1 CORPORATE INFORMATION :
Reliance Chemotex Industries Limited (CIN No.L40102RJ1977PLC001994) is a public limited company domiciled and incorporated in India and its shares are publicly traded on the BSE, in India. The registered office of Reliance Chemotex Industries Limited is at Village Kanpur,Post Box No 73,Udaipur District,Rajasthan 313003. The Company is primarily engaged in the manufacturing and sale of Synthetic & blended Yarn.
A. Basis of Preparation of Financial Statements:
a. The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as prescribed under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) (Amendment) Rules, 2016 and relevant provisions of the Companies Act, 2013.
b. Historical cost convention
The financial statements have been prepared on a historical cost basis, except for the following:
1) certain financial assets and liabilities that are measured at fair value;
2) defined benefit plans - plan assets measured at fair value.
c. Use of estimates and judgments
The estimates and judgments used in the preparation of the financial statements are continuously evaluated by the Company and are based on historical experience and various other assumptions and factors (including expectations of future events) that the Company believes to be reasonable under the existing circumstances. Differences between actual results and estimates are recognised in the period in which the results are known/materialised.
The said estimates are based on the facts and events, that existed as at the reporting date, or that occurred after that date but provide additional evidence about conditions existing as at the reporting date.
d. Current non-current classification
All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle (twelve months) and other criteria set out in the Schedule III to the Companies Act., 2013. e The financial statements of the Company are presented in Indian Rupee (INR), which is also the functional currency of the Company.
B. First Time Adoption of Ind AS:
These Financial Statements, for the year ended 31st March 2018 have been prepared in accordance with Ind AS 101, "First Time Adoption of Ind AS", as these are the Company's first Ind AS compliant financial statements.
For the periods upto and including the year ended 31st March 2017, the company prepared its financial statements in accordance with the accounting standards notified under section 133 of Companies Act, 2013, read together with Paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).
Accordingly, the company has prepared its financial statement to comply with the Ind AS for the year ending 31st March, 2018, together with the comparative figures as at and for the year ended 31st March, 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the company opening balance sheet was prepared as at 1st April, 2016, the date of transition to Ind AS. 2017.
(b) Term/Right attached to Equity Shares:
The Company has issued only one class of shares referred to as equity share having a face value of Rs.10/- per share ranking paripassu. The holders of equity shares are entitled to one vote per share.
(a) Preference Shares have a face value of Rs 100/- Each, these shares are redembable at par on expiry of 20 years from their respective date of allotment.
(b) However the Company can redeem the Preference Shares before the date of maturity.
(ii) Term Loans from Banks (Secured)
a) Term Loans from IDBI Bank Limited
Term Loan of Rs. 1919.00 Lacs, outstanding of Rs. NIL (P.Y. 217.81 Lacs) including Rs. NIL (P.Y. Rs. 217.81 Lacs) shown under the head Other Current Liabilities for Current Maturities of Long Term Debts in Note 21, is secured by way of joint first charge ranking paripassu of all immovable properties (by way of deposit of Title Deeds of Lease Hold Land), both present and future and hypothecation charge over movable (save and except book debts) machinery, spares, tools and accessories, present and future, subject to prior charges created in favour of Bankers for working capital facilities. The above loan of Rs. 1919.00 Lacs has also been guaranteed by the Managing Director and one other Director of the Company and are also secured by way of extension of pledge of 5,86,400 Equity Shares of the Company in the names of Directors and their relatives.
This loan is repaid in 96 monthly Instalments commencing from 01.04.2010 and last instalment is payable by 31.03.2018 and carry floating interest rate at base rate 4%.
b) Term Loan from State Bank of India
Term Loan of Rs. 1964.00 Lacs , outstanding Rs. NIL (P.Y. 60.50 Lacs) including Rs. NIL (P.Y. Rs. 60.50 Lacs) shown under the head Other Current Liabilities for Current Maturities of Long Term Debts in Note 21, is secured by way of joint first charge ranking paripassu of all immovable properties (by way of deposit of Title Deeds of Lease Hold Land), both present and future and hypothecation charge over movable (save and except book debts) machinery, spares, tools and accessories, present and future, subject to prior charges created in favour of Bankers for working capital facilities. The above loans of Rs. 1964.00 Lacs have also been guaranteed by the Managing Director and one other Director of the Company and are also secured by way of extension of pledge of Preference Shares of the face value of Rs. 175.00 Lacs of the Company belonging to Directors and pledge of Preference Shares of the face value of Rs. 150.00 Lacs belonging to a Promoter Company.
