1 B.4.10 Provisions. Contingent Liabilities and Contingent Assets
(a) Provisions are recognised when the Company has a present obligation {legal or constructive) as a result of a 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. Such provisions are determined based on management's estimate of the amount required to settle the obligation at the balance sheet date. When the Company expects some or all of a provision to be reimbursed, the reimbursement is recognised as a standalone asset only when the reimbursement is virtually certain.
(b) II the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
(c) Contingent liabilities are disclosed on the basis of judgment of the management. These arc reviewed at each balance sheet date and are adjusted to reflect the current management's estimate.
(d) Contingent assets are not recognized but are disclosed in the financial statements when inflow of economic benefits is probable.
1B.4.11 LncorngJaxeg
(a) Income-Tax expense comprises of current and deferred income tax which has been shown under the head Tax Expenses'. Income
tax expense is recognied in net profit in the Statement of Profit and Loss except to the extent that it relates to items recognized
directly in equity, in which case it is recognized in other comprehensive income.
(b) Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance sheet date.
(c) Deferred tax is recognised 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.
(d) Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period.
1B.4.12 Foreign Currency Transactions and Translations
(a) Transactions in foreign currencies are initially recorded at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rates of exchange at the reporting date.
(b) Exchange differences arising on settlement or translation of monetary items are recognised in Statement of Profit and Loss except to the extent of exchange differences which are regarded as an adjustment to interest costs on foreign currency borrowings that are directly attributable to the acquisition or construction of qualifying assets, are capitalized as cost of assets.
(c) Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e.. translation differences on items whose fair value gain or loss is recognised in OCI or Statement ol Profit and Loss are also recognised in OCI or Statement of Profit and Loss, respectively).
1B.4.13 Empfovee Benefits Expense
(a) Short Term Employee Benefits
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services.
(b) Post-Employment Benefits
A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions to a separate entity. The Company makes specified monthly contributions towards Provident Fund. Superannuation Fund and Pension Scheme. The Company's contribution is recognised as an expense in the Statement of Profit and Loss dunng the period in which the employee renders the related service. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognised as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for ser/ices received before the balance sheet dale, then excess is recognised as an asset to that extent.
(c) Defined Benefits Plans
(i) The cost of the defined benefit plan and other post-employment benefits and the present value of such obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
(ii) The Company pays gratuity to the employees whoever has completed five years of service with the Company at the time of resignation/superannuation. The gratuity is paid @15 days salary for every completed year of service as per the provisions of the Payment of Gratuity Act. 1972.
(iii) The gratuity liability amount is contributed to the approved gratuity fund formed exclusively for gratuity payment to the employees. The gratuity fund has been approved by the governing Income-Tax authorities.
(iv) The liability in respect of gratuity and other post-employment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employees' services.
(v) Re-measurements of defined benefit plans in respect of post-employment are charged to the Other Comprehensive Income.
(d) Employee Separation Costs
Compensation to employees who have opted for retirement under the voluntary retirement scheme of the Company is payable in the year of exercise of option by the employee. The Company recognises the employee separation cost when the scheme is announced and the Company is demonstrably committed to it.
1B.4.14 Revenue from Operations
(a) Revenue from sale of goods is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated cost can be estimated reliably, there is no continuing effective control or managerial involvement with the goods, and the amount of revenue can be measured reliably.
(b) Revenue from rendering of services is recognised when the performance obligation to render the services are completed as per contractually agreed terms.
(c) Revenue from sale of goods & rendering of services is measured at the fair value of the consideration received or receivable after taking into account contractually defined terms of payment and excluding trade discounts, volume rebates and taxes or duties collected on behalf of the Government such as Goods and Services Tax [GST]. However, mere for the representation purposes, in the Statement of Profit and Loss, value of sales, at once, is shosvn inclusive of Goods & Services Tax and subsequently, such Goods & Services Tax are reduced.
1B.4.15 Other Income
(a) Interest Income
For an Debt Instruments measured either at Amortized Cost or at Fair Value through Other Comprehensive Income, interest income is recorded using the Effective Interest Rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortized cost of a financial liability.
(b) Dividend Income
Dividend income is recognised only when the right to receive the same is established, it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of dividend can be measured reliably.
