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WORTH INVESTMENT AND TRADING COMPANY LTD.

12 July 2024 | 12:00

Industry >> Finance & Investments

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ISIN No INE114O01020 BSE Code / NSE Code 538451 / WORTH Book Value (Rs.) 2.64 Face Value 1.00
Bookclosure 03/07/2024 52Week High 49 EPS 0.12 P/E 276.44
Market Cap. 511.59 Cr. 52Week Low 4 P/BV / Div Yield (%) 13.06 / 0.00 Market Lot 1.00
Security Type Other

NOTES TO ACCOUNTS

You can view the entire text of Notes to accounts of the company for the latest year
Year End :2023-03 

3.3 Provisions, Contingent Liabilities And Contingent Assets Provisions:

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a 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.

When the Company expects some or all of a provision to be reimbursed, reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, 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 in respective expense.

Contingent Liabilities and Contingent Assets

Contingent liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

3.4 Income tax Current tax:

Provision for current tax is made as per the provisions of the Income Tax Act, 1961.

Deferred tax:

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Minimum Alternative Tax ('MAT') credit entitlement under the provisions of the Income-tax Act, 1961 is recognised as a deferred tax asset when it is probable that future economic benefit associated with it in the form of adjustment of future income tax liability, will flow to the Company and the asset can be measured reliably. MAT credit entitlement is set off to the extent allowed in the year in which the Company becomes liable to pay income taxes at the enacted tax rates. MAT credit entitlement is reviewed at each reporting date and is recognised to the extent that is probable that future taxable profits will be available against which they can be used. MAT credit entitlement has been presented as deferred tax asset in Balance Sheet. Significant management judgement is required to determine the probability of recognition of MAT credit entitlement.

3.5 Employee Benefits Short-term Employee Benefits:

Employee benefit liabilities such as salaries, wages and bonus, etc. that are expected to be settled wholly within twelve months after the end of the period in which the employees render the related service are recognised in respect of employees' services up to the end of the reporting period and are measured at an undiscounted amount expected to be paid when the liabilities are settled.

Post-employment benefit plans:

Defined Contribution Plans:

State governed Provident Fund Scheme and Employees State Insurance Scheme are defined contribution plans. The contribution paid / payable under the schemes is recognised during the period in which the employees render the related services.

Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan.

The Company's gratuity scheme is a defined benefit plan. Currently, the Company's gratuity scheme is unfunded. The Company recognises the defined benefit liability in Balance sheet. The present value of the obligation under such defined benefit plan and the related current service cost and, where applicable past service cost are determined based onan actuarial valuation done using the Projected Unit Credit Method by an independent actuary, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligations are measured at the present value of the estimated future cash flows.

Re-measurements, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) is reflected immediately in Other Comprehensive Income in the Statement of Profit and loss. All other expenses related to defined benefit plans are recognised in Statement of Profit and Loss as employee benefit expenses. Re-measurements recognised in Other Comprehensive Income will not be reclassified to Statement of Profit and Loss hence it is treated as part of retained earnings in the Statement of Changes In Equity.

3.6 Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

? In the principal market for the asset or liability, or

? In the absence of a principal market, in the most advantageous market for the asset or liability The principal or the most advantageous market must be accessible to/ by the Company.

Fair value hierarchy

All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole;

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 3: valuation techniques for which the lowest level input which has a significant effect on the fair value measurement is not based on observable market data. :

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels :

in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting :

period. ;

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset ; or liability and the level of the fair value hierarchy as explained above. ;

3.7 Financial Instruments ;

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. ;

a) Financial assets ;

Initial recognition and measurement ;

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are ; attributable to the acquisition of the financial asset. ;

Subsequent measurement ;

For purposes of subsequent measurement, financial assets are classified in four categories: -

? Debt instruments at amortised cost - The Company has cash & cash equivalents, loans and trade receivables classified within this category. ;;

? Debt instruments at fairvalue through other comprehensive income (FVTOCI) - The Company does not have any financial asset classified in this category. T

? Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL) - The Company does not have any financial asset classified in ;

this category. I

? Equity instruments measured at fair value through other comprehensive income (FVTOCI) - The Company does not have any financial asset classified in this -

category. ;

Debt instruments at amortised cost j

A 'debt instrument' is measured at the amortised cost if both the following conditions are met: ;

a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and :

b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount j

outstanding. ;

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. 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 and losses arising j

from impairment are recognised in the Statement of Profit & Loss. The amortised cost of the financial asset is also adjusted for loss allowance, if any. ;

Debt instrument at FVTPL

Derecognition ^

Impairment of financial assets '

In accordance with IndAS 109, the company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial If assets and credit risk exposure:

