H. Provision and Contingent liabilities
Provisions
A provision is recognized when the Company has a present obligation (legal or constructive) as a result of 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. Provisions are not discounted to their present value (except where time value of money is material) and are determined
based on the best estimate required to settle the obligation at the reporting date when discounting is used, the increase in provision due to
passage of time is recognized as finance cost. These estimates are reviewed at each reporting date and adjusted to reflect the current best
estimates.
Contingent liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non¬
occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because
it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases,
where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent
liability but discloses its existence in the financial statements unless the probability of outflow of resources is remote.
Provisions, contingent liabilities, contingent assets, and commitments are reviewed at each balance sheet date.
I. Inventories
Raw materials and stores, work in progress, traded and finished goods are stated at the lower of cost and net realizable value. Cost of raw
materials and traded goods comprises cost of purchases. Cost of work in progress and finished goods comprises direct materials, direct
labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated based on normal operating
capacity. Cost of inventories also include all other costs incurred in bringing the inventories to their present location and condition. Cost
includes the reclassification from equity of any gains or losses on qualifying cash flow hedges relating to purchases of raw material but
excludes borrowing costs. Costs are assigned to individual items of inventory based on weighted average price. Costs of purchased inventory
are determined after deducting rebates and discounts. Net realizable value is the estimated selling price in the ordinary cou rse of business
less the estimated costs of completion and the estimated costs necessary to make the sale.
J. Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three
months or less, which are subject to an insignificant risk of changes in value.
K. Revenue:
Sale of goods:
Revenue from operations comprises sales of goods after the deduction of discounts, goods and service tax and estimated returns. Discounts
given by the Company include trade discounts, volume rebates and other incentives given to the customers. Accumulated experience is used
to estimate the provision for discounts. Revenue is only recognized to the extent that it is highly probable a significant reversal will not occur.
Revenue from the sale of goods is recognized when control of the goods has been transferred to our customer and when there are no longer
any unfulfilled obligations to the customer, this is generally when the goods are delivered to the customer depending on individual customer
terms, which can be at the time of dispatch or delivery. This is considered the appropriate point where the performance obligations in our
contracts are satisfied as the Company no longer have control over the inventory.
Our customers have the contractual right to return goods only when authorized by the Company. Estimation is made of goods that will be
returned, and a liability is recognized for that amount. An asset is also recorded for the corresponding inventory that is estimated to return to
the Company using the best estimate based on accumulated experience.
Interest Income:
For all financial instruments measured at amortized cost, interest income is recorded using the effective interest rate (EIR), which is the rate
that discounts the estimated future cash payments or receipts through the expected life of the financial instruments or a shorter period, where
appropriate, to the net carrying amount of the financial assets. Interest income is included in other income in the Statement of Profit and
Loss.
Dividend Income
Dividend income is recognized 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.
L. Foreign Currency
Transaction and Balances:
Transactions in foreign currencies are translated into the respective functional currencies of the Company at the exchange rates at the dates
of the transactions or an average rate if the average rate approximates the actual rate at the date of the transaction. Foreign currency
transactions are recorded on initial recognition in the functional currency, using the exchange rate at the date of the transaction. At each
balance sheet date, foreign currency monetary items are reported using the closing exchange rate. Exchange differences that arise on
settlement of monetary items or on reporting at each balance sheet date of the Company's monetary items at the closing rate are recognized
as income and expenses in the period in which they arise.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates
of transactions. Non-monetary items that are measured at fair value in a foreign currency shall be translated using the exchange rates at the
date when the fair value was measured. Exchange differences are generally recognized in the Statement of Profit and Loss.
M. Employee Benefits
Short Term Benefits:
Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if
the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the
obligation can be estimated reliably.
Other long-term employee benefit obligations:
The liabilities for earned leave are not expected to be settled wholly within 12 months after the end of the period in which the employees
render the related service. They are therefore measured as the present value of expected future payments to be made in respect of services
provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the
market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Remeasurements
because of experience adjustments and changes in actuarial assumptions are recognized in profit or loss.
Post-Employment Obligations:
• Gratuity
The Company’s net obligation in respect of defined benefit plans is calculated by estimating the amount of future benefit that employees
have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets. The calculation of
defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. Remeasurement gains and
losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly
in other comprehensive income. They are included in the retained earnings in the statement of changes in equity and in the balance sheet.
• Defined Benefit contribution plan
The Company pays provident fund contributions to publicly administered provident funds as per local regulations. The Company has no
further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and
the contributions are recognized as employee benefit expense when they are due.
• Bonus Plan
The Company recognizes liability and an expense for bonuses. The Company recognizes a provision where contractually obliged or where
there is a past practice that has created a constructive obligation.
N. Taxes
Current Tax
Current tax is the amount of tax payable (recoverable) in respect of the taxable profit / (tax loss) for the year determined in accordance with
the provisions of the Income-Tax Act, 1961. Current income tax for current and prior periods is recognized at the amount expected to be paid
to or recovered from the tax authorities, using tax rates and tax laws that have been enacted or substantively enacted at the reporting date.
Current tax assets and liabilities are offset only if, the Company:
• has a legally enforceable right to set off the recognized amounts; and
• intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognized for all taxable temporary differences except:
• When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
• In respect of taxable temporary differences associated with investments in subsidiaries, when the timing of the reversal of the
temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future
• Deferred tax assets (including MAT credit) are recognized for all deductible temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available
against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilized
except:
• When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in
a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable
profit or loss
• In respect of deductible temporary differences associated with investments in subsidiaries, deferred tax assets are recognized only to
the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available
against which the temporary differences can be utilized.
