3 (B) CAPITAL WORK IN PROGESS
The Capital work in progress represent Capital Inventory and direct/ incidental expenses incurred during construction period in connection with proposed project which will be capitalised on commencement of commercial production, consequently expenses disclosed under the respective note are net of such amount .
b. Terms/rights attached to equity shares
The Company has only one class of shares i.e. equity shares having a par value of ? 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends, if any, in Indian Rupees. The dividend, recommended by the Board of Directors is subject to the approval of the share holders in the ensuing Annual General Meeting.
I n th event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
Nature and purpose of reserves:
General Reserve: Under the erstwhile Indian Companies Act 1956, a general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. Consequent to introduction of Companies Act 2013, the requirement of mandatory transfer of a specified percentage of the net profit to general reserve has been withdrawn and the Company can optionally transfer any amount from the surplus of profit and loss to the General reserves. This reserve is utilised in accordance with the specific provisions of the Companies Act 2013.
Capital Subsidy: represents investment linked capital subsidy received from the State Government.
Retained earnings: This represents the accumulated profits earned by the Company till date.
Security Premium : Securities premium is used to record premium received on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.
(a) Rupee term loan of ? 325 lakhs from Axis Bank Limited is secured by way of Hypothecation charge (2nd charge) on primary securities available for existing facilities on second ranking basis. 2nd charge over entire current assets and movable assets of the company, both present and future. The applicable interest rate is 7.75% p.a and repayable in 35 equal monthly principal instalments of ? 9.02 lakhs each and last instalment of ? 9.05 lakhs after moratorium period of 24 months from the date of first disbursement.
(b) Rupee term loan from Bank of Baroda aggregating to ? 1,092 lakhs is secured by way of Hypothecation charge (2nd charge) with existing credit facilities in terms of cash flows (including repayments). Existing primary/ collateral securities would be extended to cover the ECLGS facility. The applicable interest rate is 7.50% p.a. and would be repaid in 36 equal monthly instalments of ' 30.33 lakhs after moratorium period of 24 months from the date of first disbursement.
(c) Above term loans from Axis Bank Limited & Bank of Baroda are further secured by way of equitable mortgage of revised survey Block No. 727, 728, 729, 730 and 714 (Old Block No. 805, 806, 807, 810 & 811) at Rakanpur, Tal. Kalol, Dist. Gandhinagar and Land & Factory Building situated at new amalgamated Survey No. 100 (Old Survey No. 100, 101, 102, 103 and 105) mouje Dudhai, Tal. Kadi, Dist. Mehsana and is further secured by personal guarantee of (a) Mr. Sanjivkumar N. Patel (b) Mr. Apurva V. Shah and (c) Mr. Shivang P. Patel, directors of the company.
(d) All the loans taken by the Company have been utilised for the purpose for which the same was taken. The Company is regular in payment of interest and installment thereon.
(a) Working Capital facilities from Banks is secured by way of hypothecation of raw-materials, stores and spares, work-in-progress of finished goods and book debts of the company both present and future and first pari passu charge on plant & machinery, other movable assets of the comapany as well as further secured by way of equitable mortgage of Plot No. 805, 806, 807, 810 and 811 at Rakanpur, Tal. Kalol, Dist. Gandhinagar and Land & factory Building situated at New amalgamated survey No.100 (Old Survey No. 100,101,102,103 and 105) mouje Dudhai, Tal. Kadi, Dist. Mehsana as well as Lien over FDR of '59.00 Lakhs as collateral security and is further secured by personal guaranteed of (a) Mr. Sanjivkumar N. Patel (b) Mr. Apurva V. Shah and (c) Mr. Shivang P. Patel, directors of the company.
