p) . Provisions, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result
of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are
disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.
q) Cash & Cash Equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and demand deposits with an original
maturity of three months or less and highly liquid investments that are readily convertible into known amounts of cash and which
are subject to an insignificant risk of changes in value net of outstanding bank overdrafts as they are considered an integral part of
the Company’s cash management.
For Goyal Sanjay & Associates, For and on behalf of the Board of Directors
Chartered Accountants
FRN 010083N
Kawaljit Singh Surinder Pal Singh
Chairman & Managing Director Joint Mg. Director
(Davinder Goyal) DIN:00942794 DIN:00942870
Partner
M.N.091278
Date: 27.05.2025
Place: Ludhiana Celespreet Kaur Dilpreet Kaur
UDIN: 25091278BMGZGL4061 CFO (PAN CGDPK3291E) Company Secretary
(PAN BVMPK9617F)
A Calculation of fair values
The fair values of the financial assets and liabilities are defined as the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and
assumptions were used to estimate the fair values of financial instruments:
i. The fair value of the long-term borrowings carrying floating-rate of interest is not impacted due to interest rate changes and will
not be significantly different from their carrying amounts as there is no significant change in the under-lying credit risk of the
Company (since the date of inception of the loans).
ii. Cash and cash equivalents, trade receivables, investments in term deposits, other financial assets, trade payables, and other
financial liabilities have fair values that approximate to their carrying amounts due to their short-term nature.
Financial Assets and Liabilities
The accounting classification of each category of financial instruments and their carrying amounts are set out as below:
c. Fair value hierarchy
The Company uses the following hierarchy for determining and/or disclosing the fair value of financial instruments by valuation
techniques:
The categories used are as follows:
Level 1: It includes financial instruments measured using quoted prices and the mutual funds are measured using the closing N et
Asset Value (NAV).
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques
which maximize the use of observable market data and rely as little as possible on entity specific estimates. If all significant
inputs required to fair value an instrument are observable, the instrument is included in level 2.
29(xiii). FINANCIAL RISK MANAGEMENT
The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk
management framework.
The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set
appropriate risk limits and controls and to monitor risks. Risk management policies and systems are reviewed regularly to reflect
changes in market conditions and the Company’s activities.
The Company has exposure to the following risks arising from financial instruments:
a. Credit risk;
b. Liquidity risk;
c. Market risk; and
d. Interest rate risk
(A) Credit risk
Credit risk arises from the possibility that the value of receivables or other financial assets
of the Company may be impaired because counterparties cannot meet their payment or other performance obligations.
To manage credit risks from trade receivables other than Related Party, the credit managers from Order to Cash department of the
Company regularly analyse customer’s receivables, overdue and payment behaviors. Some of these receivables are collateralized
and the same is used according to conditions. These could include advance payments, security deposits, post-dated cheques etc.
Credit limits for this trade receivables are evaluated and set in line with Company’s internal guidelines. There is no signif icant
concentration of default risk.
Credit risks from financial transactions are managed independently by Finance department. For banks and financial institutions,
the Company has policies and operating guidelines in place to ensure that financial instrument transactions are only entered into
with high quality banks and financial institutions. The Company had no other financial instrument that represents a significant
concentration of credit risk.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant
increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in
credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the
date of initial recognition. It considers reasonable and supportive forwarding looking information such as:
i) Actual or expected significant adverse changes in business;
ii) Actual or expected significant changes in the operating results of the counterparty;
iii) Financial or economic conditions that are expected to cause a significant change to the
counterparty’s ability to meet its obligations;
iv) Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees or
credit enhancements.
Financial assets are written off when there is no reasonable expectation of recovery. Where loans or receivables have been
written off, the Company continues engage in enforcement activity to attempt to recover the receivable due. Where recoveries are
made, these are recognized in statement of profit & loss.
Credit risk is managed at Company level.
For other financial assets, the Company assesses and manages credit risk based on internal control and credit management
system. The finance function consists of a separate team who assess and maintain an internal credit management system. Internal
credit control and management is performed on a Company basis for each class of financial instruments with different
characteristics.
