2.1 Depreciation and Amortisation :
The aggregate depreciation charge for the year has been included under depreciation and amortisation expense in the Statement of Profit and Loss."
2.2 Impairment of Assets :
The Company has carried out the exercise of assessment of any indications of impairment to its property, plant and equipment as on the Balance Sheet date. Pursuant to such exercise it is determined that there has been no impairment to its property, plant and equipment during the year."
2.3 Property, plant and equipment pledged as security :
Refer Note no. 38 for information on property, plant and equipment pledged as security by the company.
2.4 Contractual obligations :
Refer Note no. 36 for disclosure of contractual commitments for the acquisition of property, plant and equipment, if any.
2.5 Title deeds of immovable properties not held in name of the company :
The title deeds of all the immovable properties (other than properties where the company is the lessee and the lease agreements are duly executed in favour of the lessee), as disclosed in Note no. 2 to the
2.6 Revaluation of Property, Plant and Equipment :
The Company has not revalued its property, plant and equipment (including Right-of-Use Assets) and intangible assets during the year.
2.7 Effect of Transition from AS to Ind AS
The Company has elected to continue with the carrying value of its Property Plant & Equipment (PPE) and Intangible assets recognised as of April 1, 2022 (transition date) measured as per the Previous GAAP and used that carrying value as its deemed cost as on the transition date (April 1, 2022) as per Para D7AA of Ind AS 101.
1) The Company has made an investment of Rs. 51.00 thousands in 5,100 equity shares of Latteys Electricals Private Limited (LEPL). The Company assesses the indicators of impairment of investments as per the requirement of Ind AS 36 at least on an annual basis. The Company has performed a detailed impairment assessment and concluded that there is no impairment of the carrying value of investments.
2) The company had valued the shares of Subsidiary at cost price under IND AS 28, without considering the temporary fluctuation.
3) The Company has complied with the number of layers for its holding in downstream companies prescribed under clause (87) of section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017.
13.1 Right, Preferences and restrictions attached to Equity Shares :
The company has only one class of equity shares having a per value of Rs. 2 per share. Each shareholder is eligible for one vote per share held. The final dividend, whenever proposed by the Board of Directors is subject to approval of the shareholders in ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation of the Company, the equity share holders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
13.2 Issue of Bonus Shares and Share Split
As on April 01, 2022, the Authorised Share Capital of the company was ^ 5,00,00,000 (divided into 50,00,000 Equity Shares with of Rs. 10/-each). Paid up & Subscribed
Capital of the Company was ^ 4,59,96,660 (divided into 45,99,666 Equity Shares with of Rs. 10/-each).
The Company has increase Authorised Share Capital from ^ 5,00,00,000 (divided into 50,00,000 Equity Shares with of Rs. 10/-each) to ^ 11,50,00,000 (divided into
1,15,00,000 Equity Shares with of Rs. 10/-each) on September 20, 2022 with the approval of Shareholders.
Thereafter, the Company capitalized its profit into Shares and issued Bonus Shares to its shareholders on the basis of 3:2 Ratio (three (3) bonus shares for every two (2) equity shares held) on the entitlement date. The Bonus was subsequently approved by the shareholders via an Annual General Meeting.
On 11.02.2023, the Company has split the face value of equity share from Rs. 10/- to Rs. 2/- per equity share with the approval of shareholders.
After consideration ofthe split of the face value of Equity Shares, Authorized Share Capital is 11,50,00,000 (divided into 5,75,00,000 equity shares with Rs. 2/- each) and paid-up share capital of the company is 11,49,91,650 (divided into 5,74,95,825 with Rs. 2/- each).
During the FY 2022-23, Company has issued Bonus Shares and also done Sub Division of Shares. Therefore, numbers of Company's Share Capital and Number of Equity Shares has been increased. The calculation of basic and diluted earnings per share is adjusted for all the periods presented.
1) Securities Premium:
Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.
2) Retained Earnings: Retained earnings are the profits that the Company has earned till date less any transfers to general reserve, dividends, utilisations or other distributions paid to shareholders.
3) Other Comprehensive Income:
The fair value change of the investments measured at fair value through other comprehensive income recognised through Other Comprehensive Income. Upon derecognition the cumulative fair value changes on the said investments except equity investments are reclassified to the Statement of Profit and Loss. Accumulated gain or loss on employee benefits also recognised through other comprehensive income.
