3.12. PROVISIONS, CONTINGENT LIABILITIES AND CONTIGENT ASSETS
Provisions
Provisions are recognized when there is a present obligation (legal or constructive) as a result of a past event and it is probable that an
outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation. Provisions are determined by discounting the expected future cash flows (representing the best estimate of
the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance
cost.
Contingent Liabilities
Contingent liability is a possible obligation arising from past events and 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 but is not recognized because it is not possible that an outflow of resources embodying
economic benefit will be required to settle the obligations or reliable estimate of the amount of the obligations cannot be made. The
Company discloses the existence of contingent liabilities in Other Notes to Financial Statements.
Contingent Assets
Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic
benefits. Contingent Assets are not recognized though are disclosed, where an inflow of economic benefits is probable.
3.13. NON CURRENT ASSET HELD FOR SALE
Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a
sale transaction rather than through continuing use. This condition is regarded as met only when the asset (or disposal group) is
available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such asset (or
disposal group) and its sale is highly probable. Management must be committed to the sale, which should be expected to qualify for
recognition as a completed sale within one year from the date of classification.
Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their carrying amount and fair value
less costs to sell. Non-current assets are not depreciated or amortised.
4. SIGNIFICANT JUDGEMENTS AND KEY SOURCES OF ESTIMATION IN APPLYING ACCOUNTING POLICIES
Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations
of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.
Information about Significant judgements and Key sources of estimation made in applying accounting policies that have the most
significant effects on the amounts recognized in the financial statements is included in the following notes:
Recognition of Deferred Tax Assets: The extent to which deferred tax assets can be recognized is based on an assessment of the
probability of the Company's future taxable income against which the deferred tax assets can be utilized. In addition, significant
judgement is required in assessing the impact of any legal or economic limits.
Useful lives of depreciable/amortizable assets: Management reviews its estimate of the useful lives of depreciable/amortizable assets
at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to actual normal wear and tear
that may change the utility of plant and equipment.
Classification of Leases: The Company enters into leasing arrangements for various assets. The classification of the leasing
arrangement as a finance lease or operating lease is based on an assessment of several factors, including, but not limited to, transfer of
ownership of leased asset at end of lease term, lessee's option to purchase and estimated certainty of exercise of such option, proportion
of lease term to the asset's economic life, proportion of present value of minimum lease payments to fair value of leased asset and extent
of specialized nature of the leased asset.
Defined Benefit Obligation (DBO): Employee benefit obligations are measured based on actuarial assumptions which include
mortality and withdrawal rates as well as assumptions concerning future developments in discount rates, medical cost trends,
anticipation of future salary increases and the inflation rate. The Company considers that the assumptions used to measure its
obligations are appropriate. However, any changes in these assumptions may have a material impact on the resulting calculations.
Provisions and Contingencies: The assessments undertaken in recognizing provisions and contingencies have been made in
accordance with Indian Accounting Standards (Ind AS) 37, 'Provisions, Contingent Liabilities and Contingent Assets'. The evaluation of
the likelihood of the contingent events is applied best judgement by management regarding the probability of exposure to potential
loss.
Impairment of Financial Assets: The Company reviews its carrying value of investments carried at amortized cost annually, or more
frequently when there is indication of impairment. If recoverable amount is less than its carrying amount, the impairment loss is
accounted for.
Allowances for Doubtful Debts: The Company makes allowances for doubtful debts through appropriate estimations of irrecoverable
amount. The identification of doubtful debts requires use of judgment and estimates. Where the expectation is different from the
original estimate, such difference will impact the carrying value of the trade and other receivables and doubtful debts expenses in the
period in which such estimate has been changed.
Fair value measurement of financial Instruments: When the fair values of financial assets and financial liabilities recorded in the
balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques
including the Discounted Cash Flow model. The input to these models are taken from observable markets where possible, but where
this not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as
liquidity risk, credit risk and volatility.
b) Rights, preferences, restrictions attached to the Equity Shares
The Company has only one class of equity shares having a par value of ? 10 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, except interim dividend. 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, if any. The distribution will be in proportion to the number of equity shares held
by the shareholders.
33 EMPLOYEE BENEFITS
Employee benefits of short term nature comprising annual encashment of unavailed leave of upto 30 days for each year and
medical expenses are recognised as expenses as and when they accrue. Post employment long term benefits are funded through
defined contribution and defined benefit plans as detailed below :
DEFINED CONTRIBUTION PLAN
The Compaany makes contribution towards provident fund to a defined contribution retirement plan for qualifying employees.
