R. Provisions and contingencies:
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. If the effect of the time value of money is material, provisions are discounted using the government securities' interest rate for the equivalent period. Unwinding of the discount is recognised in the Statement of Profit and Loss as a finance cost. Provisions are reviewed at each baLance sheet date and are adjusted to reflect the current best estimate. Provisions are not recognised for future operating losses.
Contingent liabilities are disclosed when there is a possibLe obligation arising from past events, the existence of which will be confirmed onLy by the occurrence or nonoccurrence 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 or a reliable estimate of the amount cannot be made. Information on contingent liability is disclosed in the notes to the financial statements. Contingent assets are not recognised. However, when the realisation of income is virtually certain, then the related asset is no longer a contingent asset, but it is recognised asan asset.
S. Earning per share:
Basic earnings per share is calculated by dividing the net profit or loss [after tax) for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.
Diluted earnings per share is calculated by dividing the net profit or loss (after tax) for the year attributable to equity shareholders and the weighted average number of equity shares outstanding during the year are adjusted for the effectsof all dilutive potentialequity shares.
Note U - Use of Significant Accounting Estimates, Judgments and Assumptions
In the process of applying the Company's accounting policies, management has made the following estimates and judgements, which have significant effect on the amounts recognised inthefinancialstatements:
A. Depreciation and useful lives of Property, Plant and Equipment
Property, plant and equipment are depreciated over the estimated useful lives of the assets, after taking into account their estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation to be recorded during any reporting period. The useful lives and residual values are based on the Company's historical experience with similar assets and take into account anticipated technological changes. The depreciation for future periods is adjusted if there are significant changes from previous estimates.
B. Recoverability of trade receivables
Judgments are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. The Company uses a provision matrix to determine impairment loss allowance on its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.
C. Defined Benefit plans
The cost of the defined benefit plan and other postemployment benefits and the present value of such obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, a
a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
D. Provisions:
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability require the application of judgement to existing facts and circumstances, which can be subject to change. Since the cash outflows can take place many years in the future, the carrying amounts of provisions and liabilities are reviewed regularly and adjusted to take account of changing facts and circumstances.
E. Impairment of financialassets:
The impairment provisions for financial assets are based on assumptions about risk of default and expected cash loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on Company's past history, existing market conditions as well as forward looking estimates at theendofeach reporting period.
Estimates and judgments are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances. They are continuo usly evaluated.
F. Fair Value measurement:
The Company measures financial instrument such as certain investments, at fair value at each balance sheet date.
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 forthe asset or liability, or
• In the absence of a principal market, in the most advantageous market forthe asset or liability.
The principal or the most advantageous market must be accessible bytheCompany.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would usethe asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilitiesfor which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described asfollows, based on the lowest Level input that is significant to the fair value measurement as a whole:
• Level 1 — Quoted [unadjusted)market prices inactive markets for identical assets or liabilities
• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is d i rect ly o r i nd i re ct ly obse rva b le
• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
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 re-assessing 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.
Note 5- New Standards/Amendments notified but not yet effective:
No new amendments to Ind AS has been notified by the Ministry of Corporate Affairs ("MCA") during the current financial year.
Interest risk
A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan debt investments.
Longevity risk
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan's liability.
Salary risk
The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan suability.
Fair valuation techniques:
The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available.
The following methodsand assumptions were used toestimate the fairvalues
♦ Fair value of the Equity Shares are based on price quoted on stock exchange.
♦ Fair value of investment in unquoted equity shares are considered same as carrying value as the same are recently acquired.
• Fair value of Financial Assets & Financial Liability [except which are show at their fair value] are carried at amortised cost is not materially different from its carrying cost.
• The Financial Assets do not include investments in group companies which are carried at cost.
Fair Value hierarchy:
The following table provides the fair value measurement hierarchy of Company's asset and liabilities, grouped into Level 1 to Level 3 as described below:
Level 1: Quoted prices / published NAV (unadjusted] in active markets for identical assets or liabilities. It includes fair value of financial instrumentstraded in active markets and are based onquoted market prices at the balancesheet date.
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices] or indirectly [that is, derived from prices). Fair value of the financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on the company specific estimates. If all significant inputs required to fair value an instrument are observable then instrument is included in level 2
Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
Note47 - Financial Risk Management:
The Company s activities expose it to credit risk, liquidity risk and market risk. This note explains the sources of risks which the entity is exposed to and how it mitigates that risk.
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.
Foreign currency risk:
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.
