N Provision and Contingencies
i) Provision is recognised (for liabilities that can be measured by using a substantial degree of estimation) when:
a) the company has a present obligation as a result of a past events.
b) a probable outflow of resources embodying economic benefits is expected to settle the obligation ; and
c) the amount of the obligation can be reliably estimated.
ii) Contingent liability is disclosed in case there is ;
a) possible obligation that arises 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
b) a present obligation arising from past events but is not recognised because :
(i) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation: or
(ii) a reliable estimate of the amount of the obligation cannot be made.
O Impairment
(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 and loss. Loss allowance for trade receivables with no significant financing components is measured at an amount equal to lifetime ECL. For all other financial assets, ECLs 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 ECL (or reversal) that is required to adjust loss allowance at the reporting date to the amount that is required to be recognized, is recognized as an impairment gain or loss in statement of profit and loss.
(ii) Non-financial assets
Property, plant and equipment and intangible assets
Property, plant and equipment and intangible assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit to which the asset belongs.
If such assets are considered to be impaired, the impairment to be recognized in the Statement of Profit and Loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the Statement of Profit and Loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.
P Earning per share (EPS)
Basic EPS are computed by dividing the net profit and loss for the year attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding the during the year. Diluted earning per equity share are 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 (i.e. the average market value of the outstanding
equity shares). Dilutive potential equity shares are deemed converted as of the beginning of the year, unless issued at a later date. Dilutive potential equity shares are determined independently for each year presented.
Items of “Other Comprehensive Income” are not considered for calculation of EPS (Basic or Diluted).
Q Dividends
The final dividend on shares is recorded as a liability on the date of approval by the shareholders, and interim dividends are recorded as a liability on the date of declaration by the Company’s Board of Directors.
R Leases
The Company has adopted Ind AS 116-Leases effective 1 st April, 2019, using the modified retrospective method. The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. The Company uses significant judgment in assessing the lease, lease term and the applicable discount rate.
The Company assesses whether a contract is or contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:
(i) the contract involves the use of an identified asset
(ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and
(iii) the Company has the right to direct the use of the asset.
The Company determines the lease term as the non-cancellable period of a lease, together with both periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease, or not to exercise the option to terminate the lease. The Company revises the lease term if there is a change in the noncancellable period of a lease.For short-term and low value leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the lease term.
S Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to know amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
b) Financial risk management
In the course of its business, the Company is exposed primarily to fluctuations of equity prices, liquidity and credit risk, which may adversely impact the fair value of its financial instruments.
The Company has a risk management policy which covers the risks associated with the financial assets and liabilities such as credit risks. The risk management policy is approved by the board of directors.
i) Market risk
Equity Price risk
Equity Price Risk is related to the change in market reference price of the investments in equity securities.
The fair value of some of the Company’s investments measured at fair value through other comprehensive income exposes the Company to equity price risks. These investments are subject to changes in the market price of securities. The fair value of Company’s investment in quoted equity securities as at March 31,2024 and March 31,2023 was ' 351.87 lakhs and ' 198.23 lakhs respectively. A 10% change in equity price as at March 31,2024 and March 31,2023 would result in an impact of ' 35.19 Lakhs and ' 19.82 lakhs respectively.
(Note: The impact is indicated on equity before consequential tax impact, if any).
ii) Credit risk
Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks.
Financial instruments that are subject to concentrations of credit risk, principally consist of investments classified as fair value through profit or loss, trade receivables, loans and advances. None of the financial instruments of the Company result in material concentrations of exposure to credit risks.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was ' 16911.27 lakhs as at March 31,2024 and ' 15341.18 lakhs as at March 31,2023, being the total of the carrying amount of balances with banks, short term deposits with banks, trade receivables, finance receivables, margin money and other financial assets excluding equity investments.
None of the Company’s cash equivalents, including time deposits with banks, are past due or impaired. Regarding trade receivables and other receivables, and other loans or receivables that are neither impaired nor past due, there were no indications as at March 31,2024, that defaults in payment obligations will occur.
iii) Liquidity risk
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company invests its surplus funds in bank fixed deposit and bonds, which carry no/low mark to market risks.
The table below provides details regarding the contractual maturities of financial liabilities, including estimated interest payments as at March 31,2024
Defined Benefit Plan and other long term benefits Gratuity funds
The Employees gratuity fund scheme is managed by Life Insurance Corporation of India. The present value of obligation is determined based on Actuarial valuation by certified actuary. The valuation has been carried out using the Project Unit Credit Method as per Ind AS 19.
Valuations are performed on certain basic set of pre-determined assumptions and other regulatory framework which may vary overtime. Thus, the Company is exposed to various risks which are as follows:
Interest Rate risk:
The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the benefit and will thus result in an increase in the value of the liability.
Liquidity risk:
This is the risk that the Company is not able to meet the short-term payouts. This may arise due to non availability of enough cash / cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time.
Salary Escalation risk:
The present value of defined benefit plan liability is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan’s liability.
Demographic risk:
The Company has used certain mortality abd attrition assumptions in valuation of the liability. The company is exposed to the risk of actual experience turning out to be worse compared to the assumption.
Regulatory risk:
Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts (e.g. Increase in the maximum limit on gratuity of ' 20,00,000).
38 Additional Regulatory Information
a The title deeds of all the immovable properties (other than properties where company is the leasee and the lease agreement are duly executed in favour of the company) disclosed in the financial statements including in property, plant and equipment and investment property are held in the name of the Company.
b The Company has not revalued its property, plant and equipment (including Right to use assets) or intangible assets or both during the year.
c The Company has no Capital work-in-progress or intangible asset under development, so requirement of ageing schedule is not applicable
d The Company does not have any Benami property, where any proceeding has been initiated or pending against the company for holding any Benami property.
e The Company has not been declared as a wilful defaulter by any bank or financial institution or any other lender. f The Company does not have any transaction with struck off companies.
g The Company does not have any charges or satisfaction which is yet to be registered with the Registrar of Companies (ROC)
beyond the statutory period.
h The Company has not granted loans or advanes in the nature of loans to promotors, directors, KMPs and the related parties, either severally or jointly with any other person, that are :
a. repayable on demand : or
b. without specifying any terms or period of repayment.
i The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Companies Act,2013 read with Companies (Restrictions on number of Layers) Rules, 2017.
j The Company has not advanced or loaned or invested funds to any other person(s) or entity(is), including foreign entities (intermediaries) with the understanding that the intermediary shall :
i. 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
ii. Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
k The Company has not received any funds from any person (s) or entity(is) including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall :
i. 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
ii. Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
l The Company does not have any transaction which is not recorded in the books of accounts but 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 Acy, 1961)
m The Company has not traded or invested in Crypto currency or Virtual currency during the year.
39 Previous year’s figures have been regrouped and recast to make them comparable with current year figures.
As per our report attached For and on behalf of the Board of Directors
For Aiyar & Co. Sd/- Sd/-
Chartered Accountants Deepak Arora Shuchi Arora
(FRN No. 001174N) Director Director
(DIN: 00093077) (DIN: 00093201)
Sd/- Sd/- Sd/- Sd/-
(Charanjit Chuttani) Varoon Malik Narinder Pal Singh Ramkesh Pal
(M.No. 090723) CEO CFO Company Secretary
Partner (DIN: 07004987) (M.No.093568) (M.No.A40120)
Place : Gurugram Date : 28.05.2024
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