This loan is repaid in 84 monthly Instalments commencing from July 2010 and the last instalment is payable by 30th June 2017 and carry floating interest rate at base rate 3.70%.
Term Loan of Rs. 1300.00 Lacs, Outstanding of Rs. 325.16 Lacs (P.Y. 534.30 Lacs) including Rs. 216.60 Lacs (P.Y. 209.14 Lacs) shown under the head Other Current Liabilities for Current Maturities of Long Term Debts in Note 21, is secured by way of joint first charge ranking pari-passu of all immovable properties (by way of deposit of Title Deeds of Lease Hold Land), both present and future and hypothecation charge over movable (save and except book debts) machinery, spares, tools and accessories, present and future, subject to prior charges created in favour of Bankers for working capital facilities. The above loans of Rs.1300.00 lacs have also been guaranteed by the Managing Director and one other Director of the Company and are also secured by way of extension of pledge of Preference Shares of the face value of Rs. 175.00 Lacs of the Company belonging to Directors and pledge of Preference Shares of the face value of Rs. 150.00 Lacs belonging to a Promoter Company.
This loan is repayable in 72 monthly Instalments from Oct.2013 and last instalment is payable by September 2019 and carry floating interest rate at base rate 3%.
c) Corporate Loan of Rs. 1000.00 Lacs, Outstanding of Rs. 500.00 Lacs (P.Y. 739.06Lacs ) including Rs. 249.99 Lacs (P.Y. Rs. 239.06 Lacs) shown under the head Other Current Liabilities for Current Maturities of Long Term Debts in Note 21,is secured by First Pari Passu charges on Entire Current Assets of the Company present and future. Collateral security by way of 1st paripassu charge on Entire Fixed Assets of the Company including Factory Building at Village : Kanpur, Udaipur. The above loans of Rs.1000.00 Lacs have also been guaranteed by the Managing Director and one other Director of the Company.
This loan is repayable in 48 monthly Instalments starting from April 2016 and last instalment is payable by March 2020 and carry floating interest rate at base rate 3.60%.
d) Term Loan from Export Import Bank of India
Term Loan of Rs.1300.00 Lacs , Outstanding Rs. 974.99 Lacs as on 31.03.18 (P.Y. 1187.23 Lacs ) which includes buyer credit of EURO NIL (Previous Year EURO 5,42,032) equivalent to Rs. NIL (Previous Year Rs. 380.46 Lacs ) availed from PNB Hongkong against LOU from EXIM Bank, including Rs. 216.66 Lacs (P.Y. Rs. 216.66 Lacs ) shown under the head Other Current Liabilities for Current Maturities of Long Term Debts in Note 9, is secured by way of joint first charge ranking pari-passu of all immovable properties (by way of deposit of Title Deeds of Lease Hold Land), both present and future and hypothecation charge over movable (save and except book debts) machinery, spares, tools and accessories, present and future, Finished and semi finished products, other goods and uncalled capital, subject to prior charges created in favour of Bankers for working capital facilities. The above loans of Rs.1300.00 Lacs have also been guaranteed by Managing Director and one other Director of the Company.
This loan is repayable in 24 quarterly equal installments from November 2016 and last installment is payable by August 2022. The above term loan carry interest @LTMLR 2.60% p.a.
e) Term Loans (Vehicle Loans) from HDFC Bank Limited
i) Vehicle Loan from HDFC Bank Ltd. of Rs. 6.50 Lacs outstanding Rs. NIL as on 31.03.2018 (P.Y. 0.62 Lacs ) including Rs. NIL (P.Y. Rs. 0.62 Lacs ) shown under the head Other Current Liability for Current maturity of Long Term debts in Note 21 is secured by way of Hypothecation of respective car acquired out of the said loan. This Loan is repayable in 36 monthly instalment commencing from July, 2014 along with interest @ 10.50% per annum and the last instalment is payable by June, 2017 .
ii) Vehicle Loan from HDFC Bank Ltd. of Rs. 6.50 Lacs outstanding Rs. NIL as on 31.03.2018 (P.Y. Rs. 1.22 Lacs ) including Rs. NIL (P.Y. Rs. 1.22 Lacs ) shown under the head Other Current Liability for Current maturity of Long Term debts in Note 21 is secured by way of Hypothecation of respective car acquired out of the said loan. This Loan is repayable in 36 monthly instalment commencing from October, 2014 along with interest @ 10.50% per annum and the last instalment is payable by September, 2017 .
