(a) Terms / Rights attached to the equity Shares :
The Company has one class of shares referred to as equity shares having a par value of ' 10 each. Each shareholder is entitled to one vote per share held.
In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
Note 14.1 : the approved Resolution Plan outlines a proposed payment of ' 3992.50 Lakhs to Bank of Baroda. This sum includes the issuance of Zero Coupon Non-Convertible Debentures (NCD) totalling ' 159.50 Lakhs repayable at the end of 4 years.
As of March 31st, 2023, the Company has already prepaid the amount in lieu of issuance of NCD @9% discount and booked gain of ' 19.50 Lakhs which has been recorded under exceptional items. (Note No 28) Refer Note No. 37 of Notes to Accounts
Note 14.2 :As per approved Resolution Plan by Hon'ble NCLT, Ahmedabad, the Company was required to issue Zero Coupon Non-Convertible Debenture (NCD) of ' 1,59,50,000/- to Bank of Baroda (erstwhile Dena Bank) repayable at the end of 4 years from the date of approval of resolution plan. However, Pending issuance of NCD, company sought necessary approval from Hon'ble NCLT to pay the amount at 9% discount instead of issuing NCD and accordingly paid ' 1,40,00,000/- based on the Judgment received from National Company Law Tribunal dated 10th January 2023
As per intimation available with the Company, there are no other micro, small and medium enterprises as defined in the Micro, Small and Medium Enterprise Development Act, 2006 to whom the Company owes dues on account of principal amount together with interest. This has been relied upon by the auditors.
xiv. Provisions, contingent liabilities and contingent assets
Provisions are recognized when the Company has a present obligation (legal or constructive)as a result of a past event, it is probable that an outflow of resources embodying economic benefit will be required to settle the obligation and a reliable estimate can be made of the amount of the obligationThese are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements
xv. Related Party Transactions:
Disclosure of transactions with Related Parties, as required by Ind AS 24 "Related Party Disclosures" has been set out in a separate statement annexed to this Schedule as per Note No. 37 Related Parties as defined in Ind AS 24 have been identified on the basis of representations made by key managerial personnel and information available with the Company.
xvi. Provisions:
A provision is recognized when Company has a legal and constructive obligation as a result of a past event, for which it is probable that cash outflow will be required and a reliable estimate has been made of the amount of the obligation. Accordingly, provision for income tax payable has not been done. MAT credit of ' Nil (PY. ' Nil) lakhs and unabsorbed depreciation of ' 333.89 (PY.' 465.86) lakhs have been ignored for the purpose of DTA provision.
xvii. Classification of Subsidy Receivable into Current and Non-Current Asset:
(a) The Company has received eligibility certificate from concerned department regarding VAT concession for amount of Subsidy of ' 3066.38 Lakhs for 8 years in equal installments. The VAT Concession is for the period of 8 years from 01-012014 to 31-01-2021. Amount under Subsidy receivable is treated as Non -Current Assets. The status of subsidy amount as per certificate received from concerned authorities is as under.
32 EMPLOYEES BENEFIT :-
(I) Post Employment Defined Contribution Plan
The Company contributes to the Provident Fund (PF) maintained by the Regional Provident Fund Commissioner. Under the PF scheme contributions are made by both the Company and its eligible employees to the
Fund , based on the current salaries . An amount of ' 10,62,525 (31st March 2022 : ' 10,07,163) has been charged to the Statement of Profit and Loss towards Company's contribution to the aforesaid PF scheme.
Apart from making monthly contribution to the scheme, the Company has no other obligation.
(ii) Post Employment Defined Benefit Plan-Gratuity (Funded)
The Company provides for Gratuity, a defined benefit retirement plan covering eligible employees.
(b) Fair value hierarchy
All assets and liabilities for which fair value is measured or disclosed in the Standalone Financial Statements are categorised within the fair value hierarchy, described as follows:
Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
The following tables provides the fair value measurement hierarchy of the Company's financial assets and liabilities that are measured at fair value or where fair value disclosure is required.
