Term /Rights attached to Equity Shares
"The company has only one class of equity shares having a par value of ' 5/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the 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. "
Securities Premium
Security Premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.
General Reserve
The General reserve is used from time to time for transfer of profits from surplus in statement of Profit and Loss for appropriation purposes. Capital Reserve
This reserve represents the subsidy from Government, amount received upon reissue of forfeited shares and credit on forfeiture of share warrants.
Equity Investment Reserve
This reserve represents the cumulative gains and losses arising on the revaluationof equity instruments measured at fair value through other comprehensive income, net off amounts reclassified to retained earnings when those assets have been disposed of f
Secured by first charge on entire current assets (Present and future) of Master Batch unit of Superpack division of the Company, equitable mortgage on the building , structures and machineries situated at Company’s premises at Sausar and charge on Plot Nos B12, B12/1, B/13, B13/1, B14, B14/1 at MIDC Industrial Estate, Hingna, Nagpur held in the name of a related Company and corporate guarantee of the said related Company and also by personal guarantee of a Director and C.E.O of Superpack Division of the Company.
Loan-II
Secured by way of extention of second charge on entire current assets (Present and future) of Master Batch unit of Superpack division of the Company, extention of second charge on all existing colleteral security by way of mortgage of all the building,structures and machineries situated at Company’s premises at Sausar and charge on Plot Nos B12, B12/1, B/13, B13/1, B14, B14/1 at MIDC Industrial Estate, Hingna, Nagpur held in the name of a related Company.
b) AXIS Bank Limited
Secured by first charge on entire current assets of Steel Division of the Company, present & Future, collateral security by way of extension of exclusive second charge on the entire moveable and immoveable fixed assets, present and future, situated at plot No- G-108, Butibori, MIDC,Nagpur and assets acquired out of term loan-1 installed at C-108,G-6 & G-7 Hingna Nagpur and exclusive second charge on the fixed asset acquired out of term loan-2 and by personal guarantee of the Managing and Executive Director of the r.omnan\/
On the basis of physical verification of assets, as specified in Indian Accounting Standard - 36 and cash generation capacity of those assets, in the management perception, there is no impairment of such assets as appearing in the balance sheet as on 31.03.2021.
Certain Balances under Advance from Customers, Trade Payables, Capital Advances, Trade Receivables, Advance from Customers and Advances Recoverable in cash or in kind or value to be received are subject to Confirmation.
Management estimations and assumptions
a) The management assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
b) The fair valueof the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:
(i) The fair values of the quoted shares and unquoted mutual funds are based on NAVs at the reporting date.
Level 1: Quoted Prices in active markets for identical assets or liabilities
Level2 : 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).
The company's policy is to recognize transfers into and the transfers out of fair value hierarchy levels as at the end of the reporting period. There are no transfers between level 1 and level 2 during the end of the reported periods.
27.3 Financial Risk Management
The Company’s principal financial liabilities comprise loans and borrowings, trade 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 cash equivalents that derive directly from its operations.
The Company’s activities expose it to various financial risks: market risk, credit risk and liquidity risk. The company tries to foresee the unpredictable nature of financial markets and seek to minimise potential adverse impact its financial performance. The senior management of the company oversees the management of these risks. The Audit Committee has additional oversight in the area of financial risks and controls. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken.
28 CAPITAL MANAGEMENT
The following are the objectives of Capital management policy of the company:
(i) Safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders, and
(ii) Maintain an optimal capital structure to reduce the cost of capital
As a part of capital management strategy, the company may adjust the amount of dividends paid to shareholders, issue new shares, raise debt capital or sell assets to reduce debt. The company monitors capital basis gearing ratio which is calculated by dividing the total borrowings by total equity. The company’s strategy is to maintain gearing ratio as possible as lower. In order to achieve this overall objective, the company ensures to meet its financial covenants attached to the interest bearing loans and borrowings. There have neverbeen any breaches in financial covenants of any interest bearing loans and borrowings in the past and also in the current period.
29 RELATED PARTY TRANSACTIONS
Related parties and transactions with them as specified in the Indian Accounting Standard-24 on "Related Party Disclosures" issued by the ICAI has been identified and given below;
1. Enterprises where Control Exists: Bajaj Coneagle LLC (Wholly Owned Foreign Subsidiary)
Bajaj Steel Industries (U) Limited (Wholly Owned Foreign Subsidiary)
2. Other Related parties with whom the Company had transactions:
(a) Key Management personnel and there relatives:-Sri Rohit Bajaj (Chairman cum Managing Director), Sri Sunil Bajaj (Executive Director), Sri Vinod Kumar Bajaj (Director), Sri Mahendra Kumar Sharma ( Whole time director and CEO of the Company),
Sri Ashish Bajaj (CEO of Superpack Division), Sri Manish Sharma (Chief Financial Officer), Sri Divyanshu Vyas (Company Secretary).
