? PROVISIONS AND OTHER CONTINGENT LIABILITIES AND CAPITAL
CONTRACTS
When the Company can reliably measure the outflow of economic benefits in relation to a
specific case and considers such outflows to be probable, the Company records a provision
against the case. Where the probability of outflow is considered to be remote, or probable,
but a reliable estimate cannot be made, a contingent liability is disclosed.
Given the subjectivity and uncertainty of determining the probability and amount of losses,
the Company takes into account a number of factors including legal advice, the stage of the
matter and historical evidence from similar incidents. Significant judgment is required to
conclude on these estimates.
? IMPAIRMENT OF NON-FINANCIAL ASSETS
The Company assesses, at each reporting date, whether there is an indication that an asset may
be impaired. If any indication exists, or when annual impairment testing for an asset is
required, the Company estimates the asset’s recoverable amount. An asset’s recoverable
amount is the higher of an asset’s or cash-generating unit’s (CGU) fair value less costs of
disposal and its value in use. Recoverable amount is determined for an individual asset, unless
the asset does not generate cash inflows that are largely independent of those from other assets
or Group of assets. When the carrying amount of an asset or CGU exceeds its recoverable
amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset. In determining fair value less costs of disposal, recent
market transactions are taken into account. If no such transactions can be identified, an
appropriate valuation model is used. These calculations are corroborated by valuation
multiples, quoted share prices for publicly traded companies or other available fair value
indicators.
The Company bases its impairment calculation on detailed budgets and forecast calculations,
which are prepared separately for each of the Company’s CGUs to which the individual assets
are allocated. These budgets and forecast calculations generally cover a period of five years.
For longer periods, a long-term growth rate is calculated and applied to project future cash
flows after the fifth year. To estimate cash flow projections beyond periods covered by the
most recent budgets/forecasts, the Company extrapolates cash flow projections in the budget
using a steady or declining growth rate for subsequent years, unless an increasing rate can be
justified. In any case, this growth rate does not exceed the long-term average growth rate for
the products, industries, or country or countries in which the entity operates, or for the
market in which the asset is used.
Impairment losses of continuing operations are recognized in the statement of profit and loss.
For assets excluding goodwill, an assessment is made at each reporting date to determine
whether there is an indication that previously recognized impairment losses no longer exist or
have decreased. If such indication exists, the Company estimates the asset’s or CGU’s
recoverable amount. A previously recognized impairment loss is reversed only if there has
been a change in the assumptions used to determine the asset’s recoverable amount since the
last impairment loss was recognized. The reversal is limited so that the carrying amount of the
asset does not exceed its recoverable amount, nor exceed the carrying amount that would
have been determined, net of depreciation, had no impairment loss been recognized for the
asset in prior years. Such reversal is recognized in the statement of profit or loss unless the
asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation
increase.
? SEGMENT INFORMATION
An operating segment is a component of the Company that engages in the business activities
from which it may earn revenues and incur expenses, whose operating results are regularly
reviewed by Company’s executive vice president and Chief Financial officer (“Chief operating
decision maker”).
The Company is engaged primarily in one segment; accordingly segment reporting is not
applicable.
? PERSONNEL
During the year under review, no employee was in receipt of remuneration in excess of limits
laid down under the companies act other than below:-
There are no employees employed throughout the financial year were in receipt of
remuneration which in aggregate was more that Rs. 60,00,000/- per annum;
Rs. 5,00,000/- per month.
? CASH AND CASH EQUIVALENTS (FOR PURPOSES OF CASH FLOW
STATEMENT)
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short¬
term balances, (with original maturity of three months or less from the date of acquisition),
highly liquid investments that are readily convertible into known amounts of cash and which
are subject to insignificant risk of changes in value.
Cash flows are reported using the indirect method, whereby profit / (loss) before
extraordinary items 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 flows from
operating, investing and financing activities of the Company are segregated based on the
available information.
