FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company's principal financial liabilities comprise of loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company's operations directly or indirectly. The Company's principal financial assets include investments, loans, trade and other receivables, cash and cash equivalents that derive directly from its operations.
Credit Risk
Credit risk is the risk that 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 from its operating activities (primarily trade receivables) and from its financing activities, including Fixed deposits with banks and financial institutions and other financial instruments.
Financial instruments and cash deposits
Credit risk from balances with banks and financial institutions is managed by the Company's finance department in accordance with the Company's policy. Investments of surplus funds are made generally in the fixed deposits and for funding to subsidiary company The investment limits are set to minimise the concentration of risks and therefore mitigate financial loss to make payments for vendors.
The Company's maximum exposure to credit risk for the components of the balance sheet at March 31, 2023 and March 31, 2022 is the carrying amounts as stated in balance sheet except for balances of subsidiary company.
Liquidity Risk
The Company monitors its risk of a shortage of funds using a liquidity planning tool.
The Company's objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans and unsecured loans. The Company has access to a sufficient variety of sources of funding which can be rolled over with existing lenders. The Company believes that the working capital is sufficient to meet its current requirements.
Market Risk
The Company manages market risk through a corporate treasury department, which evaluates and exercises independent control over the entire process of market risk management. The corporate treasury department recommends risk management objectives and policies, which are approved by senior management and Audit Committee. The activities of this department include management of cash resources, implementing hedging strategies for foreign currency exposures, borrowing strategies, and ensuring compliance with market risk limits and policies.
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's exposure to the risk of changes in market interest rates relates primarily to the Company's long-term debt obligations with floating interest rates.
The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. The Company's policy is to keep balance between its borrowings at fixed rates of interest. The difference between fixed and variable rate interest amounts calculated by reference to an agreed-upon notional principal amount.
Equity price risk
The Company's investments in non listed equity securities are accounted at cost in the financial statements net of impairment . The expected cash flows from these entities are regularly monitored internally and also independently , wherever necessary to identify impairment indicators.
(1) Increase in the current liabilities and decrease in the current assets has caused decline in the Current ratio.
(2) Increase in debt and decrease in retained earnings in the current year carries the ratio in the lower side.
(3) There is a decrease in EBITD and increase in debt position in current year which has impaired debt service coverage ratio.
(4) Delayed recovery of debtors in current year weakens the ratio.
(5) Increase in Revenue and decrease in working capital improved the ratio.
(6) Decrease in net profit in the current year weakens the ratio.
NOTE 43 : SEGMENT INFORMATION:
Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker, in deciding how to allocate resources and assessing performance. The Group's chief operating decision maker is the Chief Executive Officer and Managing Director. Pursuant to surrendering its license, the main Business of the Company is investing and financing to the Subsidiaries and providing support services to the Group Companies. Further all activities are carried out within India. Accordingly, Segment Reporting in accordance with Ind Accounting Standard - 108 “Operating Segment” issued by the Institute of Chartered Accountants of India and adopted by Companies (Accounting Standard) Rules, 2015 is not applicable to the Company.
NOTE 46 : UTILISATION OF BORROWED FUNDS AND SHARE PREMIUM:
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 group (Ultimate Beneficiaries) or
b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries
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 group 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
NOTE 47 : UNDISCLOSED INCOME:
There have been no transactions which have not been recorded in the books of accounts, that have been surrendered or disclosed as income during the year ended March 31,2023 and March 31, 2022, in the tax assessments under the Income Tax Act, 1961. There have been no previously unrecorded income and related assets which were to be properly recorded in the books of account during the year ended March 31, 2023 and March 31, 2022.
NOTE 48 : UTILISATION OF BORROWINGS AVAILED FROM BANKS AND FINANCIAL INSTITUTIONS:
The borrowings obtained by the Company from financial institution has been applied for the purposes for which such loans were was taken.
NOTE 49 : DISCLOSURE RELATING TO BENAMI PROPERTY HELD:
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
NOTE 50 : WILFUL DEFAULTER:
The Company has not been declared wilful defaulter by any bank or financial institutions or government or any government authority.
NOTE 51 : COMPLIANCE WITH NUMBER OF LAYERS OF COMPANIES:
The Company has complied with the number of layers prescribed under clause 87 of section 2 of the Companies Act, 2013 read with Companies (restriction on number of layers) Rules, 2017
NOTE 52 : DETAILS OF CRYPTO CURRENCY OR VIRTUAL CURRENCY:
The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.
NOTE 53 : RELATIONSHIP WITH STRUCK OFF COMPANIES:
The Company has not entered in any transactions with companies struck off under section 248 of the Companies Act ,2013. or section 560 of Companies Act 1956.
NOTE 54 : EXPENDITURE ON CORPORATE SOCIAL RESPONSIBILITY:
As per Section 135 of the Companies Act, 2013, the Company is not mandatorily required to spend on corporate social responsibility (CSR) activities.
NOTE 55 : REGISTRATION OF CHARGES OR SATISFACTION WITH REGISTRAR OF COMPANIES (ROC)
The Company has completed the process of creation and satisfaction the charges with Registrar of Companies (ROC) within the statutory timeline.
NOTE 56 : TITLE DEEDS OF IMMOVABLE PROPERTIES NOT HELD IN NAME OF THE COMPANY
There are no instances where the title deeds of immovable property (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) are not held in the name of the Company.
NOTE 57 : COMPLIANCE WITH APPROVED SCHEME(S) OF ARRANGEMENTS
The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.
NOTE 58 : THE SOCIAL SECURITY CODE, 2020
The Code on Social Security 2020 (‘the Code') relating to employee benefits, during the employment and postemployment, has received Presidential assent on September 28, 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on November 13, 2020. However, the effective date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not yet issued. The Company will assess the impact of the Code and will give appropriate impact in the financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published. Based on a preliminary assessment, the entity believes the impact of the change will not be significant.
NOTE 59:SUBSEQUENT EVENT
There have been no events after the reporting date that require disclosure in these financial statements.
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