XIV Provisions
"The Company creates a provision when there is
a present obligation (legal or constructive) as a
result of 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.
A disclosure for contingent liability is made when there
is a possible obligation or a present obligation that may,
but probably will not result in outflow of resources.
When there is a possible obligation or present obligation
in respect of which the likelihood of outflow of resources
is remote, no provision or disclosure is made."
XV Cash and cash equivalent
"Cash and cash equivalent in the balance sheet comprise
cash at banks and on hand and short-term deposits
with an original maturity of three months or less, which
are subject to an insignificant risk of changes in value.
For the purpose of statement of cash flows, cash and cash
equivalent consists of cash and short term deposits, as
defined above, as they are considered an integral part of
the Company's cash management"
XVI Financial Derivatives Hedging Transaction:
In respect of derivatives contract, premium paid,
provision for losses on restatement and gains/losses on
settlement are recognized in statement of Profit and Loss.
The company uses Foreign Currency Hedges to manage
its risks associated with Foreign Currencies Fluctuation
relating to Export receivable. The company does not use
Hedges for speculative purpose.
XVII Financial Instruments
(i) Financial asset
Initial recognition and measurement
All financial assets are recognised initially at fair value
plus, in case of financial asset not recorded at fair
value through profit or loss, transaction cost that are
attributable to the acquisition of the financial asset.
Financial assets are classified, at initial recognition, as
financial assets measured at fair value or as financial
asset measured at amortised cost.
Subsequent measurement
For purposes of subsequent measurement financial
assets are classified into two broad categories :
• Financial asset at fair value
• Financial asset at amortised cost
Where assets are measured at fair value, gains and
losses are either recognised entirely in the statement
of profit or loss (i.e. fair value through profit or loss),
or recognised in other comprehensive income (i.e.
fair value through other comprehensive income)
A financial asset that meet the following two
conditions is measured at amortised cost (net of
any write down for impairment) unless the asset is
designated at fair value through profit or loss under
the fair value option.
• Business model test : the objective of the
Company's model is to hold the financial asset
to collect the contractual cash flows (rather than
to sell the instrument prior to its contractual
maturity to realise its fair value changes)
• Cash flow characteristics test : The contractual
terms of the financial asset give rise on specified
dates to cash flows that are solely payment of
principal and interest on the principal amount
outstanding.
A financial asset that meet the following two
conditions is measured at fair value through
other comprehensive income unless the asset
is designated at fair value through profit or loss
under the fair value option.
• Business model test : the financial
asset is held within a business model
whose objective is achieved both
by collecting contractual cash flows and selling
the financial assets
• Cash flow characteristics test : The contractual
terms of the financial asset give rise on specified
dates to cash flows that are solely payment of
principal and interest on the principal amount
outstanding.
Even if an instrument meets the two requirements
to be measured at amortised cost or fair value
through other comprehensive income, a financial
asset is measured at fair value through profit or
loss if doing so eliminates or significantly reduces
a measurement or recognition inconsistency
(sometimes referred to as an 'accounting mismatch')
that would otherwise arise from measuring assets
or liabilities or recognising the gains or losses on
them on different basis.
All other financial asset is measured at fair value
through profit or loss.
Derecognition
A financial asset (or, where applicable, a part of a
financial asset or part of a group of similar financial
assets) is primarily derecognised when:
• The rights to receive cash flows from the asset
have expired, or
• The Company has transferred its rights to receive
cash flows from the asset or has assumed an
obligation to pay the received cash flows in full
without material delay to a third party under a
‘pass-through’ arrangement; and either
a) the Company has transferred substantially
all the risks and rewards of the asset, or
b) the Company has neither transferred nor
retained substantially all the risks and
rewards of the asset, but has transferred
control of the asset.
When the Company has transferred its rights to
receive cash flows from an asset or has entered into
a passthrough arrangement, it evaluates if and to
what extent it has retained the risks and rewards
of ownership. When it has neither transferred nor
retained substantially all of the risks and rewards
of the asset, nor transferred control of the asset, the
Company continues to recognise the transferred
asset to the extent of the Company's continuing
involvement. In that case, the company also
recognises an associated liability. The transferred
asset and the associated liability are measured on a
basis that reflects the rights and obligations that the
Company has retained.
Continuing involvement that takes the form of a
guarantee over the transferred asset is measured at
the lower of the original carrying amount of the asset
and the maximum amount of consideration that the
Company could be required to repay.
Impairment of financial asset
The Company assesses impairment based on
expected credit losses (ECL) model to the following :
• Financial asset measured at amortised cost
• Financial asset measured at fair value through
other comprehensive income
Expected credit losses are measured through a loss
allowance at an amount equal to:
• 12 months expected credit losses (expected
credit losses that result from those default events
on the financial instrument that are possible
within 12 months after the reporting date); or
• Full lifetime expected credit losses (expected
credit losses that result from all possible default
events over the life of the financial instrument)
The Company follows 'simplified
approach' for recognition of impairment
loss allowance on trade receivable.
