q. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
The assessments undertaken in recognising provisions and contingencies have been made in accordance with applicable Ind AS. Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date and are adjusted to reflect the current best estimate.
Provisions
Provisions represent liabilities to the Company for which amount, or timing is uncertain. Provisions are recognized when the Company has a present obligation (legal or constructive), as a result of past events, and it is probable that an outflow of resources, that can be reliably estimated, will be required to settle such an obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows to net present value using an appropriate pre-tax discount rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Unwinding of the discount is recognized in the statement of profit and loss as a finance cost.
Contingent Liabilities
In normal course of business, contingent liabilities may arise from litigation and other claims against the Company. There are certain obligations which management of the Company has concluded, based on all available facts and circumstances, are not probable of payment or are very difficult to quantify reliably, and such obligations are treated as contingent liabilities and disclosed in the notes but are not reflected as liabilities in the financial statements. Claims against the Company, where the possibility of any outflow of resources in settlement is remote, are not disclosed as contingent liabilities. Show Cause Notices received are not treated as Contingent Liabilities. Although there can be no assurance regarding the final outcome of the legal proceedings in which the Company is involved, it is not expected that such contingencies will have a material effect on its financial position or profitability.
Contingent Assets
Contingent assets are not recognised but disclosed in the financial statements when an inflow of economic benefits is probable.
r. CASH FLOW STATEMENT
Cash flows are reported using indirect method as set out in Ind AS -7 “Statement of Cash Flows”, whereby profit/ (loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. Cash flows from operating, investing and financing activities of the Company are segregated based on available information.
s. SEGMENT REPORTING
The company has two business segments- Edible Oil Operations and Liquor Operations and segment-wise results, assets and liabilities are accordingly given.
t. FAIR VALUE MEASUREMENT
The Company measures financial instruments at fair value at each balance sheet date.
Fair value is the price 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. Fair value measurement is based on presumption that transaction to sell asset or transfer liability takes place either:
i. In the principal market for asset or liability, or
ii. In absence of a principal market, in most advantageous market for asset or liability.
The principal or the most advantageous market must be accessible to the Company. Fair Value of an asset or liability is measured using assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using asset in its highest and best use or by selling it to another market participant that would use asset in its highest and best use.
The Company uses valuation techniques that are appropriate in circumstances and for which sufficient data are available to measure fair value, maximising use of relevant observable inputs and minimizing use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements 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) market prices in active markets for identical assets or liabilities. Level 2- Valuation techniques for which lowest level input that is significant to fair value measurement is directly or indirectly observable.
Level 3- Valuation techniques for which lowest level input that is significant to fair value measurement is unobservable.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing categorization (based on the lowest level input that is significant to fair value measurement as a whole) at end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
u. EXCEPTIONAL ITEMS
Exceptional items are transactions which due to their size or incidence are separately disclosed to enable a full understanding of the Company’s financial performance. Items which may be considered exceptional are significant restructuring charges, gains or losses on disposal of investments of subsidiaries, associate and joint ventures and impairment losses/write down in the value of investment in subsidiaries, associates and joint ventures and significant disposal of fixed assets.
Note 44 Additional Notes
(A) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
(B) The Company do not have any transactions with companies struck off under section 248 of the Companies Act, 2013.
(C) The Company do not have any charges or satisfaction which is yet to be registered with Registrar of Companies (ROC) beyond the statutory period.
(D) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(E) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities (“Intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in other person or entities ("ultimate beneficiaries") by or on behalf of the Company or provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries. The Company has not received any funds from any persons or entities, including foreign entities ("Funding Parties"), with the understanding that the Company shall lend or invest in other persons or entities identified by or on behalf of the Funding Party or provide any guarantee, security or the like from to or on behalf of the Ultimate Beneficiaries.
(F) The Company has not entered into 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).
(G) The company does not have any borrowings from banks and financial institutions on the basis of security of current assets.
(H) The company has not been declared as wilful defaulter by any bank or financial institution or any other lender.
(I) The Company did not have any foreign exchange contracts including derivative contracts for which there were any material foreseeable losses.