15.1 Principal Terms and Conditions of Long Term Borrowings :
a). All Bank Term Loans are secured against Equitable mortgage of properties as:-
1) Plot No. 16, Phase 1/2, GIDC Estate, Noroda, Ahmedabad-382330 in the name of Mr. Kapoor Chand Garg
2) Plot No. 625, Phase-4, , GIDC Estate Naroda, Ahmedabad-382330, in the name of Latteys Industries Ltd.
15.2 Secured borrowings and assets pledged as security
1) The Company has borrowed funds from Banks and financial institutions. The borrowed funds are utilised for the specific purpose for which it was taken.
2) There are no defaults in the repayments of the above borrowings during the year. Also, refer to note 38 for undrawn facilities secured by charges on assets.
3) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
4) The amount payable during the next 12 months, disclosed under the head 'Current Borrowings' (Note No. 19)
1) * Cash Credit Limit of Rs. 12 Cr for Working capital needs of the company and Primarily secured against Stock and Debtors, Collateral Properties are
1) Plot No. 16, Phase 1/2, GIDC Estate, Noroda, Ahmedabad-382330 in the name of Mr. Kapoor Chand Garg
2) Plot No. 625, Phase-4, , GIDC Estate Naroda, Ahmedabad-382330, in the name of Latteys Industries Ltd.
A. Contingent Liabilities:
* As per the Management representation considering the trend in the Submersible Pump Industry and verbal agreements between the company and Creditors the payment terms are 90 days to 120 days normally, therefore company neither Paid any interest to creditors nor made any Provision, However as per MSME Act Sundry Creditors more than 15 days (Consdered only whoes MSME Certificates are received by the company ) are Rs. 2,96,09,794/- and considering fifteen days grace period calculated Interest to MSME is Rs. 51,85,860/-.
* There is demand outstanding on the income tax portal for AY 2020-21, Rs. 30,24,455/-(including accrued interest) and for AY 2018-19, Rs. 3,03,740/- (including
accrued interest) however management disagree with the demand and reply is filed with the IT department, reply awaited.
It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above, pending resolution of the respective proceedings as it is determinable only on receipt of judgments/decisions pending with various forums/ authorities.
The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial results.
At officer level the decision was not in favourof the company, therefore, the company has appealed in Commisioner of appeal. Therefore, the company has recognised it as contingent liabilities.
B. Commitments:
Estimated amount of contracts remaining to be executed on capital account and not provided for net of advances, Rs. NIL Lakhs (previous year Rs. NIL Lakhs).
1) Defined Contribution Plan: Employee benefits in the form of Provident Fund are considered as defined contribution plan and the contributions to Employees Provident Fund Organisation established under The Employees Provident Fund and Miscellaneous Provisions Act 1952 and Employees State Insurance Act, 1948, respectively, are charged to the profit and loss account of the year when the contributions to the respective funds are due.
2) Defined Benefit Plan: Retirement benefits in the form of Gratuity are considered as defined benefit obligation and are provided for on the basis of third party actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet.
Every Employee who has completed 5 years or more of service is entitled to Gratuity on terms not less favourable than the provisions of The Payment of Gratuity Act, 1972.
As the Company has not funded its liability, it has nothing to disclose regarding plan assets and its reconciliation.
38 First time adoption of Ind AS Transition to Ind AS
These are the Company's first financial statement prepared in accordance with Ind AS.
38.1 Exemptions and exceptions availed
The accounting policies set out in Note 1, have been applied in preparing the financial statements for the period ended March 31, 2023, the comparative information presented in these financial statements for the year ended March 31, 2024 and in the preparation of opening Ind AS balance sheet as at April 1, 2022. In preparing its opening balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explaination of how the transition from from previous GAAP to Ind AS has affected the Company's financial position, financial performance and cash flows is set out in the following tables and notes.
Ind AS optional exemptions cost
Deemed cost:- Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment, Intangible Assets, Investment property, and Investment in subsidaries / joint venture / associates, as recognised in the financial statements as at the date of transition to Ind AS, measured as for the previous GAAP and use that as its deemed cost as at date of transition after making necessary adjustments for decommissioning liabilities. Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying values as at April 1, 2022.
