L Provisions, Contingent Liabilities and Contingent Assets
A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an
outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions
(excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate
required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted
to reflect the current best estimates.
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the
occurrence or non occurrence of one or more uncertain future events beyond the control of the Company or a present
obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the
obligation. A contingent liability is not recognized but its existence is disclosed in the financial statements. Contingent
assets are not recognised and disclosed only when an inflow of economic benefits is probable in the financial statements.
M Taxation
Tax expense comprise of current and deferred tax. Current income tax comprises taxes on income from operations in India
and in foreign jurisdictions. Income tax payable in India is determined in accordance with the provisions of the Income Tax
Act, 1961. Tax expense relating to foreign operations is determined in accordance with tax laws applicable in jurisdictions
where such operations are domiciled. Deferred tax is recognised on temporary differences between the carrying amounts
of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable
profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are
generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be
available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are
not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of
assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. The carrying amount of
deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and
liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance
sheet date.
Current and deferred tax are recognised in Statement of Profit and Loss, except when they relate to items that are
recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also
recognised in other comprehensive income or directly in equity respectively.Advance taxes and provisions for current
income taxes are presented in the balance sheet after offsetting advance taxes paid and income tax provisions arising in
the same tax jurisdiction and the Company intends to settle the asset and liability on a net basis. The Company offsets
deferred tax assets and deferred tax liabilities if it has a legally enforceable right and these relate to taxes on income levied
by the same governing taxation laws.
N Borrowing Costs:
Borrowings are recognized initially at fair value net of transaction costs incurred. Borrowings are subsequently stated at
amortized cost any difference between proceeds (net of transaction costs) and the redemption value is recognized in the
statement of profit and loss over the period of the borrowings using the effective interest method.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the
liability for at least 12 months after the balance sheet date.
Borrowing costs are recognised as an expense in the period in which they are incurred except the borrowing cost
attributable to the acquisition / construction of a qualifying asset which are capitalised as part of the cost of such asset, up
to the date, the asset are ready for their intended use.
O Segment Reporting
The Company identifies segments as operating segments whose operating results are regularly reviewed by the Chief
Operating Decision Maker [CODM] to make decisions about resources to be allocated to the segment and assess its
performance and for which discrete financial information is available. The CODM is responsible for allocating resources
and assessing performance of the operating segments of the Company. The accounting policies adopted for segment
reporting are in line with the accounting policies of the Company.
P Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders
(after deducting attributable taxes, if any) by the weighted average number of equity shares outstanding during the period.
Partly paid equity shares are treated as fraction of an equity share to the extent that they are entitled to participate in
dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares
outstanding during the period is adjusted for events such as bonus issue, bonus element in right issue, share split and
reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a
corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss for the
period attributable to equity shareholders and the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
Q Government Grants
Government grants are recognized where there is reasonable assurance that the grant will be received and all the
attached conditions will be complied with. When the grant relates to an expense item, it is recognized as income or netted
off against related expense on a systematic basis over the periods that the related costs, for which it is intended to
compensate, are expensed. Grant relates to an asset is deducted from the carrying amount of the assets.
R Events after reporting date
Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end of the reporting
period, the impact of such events is adjusted within the financial statements. Otherwise, events after the Balance Sheet
date of material size or nature are only disclosed.
S Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit / (loss) before tax is adjusted for the effects of transactions
of noncash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating,
investing and financing activities of the Company are segregated based on the available information.
T Current versus Non-Current Classification
The Company presents assets and liabilities in the balance sheet based on current/non-current classification. An asset is
treated as current when it is:
(a) expected to be realised in, or is intended to be sold or consumed in Company's normal operating cycle;
(b) held primarily for the purpose of being traded;
(c) expected to be realised within 12 months after the reporting date; or
(d) cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after
the reporting date.
All other assets are classified as non-current.
A Liability is current when:
(a) it is expected to be settled in Company's normal operating cycle;
(b) it is held primarily for the purpose of being traded;
(c) it is due to be settled within 12 months after the reporting date; or
(d) The Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the
reporting date. All other liabilities are classified as non-current.
U Operating Cycle
All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and
other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of product and the time between
acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its
operating cycle as 12 months for the purpose of current/non-current classification of assets and liabilities.
V General
Any other accounting policy not specifically referred to are in consistent with the generally accepted accounting principles.
19.2 The Company has used the borrowings from banks and financial institutions for the specific purpose for which it was
taken at the balance sheet date.
