k) Provisions, contingent liabilities and contingent assets
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, for example, under an insurance contract, the 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. Provisions
are reviewed at each balance sheet and adjusted to reflect the current best estimates.
Contingent liabilities are disclosed in respect of possible obligations that have risen from past events and 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 enterprise, or is a present obligation that arises from past events but is not recognised
because either it is not probable that an outflow of resources embodying economic benefits will be required to settle
the obligation, or a reliable estimate of the amount of the obligation cannot be made.
l) 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. 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.
Debt instruments at amortised cost
A ‘debt instrument’ is measured at its 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 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 is included in other income in
the statement of profit or loss. The losses arising from impairment are recognised in the statement of profit or loss.
Debt instrument at FVTOCI
A ‘debt instrument’ is classified at FVTOCI if both of the following criteria are met:
a) The objective of the business model is achieved both by collecting contractual cash flows and selling the
financial assets, and
b) The asset’s contractual cash flows represent SPPI.
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at
fair value. Fair value movements are recognized in the other comprehensive income (OCI). However, the company
recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the Profit and Loss.
On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity to
Profit and Loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR
method.
Debt instrument at FVTPL
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for
categorization as at amortized cost or as FVTOCI, is classified as FVTPL. In addition, the company may elect to
designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However,
such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred
to as ‘accounting mismatch’). The company has designated certain debt instrument as at FVTPL. Debt instruments
included within the FVTPL category are measured at fair value with all changes recognized in the statement of profit
and loss.
Equity investments
All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for
trading are classified as at FVTPL. For all other equity instruments, the company may make an irrevocable election
to present in other comprehensive income subsequent changes in the fair value. The company makes such election
on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.If the
company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument,
excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to statement of profit
and loss, even on sale of investment. However, the company may transfer the cumulative gain or loss within equity.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in
the statement of profit and loss.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a company of similar financial assets) is
primarily derecognised (i.e. removed from the Company’s balance sheet) when:
the rights to receive Cash flows from the asset have expired, or
the company has transferred its rights to receive Cash flows from the asset or has assumed an obligation to pay the
received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either(a)
the company has transferred substantially all the risks and rewards of the asset, or
(b) the company has neither transferred nor retained substantially all the risks and rewards of the asset, but has
transferred control of the asset.
When the company has transferred its rights to receive cash flows from an asset or has entered into a pass-through
arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither
transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset,
the company continues to recognise the transferred asset to the extent of the Company’s continuing involvement. In
that case, the company also recognises an associated liability. The transferred asset and the associated liability are
measured on a basis that reflects the rights and obligations that the Company has retained. Continuing involvement
that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount
of the asset and the maximum amount of consideration that the company could be required to repay.
Impairment of financial assets
In accordance with Ind AS 109, the company applies expected credit loss (ECL) model for measurement and
recognition of impairment loss on the following financial assets and credit risk exposure:
a) Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities,
deposits, trade receivables and bank balance
b) Financial assets that are debt instruments and are measured as at FVTOCI
c) Lease receivables under Ind AS 17
d) Trade receivables or any contractual right to receive cash or another financial asset that result from transactions
that are within the scope of Ind AS 18 (referred to as ‘contractual revenue receivables’ in these financial
statements)
e) Financial guarantee contracts which are not measured as at FVTPL
The company follows ‘simplified approach’ for recognition of impairment loss allowance on:
Trade receivables and Other receivables
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 ECLs at each reporting date, right from its initial recognition.
For recognition of impairment loss on other financial assets and risk exposure, the company determines that whether
there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased
significantly, 12-month ECL is used to provide for impairment loss.
However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of
the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then
the entity reverts to recognising impairment loss allowance based on 12-month ECL.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a
financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are
possible within 12 months after the reporting date.
ECL is the difference between all contractual cash flows that are due to the company in accordance with the contract
and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. When
estimating the cash flows, an entity is required to consider:
All contractual terms of the financial Instrument (including prepayment, extension, call and similar options) over the
expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument
cannot be estimated reliably, then the entity is required to use the remaining contractual term of the financial
instrument.
