The company has only one class of equity shares having par value of Re. 1/- each (P.Y. Re. 1/- each). Holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian Rupees. The dividend, if any, 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 of the company, the holders of the 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.
21.4 During the 5 years immediately preceding the balance sheet date, there were no equity shares allotted as fully paid up pursuant to contract without payment being received in cash, no bonus shares were issued and there was no buy-back of equity shares of the Company.
a) Bank returns/stock statements filed by the Company with its bankers are in materially agreement with books of accounts except in respect of quarter ended March 31, 2025 where such quarterly return/statement is yet to be filed.
b) Term of repayment and securities for current borrowings All the working capital facilities are secured against:
i) First pari passu charge on entire current assets of the Company, excluding those kept, stored, lying loose at Unit No. 1, both present and future.
ii) Second pari passu charge on the entire movable property, plant and equipment, excluding the movable property, plant and equipment situated or kept at unit no. 1, of the Company.(save and except for vehicles)
iii) Second pari passu charge on immovable property, plant and equipment of the Company situated at silvassa plant unit II bearing survey no. 64/2, 64/3, 64/4, 61/1, 61/2, 63/5, 63/7, 62/5 and all the piece and parcel of Industrial non-agricultural land bearing Survey No. 62/5, admeasuring 2700 sq.mtrs., situated at village - Amli, Silvassa Union Territory of Dadra & Nagar Haveli.
(iv) Fixed Deposits amounting to Rs.0.50 lakhs (As at March 31, 2024 Rs. 854.93 lakhs) pledged as margin money deposit for facilities from Banks. (Refer note no. 10 and 17 )
42 Employee benefits
A Defined Contribution plans:
The company contributes to the Government managed provident and pension fund for all qualifying employees.
Contribution to provident fund of Rs. 140.20 lakhs (March 31, 2024: Rs. 108.07 lakhs) is recognised as an expense and included in “Contribution to provident and other funds” in Statement of Profit and Loss.
The Company has defined benefit plan for payment of gratuity to all qualifying employees. It is governed by the Payment of Gratuity Act, 1972. Under this Act, an employee who has completed five years of service is entitled to the specified benefits provided which depends on the employee's length of service and salary at retirement age. The Company's defined benefit plan is funded with Life Insurance Corporation (LIC).
There are no other post retirement benefits provided by the Company.
The present value of the defined benefit obligation, the related current service cost and past service cost, were measured using the projected unit credit method.
The weighted average duration of the defined benefit plan obligations at the end of reporting period is 3.49 years
The plan assets are being managed by LIC. No further details are made available by the fund manager. (LIC) Sensitivity analysis
Significant actuarial assumptions for the determination of defined obligation are discount rate and expected salary increase. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumption would occur in isolation of one another as some of the assumptions may be correlated. Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
Estimates of future salary increases considered in actuarial valuation take account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.
These plans typically expose the Company to actuarial risks such as interest rate risk and salary risk.
(a) Interest risk: a decrease in the bond interest rate will increase the plan liability.
(b) Salary risk: the present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, a variation in the expected rate of salary increase of the plan participants will change the plan liability.
The expenses towards compensated absences (annual and short term leave) for the year ended March 31, 2025 of Rs. 37.66 lakhs (March 31, 2024: Rs. 37.33 lakhs), which is included in the 'Employee benefits expense' in the Statement of Profit and Loss.
As per the requirements of para 4 of Ind AS 108 -Operating Segments, segment information has been
provided under the Notes to Consolidated Financial Statements.
Claims against the company not acknowledged as debt:
(i) Claim against Company not acknowledged as debt, comprises of excise duty & Custom duty disputed by company relating to issue of applicability of duty and classification of goods aggregating to Rs.963.16 lakhs (As at March 31, 2024: Rs. 963.16 lakhs).
(ii) The Differential CST liability in respect of Non Collection of C Forms of Rs. 42.12 lakhs (As at March 31, 2024: Rs. 42.12 lakhs).
(iii) Goods and Service Tax (GST) demand for Rs 643.51 lakhs pertaining to the GST refund availed on exports on payment of IGST in EOU unit for FY 2018-19 to 2021-22 (As at March 31, 2024: Rs 643.51 lakhs). The matter is sub-judiciary with the Commissioner of CGST & Central Excise, Appeals. The company has deposited Rs. 117.00 Lakhs (As at March 31, 2024: Rs 58.50 Lakhs) against the demand under protest.
(iv) Goods and Service Tax (GST) demand for Rs 13.54 lakhs pertaining to the Input tax credit availed on input services from various suppliers for FY 2017-18 to 2022-23 (As at March 31, 2024: Rs Nil). The matter is sub-judiciary with the Commissioner of CGST & Central Excise. The company has deposited Rs. 1.35 Lakhs (As at March 31, 2024: Rs Nil) against the demand under protest.
(a) The transactions with related parties are made in the normal course of business and on the terms equivalent to those that prevails in the arm's length transactions.