38.2 Ind AS mandatory exeptions De-recognition of financial assets and liabilities:-
Ind As 101 requires a first time adopter to apply the de-reconginition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements in Ind AS 109 restrospectively from a date of the entity's choosing, provided that the information needed to apply AS 109 to financial assets and Financial liabilties de-recongnised as a result of past transactions was obtained at the time of initially accounting for those transactions. The Company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS, wherever applicable.
Classification and measurement of financial assets:-
Ind AS 101 requires an entity to assess classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exist at the date transition to Ind AS.
Impairment of financial assets:-
An entity shall determine the approximate credit risk at the date that financial instruments were initially recognized and compare that to the credit risk at the date of transition to Ind. This should be based on reasonable and supportable information that is available without undue cost or efforts. Ifany entity is unable to make this determination without undue cost or effort, it shall recognise a loss allowance at an amount equual to lifetime expected credit losses at each reporting date untill that financial instrument is de-recognised. The Company has this exception to analyse credit risk of the financial assets as the date of transition insteated of the date of initial recognition.
39 Financial Instruments and Risk Review
i) Capital Management
The company's objective when managing capital is to:
- Safeguard its ability to continue as a going concern so that the Company is able to provide maximum return to stakeholders and benefits for other stakeholders.
- Maintain an optimal capital structure to reduce the cost of capital.
The company's Board ofdirectors reviews the capital structure on a regular basis. As part of this review, the board considers the cost of capital risk associated with each class of capital requirements and the maintenance of adequate liquidity. Consistent with others in the industry, The Company monitors capital based on the following gearing ratio:
Netdebt (total borrowings and lease liabilities net of cash and cash equivalents and deposits with Banks and Financial Institutions) divided by Total 'equity' (as shown in the balance sheet).
Disclosures
This section gives an overview of the significance of financial instruments for the Company and provides additional information on balance sheet items that contain financial instruments.
The details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognized in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note provided hereunder :
The management assessed that the fair values of short term financial assets and liabilities significantly approximate their carrying amounts largelydue to the short term maturities of these instruments. The fair value of financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction among willing parties, other than in a forced or liquidation sale. The Company determines fair values of financial assets and financial liabilities by discounting contractual cash inflows/ outflows using prevailing interest rates of financial instruments with similer terms. The fair value of investment is determined using quoted net assets value. Further, the subsequent measurement of all finance assets and liabilities (other than investment) is at amortized cost, using the effective interest method.
2) Discount rates used in determining fair value
The interest rate used to discount estimated future cash flows, where applicable, are based on the incremental borrowing rate of the borrower which in case of financial liabilities is the weighted average cost of borrowing of the Company and in case of financial assets is the average market rate of similar credits rated instrument. The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available. In addition, the Company internally reviews valuation, including independent price validation for certain instruments. Fair value of financial assets and liabilities is the amount 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, regardless of whether that price is directly observable or estimated using another valuation technique.
3) The following methods and assumptions were used to estimate fair value:-
a) Fair value of short term financial assets and liabilities significantly approximate their carrying amounts largely due to the short term maturities of these instruments.
b) The fair value of the Company's interest borrowing received are determined using discount rate reflects the entity's borrowing rate as at the end of the reporting period. The own non performance risk as at the end of reporting period was assessed to be insignificant.
4) Fair value hierarchy:
All financial instruments for which fair value is recognized or disclosed are categorized within the fair value hierarchy described as follows, based on the lowest level input that is significant to the fair value measurement as a whole.
Level: 1 - Quoted (unadjusted) price is active market for identical assets or liabilities.
Level: 2 - Valuation technique for which the lowest level input that has a significant effect on the fair value measurement are observed, either directly or indirectly.
Level: 3 - Valuation technique for which the lowest level input has a significant effect on the fair value measurement is not based on observation market data.
5) Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
a) the fair value of the remaining financial instruments is determined using discounted cash flow analysis.
b) the use of quoted market prices or dealer quotes for similar instruments
6) The carrying amounts of trade receivables, trade payables, dealer deposits, cash and bank balances, deposits, loans, borrowings and other current financial liabilities and financial assets are considered to be the same as their fair values, due to their short-term nature. The fair values for long term loans to others and long term borrowings 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 counter party credit risk. The security deposits are receivable on demand and hence their carrying amount is considered as fair value.
For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.