Cash flows from the sale of collateral Held or Other credit enhancements that are integral to the contractual terms.
financial assets measured as at amortised cost, contractual revenue receivables and lease receivables: ECL is
presented as an allowance, i.e., as an integral part of the measurement of those assets in the balance sheet. The
allowance reduces the net carrying amount. Until the asset meets write-off criteria, the company does not reduce
impairment allowance from the gross carrying amount
m) Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss,
loans and borrowings, or payables, as appropriate. All financial liabilities are recognised initially at fair value and, in
the case of loans and borrowings and payables, net of directly attributable transaction costs. The Company’s financial
liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee
contracts and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below: Financial liabilities at
fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified
as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes
derivative financial instruments entered into by the company that are not designated as hedging instruments in hedge
relationships as defined by Ind AS 109.Gains or losses on liabilities held for trading are recognised in the statement
of profit and loss.
Loans and borrowings
This is the category most relevant to the company. After initial recognition, interest-bearing loans and borrowings
are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss
when the liabilities are derecognised as well as through the EIR amortisation process. 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 is included as finance costs in the statement of profit and loss. This category generally applies
to borrowings.
Financial guarantee contracts
Financial guarantee contracts issued by the company are those contracts that require a payment to be made to
reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance
with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value,
adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability
is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109
and the amount recognised less cumulative amortisation.
Derecognition
A financial liability is derecognised 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 in the respective carrying
amounts is recognised in the statement of profit and loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the standalone balance sheet if
there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net
basis, to realise the assets and settle the liabilities simultaneously.
n) Derivative financial instruments
Initial recognition and subsequent measurement, The Company uses derivative financial instruments, such as
forward currency contracts, full currency swaps and interest rate swaps contracts to hedge its foreign currency risks
and interest rate risks respectively. Such derivative financial instruments are initially recognised at fair value on the
date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are
carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
o) 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. For the
purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined
above, net of outstanding bank overdrafts as they are considered an integral part of the Company’s cash management.
p) Cash dividend
The Company recognises a liability to make cash distributions to equity holders when the distribution is authorised
and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution
is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.
q) Taxes
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities in accordance with the Income-tax Act, 1961. The tax rates and tax laws used to compute the
amount are those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either
in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying
transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns
with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions
where appropriate.
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. Deferred tax liabilities
are recognised for all taxable temporary differences, except: When the deferred tax liability arises from the initial
recognition of Goodwill or an asset or liability in a transaction that is not a business combination and, at the time
of the transaction, affects neither the accounting profit nor taxable profit or loss in respect of taxable temporary
differences associated with investments in subsidiaries, associates and interests in the temporary differences will
not reverse in the foreseeable future Deferred tax assets are recognised for all deductible temporary differences, the
carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that
it is probable that taxable profit will be available against which the deductible temporary differences, and the carry
forward of unused tax credits and unused tax losses can be utilised, except: When the deferred tax asset relating to
the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is
not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit
or loss 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 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. 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
Minimum Alternate Tax (MAT)
Minimum Alternate Tax (MAT) paid as per Indian Income Tax Act, 1961 is in the nature of unused tax credit which
can be carried forward and utilised when the Company will pay normal income tax during the specified period.
Deferred tax assets on such tax credit is recognised to the extent that it is probable that the unused tax credit can be
utilised in the specified future period. The net amount of tax recoverable from, or payable to, the taxation authority
is included as part of receivables or payables in the balance sheet.
r) Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all
attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on
a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When
the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related
assets.
Export Benefits:
Duty free imports of raw materials under Advance License for imports as per the Import and Export Policy are
matched with the exports made against the said licenses and the net benefit/obligation has been accounted by making
suitable adjustments in raw material consumption.
