2.11 Provisions, Contingent Liability and Contingent Assets
Disputed liabilities and claims against the company including claims raised by fiscal
authorities (e.g. Sales Tax, Income Tax, Excise, GST etc.) pending in appeal / court for
which no reliable estimate can be made and or involves uncertainty of the outcome of
the amount of the obligation or which are remotely poised for crystallization are not
provided for in accounts but disclosed in notes to accounts. However, present obligation
as a result of past event with possibility of outflow of resources, when reliable
estimation can be made of the amount of obligation, is recognized in accounts in terms
of discounted value, if the time value of money is material using a current pre-tax rate
that reflects the risk specific to the liability. No contingent asset is recognized but
disclosed by way of notes to accounts.
2.12 Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will
flow to the Company and the revenue can be reliably measured, regardless of when the
payment is being made. Revenue is measured at the fair value of the consideration
received or receivable, taking into account contractually defined terms of payment and
excluding taxes or duties collected on behalf of the Government such as Goods and
Services Tax, etc.
Rendering of Services
Revenue from rendering of services is recognized as per the terms of the contract with
customers when related services are performed and when the outcome of the
transactions involving rendering of services can be estimated reliably.
Dividend Income
Dividend Income is accounted for when the right to receive the same is established,
which is generally when shareholders approve the dividend.
Interest Income
Interest Income on financial assets measured at amortised cost is recognised on a time-
proportion basis using the effective interest method.
Other Income
Other income is recognised when no significant uncertainty as to its determination or
realisation exists.
2.13 Cash Flows and Cash and Cash Equivalents
Statement of cash flows is prepared in accordance with the indirect method prescribed
in the IND AS 7. For the purpose of presentation in the statement of cash flows, cash
and cash equivalents includes cash on hand, cheques and drafts on hand, deposits held
with Banks, other short term, highly liquid investments with original maturities of three
months or less that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value, and book overdrafts. However, Book
overdrafts are shown within borrowings in current liabilities in the balance sheet for the
purpose of presentation
2.14 Earnings per share
(i) Basic earnings per share
Basic earnings per share is 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.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic
earnings per share to take into account:
• The after 'income-tax' effect of interest and other financing costs associated
with dilutive potential equity shares, and
• The weighted average number of additional equity shares that would have
been outstanding assuming the conversion of all dilutive potential equity
shares.
2.15 Segment Reporting
Based on "Management Approach" as defined in IND AS 108 - Operating Segments, the
Management evaluates the Company's performance and allocates the resources based
on an analysis of various performance indicators by business segments.
The Company prepares its segment information in conformity with the accounting
policies adopted for preparing and presenting the financial statements of the Company
as a whole.
2.16 Foreign Currency Transactions
In preparing the financial statements of the Company, transactions in foreign currencies,
other than the Company's functional currency are recognised at the rates of exchange
prevailing at the dates of the transactions. At the end of each reporting period,
monetary assets and liabilities denominated in foreign currencies are translated at the
rate prevailing at that date. Non-monetary items that are measured in terms of
historical cost in a foreign currency, are not retranslated.
Exchange differences on monetary items are recognised in the Statement of Profit and
Loss in the period in which these arise except for:
• exchange differences on foreign currency borrowings relating to assets under
construction for future productive use, which are included in the cost of those
assets when they are regarded as an adjustment to interest costs on those
foreign currency borrowings; and
• exchange differences on transactions entered into in order to hedge certain
foreign currency risks.
2.17 Events occurring after the balance sheet date
Assets and liabilities are adjusted for events occurring after the reporting period that
provides additional evidence to assist the estimation of amounts relating to conditions
existing at the end of the reporting period.
Dividends declared by the Company after the reporting period are not recognized as
liability at the end of the reporting period. Dividends declared after the reporting period
but before the issue of financial statements are not recognized as liability since no
obligation exists at that time. Such dividends are disclosed in the notes to the financial
statements.
2.18 Financial Instruments
i. Recognition and initial measurement
All financial assets and financial liabilities are initially recognized when the
Company becomes a party to the contractual provisions of the instrument.
A financial asset or financial liability is initially measured at fair value plus, for an
item not at fair value through profit and loss (FVTPL), transaction costs that are
directly attributable to its acquisition or issue.
ii. Classification and subsequent measurement
Financial assets
On initial recognition, a financial asset is classified as measured at
• amortized cost;
• Fair Value through Other Comprehensive Income (FVOCI) - equity investment;
or
• Fair Value Through Profit and Loss (FVTPL)
Financial assets are not reclassified subsequent to their initial recognition, except
if and in the period the Company changes its business model for managing
financial assets.
