(i) Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognized only when there is a present legal or constructive obligation, as a result of past events that probablyrequires an outflow of resources and when a reliable estimate of the amount of obligation can be made at the reporting date. Provisions are measured at the present value of management best estimate of the expenditure required to settle the present obligation at the end of the reporting period.
These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. Provisions are discounted to their present values, where the time value of money is material. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense. 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 non-occurrence 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. Contingent assets are neither recognized nor disclosed except when realization of income is virtually certain, related asset is recognized.
(j) Revenue recognition
The Company recognizes revenue when it satisfies a performance obligation in accordance with the contract with the customer. This is achieved when control of the product has been transferred to the customer, which is generally determined when legal title, physical possession, risk of obsolescence, loss and rewards of ownership pass to the customer and the company has the present right to payment, all of which occurs at a point in time upon delivery of the product.
Revenue towards satisfaction of performance obligation is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. The Company considers the terms of the contract and its customary business practices to determine the transaction price. The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods to a customer, excluding amounts collected on behalf of third parties (for example taxes collected on behalf of government). The consideration promised in a contract with a customer may include fixed consideration, variable consideration (if reversal is less likely in future), or both.
The transaction price is allocated by the Company to each performance obligation in an amount that depicts the amount of consideration to which it expects to be entitled in exchange for transferring the promised goods to the customer. For each performance obligation identified, the Company determines at contract inception whether it satisfies the performance obligation over time or satisfies the performance obligation at a point in time. When either party to a contract has performed its obligation, an entity shall present the contract in the balance sheet as a contract asset or a contract liability, depending on the relationship between the entity's performance and the customer's payment.
- Interest income from debt instruments is recognised using the effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of a financial asset. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument but does not consider the expected credit losses.
- Other incomes have been recognized on accrual basis in the financial statements, except when there is uncertainty of collection
(k) Employee benefits
Liabilities for salaries and performance incentives including non-monetary benefits that are expected to be settled wholly within twelve months after the end of the period in which the employees render the related services up to the end of the reporting period are recognized as short term employee benefits, and measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefits obligations in the Balance Sheet. The company is not liable to provide any long-term benefits to employees.
(l) Income Tax
Tax expense for the period, comprising Current tax and deferred tax, are included in the determination of the net profit or lossfor the period. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with prevailing income tax law.
Minimum alternate tax ('MAT') credit entitlement is recognized as an asset only when and to the extent there is convincing evidence that normal income tax will be paid during the specified period. In the year in which MAT credit becomes eligible to be recognized as an asset, the said asset is created by way of a credit to the Statement of Profit and Loss and shown as MAT credit entitlement. This is reviewed at each balance sheet date and the carrying amount of MAT credit entitlement is writtendown to the extent it is not reasonably certain that normal income tax will be paid during the specified period.
Deferred tax is recognized 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 under provisions of the Income Tax Act. Deferred tax Assets shall be recognized for all deductible temporary differences to the extent that it is probable that the taxable profit will be available against which the temporary difference can be utilized. Deferred Tax liability shall be recognized for all taxable temporary differences. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.
Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognized amounts and there is an intention to settle the asset and the liability on a net basis. Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off and where the deferred tax assets and deferred tax liabilities relate to taxes on income levied by the same governing taxation laws.
(m) Leases
Leases of property, plant and equipment where the Company, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the lease's inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the statement of Profit and Loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Leases in which a significant portion of the risks and rewards of ownership are not transferred to the group as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the Statement of Profit and Loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessor's expected inflationary cost increases.
(n) Earning per share
Basic earnings per share are calculated by dividing the profit attributable to owners of the Company by the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year.
For the purpose of calculating diluted earnings per share, the net profit for the period / year attributed to equity shareholders and the weighted average number of shares outstanding during the period / year is adjusted for the effects of all potentially dilutive equity shares
(o) SAGMent Reporting
Operating sAGMents are reported in a manner consistent with the internal reporting provided to the Core Management Committee which includes the Managing Director who is Chief Operating Decision Maker. The Core Management Committee examines performance from both a product as well as from geographical perspective and has identified only one operative reportable sAGMent from which significant risk and rewards are derive
(p) Exceptional items
Exceptional items are those items that management considers, by virtue of their size or incidence (including but not limited to impairment charges and acquisition and restructuring related costs), should be disclosed separately to ensure that the financial information allows an understanding of the underlying performance of the business in the year, so as to facilitate comparison with prior years. Also tax charges related to exceptional items and certain one-time tax effects are considered exceptional. Such items are material by nature or amount to the year's result and require separate disclosure in accordance with Ind AS
Note 27: SAGMent Information
The Company's Chief Operating Decision Maker (CODM) Board of Directors assesses the financial performance and position of thecompany and make strategic decisions. The company is currently engaged in trading activities within territories of India. The company's business falls within a single business sAGMent. As the Company operates in single operating sAGMent, the reporting disclosures envisaged in Ind AS 108 on operating sAGMents, are not applicable to the Company. The sAGMent revenue is measured in the same way as in the Statement of Profit & Loss.