(b) Amounts outstanding are unsecured and will be settled in cash or receipts of goods and services.
(c) There have been no guarantees provided or received for any related party receivables or payables.
(d) Impairment provision amounting to Rs 440 Lakhs (for the year ended 31st March 2024: Nil) has been recognised in respect of investment in shares of wholly owned subsidiaries.
(e) The company has made a provision aggregating to Rs. 505.60 lakhs (for the year ended 31st March 2024: Nil) against the loan and advances given to the wholly owned subsidiary company..
A Capital Management:
The Company manages its capital structure with a view to ensure that it will be able to continue as a going concern while maximising the return to stakeholders through the optimization of the debt and equity balance.
The capital structure of the Company consists of net debt (borrowings as detailed in notes 23 & 27) and total equity of the Company.
The Company's management reviews the capital structure of the Company on an annual basis. As part of this review, the management considers the cost of capital and the risks associated with each class of capital.
The fair value of the Financial Assets and Liabilities are included at the amount, at which instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments based on the input that is significant to the fair value measurement as a whole:
Level 1 : This hierarchy uses quoted (unadjusted) prices in active markets for identical
assets or liabilities. The fair value of all Equity Shares which are traded on the stock exchanges, is valued using the closing price at the reporting date.
Level 2: The fair value of financial instruments that are not traded in an active market (for
example, over the counter derivatives) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on company specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the
instrument is included in Level 3.
The management assessed that cash and bank balances, trade receivables, loans, trade payables, borrowings (cash credit, foreign currency loans, working capital loans) and other financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
During the reporting period ending March 31, 2025 and March 31, 2024, there was no transfer between level 1 and level 2 fair value measurement.
1. Mutual Funds: Based on Net Asset Value of the Scheme (Level 2)
2. Derivative (forward) contracts : The fair value is determined using quoted forward exchange rates at the reporting date. (Level 2)
3. Debentures: Based on comparable instruments (Level 2)
4. Listed Equity Investments (other than Subsidiaries): Quoted Bid Price on Stock Exchange (Level 1)
The Company's Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework.
The Company's risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities.
The key risks and mitigating actions are also placed before the Audit Committee of the Company.
The Company has exposure to the following risks arising from financial instruments:
A) Credit risk;
B) Liquidity risk; and
C) Market risk 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. Credit risk arises primarily form financial assets such as trade receivables, investments in mutual funds, alternative investment funds, preference shares, debentures, derivative financial instruments, other balances with banks, loans and other receivables.
Customer credit is managed by each business unit subject to the Company's established policies, procedures and control relating to customer credit risk management. Trade receivables are non-interest bearing and are generally on 0 to 180 days credit term. Credit limits are established for all customers based on internal rating criteria. Outstanding customer receivables are regularly monitored.
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 does not hold collateral as security. The Company has no concentration of credit risk as the customer base is widely distributed both economically and geographically.
The Company measures the expected credit loss of trade receivables based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends.
The Company has given interest free unsecured loan to subsidiary, Sarlaflex Inc. The subsidiary has suspended its manufacturing operations since December, 2017 and has a negative net worth as on March 31, 2025. Credit risk have been increased significantly for these loans and accordingly necessary impairment provisions have been made.
The Group maintains exposure in cash and cash equivalents, term deposits with banks, investments in Equity Shares, preference shares, debentures, treasury bills, government securities, mutual funds, alternative investments funds and derivative contracts. The Group has diversified portfolio of investment with various number of counter parties which have secure credit ratings hence the risk is reduced. Individual risk limits are set for each counter party based on financial position, credit rating and past experience. Credit limits and concentration of exposures are actively monitored by the Management of the Group.
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.
Liquidity risk is managed by Company through effective fund management. The Company's principal sources of liquidity are cash and cash equivalents, borrowings and the cash flow that is generated from operations. The Company believes that current cash and cash equivalents, tied up borrowing lines and cash flow that is generated from operations is sufficient to meet requirements. Accordingly, liquidity risk is perceived to be low.
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. Market risk comprises three types of risk: currency risk, interest rate risk and price risk.
The Company is exposed to currency risk on account of its operating and financing activities. The functional currency of the Company is Indian Rupee. Company's exposure is mainly denominated in U.S. dollars (USD). The USD exchange rate has changed substantially in recent periods and may continue to fluctuate substantially in the future. The Company has put in place a Financial Risk Management Policy to Identify the most effective and efficient ways of managing the currency risks. The Company uses derivative instruments (mainly foreign exchange forward contracts) to mitigate the risk of changes in foreign currency exchange rate.
The Company does not use derivative financial instruments for trading or speculative purposes.