1B.4.16 Goods and Services Tax IGSTl
The Goods & Services Tax balances, as appearing in the Balance Sheet of the Company, arc subjoct to the reconciliation at the time of furnishing the annual GST returns of the company, under the Goods and Services Tax Enactments, for the financial year 2023-24.
1 B.4.17 Insurance Claims
(a) Insurance claims are accounted lor on the basis of claims admitted/ expected to be admitted to the extent that there is no uncertainty in receiving the claims.
(b) The Company is expecting the settlement of insurance claims lodged by it. within next twelve months and therefore, the Company has classified such Insurance Claims Receivables under the head 'Other Current Assets’ in the Balance Sheet.
1 B.4.18 Incentives Receivable from Government
(a) VAT Incentive receivables from Government under TRIFAC are accounted lor on the basis of claims admitted/ expected to be admitted to the extent that there is no uncertainty in receiving the claims.
(b) The Company is expecting the settlement of incentive receivables lodged by it. within next twelve months and therefore, the Company has classified such incentive receivables under the head Other Current Assets' in the Balance Sheet.
1B.4.19 Financial Instruments
(a) Financial Assets
(i) lail'9l_recQaaif.^n and measurement
All financial assets and liabilities are initially recognized at fair value. Transaction costs that are directly attributable to the acquisition or issue cl financial assets and financial liabilities, which are not at fair value through profit or loss, are adjusted to the fair value on initial recognition. Purchase and sale of financial assets are recognised using trade date accounting.
(ii) Subsequent measurement
Financial assets carried at amortised cost
A financial asset is measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms ol the financial asset give rise on specified dates to cash Hows that are solely payments ot principal and interest on the principal amount outstanding.
Financial assets at fair value through other comprehensive income (FVTOCh
A financial asset is measured at FVTOCI if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms ot the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at fair value through profit or loss (FVTPL)
A financial asset not classified as either amortised cost or FVOCI is classified as FVTPL.
(iii) Investment m subsidiaries. Associates and Joint Ventures
The Company has elected to measure investment in its wholly owned subsidiaries Tapti Pipes & Products Ltd., FZE, UAE'
& 'Shree Venkatesh Polymers Pvt. Ltd.’ and its partially owned subsidiary 'Shree Venkatesh Industries Pvt. Ltd.' at its Fair Value.
(rv) Other Equity Investments
All other equity Investments are measured at fair value, with value changes recognised in Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in 'Other Comprehensive Income'.
In accordance with Ind AS 109, the Company uses ‘Expected Credit Loss' (ECL) model, tor evaluating impairment o! financial assets.
Expected credit losses are measured through a loss allowance at an amount equal to:
• The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or
• Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument)
For trade receivables Company applies 'simplified approach' which requires expected lifetime losses to be recognised from initial recognition of the receivables. The Company uses historical default rates to determine impairment loss on the portfolio of trade receivables. At every reporting date these historical default rates are reviewed and changes in the forward looking estimates are analysed.
For other assets, the Company uses 12 month ECL to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used.
(b) Financial Liabilities
(i) Initial recognition and measurement
All financial liabilities are recognized at fair value and in case of loans, net of directly attributable cost. Fees of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost.
(ii) Subsequent, measurement
Financial liabilities are carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short matunty of these instruments.
(lii) Derivative financial instruments and Hedge Accounting
Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered
into and are also subsequently measured at fair value. Denvatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken directly to Statement of Profit and Loss, except for the effective portion of cash flow hedges which is recognised in Other Comprehensive Income and later to Statement of Profit and Loss when the hedged itom affects profit or loss or treated as basis adjustment if a hedged forecast transaction subsequently results in the recognition of a norvfinancial assets or non-financial liability.
