Rights, Preferences and Restrictions
- The Company has only one class of equity shares having a face value of K1 per share. Each holder of Equity Share is entitled to one vote per share.
- No class of shares have been issued as bonus shares or for consideration other than cash by the Company during the period of five years immediately preceding the Current Period / Year end.
- No class of shares have been bought back by the Company during the period of five years immediately preceding the Current Year end.
The description of the nature and purpose of each reserve within equity is as follows:
Securities Premium
Securities Premium Reserve is created due to premium on issue of shares. This reserve is utilised in accordance with the provisions of the Companies Act.
Capital Reserve
There has been no movement in the capital reserve during the year. Opening balance from previous year has been brought forward based on activity done from the previous management.
Disclosure relating to suppliers registered under Micro, Small and Medium Enterprises Development Act, 2006 ('MSMED') is based on the information available with the Company: This has been relied upon by the auditors. Under the Micro, Small and Medium Enterprises Development Act, 2006 ('MSMED') which came into force from October 2, 2006, certain disclosures are required to be made relating to Micro, Small and Medium enterprises ('MSME'). On the basis or the information and records available with the management, there are no outstanding dues to the Micro and Small Enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006 except as set out in the following disclosures.
25 Assets and Liabilities Relating to Employee Benefits See accounting policy in Note 1.(h)
The management of the Company is of the view that none of the employees were eligible in respect of which the Company was required to make contribution as per the provisions relating to the Payment of Gratuity and accordingly provision for gratuity was not required to be made. However, if the Company is required to make payment of gratuity on happening of any event / incident due to which the provisions relating to payment of gratuity becomes applicable to the Company, the same will be accounted as and when incurred.
26 Earnings Per Share (EPS)
Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of Equity Shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of Equity Shares Preference Shares CCDs Warrants outstanding during the year.
Terms and Conditions of Transactions with Related Parties
The transactions with related parties are made on terms equivalent to those that prevail in arm's length transactions. There have been no guarantees provided or received for any related party receivables or payables. No balances in respect of the related parties has been provided for written off / written back, except what is stated above.
Related party relationship is as identified by the management and relied upon by the auditors.
29 Fair Value Measurement Financial Instruments
The details of significant accounting policies, including crieteria for recognition, the basis of measurement and the basis on which income and expenditure are recognised, in respect of each class of Financial Asset, Financial Liability and Equity Instrument are disclosed in Note 1.
Calculation of Fair Values
The Fair Values of the Financial Assets and Liabilities are defined as 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. The following methods and assumptions were used to estimate the Fair Values of Financial Instruments:
a Financial Assets: Cash and Cash Equivalents, Trade Receivables, Other Financial Assets have Fair Values that approximate to their carrying amounts due to their short-term nature
b Financial Liabilities: The Fair Value of the long-term borrowings carrying floating-rate of interest is not impacted due to interest rate changes and will not be significantly different from their carrying amounts as there is no significant change in the under-lying credit risk of the Company (since the date of inception of the loans)
Fair Value Hierarchy
The Company uses the following hirerarchy for determining and / or disclosing the Fair Value of Financial Instruments by Valuation Techniques:
The categories used are as follows:
Level 1: It includes Financial Instruments measured using quoted prices and the Mutual Funds are measured using the closing Net Asset Value (NAV)
Level 2: The Fair Value of Financial Instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to Fair Value an instrument are observable, the instrument is included in level 2
Level 3: Inputs for the Asset or Liability that are not based on observable market data (unobservable inputs)
30 Financial Risk Management
The Company's Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework.
The Company has exposure to the following risks arising from financial instruments:
a. Credit Risk
b. Liquidity Risk
c. Market Risk
a Credit Risk
Credit Risk arises from the possibility that the value of receivables or other financial assets of the Company may be impaired because counterparties cannot meet their payment or other performance obligations. To manage Credit Risks from Trade Receivables other than Related Party, the credit managers from Order to Cash department of the Company regularly analyse customer's receivables, overdue and payment behaviors. Some of these receivables are collateralised and the same is used according to conditions. These could include advance payments, security deposits, post-dated cheques etc. Credit limits for this trade receivables are evaluated and set in line with Company's internal guidelines. There is no significant concentration of default risk."
Credit Risks from financial transactions are managed independently by Finance department. For banks and financial institutions, the Company has policies and operating guidelines in place to ensure that Financial Instrument transactions are only entered into with high quality banks and financial institutions. The Company had no other Financial Instrument that represents a significant concentration of Credit Risk.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in Credit Risk on an ongoing basis through out each reporting period. To assess whether there is a significant increase in Credit Risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:
i) Actual or expected significant adverse changes in business,
ii) Actual or expected significant changes in the operating results of the counterparty,
iii) Financial or economic conditions that are expected to cause a significant change to the counterparty's ability to meet its obligations,
iv) Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees or credit enhancements.
Financial assets are written off when there is no reasonable expectations of recovery. Where loans or receivables have been written off, the Company continues engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized in statement of Profit & Loss.
Credit Risk is Managed at Company Level
For other Financial Assets, the Company assesses and manages Credit Risk based on internal control and credit management system. The finance function consists of a separate team who assess and maintain an internal credit management system. Internal credit control and management is performed on a Company basis for each class of Financial Instruments with different characteristics.
