m. Provisions, Contingent liabilities and Contingent assets
Provisions are recognised when the company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of time value of money and the risks specific to the liability. The increase in the provision due to passage of time is recognised as interest expense.
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, is disclosed as a contingent liability. Contingent liabilities are also 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.
Contingent assets are not recognised in financial statements since this may result in the recognition of income that may never be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and is recognised
n. Government grants
The Company recognises government grants only when there is reasonable assurance that the conditions attached to them shall be complied with and the grants will be received. Grants related to assets are treated as
deferred income and are recognized as other income in the Statement of Profit and Loss on a systematic and rational basis over the useful life of the asset. Grants related to revenue are recognized in statement of Profit and Loss under the heading ‘Other Operating Revenue’.
o. Income taxes
Tax expense is the aggregate amount included in determination of profit or loss for the period in respect of current tax & deferred tax.
Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
Current tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax assets are recognised for all deductible temporary differences. Deferred tax asset shall be recognised for the carry forward of unused tax losses to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
p. Revenue
Ind AS 115 was issued on 28th March 2018 and supersedes Ind AS 11 Construction Contracts and Ind AS 18 Revenue and it applies, with limited exceptions, to all revenue arising from contracts with its customers. Ind AS 115 establishes a five-step model to account for revenue arising from contracts with customers and requires that revenue be recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. It focuses on the identification of performance obligations in a contract and requires revenue to be recognised when or as those performance obligations are satisfied.
Ind AS 115 requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers.
The Company adopted Ind AS 115 using the modified retrospective method of adoption with the date of initial application of 1st April 2018.
In terms of the requirement of the new standard, revenue is recognised net of trade schemes, discounts and incentives payable to distributors/dealers and retailers.
The specific recognition criteria described below must also be met before revenue is recognized
Sale of goods
Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. The transaction price of goods sold and services rendered is net of variable consideration on account of various discounts and schemes offered by the Company as part of the contract.
In case of domestic sales, the company believes that the control gets transferred to the customer on dispatch of the goods from the factory and in case of exports, revenue is recognised on passage of control as per the terms of contract / incoterms. Variable consideration in the form of volume rebates is recognized at the time of sale made to the customers and are offset against the amounts payable by them. The adaption of Ind AS 115 did not have significant impact for the company.
Interest income
For all debt instruments measured at amortised cost, interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortised cost of a financial liability. Interest income is included in finance income in the statement of profit and loss.
Dividend income
Dividend income from investments is recognised when the shareholder’s rights to receive payment have been established.
Insurance Claims
Insurance and other claims are accounted for as and when settled.
q. Foreign currency transactions
Transactions in Foreign currency are initially recorded at the exchange rate at which the transaction is carried out.
Monetary Assets and Liabilities related to foreign currency transactions remaining outstanding at the year-end are translated at the year-end rate.
In case of items which are covered by forward exchange contracts, the premium or discount on forward exchange contracts is amortised over the period of the respective contract.
Any income or expense on account of exchange difference either on settlement or on translation at the year-end is recognised in the Statement of Profit and Loss.
r. Borrowing costs
Borrowings costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the interest costs.
s. Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the company, by the weighted average number of shares outstanding during the financial year.
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential equity shares and the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.
t. Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the trade receivables.
The Company follows “simplified approach” for recognition of impairment loss allowances on trade receivables.
u. Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the company’s cash management.
v. Trade and other payables
These amounts represent liabilities for goods and services provided to the company prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within the credit period allowed. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. Long term trade payables are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.
w. Related party transactions
Disclosure of transactions with related parties, as required by Ind AS 24 “Related Party Disclosures” has been set out in a separate note. Related parties as defined under Clause 9 of Ind AS 24 have been identified on the basis of representations made by the management and information available with the company.
2.1 Changes in accounting policies and disclosures New and amended standards
Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31,2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.
(e) 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 holders of equity shares are entitled to receive dividends as declared from time to time. 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.
(f) There are NIL (Previous year NIL) shares reserved for issue under option and contracts / commitment for the sale of shares/disinvestment.
(g) During the period of five years immediately preceding the reporting date:
i. Pursuant to the scheme of amalgamation, 1942857 shares were issued for consideration other than cash on 6th October 2018.
ii. No bonus shares were issued
iii. No shares were bought back
(h) The company had issued and alloted 11,91,032 warrants on preferential allotment basis on 2nd September 2022. There was 9,12,808 warrants outstanding at the beginning of the year, which was converted into Equity Shares as per the below details:-
1. On 16th October 2023, 2,12,754 warrants were converted in Equity Shares having face value of ?10/- each
2. On 18th December 2023, 4,86,774 warrants were converted in Equity Shares having face value of ?10/- each
3. On 20th February 2024 2,13,280 warrants were converted in Equity Shares having face value of ? 10/- each
(i) Issue of Equity Shares and Warrants through Preferential allotment: -
During the quarter ended 31st March 2024, the company made following preferential allotment to non promoters on 27th March 2024
1. 11,77,336 equity shares, having face value of ?10/- each, at a price of ? 203 per Equity Share at a premium of ?193 per Equity Share aggregating to ?2389.99 Lakhs.
2. 9,85,220 warrants, each carring a right to subscribe to 1 (One) Equity Share of ?10 each at an issue price of ?203 per warrant aggregating to ?1999.99 Lakhs, upon receipt of 25% of issue price of ?50.75 per warrant amounting to ?499.99 towards warrant subscription money. The remaining consideration of 75% of the issue price ?152.25 per warrant amounting to ? 1500 shall be payable at any time within 18 months in one or more tranches from the date of allotment of the warrants i,e 27th March 2024. The amount received against warrants shall be adjusted/ set off against the issue price for the resultant equity share.
