14.4 During PY in accordance with the Approved Resolution Plan, the company has cancelled the shares of the erstwhile promotors and promotor group shareholders and has also reduced shares of the public shareholders to 1 share of ' 10 each for every 80 shares held. The capital reduction was approved by Central Depository Services (India) Limited and National Securities Depository Limited. The capital reduction was completed on March 09,2023.
14.5 The Company has only one class of equity shares having a par value of ' 1 per share, each shareholder is eligible for one vote per share. The Company declares and pays dividend in Indian Rupees. Dividend Proposed by Board of Directors is subject to approval of Shareholders in the ensuing Annual General Meeting.
14.6 In the event of liquidation, the Equity Sharesholders are eligible to receive the remaining Assets of the Company after Distribution of all Preferential amount, in proportion to Shareholding.
14.7 There are no shares issued pursuant to contract without payment being received in cash, allotted as fully paid up by way of bonus shares and bought back during the last 5 years.
14.8 The Board of Directors at its meeting held on December 7, 2023 approved the sub division of its Equity shares of face value ' 10 each into Equity shares of face value ' 1 each. The said sub division was further approved by the Share holder through Postal Ballot on January 11, 2024. The Company had fixed January 25, 2024 as the record date for the purpose of sub division of the Equity shares. The Basic and Diluted EPS for the prior periods of standalone and the consolidated financial statements have been restated considering the face value of ' 1 each on accordance with IND AS 33 - "Earning per share”
Nature of Other Reserves
Securities Premium Account : Securities Premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions ofthe Companies Act, 2013.
Capital Reserve : Represent a non-distributable reserve.
General Reserve : General Reserve is created in earlier years pursuant to the provisions of the Companies Act. General Reserve is a free reserve available to the Company.
30 : CONTINGENT LIABILITIES
(1) Pursuant to its order dated 05th October, 2021 ("NCLT Order”), after the payment of the dues to Creditors, Unsecured Creditors, Secured Operational Creditors, as per the Resolution Plan all the liabilities of the said stakeholders shall stand permanently extinguished as per the approved Resolution Plan. Any other claims including Government/ Statutory Authority, whether lodged during CIRP or not and any contingent/unconfirmed dues shall also stand extinguished.”
(2) Against the NCLT Order dated 05th October, 2021, Employee union has gone against the order and demanded their P.F. Dues. Accordingly the company has not extinguished PF Liabilities. However their actual liabilities will be confirmed once judgement is received.
(3) At the pre - acquisition stage, there were outstanding statutory dues related to water and electricity charges for the leasehold property located at MIDC, Koper khairne. These dues were waived off through an NCLT Order dated 29th Sept 2022. However, we have not yet received the No Objection Certificate (NOC) from the relevant government department, as they have not yet agreed to the waiver. The company is currently in process of obtaining NOC
32: SEGMENT REPORTING
As per para 4 of Ind AS 108 "Operating Segments”, if a single financial report contains both consolidated financial statements and the separate financial statements of the Parent Company, segment information may be presented on the basis of the consolidated financial statements. Thus, the information related to disclosure of operating segments required under Ind AS 108 "Operating Segments”, is given in Consolidated Financial Statements.
33: DISCLOSURES AS REQUIRED BY INDIAN ACCOUNTING STANDARD (IND AS) 19 EMPLOYEE BENEFITS
Since there are only two employeess, the Company has not made provision for gratuity and leave encashment for the year. In the absence of such valuation, relevant disclosures as per Ind AS-19 Employee Benefits have not been given.
34 - CORPORATE SOCIAL RESPONSIBILITY
In accordance with the provisions of Section 135 of the Companies Act, 2013, Schedule VII and Companies (Corporate Social Responsibility Policy) Rules, 2014 as amended, the Board of Directors of the Company had constituted a Corporate Social Responsibility (CSR) Committee. In terms of the provisions of the said Act, the Company was required to spend 21.85 lakhs (previous year NIL) towards CSR activities during the year ended 31st March, 2024. The Company has incurred following expenditure towards CSR activities for the benefit of general public and in the neighbourhood of the Company.
Note:
(i) The above related party transactions have been reviewed periodically by the Board of Directors of the Company visa-vis the applicable provisions of the Companies Act, 2013, and justification of the rates being charged/ terms thereof and approved the same.
ii) All related party transaction have been taken at arm’s length price.
37. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company’s Risk Management framework encompasses practices relating to the identification, analysis, evaluation, treatment, mitigation and monitoring of the strategic, external and operational controls risks to achieving the Company’s business objectives. It seeks to minimize the adverse impact of these risks, thus enabling the Company to leverage market opportunities effectively and enhance its long-term competitive advantage. The focus of risk management is to assess risks and deploy mitigation measures.
