2.15 Provisions, Contingent Liabilities and Contingent Assets
Based on the best estimate provisions are recognised when there is a present obligation
(legal or constructive) as a result of a past event and it is probable (“more likely than
not”) that it is required to settle the obligation, and a reliable estimate can be made of
the amount of the obligation at reporting date.
A contingent liability is a possible obligation that arises from a past event, with the
resolution of the contingency dependent on uncertain future events, or a present
obligation where no outflow is probable. Major contingent liabilities are disclosed in the
financial statements unless the possibility of an outflow of economic resources is remote.
Contingent assets are not recognised in the financial statements but disclosed, where
an inflow of economic benefit is probable.
2.16 Employees' Retirement and Other Benefits
Company’s contribution to provident and other funds is accounted for on accrual basis
and charged to Profit and Loss Account. Provident Fund is accrued on monthly basis
and is deposited with the “Statutory Provident Fund”. The Company’s contribution is
charged to the Statement of Profit and Loss Account.
The management has decided to not grant any leave encashment and the employees
should avail of all leave entitled.
Gratuity liability is provided for on the basis of actuarial valuation. Actuarial gains and
losses are recognized in full in the Profit and Loss Account for the period in which they
occur.
Income Tax
Income tax expense comprises current and deferred tax. It is recognised in the Statement
of Profit & Loss except to the extent that it relates to items recognised directly in Equity
or in Other Comprehensive Income.
Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or
loss for the year and any adjustment to the tax payable or receivable in respect of
previous years. It is measured using tax rates enacted or substantively enacted at the
reporting date. Current tax assets and liabilities are offset only if, the Company:
a) Has a legally enforceable right to set off the recognised amounts; and B) Intends
either to settle on a net basis, or to realise the asset and settle the liability
simultaneously.
Deferred tax
Deferred tax is recognised on differences between the carrying amounts of assets and
liabilities in the balance sheet and the corresponding tax bases used in the computation
of taxable profit. Deferred tax liabilities are recognised for all taxable temporary
differences. Deferred tax assets are recognised for all deductible temporary differences
to the extent it is probable that taxable profits will be available against which those
deductible temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from initial recognition of goodwill or from
the initial recognition (other than in a business combination) of other assets and liabilities
in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and
reduced to the extent that it is no longer probable that sufficient taxable profits will be
available to allow all or part of the asset to be recovered Deferred tax assets and
liabilities 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 balance sheet date.
Minimum Alternate Tax
Minimum Alternate Tax (MAT) credit is recognized as an asset when there is convincing
evidence that the Company will pay normal Income Tax during the specified period. In
the year in which MAT credit becomes eligible to be recognized as an asset in
accordance with the recommendations contained in guidance note issued by the Institute
of Chartered Accountants of India, the said asset is created by way of a credit to the
statement of statement of profit and loss and shown as MAT Credit entitlement. The
Company reviews the same at each Balance Sheet date and writes down the carrying
amount of MAT credit entitlement to the extent it is not reasonable certain that the
Company will pay normal income tax during the specified period.
2.17 Miscellaneous Expenditure
Miscellaneous Expenditure shall be amortized over a period of five years from the year
of thecommencement of commercial production.
2.18 Events occurring after Balance Sheet date :
Significant events occurring after the Balance Sheet date have been considered in the
preparation of financial statements.
2.19 Contingent Liabilities and Provisions
The Company makes a provision when there is a present obligation as a result of a
past event where the outflow of economic resources is probable and a reliable estimate
of the amount of the obligation can be made.A disclosure is made for a contingent
liability when there is a :
a) possible obligation, the existence of which will be confirmed by the occurrence/
non-occurrence of one or more uncertain events, not fully within the control of
the Company;
b) present obligation, where it is not probable that an outflow of resources embodying
economic benefits will be required to settle the obligation ;
c) present obligation, where a reliable estimate cannot be made.
2.20 Earnings per share :
Basic earnings per share is calculated by dividing the net profit or loss for the year
attributable to the equity shareholders by weighted average number of shares
outstanding during the year. For the purpose of calculating diluted earnings per share,
the net profit or losses for the year attributable to the equity shareholders and the
weighted average number of shares outstanding during the year are adjusted for the
effects of all dilutive potential equity shares.
2.21 Cash Flow Statement :
The Cash flow statement is prepared under “Indirect method” as set out in Accounting
Standard-3 on Cash Flow Statements, whereby Profit/ (Loss) Before Extraordinary
Items and 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. The cash flows from
operating, investing and financing activities of the Company are segregated based on
the available information.
