1. SIGNIFICANT ACCOUNTING POLICIES
1.1 Basis of preparation of financial statements
These financial statements have been prepared to comply in all material aspects with applicable accounting principles in India, the applicable Accounting Standards prescribed under Section 133 of the Companies Act, 2013 ('Act') read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and other accounting principles generally accepted in India, to
1.3 Revenue Recognition
a) Revenue is recognised only when it can be reliably measured and it is reasonable to expect ultimate collection. Turnover includes sale of goods and services, excise duty and sales during trial run period, adjustment for discounts but excluding central sales tax, state value added tax.
b) Dividend income is recognised when right to receive is established.
c) Interest income is recognised on time proportion basis taking into account and amount outstanding and rate applicable.
d) Share of profit/(Loss) from partnership firms for the year is accounted on the basis of provisional annual reports of the firms. Differential share of profit/(Loss), if any, from provisional and audited annual reports of the firms will be accounted in the next financial year.
1.4 Inventories
a) Stock in trade is valued at lower of cost or realisable value.
b) Stores & spares are written off at the time of purchases itself and no inventory is maintained.
1.5 Investments
Investments are either classified as current or long term based on Management's intention at the time of purchases
a) Current investment are carried at the lower of cost and fair market value.
b) Long term investments are carried at cost less provisions recorded to recognize any decline, other than temporary, in the carrying value of investments.
1.6 Foreign currency transactions
Foreign currency transactions during the accounting year are translated at the rates prevalent on the transaction date. Exchange differences arising from foreign currency fluctuations are dealt with on the date of actual payment /receipt. Assets & liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at the year end rate. The exchange difference is credited/ charged to profit & loss account in case of revenue items & capital items.
1.7 Income taxes
a) Income taxes are accrued in the same period that the related revenue and expenses arise. A provision is made for income tax annually, based on the tax liability computed as per the prevailing provisions of the Income Tax Act.
b) Deferred tax is recognized on timing difference between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. Deferred tax assets are recognized and carried forward to the extent that there is reasonably/ virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.
1.8 Retirement benefits
The management is of the opinion that since none of the employees of the company were in continuous service of more than five years, requirement of provision for gratuity does not arises. The management is also of the opinion that the provisions of payment of pension Act are not applicable to the company.
1.9 Miscellaneous expenditure
Preliminary expenses are amortized equally over a period of ten years.
e) Change in capital structure persuant to Scheme of Capital Reduction approved by National Company Law Board ("The NCLT"), Mumbai bench vide their order dated July 08, 2022.
Persuant to Scheme of reduction as approved by National Company Law Board vide their order dated July 08, 2022, otherwise as stated in below notes, the following consequential impact have been given in accordance with the approved Scheme of Capital Reduction and hence, the company on March 31, 2023 has made change in its share capital structure under Financial liability. Details of same are:
i) Reduction of existing Issued, Subscribed and Paid up Equity Capital (prior to fresh allotment) to 38,98,500 fully paid up Equity Shares of Re.1/- each and adjusting capital reduction of Rs.3,50,86,500/-with the brought forward balance of accumulated losses.
ii) Increase in authorised share capital to Rs.7,50,00,000 consisting of 7,50,00,000 equity shares of par value Re.1/- per share.
iii) Allotment of 6,00,00,000 fully paid up fresh equity shares of face value of Re.1/-.
The existing issued share capital of Rs.4,12,00,000/-, subscribed share capital of Rs.3,97,09,000/- and paid up share capital of Rs.3,89,85,000/- consisting of 41,20,000, 39,70,900 and 38,98,500 equity shares respectively of face value Rs.10/- each of the Pratik Panels Limited was reduced to issued share capital of Rs.41,20,000/-, subscribed share capital of Rs.39,70,900/- and paid up share capital of Rs.38,98,500/-consisting of 41,20,000, 39,70,900 and 38,98,500 equity shares respectively of face value Re.1/- each.