Hedges that meet the criteria for hedge accounting are accounted for as follows:
Cash flow hedge
The Company designates derivative contracts or non derivative financial assets / liabilities as hedging instruments to mitigate the risk of movement in interest rates and foreign exchange rates for foreign exchange exposure on highly probable future cash flows attributable to a recognised asset or liability or forecast cash transactions. When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognized in tho cash flow hedging reserve being part of other comprehensive income. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in the Statement of Profit and Loss. If the hedging relationship no longer meets Ihe criteria for hedge accounting, then hedge accounting is discontinued prospectively. If the hedging instrument expires or is sold, terminated or exercised, Ihe cumulative gain or loss on Ihe hedging instrument recognized in cash flow hedging reserve till the period the hedge was effective remains in cash flow hedging reserve until the underlying transaction occurs. The cumulative gain or loss previously recognized in the cash flow hedging reserve is transferred to the Statement of Profit and Loss upon the occurrence of the underlying transaction. If the forecasted transaction is no longer expected to occur, then the amount accumulated in cash flow hedging reserve is reclassified in the Statement of Profit and Loss.
Fair Valye Hedge
The Company designates derivative contracts or non derivative financial assets / liabilities as hedging instruments to mitigate the risk of change in fair value of hedged item due to movement in interest rates, foreign exchange rates and commodity prices.
Changes in the fair value of hedging instruments and hedged items that are designated and quality as fair value hedges are recorded in the Statement of Profit and Loss. If the hedging relationship no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item for which the effective interest method is used is amortised to Statement of Profit and Loss over the period of maturity.
(iv) Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Company's Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
1B.4.20 Operating.Cys'e
(a) The Company presents its assets and liabilities in the balance sheet based on current/non-current classification which is based upon the Company's operating cycle. The Company has identified twelve months as its operating cycle.
(b) An asset is treated as current when it is:
(i) Expected to be realized or intended to be sold or consumed in normal operating cycle;
(ii) Held primarily for the purpose of trading;
(iii) Expected to be realized within twelve months after the reporting period: or
(iv) Cash or cash equivalent unless restricted from being oxchangcd or used to settle a liability for at least twelve months after the reporting period
(c) A liability is treated as current when :
(i) It is expected to be settled m normal operating cycle:
(ii) It is incurred primarily for the purpose of trading:
(iii) It is due to be settled within twelve months after the reporting period, or
(iv) There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
(d) Deferred tax assets and liabilities are classified as non-current assets and liabilities.
1B.4.21 Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by weighted average number of equity shares outstanding dunng the period. The weighted average number of equity shares outstanding during the period are adjusted for events of shares issued during the year including bonus issue.
For the purpose of calculating diluted earnings per share, the not profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
IB. 4.22 Dividend Distribution
Dividends paid is recognised in the period in which the interim dividends are approved by the Board of Directors, or in respect of the final dividend when approved by the shareholders.
1 B.4.23 Statement of Cash Flows
(a) Cash and Cash equivalents
For the purpose of presentation m the statement of cash flows, cash and cash equivalents includes cash on hand, other short-lerm. 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 ot changes in value.
(b) The Statement of Cash Flows has been prepared under the 'Indirect Method' as set out in Indian Accounting Standard (Ind AS) 7 on 'Statement of Cash Flows'.
NQTE^_1_C^CRLTICAL ACCOUNTIf^ JUDGMEjjTS A^DJ<^Y^S0yRCES^F^ESTIjMT10N UNCERTAINTY
The preparation of the standalone financial statements in conformity with the Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities and disclosures as at date of the financial statements and the reported amounts of the revenues and expenses for the years presented. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates under different assumptions and conditions. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
IC. 1 Depreciation / amortisation and useful lives of property plant and equipment / intangible assets
Property, Plant and Equipment / Intangible assets are depreciated / amortised over their estimated useful lives, after taking into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives and residual values are based on the Company's historical experience with similar assets and take into account anticipated technological changes. The depreciation / amortisation for future periods is revised if there are significant changes from previous estimates.
1C. 2 Bgsflyg£ai2iBlluOj^ t_Reseiyafeia
Judgments are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.
1C.3 Provisions
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability requires the application of judgment to existing facts and circumstances, which can be subject to change. The carrying amounts of provisions and liabilities are reviewed regularly and revised to take account of changing facts and circumstances.
^CA Impairment of non-fmancial assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, the Company estimates tho asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or Cash Generating Units {CGU s) fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or a groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use. the estimated future cash flows are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account, if no such transactions can be identified, an appropriate valuation model is used.