(c) Valuation technique to determine fair value
The following methods and assumptions were used to estimate the fair values of financial instruments:
(i) The management assessed that fair value of cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
(ii) The fair values of the equity investment which are quoted, are derived from quoted market prices in active markets. The Investments measured at fair value (FVTOCI) and falling under fair value hierarchy Level 3 are valued on the basis of valuation
reports provided by external valuers with the exception of certain investments, where cost has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair values within that range. The Company considers Comparable Companies Method (CCM) method and the illiquidity discount based on its assessment of the judgement that market participants would apply for measurement of fair value of unquoted investments. In the CCM method, the Company would find comparable listed entities in the market and use the same PE multiple (ranging from 9.80 to 20.60) for determining the fair value of the investment.
(iii) The fair values of investments in mutual fund units is based on the net asset value ('NAV') as stated by the issuers of these mutual fund units in the published statements as at Balance Sheet date. NAV represents the price at which the issuer will issue further units of mutual fund and the price at which issuers will redeem such units from the investors.
(iv) The Company enters into derivative financial instruments with various counterparties, principally banks. The fair value of derivative financial instruments is based on observable market inputs including currency spot and forward rate, yield curves, currency volatility, credit quality of counterparties, interest rate and forward rate curves of the underlying instruments etc. and use of appropriate valuation models.
(v) The fair value of non-current borrowings carrying floating-rate of interest is not impacted due to interest rate changes, and will not be significantly different from their carrying amounts as there is no significant change in the under-lying credit risk of the Company (since the date of inception of the loans).
(d) Financial risk management objectives
The Company is exposed to market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk. The Company's risk management strategies focus on the un-predictability of these elements and seek to minimise the potential adverse effects on its financial performance. The Company's senior management which is supported by a Treasury Risk Management Group ('TRMG') manages these risks. TRMG advises on financial risks and the appropriate financial risk governance framework for the Company and provides assurance to the Company's senior management that the Company's financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company's policies and risk objectives. All hedging activities are carried out by specialist teams that have the appropriate skills, experience and supervision. The Company's policy is not to trade in derivatives for speculative purposes.
35 NET GAIN / (LOSSES) ON FAIR VALUE CHANGES
Estimated amounts of contracts remaining to be executed on Capital Account (Net of Advance) and not provided for ' - Nil (Previous year - Nil)
36 CONTINGENT LIABILITY NOT PROVIDED FOR IN RESPECT OF:
a) SagarPowertex Pvt. Ltd have filed a suit against the Company u/s 138 of Negotiable Instrument Act.
b) As per Approved resolution Plan, Liability of the company which is contingent in nature is being caped at ' 2.50 lakh pertaining to period before CIRP.
c) The company has provided a bank guarantee of ' 9100.00 Lakhs for its subsidiary company named K.P. Woven Private Limited.
40 EARNING PER SHARE :-
Basic Earnings per Share is calculated by dividing the net profit/ loss for the year attributable to ordinary equity holders by the weighted average number of equity shares outstanding during the year.
Diluted Earnings Per Share is calculated by dividing the profit attributable to equity holders (or owners) of the Company by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.
41 PREPAID TOWARDS NON CONVERTIBLE DEBENTURE:
As per approved Resolution Plan by Hon'ble NCLT, Ahmedabad, the Company was required to issue Zero Coupon Non-Convertible Debenture (NCD) of ' 1,59,50,000/- to Bank of Baroda (erstwhile Dena Bank) repayable at the end of 4 years from the date of approval of resolution plan. However, Pending issuance of NCD, company sought necessary approval from Hon'ble NCLT to pay the amount at 9% discount instead of issuing NCD and accordingly paid ' 1,40,00,000/- based on the Judgment received from National Company Law Tribunal dated 10th January 2023.
42 RISK MEASUREMENT, OBJECTIVES AND POLICIES42.1 Financial Risk Management
The Company's principal financial liabilities comprise loans and borrowings in domestic & foreign currency, trade payables and other payables. The main purpose of these financial liabilities is to finance the Company's operations. The Company's principal financial assets include loans, trade and other receivables, and cash and short-term deposits that derive directly from its operations.
The Company has exposure to the following risks from its use of financial instruments:
- Credit risk
- Liquidity risk
- Market risk
This note presents information about the Company's exposure to each of the above risks and how the Company is managing such risk.
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.
42.2 Credit Risk Management
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 others. In addition, credit risk arises from financial guarantees.
The Company implements a credit risk management policy under which the Company only transacts business with counterparties that have a certain level of credit worthiness based on internal assessment of the parties, financial condition, historical experience, and other factors. The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Company has established a credit policy under which each new customer is analyzed individually for creditworthiness.