The Company has revenue of Rs 460.62 lacs (1706.40 lacs). In the previous year the total revenue was with one major customer contributing 100% of total revenue of the company whereas in the current year sales to one major party contributes to 81.65% of the total revenue
Note
The Company is contesting this demand and the management, believe that its position will likely to be upheld in the appellate process and accordingly no provision has been accrued in the financial statements for the tax demand raised. The management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the Company's financial position and results of operations. Based on favourable decisions in similar cases, the Company does not expect any liability against these matters in accordance with principles of Ind AS -12 'Income taxes' read with Ind AS -37 'Provisions, Contingent Liabilities and Contingent Assets' and hence no provision has been considered in the books of accounts
Note 30: Pending Litigations
The Company is involved in a number of legal proceedings for the recovery of trade receivables and advances with the aggregate amount of Rs.35.82 Lacs which are yet to be concluded upon. The Directors evaluated the pending cases, and considered the legal intricacies and time involved in the settlement of these cases. Updated External legal opinions in respect of the merits of the case had been called for and studied. The company had already made a provision for the outstanding amount of these doubtful debts and advances
Inherent to the nature of the Company's business are a variety of financial risks, namely liquidity risk, market risk and credit risk. Developing policies and processes to assess, monitor, manage and address these risks is the responsibility of the Company's Management. The Management ensures appropriate risk governance framework for the company through appropriate policies and procedures and that risks are identified, measured and managed in accordance with the Company's policies and risk objectives andalso ensures there exists an appropriate level of safeguards against the key risks. Risk management policies and systems are reviewed regularly to reflect changes like major changes in organization structure, events denoting material change in the risk environment, etc
i. Management of Liquidity Risk
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk managementis to maintain sufficient liquidity and ensure that funds are available for use as per requirements.
The Company follows a conservative policy of ensuring sufficient liquidity at all times through a strategy of profitable growth, efficient working capital management as well as prudent capital expenditure and dividend policies.
The Company is cognizant of reputational risks that are associated with the liquidity risk and the risk is factored into the overall business strategy. The Company's management regularly monitors the rolling forecasts to ensure it has sufficient cash on an ongoing basis to meet operational needs. Any short term surplus cash generated over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits and debt investments with appropriate maturities to yoptimize the cash returns on investments while ensuring sufficient liquidity to meet its liabilities
The following table shows the maturity analysis of the Company's financial liabilities based on contractually agreed undiscounted cash flows as at the Balance Sheet date
Management of 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 prices comprise three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity price risk.
Financial instruments affected by market risks include loans and borrowings, deposits, investments, and foreign currency receivables and payables. The Company's size and operations result in it being exposed to the following market risk that arise from its use of financial instruments. The sensitivity analysis in the following sections relate to the position as at reporting date. The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other post-retirement obligations; provisions; and the non-financial assets and liabilities. The sensitivity of the relevant Profit and Loss item and equity is the effect of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities held asof March 31, 2024, and March 31, 2023
Foreign Currency Risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes inforeign exchange rates.
As all the transactions of the company are held in Indian Currency, there is no exposure of Foreign Currency Risk to the company Interest Rate Risk
Interest rate 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 is not exposed to the risk of changes in the market interest rates as it has neither borrowed funds nor made investments in interest bearing instruments
Commodity Price Risk
The company is exposed to the risk of changes in commodity prices in relation to its operating activities. The Company's exposureto, and management of, this risk is explained below
Note 32 : Financial risk management objectives and policies Management of Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or other counter-party fails to meet its contractual obligations Trade Receivable
The carrying amount of trade receivable represents the maximum credit exposure. The maximum exposure to credit risk was Rs.83.68 Lacs as at 31st March 2024 and Rs.634.60 Lacs as at 31st March 2023
Trade receivables are derived from revenue earned from customers. Credit risk for Trade receivable is managed by the Company through established policy and procedures and control relating to customer credit risk management. The Company has a review mechanism of overdue customer receivables to ensure proper attention and focus for realization
The Company has a high concentration of credit risk to a single major customer. The company has exposure in trade receivable of Rs 376.09 lacs and Rs. 634.60 Lacs as at 31st March 2024 and 31st March 2023 respectively from the single largest customer. The Company uses expected credit loss allowance for credit losses of trade receivables The expected credit loss allowance is based onthe ageing of the receivables that are due.
