24. Provisions, Contingent liabilities and Capital Commitments
Provisions are recognized when there is 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 the obligation. Provisions are reviewed at each balance sheet
date and are adjusted to reflect the current best estimate.
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 recognized as
a finance cost.
Contingent liabilities are possible obligations whose existence will only be confirmed by
future events not wholly within the control of the Company, or present obligations where it is
not probable that an outflow of resources will be required, or the amount of the obligation
cannot be measured with sufficient reliability. Information on contingent liability is
disclosed in the Notes to the Financial Statements.
Contingent assets are not recognised but disclosed when the inflow of economic benefits
is probable. However, when the realisation of income is virtually certain, then the related
asset is no longer a contingent asset, but it is recognised as an asset.
25. Government Grant
Government grants are recognised where there is reasonable assurance that the grant will be
received and all attached conditions will be complied with. A government grant that
becomes receivable as compensation for expenses or losses incurred in previous period(s).
Such a grant is recognised in profit or loss of the period in which it becomes receivable.
Government grants shall be recognised in profit or loss on a systematic basis over the
periods in which the Company recognises as expenses the related costs for which the
grants are intended to compensate.
Government grants related to assets are presented in the balance sheet as deferred
income and is recognised in profit or loss on a systematic basis over the expected useful life of
the related assets or other relevant basis.
Government grants by way of financial assistance on the basis of certain qualifying
criteria are recognised as they become receivable.
In the unlikely event that a grant previously recognised is ultimately not received, it is
treated as a change in estimate and the amount cumulatively recognised is expensed in the
Statement of Profit and Loss.
26. Revenue Recognition
Sale of Goods
Revenue is recognised upon transfer of control of promised goods to customers in an
amount that reflects the consideration which the Company expects to receive in exchange
for those goods.
Revenue from the sale of goods is recognised at the point in time when control is
transferred to the customer which is usually on dispatch / delivery of goods, based on
contracts with the customers.
Revenue is measured based on the transaction price, which is the consideration, adjusted
for volume discounts, price concessions, incentives, and returns, if any, as specified in the
contracts with the customers. Revenue excludes taxes collected from customers on behalf
of the government. Accruals for discounts/incentives and returns are estimated (using the
most likely method) based on accumulated experience and underlying schemes and
agreements with customers. Due to the short nature of credit period given to customers,
there is no financing component in the contract.
Revenue from the sale of goods excludes amounts collected on behalf of third parties,
such as Goods & Services Tax (GST).
Interest Income
Interest income is accrued on using on a time basis by the effective interest rate with
reference to the principal outstanding.
Dividend Income
Dividend income from investments is recognised when the shareholder’s right to receive
payment has been established.
Other Income
Other income is accounted for on accrual basis except where the receipt of income is uncertain
and, in such case, it is accounted for on receipt basis.
27. Employee benefits
The Company makes contributions to both defined benefit and defined contribution
schemes which are mainly administered through/by duly constituted and approved Trusts
and the Government.
Defined Contribution Scheme
In case of provident fund administered through Regional Provident Fund Commissioner,
the Company has no obligation, other than the contribution payable to the provident fund.
In case of members of constituted and approved trusts, the Company recognises
contribution payable to such trusts as an expense including any shortfall in interest
between the amount of interest realized by the investment and the interest payable to
members at the rate declared by the Government of India.
The Company’s contributions paid / payable during the year to provident fund
administered through Approved Trust, Regional Provident Fund Commissioner,
Superannuation Fund and Employees’ State Insurance Corporation are recognised in the
Statement of Profit and Loss as an expense when employees have rendered services
entitling them to contributions.
Defined Benefit Scheme
Gratuity: Cost of providing the Benefit is determined on an actuarial basis at the end of the
year and charged to Statement of Profit and Loss. The cost of providing these benefits is
determined by independent actuary using the projected unit credit method.
Re-measurements, comprising of actuarial gains and losses and the effect of the asset
ceiling, (excluding amounts included in net interest on the net defined benefit liability
and return on plan assets), are recognised immediately in the balance sheet with a
corresponding debit or credit to retained earnings through other comprehensive income in
the period in which they occur. It is included in retained earnings in the statement of
changes in equity and in the balance sheet.
