xvii Provisions, Contingent Liabilities and Contingent Assets
A provision is recognised when the Company has a present obligation (legal or constructive) as a result of past events and it is probable that an
outflow of resources embodying economic benefits will be required to settle the obligation, in respect of which a reliable estimate can be made
of the amount of obligation. Provisions (excluding gratuity and compensated absences) are determined based on management's estimate
required to settle the obligation at the Balance Sheet date. In case the time value of money is material, provisions are discounted using a
current pre-tax rate that reflects the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of
time is recognised as a finance cost. These are reviewed at each Balance Sheet date and adjusted to reflect the current management
estimates.
Contingent liabilities are disclosed in respect of possible obligations that arise from past events, whose existence would be confirmed by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. A contingent liability also
arises, in rare cases, where a liability cannot be recognised because it cannot be measured reliably.
Contingent assets are disclosed in the financial statements.
xviii Operating Segment
Operating segments are reported in a manner consistent with the internal reporting provided to Chief Operating Decision Maker (CODM).The
Company has identified its Managing Director as CODM which assesses the operational performance and position of the Company and makes
strategic decisions.
xix Cash Flows
Cash flows are reported using the indirect method, where by net profit before tax is adjusted for the effects of transactions of a non-cash nature,
any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or
financing cash flows. The cash flows from operating, investing and financing activities are segregated.
xx Leases
Company as a lessee
The Company's lease asset classes primarily consist of leases for land and buildings. The Company assesses whether a contract contains a
lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a
period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the
Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic
benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted
using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of
these leases. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the Company changes its
assessment if whether it will exercise an extension or a termination option.
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing
cash flows.
Company as a lessor
Leases for which the Company is a lessor is classified as a finance or operating lease. Whenever the terms of the lease transfer substantially all
the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating
leases.
When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sublease separately. The sublease is
classified as a finance or operating lease by reference to the right-of-use asset arising from the head lease.
For operating leases, rental income is recognized on a straight line basis over the term of the relevant lease.
Note 2.3 Recent pronouncements:
Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards under Companies (Indian Accounting
Standards) Rules as issued from time to time. On March 31, 2025, MCA has not notified any new standards or amendments to the existing
standard applicable to the company.
A - Defined benefit obligations - Gratuity (Funded)
The gratuityplan is governed by the Payment of Gratuity Act, 1972 underwhich an employee who has completed five years of service is entitled to specific benefits. The level of benefits
provided depends on the member’s length of service and salary at retirement age.
I) Assumptions :
With the objective ofpresenting the plan assets and plan liabilities of the defined benefits plans at their fairvalue on the balance sheet, assumptions under Ind AS 19 are set by reference
to market conditions at the valuation date.
Identification of Segments:
The chief operational decision maker monitors the operating results of its Business segment separately for the purpose of making decision about resource allocation and performance
assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements, Operating segment have been identified
on the basis of nature of products and other quantitative criteria specified in the Ind AS 108.
Operating Segments
Wire and Cables
Lighting & Fittings
Accessories & Others
Segment revenue and results:
The expenses and income which are not directly attributable to any business segment are shown as unallocable expenditure (net of allocable income).
Segment assets and Liabilities:
Segment assets include all operating assets used by the operating segment and mainly consist of inventory. Common assets and liabilities which can not be
allocated to any of the business segment are shown as unallocable assets / liabilities.
Note 49 : Financial instruments - Fair values and risk management
The fair value of the financial assets are included at amounts at which the instruments could be exchanged in a current transaction between willing parties other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair value:
(a) Fair value of cash and short term deposits, trade and other short term receivables, trade payables, other current liabilities, approximate their carrying amounts largely due to the short-term maturities of these instruments
(b) Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for the expected losses of
these receivables.
B. Fair Value Hierarchy.
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
C. The Company has not disclosed the fair values for financial instruments for loans (non current), other non current financial assets, trade receivables, cash and cash equivalents and bank balances other than cash and cash equivalents,Borrowings
(current and non current),Trade payables, other current financial liabilities because their carrying amounts are reasonably approximation of fair value.
Financial Risk Management
i. Risk management fra
The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The
Company manages market risk through a treasury department, which evaluates and exercises independent control over the entire process of market risk
management. The treasury department recommends risk management objectives and policies, which are approved by Board of Directors. The activities of
this department include management of cash resources, borrowing strategies, and ensuring compliance with market risk limits and policies.
The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls
and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the
Company’s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive
control environment.
The audit committee oversees how management monitors compliance with the Company’s risk management policies and procedures, and reviews the
adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal
audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit
committee.
The risks that could have significant influence on the Company are market risk, credit risk and liquidity risk.
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. To manage this, the Company
periodically assesses financial reliability of customers, taking into account the financial condition, current economic trends and analysis of historical bad
debts and ageing of accounts receivable. The maximum exposure to credit risk in case of all the financial instruments covered below is restricted to their
respective carrying amount.
(i) Trade and other receivables from customers
Credit risk in respect of trade and other receivables is managed through credit approvals, establishing credit limits and monitoring the creditworthiness of
customers to which the Company grants credit terms in the normal course of business.
