1.12. Provisions and Contingent liabilities and contingent assets
Provisions represent liabilities for which the amount or timing is uncertain. Provisions are recognized when the Company has a present obligation (legal or constructive), as a result of past events, and it is probable that an outflow of resources, that can be reliably estimated, will be required to settle such an obligation.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows to net present value using an appropriate pre-tax discount rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Unwinding of the discount is recognized in profit or loss as a finance cost. Provisions are reviewed at each reporting date and are adjusted to reflect the current best estimate.
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or nonoccurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
Contingent assets are not recognised but disclosed in the financial statements when an inflow of economic benefits is probable.
1.13. Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefit will flow to the Company and the revenue can be measured reliably.
Sale of goods:
Revenue from sale of goods is recognised when the significant risks and rewards of ownership of the goods have been transferred to the buyer either at the time of dispatch or delivery or when the risk of loss transfers. Export sales are generally recognized based on the shipped on board date as per bill of lading, which is when substantial risks and rewards of ownership are passed to the customers.
Revenue from sale of goods is net of taxes and recovery of charges collected from customers like transport, packing etc. are not treated as part of sales. Sales returns are recognised when appropriate. Revenue is measured at the fair value of consideration received or receivable and is net of price discounts, allowance for volume rebates and similar items.
Claims/Refunds not ascertainable with reasonable certainty are accounted for on final settlement and are recognized as revenue on certainty of receipt on prudent basis.
Rendering of services:
Revenue from sale of services are recognized when the services are rendered.
Other Income:
Dividend income on investments is recognised when the right to receive the dividend is established.
Interest income is recognized on a time proportionate basis taking into account the amounts invested and the rate of interest on prudent basis.
1.14. EMPLOYEE BENEFITS
Short term employee benefits
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services.
(b) Defined contribution plans such as Provident fund & Superannuation fund.
Post-employment benefits
Defined contribution Plans
A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions to a separate entity. The Company makes specified monthly contributions towards Provident Fund, Superannuation Fund and Pension Scheme. The Company’s contribution is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.
Defined benefit Plans
The Company pays gratuity to the employees whoever has completed five years of service with the Company at the time of resignation/superannuation. The gratuity is paid @ 15 days salary for every completed year of service as per the Payment of Gratuity Act, 1972.
Re-measurments of defined benefit plans in respect of post-employment are charge to Other Comprehensive Income.
Empolyee Separation Costs
Compensation to employees who opt for retirement under the voluntary retirement scheme, if any, of the Company is payable in the year of exercise of option by the employee. The Company recognises the employee separation cost when the scheme is announced and the Company is demonstrably committed to it.
1.15. Foreign exchange transactions and translation
The financial statements are presented in Indian rupee (INR), which is Company’s functional and presentation currency.
Transactions in foreign currencies are recognised at the prevailing exchange rates on the transaction dates. Realised gains and losses on settlement of foreign currency transactions are recognised in the Statement of Profit and Loss.
Exchange differences arising on settlement or translation of monetary items are recognised in Statement of Profit and Loss except to the extent of exchange differences which are regarded as an adjustment to interest costs on foreign currency borrowings that are directly attributable to the acquisition or construction of qualifying assets, are capitalized as cost of assets.
Monetary foreign currency assets and liabilities at the year-end are translated at the year-end exchange rates and the resultant exchange differences are recognised in the Statement of Profit and Loss.
1.16. TAXES ON INCOME
Income tax comprises current and deferred tax. Income tax expense is recognized in the statement of profit and loss except to the
extent it relates to items directly recognized in equity or in other comprehensive income.
• Current Tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance sheet date.
• Deferred Tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of Deferred tax liabilities and assets are reviewed at the end of each reporting period.
1.17. Government Grants
Government grants are recognised when there is reasonable assurance that the grant will be received and all attached conditions will be complied with.
