(w) Provisions & Contingent Liabilities:
Provisions:
Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount can be reliably estimated. Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period. When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognized as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the Statement of Profit and Loss net of any reimbursement.
Contingent Liabilities:
A disclosure for contingent liabilities is made when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources embodying economic
benefits will be required to settle or a reliable estimate of the amount cannot be made.
(x) Financial Assets at Fair Value through Profit or Loss Account:
Financial assets are measured at fair value through profit or loss unless it is measured at amortized cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of assets and liabilities at fair value through profit and loss are immediately recognized in the statement of profit and loss.
(y) Financial Liabilities:
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings or payables, 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 and financial guarantee contracts.
Financial liabilities are measured at amortized cost using the effective interest method.
(z) Reclassification of Financial Assets & Liabilities:
The Company determines classification of the financial assets and liabilities on initial recognitions. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The Company's senior management determines change in the business model as a result of external or internal changes which are significant to the company's operations. Such changes are evident to external parties. A change in the business model occurs when a company either begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Company does not restate any previously recognized gains, losses (including impairment gains and losses) or interest.
(aa) Offsetting of Financial Instruments
Financial assets and liabilities are offset and the net amount is reported in the Balance Sheet if there is currently enforceable legal right to offset the recognized amounts and there is no intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
i) Capital Management:-
The Company's capital management objectives are to maintain a strong capital base so as to maintain investors, creditors and market confidence and to future development of the business. The Board of Directors monitor return on capital employed.
The Company manages capital risk by maintaining sound/optimal capital structure through monitoring of financial ratios, such as debt-to-equity ratio and net borrowings-to-equity ratio on a monthly basis and implements capital structure improvement plan when necessary.
The Company uses debt ratio as a capital management index and calculates the ratio as Net debt divided by total equity. Net debt and total equity are based on the amounts stated in the financial statements.
* Net Debts includes Non-Current borrowings, Deferred Sales Tax Liability and Current borrowings.
** Equity Includes share capital and other equity.
ii) Credit Risk:-
Credit risk is the risk of financial loss arising from counter-party failure to repay or service debt according to contractual terms or obligations. Credit risk encompasses both, the direct risk of default and the risk of deterioration of credit worthiness as well as concentration of risks. Credit risk is controlled by analyzing credit limit and creditworthiness of customers on a continuous basis to whom the credit has been granted after necessary approvals for credit.
Financial instruments that are subject to credit risk principally consists of trade receivable, investments, derivative financial instruments and other financial assets. None of the financial instruments of the Company results in material concentration of credit risk.
Exposure to credit risk:-
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk is as under, being the total of the carrying amount of balances with trade receivables and loans and advances:-
Ind AS requires expected credit losses to be measured through a loss allowance. The Company assesses at each date of financial statement whether a financial asset or group of financial assets is impaired. The Company recognizes lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to 12 months expected credit losses or at an amount equal to the life time expected credit losses, if the credit risk on the financial asset has increased significantly since initial recognition
Before accenting any new customer, the Company uses an external/internal credit scoring system to assess potential customer's credit quality and defines credit limits by customer. Limits and scoring attributed to customer are reviewed periodic basis
iii) Liquidity Risk
a. Liquidity Risk Management-
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
b. Maturities of financial liabilities
The following table details the remaining contractual maturities for its financial liabilities with agreed repayment period. The amount disclosed in the table has been drawn up based on the undiscounted cash flow of financial liabilities based on the earliest date on which the Company is required to pay. The table includes principal cash outflows.
d. Market Risk:-
Market risk is risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in the market prices. Such changes in the value of financial instruments may result from changes in the foreign currency exchange rate, interest rate, credit, liquidity and other market changes.
Note No.: 35 Secured Loans
a. Working Capital and Term Loan:-
Loans Repayable on demand or on due date and GECL availed from the State Bank of India is primarily secured by Hypothecation of present and future stock of raw materials, Stock in process, finished goods, Stores & spare parts and Book debts.
Term loans availed from the State Bank of India for Co-generation power plant, Sulphuric Expansion projects and New Online Coating Plant are primarily secured by the respective plants.