The benefit accrued under the Duty Drawback, Merchandise Export Incentive Scheme and other schemes as per the
Import and Export Policy in respect of exports made under the said schemes is included as ‘Export Incentives’ under
the head ‘Other operating revenue’.
s) Earnings Per Share:
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity
shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of
calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the
weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential
equity shares.
t) Contingent Liability and Contingent assets
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed 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 is not recognized because it is not probable that an outflow of resources will be require
to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot
be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but
discloses its existence in the financial statements. A contingent asset is not recognised unless it becomes virtually
certain that an inflow of economic benefits will arise. When an inflow of economic benefits is probable, contingent
assets are disclosed in the financial statement. Contingent liabilities and contingent assets are reviewed at each
balance sheet date.
u) Share-Based Payments:
Measurement and disclosure of the employee share based payment plans is done in accordance with Ind AS 102,
Share- Based Payment. The Company measures compensation cost relating to employee stock options using the fair
value method. Compensation expense is amortised over the vesting period of the option on a straight line basis]
v) Prepaid Expenses:
Expenditure for Rs.10,000 and more incurred during the year and some portion belong to future year are consider for
prepaid expenses and expenditure less than Rs.10,000 for individual transaction is accounted expenses in same year.
Recent Indian Accounting Standards (Ind AS)
Ministry of Corporate Affairs (“MCA”), through Companies (Indian Accounting Standards) Amendment Rules,
2019 and Companies (Indian Accounting Standards) Second Amendment Rules, has notified the following new and
amendments to Ind ASs which the Group has not applied as they are effective from April 1, 2019:
Ind AS 116 will replace the existing leases standard, Ind AS 17 Leases. Ind AS 116 sets out the principles for the
recognition, measurement, presentation and disclosure of leases for both lessees and lessors. It introduces a single,
on-balance sheet lessee accounting model for lessees. A lessee recognises right-of-use asset representing its right
to use the underlying asset and a lease liability representing its obligation to make lease payments. The standard
also contains enhanced disclosure requirements for lessees. Ind AS 116 substantially carries forward the lessor
accounting requirements in Ind AS 17.
The Company will adopt Ind AS 16, effective annual reporting period beginning April 1, 2019. The Company
will apply the standard to its leases, retrospectively, with the cumulative effect of initially applying the standard,
recognised on the date of initial application (April 1, 2019). Accordingly, the Company will not restate comparative
information, instead, the cumulative effect of initially applying this Standard will be recognised as an adjustment
to the opening balance of retained earnings as on April 1, 2019. On that date, the Company will recognise a lease
liability measured at the present value of the remaining lease payments. The right-of-use asset is recognised at its
carrying amount as if the standard had been applied since the commencement date, but discounted using the lessee’s
incremental borrowing rate as at April 1, 2019. In accordance with the standard, the Company will elect not to apply
the requirements of Ind AS 116 to short-term leases and leases for which the underlying asset is of low value.
On transition, the Company will be using the practical expedient provided the standard and therefore, will not
reassess whether a contract, is or contains a lease, at the date of initial application.
The Company is in the process of finalising changes to systems and processes to meet the accounting and reporting
requirements of the standard. The company does not expect any significant impact from this pronouncement
Ind AS 12 Income taxes (amendments relating to income tax consequences of dividend and uncertainty over income
tax treatments)
The amendment relating to income tax consequences of dividend clarify that an entity shall recognise the income
tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the
entity originally recognised those past transactions or events. The company does not expect any impact from this
pronouncement.
Ind AS 109 - Prepayment Features with Negative Compensation
The amendments relate to the existing requirements in Ind AS 109 regarding termination rights in order to allow
measurement at amortised cost (or, depending on the business model, at fair value through other comprehensive
income) even in the case of negative compensation payments. company does not expect this amendment to have any
impact on its financial statements.
Ind AS 19 - Plan Amendment, Curtailment or Settlement
The amendments clarify that if a plan amendment, curtailment or settlement occurs, it is mandatory that the current
service cost and the net interest for the period after the re-measurement are determined using the assumptions used
for the re-measurement. In addition, amendments have been included to clarify the effect of a plan amendment,
curtailment or settlement on the requirements regarding the asset ceiling. Company does not expect this amendment
to have any significant impact on its financial statements.
The amendments clarify that if any specific borrowing remains outstanding after the related asset is ready for its
intended use or sale, that borrowing becomes part of the funds that an entity borrows generally when calculating the
capitalisation rate on general borrowings. company does not expect any impact from this amendment.