The Company measures the expected credit loss of trade receivables based on historical trend, industry practices and the business environment in which
the entity operates. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes
into account available external and internal credit risk factors such as credit ratings from credit rating agencies, financial condition, ageing of accounts
receivable and the Company's historical experience for customers.
ii) Cash and cash equivalents and other bank balances
The Company held cash and cash equivalents and other bank balances amounting to Rs. 29.59 Lakhs and Rs. 39.99 Lakhs respectively (March 31,2024:
Rs. 707.21 Lakh and 39.21 Lakhs respectively). The cash and cash equivalents are held with bank with good credit ratings and financial institution
counterparties with good market standing.
b) 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 reasonable price. The Company’s
objective is to at all times maintain optimum levels of liquidity to meet its cash and liquidity requirements. The Company closely monitors its liquidity position
and deploys a robust cash management system. It maintains adequate source of financing through the use of short term bank deposits and cash credit
facility. Processes and policies related to such risks are overseen by senior management. Management monitors the Company’s liquidity position through
rolling forecasts on the basis of expected cash flows. The Company assessed the concentration of risk with respect to its debt and concluded it to be low.
c) 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 equity price risk and commodity risk. Financial instruments
affected by market risk include loans and borrowings and investments in securities.
i. 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. Our
exposure are mainly denominated in U.S. dollars and Arab Emirates Dirham. The Company’s business model incorporates assumptions on currency risks
and ensures any exposure is covered through the normal business operations. This intent has been achieved in all years presented. The Company has put
in place a Financial Risk Management Policy to identify the most effective and efficient ways of managing the currency risks.
Sensitivity analysis
A reasonably possible strengthening / (weakening) of the Indian Rupee against US dollars and AED at 31 st March would have affected the measurement
of financial instruments denominated in US dollars and affected profit or loss by the amounts shown below. This analysis assumes that all other variables,
in particular interest rates, remain constant and ignores any impact of forecast sales and purchases. In cases where the related foreign exchange
fluctuation is capitalised to fixed assets or recognised directly in reserves, the impact indicated below may affect the Company's income statement over
the remaining life of the related fixed assets or the remaining tenure of the borrowing respectively.
ii) 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 is exposed to interest rate risk through the impact of rate changes on interest-bearing liabilities and assets. The Company manages its interest
rate risk by monitoring the movements in the market interest rates closely.
Exposure to interest rate risk
Company’s interest rate risk arises primarily from borrowings. The interest rate profile of the Company’s interest-bearing financial instruments is as
follows.
Cash flow sensitivity analysis for variable-rate instruments
The sensitivity analysis below have been determined based on the exposure to interest rates for financial instruments at the end of the reporting year and
the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period in the case of instruments that
have floating rates. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents
management’s assessment of the reasonably possible change in interest rates :
iii) Other price risk
The Company is not exposed to the other price risk.
Note 50 : Capital Management
The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimise returns to its shareholders.
Management monitors the return on capital as well as the debt equity ratio and make necessary adjustments in the capital structure for the development of
the business. The capital structure of the Company is based on management's judgement of the appropriate balance of key elements in order to meet its
strategic and day - to - day needs. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to
shareholders, return capital to shareholders or issue new shares.
Note 51 : ADDITIONAL REGULATORY INFORMATION REQUIRED BY SCHEDULE III TO THE COMPANIES ACT, 2013
1 The Company does not have any benami property held in its name. No proceedings have been initiated on or are pending against the Company for holding benami
property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
2 The Company has not been declared wilful defaulter by any bank or financial institution or other lender or government or any government authority.
3 The Company has complied with the requirement with respect to number of layers as prescribed under section 2(87) of the Companies Act, 2013 read with the
Companies (Restriction on number of layers) Rules, 2017.
4 Utilisation of borrowed funds and share premium
I 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:
(a) 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
(b) Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.
II The Company has not received any fund 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:
(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 on behalf of the ultimate beneficiaries.
5 There is no income surrendered or disclosed as income during the year in tax assessments under the Income Tax Act, 1961 (such as search or survey), that has not
been recorded in the books of account.
6 The Company has not traded or invested in crypto currency or virtual currency during the year.
7 The Company does not have any charges or satisfaction of charges which is yet to be registered with Registrar of Companies beyond the statutory period.
Note 52 : For financial year 2024-25, the Board recommended a final dividend of Rs.1/- (par value of Rs. 10/- each) per equity share. This payment is subject to the
approval of shareholders in the Annual General Meeting (AGM) of the Company. The Company has paid a final dividend of Rs.1/- (par value of Rs. 10/- each) per equity
share for financial year 2023-22 as per approval of shareholders in the Annual General Meeting (AGM) of the Company.
Note 54 : Previous year's figure's audited by the predecessor Auditors, vide their report dated 29th May 2024, have been re-grouped, re-arranged & re¬
classified, wherever considered necessary, to confirm the current periord figures.
As per our report of even date attached
For S G C O & Co. LLP For and on behalf of the Board of Directors of
Chartered Accountants Veto Switchgears and Cables Limited
Firm Registration No. 112081W / W100184
Nitesh Musahib Akshay Kumar Gurnani Narain Das Gurnani Kritika Todwal
Partner Managing Direcor & CEO Whole Time Director & CFO Company Secretary
Membership No. : 131146 (DIN : 06888193) (DIN : 01970599)
Place: Mumbai Place: Jaipur
Date: May 28, 2025 Date: May 28, 2025
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