1.12. PROVISIONS AND CONTINGENCIES
A provision is recognized when the Company has a present obligation as a result of past events, and it is probable that
an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made.
Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the
best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date
and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes. Contingent assets are
not recognized in the financial statements.
Contingent Assets are neither recognized nor disclosed in the financial statements.
Contingent liability is disclosed for:
• Possible obligations which will be confirmed only by future events not wholly within the control of the Company
or
• Present obligations arising from past events where it is not probable that an outflow of resources will be required
to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
1.13. FINANCIAL INSTRUMENTS
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
Financial assets
Initial recognition and measurement
All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value
through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales
of financial assets that require delivery of assets within a time frame established by regulation or convention in the
marketplace (regular way trades) are recognized on the trade date, i.e., the date that the Company commits to purchase
or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
(i) Debt instruments at amortized cost.
(ii) Debt instruments at fair value through other comprehensive income (FVTOCI)
(iii) Debt instruments, derivatives, and equity instruments at fair value through profit or loss (FVTPL).
(iv) Equity instruments measured at fair value through other comprehensive income (FVTOCI).
Debt instruments at amortized cost
A ‘debt instrument' is measured at the amortized cost if both the following conditions are met:
a) The asset is held within a business model, whose objective is to hold assets for Collecting contractual cash flows,
And
b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and
interest (SPPI) on the principal amount outstanding.
This category is the most relevant to the Company. After initial measurement, such financial assets are subsequently
measured at amortized cost using the effective interest rate (EIR) method.
De-recognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is
primarily derecognized (i.e. removed from the Group's consolidated balance sheet) when:
(i) The rights to receive cash flows from the asset have expired, or
(ii) The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to
pay the received cash flows in full without material delay to a third party under a ‘pass-through' arrangement;
and either
(a) The Company has transferred substantially all the risks and rewards of the asset, or
(b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset but
has transferred control of the asset.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans
and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net
of directly attributable transaction costs.
The Company's financial liabilities include trade and other payables, loans and borrowings including bank overdrafts,
financial guarantee contracts and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Loans and borrowings
This is the category most relevant to the Company. After initial recognition, interest-bearing loans and borrowings
are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or
loss when the liabilities are derecognized as well as through the EIR amortization process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that
are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.
De-recognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de¬
recognition of the original liability and the recognition of a new liability. The difference in the respective carrying
amounts is recognized in the statement of profit or loss.
Fair Value Measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date, regardless of whether that price is directly observable or
estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes
into account the characteristics of the asset or liability if market participants would take those characteristics into
account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure
purposes in these financial statements is determined on such basis, except for measurements that have some
similarities to fair value but are not fair value, such as net realizable value in Ind AS.
The accompanying notes form part of the financial Statements
As per our Report of even date attached
for SVD & ASSOCIATES For and on behalf of the Board of Directors of
Chartered Accountants Vijay Textiles Limited
Firm's Registration Number: 015405 S CIN : LI8I00TGI990PLC0I0973
Sd/- Sd/- Sd/-
Avinash Doba Vijay Kumar Gupta Susheel Kumar Gupta
Partner Chairman & Managing Director Executive Director
Membership No: 232340 DIN:01050958 DIN:00362714
Place: Hyderabad Place: Hyderabad
Date: 31.07.2024 Date: 31.07.2024
Sd/- Sd/-
Rakesh Malhotra Yogesh Dayama
Whole Time Director & CFO Company Secretary
DIN:05242639 M.No: A70654
Place: Hyderabad Place: Hyderabad Place: Hyderabad
Date: 31.07.2024 Date: 31.07.2024 Date: 31.07.2024
(I) Term Loans from banks namely State Bank of India and Axis Bank Limited, are secured by :
(a) First pari passu charge on all the immovable and movable Fixed Assets present and future of the Company.
(b) . Second pari passu charge on all the current assets of the Company (excluding credit card receivables).
