Disclosure regarding Cash Credit Limit with Axis Bank Limited
Axis Bank Ltd. CC A/c. 914030041250678. is primarily secured by hypothecation of current assets both present and future of the company.
Further mortgage of industrial property situated at plot no. 2234, GIDC lodhika Industrie1 Estate, Kalawad road. Village : Metoda Taluka: Lodhia. Rajkot
The facility is futher guaranteed by the personal gurantee of Mr. Rupeshbhai Mehta Repayment Terms: Repayable on Demand.
(d) Terms/Riqhts ottached to Equity
The company has only one class of equity shares having a per share value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
Sensitivity Analysis
The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
The sensitivity analysis presented above may not be representative of the actual change in the projected benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Liabilities are very less sensitive due to change in mortality assumptions. Hence.sensitivities due to change in mortality are ignored.
Furthermore, in presenting the above sensitivity analysis, the present value of the projected benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the projected benefit obligation as recognised in the balance sheet. There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
B. Provident Fund
Retirement benefit in the form of provident fund is a defined contribution scheme. The company has no obligation, other than the contribution payable to the provident fund. The company recognizes contribution payable to the provident fund scheme as an expenditure, when an employee renders the related service. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre payment will lead to. for example, a reduction in future payment or a cash refund.
35 DISCLOSURE OF TRANSACTION WITH RELATED PARTIES AS REQUIRED BY THE INDIAN ACCOUNTING STANDARD-24 (Cont.)
AJI Related Party Transactions entered during the year were in ordinary course of the business and on arm's length basis and amount showing inclusive of tax. Outstanding balances at the year-end are unsecured and settlement occurs in cash.
There have been no guarantees provided or received for any related party receivables or payobles. For the year ended 31st March. 2024. the Group has nol recorded any impairment of receivables relating lo amounts owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
36 FINANCIAL RISK MANAGEMENT_
A Financial Risk Factors
The Company's principal financial liabilities comprise borrowings, leases, trade and other payables. The main purpose of these financial liabilities is to manage finances for the Company’s operations. The Company has trade and other receivables, cash and short-term deposits that arise directly from its operations. The Company’s activities expose it to a variety of financial risks detailed below:-
a 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 prices comprise three types of risk: currency rate risk, interest rate risk and other price risks, such as commodity risk. Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Interest rate risk is the risk that the fair value orfuture cash flows of a financial instrument will fluctuate because of changes in market interest rates. This is based on the financial assets and financial liabilities held as at March 31.2024 and March 31.2023.
The sensitivity analysis excludes the impact of movements in market variables on the carrying value of postemployment benefit obligations provisions and on the non-financial assets and liabilities. The sensitivity of the relevant Statement of Profit and Loss item is the effect otthe assumed changes in the respective market risks. The Company’s activities expose it to a variety ot financial risks, including the effects of changes in foreign currency exchange rates and interest rates.
Foreign Exchange Risk and Sensitivity
The Company transacts business primarily in USD and Euro. The Company has foreign currency trade payables and receivables and is therefore, exposed to foreign exchange risk.
b Commodity Price Risk and Sensitivity
The Company is exposed to the movement in price of key raw materials in domestic and international markets. The Company has in place policies to manage exposure to fluctuations in the prices of the key raw materials used in operations.
c Credit Risk
Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss.
Credit Risk
Credit risk arises from cash and cash equivalents, credit exposures from customers including outstanding receivables and other financial instruments.
Ife.receiy a bjesandcontract assets
The Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings for extension of credit to customers. The Company monitors the payment track record of the customers. 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 industries and operate in largely independent markets. The Company has obtained advances and security deposits from its customers & distributors, which mitigate the credit risk to an extent.
Provision for Expected Credit Loss
The Company extends credit to customers as per the internal credit policy. Any deviation are approved by appropriate officials, after due consideration of the customers credentials and financial capacity, trade practices and prevailing business and economic conditions. The Company's historical experience of collecting receivables and the level of default indicate that credit risk is low and generally uniform across markets; consequently, trade receivables are considered to be a single class of financial assets. All overdue customer balances are evaluated taking into account the age of the dues, specific credit circumstances, the track record of the customers etc. Loss allowances and impairment is recognised as per the Company policy.