The reduction of existing Issued, Subscribed and Paid up Share Capital of the company shall be effected by reducing the paid up value per equity share from Rs.10/- to Re.1/- each however there is no change in number of shares held by the existing shareholders of the Company.
2.29 RECLASSIFICATION OF PROMOTERS OF THE COMPANY
It is informed and on the basis of documents produced, during previous year ended on March 31, 2023 the existing promoters have informed vide their letter to reclassify them from promoter category to public category. The existing promoters have entered into share purchase agreement in respect of 39.24% of total equity and voting share capital with the acquirer Mr. Pankaj Chandrakant Mishra and Mrs. Devyani Pankaj Mishra on 21.01.2022. Pursuant to the share purchase agreement, an open offer as per regulation 3(1) and (4) of Securities and Exchange Board of India (Substantial Acquisition of shares and takeover) Regulation, 2011 and subsequent amendment thereof is being made by the acquirer.
The above request for reclassification was approved by the Board of Directors in their meeting held on 27.08.2022. Mr. Pankaj Chandrakant Mishra and Mrs. Devyani Pankaj Mishra are incoming promoters as per share purchase agreement.
NOTE 2.30 : CAPITAL MANAGEMENT
The Company's capital management is intended to create value for shareholders by facilitating the achievement of long-term and short-term goals of the Company.
The Company determines the amount of capital required on the basis of annual business plan coupled with long-term and short-term strategic investment and expansion plans.
The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes, within net debt, interest bearing loans and borrowings, trade and other payables, less cash and short-term deposits.
(b) Financial risk management
In the course of its business, the Company is exposed primarily to interest rates, equity prices, liquidity and credit risk, which may adversely impact the fair value of its financial instruments.
The Board of Directors reviews and approves risk management framework and policies for managing these risks and monitors suitable mitigating actions taken by the management to minimise potential adverse effects and achieve greater predictability to earnings. In line with the overall risk management framework and policies, the management monitors and manages risk exposure through an analysis of degree and magnitude of risks.
Interest rate risk
Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rates. Any movement in the reference rates could have an impact on the Company's cash flows as well as costs. The Company is subject to variable interest rates on some of its interest bearing liabilities. The Company's interest rate exposure is mainly related to debt obligations.
This calculation also assumes that the change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date. The period end balances are not necessarily representative of the average debt outstanding during the period.
CreditRisk
Credit risk is the risk that counterparty will not meet 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) and from its financing activities, including deposits and loan granted to corporate and non corporate entities.
Trade receivables
Customer credit risk is managed by the Company's internal policies, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on market feedback and credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored.
The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and operate in independent markets.
Loans Granted
Lending credit risk is managed by the Company's internal policies, procedures and control relating to lending credit risk management. The Company evaluates the concentration of risk with respect to loan granted as low because loan is granted for short term and regular monitoring of the same is done by the Management.
Liauiditv Risk
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity riskmanagement is to maintain sufficient liquidity and ensurethat funds are available for use as per requirements. The Company monitors its risk of shortage of funds through using a liquidity planning process that encompasses an analysis of projected cash inflow and outflow.
The Company also constantly monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility.
(i) The table below summarises the maturity analysis for its financial liabilities based on the undiscounted cash flows at the end of reporting period :
2.35 OTHER DISCLOSURES
(a) Balances grouped under Non Current Liabilities and Current Liabilities, Non Current Assets and Current Assets in certain cases are subject to confirmation and reconciliation from respective parties. Impact of the same, if any, shall be accounted as and when determined.
(b) In the opinion of the Management Long Term Loans and Advances, Other Non Current Assets, Current Assets and Other Current Assets fetch approximately the value as stated in the Financial Statement if realised in the ordinary course of business subject to balance confirmation. The provision for all known liabilities is adequate and is not in excess of amounts considered reasonably necessary.
(c) Other information required under Part I & Part II of Schedule III to The Companies Act,2013 are either NIL or NOT APPLICABLE.
The accompanying notes are an integral part of the Standalone financial statements As per our report of even date
For R Shah & Co For Pratik Panels Limited
Chartered Accountants
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