15.2.1 Capital redemption reserve represents the reserve created against the redemption of 8% redeemable cumulative preference shares of Rs. 10/- each, amounting to Rs.3 Crores during the FY 2005-06, 7% redeemable non-cumulative preference shares of Rs.10/- each at par aggregating to Rs.45.10 Crores during the FY 2021-22. It is a statutory, nondistributable reserve into which amounts are transferred following the redemption of shares as per the relevant provisions of the Companies Act 2013.
14.5 Rights, preferences and restrictions attached to shares
The equity shares of the company have par value of Rs. 2/- per share. Each shareholder is eligible for one vote per share held. All these equity shares have same right with respect to payment of dividend, repayment of capital and voting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of preferential amounts, in proportion to their shareholding.
15.4.1 Retained earnings represents the undistributed profits of the Company. The amount that can be distributed by the company as dividends to its equity shareholders is determined on the basis of the balance of the retained earnings of the financial statements after considering the requirements of the Companies Act, 2013.
16.1 Term Loan carries an interest rate at 0.30% p.a (spread) over and above 3 months MCLR and will be repaid in 20 quarterly installments till 31.03.2027. The term loan from bank is secured by way of first charge on entire movable and immovable fixed assets of the company, corporate guarantee of promoter Company, personal guarantee of promoter director. It is also secured by way of second pari-passu charge on stocks and book debts (both present and future).
16.2 Vehicle loans are secured by hypothecation of vehicles purchased under the respective agreements.! nterest rate varies from 7.04% to 10.07% p.a, repayable in equated monthly installment.
18.1 The working capital loans from banks are secured by way of 1st pari-passu charge on entire current assets ( both present and future), 2nd pari-passu charge on all movable and immovable fixed assets of the company, corporate guarantee of promoter company and personal guarantee of the promoter director.
34.2.2 The Company has received demand from South Eastern Railway towards differential freight payment pertaining to the period FY 2008-09 to FY 2010-11 amounting to Rs 603.91 lakhs plus interest and penalty there on. The matter is subjudice with hono'rable Calcutta High Court. The management are in view that there is a fair chance of quashing of demand and accordingly no provision has been made in the Accounts.
37. EMPLOYEE BENEFITS37.1 Defined contribution plans
The Company participates in a number of defined contribution plans on behalf of relevant personnel. Any expense recognised in relation to these schemes represents the value of contributions payable during the period by them at rates specified by the rules of those plans. The only amounts included in the balance sheet are those relating to the prior month's contributions that were not due to be paid until after the end of the reporting period.
Provident fund
In accordance with Indian law, eligible employees of K I C Metaliks Limited are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employees' salary (currently 12% of employees' salary). During the year, the company has recognised Rs. 110.49 lakhs (2021-22: Rs. 106.54 lakhs) as contribution in the Statement of profit and loss.
Employees' state insurance
In accordance with Indian law, eligible employees of K I C Metaliks Limited are entitled to receive benefits in respect of employee's state insurance, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employees' salary (currently 4.75% of employees' salary). During the year, the company has recognised Rs.32.79 lakhs (2021-22: Rs. 31.63 lakhs) as contribution in the Statement of profit and loss.
37.2 Defined benefit plans Gratuity
The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump-sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 to 26 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company accounts for the liability for gratuity benefits payable in the future based on an actuarial valuation. The Company is exposed to interest risk, liquidity risk, salary escalation risk, demographic risk and regulatory risk.
i. Interest risk : The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in financial statements).
ii. Liquidity risk: This is the risk that the Company is not able to meet the short-term gratuity payouts. This may arise due to non-availability of enough cash / cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time.
iii. Salary Escalation risk : The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan's liability.
iv. Demographic risk : The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.
v. Regulatory risk : Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act , 1972 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts (e.g. Increase in the maximum limit on gratuity of Rs. 20 lakhs).
The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as at 31.03.2023 by Kushwant Pahwa, Fellow of the Institute of Actuaries of India. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.
39. FINANCIAL RISK MANAGEMENT
The Company's principal financial liabilities comprises of loans and borrowings, trade and other payables. The main purpose of these financial liabilities are to finance the Company's operations and to support its operations. The Company's principal financial assets include trade and other receivables, and cash and short-term deposits that derive directly from its operations.
39.1 Risk management framework
Managing director and Chief Financial Officer of the Company evaluates and manages the uncertainties in the Company. They conduct meetings at regular intervals involving other high level officers of the company and provides updates to the Audit Committee/Board.
The management of financial risks by the Company is summarized below :-
39.1.1 Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk as a result of the risk of counterparties defaulting on their obligations. The Company's exposure to credit risk primarily relates to investments, accounts receivable and cash and cash equivalents. The Company monitors and limits its exposure to credit risk on a continuous basis. To manage this the Company periodically reviews the financial reliability of its customers, taking into account the financial condition, current economic trends and analysis of historical bad debts and ageing of accounts receivables.
39.1.2 Liquidity risk
The Company is exposed to liquidity risk related to its ability to fund its obligations as they become due. The Company monitors and manages its liquidity risk to ensure access to sufficient funds to meet operational and financial requirements. The Company has access to credit facilities and monitors cash balances daily. In relation to the Company's liquidity risk, the Company's policy is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions as they fall due while minimizing finance costs, without incurring unacceptable losses or risking damage to the Company's reputation.
39.1.3 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.
i) 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. Any weakening of the functional currency may impact the Company's cost of imports and cost of borrowings and consequently may increase the cost of financing the Company's capital expenditures. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks.
The following table demonstrates the sensitivity in the USD to the Indian Rupee with all other variables held constant. The impact on the Company's profit before tax due to changes in the fair values of monetary assets and liabilities is given below:
ii) 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. The Company manages its interest risk exposure relating to the financial instrument classified at amortised cost by using the market interest rate as the effective interest rate and the changes in the assets liabilities is accounted for as interest income/expenses with respect to financial assets/financial liabilities respectively. The Company however has only fixed interest rate term loan.
As there is no primary exposure to the interest rate risk the sensitivity analysis has not been performed by the Company.
41.1 Variation in coverage, turnover and other profitability ratios is primarily due to decrease in borrowings, increase in turnover and decrease in profitability during the year ended March 31, 2023
42. 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 has not traded or invested in Crypto currency or Virtual Currency during the financial year.
iii) 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
iv) 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.
v) The Company does not have any 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.
vi) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.
vii) The Company is not declared wilful defaulter by any bank or financial institution or lender during the year.
viii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
ix) The Company has used the borrowings from banks and financial institutions for the specific purpose for which it was obtained.
x) The title deeds of all the immovable properties, (other than immovable properties where the Company is the lessee and the lease agreements are duly executed in favour of the Company) disclosed in the financial statements included in property, plant and equipment and capital work-in progress are held in the name of the Company as at the balance sheet date.
xi) The Company does not have any transactions with companies which are struck off
xii) The Company has not given any loans or advances to promoters, directors, KMPs and related parties ( as defined under Companies Act, 2013), either severally or jointly with any other person.
43. PREVIOUS YEAR'S FIGURE HAVE BEEN RE-GROUPED/RE-CLASSIFIED WHEREVER NECESSARY.
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