The carrying amount of deferred tax assets (including MAT credit available) is reviewed at each reporting date and reduced to the extent that
it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized
deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable
profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability
is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax relating to
items recognized outside profit or loss is recognized outside the statement of profit or loss (either in other comprehensive income or in equity).
Deferred tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity. Deferred tax assets and
deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred
taxes relate to the same taxable entity and the same taxation authority.
The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay
normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the
Company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum
Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as
“MAT Credit Entitlement.” The Company reviews the “MAT credit entitlement” asset at each reporting date and writes down the asset to the
extent the Company does not have convincing evidence that it will pay normal tax during the specified period.
GST paid for the acquisition of assets or on incurring expenses. Expenses and assets are recognized net of the amount of GST (Goods and
Service Tax) paid, except:
• When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case, the tax paid is
recognized as part of the cost of acquisition of the asset or as part of the expense item, as applicable
• When receivables and payables are stated with the amount of tax included the net amount of tax recoverable from, or payable to, the
taxation authority is included as part of other current assets or liabilities in the balance sheet.
O. Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of
time to get ready for its intended use or sale are capitalized as part of the cost of the asset until such time that the asset is substantially ready
for their intended use. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other
costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded
as an adjustment to the borrowing costs.
P. Earnings per share
Basic and diluted earnings per Equity Share are computed in accordance with Indian Accounting Standard 33 ‘Earnings per Share’, notified
accounting standard by the Companies (Indian Accounting Standards) Rules of 2015 (as amended). Basic earnings per share are calculated
by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of shares outstanding
during the period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue,
bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that have changed the number of equity shares
outstanding, without a corresponding change in resources.
NOTE 28: FINANCIAL RISK MANAGEMENT
The Company's financial risk management is an integral part of how to plan and execute its business strategies. The Company's financial risk
management policy is set by the managing board. The details of different types of risk and management policy to address these risks are listed below:
1. Market Risk-
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument.
The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and
other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments
including investments and deposits, foreign currency receivables, payables and loans and borrowings. The objective of market risk management
is to avoid excessive exposure in our foreign currency revenues and costs
1.1. Market Risk - Interest Rate Risk
Interest rate risk 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 exposure to interest rate risk generally arises from borrowings with floating interest rates. The Company manages the
interest rate risks by maintaining a debt portfolio comprising a mix of fixed and floating rate borrowings. At the reporting date, the interest profile
of the Company’s borrowings is as follows:
1.2. Market Risk - Price Risk
The Company does make deposits with the banks to provide security against guarantee issued by bank to company’s trade payables. Deposit
is made in fixed rate instrument. In view of this it is not susceptible to market price risk, arising from changes in interest rates or market yields
which may impact on the return and value of the investments.
1.3. Market Risk - Currency Risk
The fluctuation in foreign currency exchange rates may have a potential impact on the statement of profit and loss and equity, where any
transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency
of the Company. The functional currency of the company is Indian Rupees. The Company follows a natural hedge driven currency risk
mitigation policy to the extent possible.
2. 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. The carrying amount of Financial Assets represents the
maximum credit exposure.
Trade Receivables
The Company has established a credit policy under which each new customer is analyzed individually for creditworthiness before the
payment and delivery terms and conditions are offered. The Company’s review includes external ratings, if they are available, financial
statements, industry information, business intelligence and in some cases bank references.
Trade Receivables of the Company are typically unsecured, except to the extent of the security deposits received from the customers or
financial guarantees provided by the market organizers in the business. Credit Risk is managed through credit approvals and periodic
monitoring of the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company
performs ongoing credit evaluations of its customers’ financial condition and monitors the creditworthiness of its customers to which it grants
credit terms in the normal course of business. The Company has no concentration of Credit Risk as the customer base is geographically
distributed in India and outside India.
Other Financial Assets
The company maintains its Cash and Cash equivalents and Bank deposits with banks having good reputation, good past track record and
high-quality credit rating and also reviews their creditworthiness on an on-going basis.
3. Liquidity Risk
Liquidity Risk is the risk that the Company will face in meeting its obligation associated with its financial liabilities that are settled by delivering
cash or another financial asset. The Company's approach in managing liquidity is to ensure, as far as possible, that it will have sufficient
liquidity to meet its liabilities when due, under both normal and stressful conditions, without incurring unacceptable losses. Any short-term
surplus cash generated, over and above the amount required for working capital is retained as Cash and Cash Equivalents (to the extent
required).
5. Other statutory information:
a. Title deeds of Immovable Property not held in name of the Company - NIL
b. The company has not revalued its Property, Plant and Equipment.
c. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for
holding any Benami property.
d. The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
e. The Company has no relationship with struck off companies
f. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
g. The Company was not a part of any Scheme of Arrangements to be approved by the Competent Authority in terms of sections 230
to 237 of the Companies Act, 2013.
h. The Company has not received any funds 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,
i. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
The Company does not have 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)
For PSV Jain & Associates For and Behalf of Board of Director
Chartered Accountants
Firm Registration No.: 131505W
Laxmikant Kabra Bhavesh Tanna
Chairman Director
CA Vijay Kumar Jain DIN: 00061346 DIN: 03353445
Partner
Membership No.: 405129
Chintan Doshi Jaid Kojar
Place: Mumbai Company Secretary CFO
Date: 14th May 2025
| 