? LEASES
The Company’s lease asset consists of leases for 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:
a. The contract involves the use of an identified asset
b. The Company has substantially all of the economic benefits from the use of the asset
through the period of the lease and
c. The Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-to-use asset and a
corresponding lease liability for all lease arrangements in which it is a lessee, except for leases
with a term of twelve months or less (short-term leases) and low value leases. For these short
term and low value leases, the Company recognizes the lease payments as an operating
expense on a straight-line basis over the term of the lease.
The right-to-use asset is initially recognized at cost which comprises of the initial amount of
lease liability adjusted for lease payments made or prior to commencement date plus any
direct cost i.e. lease incentives. They are subsequently measured at cost less accumulated
depreciation and impairment loss if any.
The Company applies the short-term lease recognition exemption to its short-term leases of
Buildings (i.e., those leases that have a lease term of 12 months or less from the
commencement date and do not contain a purchase option). Lease payments on short-term
leases are recognized as expense on a straight-line basis over the lease term.
? GENERAL
1. The figures for the previous year have been regrouped / reclassified / rearranged where ever
necessary with the conformity with the current year figures for facilitating proper
comparisons.
2. The Figures are mentioned in lakhs rupees. (Rs. in lakhs)
? CAPITAL MANAGEMENT
For the purpose of the Company’s Capital management, capital includes equity capital and all
other reserves. The Company’s capital management objective is to maximize the total
shareholder return by optimizing cost of capital through flexible capital structure that supports
growth.
The Company manages its capital structure and makes adjustments in the 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 Company monitors capital using a gearing ratio, which
is net debt divided by total capital plus net debt.
Financial Risk Management
In course of its business, the Company is exposed to certain financial risks that could have
significant influence on the Company’s business and operational / financial performance. These
include market risk (including interest rate risk and equity price risk), credit risk and liquidity risk.
The Board of Directors reviews and approves risk management framework and policies for
managing these risks and monitors suitable mitigating actions taken by the management to
minimize potential adverse effects and achieve greater predictability to earnings. In line with the
overall risk management framework and policies, the treasury function provides services to the
business, monitors and manages through an analysis of the exposures by degree and magnitude of
risks.
Borrowings, trade payables and other financial liabilities constitute the Company's primary
financial liabilities and investment in unquoted equity shares, trade receivables, loans, cash and
cash equivalents and other financial assets are the financial assets.
Trade Receivables
Credit risk refers to the risk of default on the receivables to the Company that may result in
financial loss. The maximum exposure from trade receivables amounting to Rs. 12.89 lacs as of
March 31, 2023 (Rs.61.04 lacs as of March 31, 2022 respectively).
Trade receivables mainly constitute receivable from Corporate Borrowers. Credit risk is being
managed through credit approvals, establishing credit limits and monitoring the creditworthiness
of customers to allow credit terms in the normal course of business. In the case of the Company,
the credit period offered varies between 30 to 60 days and there have been no significant cases of
impairment historically.
Cash and Cash Equivalents And Deposits With Banks
The credit risk on cash and bank balances is limited because the counterparties are banks with high
credit ratings. Therefore the risk of default is considered to be insignificant.
♦♦♦ Equity Price Risk
Equity price risk is related to the change in market reference price of the investments in quoted
equity securities. In the case of the Company, the sole investment in equity shares is unquoted and
does not expose the Company to equity price risks, however there can be changes in the equity
price based on valuations done at different reporting periods owing to the operations and general
business environment in which the investee operates. In general, the investment is not held for
trading purposes.
♦♦♦ Equity Price Sensitivity Analysis
A 1% change in prices of equity instruments held as at March 31, 2024, and March 31,
2023, would result in an increase / decrease of INR 5.31 lakhs INR 3.86 lakhs in fair value
of the equity instrument respectively.
♦♦♦ Provision For Expected Credit Losses
Financial assets for which loss allowance is measured using life time expected
credit losses
The Company's main customer base is Corporate Borrowers. Historically the risk of default
has been negligible or nil. Further, management believes that the unimpaired amounts that
are past due by more than 60 days are still collectible in full, based on historical payment
behavior and extensive analysis of customer credit risk. Hence, no impairment loss has been
recognized during the reporting periods in respect of trade receivables.