iii) Vehicle Loan from HDFC Bank Ltd. of Rs. 7.18 Lacs outstanding NIL as on 31.03.2018 (P.Y. Rs. 0.68 Lacs ) including Rs. NIL (P.Y. Rs. 0.68 Lacs ) shown under the head Other Current Liability for Current maturity of Long Term debts in Note 21 is secured by way of Hypothecation of respective car acquired out of the said loan. This Loan is repayable in 36 monthly instalment commencing from July, 2014 along with interest @ 10.50% per annum and the last instalment is payable by June, 2017 .
iv) Vehicle Loan from HDFC Bank Ltd. of Rs. 6.00 Lacs outstanding Rs.3.54 Lacs as on 31.03.2018 (P.Y. 5.41 Lacs ) including Rs. 3.54 Lacs (P.Y. 5.41 Lacs ) shown under the head Other Current Liability for Current maturity of Long Term debts in Note 21 is secured by way of Hypothecation of respective car acquired out of the said loan. This Loan is repayable in 36 monthly instalment commencing from December, 2016 along with interest @ 9.66% per annum and the last instalment is payable by November, 2019 .
v) Vehicle Loan from HDFC Bank Ltd. of Rs. 6.00 Lacs outstanding Rs.3.54 Lacs as on 31.03.2018 (P.Y. 5.41 Lacs ) including Rs.3.54 Lacs (P.Y. 5.41 Lacs) shown under the head Other Current Liability for Current maturity of Long Term debts in Note 21 is secured by way of Hypothecation of respective car acquired out of the said loan. This Loan is repayable in 36 monthly instalment commencing from December, 2016 along with interest @ 9.66% per annum and the last instalment is payable by November, 2019 .
vi) Vehicle Loan from HDFC Bank Ltd. of Rs. 6.00 Lacs outstanding Rs.2.71 Lacs as on 31.03.2018 (P.Y. 4.65 Lacs ) including Rs.2.71 Lacs (P.Y. 1.94 Lacs) shown under the head Other Current Liability for Current maturity of Long Term debts in Note 21 is secured by way of Hypothecation of respective car acquired out of the said loan. This Loan is repayable in 36 monthly instalment commencing from July, 2016 along with interest @ 9.75% per annum and the last instalment is payable by June 2019 .
f) Term Loans (Vehicle Loans) from ICICI Bank Limited
Vehicle Loan from ICICI Bank Ltd. of Rs. 18.50 Lacs outstanding Rs.14.73 Lacs as on 31.03.2018 (P.Y. NIL ) including Rs.5.99 Lacs (P.Y. NIL) shown under the head Other Current Liability for Current maturity of Long Term debts in Note 21 is secured by way of Hypothecation of respective car acquired out of the said loan. This Loan is repayable in 36 monthly instalment commencing from August, 2017 along with interest @ 8.25% per annum and the last instalment is payable by July 2020 .
(iii) Term Loan from Rajasthan State Industrial Development & Investment Corporation Limited (RIICO)
i) Term Loan of Rs.1000.00 Lacs , Outstanding Rs. 166.70 Lacs as on 31.03.18 (P.Y. 333.36 Lacs ) including Rs. 166.66 Lacs (P.Y. 166.66 Lacs) shown under the head Other Current Liabilities for Current Maturities of Long Term Debts in Note 21, is secured by way of joint first charge ranking pari-passu of all immovable properties (by way of deposit of Title Deeds of Lease Hold Land), both present and future and hypothecation charge over movable (save and except book debts) machinery, spares, tools and accessories, present and future, Finished and semi finished products, other goods and uncalled capital, subject to prior charges created in favour of Bankers for working capital facilities. The above loans of Rs.1000.00 Lacs have also been guaranteed by Managing Director and one other Director of the Company.
This loan is repayable in 24 quarterly equal installments from May 2013 and last installment is payable by February 2019. The above term loan carry interest @11.00% p.a.
ii) Term Loan of Rs. 1250.00 Lacs , Outstanding Rs. 729.00 Lacs as on 31.03.18 (P.Y. 937.40 Lacs ) including Rs. 208.40 Lacs (P.Y. 208.40 Lacs) shown under the head Other Current Liabilities for Current Maturities of Long Term Debts in Note 21, is secured by way of joint first charge ranking pari-passu of all immovable properties (by way of deposit of Title Deeds of Lease Hold Land), both present and future and hypothecation charge over movable (save and except book debts) machinery, spares, tools and accessories, present and future, Finished and semi finished products, other goods and uncalled capital, subject to prior charges created in favour of Bankers for working capital facilities. The above loans of Rs. 1250.00 Lacs have also been guaranteed by Managing Director and one other Director of the Company. This loan is repayable in 24 quarterly equal installments from November 2015 and last installment is payable by August 2021. The above term loan carry interest @11.5% p.a.