The Company is exposed to foreign exchange risk through purchases of goods or services from overseas supplier in foreign currency. The Company generally transacts in US dollar. The foreign exchange rate exposure is balanced by purchasing of goods or services in the respective currency.
The Company is exposed to insignificant foreign exchange risk as at the respective reporting dates.
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 not exposed to interest rate risk as the Company has fixed rate of borrowings as at the respective reporting dates.
Commodity and Other price risk:
The Company is not exposed to the commodity and other price risk.
Credit Risk:
Credit risk is the risk of financial loss to the Company that a customer or counter party to a financial instrument fails to meet its obligations. The Company is exposed to credit risk from its operating activities [primarily trade receivables) and from its financing activities, including deposits with ba nks. mutual funds, financial institutions and other financial instruments
Trade and other receivables:
The Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings for extension of credit to customers. To manage credit risk, the Company periodically assesses the financial reliability of the customer, taking into account the financial condition, current economic trends, and analysis ol historical bad debts and aging of accounts receivables. Outstanding customer receivables are regularly monitored to make an assessment of recoverability. Receivables are provided as doubtful / written off, when there is no reasonable expectation of recovery. Where receivables have been provided / written off, the Company continues regular follow-up, engage with the customers, legal options/ any other remedies available with the objective ol recovering these outstanding.
The Company is not exposed to concentration of credit risk to any one single customer since services are provided to vast spectrum and hence, the concentration of risk with respect to trade receivables is low. The Company also takes security deposits, advances, post-dated chequesetc. from its customers, which mitigate the credit risk to an extent."
Cash and cash equivalentsanother investments:
The Company is exposed to counter party risk relating to medium term deposits with banks and investment in mutual funds.
The Company considers factors such as track record, size of the institution, market reputation and service standards to select the banks with which balances and deposits are maintained. Generally, the balances are maintained with the institutions with which the Company has also availed borrowings. “
Liquidity risk:
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses.
The Company s objective is to at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company relies on a mix of borrowings, capital infusion and excess operati ng cash flows to meet its needs for funds. The current borrowings are sufficient to meet its short to medium term expansion needs. Management monitors the Company's net liquidity position through rolling forecasts on the basis of expected cash flows.
The Company is required to maintain ratios (such as debt service coverage ratio and secured coverage ratio) as mentioned in the loan agreements at specified levels and also cash deposits with banks to mitigate the risk of default in repayments. In the event of any failure to meet these covenants, these loans become callable to the extent of failure at the option of lenders, except where exemotion is provided bv lender.
Capital management
The primary objective of the Company's capital management is to maximize the shareholder value. The Company's primary objective when managing capital is to ensure that it maintains an efficient capital structure and healthy capital ratios and safeguard the Company's ability to continue as a going concern in order to support its business and provide maximum returns for shareholders. The Company also proposes to maintain an optimal capital structure to reduce the cost of capital. No changes were made in the objectives, policies or processes during the year ended March 31,2024 and March 31,2023.
For the purpose of the Company's capital management, capital includes issued capital, share premium and all other equity reserves. Net debt includes, interest bearing loans and borrowings, trade and other payables less cash and shortterm deposits.
Note 50 - The previous year figures have been regrouped, reworked, rearranged and reclassified, wherever necessary and are to be read in relation to the amounts and other disclosures relating to the current year.
Note51 - Additional regulatory information required by Schedule III:
Details of 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.
Borrowing secured against currentassets
The company does not have borrowings from banks and financial institutions on the basis of security of current assets.
Wilful defaulter
Company have not been declared wilful defaulter by any bank or financial institution or government or any government authority. Compliance with number of layers of companies
The company has complied with the number of layers prescribed under the Companies Act, 2013.
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.
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 company (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 Partyl 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 Undisclosed income
There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the IncomeTax Act, 1961, that has not been recorded in the booksof account.
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.
Valuation of PP&E, intangible assetand investment property
The company has not revalued its property, plant and equipment (including right-of-use assetsl or intangible assets or both during the current or previous year.
As per our report of even date
For Suryaprakash Maurya & Co. For and on behalf of the Board of Directors
Kilitch Drugs India Limited
Chartered Accountants
FRN: 14741OW Mukund P. Mehta
(Managing Director)
[DIN:00147876]
Suryaprakash Maurya Bhavin M. Mehta
Partner (Whole-time Director)
M. No. 178258 [DIN: 00U7895]
Sunil Jain
[Chief Financial Officer)
Place: Mumbai PushPa NV°uPane
Dated: 27th May 2024 [Company Secretary)
M. No. A64-04-7
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