2.8 Provisions and contingent liabilities
2.8.1 Provisions
A provision is recorded when the Company has a present 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 reasonably estimated.
Provision for warranty claims is recognised at the time of sale based on the historical experience. Initial estimate of warranty expense is reviewed annually
2.8.2 Contingent Liabilities
Contingent liabilities are disclosed when there is a possible obligation arising from past events, 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 where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is termed as a contingent liability. Show cause notices are not considered as Contingent Liabilities unless converted into demand.
2.9 Leases
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating lease. Payments made under operating leases are charged to profit or loss in the year in which the rent is actually incurred as the payments made to the lessor are structured to increase in line with expected general inflation to compensate for the lessor's expected inflationary cost increase.
2.10 Cash and Cash equivalents
Cash and cash equivalents include cash on hand and 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.
2.11 Financial assets
2.11.1 Classification
The Company classifies its financial assets in the following measurement categories:
(i) Those measured subsequently at fair value through other comprehensive income (in case of investments in equity instruments) through profit or loss.
(ii) Those measured at amortised cost
The classification is based on the Company's business model for managing the financial assets and the contractual terms of the cash flow for assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income.
2.11.2 Measurement
Initial Measurement
The Company measures a financial asset at its fair value plus cost that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
2.11.3 Subsequent measurement
Investments - Fair value through OCI
Equity investments which are not held for trading, are measured at Fair Value Through Other Comprehensive Income
(FVTOCI). Fair value gains or losses are routed to OCI. A gain or loss on sale of equity investment that is subsequently measured at fair value through OCI is reclassified to Profit and loss account.
2.11.4 Other financial assets
After Initial Measurement, financial assets are subsequently measured at amortised cost using the effective interest rate method (EIR). Amortised cost is calculated by taking into account any discount or premium and fees or cost that are an integral part of EIR. The EIR amortization is included in finance income in the statement of profit and loss. The losses arising from impairment are recognised in the Statement of Profit and Loss.
2.11.5 Impairment of financial assets
The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost and FVTOCI debt instruments. The impairment methodology applied depends on whether there has been significant increase in credit risk.
For trade receivables, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected credit losses to be recognised from initial recognition of the receivables.
The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each Balance Sheet date, right from its initial recognition
2.11.6 De-recognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily de-recognised (i.e. removed from the Company’s balance sheet) when the rights to receive cash flows from the asset have expired.
2.12 Financial Liabilities
2.12.1 Classification
The Company classifies all financial liabilities as subsequently measured at amortised cost, except for financial liabilities at fair value through profit or loss. Such liabilities shall be subsequently measured at fair value
2.12.2 Initial recognition and measurement
The Company’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
2.12.3 Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the Statement of Profit and Loss when the liabilities are derecognised.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit and Loss. This category generally applies to interest-bearing loans and borrowings.
2.12.4 De-recognition
A financial liability is de-recognised 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 de-recognition 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 and Loss.
2.12.5 Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
2.13 Dividend to Shareholders
Final dividend distributed to equity shareholders is recognized in the period in which it is approved by the members of the Company in the Annual General Meeting. Interim dividend is recognized when approved by the Board of Directors at the Board Meeting. Dividend distributed is recognized in the Statement of Changes in Equity.
2.14 Earnings per Share
Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.
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.
2.15 Segment Information
The Chief Executive (CEO) of the Company has been identified as the Chief Operating Decision Maker (CODM) as defined by Ind AS-108, “Operating Segments.” The Management considers " Money Changing" as single reportable segment.
2.16 Cash flow statement
Cash flow statement is prepared in accordance with the indirect method prescribed in Ind AS 7 ‘Statement of Cash Flows’.
Cash flows are reported using the indirect method, whereby profit/ (loss) before tax is adjusted for the effects of transactions of no cash nature and any deferrals or accruals of past or future cash receipts or payments. Cash flow for the year is classified by operating, investing and financing activities.
2.17 Critical Estimates and Judgements
The preparation of financial statements in conformity with the generally accepted accounting principles requires management to make certain estimates and assumptions that affect the reported amount of assets and liabilities as of the balance sheet date and reported revenue and expenses for the year and disclosure of contingent liabilities as of the date of balance sheet. The estimates and assumptions used in the accompanying financial statements are based upon the management's evaluation of the relevant circumstances as of the date of financial statements. Actual amounts could differ from these estimates.
This note provides an overview of the areas that involve a higher degree of judgment or complexity, and of items which may be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed in about each of these estimates and judgments is included in the relevant notes together with information about the basis of calculation of each affected line item in the financial statements.
The areas involving critical estimates or judgments are:
i. Estimation of current tax expense and payable - Note 4
ii. Estimation of defined benefit obligation - Note 6
iii. Estimation of useful life of Property, Plant and Equipment and Intangibles -Note 2.3 of financial statements.
5. Financial risk management
The Company's activities expose to limited financial risks: market risk, credit risk and liquidity risk. The Company's primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.