3. The company on 27th March 2024 received a total amount aggregating to ?2889.99 Lakhs, which includes Equity Shares subscription of amounting to ?2389.99 Lakhs and 25% of the warrant subscription money amounting to ?500 Lakhs.
(j) The proceeds of the issue has been utilized to augment the long-term resources of the Company for meeting funding requirements of its business activities, strengthen balance sheet, maintain adequate liquidity, pursue growth opportunities and general corporate and other purposes.
(k) There are 985220 (Previous year 912808) securities convertible into Equity / Preference Shares.
(l) There are NIL (Previous year NIL) calls unpaid including calls unpaid by Directors and Officers as on the balance sheet date.
(m) No shares were forfeited during the year or during the previous year. 5625 equity shares of ?10/- on which ?5/- each
7. Financial risk management objectives and policies
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 and to support its operations. The Company’s financial assets include Investments, trade and other receivables, and cash & cash equivalents that derive directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The company’s senior management oversees the management of these risks. The company’s senior management is supported by a financial risk committee that advises on financial risks and the appropriate financial risk governance framework for the Company. This financial risk committee provides assurance to the Company’s senior management that the Company’s financial risk activities are governed by appropriate policies and procedure and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. The management reviews and agrees policies for managing each risk, which are summarised as below:
(A) 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 three types of risk: interest rate risk, currency risk and other price risks. Financial instruments affected by market risk include Trade payables and borrowings in foreign currencies.
a) 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’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long term debt obligations with floating interest rates. The Company is carrying its borrowings primarily at variable rate. The Company expects the variable rate to decline, accordingly the Company is currently carrying its loans at variable and Fixed interest rates.
B) Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables).
(i) Trade receivables
Customer credit risk is managed by each business location subject to the Company’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed and individual credit limits are defined in accordance with the assessment both in terms of number of days and amount.
An impairment analysis is performed at each reporting date on an individual basis for major clients. In addtion, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 10. The Company does not hold collateral as security.
(ii) Financial instruments and cash deposits
Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investment of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. The Company’s maximum exposure to credit risk for the components of the balance sheet at 31st March 2024 and 31st March 2023 is the carrying amount as illustrated in Note 39(7).
(C) Liquidity risk
The Company monitors its risk of a shortage of funds by estimating the future cash flows. The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, cash credit facilities and bank loans. The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources
Defined Benefit Plan:
Post employment and other long-term employee benefits in the form of gratuity, sick leave and earned leave encashment are considered as defined benefit obligation. The present value of obligation is determined based on actuarial valuation using projected unit credit method as at the Balance Sheet date. The amount of defined benefits recognized in the balance sheet represent the present value of the obligation as adjusted for unrecognized past service cost, and as reduced by the fair value of plan assets.
Any asset resulting from this calculation is limited to the discounted value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. The amounts recognised in the Profit & Loss Statement and Balance sheet and the movements in the net defined benefit obligation over the year are as follows:
Note: -
a. Increases due to increase of Current Assets over Current Liabilities..
b. Decreases due to increase in shareholder fund due to equity infusion during the year.
c. Decreases due to decrease in net operation income.
d. Decreases due to increase in shareholder fund due to equity infusion during the year.
e. Decreases due to higher working capital utilisation.
f. Decreases due to lower net profit.
g. Decreases due to lover profit before interest and tax.
13. The company does not have any Benami property, where any proceeding has been inititated or pending against the company for holding any Benami property.
14. 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(such as search or survey or any other relevant provisions of the Income Tax Act, 1961)
15. The company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.
16. The Company has borrowing limits sanctioned from banks on the basis of security of current assets. The quarterly returns or statements filed by the company with banks are in agreement with the books of accounts.
17. The company is not declared as wilful defaulter by any bank or financial institution (as defined under the Companies Act, 2013) or consortium thereof or other lender in accordance with the guidelines on willful defaulters issued by the Reserve Bank of India.
18. There has been no delay in Charges or satisfaction to be registered with ROC beyond the statutory period.
19. The Company does not have any transactions with struck off companies under Companies Act, 2013 or Companies Act, 1956, during the year.
20. As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility
(CSR) activities. The areas for CSR activities are promoting education, promoting gender equality by empowering women, healthcare, environment sustainability, art and culture, destitute care and rehabilitation, disaster relief, COVID-19 relief and rural development projects.For the year ending March 31, 2024, the Company is not required to contribute under CSR as the 2% of its average net profit for the immediately preceding three financial years is negative.
21. The company has 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: -
a. 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
b. Provided any gurantee, security or the like to or on behalf of the ultimate beneficiaries.
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 whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
b. Provided any gurantee, security or the like to or on behalf of the ultimate beneficiaries.
22. The Company has utilised the fund borrowed from banks and financial institutions for the purpose it was taken.
23. Disclosure under Schedule V to the SEBI (Listing Obligations and Disclosure Requirments) Regulations, 2015 : There are no transactions (except related party transactions) which are required to be disclosed under Schedule V to the SEBI (Listing Obligations and Disclosure Requirments) Regulations, 2015.
24. The previous year’s figures have been reworked, regrouped, rearranged and reclassified wherever necessary. Amounts
and other disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read in relation to the amounts and other disclosures relating to the current year.
On behalf of the Board
For S K Agrawal And Co Chartered Accountants LLP PAWAN KUMAR VERMA AKHILESH CHITLANGIA
Chartered Accountants Chief Financial Officer Managing Director & CEO
(F.R. NO. 306033E/E300272) DIN. 03120474
CA VIVEK AGARWAL KOMAL DHRUV SUPARNA CHAKRABORTTI
(Membership No. 301571) Company Secretary Independent Director
Partner DIN. 07090308
Place of Signature: Kolkata Date : 17th May 2024
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