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SENSEX NIFTY India | Notes to Account > Textiles - Readymade Apparels > Notes to Account from Page Industries - BSE: 532827, NSE: PAGEIND

Page Industries

BSE: 532827|NSE: PAGEIND|ISIN: INE761H01022|SECTOR: Textiles - Readymade Apparels
Oct 15, 15:19
118.1 (0.56%)
VOLUME 1,826
Oct 15, 15:19
63.85 (0.3%)
VOLUME 39,997
Mar 17
Notes to Accounts Year End : Mar '19

1. Corporate information

The Company was incorporated in the year 1995 with the key objective of bringing the innerwear brand “JOCKEY” to India. The core values of the brand include youthfulness, fun, quality, value, confidence and innovation. The Company has introduced a wide range of quality products for men, women and children as well as innovative marketing concepts such as display modules aimed at enhancing the consumer’s involvement with the purchase.

The Company commenced operations in the year 1995 in Bengaluru with the manufacturing, distribution and marketing of Jockey products. The Company has added to its profile by entering into license with “SPEEDO”, globally known International brand for swim wear.

The Company is a public company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. The registered office of the Company is located at Cessna Business Park, 7th Floor, Umiya Business Bay, Tower-1, Varthur Hobli, Outer Ring Road, Bengaluru - 560 103. Its shares are listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

The financial statements are approved for issue by the Company’s Board of Directors on 24 May 2019.

During the year ended 31 March 2019, Rs. (29.43) million (31 March 2018 : Rs. 204.75 million) was recognised as a provision / (reversal of provision) for certain old inventories.

i) Loans are measured at amortised cost

ii) The above loan to related party carries interest at the rate of 9% and is repayable on demand.

iii) Loans as per SEBI (Listing Obligation and Disclosure Requirement) regulation 2015:

i) Trade receivable due from a Company in which key managerial personnel or their relatives have significant influence is as follows:

ii) Trade receivables are measured at amortised cost. No trade receivables are due from directors or other officers of the Company either severally or jointly with any other person.

iii) Trade receivable are generally on terms of 7 to 45 days.

* Full amount ‘3201.

** The above trade receivables are secured against deposits from dealers and bank guarantees.

Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each shareholder is entitled to one vote per share.

In the event of liquidation, the equity shareholders are eligible to receive the residual assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

The Company does not have any holding company or subsidiary company.

2. Other equity

a) General reserve

Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. Such amount can be utilised in accordance with the specific requirements of Companies Act, 2013.

b) Securities premium

Securities premium is used to record the premium on issue of shares. The reserve can be utilised only for certain purposes in accordance with the provisions of the Companies Act, 2013.

The above loans from banks are secured by first charge on building, leasehold land and plant and machinery bought with the respective loans and second charge on other fixed assets and current assets, ranking pari passu with other banks.

(i) The cash credit from bank carries interest ranging from 9.30 % p.a. to 10.50 % p.a. and are repayable on demand and is secured by first charge on hypothecation of inventory and trade receivables and other current assets and second charge on movable property, plant and equipment.

(ii) The short term loan from bank carries interest at the rate of 8.60 % p.a. for a period of 60 days and is secured by first charge on hypothecation of inventory and trade receivables and other current assets and second charge on movable property, plant and equipment.

i) Trade payables are measured at amortised cost.

ii) Trade payables are non-interest bearing and are normally settled on 15 to 45 days terms.

* Details of dues to micro and small enterprises as defined under the MSMED Act, 2006

The Company has amounts due to Micro and Small Enterprises under The Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) as at 31 March 2019 and 31 March 2018. The details in respect of such dues are as follows:

i) Other financial liabilities are measured at amortised cost.

ii) Borrowings from banks and deposits from dealers are interest bearing.

Sale of products includes excise duty collected from customers of Rs. 6.59 million upto 30 June 2017. Sale of products net of excise duty is Rs. 25,180 million for the year ended 31 March 2018.

3. In accordance with the provisions of Companies Act, 2013, the Company is required to contribute Rs. 83.60 million (31 March 2018: Rs. 65.34 million) towards CSR expenditure for the year ended 31 March 2018 against which actual revenue expenditure is Rs. 52.73 million (31 March 2018: Rs. 32.23 million).

4. Employee benefit plan

The Company has a defined benefit gratuity plan for its employees. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member’s length of service and salary at retirement age. The contributions are managed through a third party which acts as the administrator of the fund.

The sensitivity analyses above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

The average duration of the defined benefit plan obligation at the end of the reporting period is 6 years (31 March 2018: 7 years).

5. Commitments and contingencies

a. Leases

Operating lease commitments - Company as lessee

The Company has entered into operating leases on buildings for office, factory and other premises with lease term between 11 and 132 months and which are renewable on a periodic basis at the option of the Company or lessor.

The Company has recorded Rs. 361.56 million (31 March 2018: Rs. 371.99 million) during the year towards lease expenses.

b. Other Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for as at 31 March 2019 is Rs. 36.13 million (31 March 2018: Rs. 66.86 million).

