(H) Provisions, Contingent Liabilities and Contingent Assets and Commitments
i) 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 obligation. Such provisions are determined based on management 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.
ii) If 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.
iii) Contingent liability is a possible obligation arising from past events and the existence of which will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present
obligation that arises from past events but is not recognised because it is not possible that an outflow of resources embodying economic
benefit will be required to settle the obligations or reliable estimate of the amount of the obligations cannot be made.
iv) Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic
benefits. Contingent assets are not recognized but are disclosed in the financial statements when inflow of economic benefits is
probable.
(I) Financial Instruments:
Financial Assets
(i) Initial recognition and measurement
All financial assets are initially recognized at fair value plus transaction costs that are directly attributable to the acquisition or issue of
financial assets, 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.
The Company classifies its financial assets in the following measurement categories: (1) those to be measured subsequently at fair value
(either through other comprehensive income, or through the Statement of Profit and Loss), and (2) those measured at amortised cost.
The classification depends on the Company's business model for managing the financial assets and the contractual terms of the cash
flows.
Debt instruments: Subsequent measurement of debt instruments depends on the Company's business model for managing the asset
and the cash flow characteristics of the asset. The Company classifies its debt instruments into following categories: (1) Amortised cost:
Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest
are measured at amortised cost. Interest income from these financial assets is included in other income using the effective interest rate
method. (2) Fair value through profit and loss: Assets that do not meet the criteria for amortised cost are measured at fair value through
statement of Profit and Loss. Interest income from these financial assets is included in other income.
Equity instruments: The Company measures its equity investment other than in subsidiaries, joint ventures and associates at fair value
through profit and loss. However where the Company's management makes an irrevocable choice on initial recognition to present fair
value gains and losses on specific equity investments in other comprehensive income (Currently no such choice made), there is no
subsequent reclassification, on sale or otherwise, of fair value gains and losses to the Statement of Profit and Loss.
Balances of sundry debtors and Creditors at the balance sheet are subject to reconciliation.
(ii) Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
• Financial Assets at amortised cost.
• Financial Assets at fair value through other comprehensive income (FVTOCI).
• Financial Assets including derivatives and equity instruments at fair value through profit or loss (FVTPL).
• Equity instruments measured at fair value through other comprehensive income (FVTOCI).
(iii) Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised
when:
• The rights to receive cash flows from the asset have expired, or
• The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash
flows in full without material delay to a third party under a 'pass-through' arrangement; and either (a) the Company has transferred
substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks
and rewards of the asset, but has transferred control of the asset.
Financial Liabilities
(i) Initial recognition and measurement
All financial liabilities are recognized at fair value and in case of loans and borrowings and payables, 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 Normal 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 maturity of these instruments.
(iii) Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing
financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a
new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.
(J) Revenue Recognition
(i) Sale of Goods & Services
The Company derives revenue primarily from trading and leasing activity.
Revenue from contracts with customers is recognised when control of the goods is transferred to the customer at an amount that reflects
the consideration entitled in exchange for those goods. The Company is generally the principal as it typically controls the goods before
transferring them to the customer. Generally, control is transferred upon shipment of goods to the customer or when the goods is made
available to the customer, provided transfer of title to the customer occurs and the Company has not retained any significant risks of
ownership or future obligations with respect to the goods shipped
Revenue is measured at the amount of consideration which the Company expects to be entitled to in exchange for transferring distinct
goods to a customer as specified in the contract, excluding amounts collected on behalf of third parties (for example taxes and duties
collected on behalf of the government). Consideration is generally due upon satisfaction of performance obligations and a receivable is
recognised when it becomes unconditional. The Company provides volume rebates to certain customers once the quantity of products
purchased during the period exceeds a threshold specified and also accrues discounts to certain customers based on customary business
practices. Consideration is determined based on its most likely amount.
Revenue from rendering of services is recognised when the performance of agreed contractual task has been completed.
(ii) Interest Income
Interest income from a financial asset is recognised using effective interest method.
(iii) Lease Income
Rental income from operating lease is recognized on a straight-line basis over the term of the relevant lease term in accordance with Ind
AS 116, Leases.
(iv) Other Operating Revenue
All other income in financial statement recorded on accrual basis.
(K) Employee Benefit Expenses
(i) Short Term Employee Benefits:-
Short term employee benefit obligations are measured on an undiscounted basis and are expensed as the related services are provided.
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within twelve months after the
end of the period in which the employees render the related service are recognised in respect of employees' services up to the end of the
reporting period.
(ii) Post-Employment Benefits:-
• Defined Contribution Plans
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 during the period in which the employee
renders the related service.