The following table details the Company's sensitivity to a 5% increase and decrease in the Rupee against the relevant foreign currencies. 5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management's assessment of the reasonably possible change in foreign exchange rates. This is mainly attributable to the net exposure outstanding on receivables or payables in the Company at the end of the reporting period. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% charge in foreign currency rate. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases. In cases where the related foreign exchange fluctuation is capitalised to fixed assets or recognised directly in reserves, the impact indicated below may affect the Company's income statement over the remaining life of the related fixed assets or the remaining tenure of the borrowing respectively.
Interest rate sensitivity has been calculated assuming the borrowings outstanding at the reporting date have been outstanding for the entire reporting period.
The Company has deployed its surplus fund into various financial instruments including units of mutual fund, bond, debentures etc. The Company is exposed to price risk on such investments, which arises on account of interest rate, liquidity and credit quality of underlying securities.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in prevailing market interest rates. The Company's exposure to the risk due to changes in interest rates relates primarily to the Company's short-term and long term borrowings with floating interest rates. The Company constantly monitors the credit markets and revisits its financing strategies to achieve an optimal maturity profile and financing cost.
The Company has given interest free loan to Subsidiaries for business purpose.
The Company's investments in term deposits (i.e., certificates of deposits) with banks, investments in preference shares, mutual funds and debentures are at fixed interest rate and therefore do not expose the Company to significant interest rates risk.
52 Balances in loans and advances, trade receivables, trade payables and borrowings are subject to confirmations and reconciliations, if any, however the management does not expect any material differences.
Company's Wholly Owned Subsidiary, Sarlaflex, Inc. has suspended its manufacturing operations since December 2017. Thus, management of the Subsidiary is presently monitoring the situation on a continuous basis and exploring all options including sale of the undertaking. Based on the impairment indicator, Company has tested its investments in Sarlaflex, Inc. for whether any impairment is required to be recognised in accordance with the requirements of Ind AS 36 -Impairment of Assets.
As at 31st March, 2025, the Company has gross exposure amounting to Rs. 8,926.95 lakhs by way of investments in preference shares, equity shares of Sarlaflex, Inc, loans and advances given to Sarlaflex, Inc. Impairment assessment of those gross exposure have been performed by comparing carrying value to their recoverable amount. Further, an impairment of Rs. 1,840.10 was recognised in previous years. For the purpose of impairment testing, recoverable amount of Investments in equity and preference shares has been determined considering valuation report dated 28th August, 2024 obtained from an external expert. Consequently, impairment provision amounting to Rs. 440 lakhs has been recognised in the Statement of Profit and Loss as an exceptional item. Deferred tax assets is not recognised for impairment provision on investments in subsidiary on account of reasonable certainty in accordance with Ind AS 12 - Income Taxes.
(a) Impairment loss recognized in statement of Profit and Loss (as an exceptional item ) as Quarter ended September 2024 : Rs. 440 lakhs
(b) Revised Carrying Amount as at March 31, 2025: Rs. 5,544 lakhs (after reducing earlier impairment loss on recognised on 30th September 2024, of Rs. 440 lakhs
(c) Recoverable amount: Rs. 5,810 lakhs
(d) Value in use: Rs. 5,623 lakhs
(e) Assumptions used for valuation by an external expert:
• Valuation is carried out under Ind AS 36, Discounted Cash Flow is worked out with a weighted average Cost of Capital 10%
• The Future projected Cash Flows were taken into consideration for discounting purposes based on updated cash flows and market conditions.
• Terminal Growth Rate: 2% future projected cash folws
No Further impairment required as at March 31, 2025 as VIU is higher then Carrying value 55 Other disclosures
1. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
2. The Company is not declared as wilful defaulter by any bank or financial Institution or other lender.
3. There is no Scheme of Arrangements approved by the Competent Authority in terms of sections
230 to 237of the Companies Act, 2013.
4. The Company has no such transaction which is not recorded 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).
5. The Company have not traded or invested in Crypto currency or Virtual Currency during the year.
6. The Company does not have any charges or satisfaction which is yet to be registered with ROC
beyond the statutory period except few charges, for which the company is in process of satisfying charge against which payment has been made.
7. The Company have 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.
8. The Company have 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. 9. The Company has complied with the requirement in respect of number of layers prescribed under Section 2(87) of the Companies Act, 2013 read with Companies (Restiction on number of Layers) Rule, 2017.
57 For the Financial Year 2024-25, the company has paid Rs.359.85 lakhs inclusive of interest and penalty towards the labilities arising form disallowance of input tax credit pursuant to an audit conducted by GST authorities from FY 2018-19 to 2022-23.
This amount has been recognized in the statement of Profit and Loss under the head “Other Expenses” and “Finance Cost”.
58 For the Financial Year 2024-25, the company has made a provision aggregating to Rs. 505.60 lakhs against the loan and advances given to the wholly owned subsidiary company.
This amount has been recognized in the statement of Profit and Loss under the head “Other Expenses”.
No adjusting or significant non - adjusting events have occurred between the reporting date (March 31, 2025) and the report release date (April 25, 2025)
60 Figures for previous year have been regrouped, wherever necessary