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 reporting date, right
from its initial recognition.
The Company uses a provision matrix to determine
impairment loss allowance on the portfolio of trade
receivables. The provision matrix is based on its
historically observed default rates over the expected
life of the trade receivable and is adjusted for forward
looking estimates, if any. At every reporting date,
the historical observed default rates are updated
and changes in the forward-looking estimates are
analysed.
(ii) Financial liabilities:
Initial recognition and measurement
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.
The Company’s financial liabilities include trade and
other payables, loans and borrowings including bank
overdrafts.
Loans and borrowings - subsequent measurement
After initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortised
cost using the Effective Interest Rate (EIR) method.
Gains and losses are recognised in profit or loss when
the liabilities are derecognised as well as through the
Effective Interest Rate (EIR) amortisation process.
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 Effective
Interest Rate (EIR). The Effective Interest Rate (EIR)
amortisation is included as finance costs in the
statement of profit and loss.
Derecognition
A financial liabilityis derecognisedwhen 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 derecognition 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 or loss."
Financial assets:
Initial recognition and measurement
All financial assets are recognised initially at fair
value plus, in case of financial asset not recorded at
fair value through profit or loss, transaction cost that
are attributable to the acquisition of the financial
asset.
Financial assets are classified, at initial recognition, as
financial assets measured at fair value or as financial
asset measured at amortised cost.
Subsequent measurement
For purposes of subsequent measurement financial
assets are classified into two broad categories:
- Financial asset at fair value
- Financial asset at amortised cost
Where assets are measured at fair value, gains and
losses are either recognised entirely in the statement
of profit or loss (i.e. fair value through profit or loss),
or recognised in other comprehensive income (i.e.
fair value through other comprehensive income)
A financial asset that meet the following two
conditions is measured at amortised cost (net of
any write down for impairment) unless the asset is
designated at fair value through profit or loss under
the fair value option.
Business model test : the objective of the Company's
model is to hold the financial asset to collect the
contractual cash flows (rather than to sell the
instrument prior to its contractual maturity to realise
its fair value changes)
Cash flow characteristics test : The contractual terms
of the financial asset give rise on specified dates to
cash flows that are solely payment of principal and
interest on the principal amount outstanding.
A financial asset that meet the following two
conditions is measured at fair value through other
comprehensive income unless the asset is designated
at fair value through profit or loss under the fair value
option.
Business model test : the financial asset is held within
a business model whose objective is achieved both
by collecting contractual cash flows and selling the
financial assets
Cash flow characteristics test : The contractual terms
of the financial asset give rise on specified dates to
cash flows that are solely payment of principal and
interest on the principal amount outstanding.
Even if an instrument meets the two requirements to
be measured at amortised cost or fair value through
other comprehensive income, a financial asset is
measured at fair value through profit or loss if doing
so eliminates or significantly reduces a measurement
or recognition inconsistency (sometimes referred to
as an 'accounting mismatch') that would otherwise
arise from measuring assets or liabilities or
recognising the gains or losses on them on different
basis.
All other financial asset is measured at fair value
through profit or loss.
Derecognition
A financial asset (or, where applicable, a part of a
financial asset or part of a group of similar financial
assets) is primarily derecognised when:
- The rights to receive cash flows from the asset
have expired, or
- The Company has transferred its rights to receive
cash flows from the asset or has assumed an
obligation to pay the received cash flows in full
without material delay to a third party under a
'pass-through' arrangement; and either
a) the Company has transferred substantially
all the risks and rewards of the asset, or
b) the Company has neither transferred nor
retained substantially all the risks and
rewards of the asset, but has transferred
control of the asset.
When the Company has transferred its rights to
receive cash flows from an asset or has entered into
a pass-through arrangement, it evaluates if and to
what extent it has retained the risks and rewards
of ownership. When it has neither transferred nor
retained substantially all of the risks and rewards
of the asset, nor transferred control of the asset, the
Company continues to recognise the transferred
asset to the extent of the Company's continuing
involvement. In that case, the company also
recognises an associated liability. The transferred
asset and the associated liability are measured on a
basis that reflects the rights and obligations that the
Company has retained.
Continuing involvement that takes the form of a
guarantee over the transferred asset is measured at
the lower of the original carrying amount of the asset
and the maximum amount of consideration that the
Company could be required to repay.
