3.12 Provisions and Contingent Liabilities
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of
past event, it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are
measured at the best estimate of the expenditure required to settle the present obligation at the Balance
Sheet date.
If the effect of the time value of money is material, provisions are discounted to reflect its present value
using a current pre-tax rate that reflects the current market assessments of the time value of money and the
risks specific to the obligation. When discounting is used, the increase in the provision due to the passage
of time is recognised as a finance cost.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the
existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain
future events not wholly within the control of the Company or a present obligation that arises from past
events where it is either not probable that an outflow of resources will be required to settle the obligation or
a reliable estimate of the amount cannot be made.
3.13 Cash flow statement
Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of
transactions of a non - cash nature and any deferrals or accruals of past or future cash receipts or payments.
The cash flows from operating, financing and investing activities of the Company are segregated.
3.14 Earnings Per Share
Basic earnings per share is computed by dividing the net profit for the period attributable to the equity
shareholders of the Company by the weighted average number of equity shares outstanding during the
period. The weighted average number of equity shares outstanding during the period and for all periods
presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares
that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity
shareholders and the weighted average number of shares outstanding during the period is adjusted for the
effects of all dilutive potential equity shares.
3.15 Employee Benefits
Defined contribution plans
Contributions to defined contribution schemes such as employees’ state insurance, labour welfare fund,
superannuation scheme, employee pension scheme etc. are charged as an expense based on the amount of
contribution required to be made as and when services are rendered by the employees. Company’s
provident fund contribution, in respect of certain employees, is made to a government administered fund
and charged as an expense to the Statement of Profit and Loss. The above benefits are classified as Defined
Contribution Schemes as the Company has no further defined obligations beyond the monthly
contributions.
Defined benefit plans
The Company provides for retirement/post-retirement benefits in the form of gratuity, and compensated
absences, in respect of certain employees. All defined benefit plans obligations are determined based on
valuations, as at the Balance Sheet date, made by independent actuary using the projected unit credit
method. The classification of the Company’s net obligation into current and non-current is as per the
actuarial valuation report.
For defined benefit plans, the amount recognized as ‘Employee benefit expenses’ in the Statement of Profit
and Loss is the cost of accruing employee benefits promised to employees over the year and the costs of
individual events such as past/future service benefit changes and settlements (such events are recognized
immediately in the Statement of Profit and Loss). The amount of net interest expense calculated by
applying the liability discount rate to the net defined benefit liability or asset is charged or credited to
‘Finance costs’ in the Statement of Profit and Loss. Any changes in the liabilities over the year due to
changes in actuarial assumptions or experience adjustments within the plans, are recognised immediately in
‘Other comprehensive income’ and subsequently not reclassified to the Statement of Profit and Loss.
3.16 Financial instruments
Financial assets and liabilities are recognized when the Company becomes a party to the contractual
provisions of the instrument.
The Company derecognizes a financial asset only when the contractual rights to the cash flows from the
asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership
of the asset to another entity. The Company derecognizes financial liabilities when, and only when, the
Company’s obligations are discharged, cancelled or have expired.
A. Financial Assets
On initial recognition, a financial asset is recognised at fair value. In case of financial assets which are
recognised at fair value through profit and loss (FVTPL), its transaction cost is recognised in the statement
of profit and loss. In other cases, the transaction cost is attributed to the acquisition value of the financial
asset. Financial assets are subsequently classified and measured at - Transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets
and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value
measured on initial recognition of financial asset or financial liability. In case of Financial assets which are
recognised at fair value through profit and loss (FVTPL), its transaction cost is recognised in the statement
of profit and loss. In other cases, the transaction cost is attributed to the acquisition value of the financial
asset. Financial assets are subsequently classified and measued at:
-amortized cost
-fair value through other comprehensive income (FVOCI)
-fair value through profit and loss (FVTPL)
Financial assets are not reclassified subsequent to their recognition, except during the
period the Company changes its business model for managing financial assets.
a) Cash and cash equivalents
Cash and cash equivalents are cash, balances with bank and short-term (three months or less from the date
of acquisition), highly liquid investments that are readily convertible into cash and which are subject to an
insignificant risk of changes in value.
b) Trade Receivables and Loans
Trade receivables are initially recognised at fair value. Subsequently, these assets are held at amortised
cost, using the effective interest rate (EIR) method net of any expected credit losses. The EIR is the rate
c) Debt Instruments
Debt instruments are initially measured at amortised cost, fair value through other comprehensive income
(‘FVOCI’) or fair value through profit or loss (‘FVTPL’) till derecognition on the basis of (i) the
company’s business model for managing the financial assets and (ii) the contractual cash flow
characteristics of the financial asset.