1 C.5 Impairment of financial assets
The impairment provisions for financial assets are based on assumptions about risk of default and expected cash loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on Company's past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
NOTE-39- OBCLOSUBESAS REWIND AS 116-LEASES"
APPLICATION OF IND AS 116
Ministry of Corporate Affairs ("MCA") through Companies (Indian Accounting Standards) Amendment Rules, 2019 and Companies (Indian Accounting Standards) Second Amendment Rules, has notified Ind AS 116 Leases, which replaces the existing lease standard. Ind AS 17 Leases, and other interpretations. Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. It introduces a single, on-balance sheet lease accounting model for lessees.
The Company has adopted Ind AS 116, effective annual reporting penod beginning 1st April, 2021 and applied the standard to its leases. Accordingly, the Company has measured its lease liability as at 1st April. 2021 at the present value o( the remaining lease payments, discounted using the interest rale of 8.95% p.a. implicit in the lease at the date of transition to Ind AS.
The Right-of-Use Asset has been recognised at an amount equal to the lease liability. Accordingly, a Right-of-Use asset of ? 1371.53 Lakhs has been recognized in F.Y. 2021-22. The cumulative effect on transition in retained earnings net off taxes is ? Nil.
On application of Ind AS 116. the nature of expenses has changed fiom lease rent in previous periods to depreciation cost for the Right-of-Use asset, and finance cost for interest accrued on lease liabilities.
The Company does not have an option to purchase such leasehold land at the end of the lease period. There are no restrictions such as those concerning dividends, additional debts and further leasing Imposed by the lease agreements.
Ind AS 116 has resulted in an increase in net cash inflows from operating activities and an increase in cash outflows Irom financing activities on account of lease payments. The principal and interest portion of the lease payments have been disclosed under cash flow from financing activities which for the year ended March 31 si, 2024. aggregating to ? 229.03 Lakhs (Previous Year ? 210.80 Lakhs).
5 Defined Benefit Plan:
The Company has defined benefit plans for gratuity to eligible employees contributions for which are made to Life Insurance Corporation of India, who invests the funds as per IRDA guidelines. The details of these defined benefit plans recognized in the financial statements are as under:
G8neral.Pescnpti.onpf.Ahe.PJ.an
The Company operates a defined benefit plan (the Gratuity Plan) covering eligible employees, which provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employees salary and the tenure of employment.
The defined benefit plans typically expose the company to various risk such as :
(a) Investment risk:
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If Ihe return on plan asset is below this rate, it will create plan deficit.
(b) Interest risk:
A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the plan assets.
(c) Longevity risk:
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 after their employment. An increase in the life expectancy of the plan participants will increase the plan's liability.
(d) Salary risk:
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan's liability.
Sensitivity analysis of 1% change in exchange rate at the end of reporting period net of hedges
(c) Foreign Currency Sensitivity
For every' percentage point change in the underlying exchange rate of the outstanding foreign currency denominated assets and liabilities, including derivative contracts, holding all other variables constant, the profit before tax for the year ended 31st March, 2024 would change by 12520.51 USD [Previous Year - 12520.51 USD). However, the management of the Company docs not expects its foreign currency denominated financial assets to mature within a period of five years from the end of the year under review.
(d) Interest Rate Risk
Interest rate risk is the risk that the future cash flow with respect to interest payments on borrowing will fluctuate because of change in market interest rates. The company's exposure to the risk ot changes in market interest rates relates primarily to the Company's long-term debt obligation with floating Interest rates.
(e) Interest Rate Sensitivity
Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rates. Any movement in the reference rates could have an impact on the Company's cash flows as well as costs.
The Company is subject to variable interest rates on some of its interest beanng liabilities. The Company's interest rate exposure is mainly related to debt obligations. The Company also uses a mix of interest rate sensitive financial instruments to manage the liquidity and fund requirements for its day to day operations like short term loans.
As at March 31. 2024, financial liability of ? 888.13 lakhs was subject to vanable interest rates. Incroase/decrcase of 100 basis points in Interest rates at the balance sheet date would result in decrease/lncrease in profit/(loss) before tax of ? 1.30 Lakhs for the year ended March 31.2024.