A financial asset is measured at amortized cost if it meets both of the following
conditions and is not designated as at FVTPL:
• the asset is held within a business model whose objective is to hold assets to
collect contractual cash flows; and
• the contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal
amount outstanding.
On initial recognition of an equity investment that is not held for trading, the
Company may irrevocably elect to present subsequent changes in the
investment's fair value in OCI. (designated as FVOCI - equity investment). This
election is made on an investment-by-investment basis.
All financial assets not classified as measured at amortized cost or FVOCI as
described above are measured at FVTPL. This includes all derivative financial
assets. On initial recognition, the Company may irrevocably designate a financial
asset that otherwise meets the requirements to be measured at amortized cost
or at FVOCI or at FVTPL if doing so eliminates or significantly reduces an
accounting mismatch that would otherwise arise.
Financial liabilities
Financial liabilities are classified as measured at amortized cost or FVTPL. A
financial liability is classified as at FVTPL if it is classified as held-for-trading, or it
is a derivative or it is designated as such on initial recognition. Financial liabilities
at FVTPL are measured at fair value and net gains and losses, including any
interest expense, are recognized in profit or loss. Other financial liabilities are
subsequently measured at amortized cost using the effective interest method.
Interest expense and foreign exchange gains and losses are recognized in profit
or loss. Any gain or loss on de-recognition is also recognized in profit or loss
De-recognition
Financial assets
The company de-recognizes a financial asset when the contractual rights to the
cash flows from the financial asset expire, or it transfers the rights to receive the
contractual cash flows in a transaction in which substantially all of the risks and
rewards of ownership of the financial asset are transferred or in which the
company neither transfers nor retains substantially all of the risks and rewards of
ownership and does not retain control of the financial asset.
If the company enters into transactions whereby it transfers assets recognized
on its balance sheet, but retains either all or substantially all of the risks and
rewards of the transferred assets, the transferred assets are not derecognized.
Financial liabilities
The company de-recognizes a financial liability when its contractual obligations
are discharged or cancelled, or expire. The company also de-recognizes a
financial liability when its terms are modified and the cash flows under the
modified terms are substantially different. In this case, a new financial liability
based on the modified terms is recognized at fair value. The difference between
the carrying amount of the financial liability extinguished and the new financial
liability with modified terms is recognized in profit or loss.
Offsetting
Financial assets and financial liabilities are offset and the net amount presented
in the balance sheet when, and only when, the company currently has a legally
enforceable right to set off the amounts and it intends either to settle them on a
net basis or to realize the asset and settle the liability simultaneously.
10.8 Rights, Preferences and Restrictions attached to equity shares
The Company has one class of equity shares having a par value of Rs. 10 per share.
Each shareholder is eligible for one vote per share held. The dividend, if any proposed by the Board of Directors is subject to
the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after
distribution of all preferential amounts, if any, in proportion to their shareholding.
10.9 The Company has not reserved any share for issue under options and contracts or commitments for the sale
of shares or disinvestment.
10.10 Aggregate number and class of shares allotted as fully paid up pursuant to contracts without payment being
received in cash :- Nil
10.11 Aggregate number and class of shares allotted as fully paid by way of Bonus Shares :- Nil
10.12 Aggregate number and class of shares bought back :- Nil
10.13 Securities which are convertible into Equity Shares :- Nil
10.14 Aggregate Value of Calls unpaid by directors and officers :- Nil
The Company's activities expose it to a variety of financial risks, including credit risk, market risk and liquidity risk. The
Company's primary risk management focus is to minimize potential adverse effects of market risk on its financial performance.
The Company's risk management assessment and policies and processes are established to identify and analyse the risks faced
by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same.
The Company's risk management is governed by policies and approved by the board of directors. The Company identifies,
evaluates and hedges financial risks in close co-operation with the Company's operating units. The Company has policies for
overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk,
use of non-derivative financial instruments.
The audit committee oversees how management monitors compliance with the company's risk management policies and
procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The
audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of
risk management controls and procedures, the results of which are reported to the audit committee.
I Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from the Company's receivables from customers. Credit risk is managed through
credit approvals, establishing credit limits, and continuously monitoring the creditworthiness of customers to which the
Company grants credit terms in the normal course of business. The history of trade receivables shows a negligible provision for
bad and doubtful debts. The Company establishes an allowance for doubtful debts and impairment that represents its estimate
of expected losses in respect of trade and other receivables and investments. The company has adopted simplified approach of
i) Trade Receivables:
The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The
demographics of the customer, including the default risk of the industry and country in which the customer operates, also has
an influence on credit risk assessment. The Company with various activities as mentioned above manages credit risk. An
impairment analysis is performed at each reporting date on an individual basis for major customers. In addition, a large number
of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based
on historical data. The Company does not hold collateral as security.
ii) Financial assets
Credit risk from balances with banks and financial institutions is managed by the Company's treasury department in accordance
with the Company's assessment of credit risk about particular financial institution. None of the Company's cash equivalents,
including term deposits (i.e., certificates of deposit) with banks, were past due or impaired as at each balance sheet date.