Leave encashment: Accrued Leaves are encashed annually at the end of the calendar year
and not accumulated. Provision for the same is done on the basis of leaves accrued as at
the end of the reporting period.
28. Research and Development Expenditure
Expenditure on research of revenue nature is charged to Statement of Profit and Loss and
that of capital nature is capitalized as fixed assets.
29. Taxes on Income
Current tax is the amount of tax payable determined in accordance with the applicable tax
rates and provisions of the Income Tax Act, 1961 and other applicable tax laws.
Deferred tax is recognised on differences between the carrying amounts of assets and
liabilities in the Balance sheet and the corresponding tax bases used in the computation
of taxable profit and are accounted for using the liability method. Deferred tax
liabilities are generally recognised for all taxable temporary differences, and deferred
tax assets are generally recognized for all deductible temporary differences, carry forward
tax losses and allowances to the extent that it is probable that future taxable profits will
be available against which those deductible temporary differences, carry forward tax losses
and allowances can be utilised. Deferred tax assets and liabilities are measured at the
applicable tax rates. Deferred tax assets and deferred tax liabilities are off set, and
presented as net.
Current and deferred taxes relating to items directly recognised in reserves are recognised
in reserves and not in the Statement of Profit and Loss.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future
economic benefits in the form of adjustment to future income tax liability, is considered
as an asset if there is convincing evidence that the Company will pay normal income tax.
Accordingly, MAT is recognised as an deferred tax asset in the Balance Sheet when it is
probable that future economic benefit associated with it will flow to the Company.
30. Dividend Distribution
Dividends paid (including income tax thereon) is recognised in the period in which the
interim dividends are approved by the Board of Directors, or in respect of the final
dividend when approved by shareholders.
31. Cash Flow Statement
Cash flows statement is prepared as per the Indirect Method specified in Ind AS 7 on Cash
Flows. Cash and cash equivalents (including bank balances) shown in statement of cash
flows exclude item which are not available for general use on the date of balance sheet.
32. Earnings per share
Basic earnings per share is computed by dividing the profit / (loss) after tax (including the
post-tax effect of extraordinary items, if any) by the weighted average number of equity
shares outstanding during the year. Diluted earnings per share is computed by dividing
the profit / (loss) after tax (including the post-tax effect of extra-ordinary items (if any) as
adujusted for dividend, interest and other charges to expense or income (net of any
attributable taxes) relating to the dilutive potential equity shares, by the weighted
average number of equity shares considered for deriving basic earnings per share and the
weighted average number of equity shares which could have been issued on the
conversion of all dilutive potential equity shares.
Potential equity shares are deemed to be dilutive only if their conversion to equity shares
would decrease the net profit per share from continuing ordinary operations. Potential
dilutive equity shares are deemed to be converted as at the beginning of the period,
unless they have been issued at a later date.
The dilutive potential equity shares are adjusted for the proceeds receivable had the
shares been actually issued at fair value (i.e. average market value of the outstanding
shares). Dilutive potential equity shares are determined independently for each period
presented. The number of equity shares and potentially dilutive equity shares are adjusted
for share splits / reverse share splits and bonus shares, as appropriate.
Segment Reporting
Operating segments are reported in consistent manner with the internal reporting
provided to the Chief Operating Decision Maker (CODM) of the Company. The CODM is
responsible for allocating resources and assessing performance of the Company.
38. Disclosure pursuant to Ind AS 17 "Leases":
(a) Where the company is Lessor
i. Operating Lease: The Company has not entered into any such operating lease.
ii. Finance Lease: The Company has not entered into any finance lease.
(b) Where the company is Lessee
i. Finance Lease: The Company has not entered into any finance lease.
ii. Operating Lease: The Company has not entered into any non-cancellable operating leases.
39. Financial Instruments
(i) Capital Management
The Company's capital management is intended to create value for shareholders by facilitating the meeting of long-term
and short-term goals of the Company.
The Company determines the amount of capital required on the basis of annual operating plans and long term product
and other strategic investment plans. The funding requirements are met through equity and other long term/short term
borrowings. The Company's policy is aimed at combination of short term and long term borrowings.
The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall
debt portfolio of the Company.
