xv. Provisions and Contingent liabilites and Contingent Assets
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense. Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence will be confirmed by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made. Contingent assets are not recognised in the financial statements.
xvi. Cash and Cash Equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, bank overdraft, deposits held at call with financial institutions, 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.
xvii. Dividend:-
Final dividend on Equity shares are recorded as a liability on the date of approval by the shareholders and interim dividend are recorded as a liability on the date of declaration by the company’s Board of Directors.
xviii. Earning Per Share -
Basic earning per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares outstanding during the period. Diluted earning per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares considered for deriving basic earning per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.
NOTE NO .37 Financial Risk Management Objectives and Policies:
The Company's activities are exposed to a variety of Financial Risk from its Operations. The key financial risk include Market risk, Credit risk and Liquidity risk.
(a) Market Risk: Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises mainly three types of risk:, Foreign currency risk, Interest rate risk and other price risk such as Equity price risk and Commodity Price risk.
(b) Foreign Currency Risk:
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company is exposed to foreign exchange risk arising from foreign currency transactions of imports, exports and borrowing primarily with respect to USD and Euro. The Company's exports are denominated generally in USD, providing a natural hedge to some extent against foreign currency payments on account of imports of raw materials and/or the payment of borrowings. The foreign currency transaction risk are managed through selective hedging programmes by way of forward contracts including for underlying transactions having firm commitments or highly probable forecast of crystalisation.
The Company uses forward exchange contracts to hedge its exposure in foreign currency. The details of foreign currency exposures hedged by derivative instruments and those have not been hedged are as follows:
(d) Interest Rate Risk and Sensitivity:
The Company is having fixed rate long term borrowings which are not exposed to any risk of changes in market interest rates.
(e) Commodity price risk:
The Company is affected by the price volatility of certain commodities. Its operating activities require the purchase of raw material and therefore, require a continuous supply of certain raw materials. To mitigate the price risk, the company has an approved supplier base to get the best competitive prices for the commodities and to manage the cost without any compromise on quality.
(f) Equity price risk:
The Company's exposure to equity instruments price risk arises from investments held by the company and classified in the balance sheet at fair value through OCI. Having regard to the nature of securities, intrinsic worth, intent and long term nature of securities held by the company, fluctuation in their prices are considered acceptable and do not warrant any management estimation.
(g) Credit Risk:
Credit risk is the risk that counterparty might not honor its obligations under a financial instrument or customer
contract, leading to a financial loss. The company is exposed to credit risk from its operating activities (primarily trade receivables).
Trade Receivables:
Customer credit risk is managed based on company's established policy, procedures and controls. The company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.
Credit risk is reduced by receiving pre-payments and export letter of credit to the extent possible. The Company has a well defined sales policy to minimize its risk of credit defaults. Outstanding customer receivables are regularly monitored and assessed. The Company follows the simplified approach for recognition of impairment loss and the same, if any, is provided as per its respective customer's credit risk as on the reporting date
(h) Deposits with Bank:
The deposits with banks constitute mostly the investment made by the company against bank guarantee and letter of credits and are generally not exposed to credit risk.
(i) Liquidity Risk:
Liquidity risk is the risk, where the company will 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 is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due.
The table below summarises the maturity profile of company's financial liabilities based on contractual undiscounted payments:
NOTE NO. 38 Capital Management:
The Company's policy is to maintain an adequate capital base so as to maintain creditor and market confidence and to sustain future development. Capital includes issued capital, share premium and all other equity reserves attributable to equity holders.
The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. Net Debt is calculated as borrowings less cash and cash equivalents.
NOTE NO. 42
Accounts in respect of Current and Non-Current Liabilities, Trade Receivables , Other Current Assets, Loans and Advances and Deposits are subject to confirmations of respective parties.
NOTE NO. 43
The Board of Directors in their meeting held on 24th May 2024 has recommended a dividend of Rs. 1/- on per fully paid up equity share of Rs. 10/- each aggregating to Rs. 75.44 lacs for the financial year ended on 31st March 2024. The same is subject to the approval by the Shareholders in the ensuing Annual General Meeting of the Company.
NOTE NO. 44
Additional Regulatory Information pursuant to amendment in Schedule III of the Companies Act 2013 dated 24.03.2021 has been given to the extent applicable to the Company.
Defined - Contribution Plans
The Company offers its employees defined contribution plan in the form of provident fund(PF), family pensions fund (FPF) and Employees State Insurance Scheme (ESI) which covers substantially all regular employees. Contribution are paid during the year into separate funds under certain fiduciary-type arrangements. Both the employees and the company pay pre determined contribution into the provident funds, family pension fund and the Employees State Insurance Scheme. The Contributions are normally based on a certain proportion of the employee's salary.
Defined - Benefit Plans
The Company offers its employees defined- benefit Plans in the form of a Gratuity Scheme. Benefits under the defined benefit plan is typically based either on years of service and the employee's compensation (generally immediately before retirement). The Gratuity scheme covers substantially all regular employees. The Company contributes funds to Life Insurance Corporation of India, which is irrevocable. Commitments are actuarially determined at year end. The actuarial valuation is done based on “’’Projected Unit Credit”” method. Gains & Losses of changed actuarial assumptions are charged to the profit and loss account. The obligations for leave encashment is recognised in the same manner as gratuity.
Note No : 53 Related Party Disclosures:
Disclosures in respect of Related Parties as defined in Indian Accounting Standard 24 (Ind AS 24), with whom transactions were entered into at an arm's length and in the ordinary course of business for the year ended March 31, 2024
(i) Key Management Personnel and Relatives of Key Management Personnel
Mr. Ramadoss Srinivasan - Chairman Mr. Sanjiv Shroff (Managing Director)
Mr. Rahul Shroff (Wholetime Director Designated as Executive Director)
Mr. Ameya Shroff (Wholetime Director Designated as Executive Director)
Mr. Nand Gopal Khaitan (Non Exeutive Director)
Mrs. Dipika Shroff (Non Executive Director)
Mr. Ram Niwas Sharma ( Non Executive Director)
Mr. Narayan Shroff ( Non Executive Director )
Mr. Chandrasekaran Rajagopalan (CFO)
Mr. Utkarsh Gaur (Company Secretary)
Relative of Key Managerial Person
Mr. Shanker Lal Shroff, Chairman Emeritus (Father of Mr. Sanjiv Shroff)
Mrs. Bimla Devi Shorff (Mother of Mr. Sanjiv Shroff)
Mrs. Kavisha Rahul Shroff ( Wife of Mr. Rahul Shroff)
Note No : 58
Previous year figures have been regrouped / rearranged, wherever necessary.
Signatures to notes 1 to 58
Significant Accounting Policies and Notes to Accounts (Note No. 35 to 58)
As per our report of even date
For PKMB & Co. For & On behalf of Board of Directors
Chartered Accountants
(Firm Registration No. 005311N)
P.K. Jain UTKARSH GAUR R. CHANDRASEKARAN SANJIV SHROFF RAHUL SHROFF
Partner Company Secretary Chef Financial Officer Managing Director Excutive Director
M. No. 010479 M. No. A60237 DIN - 00296008 DIN - 002301693
Place New Delhi Dated: 24 May 2024
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