Impairment of financial asset
The Company assesses impairment based on
expected credit losses (ECL) model to the following :
- Financial asset measured at amortised cost
- Financial asset measured at fair value through
other comprehensive income
Expected credit losses are measured through a loss
allowance at an amount equal to:
- 12 months expected credit losses (expected credit
losses that result from those default events on the
financial instrument that are possible within 12
months after the reporting date); or
Full lifetime expected credit losses (expected credit
losses that result from all possible default events over
the life of the financial instrument)
The Company follows 'simplified approach’ for
recognition of impairment loss allowance on trade
receivable.
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 reporting date, right
from its initial recognition.
The Company uses a provision matrix to determine
impairment loss allowance on the portfolio of trade
receivables. The provision matrix is based on its
historically observed default rates over the expected
life of the trade receivable and is adjusted for forward
looking estimates, if any. At every reporting date,
the historical observed default rates are updated
and changes in the forward-looking estimates are
analysed.
Financial liabilities:
Initial recognition and measurement
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.
The Company’s financial liabilities include trade and
other payables, loans and borrowings including bank
overdrafts.
Loans and borrowings - subsequent measurement
After initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortised
cost using the Effective Interest Rate (EIR) method.
Gains and losses are recognised in profit or loss when
the liabilities are derecognised as well as through the
Effective Interest Rate (EIR) amortisation process.
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 Effective
Interest Rate (EIR). The Effective Interest Rate (EIR)
amortisation is included as finance costs in the
statement of profit and loss.
Derecognition
A financial liability is derecognised 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 derecognition 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 or loss.
XVIII Cash Flow Statement:
Cash flows are reported using indirect method,
whereby profit/(loss) before extraordinary item
and tax is adjusted for the effects of transactions of
non cash nature and any deferrals or accruals of past
or future, cash receipts or payments. The cash flow
from operating, investing and financing activities of
the company are segregated based on the available
information.
2 Significant Accounting judgements, estimates and
assumptions
The preparation of Company's financial statements requires
management to make judgements, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets
and liabilities, and the accompanying disclosures, and the
disclosure of contingent liabilities. Uncertainty about these
assumptions and estimates could result in outcomes that
require a material adjustment to the carrying amount of assets
or liabilities affected in future periods.
Estimates and assumptions
The key assumptions concerning the future and other key
sources of estimation uncertainty at the reporting date, that
have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next
financial year, are described below. The Company based its
assumptions and estimates on parameters available when the
financial statements were prepared. Existing circumstances
and assumptions about future developments, however, may
change due to market changes or circumstances arising that
are beyond the control of the Company. Such changes are
reflected in the assumptions when they occur.
I Defined Benefit plans - Gratuity Benefit
The cost of defined benefit plans and other post
employment benefits and the present value of such
obligations are determined using actuarial valuations. An
actuarial valuation involves making various assumptions
that may differ from actual developments in the future.
These include the determination of the discount rate,
future salary increases, mortality rates and attrition
rate. Due to the complexities involved in the valuation
and its long term nature, a defined benefit obligation is
highly sensitive to changes in these assumptions. All
assumptions are reviewed at each reporting date.
II Useful life
The estimated useful lives of items of property, plant and
equipment and intangible assets for the current and the
comparative periods are as follows :
III Fair valuation of financial instruments
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 technique
including the Discounted Cash Flow (DCF) model.
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 consideration 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.
Other Statutory Information
i) The Company does not have any Benami property,
where any proceeding has been Initiated
or pending against the Company for holding any
Benami property.
ii) The Company does not have any transactions
with companies struck off
iii) The Company does not has any charges or
satisfaction which is yet to be registered with
ROC beyond the statutory period.
iv) The Company has not traded or invested in
Crypto currency or Virtual Currency during the
financial year
v) The Company has not advanced or extended loan
or invested funds to any other persons or entity,
including foreign entities or Intermediaries with
the understanding that the Intermediary shall
(a) Directly or indirectly lend or invest in
other persons or entitles identified in any
manner whatsoever by or on behalf of the
company (Ultimate Beneficiaries) or
(b) Provide any guarantee, security or the like
to or on behalf of the Ultimate Beneficiaries.
vi) The Company has not received any fund from
any person or entity. Including foreign entities
(Funding Party) with the understanding
(whether recorded in writing or otherwise) that
the Company shall:
(a) 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
(b) Provide any guarantee, security or the like
un behalf of the Ultimate Beneficiaries.
vii) The Company has not any such transaction which
is not recorded in the books of accounts that has
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,
1941
viii) The company has obtained the declaration from
Directors stating therein that the amount so
advanced to the company has not been given out
of the funds borrowed/acquired from others by
them.
ix) The company has not received information
from vendor and service provider regarding
their status under the Micro, Small and Medium
Enterprises Development Act, 2006 and hence,
disclosures relating to amounts unpaid as at the
year end together with interest paid/payable
under this Act have not been given.