All the above facilities are additionally secured by the registered mortgage on existing leasehold land admeasuring 23,409 sq mtr with building and structure thereon, including all machineries at industrial Plot No 293, 296 in industrial area bearing survey no. 55/P, 57/P, 67P, 68P and 139P, within the limits of Chirri and Chanod, Vapi, Taluka Pardi, Dist Valsad - 396195 and existing leasehold land and building bearing Survey No 621/P, 58/P, 56/P, 136/P, 137/P situated at Industrial Plot No 294, 295 and 296/P, within the limits of Chirri and Chanod, Vapi, Taluka Pardi, Dist Valsad - 396195 admeasuring 39,020 sq mtrs,
b. Working capital term loan availed from Aditya Birla Finance Limited is secured by registered mortgage on land at
i. Gut No 50/2, 50/3 and 50/6 at Wahegaon and Gut No 54/1, 54/2, 54/3 and 54/5 50/5, 50/6 and 54/1 at Issarwadi, both lands at Tal. Paitha, Dist Aurangabad owned by the company admeasuring 30.59 acres
ii. Gut No 321, 322, 323, 324 and 37/8 at Wahegaon Tal Paithan, Dist. Aurangabad admeasuring 31.89 acres and
iii. Utsah Bunglow, Ground Floor at Plot No 3, CTS no. 20186 bearing Municipal no 5-14-67, Adalat Road, Aurangabad owned by Mrs Jeevanlata Kagliwal admeasuring 1598 sq ft. and
iv. Utsah Bunglow, First Floor at Plot No 3, CTS no. 20186 bearing Municipal no 514-67, Adalat Road, Aurangabad owned by Mr Akash Kagliwal admeasuring 1598 sq ft. and portion admeasuring 305 sq ft on second floor.
c. Vehicle loans availed are secured against the hypothecation of respective vehicles.
Note: The remuneration paid to key managerial personal excludes gratuity and
compensated absences as the provision is computed for the Company as a whole and
separate figures are not available.
c. Other Related Parties:-
i. M/s Akash Farms LLP
ii. M/s Tapovan International Trading Private Limited
iii. N Kagliwal Education & Research Foundation.
iv. Paithan Mega Food Park Private Limited
d. Transactions carried out with related parties are in the ordinary course of business and the transactions are made on terms equivalent to those that prevail in arm's length transactions. Outstanding balances at the year-end are unsecured. Transaction details are as under:
Note No.:41 Segment Reporting :
i) Primary Segment:-
The company is engaged in manufacturing of Paper & chemicals. Management has identified reportable primary Segment & Geographic secondary Segment in accordance with Accounting Standard 108 issued by the Institute of Chartered Accountants of India. Revenue & Expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to a specific segment have been allocated on the basis of associated revenue of the segment and manpower efforts. All other expenses which are not attributable or allocable to segment have been disclosed as un allocable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as un allocable.
NOTE No.:42
Deferred Sales Tax Liability
Nath Industries Limited -Unit Nath Paper was the beneficiary of Package Scheme of Incentive (PSI-1988) of Government of Maharashtra upto 2008-09. As per the scheme and Government Resolution no IDL/1093/(8889)/IND-8 dated 07th May 1993, unit Nath Paper being located in Marathwada was eligible to pay the deferred sales tax after 18 years in seven equal annual installments. Accordingly, the liability of deferred sales tax will be paid from 18th years in seven equal installments. The repayment of same will begin from the F.Y. 2029-30.
The Department of Industries, Government of Maharashtra has further sanctioned vide their letter dated 07.12.2015 the Eligibility for the unutilized CQB of Rs. 1951.75 lakhs under PSI-1988, for a period of 5 years i.e. from 1st November, 2015 to 31st October, 2020
Deferred Sales tax Liability of MVAT/ SGST has been valued at Book value, which would have been Rs 1964.59 lakhs if valued at Fair Value as required under the IND AS -113 Fair Value Measurement. Company has recognized the same at its Book value considering the fact that the company is liable to pay the entire dues to the Government of Maharashtra as per the schedule of repayment.
Note No.:44
Disclosure in accordance with Section 22 of the Micro, Small and Medium Enterprises Act, 2006:
The Company has asked for confirmations from suppliers and service providers who have registered themselves under the Micro Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006) However no confirmations or information was received or available with the Company as on date of signing of final accounts, Hence information about the balance of Principal amount and the Interest due thereon remaining unpaid to supplier registered under Micro, Small and Medium Enterprises as defined under the MSMED Act, 2006 is not available.
*Net profit was low because of under utilization of capacities due to shutting down of plants for expansion.
Note No.:47 Previous year Figures
Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.
In term of our report attached
For N. R. Agrawal & Co For and on behalf of the Board
Chartered Accountants
Firm Reg. No. 100143W
N. R. Agrawal Akash Kagliwal
Partner Managing Director
M.No.: 030117
UDIN:- 24030117BKBFCB5830
Place : Mumbai Abhaykumar Jain
Date: 30th May 2024 Director
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