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32 CONTINGENT LIABILITIES & CAPITAL COMMITMENTS NOT PROVIDED FOR:
a) Contingent Liabilities (' in Lakhs)
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Particulars
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As at
31st March, 2024
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As at
31st March, 2023
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a) Claims against Company not acknowledged as Debt :
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i) Disputed Income Tax demand, and
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6.48
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6.48
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ii) Disputed Tax Demand under Central Sales Tax/ Goods & Service Tax.
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-
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4.38
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b) Guarantees excluding financial guarantees :
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• Outstanding Bank Guarantees
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12,307.40
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10,458.28
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• Outstanding Foreign Bank Guarantees
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US$ 16,37,888.30
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US$ 15,50,439.90
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• Outstanding Inland/Foreign LC
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US$ 30,110.00
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US$ 2,12,813.50
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b) Capital Commitments
Estimated amount of contracts remaining to be executed on capital account [net of advances]
and not provided for ' NIL (P.Y ' NIL).
Note:
a) I t is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above, pending resolution of the respective proceedings as it is determinable only on receipt of judgments/decisions pending with various forums/ authorities.
b) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial results.
1. Mr. Himanshu N. Rawal (DIN: 06631728) ceased to be a Director, being Independent Director of the Company w.e.f 23rd September, 2023 upon completion of his 2nd term as Independent Director. Mr. Naimish B. Patel (DIN: 02813295) has been appointed as an Independent Director of the Company (Non-Executive & Independent), for a first term of five years from 12th August, 2023 upto 11th August, 2028.
2. Unsecured Loans accepted from Narayanbhai G. Patel is upto his date of death i.e. 03rd October, 2023. Further, Unsecured Loans accepted from Mr. Sanjivkumar N. Patel includes ? 25.29 Lakhs, Mr. Shivang P. Patel includes ? 12.65 Lakhs, Mrs. Aarti P. Patel includes ? 12.65 Lakhs transferred from Mr. Narayanbhai G. Patel, as his legal heirs.
3. Gratuity of Late Shri Narayanbhai G. Patel, Chairman & Whole-time Director of the Company expired on 03rd October, 2023, transferred to Mr. Sanjivkumar N. Patel, Mrs. Aartiben P. Patel and Mr. Shivang P. Patel as legal heirs.
4. Unsecured Loan given by the Company to Patels Airtemp (USA) Inc., Wholly-owned Subsidiary has been written off due to dissolution of the said Wholly-owned Subsidiary w.e.f. 11th December, 2023.
5. I nvestment made by the Company in Patels Airtemp (USA) Inc., Wholly-owned Subsidiary has been written off upon dissolution of the said Wholly-owned Subsidiary w.e.f. 11th December, 2023.
6. The remuneration to directors and other members of key management personal during the year are in the nature of short-term benefits.
1. Upon death of Mr. Narayanbhai G. Patel as on 03rd October, 2023, his closing balance of unsecured loan amounting to ? 50.59 Lakhs has been transferred to legal heirs Mr. Sanjivkumar N. Patel ? 25.29 Lakhs, Mr. Shivang P. Patel ? 12.65 Lakhs, Mrs. Aarti P. Patel ? 12.65 Lakhs.
34. SEGMENT INFORMATION
Primary Segment - Business Segment
The Company's operation predominantly comprise of only one segment. In view of the same, separate segmental information is not required to be disclosed as per the requirement of Indian Accounting Standard 108 Operating Segment.
Secondary Segment - Geographical Segment
The analysis of geographical segment is based on the geographical location of the customers. The geographical segments considered for disclosure are as follows:
Sales within India include sales to customers located within India. Sales outside India include sales to customers located outside India.
36. In the opinion of the Board of Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business. The provisions for depreciation and all known and ascertained liabilities are adequate and not in excess of the amounts reasonably necessary.
37. The balance confirmation from the suppliers and customers have been called for, but the same are awaited till date of audit. Thus, the balances or receivables and trade payables have been taken as per the books of accounts submitted by the company and are subject to Confirmation from respective parties.
The management has identified micro and small enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) on the basis of information made available by the supplier or vendors of the Company.
