m) Provisions and contingent liabilities
i) Provisions
Provisions are recognized when there is a present legal or constructive obligation as a result of a past
events, it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and there is a reliable estimate of the amount of the obligation. If the effect of the
time value of money is material, provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks
specific to the liability. Where discounting is used, the increase in the provision due to the passage of
time is recognized as a finance cost.
ii) Contingent liabilities
Contingent liabilities are disclosed in the Notes to the standalone financial statements. They are
disclosed when there is a possible obligation arising from past events, the existence of which will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly
within the control of the Company, or a present obligation that arises from past events where it is
either not probable that an outflow of resources will be required to settle the obligation, or a reliable
estimate of the amount cannot be made.
iii) Contingent assets
A contingent asset is a possible asset that arises from past events and whose existence will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly
within the control of the entity. The Company does not recognize the contingent asset in its standalone
financial statements since this may result in the recognition of income that may never be realized.
Where an inflow of economic benefits is probable, the Company discloses a brief description of the
nature of contingent assets at the end of the reporting period. However, when the realization of income
is virtually certain, then the related asset is not a contingent asset and the Company recognizes such
assets.
Provision, contingent liabilities and contingent assets are reviewed at the each Balance Sheet date.
n) Earning per shares
Basic earnings per share is calculated by dividing the net profit after tax for the period attributable to
equity shareholders by the weighted average number of equity shares outstanding during the period.
The weighted average number of equity shares outstanding during the period and for all periods
presented is adjusted for events, such as bonus shares and sub-division of share, other than the
conversion of potential equity shares that have changed the number of equity shares outstanding,
without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit for the period attributable to
equity shareholders and the weighted average number of shares outstanding during the period is
adjusted for the effects of all dilutive potential equity shares.
0) Foreign currency translation
1) Functional and presentation currency
Items included in the standalone financial statements are measured using the currency of the primary
economic environment in which the Company operates (‘the functional currency’). The standalone
financial statements are presented in Indian Rupees (INR), which is Company’s functional and
presentation currency.
ii) Transaction and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at
the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions, as well as from the translation of monetary assets and liabilities denominated in foreign
currencies at year-end exchange rates, are generally recognized in the Statement of Profit and Loss.
Non-monetary items that are measured at historical cost in foreign currency are not retranslated. All
non-monetary items denominated in foreign currency are carried at historical cost or a similar
valuation and are reported using the exchange rate that existed when the values were determined.
p) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the
Chief Operating decision-maker. The Chief Operating decision-maker is responsible for allocating
resources and assessing performance of the operating segments and makes strategic decisions. Refer
Note 34 for segment information presented.
q) Exceptional items
When items of income or expense are of such nature, size and incidence that their disclosure is
necessary to explain the performance of the Company for the year, the company makes a disclosure of
the nature and amount of such items separately under the head “exceptional items.”
r) Statement of Cash Flow
Cash flows are reported using the Indirect Method, as set out in Ind AS 7 ‘Statement of Cash Flow’,
whereby profit for the year is adjusted for the effects of transaction of 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 of the Company are segregated.
[34] SEGMENT REPORTING
a) Details of principal activities and reportable segment
The Company has identified its operating segments in accordance with Indian Accounting Standard (Ind AS) 108 - Operating Segments. The reporting of these segments aligns with the
internal information provided to the Chief Operating Decision Maker (“CODM”), who is responsible for the allocation of resources and assessment of segment performance. The
Managing Director of the Company has been designated as the CODM. Operating segments are defined as components of the Group whose operating results are regularly reviewed by
the CODM for the purpose of making strategic decisions regarding resource allocation and performance evaluation, and for which discrete financial information is available. In line with the
Company’s vertically integrated business model, all operations related to Vegetable Refined Oil and its by-products—including Rice Bran Refined Oil, Rice Fatty Acid, Rice Wax Oil,
Gum/Spent Earth, and other incidental trading activities within India—are considered part of a single business segment. Consequently, the Company does not have any separately reportable
segments under Ind AS 108.
b) Geographical segment
Company’s performance is predominantly driven by domestic operations, and hence, no separate geographical segment has been identified. Accordingly, no additional segmental
disclosures are presented in the financial statements.
c) Information about major customers
No single customer accounted for more than 10% of the company's total revenue during the year under review.