Cash and cash equivalents
The company holds cash and cash equivalents of Rs. 58.27 lakh at March 31, 2024 (March 31, 2023: Rs. 73.41 lakh ) The cash
and cash equivalents are held with bank and cash on hand.
II Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The level of
liquidity risk is very low considering the fact that the company relies on operating cash flows and owned equity. Currently the
company has borrowed funds from bank mainly for day to day business needs (i.e. Cash Credit Facilities are being availed by
the company).
Further the Company manages liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring
the forecasted and actual cash flows and matching the maturity profiles of financial assets and liabilities. The Company
manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when
due.
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market
rates and prices (such as interest rates, foreign currency exchange rates and commodity prices) or in the price of market risk-
sensitive instruments as a result of such adverse changes in market rates and prices. Market risk is attributable to all market
risk-sensitive financial instruments, all foreign currency receivables and payables and all short term and long-term debt. The
Company is exposed to market risk primarily related to foreign exchange rate risk, interest rate risk and commodity risk.
a) Interest Risk
Interest rate risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in
market interest rates. In order to optimize the Company's position with regards to the interest income and interest expenses
and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing
the proportion of fixed rate and floating rate financial instruments in it total portfolio. With all other variables held constant,
the following table demonstrates the impact of the borrowing cost on floating rate portion of loans and borrowings and
excluding loans on which interest rate swaps are taken. Interest rate risk 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's exposure to the risk of changes
in market interest rates related primarily to the Company's short-term borrowings with floating interest rates. Company's
treasury department monitors the interest rate movement and manages the interest rate risk based on its policies.
iii) Exposure
The Company's exposure to equity securities price risk arises from investments held by the Company and classified in the
balance sheet either at fair value through OCI and at amortised cost. To manage its price risk arising from investments in equity
securities, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the
Company.
Above referred sensitivity pertains to quoted equity investment.Profit for the year would increase/ (decrease) as a result of
gains/ losses on equity securities as at fair value through other comprehensive income before net of tax.
Under the Micro, Small and Medium Enterprises Development Act, 2006, (MSMED), certain disclosers are required to be made
relating to Micro, Small and Medium enterprises. On the basis of the information and records available with management,
outstanding dues to the Micro and Small enterprise as defined in the MSMED Act, 2006 are disclosed as below:
30 Capital Management:_
The Company's capital management is intended to maximise the return to shareholders and benefits for other stakeholders for
meeting the long-term and short-term goals of the Company; and reduce the cost of capital through the optimization of the
capital structure i.e. the debt and equity balance.
The Company monitors the capital structure on the basis of Gearing ratio and maturity profile of the overall debt portfolio
of the Company.
33 The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for
holding any Benami property.
34 The Company do not have any transactions with companies struck off.
35 The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period,
36 The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.
37 The Company 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 underthe Income Tax Act, 1961 (such as, search or survey orany other
relevant provisions of the Income Tax Act, 1961
38 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,
39 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
40 Recent Indian Accounting Standards (Ind AS)
As at the date of issue of financial statements, there are no new standards or amendments which have been notified by the MCA
but which have not yet been adopted by the Company. Hence, the disclosure is not applicable.
41 Subsequent Events:
Subsequent to Balance Sheet Date, there are no events occurred which require disclosure or adjustments in the financial
statements.
45 Approval of the Financial Statements: The Financial Statements were approved for issue by the board of directors on May 30,2024.
46 Previous year's figures have been regrouped/re-arranged/recasted, wherever necessary, so as to make them comparable with current
year's figures.
As per our report of even date attached.
For, H S K & CO LLP For and on behalf of Board of Directors
Chartered Accountants
FRN: 117014W/W100685
SD/- SD/-
SD/- Chirag K Shah Alkesh Shah
CA. Sudhir S. Shah Managing Director Director
Partner DIN: 08111288 DIN: 09264246
M. No. 115947 SD/-
UDIN:24115947BKAPFB4305 Anjali Asknani
Company Secretary
Place : Ahmedabad Place : Ahmedabad
Date :May 30,2024_Date :May 30,2024_
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