40. EMPLOYEE BENEFIT OBLIGATION
As per Indian Accounting Standard (Ind AS) 19 "Employee Benefits", the disclosures of Employee benefits as defined in the Accounting Standard are given below:
ii) Defined Contribution Plan: Employee benefits in the form of Provident Fund are considered as defined contribution plan and the contributions to Employees Provident Fund Organization established under The Employees Provident Fund and Miscellaneous Provisions Act, 1952 and Employees State Insurance Act, 1948, respectively, are charged to the profit and loss account of the year when the contributions to the respective funds are due.
iii) Defined Benefit Plan: Retirement benefits in the form of Gratuity are considered as defined benefit obligation and are provided for on the basis of third-party actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet. Every Employee who has completed five years or more of service is entitled to Gratuity on terms not less favorable than the provisions of The Payment of Gratuity Act, 1972.
iv) Following are the risks associated with the plan:
Interest rate risk:
A fall in the discount rate which is linked to the G. Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
Salary Risk:
The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan's liability.
Investment Risk:
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
Asset Liability Matching Risk:
The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.
Mortality risk:
Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
Concentration Risk:
Plan is having a concentration risk as all the assets are invested with the insurance company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.
Sensitivities have been calculated to show the movement in Defined Benefit Obligation in isolation and assuming there are no other changes in market conditions at the accounting date. In presenting the above sensitivity analysis, the present value of the defined benefit obligations has been calculated using the Projected Unit Credit Method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognized in the balance sheet.
41. During the Financial Year 2023-2024, M/s. Patels Airtemp (USA) Inc., a Wholly Owned Subsidiary (WOS/Foreign Entity) of the Company, stands dissolved w.e.f. 11th December, 2023 as per Certificate of Dissolution issued by State of Delaware (USA). Consequent upon the said dissolution, Patels Airtemp (USA) Inc., ceased to be a Subsidiary of the Company. Patels Airtemp (USA) Inc., was not a material subsidiary of the Company. Accordingly, the Company has written off Investment in Wholly Owned Subsidiary amounting to ' 7.18 Lakhs and Loan to Wholly Owned Subsidiary amounting to ' 5.32 Lakhs in the books of accounts during the financial year ended 31st March, 2024.
42. APPROVAL OF FINANCIAL STATEMENT
The financial statements were approved for issue by the board of directors on 24th May, 2024.
43. UNDISCLOSED TRANSACTIONS
As stated, & confirmed by the Board of Directors, 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).
44. BENAMI TRANSACTIONS
As stated & confirmed by the Board of Directors, the Company does not have any Benami property, where any proceeding has been initiated or pending against the Group for holding any Benami property.
45. LOAN OR INVESTMENT TO ULTIMATE BENEFICIARIES
As stated & confirmed by the Board of Directors, 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
46. LOAN OR INVESTMENT FROM ULTIMATE BENEFICIARIES
As stated & confirmed by the Board of Directors, the Company has not received any funds from 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
46a. As stated & confirmed by the Board of Directors, the company has not been sanctioned any term loan during the year ended on 31st March 2023.
47. As stated & confirmed by the Board of Directors, the company has not been sanctioned any term loan during the year ended on 31st March 2024.
48. As stated & confirmed by the board of Directors, the company has not revalued its Property, Plant and Equipment and intangible assets during the year under review.
49. WILLFUL DEFAULTER
As stated & confirmed by the Board of Directors, the company has not been declerated willful defaulter by the bank during the year under review.
49. TRANSACTIONS WITH STRUCK OFF COMPANIES
As stated & confirmed by the Board of Directors, the company has not been decelerated willful defaulter by the bank during the year under review.
50. TRANSACTIONS WITH STRUCK OFF COMPANIES
As stated & confirmed by the Board of Directors, the company has not under taken any transactions nor has outstanding balance with the company Struck Off either under section 248 of the Act or under Section 560 of The Companies Act, 1956.