[35] LEASES
i) Amounts recognised in balance sheet
The Company has entered into a long-term lease agreement for factory land utilized in its operational and day-to-day management activities. Accordingly, the amounts relating to
leasehold land are depicted in the Balance Sheet as below:
IV) The following is the basis of categorizing the financial instruments measured at fair value into Level 1 to Level 3:
The Company categorizes financial instruments measured at fair value into a three-level hierarchy based on the observability of the inputs used in the valuation process. Fair values are
determined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement
date, under current market conditions, irrespective of whether the price is directly observable or estimated using other valuation techniques.
The Company has established the following fair value hierarchy that categorizes the values into 3 levels. The inputs to valuation techniques used to measure fair value of financial instruments
are:
Level 1: This hierarchy includes financial assets and liabilities that are measured by using quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: This hierarchy includes financial assets and liabilities that are not traded in an active is determined using valuation techniques which maximize the use of observable market data
and rely as little as possible on company specific estimates.
Level 3: This level includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole
or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument not are they based on
available market data.
[39] FINANCIAL RISK MANAGEMENT
The company’s activity exposes itself to variety of financial risk which includes market risk, credit risk, liquidity risk and interest rate risk. The Company has various financial assets such
as deposits, trade receivables and cash and cash equivalent directly related to its business operations. The principal financial liabilities of the company consist of borrowings and trade
payables. The senior management of the company focuses on anticipating unpredictability and minimizing potential adverse effects on the company’s financial performance. The Company’s
overall risk management procedures to mitigate the potential adverse effects of financial market on the Company’s performance are as follows:
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 risk comprises three types of risk: interest
rate risk, currency risk and other price risk, such as commodity risk. The Company’s exposure to market risk is primarily on account of interest risk, foreign currency risk and Commodiy
price risk.
i) Interest rate risk management:
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The Company is exposed to such risk
primarily through its interest-bearing liabilities. Interest rate risk is actively monitored and managed by tracking market rate movements and evaluating the impact on existing exposures.
As of the reporting date, all of the Company’s borrowings are at fixed interest rates, except for one working capital demand loan which carries a floating interest rate. The Company does
not have any interest-bearing assets with floating rates.
Interest rate sensitivity analysis
The sensitivity analysis below has been prepared based on the exposure to interest rate risk arising from floating rate liabilities as of the end of the reporting period. The analysis assumes
that the amount of the floating rate liability outstanding at the reporting date was in place for the full year. A 50 basis point increase or decrease in interest rates is used, reflecting management’s
assessment of a reasonably possible shift in market interest rates.
If interest rates had been 50 basis points higher or lower, with all other variables held constant, the Company’s profit for the year ended March 31, 2025 would have decreased or
increased by Rs.1826920.00 (for the year ended March 31,2024: Rs.954530.00). This sensitivity is primarily attributable to the Company’s exposure to changes in interest rates on its variable
rate borrowings.
ii) Foreign currency exchange rate risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument or transaction may fluctuate due to changes in foreign exchange rates. The Company’s
exposure to such risk arises primarily from its operating activities involving transactions denominated in foreign currencies.
During the year ended March 31, 2025, the Company’s exposure to foreign currency risk was limited solely to the import of materials from overseas suppliers. The total value of such imports
was Rs. Nil, compared to Rs.67652436.78 for the year ended March 31, 2024, representing approximately 0% and 3% of total purchases for the respective periods. There were no
outstanding foreign currency payables as at the end of the reporting period.
Given the negligible volume of foreign currency-denominated transactions, the Company typically meets its foreign exchange requirements by procuring currency from the open market
at the time of settlement of import liabilities. The Company monitors its exposure to foreign currency risk on an as-needed basis, but does not engage in derivative contracts or hedging
instruments to mitigate this risk, due to the minimal nature of its exposure.
iii) Commodity Price Risk
The Company is exposed to the risk of changes in commodity prices, particularly related to its purchase of raw materials, especially crude edible oil and chemicals.
The Company develops periodic financial forecasts based on commodity price forecasts by its procurement group and appropriate actions including changes in selling price and cost
saving measures are considered as part of the financial modeling to mitigate the impact of commodity price changes.