27. Financial Risk Management
The Company's activities expose it to market risk, liquidity risk and credit risk. Market risk is the risk of loss of future earnings, fair
value or future cashflows that may result from a change in the price of financial instrument. The value of a financial instrument may
change as a result of changes in interest rates, foreign currency exchange rates and other market changes that affect market risk
sensitive instruments. Market risk is attributable to all market sensitive financial instruments including investments and deposits,
foreign currency receivable and payables and loans and borrowings.
If the risk exposure is significant then senior management reviews the position and takes decision regarding hedging / other risk
strategies to mitigate such risk exposures.
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 the
market interest rate.
Foreign Currency Risk
The Company is not exposed to foreign exchange risk as there is no overseas transaction during the reporting period.
Thus,the Company did not have any outstanding dues as on 31st March, 2025
Credit Risk
Credit risk arises from the posibility that counter party may not be able to settle their obligations as agreed. To manage this, the
Company periodically assesses the financial reliability of customers, taking into account the financial conditions, current economic
trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.
The company considers the probability of default upon initial recognition of asset and whether there has been a significant increase
in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the
Company compares the risk of a default occuring on the asset as at the reporting date with the risk of default as at the date of initial
recognition. It considers reasonable and supportive forwarding-looking information such as:
(i) Actual or expected significant adverse change in business
(ii) Actual or expected significant change in the operating results of the counterparty
(iii) Financial or economic conditions that are expected to cause a significant change to the counterparty's ability to meet its
obligation.
(iv) Significant increases in credit risk on other financial instruments of the same counterparty
A default on a financial asset is when the counterparty fails to make contractual payments within 30 - 60 days of when they fall
due. This definition of default is determined by considering the business environment in which entity operates and other macro¬
economic factors.
Financial assets are written off when there is no reasonable expectation of recovery. Where loans or receivables have been written
off, the Company may engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are
recognised in profit or loss.
(iv) Liquidity risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price.
The Company’s treasury department is responsible for liquidity, funding as well as settlement manangement. In addition, processes
and policies related to such risks are overseen by senior management. Manage ment monitors the company's net liquidity position
through rolling forecasts on the basis of expected cash flows.
31 Commitments
Non Cancellable Operating Leases:
(i) The Company's lease asset primarily consist of leases for land and buildings for branch offices and warehouses having the
various lease terms. Effective April 1, 2019, the Company adopted Ind AS 116 "Leases" and applied the standard to all lease
contracts existing on April 1, 2019 using the modified retrospective method. Consequently, the Company recorded the lease
liability at the present value of the remaining lease payments discounted at the incremental borrowing rate as on the date
of transition and has measured right of use asset at an amount equal to lease liability adjusted for any related prepaid and
accrued lease payments previously recognised.
(ii) Following is the summary of practical expedients elected on initial application:
(a) Applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end
date
(b) Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease
term on the date of initial application
(c) Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application
(d) Applied the practical expedient by not reassessing whether a contract is, or contains, a lease at the date of initial
application. Instead applied the standards only to contracts that were previously identified as leases under Ind AS 17.
(e) Used hindsight in determining the lease term where the contract contained options to extend or terminate the lease
(v) The adoption of the new standard has also resulted in no increase decrease in profit before tax (Increase in depreciation
expense and finance cost by ' 26.54 Lacs and ' 6.49 Lacs respectively with corresponding decrease in other expense by ' 33.03
Lacs). The effect of this adoption is insignificant on earnings per share. Ind AS 116 has also resulted in an increase in cash
inflows from operating activities and an increase in cash outflows from financing activities on account of lease payments by
' 34.53 Lacs each.
(vi) The maturity analysis of lease liabilities are disclosed in Note 31.
(vii) The weighted average incremental borrowing rate applied to lease liabilities as at April 1, 2019 is 9.96%
(viii) Rental expense recorded for short-term leases was ' 5.00 lacs for the year ended March 31,2025 (' 5.40 lacs for the year ended
March 31,2024). (refer note 24)
(ix) The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to
meet the obligations related to lease liabilities as and when they fall due.
Note: The above loans have given for principle business purpose & it is utilised for the same purpose by the recipient
38 Previous year figures have been re-grouped/re-classified wherever considered necessary to make comparable with current year
figures.
As per our report of even date attached
For Ashok Shyam and Associates For and on behalf of the Board of Directors
Chartered Accountants
Firm Registration No.: 011223N
FCA Deepak Khanna Amrut P. Shah Shantilal P.Shah
Partner Chairman & Managing Director Whole-time Director
Membership No.: 083466 DIN: 00033120 DIN: 00033182
Place : Mumbai Rajesh B. Jain Urmi Shah Hardik A. Shah
Date :22nd May, 2025 Chief Financial Officer Company Secretary Chief Executive Officer
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