2.22 Significant accounting estimates, judgments and assumptions :
The preparation of the Company’s financial statements in conformity with Ind AS requires
the management to make judgments, estimates and assumptions which affect the
reported amounts of revenues, expenses, assets and liabilities and the accompanying
disclosures, including the disclosure on contingent liabilities.
Uncertainty about these assumptions and estimates could result in outcomes that require
a material adjustment to the carrying amount of assets or liabilities affected in future
periods. The estimates and associated assumptions are based on historical experience
and various other factors that are believed to be reasonable under the existing
circumstances when the financial statements are prepared. The estimates and
underlying assumptions are reviewed on an ongoing basis. Revision to accounting
estimates is recognized in the year in which the estimates are revised and in any future
year that is affected.
In the process of applying the Company’s accounting policies, management has made
the following judgments which have significant effect on the amounts recognised in the
financial statements :
I) Useful life of property, plant & equipment:
Determination of the estimated useful life of tangible assets and the assessment
as to which components of the cost may be capitalized. Useful life of tangible
assets is based on the life specified in Schedule II of the Companies Act, 2013,
while Freehold land is valued at market value.
II) Defined benefit plan:
The cost of defined benefit plan and other post-employment benefits and the
present value of gratuity obligation are determined using actuarial valuations,
which entail making various assumptions such as determination of discount rates,
future salary increases and mortality rate that may differ from actual developments
in the future.
III) Allowances for uncollected accounts receivable and advances:
Trade receivables do not carry interest and are stated at their normal value as
reduced by appropriate allowances for estimated irrecoverable amounts. Individual
trade receivables are written off when the management deems them not
collectable. Impairment provision is made based on assumptions about the risk
of default and the judgment in making these assumptions are based on past
history, existing market conditions as well as forward looking estimates at the
end of each reporting period, that may differ from actual developments in the
future.
IV) Allowance for inventories:
The management reviews the inventory age listing on a periodic basis. The review
involves comparison of the carrying value of the aged inventory items with the
respective net realizable value. The purpose is to ascertain whether an allowance
is required to be made in the financial statements for any obsolete or slow moving
item, based on past history, existing market conditions as well as forward looking
estimates at the end of each reporting period, which may differ from actual
developments in the future.
V) Contingencies:
Management judgment is required for estimating the possible outflow of resources,
if any, in respect of contingencies/claims/litigation against the company and it is
not possible to predict the outcome of pending matters with accuracy.
Where the company has not used the borrowings from banks and financial institutions for the
specific purpose for which it was taken at the balance sheet date, the company shall disclose
the details of where they have been used.
24.3 The company shall provide the details of all the immovable property (other than
properties where the Company is the lessee and the lease agreements are duly executed
in favour of the lessee) whose title deeds are not held in the name of the company, and
where such immovable property is jointly held with others, details are required to be
given to the extent of the company’s share.
- i) During the year no borrowings from Bank/Financial Institutions
-ii) Earlier term loan was used for specific purpose for which it was taken.
24.4 Where the Company has revalued its Property, Plant and Equipment, the company
shall disclose as to whether the revaluation is based on the valuation by a registered
valuer as defined under rule 2 of the Companies (Registered Valuers and Valuation)
Rules, 2017.
- Company has not revalued its PPE during the year.
24.5 The Company shall disclose as to whether the fair value of investment property (as
measured for disclosure purposes in the financial statements) is based on the valuation
by a registered valuer as defined under rule 2 of Companies (Registered Valuers and
Valuation) Rules, 2017. (N.A)
24.6 Where the company has revalued its intangible assets, the company shall disclose as
to whether the revaluation is based on the valuation by a registered valuer as defined
under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017. (N.A)
24.7 Following disclosures shall be made where Loans or Advances in the nature of loans
are granted to promoters, directors, KMPs and the related parties (as defined under
Companies Act, 2013,) either severally or jointly with any other person, that are:
24.12 Where any charges or satisfaction yet to be registered with Registrar of Companies
beyond the statutory period, details and reasons thereof shall be disclosed. - (N.A)
24.13 Where the company has not complied with the number of layers prescribed under
clause (87) of section 2 of the Act read with Companies (Restriction on number of
Layers) Rules, 2017, the name and CIN of the companies beyond the specified layers
and the relationship/extent of holding of the company in such downstream companies
shall be disclosed. -(N.A)
24.14 Where any Scheme of Arrangements has been approved by the Competent Authority
in terms of sections 230 to 237 of the Companies Act, 2013, the Company shall disclose
that the effect of such Scheme of Arrangements have been accounted for in the books
of account of the Company ‘in accordance with the Scheme’ and ‘in accordance with
accounting standards’ and deviation in this regard shall be explained - (N.A)
24.15 Where company has advanced or loaned or invested funds (either borrowed funds or
share premium or any other sources or kind of funds) to any other person(s) or entity(ies),
including foreign entities (Intermediaries) with the understanding (whether recorded in
writing or otherwise) that the Intermediary shall
(i) 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
-N.A
(ii) provide any guarantee, security or the like to or on behalf of the Ultimate
Beneficiaries;
-N.A
the company shall disclose the following:-
(I) date and amount of fund advanced or loaned or invested in Intermediaries with
complete details of each Intermediary. -N.A-
(II) date and amount of fund further advanced or loaned or invested by such
Intermediaries to other intermediaries or Ultimate Beneficiaries along with omplete
details of the ultimate beneficiaries. -N.A-
(III) date and amount of guarantee, security or the like provided to or on behalf of the
Ultimate Beneficiaries -N.A-
(IV) declaration that relevant provisions of the Foreign Exchange Management Act,
1999 (42 of 1999) and Companies Act has been complied with for such
transactions and the transactions are not violative of the Prevention of Money¬
Laundering act, 2002 (15 of 2003).; -N.A-
24.16 Where a company has 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
(i) 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
(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
the company shall disclose the following:-
(I) date and amount of fund received from Funding parties with complete details of
each Funding party.