19.3 In respect of borrowings on the basis of security of current assets from banks and financial institutions, quarterly returns
/ statements of current assets filed by the Company with banks and financial institutions were in agreement with the books
of accounts.
19.4 There were no charges or satisfaction yet to be registered with ROC beyond the statutory period.
19.5 The Company is not declared as wilful defaulter by any bank or financial Institution or other lender.
19.6 The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign
entities (“Intermediaries”) 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.Further, Company has not
received any fund from any person(s) or entity(ies), including foreign entities (“Funding Party”) with the understanding
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 on behalf of the Ultimate Beneficiaries.
B Measurement of Fair Values
i Financial Instrument measured at Amortised Cost
The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial
statements are reasonable approximation of their fair values since the Company does not anticipate that the
carrying amounts would be significantly different from the values that would eventually be received or settled.
ii Levels 1,2 and 3 : Valuation Techniques and Key Inputs
Level 1 : It includes Investment that has a quoted price and which are actively traded. It is being valued using
the closing price as at the reporting period on the active market. Fair value of Investment in ULIP is considered
as Level 1 fair value.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using
valuation techniques which maximise the use of observable market data and rely as little as possible on entity-
specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is
included in level 2. Fair value of foreign exchange forward contracts outstanding on reporting date is considered
as Level 2 fair value.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is
included in Level 3.
iii There have been no transfers between Level 1,2 and 3 during the years.
36 Derivative financial instruments and hedging activity
The Company's revenue is denominated in various currencies. Given the nature of the business, a large portion of cost
is denominated in Indian Rupee. This exposes the group to currency fluctuation.
The Group has entered into derivative instruments by way of foreign exchange forward. Such derivatives are recorded at
fair value through profit and loss. As at March 31,2024, the notional amount of outstanding contracts aggregated to Rs.
Nil (Rs. Nil as at March 31,2023) and corresponding derivative asset / (liability) is Rs. Nil (Rs. Nil as at March 31,2023).
Fair value loss / (gain) of Rs. Nil and (Rs. 1.49 Lakhs/-) on foreign exchange forward have been recognised in the
statement of profit and loss for the years ended March 31,2024 and 2023, respectively. If exchange rates had been 5%
higher/lower, Profit before tax for the year ended March 31,2024 would increase/decrease by Rs. Nil (for the year ended
March 31,2023 by Rs. 0.07 Lakhs) as a result of the change in fair value of derivative financial instruments.
37 Financial Risk Management
The Company's financial liabilities comprise mainly of borrowings, trade and other payables and financial assets comprise
mainly of cash and cash equivalents, trade and other receivables.
The Company is exposed to Market risk, Credit risk and Liquidity risk. The Board of the Company monitors the risk as per
risk management policy. Further, they also have oversight in the area of financial risks and controls.The following
disclosures summarize the Company's exposure to financial risks. Quantitative sensitivity analysis have been provided
to reflect the impact of reasonably possible changes in market rates on the financial results, cash flows and financial
position of the Company.
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 three types of risks: interest rate risk, currency risk and other price
risk. Financial instruments affected by interest rate risk includes borrowings, by currency risk includes trade payables
and trade receivables and by price risk includes investments.
Within the various methodologies to analyze and manage risk, Company has implemented a system based on
“sensitivity analysis” on symmetric basis. This tool enables the risk managers to identify the risk position of the
entities. Sensitivity analysis provides an approximate quantification of the exposure in the event that certain specified
parameters were to be met under a specific set of assumptions. The risk estimates provided here assume:
- 1% increase / decrease in interest rates
- 5% increase / decrease in exchange rates
- 5% increase / decrease in investment price
The potential economic impact, due to these assumptions, is based on the occurrence of adverse / inverse market
conditions and reflects estimated changes resulting from the sensitivity analysis. Actual results that are included in
the Statement of profit and loss may differ materially from these estimates due to actual developments in the global
financial markets.
The following assumption has been made in calculating the sensitivity analysis:
The sensitivity of the relevant statement of profit or loss item is the effect of the assumed changes in respective
market risks. This is based on the financial assets and financial liabilities held at March 31, 2024, and March 31,
2023.
i Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market interest rates. The Company seeks to mitigate such risk by regularly reviewing its interest
rate on borrowings. Summary of borrowings which are exposed to such risk has been provided below:
change in interest rates. The risk estimates provided assume a parallel shift of 100 basis points interest rate
across all yield curves. 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.
ii Currency Risk
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 transacts business in foreign currencies (primarily USD). Consequently,
the Company has foreign currency trade payables and receivables and is therefore exposed to foreign exchange
risk. The Company manages its foreign currency risk by following policies approved by board as per established
risk management policy. The carrying amounts of the Company's foreign currency denominated monetary
items are as follows:
iii Price Risk
The Entity is exposed to price risks arising from its investments in ULIP which are held for strategic purposes.