The Company’s activities expose it to variety of financial risks namely market risk, credit risk and liquidity risk. The Company has various financial assets such as deposits,other receivables and cash and bank balances directly related to the business operations. The Company’s principal financial liabilities comprise of trade and other payables. The Company’s senior management’s focus is to foresee the unpredictability and minimize potential adverse effects on the Company’s financial performance. The Company’s overall risk management procedures to minimize the potential adverse effects of financial market on the Company’s performance are outlined hereunder:
The Company’s Board of Directors have overall responsibility for the establishment and oversight of the Company’s risk management framework.
The Company’s risk management is carried out by the management in consultation with the Board of Directors. They provide principles for overall risk management, as well as policies covering specific risk areas.
The note explains the sources of risk which the entity is exposed to and how the entity manages the 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, and arises principally from the Company’s receivables from customers and from its financial activities including deposits with banks and other financial instruments.
(i) Cash and cash equivalents:
The Company considers factors such as track record, size of institution, market reputation and service standard to select the banks with which deposits are maintained. The Company does not maintain significant deposit balances other than those required for its day to day operations. Credit risk on cash and cash equivalents is limited as these are generally held or invested in deposits with banks and financial institutions with good credit ratings.
(B) Liquidity Risk
Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company’s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses. In doing this, management considers both normal and stressed conditions.
The Company’s objective is to maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company relies on a mix of borrowings, capital and excess operating cash flows to meet its needs for funds. The current committed lines of credit are sufficient to meet its short to medium term expansion needs. The Company monitors rolling forecasts of its liquidity requirements to ensure that it has sufficient cash to meet operational needs.
The table below provides undiscounted cash flows towards non-derivative financial assets/ (liabilities) into relevant maturity based on the remaining period at the Balance Sheet date to the contractual maturity date and where applicable, their effective interest rates.
(C) Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices.Market risk comprises three types of risks : foreign currency risk, interest risk and other price risk such as commodity risk.
(i) Interest rate risk
The Company’s exposure to the risk of changes in market interest rates relates primarily to debts having floating rate of interest. Its objective in managing its interest rate risk is to ensure that it always maintains sufficient headroom to cover interest payment from anticipated cashflows which are regularly reviewed by the Board.
(ii) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates and arises where transactions are done in foreign currencies. It arises mainly where receivables and payables exist due to transactions entered in foreign currencies. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows approved policy parameters utilizing forward foreign exchange contracts whenever felt necessary. The Company does not enter into financial instrument transactions for trading or speculative purpose.
I. Foreign Currency Exposure
Refer Note 33 for foreign currency exposure as at reporting periods respectively.
(iii) Commodity Risk:
The Company is exposed to the movement in the price of key raw materials and other traded goods in the domestic and international markets. The Company has in place policies to manage exposure to fluctuation in prices of key raw materials used in operations. The Company enters into contracts for procurement of raw materials and traded goods, most of the transactions are short term fixed price contracts and a few transactions are long term fixed price contracts.
(D) Capital management
The Company manages its capital to be able to continue as a going concern while maximising the returns to shareholders through optimisation of the debt and equity balances. For the purpose of calculating gearing ratio, debt is defined as non current and current borrowings (excluding derivatives). Equity includes all capital and reserves of the Company attributable to equity holders of the Company. The Company is not subject to externally imposed capital requirements. The Board reviews the capital structure and cost of capital on an annual basis but has not set specific targets for gearing ratios. The risks associated with each class of capital are also considered as part of the risk reviews presented to the Board of Directors.
1) Current ratio (in times)
The company has invested the surplus funds into certain investment buckets. During the year the company has repaid significant borrowings.
2) Debt equity ratio (in times)
Improved due to repayment of significant borrowings and substantial jump in profit before tax.
3) Inventory turnover ratio (in times)
Improved revenue cycles leading to better turnover ratio and lower inventory holding period.
4) Trade receivable turnover ratio (in times)
Increased due to improvement in debtor’s collection cycle.
5) Trade Payable turnover Ratio (in times)
Increased due to better financial position of the company leading to intime payments of creditors.
6) Net profit ratio (%):
Decrease due to below reasons:
1. Exceptional DTA in previous year.
2. Decrease in depreciation due to non allowability of amortisation of goodwill.
If Eliminating the above exceptional items, ratio has been improved.
7) Return on capital employed (%)
Major impact due to significant increase in turnover and better profitibility of the company during the year.
8) Return on Investment (%)
Major impact due to significant increase in turnover and better profitibility of the company during the year.
Note 39
The Company does not have any transactions with companies struck - off under Section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956.
Note 40
Previous period figures have been regrouped, re-classified and re-arranged wherever considered necessary to confirm to the current year’s classification.
Note 41 -
Additional information as required under para 2 of General Instruction of Division II of Schedule III to the Companies Act, 2013.
A. The Company has not carried out any revaluation of Property, Plant and Equipment in any of the period reported in this Financial Statements hence reporting is not applicable.