The Provident Fund plan is operated by duly constituted and approved independent trustees/government. Under the said
scheme the Company is required to contribute a specific percentage of pay roll costs in respect of elligible employees to the
retirement benefit schemed to the fund the benefits.
DEFINED BENEFIT PLAN
Gratuity
The Company makes annual contribution of gratuity to gratuity funds duly constituted and administered by independent
trustees and funded with Life Insurance Corporation of India/ independent trust for the qualifying employees. The scheme
provides for a lump sum payment to vested employees upon retirement, death while in employment or on termination of
employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon
completion of 5 years of continuous service.
The present value of defined obligation and related current cost are measured using the projected unit credit method with
actuarial valuation being carried out at each balance sheet date.
Identification of Segments :
The Chief Operating Decision Maker monitors the operating results of its business segments separately for the purpose of
making decisions about resource allocation and performance assessment. Segment perfomance is evaluated based on profit or
loss and is measured consistently with profit or loss in the financial statements. Operating segments have been identified on the
basis of the nature of products/services and have been identiified as per the qunatitative criteria specified in Ind-AS.
Segments Rev enue & Results :
The expenses and incomes which are not attributable to any business segment are shown as unallocated expenditure (net of
unallocated income).
Segments Assets & Liabilities :
Segment assets include all operating assets used by the operating segment and mainly consist of property plant and equipment,
trade receivables, cash and cash equivalents etc. Segment liabilities primarily includes Current liabilities except for borrowings.
Common assets and liabilities which cannot be allocated to any of the segments are shown as a part of unallocated Corporate
assets/liabilities.
Inter Segmnet Transfer :
Profit or loss on inter segment transfers are eliminated at company level.
35 DISCLOSURES RELATED TO GOODS & SERVICE TAX
(a) In terms of Notification No. 22/2017 CGST - Rates dated 22.08.2017 and other applicable provision of Goods & Service Tax
laws, the company opted to operate under Forward Charge Mechanism wef 1st April 2018.
(b) Assets purchased and expenses recognised in the accounts are net of elligble input credits of Goods & Service Tax ("GST").
However, GST input credits to the extent not admissible being attributable to exempted incomes have been debited to Profit &
Loss Account under the head Administration Expenses.
(c) Earnings includes unbilled revenue recognised on consignments remaining unbilled as on 31st March due to non receipt of
unqualifed acknowledgements and are net of deductions made by customers on account of transit and other issues as set out
below
The management assessed that the fair values of cash and cash equivalents, trade receivables, trade payables, short term
borrowings, and other financial liabilities approximates their carrying amounts largely due to the short-term maturities of these
instruments.
For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to their fair values.
The fair value of the financial assets and financial liabilities is included at the amount at which the instruments 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:
The fair values for loans, security deposits were calculated based on cash flows discounted using a current lending rate. They
are classified as Level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including
counterparty credit risks, which has been assessed to be insignificant.
The fair values of non-current borrowings are based on the discounted cash flows using a current borrowing rate. They are
classified as Level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including own credit
risks, which was assessed as on the balance sheet date to be insignificant.
38 FINANCIAL RISK MANAGEMENT
Financial risk management of the Company has been receiving attention of the top management of the Company. The
management considers finance as the lifeline of the business and therefore, financial management is carried out meticulously on
the basis of detailed management information systems and reports at periodical intervals extending from daily reports to long¬
term plans. Importance is laid on liquidity and working capital management with a view to reduce over-dependence on
borrowings and reduction in interest cost. Various kinds of financial risks and their mitigation plans are as follows:
Credit Risk
Credit risk is the risk that counterparty will not meet its obligations leading to financial loss. The Company has an established
credit policy and a credit review mechanism. Credit exposure is undertaken only with large reputed business houses and with
no history of default against payments. Based on the business model, macro economic enviroment of the business and past
trends, the management has determined nil percentage for any class of financial asset under expected credit loss.
Liquidity Risk
The Company determines its liquidity requirement in the short, medium and long term. This is done by drawings up cash
forecast for short term and long term needs.