Note: The Company had received a demand order of Rs 117.25 million from the income tax authorities for AY 2010-11 on account of disallowance of certain expenditure which was dismissed by the Income Tax Appellate Tribunal (ITAT) in favour of the Company during FY 2016-17. The income tax department has filed an appeal against the aforesaid ITAT order and the matter is now pending in the High Court of Karnataka.

(ii) The Hon’ble High Court of Karnataka, based on a preliminary hearing of writ petition filed by the Karnataka Employers’ Association, of which, the Company is a Member, on 2 February 2016, has stayed the retrospective applicability of The Payment of Bonus (Amendment) Act, 2015 from 1 April 2014. The Hon’ble High Court has further ordered that the amended provision shall be implemented effective from FY 2015-16 pending disposal of the writ petition. Consequent to the above, the Company has not recorded the differential liability of bonus payable for the year ended 31 March 2015 aggregating to Rs. 118.18 million in its books.

(iii) The Supreme Court of India in a judgment on Provident Fund (PF) dated 28 February 2019 addressed the principle for determining salary components that form part of Basic Salary for individuals below a prescribed salary threshold. There are numerous interpretative issues relating to the Supreme Court (SC) judgement on PF dated 28 February 2019. As a matter of caution, the Company has evaluated the impact of such order on a prospective basis from the date of the SC order and concluded that the same has no material impact on the Company. The Company will update its provision, on receiving further clarity on the subject.

Future cash outflows in respect of the above matters are determinable only on receipt of judgments/ decisions pending at various forums/authorities.

Terms and conditions of transactions with related parties

The transactions with related parties are at arm’s length. Outstanding balances at the year-end are unsecured and settlement occurs in cash. The Company has not recorded any impairment relating to amounts owed by related parties.

6. Segment information

The Company has one business unit based on its products and has one reportable segment. The management monitors the operating results of its single business unit for the purpose of making decisions about resource allocation and performance assessment. The following tables present revenue and non-current operating assets details of the Company for the year ended 31 March 2019 and 31 March 2018.

The information above is based on the locations of the customers.

All non-current operating assets (property, plant & equipment, etc.) are located in India.

The fair value of 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 fair values of the investments in mutual funds are derived from quoted market prices in active markets. Accordingly, these are classified as level 1 of fair value hierarchy.

b) The fair values of the Company’s security deposits and loans are determined by using Discounted Cash Flow (DCF) method (Level 3) using discount rate that reflects the issuer’s borrowing rate for the respective financial asset/liability as at the end of the reporting period.

The carrying value of trade receivables, trade payables, cash and cash equivalents, loans, shortterm borrowings and other current financial assets and liabilities approximate their fair values largely due to the short-term maturities of these instruments.

There are no transfer between levels during the year.

7. Financial risk management objectives and policies

The Company’s activities expose it to the following risks:

a) Credit risk

b) Liquidity risk

c) Market risk

a) Credit risk

Credit risk is the risk that counter party will not meet its obligations under a financial instruments or customer contract leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities including deposits with banks and financial institutions, investments, foreign exchange transactions and other financial instruments.

i) Trade receivables

Customer credit risk is managed by the Company subject to the Company’s established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored and major customers are generally secured by obtaining security deposits/bank guarantee or other forms of credit insurance.

ii) Financial instrument and cash deposit

Credit risk is limited as the Company generally invest in deposits with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies. Investments primarily include investments in liquid mutual fund units. Counterparty credit limits are reviewed by the Company periodically and the limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.

b) Liquidity risk

Liquidity risk is the risk that 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 to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. Typically the Company ensures that it has sufficient cash on demand to meet expected short term operational expenses. The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans/internal accruals.

c) 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 two types of risk: interest rate risk and foreign currency risk. Financial instruments affected by market risk include borrowings, trade receivable and trade payable.

Interest rate risk is the risk that the fair value or future cash flows of the Company’s financial instruments will fluctuate because of changes in market interest rates. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. As the Company does not have significant debt obligations with floating interest rates, it is not exposed to any significant interest rate 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 does not have significant foreign currency exposure and hence, is not exposed to any significant foreign currency risk.

8. Capital management

The Company’s objective is to maintain a strong capital base to ensure sustained growth in business. The Capital Management focusses to maintain an optimal structure that balances growth and maximizes shareholder value.

The Company is predominantly equity financed. Further, the Company has sufficient cash, cash equivalents and financial assets which are liquid to meet the debts.

9. The dividends declared during the year are approved by the Board of Directors. Further, subsequent to the year-end, the Board of Directors, at their meeting held on 24 May 2019, have declared 4th interim dividend of Rs. 41 per share.

10. Previous year figures have been regrouped / reclassified, wherever necessary to confirm to the current year’s classification.

Source : Dion Global Solutions Limited
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