A 1% increase in commodity prices would have led to approximately Rs.27197162.00 additional loss in the Statement of Profit and Loss (2023-24: Rs.22456274.00 loss). Conversely, a
1% decrease in commodity prices would have had an equal but opposite effect.
b) Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty fails to meet its contractual obligations. The Company is exposed to credit risk from its operating activities
(particularly trade receivables). To manage this risk, the Company consistently monitors the financial health of its customers, ensuring that sales proceeds are realized according to milestone
payment terms to minimize losses from defaults or customer insolvency. Progressive liquidity management practices are employed to mitigate the risk of non-fulfillment of liabilities to
various creditors, statutory obligations and stakeholders. The Carrying amount of financial assets represents the maximum credit risk exposure. There is no significant concentration.
i) Trade Receivables
Credit risk is the risk of financial loss to the Company in the event of a trade partner’s failure to meet its contractual obligations. The Company is primarily exposed to credit risk arising
from its trade receivables. This risk is managed in accordance with established policies, procedures, and controls that govern the assessment and monitoring of trade partner creditworthiness.
To measure impairment losses, the Company applies the simplified approach permitted by Ind AS 109, using a provision matrix to recognize lifetime expected credit losses (ECL) on its
portfolio of trade receivables. The provision matrix is developed based on historically observed default rates over the expected life of the receivables, and it is further adjusted to reflect
current and forward-looking macroeconomic conditions. The Company consistently measures the loss allowance for trade receivables at an amount equal to lifetime ECL. This approach
uses practical expedients under the simplified model and incorporates the ageing profile of receivables. Based on an internal assessment—considering historical trends and presently available
data on defaults and delays—the credit risk on trade receivables is assessed to be low.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company does not hold collateral as security.
The management believes that no further provision is necessary in respect of trade receivables based on historical trends of these customers. Further, the Company’s exposure to
customers is diversified and no single customer has significant contribution to trade receivables balances.
ii) The Company maintains its cash and cash equivalents and term deposits (if any) with reputed banks. The credit risk on these instruments is limited because the counterparties are banks
with high credit ratings assigned by international credit rating agencies.
iii) Financial assets other than trade receivables and cash and cash equivalents are not exposed to any material credit risk.
c) Liquidity Risk
Liquidity risk refers to the risk that the Company may not be able to meet its financial obligations as they fall due, whether under normal conditions or during periods of stress, without
incurring unacceptable losses or adversely affecting its financial position and reputation.
The Company’s liquidity management approach is focused on ensuring that it has adequate liquidity to meet its liabilities as they become due. This includes maintaining access to
sufficient funding sources and aligning the maturity profiles of financial assets and liabilities.
The ultimate responsibility for managing liquidity risk lies with the Board of Directors, which has established a robust framework to oversee the Company’s short-term, medium-term,
and long-term funding and liquidity needs. The Company actively manages its liquidity risk by maintaining adequate internal accruals, equity infusion when necessary, and by strategically
matching the maturities of its financial assets and liabilities.
The table below has been drawn up based on the undiscounted contractual maturities of the financial liabilities including interest that will be paid on those liabilities upto the maturity of
the instruments.
[40] CAPITAL MANAGEMENT
For the purpose of capital management, the Company defines capital as the aggregate of issued equity share capital and other equity reserves attributable to its equity shareholders. The
primary objective of capital management is to ensure the Company's continued operation as a going concern while maximizing shareholder value.
The Company actively manages its capital structure by adapting to changes in economic conditions, annual operating plans, and long-term strategic investment goals. To achieve an
optimal capital structure, it may adjust dividend payouts, return capital to shareholders, or issue new equity. The current capital structure primarily consists of equity, supplemented by
borrowings. The Company is not subject to any externally imposed capital requirements.
[43] 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 charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
iii) The Company has not traded or invested in Crypto currency or Virtual currency during the current and previous year.
iv) The Company has not advanced or loaned or invested funds to any other persons(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.
v) 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.
vi) The Lender of the company has not declared company as willful defaulter by any bank or financial institution or any lender and also company has not defaulted in repayment of loan to the
lender.
vii) The Company has no subsidiary, associates and joint venture down word.
viii) The Company has not entered into any 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, 1961).
ix) 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.
x) Valuation of property, plant and equipment, intengible assets and investment property
The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.
[44] Previous years’ figures have been regrouped / reclassified, wherever necessary, to conform with the current period presentation.
As per our report on even dated attached For and on behalf of the Board of Directors of
For M/s KRA & Co., M. K. Proteins Limited
Chartered Accountants CIN : L15500HR2012PLC046239
Firm Registration No.: 020266N
PARMOD KUMAR NEHA AGGARWAL
(Rajat Goyal) Managing Director Company Secretary
Partner 00126965
Membership No.: 503150
UDIN: 25503150BMJBZH8774 VINOD KUMAR
Place: Ambala Whole Time Director & CFO
Date: 23 May 2025 00150507
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