(a) Borrowings of Rs. 3147.10 (P.Y. Rs 2123.81 ) from SBI, IDBI and ICICI Bank Ltd. for working capital are secured on pari passu basis by way of joint hypothecation first charge on entire inventories, trade receivables and other current assets present & future and secured by second pari passu charge on fixed assets of the Company. Such borrowings are also guaranteed by the Managing Director and one other Director of the Company.
The fair value of financial assets and liabilities are included at the amount at which instruments could be exchanged in a current transaction between the willing parties. The following methods and assumptions were used to estimate the fair value:
(A) The Company has opted to fair value its unquoted equity instruments at its Net Asset Value through Retained Earnings.
(B) The fair values of cash and cash equivalents, other bank balances, trade receivables, loans, other financial assets, short term borrowings, trade payables, and other financial liabilities approximates their carrying amounts largely due to the short-term maturities of these instruments. Company has adopted Effective Interest Rate Method (EIR) for fair valuation of long term borrowings.
Fair Value Hierarchy
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - 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 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
NOTE NO .2
Financial Risk Management Objectives and Policies: The Company's activities are exposed to a variety of Financial Risks from its Operations. The key financial risks include Market risk, Credit risk and Liquidity risk.
(a) 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 mainly three types of risk:, Foreign currency risk, Interest rate risk and other price risk such as Equity price risk and Commodity Price risk.
(b) 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. The Company is exposed to foreign exchange risk arising from foreign currency transactions of imports, exports and borrowing primarily with respect to USD and Euro. The Company's exports are denominated generally in USD, providing a natural hedge to some extent against foreign currency payments on account of imports of raw materials and/or the payment of borrowings. The foreign currency transaction risk are managed through selective hedging programmes by way of forward contracts including for underlying transactions having firm commitments or highly probable forecast of crystalisation.The Company uses forward exchange contracts to hedge its exposure in foreign currency. The details of foreign currency exposures hedged by derivative instruments and those have not been hedged are as follows:
The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment.
(d) Interest Rate Risk and Sensitivity:
The Company is having fixed rate long term borrowings which are not exposed to any risk of changes in market interest rates.
(e) Commodity price risk:
The Company is affected by the price volatility of certain commodities. Its operating activities require the purchase of raw material and therefore, require a continuous supply of certain raw materials. To mitigate the price risk, the company has an approved supplier base to get the best competitive prices for the commodities and to manage the cost without any compromise on quality.
(f) Equity price risk:
The Company's exposure to equity instruments price risk arises from investments held by the company and classified in the balance sheet at fair value through OCI. Having regard to the nature of securities, intrinsic worth, intent and long term nature of securities held by the company, fluctuation in their prices are considered acceptable and do not warrant any management estimation.
(g) Credit Risk:
Credit risk is the risk that counter party might not honor its obligations under a financial instrument or customer contract, leading to a financial loss. The company is exposed to credit risk from its operating activities (primarily trade receivables).
Trade Receivables:
Customer credit risk is managed based on company's established policy, procedures and controls. The company assesses the credit quality of the counter parties, taking into account their financial position, past experience and other factors.
Credit risk is reduced by receiving pre-payments and export letter of credit to the extent possible. The Company has a well defined sales policy to minimize its risk of credit defaults. Outstanding customer receivables are regularly monitored and assessed. The Company follows the simplified approach for recognition of impairment loss and the same, if any, is provided as per its respective customer's credit risk as on the reporting date
(h) Deposits with Bank:
The deposits with banks constitute mostly the investment made by the company against bank guarantee and are generally not exposed to credit risk .
(i) Liquidity Risk:
Liquidity risk is the risk, where the company will 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 is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due.
The table below summarises the maturity profile of company's financial liabilities based on contractual undiscounted payments:
NOTE NO. 3 Capital Management:
The Company's policy is to maintain an adequate capital base so as to maintain creditor and market confidence and to sustain future development. Capital includes issued capital, share premium and all other equity reserves attributable to equity holders.
The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. Net Debt is calculated as borrowings less cash and cash equivalents.