Liquidity Risk
The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds
are available for use as per requirements. The Company manages liquidity risk through cash credit
limits and undrawn borrowing facilities by continuously monitoring forecast and actual cash flows.
The Company invests its surplus funds in bank fixed deposit which carry minimal mark to market
risks.
Currency Risk
The Company is not exposed to any currency risk since it does not have any transactions in any
foreign currency.
Sensitivity Analysis
Since the company is not exposed to any currency risk, sensitivity analysis is not applicable.
Maturities of Financial Liabilities
The Following are the contractual Maturities (principal and interest in the case of loan) of non¬
derivative financial liabilities, based on contractual cash flows:
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 risk for the entity comprises two types of
risk: currency risk, interest rate risk and equity price risk. Financial instruments affected by
market risk include borrowings and investment in unquoted equity shares. The objective of
market risk management is to manage and control market risk exposures within acceptable
parameters, while optimizing the return.
Interest Rate Risk
The Company is not exposed to any interest rate risk. At the reporting date the interest rate
profile of the Company’s interest-bearing financial instruments is as follows:
Borrowings from Banks & Financial Institutions
The company doesn’t have any borrowings from Banks/Financial Institutions and no
corresponding report is required to be filed in relation to the same.
Receivables and Payables
The receivables and payables as stated in Current Assets and Current Liabilities and in the
opinion of the management have a value and realization equal to the amount at which they are
stated in the Balance Sheet and no provision for doubtful debts has been made by the company
for the year ending March 31, 2023.
♦♦♦ Benami Transactions / Property
No proceedings have been initiated during the year or are pending against the Company as at
March 31, 2024 for holding any Benami property under the Benami Transactions (Prohibition)
Act, 1988 (as amended in 2016) and rules made thereunder.
♦♦♦ Registration Of Charge Creation On Property
The company has no charge on its receivables and hence, there are no related registration
compliances involved.
♦♦♦ Revaluation Of Plant, Property And Equipment
There was no revaluation of assets during the year 2023-24.
♦♦♦ Un Disclosed Income
The company doesn’t have any current or previous transactions that have not been recorded in the
books of accounts and has been surrendered or disclosed as income during the year in the tax
assessments under the Income Tax Act, 1962.
♦♦♦ Willful Defaulter
The Company has not been declared willful defaulter by any bank or financial institution or
government or any government authority.
Title Deeds Of Immovable Property Not Held In The Name Of The company
There are no Title Deeds of immovable property held in the name of the Company.
♦♦♦ Scheme Of Arrangement
The company doesn’t have any scheme of arrangements to disclose during the year 2023-2024.
♦♦♦ Fair Value Sensitivity Analysis For Fixed-Rate Instruments
The company’s fixed rate instruments are carried at amortized cost. They are therefore not
subject to interest rate risk, since neither the carrying amount nor the future cash flows will
fluctuate because of a change in market interest rates.
♦♦♦ Crypto Currency
The Company has not traded or invested in Crypto currency or Virtual Currency during the
financial year.
? GENERAL
1. The figures for the previous year have been regrouped / reclassified / rearranged where
ever necessary with the conformity with the current year figures for facilitating proper
comparisons.
2. There are no unexecuted capital contracts which are outstanding or remaining to be
performed for the current year.
3. The figures have been rounded off and mentioned in Rs. In Lakhs.
Signatories To Schedule 1 To 20
For and on behalf of the Board of Directors As per”y R^? of Even
Date Attached
Sd/- Sd/- For Darpan & Associates
Sangita Tatia M. Thadhalingam CWe^ Acc°untants
Whole Time Director FRN 016156S
Chief Financial Officer
DIN. 06932448 Sd/-
Sd/- Darpan Kumar Jain
Tatia Jain Pannalal Sampathlal , Partner
Director Mr Raghuvender M.No.235817
DIN. 01208913 Company Secretary UDIN: 4235817BKFAZG3065
Place: Chennai
Date: 28/05/2024
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