The sensitivity analysis have been determined based on the exposure to price risks for Investments in ULIP at
the end of the reporting period. If prices had been 5% higher/lower, Profit before tax for the year ended March
31,2024 would increase/decrease by Rs.Nil (for the year ended March 31,2023 by Rs. 0.44 Lakhs) as a result
of the change in fair value of investments.
B Credit Risk
Credit risk is the risk that a 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 primarily trade receivables and other
financial assets. Credit risk arising from trade receivables is managed in accordance with the Company's established
policy, procedures and control relating to customer credit risk management. Management specifically analyses
accounts receivables and analyses historical bad debt, customer concentrations, customer creditworthiness, current
economic trends and changes in customer payment terms when evaluating the adequacy of the impairment on
doubtful receivables. Credit risk arising from these financial assets are limited and do not require for providing
impairment. The Company does not have significant concentration of credit risk related to trade receivables except
the details given below for the customers contribute to more than 5% of total outstanding accounts receivable as at
any reporting period end:
C Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated
with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from
an inability to sell a financial asset quickly at close to its fair value. The Company's objective is to, at all times
maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its
liquidity position and deploys a robust cash management system. It maintains adequate sources of financing at an
optimised cost.
The table below analysis financial liabilities of the Company into relevant maturity groupings based on the remaining
period from the reporting date to the contractual maturity date. The amounts disclosed under the ageing buckets are
the contractual undiscounted cash flows and includes contractual interest payments.
38 Capital Management
The entity manages its capital to ensure that entity will be able to continue as going concern while maximising the return
to stakeholders through the optimisation of total equity balance. The capital structure of the Company consists of both
own equity as well as borrowings. Gearing Ratio of the Company as at March 31, 2024 and March 31, 2023 is as
calculated as under. The Company is not subject to any externally imposed capital requirement.
Note 39
Disclosures pursuant to Employee Benefits
Defined Benefit Plans
(a) Gratuity
Every employee of the Company is entitled to the benefits in form of Gratuity for each completed year of service. The same
is payable on retirement or termination whichever is earlier. The benefit vests only after five years of continuous service.
The liability in respect of gratuity benefits being defined benefit schemes, payable in future, are determined by actuarial
valuation as on balance sheet date.
This information, as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006,
has been determined to the extent such parties have been identified on the basis of information available with the
Company. The auditor has relied on the same.
46 The Company has not granted any Loans or Advances in the nature of loans to Promoters, directors, KMP's and related
parties that are repayable on demand or given without specifying terms or period of repayment.
47 The Company does not hold any Benami Property under the Benami Transactions (Prohibition) Act, 1988.
48 The Company has not entered into any transactions with companies struck off under section 248 of the Companies Act,
2013 or section 560 of Companies Act, 1956.
49 The Company has not made any Investment in violation to the provisions related to number of layers prescribed under
clause (87) of section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules,
2017.
50 The Company has not traded or invested in Crypto Currency or Virtual Currency.
51 The Company has used Tally software for maintaining its books of account which have a feature of recording audit trail
(edit log) facility that have operated throughout the financial year for all relevant transactions recorded in the software.
Further, there was no instance of audit trail feature being tampered with for the period the audit trail was enabled.
52 The Financial Statements were authorized for issue in accordance with a resolution of the Directors on 30th May, 2024.
53 Previous year's figures have been regrouped / reclassified wherever necessary to make it comparable with the Current
year's figures.
Signatures to Notes 1 to 53
As per our report of even date
For Jain P. C. & Associates For and on behalf of the Board of Directors
Chartered Accountants Shubham Polyspin Limited
[Firm Reg No: 126313W] CIN: L17120GJ2012PLC069319
sd/- sd/- sd/-
Karan Ranka Ankit Anil Somani Akshay Anil Somani
Partner Director CFO & Director
Membership No.: 136171 DIN: 05211800 DIN: 05244214
UDIN: 24136171BKEYQR9751
sd/-
Dhara M Sanghavi
Company Secretary
Place : Ahmedabad Place : Ahmedabad
Date : 30/05/2024 Date : 30/05/2024
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