NOTE NO. 4
Exceptions and Exemptions applied for Transition to Ind AS
Ind AS 101 "First-time adoption of Indian Accounting Standards" (hereinafter referred to as Ind AS 101) allows first time adoptions certain mandatory exceptions and optional exemptions from the retrospective application of certain Ind AS, effective from 1st April, 2016. In preparing these financial statements , the company has applied the below mentioned optional exemptions and mandatory exceptions.
(a) Optional Exemptions Availed:
Property Plant and Equipment, Intangible Assets and Investment Properties
As permitted in para D5-D8B of Ind AS 101, the company has opted to continue with the carrying values under previous GAAP for all the items of Property, Plant and Equipment and investment exept free hold land & lease hold land in which the company has opted to carry the fair value as deemed cost on transition date.
(b) Mandatory Exceptions:
(i) Estimates
Upon an assessment of the estimates made under Previous GAAP, the company has an opinion that there was no necessity to revise such estimates under Ind AS, except where revision in estimates was necessitated as required in Ind AS. The estimates used by the company to present the amounts in accordance with Ind AS reflect conditions existing as at 1st April, 2016, the date of transition to Ind AS and as at 31st March, 2017 and as at 31st March, 2018.
(ii) Derecognition of Financial Assets and Financial Liabilities
The Company has opted to apply the derecognition requirements for financial assets and financial liabilities in accordance with Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS.
(iii) Classification and Measurement of Financial Assets
The Company has classified the financial assets in accordance with Ind AS 109 on the basis of facts and circumstances that exist at the date of transition to Ind AS.
NOTE NO. 5
Standards Issued but not yet Effective:
IND AS 115- Revenue from Contract with Customer: On March 28, 2018 Ministry of Corporate Affairs ("MCA") has notified the Ind AS 115, Revenue from Contract with Customers. The core principal of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts with customers.
The company will adopt the standard on April 1, 2018 by using the cumulative catch-up transition method and accordingly comparatives for the year ending or ended March 31, 2018 will not be retrospectively adjusted. The effect on adoption of IND AS 115 is expected to be insignificant.
NOTE NO. 6 Reconciliation:
The following reconciliations provide a quantification of the effect of significant differences arising as a result of transition from Previous GAAP to Ind AS in accordance with Ind AS 101:
(a) Effect of Ind AS adoption on the Balance Sheet as at 31st March 2017 and 1st April 2016:
1 Property Plant and Equipment
The Company has opted the option of fair value as deemed cost for freehold land and lease hold land as on the date of transition to IND AS i.e. as at 01-04-2016 . This has resulted in increase of Rs 4529.94 Lacs in the value of freehold and leasehold land with Corrosponding increase in Retained Earnings of Rs 4529.94 Lacs.
2 Non Current Investment :-
The company has treated fair value of Investment of Equity shares of Rs 167.47 Lacs and 0.01% Cumulative Preference Shares of Rs 148.56 Lacs as NIL in view of negative book value and has made provision for diminution in value of investment by debiting to retained earnings as at 01.04.2016
3 Employee Benefit Expenses:-
Under IND AS remeasurement i.e. Acturial Gain and losses and defined benefit obligation are recognised in the other comprehensive Income instead of Statement of Profit & Loss Thus employee benefit expenses are reduced by Rs. 5.79 Lacs and is recognised in OCI in year ended 31st March 2017
4 Security Deposit:-
Interest free Security Deposit has been accounted for at amortised cost using market rate of interest. The difference between the amount of Deposit and the amortised cost as at 01-04-2016 amounting of Rs. 95.81 Lacs. has been debited to retained earnings.
5 Prior Period Expenses of Employee benefit expenses Rs 154.42 Lacs. have been debited to Retained Earnings as at 01-04-2016
6 Deferred Tax liabilities / Assets has also been recognised due to the Accounting treatment in respect of certain items as per IND AS
7 MAT entitlement credit being of the nature of Deferred Tax on transition to IND AS. MAT credit entitlement of Rs. 172.49 Lacs. as at 01.04.2016 has been regrouped under Deferred Tax Assets from Current Tax Assets (Net)
NOTE NO. 7
Accounts in respect of Current and Non-Current Liabilities, Trade Receivables , Other Current Assets, Loans and Advances and Deposits are subject to confirmations of respective parties.
NOTE NO. 8
The management has certified that the Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence, disclosures, if any, relating to total outstanding dues of Micro Enterprises and Small Enterprises and the Principal amount and Interest due thereon remaining unpaid and the amount of Interest paid/ payable as required under amended Schedule III of the Companies Act.2013 could not be compiled and disclosed. The Auditors have relied on the certificate of the management in this regard.