i. Measured at amortised cost:
Financial assets that are held within a business model whose objective is to hold financial assets in order to
collect contractual cash flows that are solely payments of principal and interest, are subsequently measured
at amortised cost using the effective interest rate (‘EIR’) method less impairment, if any. The amortisation
of EIR and loss arising from impairment, if any is recognised in the Statement of Profit and Loss.
ii. Measured at fair value through other comprehensive income (FVOCI):
Financial assets that are held within a business model whose objective is achieved by both, selling financial
assets and collecting contractual cash flows that are solely payments of principal and interest, are
subsequently measured at fair value through other comprehensive income. Fair value movements are
recognized in the other comprehensive income (OCI). Interest income measured using the EIR method and
impairment losses, if any are recognised in the Statement of Profit and Loss. On derecognition, cumulative
gain or loss previously recognised in OCI is reclassified from the equity to ‘other income’ in the Statement
of Profit and Loss.
iii. Measured at fair value through profit or loss (FVTPL):
A financial asset not classified as either amortised cost or FVOCI, is classified as FVTPL. Such financial
assets are measured at fair value with all changes in fair value, including interest income and dividend
income if any, recognised as ‘other income’ in the Statement of Profit and Loss.
d) Equity Instruments:
All investments in equity instruments classified under financial assets are initially measured at fair value,
the Company may, on initial recognition, irrevocably elect to measure the same either at FVOCI or
FVTPL.
The Company makes such election on an instrument by-instrument basis. Fair value changes on an equity
instrument is recognised as ‘other income’ in the Statement of Profit and Loss unless the Company has
elected to measure such instrument at FVOCI. Fair value changes excluding dividends, on an equity
instrument measured at FVOCI are recognised in OCI. Amounts recognised in OCI are not subsequently
reclassified to the Statement of Profit and Loss. Dividend income on the investments in equity instruments
are recognised as ‘other income’ in the Statement of Profit and Loss.
Impairment of Financial Asset
The Company applies expected credit loss (ECL) model for measurement and recognition of loss
allowance on the following:
i. Trade receivables
ii. Financial assets measured at amortized cost (other than trade receivables)
iii. Financial assets measured at fair value through other comprehensive income (FVTOCI)
In case of trade receivables, the Company follows a simplified approach wherein an amount equal to
lifetime ECL is measured and recognized as loss allowance.
In case of other assets (listed as ii and iii above), the Company determines if there has been a significant
increase in credit risk of the financial asset since initial recognition. If the credit risk of such assets has not
increased significantly, an amount equal to 12-month ECL is measured and recognized as loss allowance.
However, if credit risk has increased significantly, an amount equal to lifetime ECL is measured and
recognized as loss allowance.
Subsequently, if the credit quality of the financial asset improves such that there is no longer a significant
increase in credit risk since initial recognition, the Company reverts to recognizing impairment loss
allowance based on 12- month ECL.
ECL is the difference between all contractual cash flows that are due to the Company in accordance with
the contract and all the cash flows that the Company expects to receive (i.e., all cash shortfalls), discounted
at the original effective interest rate.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life
of a financial asset. 12-month ECL are a portion of the lifetime ECL which result from default events that
are possible within 12 months from the reporting date.
ECL are measured in a manner that they reflect unbiased and probability weighted amounts determined by
a range of outcomes, taking into account the time value of money and other reasonable information
available as a result of past events, current conditions and forecasts of future economic conditions.
As a practical expedient, the Company uses a provision matrix to measure lifetime ECL on its portfolio of
trade receivables. The provision matrix is prepared based on historically observed default rates over the
expected life of trade receivables and is adjusted for forwardlooking estimates. At each reporting date, the
historically observed default rates and changes in the forward-looking estimates are updated.
ECL allowance recognised (or reversed) during the period is recognized as income/ expense in the
Statement of Profit and Loss under the head ‘Other expenses’.
B. Financial Liabilities
Financial liabilities are initially measured at the amortised cost unless at initial recognition, they are
classified as fair value through profit and loss. In case of trade payables, they are initially recognised at fair
value and subsequently, these liabilities are held at amortised cost, using the effective interest rate method.
Subsequent measurement
Financial liabilities are subsequently measured at amortised cost using the EIR method. Financial liabilities
carried at fair value through profit or loss are measured at fair value with all changes in fair value
recognised in the Statement of Profit and Loss.
i. TL & WCTL - 1. Second charge on entire current assets (both present and future) of the company. 2.
