Pursuant to such Approval of the Resolution Plan, the financial statements have been prepared on a going-concern basis taking into consideration the settlement payments crystallized under the 'Debt Restructuring Scheme' prescribed under the Approved Resolution Plan. Detailed information about each of these items and its impact is stated hereunder and included in relevant notes together with information about the basis of calculation for each affected line item in the Financial Statements.
The Company has paid and is paying settlement amount in accordance with the approved NCLT Order. In relation to the outstanding payments of unsecured operational creditors and public fixed deposit holders as on March 31, 2024, the Company has made payments by way of cheques on the basis of last known addresses available in the records of the Company, however, the cheques were returned on account of non-traceability of the parties. An application to the Hon'ble NCLT seeking directions for payments required to be made in relation to the outstanding amount standing in respect of such non traceable unsecured operational creditors & public fixed deposits in the books of accounts as on date vide their letter dated September 30, 2022.
2) Rights, preferences and restrictions attached to equity shares
- The Company has only one class of equity shares having a par value of INR 10 each per share. Each holder of equity shares 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.
B) Sensitivity Analysis1. Description of methods used for sensitivity analysis and its limitations:
a) The sensitivity analyses above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period and may not be representative of the actual change.
b) It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the method (Projected Unit Credit Method) used to calculate the liability recognised in the balance sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous period.
c) Sensitivitiy due to mortality is not material hence impact of change due to these is not calculated. Sensitivities as to rate of increase of pensions in payment, rate of increase of pensions before retirement and life expectancy are not applicable.
d) The Weighted Average Duration (Years) as at valuation date is 9.7 years.
2. Description of Risk Exposures:
The defined benefit plan is exposed to a number of risks, the most significant of which are detailed below:
a) Salary increases - Actual salary increases will increase the plan's liability. Increase in salary increase rate assumption in future valuations will also increase the liability.
b) 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.
c) Discount rate - Reduction in discount rate in subsequent valuations can increase the plan's liability.
d) Mortality and disability - Actual deaths and disability cases proving lower or higher than assumed in the valuation can impact the liabilities.
e) Withdrawals - Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent valuations can impact plan's liability.
i Related parties are identified by the Management and relied upon by the Auditors
ii Borrowings of the company are guaranteed by the personal guarantee of the directors
iii For the year ended March 31, 2024, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (P.Y.- 2022-23- Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
Iv Above transaction with related parties are made on terms equivalents to those that prevails in arm length transactions. Outstanding balance at the year end are unsecured.
v Remuneration paid to key managerial person excludes gratuity liability and compensated absences as the provision is computed for the company as a whole and separate figure are not available.
Note 36: Financial Risk Management
The Company is exposed to financial risks arising from its operations and the use of financial instruments. The Company has identified financial risks and categorised them in three parts viz.
(i) Credit Risk,
(ii) Liquidity Risk and
(iii) Market Risk.
Risk management framework
The Company's board of directors has overall responsibility for the establishment and oversight of the Company's risk management framework. The board of directors are responsible for developing and monitoring the Company's risk management.
The Company's risk management framework, are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
(i) Credit Risk
Credit risk refers to the possibility of a customer and other counterparties not meeting their obligations and terms and conditions which would result into financial losses. Such risk arises mainly from trade receivables, other receivables, loans and investments.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-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 obligations,
iv) Significant increase in credit risk on other financial instruments of the same counterparty,
v) Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees or credit enhancements.
Financial Assets are written off when there is no r easonab le expectation of rec overy, such as a debtor declaring bankruptcy or a litigation decided against the Company. The Company continues to engage with parties whose balances are written off and attempts to enforce repayment. Recoveries made are recognised in Statement of Profit and Loss.
b) Investments
The Company invests its funds in unlisted equity shares of Banks which carry (no/low/high risk) for (short/long) duration and therefore (does/does not) expose the company to Credit risk. Such investment are made after reviewing creditworthiness and therefore (does/does not) expose the company to credit risk. Such investment are monitored on a regular basis.
c) Loans and other financial assets
Loans and other financial assets include s other r eceivables, loans given and esecurity deposits to customers. These loans and deposits were made in continuation of business related activities and are made after review as per companies policy.
d) Cash and cash equivalents
The cash and cash equivalents are held with banks with go od credit ratings. Also, the Company invests its funds in bank fixed deposits and shares, which carry (no / low) market risks for shortduration and therefore, does not expose the Company to credit risk.
(ii) 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 have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation.
The Management monitors rolling forecasts of the Company's liquidity position and cash and acash equivalents ont he basis of expected cash flows. The Company takes into account the liquidity of the market in which the Company operates.
a) Financing arrangements
The Company has an adequate fund and non-fund based limits lines with various banks. The undrawn borrowing facilities at the end of the reporting period to which the Company had access is INR NIL ( P.Y.: NIL).
b) Maturities of financial liabilities
The amounts disclosed in the table are the contractual undiscounted cash flows
(iii) Market Risk
The risk that the fair value or future cash flows of financial instruments will fluctuate because of changes in market price. Market risk further comprises of
(a) Currency risk;
(b) Interest rate risk; and
(c) Commodity risk.
a) Currency risk
The Company is not exposed to any currency risk as the Company does not have any import payables, short term payables, short term borrowings and export receivables in foreign currency.
b) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a fin ancial instrument will fluctuate because of changes in market interest rates. Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates.
The Management is responsible for the monitoring of the Company's interest rate position. Various variables are considered by the Management in structuring the Company's borrowings to achieve a reasonable, competitive, cost of funding.
- Fair value sensitivity analysis for fixed-rate instruments
The Company does not account for any fixed-rate financial assets or fin ancial liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.
b) Commodity risk
- Raw Material Risk
Edible Oil - Timely availability and also non-availability of good quality base oils from across the globe could negate the qualitative and quantitative production of the various products of the Company. Volatility in prices of crude oil and base oil is another major risk for this segment. The Company procures base oils from various suppliers scattered in different parts of the world. The Company tries to enter into long term supply contracts with regular suppliers and at times buys the base oils on spot basis.
- Capital Management
The Company' s capital management objectives are:
a) to ensure the Company's ability to continue as a going concern
b) to provide an adequate return to shareholders
The Company monitors capital on the basis of the carrying amount of eq uity less cash and cash equivalents as presented on the face of balance sheet.
The Management assesses the Company's capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the subordination levels of the Company's various classes of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.
Note 39: Events after the reporting year
There are no significant subsequent events that would require adjustment or disclosure in the financial statements as on balance sheet date.
Note 40: Segment Reporting
As the Company's business activity falls within a single primary business segment “Edible Oil & Cakes" the disclosure requirement of Ind AS 108 "Operating Segment" are not applicable.
Note 41: Other Statutory Information
1. The Company does not have any Benami property, where any proceeding have been initiated or pending against the Company for holding any Benami property.
2. The Company does not have any transactions with companies struck off.
3. The Company has not entered into any scheme of arrangement which has an accounting impact on the current or previous financial period.
4. The Company has not traded or invested in Crypto currency or Virtual Currency during the current or previous year.
5. 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.
6. 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.
7. The Company does not have any such transa ction which is not recorde d in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
8. The Company has not been declared wilful d efaulter by any bank or financial institution or government or any government authority.
9. The Company has complied with the number of layers prescribed under the Companies Act, 2013.
10. The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies beyond the statutory year.
Note 42: Other Notes
The previous year figures have been regrouped/reclassified wherever necessary to confirm the current year presentation.