The Company assigns the following internal credit ratings to each class of financial assets based on the assumptions, inputs and factors specific to the class ofthe financial assets. The Company provides for expected creditloss based on the following:_
Others
A11 of the entity's debt investments (securities, loan to related parties and others and security deposits) at amortised cost are considered to have low credit risk, when they have a low risk of default and the issuer/holder has a strong capacity to meet its contractual cash flow obligations in the near term. For cash and cash equivalents, the Company considers factors such as track record, size of the institution, market reputation and service standards to select the banks with which balances and deposits are maintained. The Company does not maintain significant cash balances other than those required for its day to day operations. The company invests in liquid schemes of mutual fund which have a very short maturity. These schemes are readily convertible and have insignificant changes in value and are held as means for settling liabilities or for working capital limits from banks. The loss allowance recognised during the period was therefore limited upto 12 months expected losses.
d Liquidity Risk
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company’s financial performance. The Company does not acquire or issue derivative financial instruments for trading or speculative purposes. Risk management is carried out under policies approved by the board of directors. It identifies, evaluates and hedges financial risks in close co-operation with the Company's operating units. The board provides principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk and liquidity risk.
Liquidity Risk
The Company's objective is to maintain optimum levels of liquidity to meet its cash requirements at all times. The current committed lines of credit are sufficient to meet its short lo medium term expansion needs. The Company monitors rolling forecasts of its liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of ifs borrowing facilities.
The table below provides undiscounted cash flows towards non-derivative financial liabilities and net-settled derivative financial liabilities into relevant maturity based on the remaining period at the balance sheet to the contractual maturity date.
e Competition Risk
The Company faces competition from local and foreign competitors. Nevertheless, it believes that it has competitive advantage in terms of high quality products and by continuously upgrading its expertise and range of products to meet the needs of its customers.
f Capital Risk Management
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The primary objective of the Company's capital management is to maximize the shareholder value. The Company's primary objective when managing capital is to ensure that it maintains an efficient capital structure and healthy capital ratio and safeguard the Company's ability to continue as a going concern in order to support its business and provide maximum returns tor shareholders. The Company also proposes to maintain an optimal capital structure to reduce the cost of capital. No changes were made in the objectives, policies or processes during the year ended March 31, 2024 and year ended March 31, 2023. The Company monitors capital using gearing ratio, which is net debt divided by sum ot capital and net debt.
For the purpose of the Company's capital management, capital includes equity share capital and other equity as per the balance sheet. Net debt includes, lease liabilities and borrowings less cash and cash equivalents.
B Fair Value Heirarchy
The table below analysis financial instruments at fair value, by valuation method. The different levels have been identified as follows:
Level I: - Quoted prices in active markets for identified assets or liabilities.
Level 2: - Inputs other than quoted prices included with level 1 that are observable for the assets or liability, other directly (i.e.as prices) or indirectly (i.e. derived from prices).
Level 3: - Inputs for the assets or inabilities that are not based on observable market data (underrated inputs).
Fair Value Measurement of Financial Liabilities
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
37 Others (Cont.)
(iv) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company ("Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(vj There were no material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year to which this financial statement relates on the date of this Integrated Annual Report.
38 Goods and Service Tax
Expenses and assets are recognised net of the amount of sales/ value added taxes/ goods and services tax paid, except:
• When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case, the tax paid is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable; and
• When receivables and payables are stated with the amount of tax included. The net amount of tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.
39 Benaml Transactions
There is no proceedings initiated or pending against the company for holding any Benami Property under the Benami Transactions (Prohibitions) Act, 1988 (45 of 1988) and Rules made there under during the year.
40 Undisclosed Income
There is no tax assessment under The Income Tax Act, 1961 for non-disclosure or surrender of undisclosed income during the year.
41 Crypto Currency
The company has not traded nor invested in the Virtual Currency - Crypto Currency during the year.
42 Events after the balance sheet date
Events after the Bolonce Sheet Date - The Board of directors have recommended dividend for the financial year 2023-24. which is subject to the approval of the shareholders in the ensuing annual general meeting. These financial statements were approved and adopted by the board of directors of the Company in their meeting and are subject to shareholder approval at the forthcoming Annual General Meeting of shareholders.
43 Audit Trail
As per the proviso to rule 3(1} of the Companies (Accounts) Rules. 2014 for maintaining books of account using accounting software which has a feature of recording audit trail ( Edit Log) facility is complied by the company.
44 Regrouping
There has been change in the internal grouping of few balance sheet items which has caused changes in the values of those balance sheet items as shown on the face of balance sheet of the statutory report as compared with the result published. However the regrouping as done is not material.
1
In line with Circular No 04/2015 issued by Ministry of Corporate Affairs dated 10th March, 2015. loans given to employees as per the Company's policy ore not considered for the purposes of disclosure under Section 186(4) of the
Companies Act. 2013.
There ore no loans or advances in the nature of loans granted to Promoters, Directors. KMPs and their related parties
(as defined under Companies Act, 2013). either severally or jointly with any other person, that are:
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