The Company establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component that are expected to occur. The collective loss allowance is determined based on historical data of payment statistics for similar financial assets. Debt securities are analyzed individually, and an expected loss shall be directly deducted from debt securities.
Credit risk also arises from transactions with financial institutions, and such transactions include transactions of cash and cash equivalents and various deposits. The Company manages its exposure to this credit risk by only entering into transactions with banks that have high ratings. The Company's treasury department authorizes, manages, and oversees new transactions with parties with whom the Company has no previous relationship.
The Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends and ageing of accounts receivable. Individual risk limits are set accordingly.
42.3 Liquidity Risk
Liquidity risk is the risk that the Company may 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 always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation.
The company's treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the company's net liquidity position through rolling forecast on the basis of expected cash flows.
Maturity profile of financial liabilities
The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual discounted payments.
42.4 Market risk
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and loan borrowings. The goal of market risk management is optimization of profit and controlling the exposure to market risk within acceptable limits.
a) Foreign currency rate 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. The Group transacts business in foreign currencies (primarily USD, EUR and GBP). Consequently,the Group has foreign currency trade payables and receivables and is therefore exposed to foreign exchange risk. The Group manages its foreign currency risk by following policies approved by board as per established risk management policy.
Foreign Currency Sensitivity
The Following tables demostrate the sensitivity to reasonabaly possible change in USD rates to functional currency of respective entity. With all other variable held constant. The Group's exposure to foreign currency changes for all other currencies is not material. The impact on the Group's profit before tax is due to changes in fair value of monetary assets and Liabilities.
b) 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.
Interest rate Sensitivity
With all other variables held constant, the following table demonstrates the impact of the borrowing cost on floating rate portion of loans and borrowings
c) Commodity Price Risk
Principal Raw Material for company's products are Polyproplene Granules, LLDPE Granules, LDPE Granules,Filler, HDPE Granules, Master Batch etc. Company sources its raw material requirements from domestic markets as well as International markets. Domestic market price generally remains in line with international market prices. Volatility in Granules prices, currency fluctuation of rupee vis-a-vis other prominent currencies coupled with demand-supply scenario in the world market affects the effective price of raw materials. Company effectively manages availability of material as well as price volatility through well planned procurement and inventory strategy and also through approprate contracts and commitments.
43 For the purposes of the Company's capital management, capital includes issued capital and all other equity reserves. The primary objective of the Company's Capital Management is to maximize shareholder value. The company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirement of the financial covenants.
44 The Parent has, issued 4,41,000 equity shares of face value of ' 10/- each ('Rights Equity Shares') to the Public Eligible Equity Shareholders at an issue price of ' 600/- per Rights Equity Share (including premium of ' 590/- per Rights Equity Share), in the ratio of 3 Rights Equity Shares for every 5 existing fully paid-up shares held by the public eligible equity shareholders as on March 18, 2022, the Record date. Further, on April 21,2022, the Management Committee of the Board of Directors approved the allotment of Equity Shares in relation to the said Rights Issue.
45 ADDITIONAL STATUTORY INFORMATION:
(a) The title deeds of all the immovable properties, (other than immovable properties where the Group is the lessee and the lease agreements are duly executed in favour of the Group) disclosed in the financial statements Included in property, plant and equipment and capital work-in progress are held in the name of the Group as at the balance sheet date.
(b) The Company has not advanced or loaned or invested funds to any promoter(s), Director(s), KMP(s) or their Related Parties.
(c) The Company does not have any benami property, where any proceeding has been initiated or pending against the Group for holding any benami property.
(d) The Company is not declared wilful defaulter by and bank or financials institution or lender during the year.
(e) The Company does not have any transactions with companies which are struck off.
(f) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(g) 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.
(h) No scheme of arrangements have been approved by the competent authority. Hence, reporting under this point is not applicable.
(i) I. 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:
(i) 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)
(ii) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
II. 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:
(i) 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)
(ii) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
(j) There are no transactions 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
(k) Corporate social responsibility
(a) Corporate social responsibility, amount require to be spent as per Section 135 of the companies Act, 2013 read with Schedule VII.
(l) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(m) The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified and the final rules/interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.
46 Figures for the previous year have been regrouped/reclassified wherever necessary to conform to current period's classification, in order to comply with the requirements of the amended Schedule III to the Companies Act,2013.
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