Second charge on all assets created under expansion, which inter alia includes land and building
bearing sy no. 124/3B measuring 2 acres 4 cents situated at Chennapalli village, Hosur taluk,
Krishnagiri Dist, Tamil Nadu.
Collateral: 1. Equitable mortgage of 3 flats no. 902, 903, and 904, with a built-up area of 945 Sq Ft, at
Prestige Meridian, 29, M G Road, Bangalore, owned by Paramount Kum Kum Pvt Ltd, on a Second
charge basis. 2. Lien on FD of Rs. 115 Lakhs(i.e sale proceeds from Daman property) 3. Second
charge on Plant & Machinery and other Fixed Assets which are not funded by IDBI Bank.
Personal Guarantee: Irrevocable and unconditional personal guarantee of : Shri Hiitesh Topiiwaalla,
Managing director of the company on second charge basis.
Corporate Guarantee of : M/s. Paramount Kum Kum Private Limited on Second charge basis. NCGTC :
Compulsorily covered under Guaranteed emergency credit line (GECL) under NCTGC.
b) Term Loan having outstanding 40.36 Lakhs repayable in 18 EMI of Rs.2.24 lakhs payable Up to
Sep 2026 @ 9.10%p.a(RLLR 345bps p.a)
c) Term Loan having outstanding 1.46 Crore repayable in 65 EMI of Rs.2.31 lakhs payable Up to Aug
2030 @ 9.10%p.a(RLLR 345bps p.a)
d) Term Loan having outstanding 1.5 Crore repayable in 45 EMI of Rs.3.25 lakhs payable Up to Feb
2028 @ 9.10%p.a(RLLR 345bps p.a)
ii. Cash Credit - Exclusive charge over entire current assets of the Company, First charge on all assets
created under expansion, which inter alia includes land and building bearing sy no. 124/3B measuring
2 acres 4 cents situated at Chennapalli village, Hosur taluk, Krishnagiri Dist, Tamilnadu and second
charge for WCTL, repayment on demand, Interest is payable @ 9.10%(RLLR 345bps) .
iii. Unsecured loans from other parties are from NBFC repayable in 36 EMIs, It consists of borrowing
from 6 Parties and rate of interest varies from 14% to 21%.
iv. Unsecured loans from bank is from ICICI bank which is repayable in 36 EMI's at rate of interest
16% p.a.
i. Cash Credit is secured hypothecation Current assets (Present and Future) of entire including all the
assets created under expansion and all the current assets of the Company, equitable mortgage of land
and building office premises of associate company at Bangalore, personal guarantee of Managing
Director of the Company and corporate guarantee of associate company@ 9.10%(RLLR 345bps)
ii. Unsecured loans from related parties are interest-free and expected to be repayable within 12
months.
b. Company as a Lessee
The Company’s leasing arrangement is in respect of leases for premises (office). These leasing arrangement is
usually renewable by mutual consent on mutually agreeable terms and lease term is of 11 months and
Company applies the ‘short-term lease’ recognition exemptions for these lease (i.e.,12 months or less)
Note 41: Ind AS-108 Operating Segments
Operating segments are defined as components of an enterprise for which discrete financial information is
available that is evaluated regularly by the chief operating officer i.e. Managing director of the company. On
review of operations, it is identified that the company has only one segment.
Note 42: Classification of Leased Assets
The Company has leased out a premises along with Plant & Machinery, Equipment's and laboratory as a
single inseparable unit. As the lease consideration is not separately identifiable and involves significant
operational services, the asset is classified under Property, Plant and Equipment (PPE) in accordance with Ind
AS 16, and not as Investment Property under Ind AS 40.
The rental income from this arrangement has been recognized as Other Income in the Statement of Profit and
Loss.
Note 43: Trade deposits - Financial liabilities
Trade deposits from CFA agents as given in note no : 17 carries interest rates that are close to or higher than
prevailing market rates. In accordance with Ind AS 109 (Para B5.1.1), these liabilities have been initially
recognized at the transaction price, which approximates fair value due to the absence of observable evidence
indicating a material difference. Accordingly, no discounting adjustment has been made at initial recognition.
Since the contractual interest rate is close to or exceeds the market rate, the same rate has been applied as the
Effective Interest Rate (EIR) for subsequent measurement at amortized cost.
Note 44: Security Deposits - Financial Assets
The Company has classified security deposits as given in note no : 5 (including electricity, telephone, and
other similar deposits) as non-current financial assets, as they are refundable only upon discontinuation of the
related services and are not expected to be realized within 12 months from the reporting date.