• Defined Benefits Plans
The defined benefit obligation is calculated annually by an independent actuary using the projected unit credit method. The present
value of defined benefit is determined by discounting the estimated future cash outflows by reference to market yield at the end of
each reporting period on government bonds that have terms approximate to the terms of the related obligation.
The Company provides 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 basic salary for every completed year of service as per the Payment of
Gratuity Act 1972.
(L) Foreign Currency Transactions
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. 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 the
initial transactions. However there were no such foreign currency transactions during the reporting period.
(M) Income Taxes
The tax expense for the period comprises current and deferred tax. Tax is recognised in Statement of Profit and Loss, except to the extent
that it relates to items recognised directly in equity or in other comprehensive income. In which case, the tax is also recognised in other
comprehensive income or equity.
(i) Current tax
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 by the end of the reporting period.
(ii) Deferred tax
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.
(iii) Minimum Alternate Tax (MAT)
MAT liability is being calculated on book profit section 115JB of the Income-tax Act, 1961.
(iv) Uncertain Tax Position
Accruals for uncertain tax positions require management to make judgments of potential exposures. Accruals for uncertain tax positions
are measured using either the most likely amount or the expected value amount depending on which method the entity expects to better
predict the resolution of the uncertainty. Tax benefits are not recognised unless the management based upon its interpretation of
applicable laws and regulations and the expectation of how the tax authority will resolve the matter concludes that such benefits will be
accepted by the authorities. Once considered probable of not being accepted, management review each material tax benefit and reflects
the effect of the uncertainty in determining the related taxable amounts.
(N) Dividend Distribution
Since company has unabsorbed losses lying in the books, therefore no dividend distributed.
(O) Statement of Cash Flows
(i) Cash and Cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash at banks and in hand, other short¬
term, 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 of changes in value.
(ii) Statement of Cash Flows is prepared in accordance with the Indirect Method prescribed in the Indian Accounting Standard-7
"Statement of Cash Flows”.
(P) Segment Reporting
The Company has reported segment wise information as per Accounting Standard (Ind AS 108). The operating segments are identified on
the basis of business activities whose operating results are regularly reviewed by the Chief Operating Decision Maker of the Company and
for which the discrete financial information is available.
(Q) Non-current assets held for sale
Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather
than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair
value less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefits, financial assets and contractual
rights under insurance contracts, which are specifically exempt from this requirement. Non-current assets are not depreciated or
amortised while they are classified as held for sale. However, there is no non-current assets held for sale at the year end.
(R) Additional Regulatory Information
Title deeds of Immovable Properties held in name of the Company hence Additional Regulatory Information is not applicable on the
company.
(S) 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 during the period. The weighted average number of equity shares outstanding during the
period are adjusted for events of bonus issue; bonus element in a right issue to existing shareholders.
For the purpose of calculating diluted earnings per share, the net 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.
3. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of the 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.
A) 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.
B) Recoverability of trade receivable
Judgements 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. Based on bad debts assessed by Management have
been written off.
C) 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.
Further, our company have received claim from previous mill workers and employees on account of pending unpaid leave encashment
relating to their services up to 31“ March 2018, amounting to Rs. 15.02 Lacs (Previous year Rs. 46.21 lacs) which has been approved by the
board of directors in their meeting dated 30th Jan 2023. The provision for the mentioned claim has been recognised in the books of accounts
on 31“ March 2024.
D) Impairment of non-financial 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 the 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.
E) 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 past history, existing market
conditions as well as forward looking estimates at the end of each reporting period.
F) Defined Benefit Obligation:
Employee benefit obligations are measured on the basis of actuarial assumptions which include mortality and withdrawal rates as well as
assumptions concerning future developments in discount rates, medical cost trends, anticipation of future salary increases and the
inflation rate. The Company considers that the assumptions used to measure its obligations are appropriate. However, any changes in these
assumptions may have a material impact on the resulting calculations.
For ATM & ASSOCIATES For and on behalf of the Board
Chartered Accountants MID INDIA INDUSTRIES LIMITED
Firm Registration No. 017397C
CA Anand Seksaria [Sanjay Singh) [Bhawani Shankar Soni)
Partner Chairman & Managing Director Wholetime Director
Membership No. 420231 [DIN: 01548011) [DIN: 01591062)
Place: Indore
[Omprakash Dhanotiya) [Shailendra Kumar Agrawal)
Date: 24th May, 2024 Chief Financial Officer Company Secretary
UDIN: 24420231BKCZZT1004 [Mem. No. FCS 12104)
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