The capital structure of the company consists of debt, which includes the borrowings including temporary overdrawn
balance, cash and cash equivalents including short term bank deposits, equity comprising issued capital, reserves and
non-controlling interests. The gearing ratio for the year is as under:
(ii) Categories of financial instruments
Calculation of fair values
The fair values of 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) The fair values of investment in quoted investment in equity shares is based on the current bid price of respective investment
as of the Balance Sheet date. However, there is no such investment as of the balance sheet date.
b) The fair value of bank 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).
c) Cash and Cash equivalents, trade receivables, other financial assets, trade payables, and other financial liabilities have fair
values that approximate to their carrying amounts due to their short-term nature.
Fair value measurements recognized in the balance sheet:
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value,
grouped into Levels 1 to 3 based on the degree to which the fair value is observable.
- Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or
liabilities.
- Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
- Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that
are not based on observable market data (unobservable inputs).
(iii) Financial risk management objectives:
The Company's principal financial liabilities comprise loans from banks, financial institutions, and trade payables. The main
purpose of these financial liabilities is to raise finance for the Company's operations. The Company has various financial assets
such as trade receivables, cash and short-term deposits, which arise directly from its operations.
The main risk arising from the Company's financial instruments are foreign currency risk, credit risk, market risk, interest rate risk
and liquidity risk. The Board of Directors reviews and policies for managing each of these risks.
(a) 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 trade and other receivables, cash and cash equivalents and
other bank balances. The maximum exposure to credit risk in the case of all the financial instruments covered below is
restricted to their respective carrying amount.
Trade and other receivables
Customer credit is managed by each business unit subject to the Company's established policies, procedures and controls
relating to customer credit risk management. Trade receivables are non-interest bearing and are generally on 90 90-day credit
term. Credit limits are established for all customers based on internal rating criteria. Outstanding customer receivables are
regularly monitored.
The Company measures the expected credit loss of trade receivables based on historical trends, industry practices and the
business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends.
Expected credit loss assessment for customers:
The company is making provisions on trade receivables based on Expected credit loss (ECL) model. The reconciliation of ECL is as follows:
Other Financial assets
The Company maintains exposure in cash and cash equivalents and term deposits with banks.
The Company held cash and cash equivalents of Rs. 23.85 Lacs on March 31, 2024 (March 31, 2023: Rs. 20.83 Lacs). Cash and cash
equivalents are held with reputable and credit-worthy banks.
Individual risk limits are set for each counter-party based on the financial position, credit rating and past experience. Credit limits
and concentration or exposures are actively monitored by the management of the Company.
Other than trade and other receivables, the Company has no other financial assets that are past due but not impaired.
(b) Market risk:
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
prices. Market risk comprises three types of risk: currency risk, interest rate risk and price risk.
(I) Foreign Currency Risk
The Company is exposed to currency risk on account of its operating and financing activities. The functional currency of the
Company is Indian Rupee. The company's exposure is mainly denominated in USD on account of imports. The exchange rates
have changed substantially in recent periods and may continue to fluctuate substantially in the future. The Company has put in
place a Financial Risk Management Policy to identify the most effective and efficient ways of managing currency risks. The
Company uses derivative instruments (mainly foreign exchange forward contracts) to mitigate the risk of changes in foreign
currency exchange rates.
The Company does not use derivative financial instruments for trading or speculative purposes.
(II) 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 also uses a mix of interest
rate-sensitive financial instruments to manage the liquidity and fund requirements for its day-to-day operations like short-term
loans.
Interest rate sensitivity analysis
As at March 31, 2023, interest-bearing financial liability (secured loan from banks) stood at Rs. 1296.67 Lacs, and was subject to
variable interest rates. An increase/decrease of 50 basis points in interest rates at the balance sheet date would result in a
decrease/increase in profit before tax of Rs. 6.48 lacs.
The risk estimates provided assume a parallel shift of 50 basis points in interest rate. This calculation also assumes that the
change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as of that date. The
period-end balances are not necessarily representative of the average debt outstanding during the period.
This analysis assumes that all other variables, in particular foreign currency rates, remain constant.
The fair value of financial instruments:
All financial assets are initially recognized at the fair value of consideration paid. Subsequently, financial assets are carried at
fair value or amortized cost less impairment. Where non-derivative financial assets are carried at fair value, gains and losses on
re-measurement are recognized directly in equity unless the financial assets have been designated as being held at fair value
through profit or loss, in which case the gains and losses are recognized directly in the statement of profit and loss. Financial
assets are designated as being held at the fair value through profit or loss when it is necessary to reduce measurement
inconsistency for related assets and liabilities. All financial liabilities other than derivatives are initially recognized at fair value
of consideration received net of transaction costs as appropriate (initial cost) and subsequently carried at amortized cost.