The Company considers whether there has been a significant increase in Cedit Risk on an ongoing basis throughout each reporting period. It considers available reasonable and supportive forward-looking information.
Macroeconomic information (such as regulatory changes, market interest rate or growth rates) are also considered as part of the internal credit management system.
A default on a Financial Asset is when the counterparty fails to make payments as per contract. This definition of default is determined by considering the business environment in which entity operates and other macro-economic factors.
The Company measures the expected credit loss of trade receivables from individual customers based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, no additional provision has been considered necessary in respect of trade receivables more than 90 days for the 31st March 2025, since the management has taken suitable measures to recover the said dues and is hopeful of recovery in due course of time.
The Company maintains exposure in Cash and Cash Equivalents, Deposits with Banks, Investments, and Other Financial Assets. Individual risk limits are set for each counter-party based on financial position, credit rating and past experience. Credit limits and concentration of exposures are actively monitored by the Management of the Company. The maximum exposure to Credit Risk at the reporting date is the carrying value of each class of Financial Assets. The Company believes that the current value of trade receivables reflects the Fair Value / Recoverable Values.
b Liquidity Risk
Liquidity Risk is the riskthatthe Companywill encounter difficulty in meeting the obligations associated with its Financial Liabilities that are settled by delivering cash or another Financial Asset. The Company's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation. Due to the dynamic nature of underlying businesses, the Company maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecast of Company's liquidity position (comprising the undrawn borrowing facilities below) and Cash and Cash Equivalents on the basis of expected cash flows. In addition, the company's liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.
Maturities of Financial Liabilities
The tables below analyse the company's Financial Liabilities into relevant maturity groupings based on their contractual maturities for:
All non-derivative Financial Liabilities, and the amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
c Market Risk
Market Risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Company's income or the value of its holdings of Financial Instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimising the return. The Company is exposed to market risk primarily related to foreign exchange rate risk (currency risk), interest rate risk and market value of its investments. Thus the Company's exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currencies.
Capital Management & Risk Management
The Company's objectives when managing capital are to: 1. Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and 2. Maintain an optimal capital structure to reduce the cost of capital.
Notes:
1. Current Ratio = Current Assets / Current Liabilities
2. Debt Equity Ratio = Total Debt / Total Equity
3. Debt Service Coverage Ratio = Earnings before Interest and Tax / Interest Expense Principal Repayments made during the year for long term loans
4. Return on Equity = Profit After Tax / Net Worth
5. Inventory Turnover Ratio = Cost of Goods Sold / Average Inventories
6. Trade Receivables Turnover Ratio = Revenue from Operations / Trade Receivables
7. Trade Payables Turnover Ratio = Credit Purchases / Trade Payables
8. Net Capital Turnover Ratio = Revenue from Operations / Net Working Capital
9. Profit Ratio = Net Working Capital / Revenue from Operations
10. Return on Capital Employed = Net Profit After Tax Deferred Tax Expense / (Income) Finance Cost (-) Other Income from Cash & Other Marketable Securities / Capital Employed
11. Return on Investment = Net Profit After Tax / Total Investment
32 Additional Regulatory Disclosures As Per Schedule III Of Companies Act, 2013
Additional Regulatory Information pursuant to Clause 6L of General Instructions for preparation of Balance Sheet as given in Part I of Division II of Schedule III to the Companies Act, 2013, are given hereunder to the extent relevant and other than those given elsewhere in any other notes to the Financial Statements.
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 does not have any transactions with companies which are struck off
c. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
d. The Company has not traded or invested in crypto currency or virtual currency during the financial year.
e. The Company has 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)
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
ii. Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries"
f. The Company has 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:
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."
g. The Company does not have any 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.
h. The Company is not declared willful defaulter by any bank or financial institution or lender during the year.
i. The Company has used the borrowings from banks and financial institutions for the specific purpose for which it was taken as at Balance Sheet date.
33 Audit Trail
The Ministry of Corporate Affairs (MCA) has prescribed a new requirement for companies under the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 inserted by the Companies (Accounts) Amendment Rules 2021 requiring companies, which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled and the audit trail has been preserved by the Company as per the statutory requirements for record retention.
The Company, in respect of financial year commencing on or after the 1st April, 2024, has used such accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has been operated throughout the year except for during 1st April, 2024 to 25th September, 2024 for all transactions recorded in the software. Further, during the course of our audit, the Company did not come across any instance of the audit trail feature being tampered with, and the audit trail has been preserved by the Company as per the statutory requirements for record retention, in respect of such accounting software's for which the audit trail feature was enabled and operating.
34 Events Occurring After the Reporting Period
The Company evaluates events and transactions that occur subsequent to the Balance Sheet date but prior to the approval of Financial Statements to determine the necessity for recognition and / or reporting of subsequent events and transactions in the financial statements.
35 Certain Financial Assets and Financial Liabilities are subject to formal confirmations and reconciliations, if any. The management, however, is confident that the impact whereof for the year on the Financial Statements will not be material.
36 Previous year figures have been re-grouped / re-classified wherever necessary to conform current years' classification.
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