are held in the name of company.
(vi) 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.
(vii) The Company has no subsidiary, associates and joint venture downward.
(viii) The lender of the company has not declared company as willful defaulter and also company has not defaulted in loan
repayment of loan to the lenders.
(ix) Quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in
agreement with the books of accounts.
(x) There is no transaction which are not recorded in the books of account that has been surrendered or disclosed as
income during the year in the tax assessments under the Income Tax Act, 1961
(xi) The company has used two integrated accounting softwares 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 softwares. Further, at database level log was enabled throughout the year, the audit trail has been
preserved by the company as per statutory requirements for record retention.
Note 47: Approval of financial statements
The financial statements for the period ended 31st March 2025 were approved by the Board of Directors and authorises
to issue on 08th May 2025.
For S S Kothari Mehta & Co. LLP For and on behalf of the Board of Directors
Chartered Accountants MARAL OVERSEAS LIMITED
Firm Registration No.000756N/N500441
Vivek Raut Shekhar Agarwal Shantanu Agarwal
Partner Chairman & Managing Director and CEO Joint Managing Director
Membership No. 097489 DIN: 00066113 DIN: 02314304
UDIN: 25097489BNUISQ3709
Place: Noida (U.P) Manoj Gupta Sandeep Singh
Date: 8th May, 2025 Chief Financial Officer Company Secretary
FCA- 500020 FCS- 9877
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