14. Provisions, contingent liabilities and contingent assets
A provision is recognized when there is a present obligation
as a result of past event and it is probable that there will be
an outflow of resources in respect of which a reliable
estimate can be made. Contingent liabilities are disclosed
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 will be
required to settle or a reliable estimate of the amount
cannot be made. Information on contingent liability is
disclosed in the Notes to the Financial Statements.
Contingent assets are not recognised.
15. Employee benefits
Short-term obligations
Liabilities for wages and salaries, including non-monetary
benefits that are expected to be settled wholly within 12
months after the end of the period in which the employees
render the related service are recognised in respect of
employees' services up to the end of the reporting period
and are measured at the amounts expected to be paid when
the liabilities are settled. The liabilities are presented as
current employee benefit obligations in the balance sheet.
Post-employment obligations
(a) Defined benefit plans
Gratuity obligations
The liability in respect of Gratuity is determined based
on the actuarial valuation done by Actuary as at
Balance Sheet dated in context of the Ind AS 19
following Projected Unit Credit Method. The gratuity
plan in unfunded and the Company will pay gratuity
as and when it becomes due. The obligation is
measured at the present value of the estimated
future cash flows. Actuarial gains and losses are
recognised immediately in the Statement of Profit
and Loss.
Leave encashment on termination of service
Benefits under the Company's leave encashment
constitute other employee benefits. The liability in
respect of leave encashment is provided on the basis
of an actuarial valuation done by an independent
actuary at the year end. Actuarial gains and losses are
recognised immediately in the Statement of Profit
and Loss. It is unfunded plan.
(b) Defined contribution plans
Provident Fund
Retirement benefit in the form of provident fund is a
defined contribution scheme. The Company has no
obligation, other than the contribution payable to the
provident fund. The Company recognizes contribution
payable to the provident fund scheme as an expense,
when an employee renders the related service.
16. Earnings per share
Basic earnings per equity share is computed by dividing the
net profit attributable to the equity holders of the company
by the weighted average number of equity shares
outstanding during the period.
Diluted earnings per equity share is computed by dividing the
net profit attributable to the equity holders of the company
by the weighted average number of equity shares considered
for deriving basic earnings per equity share and also the
weighted average number of equity shares that could have
been issued upon conversion of all dilutive potential equity
shares. The dilutive potential equity shares are adjusted for
the proceeds receivable had the equity shares been actually
issued at fair value.
17. 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.
(i) Initial recognition and measurement
On initial recognition, all the financial assets and
liabilities are recognized at its fair value plus or minus
transaction costs that are directly attributable to the
acquisition or issue of the financial asset or financial
liability except financial asset or financial liability
measured at fair value through profit or loss.
Transaction costs of financial assets and liabilities
carried at fair value through the Profit and Loss are
immediately recognized in the Statement of Profit
and Loss.
(ii) Subsequent measurement
Financial assets carried at amortised cost
A financial asset is subsequently measured at
amortised cost if it is held within a business model
whose objective is to hold the asset in order to collect
contractual cash flows and the contractual terms of
the financial asset give rise on specified dates to cash
flows that are solely payments of principal and
interest on the principal amount outstanding.
Financial assets at fair value through other
comprehensive income (FVTOCI)
A financial asset is subsequently measured at fair
value through other comprehensive income if it is
held within a business model whose objective is
achieved by both collecting contractual cash flows
and selling financial assets and the contractual terms
of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and
interest on the principal amount outstanding.
Financial assets at fair value through profit or loss
(FVTPL)
A financial asset is measured at fair value through
profit and loss unless it is measured at amortized cost
or at fair value through other comprehensive income.
Financial liabilities
The financial liabilities are subsequently carried at
amortized cost using the effective interest method.
For trade and other payables maturing within one
year from the balance sheet date, the carrying
amounts approximate fair value due to the short
maturity of these instruments.
18. Impairment of assets
(i) Financial assets
The company recognizes loss allowances using the
expected credit loss (ECL) model for the financial
assets which are not fair valued through profit or loss.
Loss allowance for trade receivables with no
significant financing component is measured at an
amount equal to lifetime ECL. For all other financial
assets, expected credit losses are measured at an
amount equal to the 12-month ECL, unless there has
been a significant increase in credit risk from initial
recognition in which case those are measured at
lifetime ECL. The amount of expected credit losses (or
reversal) that is required to adjust the loss allowance
at the reporting date to the amount that is required
to be recognised is recognized as an impairment gain
or loss in statement of profit or loss.