(J) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
(K) Rule 11 (g) of Companies (Audit and Auditors) Rule, 2014 (“rule”) stipulates that where the Company has used accounting software for maintaining its books of account, whether it has a feature of recording audit trail (edit log) facility and the same has been operated throughout the year for all transactions recorded in the software. The Company has used an accounting software for maintaining its books of accounts which has a feature of recording audit trail (edit log) facility and it operated throughout the year. However, management is not able to extract necessary control reports to determine whether the requirements of above rule has been met.
Note 47 Fair Value Measurements (INR in lakhs)
The Company measures financial instruments at fair value at each balance sheet date. Fair value is the price 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. Fair value measurement is based on presumption that transaction to sell asset or transfer liability takes place either:
i. In the principal market for asset or liability, or
ii. In absence of a principal market, in most advantageous market for asset or liability.
Fair Value of an asset or liability is measured using assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using asset in its highest and best use or by selling it to another market participant that would use asset in its highest and best use.
The Company uses valuation techniques that are appropriate in circumstances and for which sufficient data are available to measure fair value, maximising use of relevant observable inputs and minimizing use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements 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) market prices in active markets for identical assets or liabilities. Level 2- Valuation techniques for which lowest level input that is significant to fair value measurement is directly or indirectly observable.
Level 3- Valuation techniques for which lowest level input that is significant to fair value measurement is unobservable.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re assessing categorization (based on the lowest level input that is significant to fair value measurement as a whole) at end of each reporting period. For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
Note 48 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
(INR in lakhs)
The Company’s Corporate Treasury function provides services to the business, co-ordinates access to domestic market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk. The company does not have foreign trade transactions nor any foreign currency transactions. The Board of Directors manages the financial risk of the company through internal risk reports and analyse exposure by magnitude of risk.
The Company's overall risk management procedures to minimise potential adverse effects of financial market on the Company are as follows:
(A) Market Risk
Market risk is attributable to all the market risk sensitive financial instruments including investments and deposits, foreign currency receivables or payables. It includes three types of risks :a) Interest rate risk b) Currency risk and c) price and commodity risk.
A) Interest Rate Risk: The Company’s borrowing are at fixed rates.Therefore,interest rate risk does not have any major impact on the company.
B) Currency Risk: Since, Company does not have any foreign currency dealings, this risk is not applicable to the Company.
C) Price and commodity risk: The Company majorly purchase Spirits and Grain in its
manufacturing . Since , prices are generally regulated, there are no major movements in the prices .Therefore, the adversity of this risk is low.
(B) Credit Risk
Credit Risk is the risk that counterparty will not meet its obligations under a financial instrument leading to a financial loss.The Company’s exposure to credit risk primarily consists of trade receivables and other financial assets . The Company deals with only few customers since liquor operations are government regulated . Therefore, default risk on the part of debtors is significantly low.
(C) Liquidity Risk
The Company’s principle source of liquidity are Cash and cash equivalents and cash generated from operations . The Company manages its liquidity risk in a manner so as to meet its normal financial obligations without any significant delay. The Company has developed appropriate internal control systems and contingency plans for managing liquidity risk.
Note 49 CAPITAL MANAGEMENT (INR in lakhs)
(A) Risk Management
Capital management is driven by Company's policy to maintain a sound capital base to support the continued development of its business. The Management and Board of Directors seeks to maintain a prudent balance between different components of Company's capital. Management monitors capital structure and net financial debt at individual currency level. Net financial debt is defined as current and non-current financial liabilities including lease liabilities less cash and cash equivalents and short term investments.
The capital structure is governed by policies approved by the Board of Directors and monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, lease liabilities, less cash and cash equivalents.
Note 51 Previous year’s figures have been regrouped/reclassified, wherever considered necessary As per our Report of even date
For PAWAN SHUBHAM & CO. For and On behalf of the Board of Directors of
Chartered Accountants SURAJ INDUSTRIES LTD
Firm’s Registration No: 011573C
Sd/- Sd/- Sd/-
(CA Krishna Kumar) Suraj Prakash Gupta Syed Azizur Rahman
PARTNER (Managing Director) (Non- Executive Director)
Membership No. 523411 DIN-00243846 DIN- 00242790
Sd/- Sd/-
Somir Bhaduri Snehlata Sharma
Place: New Delhi Chief Financial Officer Company Secretary
Date: 28.05.2024 PAN No.AAXPB1836A M.No: 62066
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