(c) . Further the terms loans are collaterally secured by;
(i) Commercial space admeasuring 5108.75 sft, bearing shop Nos: 8,9,11 and 13, situated in Ground Floor,
Surya Towers, 104, S.PRoad, Secunderabad-500 003,standing in the names of Shri Vijay Kumar Gupta,Shri
Vijay Kumar Gupta(HUF), Shri Susheel Kumar Gupta and Smt.Shashikala Gupta.
(ii) Pledge of entire shares held by Promoters i.e. Shri Vijay Kumar Gupta, Shri Susheel Kumar Gupta, Smt
Shashikala Gupta.
(iii) Personal Guarantees of Mr. Vijay Kumar Gupta,Vijay Kumar Gupta HUF Mr. Susheel Kumar Gupta and Mrs.
Shashikala Gupta. Guarantee limited to the value of the security mortgaged.
(iv) Term -II and FITL-II of State Bank of India is secured by exclusive charge on credit card receivables and
collateral security as pari passu first charge on the fixed assets of the Company present and future.
II) Terms of Repayment:
1 State Bank of India - Term Loan - II ,III, IV and FITL have been become due for repayment on 31.12.2021 and
present rate of interest charged as these accounts is @11.55% p.a
III) Unsecured Loans From Related Parties:
1 Unsecured Loans are from Shri.Vijay Kumar Gupta, Chairman and Managing Director and Shri. Susheel Kumar
Gupta, Executive Director of the Company repayable over a period of 5 years ending on 15th April, 2027.
(IV) Repayment of Term Loan
1 The Company had submitted a proposal on November, 10, 2022, for one time settlement of dues by making
payment of Rs,79.60 Crores (SBI Rs.61.00 Crores and Axis Bank Rs.18.60 Crores) as stipulated in the offer letter
to be completed by 15th March,2023. Wherein the Company received approval from the consortium banks
viz. State Bank of India and Axis Bank Limited vide their letters dated 25th January,2023 and 27th January,2023
respectively to its compromise proposal submitted on 10th November, 2022 for one time settlement of bank
dues of Rs.79.69 Crores to be paid by the 31st March,2023. However, Company was unsuccessful to honor the
compromise agreement by 31st March, 2023 and SBI & Axis bank had revoked the compromise agreement
on 29th April,2023 and 3rd May,2023 respectively. However, the Company has repaid Rs.13.52 Crores (Rs.6.27
Crore in FY 2022-23 and Rs.7.25 Crore in FY 2023-24) to the banks so far.
Working Capital facilities availed by the Company from State Bank of India and Axis Bank Limited are carrying are secured by:
(a) Pari-Passu first charge on all chargeable current assets of the Company in favour of State Bank of India and Axis Bank
Limited (excluding credit card receivables, which are charged to State Bank of India alone and are separately dealt with
herein).
(b) Pari-Passu second charge on entire Fixed Assets of the Company, both present and future.
Further the Working Capital facilities are collaterally secured by :
(c) Commercial space admeasuring 5108.75 sft, bearing shop Nos: 8,9,11 and 13, situated in Ground Floor, Surya Towers,
104, S.P.Road, Secunderabad-500 003,standing in the names of Shri Vijay Kumar Gupta,Shri Vijay Kumar Gupta (HUF),
Shri Susheel Kumar Gupta and Smt.Shashikala Gupta.
(d) Pledge of entire shares held by Promoters i.e. Shri Vijay Kumar Gupta, Shri Susheel Kumar Gupta, Smt Shashikala Gupta.
(e) Personal Guarantees of Mr. Vijay Kumar Gupta,Vijay Kumar Gupta HUF, Mr. Susheel Kumar Gupta and Mrs. Shashikala
Gupta. Guarantee limited to the value of the security mortgaged.