Government grants related to revenue are recognised on a systematic basis in the statement of profit and loss over the periods necessary to match them with the related costs which they are intended to compensate. Such grants are deducted in reporting the related expense. When the grant relates to an asset, it is recognized as income over the expected useful life of the asset.
In case a non-monetary asset is given free of cost, it is recognised at a fair value. When loans or similar assistance are provided by government or related institutions, with an interest rate below the current applicable market rate, the effect of this favourable interest is recognized as government grant. The loan or assistance is initially recognized and measured at fair value and the government grant is measured as the difference between the initial carrying value of the loan and the proceeds received.
1.18. Earning Per Share
The basic earning per share (EPS) is computed by dividing the net profit after tax available to equity share holders for the year by the weighted average number of equity shares outstanding during the current year.
The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares unless impact is anti-dilutive.
The financial instruments are categorized into two levels based on the inputs used to arrive at fair value measurements as described below:
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities; and
Level 2: Inputs other than the quoted prices included within Level 1 that are observable for the assets or liability, either directly or indirectly.
Liquidity Risk
Liquidity risk is the risk that suitable sources of funding for the company's business activities may not be available. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due, so that the company is not forced to obtain funds at higher rates. The Company monitors rolling forecasts of the Company's cash flow position and ensure that the Company is able to meet its financial obligation at all times including contingencies.
Credit Risk
Credit risk is the risk that a customer or counterparty to a financial instrument will fail to perform or pay amounts due causing financial loss to the company. It arises from cash and cash equivalents, financial instruments and principally from credit exposures to customers relating to outstanding receivables. The Company deals with highly rated counter parties.
27.13 Dividend
Dividends declared by the Company are based on the profit available for distribution. On May 29, 2024, the Board of Directors of the Company have proposed a final dividend of Rs. 2.75 per share in respect of the year ended March 31, 2024 subject to the approval of shareholders at the Annual General Meeting, and if approved, would result in a cash outflow of approximately Rs. 81.48 Lakhs.
27.14: Additional Regulatory Information
1 The title deeds of all the immovable properties, (other than immovable properties where the Company is the lessee and the lease agreements are duly executed in favour of the Company) disclosed in the financial statements included in Property, Plant and Equipment are held in the name of the Company as at the balance sheet date.
2. The company has not revalued its Property, Plant and Equipment during the year.
3. The Company does not have any Capital Work-in-Progress as on the date of the Balance Sheet. The Company also does not have any intangible asset under development.
4. The company has not made any loans or advances in the nature of loans to any promoters, directors, KMP, and its related parties.
5. The Company is neither in possession of any benami property, nor any proceeding has been initiated or is pending against the Company for holding any benami property.
6. The company has not been sanctioned limits against hypothecation of its current assets during the year.
7. The Company has not been declared as a wilful defaulter by any bank or financials institution or lender during the year.
8. As per the information available with the Company, it does not have any transactions with companies which are struck off under section 248 or Section 560 of the Companies Act, 2013.
9. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
10. The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017, wherever required.
11. 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) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.
12. 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 funding party (ultimate beneficiaries); or
(b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
13. Having regard to the expert opinion obtained by the management, the provisions of Section 135 "Corporate Social Responsibility" are not applicable on the Company.
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.
15. The company does not have any borrowed funds or share premium.
16. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
17. The Company has not recognised any prior period items in its audited annual accounts. In terms of its policy generally followed over the years, the liability is recognised in the year of its crystalisation.
18. The company has reclassified/regrouped/rearranged the previous year figures in accordance with requirement for the current period.
In terms of our report of even date. For & on behalf of Board of Directors
For SDBA & CO. Rajesh Agrawal
Chartered Accountants Chairman & Managing Director
(FRN : 142004W)
Sanjeev A. Mehta Hitesh Kothari Pooja Ponda
Chief Financial Officer Company Secretary
M. No : 41287 ACS 66677
Place : Mumbai Place : Mumbai
Date : 29th May, 2024 Date : 29th May, 2024
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