(ii) Non-financial assets
The carrying amounts of assets are reviewed at each
balance sheet date in accordance with Ind AS 36
'Impairment of Assets', to determine whether there is
any indication of impairment. If any such indication
exists, the asset's recoverable amount is estimated.
An impairment loss is recognised whenever the
carrying amount of an asset exceeds its recoverable
amount. Impairment losses are recognised in the
Statement of Profit and Loss. An impairment loss is
reversed if there has been a change in the estimates
used to determine the recoverable amount. An
impairment loss is reversed only to the extent that
the asset's carrying amount does not exceed the
carrying amount that would have been determined
net of depreciation or amortisation, if no impairment
loss had been recognised.
(i) Retained earnings
Retained earnings represents amount that can be distributed by the Company to its equity shareholders is
determined based on the financial statements of the Company and also considering the requirements of the
Companies Act 2013.
(ii) Capital Redemption Reserve
Capital Redemption reserve is a statutory, non-distributable reserve created on account of redemption of
redeemable preference shares as per the provisions of Companies Act, 2013.
38. Financial instruments
a) Capital management
The Company manages its capital to ensure that the Company will be able to continue as a going concern while
maximising the return to stakeholders through efficient allocation of capital towards expansion of business,
optimisation of working capital requirements and deployment of surplus funds into various investment options.
The Company's capital requirement is mainly to fund its capacity expansion, repayment of principal and interest on
its borrowings and strategic acquisitions. The principal source of funding of the Company has been, and is expected
to continue to be, cash generated from its operations supplemented by funding from borrowings from banks and
financial institutions.
The Company monitors its capital using gearing ratio, which is net debt divided to total equity. Net debt includes,
interest bearing loans and borrowings less cash and cash equivalents, bank balances other than cash and cash
equivalents while equity includes all capital and reserves of the Company.
# includes current maturities of long term debt
The fair value of financial assets and liabilities are included at the amount at which the instrument could be
exchanged in a current transaction between willing parties in an orderly market transaction, other than in a forced or
liquidation sale.
Fair value hierarchy
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - 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)
c) Financial risk management
These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity
risk. The Company seeks to minimise the effects of these risks by using derivative financial instruments, credit limit to
exposures, etc., to hedge risk exposures.
The Company's risk management is carried out by senior management team. The risk management includes
identification, evaluation and identifying the best possible option to reduce such risk.
(i) 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 prices comprise three types of risk: foreign currency risk, interest rate risk,
investment risk.
Foreign currency risk management
The Company operates internationally and is exposed to foreign exchange risk arising from foreign currency
transactions primarily with respect to USD, GBP, SGD and EURO. Foreign currency risk arises from future commercial
transactions and recognised assets and liabilities denominated in a currency that is not the Company's functional
currency. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows
established risk management policies.
(ii) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Company is exposed to interest rate risk because funds are borrowed at both
fixed and floating interest rates. The Company has exposure to interest rate risk, arising principally on changes in
base lending rate.
(iii) Liquidity risk management
Liquidity risk refers to the risk of financial distress or high financing costs arising due to shortage of liquid funds in a
situation where business conditions unexpectedly deteriorate and requiring financing. The Company requires funds
both for short term operational needs as well as for long term capital expenditure growth projects. The Company
relies on a mix of borrowings, capital infusion and excess operating cash flows to meet its needs for funds. The
current committed lines of credit are sufficient to meet its short to medium term expansion needs. 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.
Maturity profile of financial liabilities:
The table below provides details regarding the remaining contractual maturities of financial liabilities at the
reporting date.
(iv) Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to
the Company. Customer credit risk is managed centrally by the Company and subject to established policy,
procedures and control relating to customer credit risk management. The company also assesses the
creditworthiness of the customers internally to whom goods are sold on credit terms in the normal course of
business. The credit limit of each customer is defined in accordance with this assessment. Outstanding customer
receivables are regularly monitored and any shipments to overseas customers are generally covered by letters of
credit.
40. Previous year figures have been regrouped/rearranged, wherever considered necessary to conform to current year's
classification.
See accompanying notes to the financial statements 1 to 40
As per our report of even date For and on behalf of the Board of Directors
For O. P. Bhandari & Co.
Chartered Accountants
Firm Regn. No. 112633W
Rishi Rajendra Tikmani Director
O. P. Bhandari (DIN : 00638644)
Partner
Pooja Tikmani Director
M.No. 034409 (DIN : 06944249)
Ayush Ratanlal Kedia Director
Place : Ahmedabad (DIN : 08605912)
Date : 28th May 2025
Himadri Trivedi Company Secretary
Hansraj Sekhani Chief Finance Officer
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