41 Financial Risk Management Objectives
While ensuring liquidity is sufficient to meet Company's operational requirements, the Company's financial management committee also monitors and manages key financial risks relating to the operations of the Company by analysing exposures by degree and magnitude of risks. These risks include market risk (including currency risk and price risk), credit risk and liquidity risk.
Market Risk
Market risk is the risk ofuncertainty arising from possible market price movements and their impact on the future performance of a business. The major components of market risk are price risk and interest rate. Financial instruments affected by market risk include FVTPL investments, trade payables, trade receivables, etc.
Interest Rate Risk
It is the risk that the fair value or future cash flows of a financial instrument will fluctuate because ofchanges in market interest rates. The Group's exposure to the risk of changes in market interest rates relates primarily to the Group's debt obligations with floating interest rates.
Liquidity Risk
The Company manages liquidity risk by maintaining sufficient cash and cash equivalents including bank deposits and availability of funding through an adequate amount of committed credit facilities to meet the obligations when due.
Management monitors rolling forecasts of liquidity position and cash and cash equivalents on the basis of expected cash flows. In addition, liquidity management also involves projecting cash flows considering level of liquid assets necessary to meet obligations by matching the maturity profiles of financial assets & liabilities and monitoring balance sheet liquidity ratios.
The following tables detail the Company's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The information included in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.
42.1 Related Parties & their Relationship
As per IND AS 24, the disclosures of transactions with the related parties are given below: i) List of Related parties where control exists and related parties with whom transactions have taken place and relationships:
1) . There is an increase in Earning available for Debt Service by 23.08% and a decrease in interest and principal repayments value by 9.04%.
2) . There is an increase in the Cost of Goods sold by 38.73% and a decrease in Average Inventory by 6.09%.
3) . There is an increase in the Cost of Material Consumed by 38.73% and a decrease in Average Trade Payables by 5.81%.
4) . There is an increase in the Turnover by 20.23% and a decrease in Net Working Capital by 8.30%.
5) . There is an increase in the Turnover and Net Profit by 20.23% and 12.58%, respesctively.
6) . There is an increase in the Operating Profit and Average Capital Employed by 53.39% and 13.02%, respectively.
44 Certain Balances of Debtors, Creditors, Loans & Advances for Capital expenditures are non-moving / sticky. However in view of the management, the same is recoverable/payable. Hence no provision for the same is made in the books of accounts.
45 In the opinion of the Board of Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and the provisions for depreciation and all known and ascertained liabilities are adequate and not in excess of the amounts reasonably necessary.
46 The balance confirmation from the suppliers, customers as well as to various loans or advances given have been called for, but the same are awaited till the date of audit. Thus, the balances of receivables, trade payables as well as loans and advances have been taken as per the books of accounts submitted by the company and are subject to confirmation from the respective parties.
47 Previous year's figures have been regrouped and rearranged wherever necessary.
48 Segment Reporting
The Company has a geographical segment other than Domestic area, however management consider the same as one segment only. Therefore, Segment Reporting is not provided.
49 Benami Transactions
There is no proceedings has been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
50 Wilful Defaulter
The Company has not been declared wilful defaulter by any bank or financial institutions or other lender.
51 Transactions with Struck off Companies
As stated & Confirmed by the Board of Directors ,The Company has not under taken any transactions nor has outstanding balance with the Company Struck Off either under section 248 of the Act or under Section 560 of Companies act 1956.
52 Satisfaction of Charge/Creation of Charge
There is no charges or satisfaction yet to be registered with ROC beyond the statutory period.
53 Number of Layers of Subsidiary
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.
54 Undisclosed Transactions
As stated & confirmed by the Board of Directors, 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 IncomeTax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
55 Loan or Investment to Ultimate Beneficiaries
As stated & Confirmed by the Board of Directors, 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
56 Loan or Investment from Ultimate Beneficiaries
As stated & Confirmed by the Board of Directors ,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
57 Audit Trail
The company has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software.
58 Utilization of Term Loans
The Company has applied term loans for the purpose for which the same was obtained during the year.
59 Working Capital
The Company has been sanctioned working capital limits from a bank on the basis of security of the current assets. Quarterly returns or statements filed by the Company with such bank are not in agreement with the books of accounts.
60 Crypto Currency
The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
Notes referred to herein above form an integral part of the Financial Statements
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