Market risk
Market risk is the risk of loss of future earnings or fair values or future cash flows that may result from a change in the price of a financial instrument.
The Company is exposed to market risk primarily related to foreign exchange rate risk (currency risk), Interest rate risk and the market value of its investments.
Securities Prices Risk
The Company’s exposure to equity securities price risk arises from Investments held and classified in the Balance Sheet either Fair Value through P&L or fair value through OCI.
Credit Risk
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. It principally arises from the Company’s Trade Receivables, Retention Receivables, Advances and deposit(s) made. The company is predominantly into cash and carry business and does an internal evaluation before credit is given to any party and as such the impact of credit risk is minimal.
Liquidity Risk
Company’s liquidity needs are monitored on the basis of monthly and yearly projections. The company’s principal sources of liquidity are cash and cash equivalents, cash generated from operations.
The company liquidity needs by continuously monitoring cash inflows and by maintaining adequate cash and cash equivalents. Net cash requirements are compared to available cash in order to determine any shortfalls.
Short term liquidity requirements consist mainly of sundry creditors, expense payable, employee dues, repayment of loans and retention & deposits arising during the normal course of business as of each reporting date. Company maintain a sufficient balance in cash and cash equivalents to meet short-term liquidity requirements.
Company accesses the long term liquidity requirements on a periodical basis and manage them through internal accruals, Unsecured Loans from holding company, Retentions & deposits. Company do not have any outside borrowings.
Foreign currency exchange rate risk
The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other comprehensive income 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 respective entities.
The Company primary function is forex trading, as holds stock of foreign currency to sell it to customers and as such impact of foreign exchange rate fluctuations are insignificant for the company.
Capital management
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure.
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets or by adequate funding by the shareholders to absorb the losses of the Company.
The Company's capital comprises equity share capital, retained earnings and other equity attributable to equity holders. The primary objective of Company's capital management is to maximize shareholders value. The Company manages its capital and makes adjustment to it in light of the changes in economic and market conditions. The company is free of external debt.
6. Disclosure in respect of Indian Accounting Standard (Ind AS)-19 “Employee Benefits”
6.1. General description of various defined employee’s benefits schemes are as under:
a) Provident Fund:
The company’s Provident Fund is managed by Regional Provident Fund Commissioner. The company pays fixed contribution to provident fund at pre-determined rate.
b) Gratuity:
Gratuity is a defined benefit plan, provided in respect of past services based on the actuarial valuation carried out by LIC of India and corresponding contribution to the fund is expensed in the year of such contribution.
The scheme is funded by the company and the liability is recognized on the basis of contribution payable to the insurer, i.e., the Life Insurance Corporation of India, however, the disclosure of information as required under Ind AS-19 have been made in accordance with the actuarial valuation.
2. Disclosure on Revaluation of Assets:
The Company has not revalued its Property, Plant and Equipment (including Right of Use assets) or intangible assets or both.
3. Disclosure on Loans/Advance to Director/KMP/Related parties
The Company has not made Loans or Advances to promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013,) either severally or jointly with any other person.
4. Capital Work-in-Progress (CWIP) :
Since the company is a service company Disclosure of Capital Work-in-Progress is not applicable.
5. Details of Benami Property held:
No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45) and Rules made thereunder.
6. Working Capital/Borrowings:
The Company has not borrowed any loan for working capital.
7 Wilful Defaulter & End use of Funds:
The company has not been declared a wilful defaulter by any bank or financial institution or other lender.
8. Relationship with struck off companies:
The Company does not have any transactions with companies struck off under section 248 of the Companies Act 2013 or section 560 of the Companies Act 1956 which warrants disclosure.
9. Registration of charges:
The company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
10. Compliance with Number of layers of companies:
Since the company has not violated the numbers of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of layers) Rules 2017 the disclosure requirement are not warranted.
11. Compliance with approved scheme(s) of arrangements:
The Company has not entered into any Scheme(s) of Arrangements, hence disclosure requirement are not warranted.
12. Undisclosed income:
There is no income surrendered or disclosed as income during the current or Previous financial years in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the Books of accounts.
13. Corporate Social Responsibility:
The provision of section 135 are not applicable to the Company.
14. Details of Crypto currency or Virtual Currency:
The Company has not traded or invested in crypto currency or virtual currency during the current or previous years.
15. Valuation of PP&E, intangible asset and investment property:
The company has not revalued its property (including right-of-use-assets) or intangible assets or both during the Current or previous financial years.
As per our report of even date attached For and On behalf of the Board
forM/S. P.S.SUBRAMANIA IYER & CO INDIA CEMENTS CAPITAL LIMITED
Chartered Accountants FirmRegnNo. 004104S
SWAMINATHAN VENKATRANIAN President, CEO & CFO Chairman
Partner DIN 00179715
Membership No. 022276
UDIN: 24022276BKAIKY2414
. Company Secretary Director
Place: Chennai D|N 00921760
Date: 20/05/2024
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