The Company manages its liquidity risk in a manner so as to meet its normal financial obligations without any significant delay
or stress. Such risk is managed through ensuring operational cash flow while at the same time maintaining adequate cash and
cash equivalent position. The management has arranged for diversified funding sources and adopted a policy of managing
assets with liquidity monitoring future cash flow and liquidity on a regular basis. Surplus funds not immediately required are
invested in fixed deposit which provide flexibility to liquidate. Besides, it generally has certain prompt payment and bill
purchase agreements with customers/their bankers which can be assessed as and when required; such credit facilities are
reviewed at regular basis.
The amounts are gross and undiscounted, and include contractual interest payments and exclude the impact of netting
agreements (if any). The interest payments on variable interest rate loans in the tables above reflect market forward interest
rates at the respective reporting dates and these amounts may change as market interest rates change. Except for these financial
liabilities, it is not expected that cash flows included in the maturity analysis could occur significantly earlier, or at significantly
different amounts. When the amount payable is not fixed, the amount disclosed has been determined with reference to
conditions existing at the reporting date.
Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market prices. Market risk comprises two type of risks: Foreign Exchange Risk, Interest Rate Risk.
Foreign Exchange Risk
Foreign Exchange Risk is the exposure of the Company to the potential impact of movements in foreign exchange rates. The
management has assessed that exposure of the Company in foreign currency at the end of the year is K Nil (Previous Year: K
Nil).
Interest Rate Risk
The company's borrowings comprise of vehicle loans only which carries fixed rate of interest. The management has assessed that
exposure of the Company in interest rate risk at the end of the year is K Nil (Previous Year K Nil)
39 CAPITAL MANAGEMENT
The Company's objective to manage its capital is to ensure continuity of business while at the same time provide reasonable
returns to its various stakeholders but keep associated costs under control. In order to achieve this, requirement of capital is
reviewed periodically with reference to operating and business plans that take into account capital expenditure and strategic
Investments. Sourcing of capital is done through judicious combination of equity/internal accruals and borrowings, both short
term and long term. Net debt (total borrowings less investments and cash and cash equivalents) to equity ratio is used to
monitor capital.
42 OTHER STATUTORY INFORMATION
i. The Company does not have any Benami property, where any proceeding has been initiated or pending against the company
for holding any Benami property.
ii. The Company does not have any transactions with companies struck off.
iii. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
iv. The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.
v. The Company has not been declared wilful defaulter by any bank or financial institution or government or any government
authority.
vi. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Interemediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsover by or on behalf of the
company (Ultimate Beneficiaries ) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
vii. 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 Company shall :
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsover by or on behalf of the
Funding Party (Ultimate Beneficiaries ) or
(b) Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
viii. The Company has not undertaken 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.
43 The Code of Social Security, 2020 ('Code') relating to employee benefits during employment and post-employment received
Presidential assent in September 2020 and its effective date is yet to be notified. The Company will assess and record the impact
of the Code, once it is effective.
44 Prior Period Errors and Restatement of Comparative Figures
During the current financial year, the company idenitifed that it had not recognised fair value changes on its investments in
mutual funds for the year ended 31st March 2024. These invesments, to be classifed as financial assets at fair value through
profit or loss (FVPTL), were carried at cost in the financial statements in the previous year. Consequently, the comparative
figures for the year ended 31st March 2024 have been restated, in accordance with Ind AS 8 - Accouting Policies, Changes in
Accounting Estimates and Errors.
i. Nature of the prior period error :
Fair Valuation of the mutual fund investments was not recognised as required under Ind AS 109 - Financial Instruments. As a
result, unrealised gains for FY 2023-24 wre not recognised in the statement of profit and loss.
ii. Correction Methodology :
The comparative figures related to FY 2023-24 in the current report have been restated to include the unrealised gains under the
head "Other Income". Corresponging Deferred Tax Liability has also been recognised and restated.
iv. No Impact on Cash flows :
The restatement pertains solely to non-cash fair value adjustments and has no impact on the cash flows for the year ended 31st
March 2024.
Accompanying notes 1 to 44 form an integral part of the financial statements
KanhaiyaKumar Todi Jagpal Singh
In terms of our report of even date Chairman, Managing Director Director
& CEO - DIN-00112633 DIN-06964314
Virat Sharma
Udit lodi Raja Saraogi
Partner Director Director & CFO
Membership No.061553 DIN-00268484 DIN-00271334
For & on behalf of
Patanjali & Co
Chartered Accountants Sneha Jain
FRN 308163E Company Secretary
ACS-38991
Kolkata, the 28th day of May 2025
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