Ind AS 28 - Long-term Interests in Associates and Joint Ventures
The amendments clarify that an entity applies Ind AS 109 Financial Instruments, to long-term interests in an associate
or joint venture that form part of the net investment in the associate or joint venture but to which the equity method
is not applied. Company does not expect this amendment to have any significant impact on its financial statements.
Ind AS 103 - Business Combinations and Ind AS 111 - Joint Arrangements
The amendments to Ind AS 103 relating to re-measurement clarify that when an entity obtains control of a business
that is a joint operation, it re-measures previously held interests in that business. The amendments to Ind AS 111
clarify that when an entity obtains joint control of a business that is a joint operation, the entity does not re-measure
previously held interests in that business. Company will apply the pronouncement if and when it obtains control /
joint control of a business that is a joint operation.
i. 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. Such changes in the values of financial instruments may result from changes in the foreign currency
exchange rates, interest rates, credit, liquidity and other market changes. The Company’s exposure to market risk is
primarily on account of foreign currency exchange rate risk,
a) Foreign currency exchange rate risk
The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit and loss and
other comprehensive income and equity, where any transaction references more than one currency or where assets
/ liabilities are denominated in a currency other than the functional currency of the Company .
b) Interest rate risk
As company is not holding any investment porfolio and further company borrowing from financial institute are
repaid regulary company is not facing any significant interest rate risk
ii. Credit risk
Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the
contractual terms or obligations, Credit risk encompasses of both, the direct risk of default and the risk of deterioration of
creditworthiness as well as concentration of risks, Credit risk is controlled by analysing credit limits and creditworthiness
of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit,
Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, unbilled
receivables, investments, cash and cash equivalents, bank deposits and other financial assets.
Geographic concentration of credit risk
Geographical concentration of trade receivables, unbilled receivables (previous year: unbilled revenue) and contract assets
is allocated based on the location of the customers,
iii. Liquidity risk
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. 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 by maintaining adequate reserve, banking facilities and reserve borrowing
facilities, continuously monitoring forecast and actual cash flow and by matching the maturity profiles of financial
assets and liabilities,
A Fair Values hierarchy :
Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities; and
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly
or indirectly observable
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable
Note 33: In the opinion of the Board and to the best of their knowledge and belief all the Current Assets, Loans and Advances
have value on realisation at least of an amount at which they are stated in Balance Sheet.
Note 34: The Company has not received intimation from most of the suppliers regarding the status under the Micro, Small
and Medium Enterprise Development Act, 2006, and hence disclosure requirements in this regard as per schedule III of the
Companies Act, 2013 is not being provided.
Note 35: Figures of previous year are regrouped, rearranged and reclassified wherever necessary to correspond to figures of the
current year to extent possible / Practicable.
Note 36: During the year, the Company has not executed any transaction with companies struck off under section 248 of the
Companies Act, 2013 or section 560 of Companies Act, 1956.
Note 37: There are no transactions which were not recorded in books of accounts and have been surrendered or disclosed as
income during the year in the tax assessments under Income tax Act, 1961 (such as, search or survey or any other relevant
provisions of the Income Tax Act, 1961).
Note 38: Company has signed Business Transfer Agreement for sale of Thermal Overload Protector business with Shree
Krishna Controls Private Limited on 15th February 2023. During the previous quarter ended 30th September 2023, the
Company has completed the condition precedents to the closing of BTA Agreement in respect of transferring the banking
facilities to the purchaser, hence BTA Agreement has been executed in the quarter. The Company has transferred assets and
liabilities as per the agreement and gain of Rs. 17.75 thousand is booked. The company has not carried on any business during
the year ended 31st March 2024.
For D. Kothary & Co. For and on behalf of the Board of Directors
Chartered Accountants
Firm's Registration No.105335W Navin Thakkar Samir Thakkar Amit Thakkar
Chairman & Managing Director Director Director (CFO)
Mukesh U. Jha Juhi Balani
Partner Company Secretary &
Membership No. 125024 Compliance Officer
UDIN: 24125024BKFFBK7446
Place: Mumbai
Date:30th May 2024
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