Financial assets that are debt instruments, and are measured at amortised cost e.g. Loans and trade receivables. ;>

The company follows 'simplified approach' for recognition of impairment loss allowance on Trade receivables that do not contain a significant financing component. - f

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 If

ECLs at each reporting date, right from its initial recognition.

b) Financial liabilities Ý

Initial recognition and measurement f

All financial liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument. Tf

All financial liabilities are initially measured at fair value deducted by, in the case of financial liabilities not recorded at fair value through profit or loss, transaction Ý f

costs that a re attributable to the liability. ;>

Subsequent measurement <

Financial liabilities are classified as measured at amortised cost using the effective interest method. The Company's financial liabilities include trade payables, borrowings and other financial liabilities. If

Under the effective interest method, the future cash payments are exactly discounted to the initial recognition value using the effective interest rate. The cumulative amortization using the effective interest method of the difference between the initial recognition amount and the maturity amount is added to the initial recognition Tf

value (net of principal repayments, if any) of the financial liability over the relevant period of the financial liability to arrive at the amortized cost at each reporting - f date. The corresponding effect of the amortization under effective interest method is recognized as expense over the relevant period of the financial liability in the f> Statement of Profit and Loss. - f

Derecognition: ;f

A financial liability is derecognized 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 between the carrying amount of the financial liability - f derecognized and the consideration paid is recognized in the Statement of Profit and Loss.

Offsetting of financial instruments ;

Financial assets and financial liabilities are offset and the net amount presented in the Balance Sheet when, and only when, the Company currently has a legally Tf enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the assets and settle the liabilities simultaneously. ;>

3.8 Cash and cash equivalents

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.

3.9 Revenue Recognition

The Company recognises revenue to depict the transfer of promised goods or services to customers in an amount ;

that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. '

A 5-step approach is used to recognise revenue as below: ;

Step 1: Identify the contract(s) with a customer ;

Step 2: Identify the performance obligation in contract -

Step 3: Determine the transaction price ;

Step 4: Allocate the transaction price to the performance obligations in the contract '

Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation ;

Interest Income

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable j

3.10 Earnings per share ;

Basic earnings per share is computed using the net profit for the year attributable to the shareholders' and weighted average number of equity shares outstanding -during the year. ;

Diluted earnings per share is computed using the net profit for the year attributable to the shareholders' and weighted average number of equity shares. ;

3.11 Cash flow statement

Cash flows are reported using the indirect method, whereby profit for the period 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 cashflows. The cash flows from ; operating, investing and financing activities of the Company are segregated. -

3.12 Borrowing Cost

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets up to the ; assets are substantially ready fortheir intended use. The loan origination costs directly attributable to the acquisition of borrowings (e.g. loan processing fee, upfront j fee) are amortised in the year in which they occur -

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs -eligible for capitalization. All other borrowing costs are recognised in the statement of profit and loss in the period in which they are incurred. ;

The Company's principal financial liabilities comprise borrowings, trade and other payables, etc. The main purpose of these financial liabilities is to finance the Company's operations. The Company's principal financial assets include cash and cash equivalents that derive directly from its operations. The Company also holds investments in the shares of other companies measured at amortised cost. ';•>

The Company is exposed to market risk, credit risk and liquidity risk. The management oversees the management of these risks. The management is responsible for formulating an appropriate financial risk governance framework for the Company and periodically reviewing the same. The management ensures that financial risks are identified, measured and managed in accordance with the Company's policies and risk objectives. The management reviews and agrees policies for managing each of these risks, which are summarised below.

(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 prices comprise three types of risk: interest rate risk, ^ foreign currency risk and Equity price risk. ' T

(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. Since the Company has borrowings, therefore Company is exposed to such risk.

(ii) Foreign Currency Risk

The Indian Rupee is the Company's most significant currency. Asa consequence, the Company's results are presented in Indian Rupee and exposures are managed against Indian Rupee accordingly. So, ^ the Company is exposed to such risk. ^ >

(iii) Equity Price Risk

The Company's investment in shares are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the price risk through ^

diversification and by placing limits on individual and total instruments. Reports on the portfolio are submitted to the management on a regular basis. ' \

(b) Liquidity Risk ^

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The ;>

Company's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are fallen due, under both normal and stressed conditions, ;

without incurring unacceptable losses or risking damage to the Company's reputation.

26 Other Notes

No funds (which are material either individually or in the aggregate) 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 or entity, including foreign entity (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, 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 provide any guarantee, security orthe like on behalf of the Ultimate Beneficiaries.

No funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, 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 provide any guarantee, security orthe like on behalf of the Ultimate Beneficiaries.

There is no “undisclosed income” which has been reported by the Company during the assessment.

The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.