The model assumes that interest rate changes are instantaneous parallel shifts in the yield curve. Although some assets and liabilities may have similar maturities or periods to re-pricing, these may not react correspondingly to changes in market interest rates. Also, the Interest rates on some types cf assets and liabilities may fluctuate with changes in market interest rates, while interest rates on other types of assets may change with a lag.
The risk estimates provided assume a parallel shift of 100 basis points interest rate across all yield curves. This calculation also assumes that the change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date. The period end balances are not necessarily representative of the average debt outstanding during the period.
(Note The impact is indicated on the profiV(loss) before tax basis).
(f) Commodity Price Risk
Commodity price risk arises due to fluctuation in prices of raw material. The company has a risk management frame work aimed at prudently managing the risk arising from the volatility in raw material prices and freight costs. The company's commodity risk is managed centrally through well-established trading operations and control processes. In accordance with the risk management policy, the Company carefully calibrates the timing and the quantity of purchase.
(g) 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 toss to the company. Credit risk anscs mainly from the outstanding receivables from customers. The company has a prudent and conservative process for managing its credit risk arising in the course of its business activities. The credit ratings/market standing of the customers are evaluated on a regular basis.
(h) Liquidity Risk
Liquidity risk arises from thG Company's inability to meet its cash flow commitments on time. Prudont liquidity risk management implies maintaining sufficient stock of cash and marketable securities . The Company maintains adequate cash and cash equivalents along with the need based credit limits to meet the liquidity needs.
(i) Hedge Accounting
The Company has established risk management policies to hedge the volatility arising from exchange rate fluctuations in respect of firm commitments and highly probable forecast transactions, through foreign exchange forward and options contracts. The proportion of forecast transactions that are to be hedged is decided based on the size of the forecast transaction and market conditions. As the counterparty for such transactions are highly rated banks, the risk of their non-performance is considered to be insignificant.
The Company uses derivatives to hedge its exposure to changes in movement in foreign currency. Where such derivatives are not designated under hedge accounting, changes in the fair value ol such hedges are recognised in the Statement of Profit and Loss.
The Company may also designate certain hedges, usually for largo transactions, as a cash flow hedge under hedge accounting, with the objective of shielding the exposure from variability in cash flows. The currency, amount and tenure of such hedges are generally matched to the underlying transacbon(s). Changes in the fair value of the eltective portion of cash flow hedges are recognised as cash llow hedging reserve in Other Comprehensive Income. While the probability of such hedges becoming ineffective is very low, the ineffective portion if any. is immediately recognised in the Statement of Profit and Loss.
The management of the Company does not expects its foreign currency denominated financial assets to mature within a period of five years from the end of the year under review and therefore, it has not entered into any hedging contracts for the same.
E»PJJ^7^AODITIONAL REGULATORY INFORMATION
(i) During the financial year 2023-24 no proceeding has been initiated or pending against the company tor holding any benami properly under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(il) The Company has filed quarterly returns or statements with the banks In lieu of sanctioned working capital facilities, which arc in agreement with the books of account other than those as set out below:
(iii) The company is not declared a wilful defaulter by any bank or financial institution or any other lender.
(iv) The company has not entered into any material transaction with the companies slruck-ofl under s. 248 of the Companies Act. 2013 or section 560 of the Companies Act. 1956 during the year.
(v) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(vi) The company has complied with the number of layers presented under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules. 2017
(vii) The company has not applied for any Scheme of Arrangements in terms of Sections 230 to 237 of the Companies Act, 2013.
(viii) 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 person(s) or entity(ies). including foreign entities f Intermedianes") with the understanding.whether recorded in v/riting or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf ol the Ultimate Beneficiaries.
For Anil Kamal Garg & Company For and on the behalt of Board
Chartered Accountants
ICAI Firm Registration No. 004I86C
Devendra Bansal Sanjay Kumar Agrawal Vijay Prasad Pappu
Partner Managing Director Whole Time Director cum CFO
Membership No. : 078057 DIN: 00316249 DIN : 02066748
ICAI UDIN : 24078057BKGOUV2313
Mohit Agrawal Ajay Shrivastava
Chiel Executive Ollicer Company Secretary
Indore, May 29th. 2024 Burhanpur, May 29th, 2024
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