The Company considers whether there has been a significant increase in credit risk on an ongoing basis throughout each
reporting period. It considers available reasonable and supportive forward-looking information.
Macroeconomic information (such as regulatory changes, market interest rate or growth rates) are also considered as part of the
internal credit management system.
A default on a financial asset is when the counterparty fails to make payments as per contract. This definition of default is
determined by considering the business environment in which entity operates and other macro-economic factors.
The Company measures the expected credit loss of trade receivables from individual customers based on historical trend, industry
practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past
trends. Based on the historical data, no additional provision has been considered necessary in respect of trade receivables m ore
than 90 days for the March 31, 2024, since the management has taken suitable measures to recover the said dues and is hopeful of
recovery in due course of time.
The Company maintains exposure in cash and cash equivalents, deposits with banks, investments, and other financial assets.
Individual risk limits are set for each counter-party based on financial position, credit rating and past experience. Credit limits
and concentration of exposures are actively monitored by the Management of the Company. The maximum exposure to credit
risk at the reporting date is the carrying value of each class of financial assets. The Company believes that the current value of
trade receivables reflects the fair value/recoverable values.
(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 t o
ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. Due to the dynamic
nature of underlying businesses, the Company maintains flexibility in funding by maintaining availability under committed credit
lines.
Management monitors rolling forecast of Company’s liquidity position (comprising the undrawn borrowing facilities below) and
cash and cash equivalents on the basis of expected cash flows. In addition, the Company’s liquidity management policy involves
projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance
sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.
(i) Maturities of financial liabilities
All non-derivative financial liabilities, and the amounts disclosed in the table are the contractual undiscounted cash flows.
Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
(C) Market risk
Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect
the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to
manage and control market risk exposures within acceptable parameters while optimizing the return.
The Company is exposed to market risk primarily related to foreign exchange rate risk (currency risk), interest rate risk and
market value of its investments. Thus the Company’s exposure to market risk is a function of investing and borrowing activities
and revenue generating and operating activities in foreign currencies.
(i) Foreign Currency Risk
Foreign currency opportunities and risks for the Company result from changes in exchange rates and the related changes in the
value of financial instruments (including receivables and payables) in the functional currency (INR). The Company is exposed to
foreign exchange risk arising from foreign currency transactions primarily with respect to US Dollar(USD).
The USD exchange rate has changed substantially in recent periods and may continue to fluctuate substantially in the future. The
Company has put in place a Financial Risk Management Policy to Identify the most effective and efficient ways of managing the
currency risks.
Sensitivity analysis
The following table details the Company’s sensitivity to a 25 basis points increase and decrease in the Rupee against the relevant
foreign currencies is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and
represents management’s assessment of the reasonably possible change in foreign exchange rate s. This is mainly attributable to
the net exposure outstanding on receivables or payables in the Company at the end of the reporting period. The sensitivity
analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end
for a 0.25% change in foreign currency rate. This analysis assumes that all other variables, in particular interest rates, remain
constant and ignores any impact of forecast sales and purchases. In cases where the related foreign exchange fluctuation is
capitalised to fixed assets or recognised directly in reserves, the impact, indicated below may affect the Company's income
statement over the remaining life of the related fixed assets or the remaining tenure of the borrowing respectively.
(D) Cash flow and fair value interest rate risk
- Interest rate risk management:
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 rates. The Company’s exposure to the risk of changes in market rates relates primarily to the Company’s long-term debt
obligations with floating interest rates.
The Company’s approach to managing interest rate risk is to have a judicious mix of borrowed funds with fixed and floating
interest rate obligation. Moreover, the short-term borrowings of the Company do not have a significant fair value or cash flow
interest rate risk due to their short tenure.