(III) Liquidity risk
The Company follows a Conservative policy of ensuring sufficient liquidity at all times through a strategy of profitable growth,
efficient liquidity at all times through a strategy of profitable growth, efficient working capital management as well as prudent
capital expenditure. The Company has an overdraft facility with banks to support any temporary funding requirements.
The Company believes that current cash and cash equivalents, tied-up borrowing lines and cash flow that is generated from
operations is sufficient to meet requirements. Accordingly, liquidity risk is perceived to be low.
Liquidity table:
Liquidity tables are drawn up based on the cash flows of financial liabilities based on the earliest date on which the Company
can be required to pay is disclosed in Note no. 47.
(IV) Other price risk
The Company is not exposed to any significant equity price risk arising from equity investments, as on 31st March 2024. Equity
investments are held for strategic rather than trading purposes. The Company does not actively trade these investments.
(V) Equity price sensitivity analysis
There is no exposure to equity price risks as at the reporting date or as at the previous reporting date.
40. There is no amount due and outstanding to be credited to the Investor Education & Protection Fund as at March 31, 2024.
49. Additional Regulatory Information
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 of 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) Title deeds of Immovable Property not held in the name of the Company
All immovable properties are held in the name of the company.
(b) Fair Value of Investment Property
The Company does not have any investment property.
(c) Revaluation of Property, Plant & Equipment and Intangible Assets
The Company has not revalued any of its Property, Plant & Equipment, and Intangible Assets, during the year.
(d) Details of Benami Property held
The Company does not have any Benami Property, where any proceeding has been initiated or pending against the Company for
holding any benami property under the Benami T ransactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.
(f) Wilful Defaulter
The Company has not been declared as a wilful defaulter by any lender who has the power to declare a company as a wilful
defaulter at any time during the financial year or after the end of the reporting period but before the date when the financial
statements are approved.
(g) Relationship with struck-off Companies
The Company has no transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of
Companies Act, 1956.
(h) Registration of charges or satisfaction thereof with Registrar of Companies
There are no charges or satisfaction thereof yet to be registered with the Registrar of Companies beyond the statutory period as
on the date of the Balance Sheet.
(i) Compliance with a number of layers of companies
There is no non-compliance of provisions regarding the number of layers prescribed under clause (87) of section 2 of the Act read
with Companies (Restriction on Number of Layers) Rules, 2017.
(j) The Company has not advanced or loaned or invested funds to any other person(s) or entity (is), including foreign entities (inter¬
mediaries), 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.
(k) 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 to or on behalf of the Ultimate Beneficiaries.
(l) Undisclosed Income
The Company does not have any transactions which is not recorded in the books of accounts but have 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.)
(m) Details of Crypto Currency or Virtual Currency
The Company has not traded or invested in Cryptocurrency or virtual currency during the year.
(n) Compliance with approved Scheme(s) of Arrangements
During the year, no scheme of Arrangements has been approved by the Competent Authority in terms of sections 230 to 237 of
the Companies Act, 2013.
01 Increase in long-term borrowing has resulted into increase in ratio
02 Increase in long-term borrowing has resulted into decrease in ratio
03 Decrease in profit has resulted into a decrease in ratio
04 Decrease in sales has resulted into a decrease in ratio
05 Increase in purchases has resulted into increase in ratio
51. The previous year's figures have been regrouped/rearranged wherever required to make them comparable with those of the current
year. Figures have been rounded off to the nearest rupee in lacs.
As per our attached report of even date For and on behalf of the Board
For Kapoor Tandon & Co.
Chartered Accountants Sd/- Sd/
Firm Regd No. 000952C Ashok Kumar Matanhelia Somil Matanhelia
Managing Director Whole Time Director
Sd/- (DIN: 01763776) (DIN: 01738413)
Divyank Nigam
Partner Sd/- Sd/-
M. No. 438443 Shashi Srivastava Kunika Meghani
Chief Financial Officer Company Secretary &
Place: Kanpur Compliance Officer
Date: May 30, 2024
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