Based on assessment of the period end trade receivable balance and forward looking information, there was an impairment loss of Rs. 0.85 Lacs as at 31st March 2024 and Rs. 9.67 Lacs on 31st March 2023
Other Financial Assets
The Company maintains exposure in cash and cash equivalents and term deposits with banks and investments in debt instruments.The Company has set counter-party limits based on multiple factors including financial position, credit rating, etc. The Company's maximum exposure to credit risk as at March 31, 2024 and March 31, 2023 is the carrying value of each class of financial assets.
Capital Management
The Company's objective in managing its capital is to safeguard its ability to continue as a going concern and to optimize returnsto the shareholders.
The Company considers the following components of its Balance Sheet to be managed capital:
1) Share Capital, 2) Share Premium and 3) Other Reserves comprising of General Reserve and Retained Earnings
The Company's capital structure is based on the Managements assessment of the balances of key elements to ensure strategic decisions and day to day activities. The capital structure of the Company is managed with a view of the overall macro-economic conditions and the risk characteristics of the underlying assets.
The Company's policy is to maintain a strong capital structure with a focus to mitigate all existing and potential risks to the Company, maintain shareholder, vendor and market confidence and sustain continuous growth and development of the Company.
The Company's focus is on keeping a strong total equity base to ensure independence, security, as well as high financial flexibilitywithout impacting the risk profile of the Company
In order, to maintain or adjust the capital structure, the Company will take appropriate steps as may be necessary
On 13th April 2023 the Acquirer Mr. Nitin Vitthalrao Thorave had entered into a Share Purchase Agreement ("SPA" ) with the outgoing Promoter
i.e. Bobby Sonathalia Jalan and Govind Prasad HUF present Promoters and members of Promoter Group for acquisition of 2,08,511 shares, constituting 5.71% of the voting Share capital of the company. In pursuant of which, Open Offer has been made by the Acquirer Mr. Nitin Vitthalrao Thorave to the equity shareholders of the company to acquire from them up to 9,48,688 equity shares of face value of Rs 10/-each representing 26% of the total equity and voting share capital of the company. In this connection, Post Offer Public Announcement to the Public Shareholders of the Company had been filed with the Stock Exchange on September 6, 2023.
Now as at 31st March 2024, the Acquirer Mr Nitin Vitthalrao Thorave has acquired in total 1248955 shares constituting 34.23% and post completion of open offer in the year ,Mr Nitin Thorave has acquired control over the affairs of the Company
Note 37 : Additional Regulatory Information Required By Schedule iii To The Companies Act, 2013
1. The Company do not have any Benami property, where any proceeding has been initiated or pending against the Group for holding any Benami property
2. The Company do not have any transactions with struck off companies
3. The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.4.The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year
5. The Company have 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
6. The Company have 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.
7. The Group have not 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
8. The Company has not revalued any of its Property, Plant and Equipment (including Right-of-Use Assets) during the year.
Note 38: Resignation of Company secretary
After the close of the Financial year on 2nd April, 2024, Tanvi Patel the Company secretary of the company has resigned. Now as per the SEBI LODR Regulation, the company must appoint the new company secretary within a period of 3 month from the date of resignation. Now as on theBalancesheet date, the company is still in the process of appointing new company secretary, the financials for the Financial year 2023-2024 is been signed without the company secretary signature. The Board of Directors will appoint Company Secretary within required time period as per LODR and Companies Act, 2013
Note 39 : Prior year comparatives
Previous year's figure's have been re-grouped, re-arranged & re-classified, wherever considered necessary, to confirm the current periordfigures.
As per our attached report of even date
For and on behalf of the Board of director For R. K. Chapawat & Co. Pradhin Limited
Chartered Accountants Firm Registration No.101708W
Sd/- Sd/- Sd/- Sd/-
Kamlesh Chapawat Hariprit Nitin Thorve Saily Thorve Sunil Inani
Partner Director Director Chief Financial
Mem. No. 181441 DIN : 10359981 DIN : 10100615
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