B. The Company does not hold any benami property as defined under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder. 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. The company does not have any charges or satisfaction, which is yet to be registered with ROC beyond the statutory period.
D. The Company does not have any such trasaction 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).
E. 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,
F. During the FY 2023-24 the Company had raised the equity through fresh issue of 8,42,000 Equity Shares under Qualified Institutions Placement basis. These shares have been issued at a premium of Rs. 448 per share against equity share price of Rs.10 each. The primary purpose of said equity issuance was to achieve Minimum Public Shareholding (MPS) of 25%. The said funds will be utilized towards refurbishment and / or acquisition of asset through Subsidiary and repayment of outstanding borrowings availed by company and would be helpful in growing business further.
G. The Board of Directors of the company at the meeting held on December 07,2023 has approved subdivision of Equity shares of the company having face value of Rs. 10 per shares into Equity shares having face value of Rs. 1 per share subject to approval of shareholders and/or any other regulatory authority , if any.
H. The Company has not traded or invested in crypto currency or virtual currency during the financial year.
I. The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act
read with the Companies ( Restriction on number of Layers) Rules, 2017.
43. Brief note on NCLT. Order.
1. Based on the petition filed by a financial creditor, the Hon’ble NClT, Mumbai Bench, passed the order for initiation of CIRP under section 7 of the insolvency and Bankruptcy Code, 2016 (As amended and hereinafter referred to as "the
Code”) dated July 16, 2020 appointing Mr. Vinit Gangwal as Interim Resolution Professional. The COC in its 3rd
meeting held on October 19,2020 appointed Mr. Dinesh Kumar Agarwal as the Resolution Professional (RP)and the same was approved by NCLT bench vide order dated December 04, 2020. Further, the RP had invited expression of interest (Eol) from Prospective Resolution Applicants (PRAs) to submit the Resolution Plan for the Company. Final
plans received were placed, put to vote in the 16th CoC meeting held on February 07, 2022. The resolution plan submitted by M/s Deep Industries limited (Resolution Applicant- RA) was approved by CoC. The application for Plan approval was filed with Hon’ble National Company Law Tribunal (NCLT) on February 16, 2022 and subsequently has been approved/allowed by the Hon’ble NCLT vide Order dated September 29, 2022.
2. With the approval of the Resolution Plan by the Hon’ble National Company Law Tribunal (NCLT) vide Order dated September 29, 2022, the CIRP of the Company has concluded and Mr. Dinesh Kumar Agarwal ceased to be the RP of the Company. The said resolution plan has been implemented by the Monitoring Committee and the management of the Company has been handed over to the RA by the Monitoring Committee w.e.f. April 01, 2022. In view of the approved resolution plan, following effects have been given in the accounts of the Company for the year and quarter ended March 31, 2023.
3 (a) In compliance with Rule 19A(5) of the Securities Contracts (Regulation) Rules, 1957 with respect to 5% public
shareholding, shares held by public shareholders shall stand partially extinguished while that of promoters shall stand extinguished. Fresh equity is issued by RA through its subsidiary to the tune of INR 3 Crores carrying 95% shareholding having face value of INR 10 each.
(b) The existing directors of the Company as on the date of Order stand ceased pursuant to the order. The new Board of Directors were appointed by the Monitoring Agency with effect from December15, 2022.
(c) In view of extinguishment post payment as per the Resolution Plan, balances comprising of current liabilities, current assets, statutory outstanding and equity investments except Provident Fund & ESIC, the same is recognized in the statement of profit and loss statement in accordance with "Ind AS - 109” on "Financial Instruments” prescribed under section 133 of the Companies Act, 2013 and disclosed and included under "Exceptional items”.
(d) In view of extinguishment post payment as per the Resolution Plan, balances comprising of financial creditors & extinguished equity, is recognized directly in "Other Equity” in accordance with "Ind AS - 109” on "Financial Instruments” prescribed under section 133 of the Companies Act, 2013.
(e) Funds amounting to INR 1,802.53 Lakhs were brought by way of Unsecured Loans and INR 300 Lakhs by way of Equity Shares by the RA through its subsidiary as per the terms of the approved resolution plan.
(f) As per approved resolution plan, the contingent liabilities and commitments, claims and obligations, corporate guarantees and Legal Proceedings initiated against the Company stand extinguished and accordingly no outflow of economic benefits is expected in respect thereof. The Resolution plan further provides that implementation of resolution plan will not affect the rights of the Company to recover any amount due to the Company and there shall be no set off of any such amount recoverable by the Company against any liability discharged or extinguished.
(g) As per NCLT order, the existing issued, subscribed, paid up 1,67,72,518 equity share capital of Rs. 10 each stand fully cancelled and extinguished. The reduction in the share capital of the Company amounting to Rs. 1,677.25 Lakh is adjusted against the debit balance as appearing in its profit and loss account (i.e., retained earnings).
|