24.4.Employee Benefits:
As per Ind AS-19 “Employee Benefits”, the disclosures of Employee Benefits in the Accounting Standard are given below:
The Company makes Provident Fund and Employee State Insurance Scheme contributions which are defined contribution
plans, for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of
the payroll costs to fund the benefits.
The Company has recognized Rs. 13.21Lakhs (Year ended 31st March 2023 Rs. 22.65Lakhs) towards Provident Fund
contributions and Rs. 2.36Lakhs (Year ended 31st March 2023 Rs. 5.60Lakhs) for the Employee State Insurance Scheme
contribution in the statement to Profit and Loss. The contributions payable to these plans by the Company are at rates
specified in the rules of the schemes.
The employees' gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of obligation
is determined based on actuarial valuation using the Projected Unit Credit Method, which recognized each period of
service as giving rise to additional unit of employee benefit entitlement and measures each unit to build up the final
obligation. Reconciliation of opening and closing balances of Defined benefit obligation as below:
24.5. The Company's operations mainly consist of only one segment-Textile Fabrics and therefore the figures as above relate
to that segment.
24.6. Fair Value Hierarchy
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into
three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the
measurement, as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;
During the year the company has taken unsecured loan for meeting the regular operational expenditure
of the Company from the promoters at regular intervals which is within the limits approved by Members
in the General Meeting vide Special Resolution dated 30.09.2014 at 24th Annual General Meeting held on
30/09/2014.
24.8.Assets taken on Lease
(a) The Company's Lease Agreement is in respect of Building at Ameerpet, Kukatpally, Dilsukhnagar, and Secunderabad
show rooms. The Leasing arrangement is for a longer period and renewable by mutual consent on mutually
agreeable terms.
24.l2.In accordance with the Ind AS -39 on “Impairment of Assets” the management during the year carried out exercise of
identifying the assets that might have been impaired in respect of each cash-generating unit. On the basis of this review
carried out by the management, there was no impairment loss on the fixed assets during the year ended 31st March
2024.
24.13. Letters have been written for confirmation of debit and credit balances pertaining to debtors and creditors and reply
from the parties is awaited.
24.14. Promoter/Directors have agreed to waive the rent and remuneration payable to them for the financial year 2023-2024
accordingly, the Company has not provided for the same.
24.15. Post categorization of the Company's loan accounts with State Bank of India (“SBI”) and Axis Bank Limited (‘Axis”) as
Non-Performing Assets (NPAs) regular business transactions were routed through trust & retention account (“TRA”)
managed by SBI on behalf of Company for both SBI & Axis Bank Limited, which however was permitted up to 31st July
2022. SBI has applied a freeze on the TRA account with effect from 01st August 2022.
As the TRA Account is under freeze, the Company is managing its daily operations with the support of Promoter
Directors.
Pursuant to the above, the Company submitted a proposal for compromise on November 10, 2022, for one time
settlement of dues by making a payment of Rs.79.60 Crore (SBI: Rs.61.00 Crore & Axis: Rs.18.60 Crore) as stipulated in
the offer letter to be completed by March 15, 2023. Wherein Company has received approval from the consortium banks
viz. State Bank of India and Axis Bank Limited vide their letters dated January 25, 2023 and January 27, 2023 respectively
to its compromise proposal submitted on November 10, 2022 for one time settlement of bank dues of Rs.79.60 Crore
to be paid by March 31,2023. However, Company was unsuccessful to honor the compromise agreement as on March
31,2023 and SBI & Axis has revoked the compromise agreement on April 29, 2023 and May 03, 2023 respectively. The
Company has, however, submitted a fresh request for revival of the compromise agreement to banks and extension of
time for repayment of dues but same is yet to confirmed by the respective banks.
Meanwhile, SBI has on behalf of both the consortium banks, initiated recovery action as per provisions of section 13 (2)
of Securitization and Reconstruction of Financial Assets & Enforcement of Securities Interest Act, 2002 (“SARFAESI Act”)
SARFAESI Act by filing an application before Debt Recovery Tribunal (DRT), Hyderabad and before NCLT, Hyderabad
Bench under IBC 2016 in the month of June 2023. Further proceedings in both the cases initiated by the bank are in
progress before DRT and NCLT, Hyderabad Bench respectively.