Relatives :- Sri Hargovind Bajaj, Smt Devika Bajaj, Sri Lav Bajaj,
(b) Enterprises over which Key Management personnel and their relatives are able to exercise Significant Influence-Associated Biscuit Company Limited, Bajaj Chemoplast (I) Limited, Bajaj Trade Development Limited, Bajaj Exports Private Limited,
Rohit Polytex Limited, Prosperous Finance Services Limited, Ampee Textiles Private Limited, Bajaj Global Limited, Vidarbha Tradelinks Pvt. Limited, Glycosic Merchants Private Limited, Xerxes Traders Pvt. Ltd., Gangalaxmi Agrotech Limited, Gangalaxmi Industries Ltd,
Luk Technical Services Pvt Limited ,Luk Plastcon Limited, Luk Infrastructure Private Limited, Luk Bedrocks Private Limited, Nagpur Infotech Pvt.Ltd, Bajaj Polymin Ltd., Bajaj Polyblends Pvt. Ltd , Bajaj Superpack (I) Ltd, Bajaj Gintech Pvt. Ltd., Bajaj Reinforcement LLP, Liberson Agencies Pvt. Ltd., Sidhi Vinimay Pvt. Limited, Bajaj Plast Pvt. Ltd., and Bajaj Polymers.
32 Inventories of raw materials and Semi-Finished include obsolete and slow moving stock, cost wherofwas Rs.576.99 Lacs (P.Y-389.05 lacs), being carried at estimated net realisable value of Rs. 57.70 Lacs (P.Y-Rs. 77.81 lacs). The profit for the year is lower by Rs.519.29 Lacs (P.Y. Rs.311.24 lacs) due to this.
33 In absence of adequate information relating to the suppliers under the Micro, Small and Medium Enterprises Development Act, 2006, the Company is unable to identify such suppliers, hence the Information required under the said Act, cannot be ascertained.
34 The outbreak of Corona Virus Disease (COVID-19) has severely impacted and triggered significant disruptions to businesses worldwide, leading to an economic slowdown. Significant disruptions primarily include interruptions in production, supply chain disruptions, unavailability of personnel, closure of offices/facilities, decline in demand, liquidity and working capital issues, reduced movement of inventory, decline in selling prices, etc. The company has to the best of its abilities considered impact of COVID-19 while preparing these financial statements and accordingly reviewed the following possible effects:
i) there is no material uncertainty on the ability of the company to continue as a going concern,
ii) there is no material adjustment required to be done in the carrying amounts of the assets and liabilities as on March 31, 2021,
iii) there is no material event/circumstance happened due to COVID-19 as on the date of approval of these financial statements that require specific adjustments/disclosures in these financial statements. However, the company shall continue to closely monitor any material changes arising of future economic conditions and its impact on the business.
35 LEASE
(i) The Company’s lease asset primarily consist of leases for land and buildings, Plant and Machinery and Vehicles for factory and offices having the various lease terms. Effective from April 1, 2019, the Company adopted Ind AS 116 “Leases" and applied the standard to all lease contracts existing on April 1, 2019 using the modified retrospective method. Consequently, the Company recorded the lease liability at the present value of the remaining lease payments discounted at the incremental borrowing rate as on the date of transition and has measured right of use asset at an amount equal to lease liability adjusted for any related prepaid and accrued lease payments previously recognised.
(ii) The following is the summary of practical expedients elected on initial application:
(a) Applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date,
(b) Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term and low value lease on the date of initial application,
(c ) Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application,
(d) Applied the practical expedient by not reassessing whether a contract is, or contains, a lease at the date of initial application. Instead applied the standards only to contracts that were previously identified as leases under Ind AS 17.
(e ) Used hindsight in determining the lease term where the contract contained options to extend or terminate the lease.
(v) The maturity analysis of lease liabilities are disclosed in N ote- 2.14.
(vi) The weighted average incremental borrowing rate applied to lease liabilities as at April 1,2020 is 11%.
(vii) Rental expense recorded for short-term and low value leases was Rs.2075505/- for the year ended March 31,2021.
(viii) The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.
Previous year figures above are indicated in brackets.
Previous year figure have been regrouped/rearranged, wherever found necessary.
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