The fair valuation is based on current prices in the active market for similar properties. The main inputs used are quantum, area, location, demand, restrictive entry to the complex,age of building and trend of fair market rent in village/city area.
This valuation is based on valuations performed by an accredited independent valuer. Fair valuation is based on replacement cost method. The fair value measurement is categorised in level 2 fair value hierarchy.
19.6 The Company has only one class of equity shares having a par values of Rs. 10/- per share. Each holder of 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 in proportion of the number of equity share held by the shareholders.
19.7 During the year, the company has allotted 2282 (31st March 2023: NIL) Equity share of Rs.10/- each fully paid to its employee under Employee StockOption Plan (ESOP 2013).
40. CONTINGENT LIABILITIES
Particulars
As at
31st March, 2024
31st March, 2023
i)
Letter of Credit / Import Bills outstanding -
4,357.05
3,354.06
ii)
Bill Discounting
757.59
1,466.06
iii)
Standby Letter of credit (SBLC) issued by company bankers in favour of the bankers of its subsidiaries
- Ultima S A
6,133.80
6,078.14
iv)
Corporate Guarantee given by the company to a bank against facilities granted by that bank to its wholly owned subsidiaries Ultima Italia SRL.
135.05
134.33
v)
Karnataka Vat Demand Under dispute
56.60
vi)
Andhra Pradesh GST Demand Under dispute
81.07
vii)
Income tax Demand under dispute
87.19
3,485.04
viii)
Tamil Nadu Vat Under dispute
-
8.14
41. CAPITAL AND OTHER COMMITMENTS
Rs. in Lakhs
i) Commitments under import of goods & capital goods at concessional rate of custom duty.
3,379.00
6,402.26
ii) Estimated Value of contract remaining to be executed on capital account
19.24
7.78
42. SUBSEQUENT EVENT
Subsequent to the year ended March 31st 2024, the Board of Directors in its meeting held on 7th May 2024 approved the proposal of allotting of 12,01,000 warrants to promoter's group company, subject to the approval of shareholders at the extraordinary general meeting to be held on 3rd June 2024. Each warrant attached thereto has the right to subscribe for equal number of equity shares of face value of Rs,10/-each at a premium ofRs.420/-per share on preferential basis.
The Company primarily operates in the Fashion apparels and accessories segment. The Fashion apparels and accessories segment includes Leather products, Textiles products and intermediaries .
As defined in Ind AS 108, the chief operating decision maker (CODM) evaluates the Group's performance, allocate resources based on the analysis of the various performance indicator of the Group as a single unit. Therefore, there is no reportable segment for the Group as per the requirement of Ind AS 108 "Operating Segments".
49. The Net worth of a subsidiary has been eroded and there is a consequent possibility of impairment of equity investment of Rs. 4.78 crore. Looking into the subsidiary's future plans, growth prospects and determining it's valuation based on forecasting and discounting future cashflows, such impairment if any is considered to be temporary in nature and no impairment in value of the investment is made in the accounts of the company.
The fair value of the financial assets and liabilities are included at the amount that would be received to sell an asset and paid to transfer a liability in an orderly transaction between market participants.
Trade receivables, cash and cash equivalents, other bank balances, short term loans, other current financial assets, current borrowings, trade payables and other current financial liabilities, : approximate their carrying amounts largely due to the short-term maturities of these instruments.
Investments traded in active markets are determined by reference to quotes from the financial institutions; for example: Net asset value (NAV) for investments in mutual funds declared by mutual fund house.
The fair values for loans, security deposits were calculated based on cash hows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counter party credit risk.
The fair values of non-current borrowings are based on discounted cash hows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.
The following is the basis for categorising the financial instruments measured at fair value into Level 1 to Level 3 :
Level 1: This level includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: This level includes financial assets and liabilities, measured using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
Level 3: This level includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.
For the purpose of the Company's capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company's capital management is to maximise the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings less cash and cash equivalents.
In order to achieve this overall objective, the Company's capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants ofany interest-bearing loans and borrowing in the current period.
No changes were made in the objectives, policies or processes for managing capital during the years ended 31st March, 2024 and 31st March, 2023.
The Company's management monitors and manages the financial risks relating to the operations of the Company. These risks include credit risk, liquidity risk and market risk (including currency risk, interest rate risk and other price risk).
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. To manage this, the Company periodically assesses financial reliability of customers and other counter parties, taking into account the financial condition, current economic trends , and analysis of historical bad debts and ageing of financial assets.
Financial instruments that are subject to concentrations of credit risk, principally consist of balance with banks, investments in debt instruments/bonds, trade receivables, loans and advances. None of the financial instruments of the Company result in material concentrations of credit risks.
The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash hows, and by matching the maturity profiles of financial assets and liabilities.
The surplus funds with the Company and operational cash hows will be sufficient to dispose the financial liabilities within the maturity period.
Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash hows that May, result from a change in the price of a financial instrument. The Company's activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates risk/liquidity risk which impact returns on investments. Market risk exposures are measured using sensitivity analysis.
Interest rate risk is the risk that the fair value or future cash hows of a financial instrument will fluctuate because of changes in market interest rates. The Company's exposure to the risk of changes in market interest rates relates primarily to the debt obligations with floating interest rates. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings.
The following table details the Company's sensitivity to a 5% change in rupee value against the relevant foreign currencies, which is 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. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end.
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.
The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to accounts receivable . The use of foreign currency forward contracts is governed by the Company's strategy approved by the Board of Directors, which provide principles on the use of such forward contracts consistent with the Company's Risk Management Policy. The Company does not use forward contracts for speculative purposes.