However, the application filed by State Bank of India before Hon'ble National Company Law Tribunal [NCLT] Hyderabad
bench under section 7 of Insolvency and Bankruptcy Code, 2016 in respect of dues payable to State bank of India & Axis
Bank Limited, was rejected by the Hon'ble tribunal on 08th May 2024 without costs since same petition cannot be filed
with two different authorities simultaneously and other grounds.
State Bank of India has also sued for recovery before Debt Recovery Tribunal under SARFAESI Act, 2002, proceedings
for which are in progress and next date of hearing is fixed for 21st August 2024.
24.16. The Company has received warrant of attachment of immovable property vide RC no. 175/ 2023 dated 13 March 2024
under Rule 48 of the second schedule to the Income Tax Act,l96l read with the Recovery of Debts & Bankruptcy Act,
1993 which is listed for hearing before the Debt Recovery Tribunal for 21st August 2024.
24.17. Company has received notice dated 24th April 2024 from the Advocate Commissioner appointed by the court of chief
Judicial Magistrate has served warrant of commission issued u/s 24 of the SARFAESI Act, 2002 giving therein 15 days'
notice & has taken possession of factory unit on 06 June 2024 in compliance of the said order of the court.
24.18. Management has performed a detailed review and reached out to all its debtors with regards to recovery of the long
outstanding dues. Considering the long association debtors have given their assurance that the amount owed to the
Company will be surely repaid, which was delayed due to the impact of COVID 19 pandemic and several other factors
affecting the markets. Keeping in view the assurance given by the debtors, management is of the opinion that there
is no requirement of provision for expected credit loss towards the recovery from debtors. Further efforts are being
made for expediting recovery from long overdue debtors. The management is, therefore, of the opinion there is no
significant credit loss for the existing debtors outstanding and accordingly provisions are not required to be made in
the books.
24.19. The Company does not have any Benami property where any proceeding has been initiated or pending against the
Group for holding any Benami property.
24.20. The Company does not have any transactions with companies struck off.
24.21. The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies
beyond the statutory period.
24.22. The Company has complied with the requirements of the number of layers prescribed under clause (87) of section 2
of the Companies (Restriction on number of Layers) Rules 2017.
24.23. 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 company (Ultimate Beneficiaries) or
ii. Provide any guarantee security or the like to or on behalf of the Ultimate Beneficiaries.
24.24. 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 Group shall:
24.25. 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 Provide any guarantee security or the like on behalf of the Ultimate
Beneficiaries.
24.26. The Company has not entered into 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).
24.27. The company has not traded or invested in crypto currency or Virtual currency during the financial year
24.28. The company has an accounting software for maintaining its books of account which has a feature of recording audit
trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the
software. Further, the audit trail feature has not been tampered with at any point of time during the year.
As per our Report of even date attached
for SVD & ASSOCIATES For and on behalf of the Board of Directors of
Chartered Accountants Vijay Textiles Limited
Firm's Registration Number: 015405 S CIN : L18100TG1990PLC010973
Sd/- Sd/- Sd/-
Avinash Doba Vijay Kumar Gupta Susheel Kumar Gupta
Partner Chairman & Managing Director Executive Director
Membership No: 232340 DIN:01050958 DIN:00362714
Place: Hyderabad Place: Hyderabad
Date: 31.07.2024 Date: 31.07.2024
Sd/- Sd/-
Rakesh Malhotra Yogesh Dayama
Whole Time Director & CFO Company Secretary
DIN:05242639 M.No: A70654
Place: Hyderabad Place: Hyderabad Place: Hyderabad
Date: 31.07.2024 Date: 31.07.2024 Date: 31.07.2024
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