51. CRYPTO CURRENCY
As stated & confirmed by the Board of Directors, the Company has not traded or invested in Crypto Currency or Virtual Currency.
52. COMPLIANCE WITH APPROVED SCHEMES OF ARRANGEMENT
The Company has not applied for any scheme of Arrangements under sections 230 to 237 of The Companies Act, 2013.
53. The Company has assessed internal and external information upto the date of approval of the audited financial statements while reviewing the recoverability of assets, adequacy of financial resources, performance of contractual obligations, ability to service the debt and liabilities etc. Based on such assessment, the company expects to fully recover the carrying amounts of the assets and comfortably discharge its debts and obligations. Hence, the management does not envisage any material impact on the audited financial statements of the company for the year ended on 31st March 2024.
54A. EVENT OCCURING AFTER THE BALANCE SHEET DATE
On 24th May, 2024, the Board of Directors recommended a final dividend of ' 3.00/- per equity share to be paid to the shareholders for the financial year 2023-24, which is subject to approved by the share holders at the Annual General Meeting. If approved, the dividend would result in a cash outflow of ' 164.11 lakhs.
54B. SATISFACTION OF CHARGE
As informed by the Management there are no charges which are yet to be registered or yet to be satisfied with Registrar of Companies beyond statutory period. However, while carrying out search on MCA portal, following charges are yet to be satisfied beyond the statutory period, details of which are as under:
55A. CAPITAL MANAGEMENT
The Company's capital management is intended to create value for shareholders by facilitating the achievement of long-term and short-term goals of the Company.
The Company determines the amount of capital required on the basis of annual business plan coupled with long-term and short-term strategic investment and expansion plans. The funding needs are met through equity, cash generated from operations, long-term and short-term bank borrowings.
The Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
Net debt includes interest bearing borrowings less cash and cash equivalents, other bank balances. The table below summarises the capital, net debt and net debt to equity ratio of the Company.
(ii) Fair Value Measurement
This note provides information about how the Company determines fair values of various financial assets.
Fair Value of financial assets and liabilities that are not measured at fair value (but fair value disclosures are required).
Management considers that the carrying amounts of financial assets and financial liabilities recognized in the financial statements approximate their fair values.
(iii) Financial Risk Management Objectives
While ensuring liquidity is sufficient to meet Company's operational requirements, the Company's financial management committee also monitors and manages key financial risks relating to the operations of the Company by analysing exposures by degree and magnitude of risks. These risks include market risk (including currency risk and price risk), credit risk and liquidity risk.
Market Risk
Market risk is the risk of uncertainity arising from possible market price movements and their impact on the future performance of a business. The major components of market risk are commodity price risk.
i. Interest Rate Risk
I nterest rate risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Interest risk arises to the Company mainly from borrowings with variable rates. The Company measures risk through sensitivity analysis. The banks are now finance at variable rate only, which is the inherent business risk.
ii. Liquidity Risk
The Company manages liquidity risk by maintaining sufficient cash and cash equivalents including bank deposits and availability of funding through an adequate amount of committed credit facilities to meet the obligations when due. Management monitors rolling forecasts of liquidity position and cash and cash equivalents on the basis of expected cash flows. In addition, liquidity management also involves projecting cash flows considering level of liquid assets necessary to meet obligations by matching the maturity profiles of financial assets & liabilities and monitoring balance sheet liquidity ratios.
The following tables detail the Company's remaining contractual maturity for its nonderivative financial liabilities with agreed repayment periods. The information included in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows. The contractual maturity is based on the earliest date on which the Company may be required to pay.
d. Performance obligations
The performance obligation is satisfied upon delivery of the finished goods and payment is generally due within 1 to 3 months from delivery. The performance obligation to deliver the finished goods is started after receiving of sales order. The customer can pay the transaction price upon delivery of the finished goods within the credit period, as mentioned in the contract with respective customer.
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