In accordance with Ind AS 109 - Financial Instruments (Para 5.1.1 and B5.1.1), financial assets are initially
measured at fair value. However, in this case, the difference between the transaction value and fair value is not
considered material due to the nature, amount, and expected duration of these deposits. Accordingly, the
deposits have been measured at transaction value.
Note 45: Financial instruments
Financial instruments by category
The carrying value and fair value of financial instruments by categories as at March 31, 2025 are as
follows :
Fair value of financial assets and financial liabilities measured at amortised cost :
The management believes that the fair values of non-current financial assets (e.g. security deposites), current
financial assets (e.g., cash and cash equivalents, trade receivables, loans and others excluding other derivative
assets) , Other non-current financial liabilities (i.e., trade deposites) and current financial liabilities (e.g. trade
payables and other payables excluding derivative liabilities) approximate their carrying amounts.
Note 46: Financial Risk Management
The Company's activities are exposed to a variety of Financial risks from its operations. The Key financial
risks include Credit Risk, Market Risk and Liquidity Risk. The Company also uses derivative instruments on
selective basis prudently to manage the volatility of financial markets and minimize the adverse impact on its
financial Performance in accordance Risk Management Policy Framework.
a. Credit Risk
Credit risk is the risk that a customer or counterparty to a financial instrument fails to perform or pay the
amounts due causing financial loss to the company. The company is exposed to credit risk from its operating
activities primarily arising from trade receivables from customers and other financial instruments.
Customer Credit risk is managed as per the Company's established policy, procedures and control framework
relating to customer credit risk management. The company assesses the credit quality of the counterparties
taking into account their financial position and credit worthiness, the age of specific receivable balance and the
current and expected collection trends, age of its contracts in progress, historically observed default over the
expected life of trade receivables. Credit risk is also actively managed to the extent feasible by securing
payment through letter of credit, advance payment and bill discounting facility. The Company's exposure (
unsecured trade receivables ) and credit ratings of its counter parties are continuously monitored and assessed
while ensuring that the aggregate value of the transaction is reasonably spread amongst counterparties. The
company uses the expected credit loss model to assess the impairment allowance on trade receivables, if any
on the reporting date and accordingly applied the same for measurement and recognition of impairment losses
on trade receivables.
b. Market Risk
Market Risk is the risk that the fair value or future cash flow of the financial instrument will fluctuate because
of changes in market prices.
i) Foreign Exchange Risk
The Company is exposed to foreign currency risk primarily on account of import payables denominated in
USD. As of the reporting date, the Company has not entered into any forward contracts or derivative
instruments to hedge its foreign currency exposure.
reviewed periodically with reference to operating and business plans that take into account capital expenditure
and strategic investments. Sourcing of capital is done through judicious combination of equity/ internal
accruals and borrowings, both short term and long term. The capital structure is governed by policies approved
by the Board of Directors and the Company monitors capital by applying net debt (total borrowings less
investments and cash and cash equivalents) to equity ratio. The Company manages its capital structure and
make adjustments in the light of changes in economic conditions and the requirements of financial covenants
attached to the interest bearing loans and borrowings that define capital structure requirements. No changes
were made in the objectives, policies or processes for managing capital during the year ended 31st March
2025 or corresponding previous year.
Reason for Difference in Debtors:
1) Difference in debtors in Q1 and Q3 is on account of - Company has reinstated/Regrouped and made loss
allowances to its debtors but the same has not considered in the statement submitted to bank.
Reason for Difference in Inventory:
1)Differences of inventory in quarter 4 is on account of valuation difference i.e., variation in provisional
valuation made by considering provisional rates in statement submitted to bank vs Actual valuation made later
once books of accounts are finalized.
Note 52: Employee benefit plans
1. Defined benefit plans - Gratuity
In accordance with Indian law, the Company operates a scheme of gratuity which is a defined benefit plan.
The gratuity plan provides for a lump sum payment to vested employees at retirement, death while in
employment or on termination of employment of an amount equivalent to 15 to 30 days’ salary payable for
each completed year of service. Vesting occurs upon completion of five continuous years of service. The
Company manages the plan through a trust. The following table sets out the details of the defined benefit
retirement plans and the amounts recognised in the financial statements:
The discount rate indicated above reflects the estimated timing and currency of benefit payments. It is
based on the yields/rates available on applicable bonds as on the current valuation date.