The Company is also exposed to interest rate risk on its financial assets that includes fixed deposits, since the same are generally
for short duration, the Company believes it has manageable risk and achieving satisfactory returns. The Company also has long -
term fixed interest bearing assets. However, the Company has in place an effective system to manage risk and maximize return
(iii) Price Risk
The Company’s exposure to price risk arises from investment in mutual funds and classified in the balance sheet as fair value
through profit and loss Mutual fund investments are susceptible to market price risk, mainly arising from changes in the interest
rates or market yields which may impact the return and value of such investments. However, due to very short tenor of the
underlying portfolio in the liquid schemes, these do not pose any significant price risk
29(xiv). CAPITAL MANAGEMENT
(a) Risk management
The Company's objectives when managing capital are to:
1. Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and
benefits for other stakeholders; and
2. Maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the
Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, reduce debt
or sell assets.
29(xx) Notes to reconciliations:
A Remeasurement of defined benefit liabilities
Under previous GAAP, the Company recognised re-measurement of defined benefit plans under Statement of Profit or Loss.
Under Ind AS, re-measurement of defined benefit plans are recognised in Other Comprehensive Income.
B Other Comprehensive Income
Under Ind AS, all items of income and expense recognised in the year should be included in the Statement of Profit and Loss for
the year, unless a standard requires or permits otherwise. Items of income or expense that are not recognised in the Statement of
Profit and Loss but are shown in statement of profit and loss as “Other Comprehensive Income” includes re -measurement of
defined benefit plans. The concept of Other Comprehensive Income did not exist under previous GAAP.
29(xxi). Leases
Long-term leases:
The company has no long term leases.
Short-term leases and leases of low-value assets:
During the year under consideration, the company has taken on lease a Reclaim Rubber manufacturing unit namely M/s. Majestic
Reclamation LLP for a period of less than 12 months. The Company has elected not to recognize ROU assets and lease liabilitie s
for short term leases as well as low value assets and recognizes the lease payments associated with these leases as an expense in
the statement of profit and loss.
29(xxii). Financial and Derivative Instruments: Nil (Previous Year Nil)
29(xxiii) There is no issue of securities during the year.
29(xxiv) The immovable properties disclosed in the financial statements included under Property, Plant and Equipment are held
in the name of the Company as at the balance sheet date.
29(xxv) The Company has not revalued its Property, Plant and Equipment.
29(xxvi) The Company has not granted any Loans or Advances in the nature of loans to promoters, directors, KMPs and the
related parties (as defined under Companies Act, 2013,) either severally or jointly with any other person. That are (a) repayable
on demand or (b) without specifying any terms or period of repayment.
29(xxviii) The Company has no Intangible assets under development.
29(xxix) No proceedings have been initiated or pending against the company for holding any benami property under the Benami
Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.
29(xxx) The Company has taken borrowings from banks on the basis of security of current assets, monthly returns or statements
of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts.
29(xxxi) The Company is not declared willful defaulter by any bank or financial Institution or other lender.
29(xxxvii) Utilization of Borrowed funds and share premium:
The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:
Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
company (Ultimate Beneficiaries) or
Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
The Company have 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:
Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party (Ultimate Beneficiaries) or
Provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
29(xxxviii). The Company does not have 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.
29(xxxix). Corporate Social Responsibility under Section 135(5) of the Companies Act, 2013 is applicable to the Company
during the year as the net profit for the financial year 2023-2024 is more than 5 crores,
29(xxxx). The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
29(xxxxi). Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's
classification / disclosure.
29(xxxxii). Corporate Information & Significant accounting policies and practices adopted by the Company are disclosed in the
statement annexed to these financial statements as Note I.
For Goyal Sanjay & Associates, For and on behalf of the Board of Directors
Chartered Accountants
FRN 010083N
Kawaljit Singh Surinder Pal Singh
Chairman & Managing Director Joint Mg. Director
(Davinder Goyal) DIN:00942794 DIN:00942870
Partner
M.N.091278
Date: 27.05.2025
Place: Ludhiana Celespreet Kaur Dilpreet Kaur
UDIN: 25091278BMGZGL4061
CFO (PAN CGDPK3291E) Company Secretary
(PAN BVMPK9617F)
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