(II) date and amount of fund further advanced or loaned or invested other
intermediaries or Ultimate Beneficiaries alongwith complete details of the other
intermediaries’ or ultimate beneficiaries.
(III) date and amount of guarantee, security or the like provided to or on behalf of the
Ultimate Beneficiaries
(IV) declaration that relevant provisions of the Foreign Exchange Management Act,
1999 (42 of 1999) and Companies Act has been complied with for such
transactions and the transactions are not violative of the Prevention of Money¬
Laundering act, 2002 (15 of 2003).
company has not received any fund from any person(s) or entity(ies), including
foreign entities (Funding Party) which cover24.16 (I to ii(I,ii,iii,iv))
24.17 The Company shall give details of any transaction 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), unless there is immunity for disclosure under.
any scheme and also shall state whether the previously unrecorded income and related
assets have been properly recorded in the books of account during the year. (N.A)
24.18 Where the company covered under section 135 of the companies act, the following
shall be disclosed with regard to CSR activities:- : (Notapplicable on company)
(a) amount required to be spent by the company during the year,
(b) amount of expenditure incurred,
(c) shortfall at the end of the year,
(d) total of previous years shortfall,
(e) reason for shortfall,
(f) nature of CSR activities,
(g) details of related party transactions, e.g., contribution to a trust controlled by the
company in relation to CSR expenditure as per relevant Accounting Standard,
(h) where a provision is made with respect to a liability incurred by entering into a
contractual obligation, the movements in the provision during the year should be
shown separately.
24.19 Where the Company has traded or invested in Crypto currency or Virtual Currency
during the financial year, the following shall be disclosed:¬
- Company has not traded /invested in Crypto currency or Virtual currency.
(a) profit or loss on transactions involving Crypto currency or Virtual Currency -NIL-
(b) amount of currency held as at the reporting date, -NIL-
(c) deposits or advances from any person for the purpose of trading or investing in
Crypto Currency/ virtual currency.”; -NIL-
24.20 Provision for gratuity Rs 12025 has been made during financial year 2023-24, as the
provisions of Gratuity Act 1972 is applicable on the Company.
24.21 As required Under the Micro, Small and Medium Enterprise Development Act, 2006
there have generally been no reported cases of delays in payments to Micro, Small
and Medium Enterprise or of interest payments due to delays in such payments.
There is no supplier and buyer coverage under the Micro, Small and Medium Enterprise
Development Act, 2006.
24.22 Expenditure in Foreign Exchange : Nil
24.23 Earnings in Foreign Exchange : Nil
24.33 Economic Assumptions
The principal assumptions are the discount rate & salary growth rate. The discount
rate is generally based upon the market yields available on Government bonds at the
accounting date with a term that matches that of the liabilities & the salary growth rate
takes account of inflation, seniority, promotion and other relevant factors on long term
basis.
24.34 The figures for the previous periods have been regrouped/rearranged, wherever
considered necessary, to conform current period classifications.
Signatures to Notes 1 to 24
As per our report of even date. For and on behalf of the Board of Directors
For S Agarwal & CO. Rajesh Punia Savita Punia
Chartered Accountants DIN00010289 DIN00010311
(FRN : 000808N) Managing Director Director
B.S Choudhary, F.C.A., Pooja Somani Om Prakash Sharma
(Partner) Company Secretary Chief Financial Officer
Mem. No.: 406200 ACS 44573
Place : New Delhi
Date : May 23, 2025
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