The salary growth rate indicated above is the Company's best estimate of an increase in salary of the
employees in future years, determined considering the general trend in inflation, seniority, promotions,
past experience, and other relevant factors such as demand and supply in the employment market, etc.
Attrition rate indicated above represents the Company's best estimate of employee turnover in the future
(other than on account of retirement, death or disablement) determined considering various factors such as
nature of business, retention policy, industry factors, past experience, etc.
The significant actuarial assumptions for the determination of the defined benefit obligations are discount
rate and expected salary increase. The sensitivity analysis below have been determined based on
reasonably possible changes of the respective assumptions occurring at the end of the reporting period,
while holding all other assumptions constant..
The sensitivity analysis presented above may not be representative of the actual change in the defined
benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another
as some of the assumption may be correlated. Furthermore, in presenting the above sensitivity analysis,
the present value of the defined benefit obligations has been calculated using the Projected Unit Credit
Method at the end of the reporting period, which is the same as that applied in calculating the defined
benefit obligation liability recognised in the balance sheet. Each year an Asset - Liability matching study
is performed in which the consequences of the strategic investment policies are analysed in terms of risk
and return profiles. Investment and contribution policies are integrated within this study.
Risk analysis
Company is exposed to a number of risks in the defined benefit plan. Most significant risks pertaining to
defined benefits plan and management estimation of the impact of these risks are as follows:
a. Investment risk
The present value of the defined benefit plan liability is calculated using a discount rate determined by
reference to Government of India bonds. If the return on plan asset is below this rate, it will create a plan
deficit.
b. Interest risk
A decrease in the interest rate on plan assets will increase the plan liability.
c. Longevity risk/life expectancy
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the
mortality of plan participants both during and at the end of the employment. An increase in the life
expectancy of the plan participants will increase the plan liability.
d. Salary growth risk
The present value of the defined benefit plan liability is calculated by reference to the future salaries of
plan participants. An increase in the salary of the plan participants will increase the plan liability
2. Defined contribution plans:
A sum of Rs. 10.90 Lakhs has been charged to the Statement of Profit and Loss in respect of the
Company’s contribution to the provident fund and employees' state insurance._
Note 53: Regrouping & Reclassification
The previous year figures have been regrouped/reclassified wherever necessary to facilitate comparison with
the current year’s figures.
Note 54: Balance Confirmation from Parties
Balances in parties’ accounts are subject to confirmation and reconciliation.
Note 55: Other Statutory Information
a. The title deeds of all 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.
b. The Company has not revalued its Property, Plant and Equipment (including, right to use the asset) or
intangible asset or both during the year.
c. The Company does not have any Benami property, where any proceeding has been initiated or pending
against the Company for holding any Benami property.
d. The Company has not been declared as a wilful defaulter by any lender who has powers to declare a
company as a wilful defaulter at any time during the financial year or after the end of reporting period
but before the date when the financial statements are approved.
e. The Company does not have any transaction with struck-off companies.
f. The Company does not have any charge or satisfaction of charge which is yet to be registered with the
Registrar of Companies (ROC) beyond the statutory period.
g. 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;
-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.
h. The Company does not have any transactions which are not recorded in the books of account 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 Act, 1961).
i. The company does not come with in the preview of sec 135 of the companies act hence reporting
relating to CSR does not arise.
j. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial
year.
Note:56: Other disclosures
a. As per the MCA notification dated August 05, 2022, Companies (Accounts) Fourth Amendment Rules
2022. The books of accounts along with other relevant records and papers of the companies are
currently maintained in the electronic mode. These are readily accessible in India at all times and
backup is maintained on servers located in india, on daily basis.
b. The company is using accounting software that has an audit trail feature. The audit trail has been
operated throughout the year for all transactions recorded in the books of account and has not been
tampered with. The audit trail has been preserved as per the statutory requirements.
c. The disclosures under additional reporting requirements, which are not applicable to the company are
not disclosed in the current year financial statements.
For and on behalf of the Board of Directors As per our report of even date
PARAMOUNT COSMETICS (INDIA) LIMITED For Sharma & Pagaria
Chartered Accountants
Firm Reg. No. 008217S
Hiitesh Topiiwaalla Aartii Topiiwaalla Pawan Pagaria
Managing Director Director Partner
(DIN:01603345) (DIN:03487105) Membership No : 20178
UDIN:25201781BMJHRA5567
Rajnish Matta Ankita Karnani
Chief Financial Officer Company Secretary & Compliance Officer
Place: Bangalore Place: Bangalore
Date : 29/05/2025 Date : 29/05/2025
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