NOTE NO. 9
Revenue from operation upto 30th June 2017 is inclusive of Excise Duty and thereafter it is net of Goods and Service Tax (GST).
NOTE NO. 10 Segment Information :
(a) The Company has only one reportable Primary Business Segment i.e Yarn. Hence, no seprate segment wise information of revenue, results and capital employed is given.
(b) The following table shows the distribution of Company's Revenue from operations by geographical market, regardless of where the goods were produced :
(c) Sales to one Export Customer of the Company is Rs. 3292.10 Lacs (Previous Year Rs 5903.62 Lacs ) which is more than 10% of the Company's total turnover.
NOTE NO. 11
The disclosures required as per the Indian Accounting Standards (Ind-AS 19 - Employee Benefits) notified under the Companies (Indian Accounting Standards) Rules, 2015 are as under :
Defined - Contribution Plans
The Company offers its employees defined contribution plan in the form of provident fund(PF), family pensions fund (FPF) and Employees State Insurance Scheme (ESI) which covers substantially all regular employees. Contribution are paid during the year into separate funds under certain fiduciary-type arrangements. Both the employees and the company pay pre determined contribution into the provident funds, family pension fund and the Employees State Insurance Scheme. The Contributions are normally based on a certain proportion of the employee's salary. "
Defined - Benefit Plans
The Company offers its employees defined- benefit Plans in the form of a Gratuity Scheme. Benefits under the defined benefit plan is typically based either on years of service and the employee's compensation (generally immediately before retirement). The Gratuity scheme covers substantially all regular employees. The Company contributes funds to Life Insurance Corporation of India, which is irrevocable. Commitments are actuarially determined at year end. The actuarial valuation is done based on "Projected Unit Credit" method. Gains & Losses of changed actuarial assumptions are charged to the profit and loss account. The obligations for leave encashment is recognised in the same manner as gratuity.
Gratuity amount for the current year is higher as compared to the previous year mainly due to change in acturial assumption and discounting factor. The estimates of future salary increases, considered in actuarial Valuation, take account of inflation, seniority, promotion, and other relevant factors such as demand and supply in the employment market. The above information is as submitted and or obtained from Actuaries and relied upon by the Auditors.
NOTE NO. 12
Related Party Disclosures
(As certificed by the Management)
Disclosures in respect of Related Parties as defined in Indian Accounting Standard 24(Ind AS 24), with whom transactions were entered into at an arm's length and in the ordinary course of business during the year are given below:
(i) Key Management Personnel and Relatives of Key Management Personnel
Mr. Ramadoss Srinivasan - Chairman Mr. Sanjiv Shroff (Managing Director)
Mr. Rahul Shroff (Whole-time Director Designated as Executive Director)
Mr. Ameya Shroff (Whole-time Director Designated as Executive Director)
Mr. N.G.Khaitan (Non Executive Director)
Mrs. Dipika Shroff (Non- Executive Director)
Mr. K.L Sonthalia ( Non Executive Director)
Mr. R N Sharma ( Non Executive Director)
Mr. Narayan Shroff ( Non Executive Director )
Mr. Amar Inder Singh Jassar (CFO)*
Mr. Kiran Firodiya (CFO)*
Mr. Vimal Tank (Company Secretary)
Relative of Key Managerial Person
Mr. Shankar Lal Shroff, Chairman Emeritus (Father of Mr. Sanjiv Shroff)
Mrs. Bimla Devi Shorff (Mother of Mr. Sanjiv Shroff)
Mrs. Kavisha Shroff (Wife of Mr. Rahul Shroff)
ii) Enterprises over which key Management Personnel and relative of such personnel is able to exercise significant influence or control
a) Indo Textiles & Fibres Limited
b) Spell Fashions Pvt.Ltd.
c) A.R.Fibtex Pvt. Ltd.
d) Khaitan & Co. LLP
e) A.R. Commercial Private Limited
f) A.S. Chemotex pvt. Ltd.
g) Sunrise Producers Pvt. Ltd.
h) Sunrise Cotton Industries Limited
i) Modern Fibotex India Limited
Note: #The remuneration to Key Managerial Personnel's stated above does not include provision/payment towards incremental liability on account of gratuity and compensated absences since actuarial valuation is done for the Company as a whole. *Mr. Amar Inder Singh Jassar,CFO appointed on 02.12.2017 and Mr. Kiran Firodiya, was CFO till 14.09.2017
NOTE NO. 13
Previous Year figures have been regrouped / rearranged, wherever necessary.
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