2.13 Provisions and Contingent Liabilities
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. Provisions
are measured at the best estimate of the expenditure
required to settle the present obligation at the Balance
Sheet date.
I f the effect of the time value of money is material,
provisions are discounted to reflect its present value
using a current pre-tax rate that reflects the current
market assessments of the time value of money and
the risks specific to the obligation. When discounting is
used, the increase in the provision due to the passage
of time is recognised as a finance cost.
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 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.
2.14 Inventories
Inventories are valued at lower of cost on FI FO basis and
net realisable value after providing for obsolescence
and other losses, where considered necessary. Cost
includes all charges in bringing the goods to their
present location and condition, including octroi and
other levies, transit insurance and receiving charges.
Work-in-progress and finished goods include
appropriate proportion of overheads and, where
applicable, GST. Net realisable value is the estimated
selling price in the ordinary course of business, less the
estimated costs of completion and the estimated costs
necessary to make the sale.
2.15 Non-derivative financial instruments
Classification
The classification is done depending upon the
Company's business model for managing the financial
assets and the contractual terms of the cash flows.
For assets classified as 'measured at fair value', gains
and losses will either be recorded in profit or loss or
other comprehensive income, as elected. For assets
classified as 'measured at amortized cost', this will
depend on the business model and contractual terms
of the cash flows.
Initial Measurement and Recognition
Financial assets and liabilities are recognised when
the Company becomes a party to the contractual
provisions of the instrument. Financial assets and
liabilities are initially measured at fair value. Transaction
costs that are directly attributable to the acquisition or
issue of financial assets and financial liabilities (other
than financial assets and financial liabilities at fair
value through profit or loss) are added to or deducted
from the fair value measured on initial recognition of
financial asset or financial liability.
a. Financial assets - Subsequent measurement
Financial assets at amortised cost: Financial
assets are subsequently measured at amortised
cost if these financial assets are held within a
business whose objective is to hold these assets
in order to collect contractual cash flows and the
contractual terms of the financial asset give rise
on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.
Financial assets at fair value through other
comprehensive income (FVTOCI): Financial
assets are measured at fair value through other
comprehensive income if these financial assets
are held within a business whose objective is
achieved by both collecting contractual cash
flows that give rise on specified dates to solely
payments of principal and interest on the
principal amount outstanding and by selling
financial assets.
Financial assets at fair value through profit or
loss (FVTPL): Financial assets are measured at fair
value through profit or loss unless it is measured
at amortized cost or at fair value through other
comprehensive income on initial recognition.
The transaction costs directly attributable to the
acquisition of financial assets and liabilities at
fair value through profit or loss are immediately
recognised in profit or loss.
I nvestments are measured at fair value changes
recognised in the Statement of Profit and loss.
However, income on such investments are also
recognised in the Statement of Profit & loss
when the company's right to receive payment
is established.
b. Financial liabilities - Subsequent measurement
Financial liabilities are measured at amortised
cost using the effective interest method. The
measurement of financial liabilities depends on
their classification, as described below:
Loans and borrowings: After initial recognition,
interest-bearing loans and borrowings are
subsequently measured at amortised cost on
accrual basis.
Composite financial Instrument: The fair value
of the liability portion of an optionally convertible
bond is determined using a market interest rate
for an equivalent non-convertible bond. This
amount is recorded as a liability on an amortised
cost basis until extinguished on conversion or
redemption of the bonds. The remainder of the
proceeds is attributable to the equity portion of
the compound instrument. This is recognised and
included in shareholders' equity.
Impairment of financial assets
The Company assesses on a forward-looking
basis, the expected credit losses associated with
its financial assets carried at amortised cost for
e.g., debt securities, deposits, trade receivables
and bank balances; and lease receivables. The
impairment methodology applied depends on
whether there has been a significant increase in
credit risk and if so, assess the need to provide for
the same in the Statement of Profit and Loss.
The Company follows 'simplified approach' for
recognition of impairment loss allowance on
trade receivables and all lease 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 expected credit
losses (ECL) at each reporting date, right from its
initial recognition.
For recognition of impairment loss on other
financial assets and risk exposure, the Company
determines 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
over the expected life of the financial instrument.
ECL impairment loss allowance (or reversal)
recognised during the period is recognised as
income/expense in the Statement of Profit and
Loss. This amount is reflected under the head
'other expenses' in the Statement of Profit and
Loss. The Balance Sheet presentation for various
financial instruments is described below:
Ý Financial assets measured at amortised cost,
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.
For assessing increase in credit risk and impairment
loss, the Company combines financial instruments
based on shared credit risk characteristics with
the objective of facilitating an analysis that is
designed to enable significant increases in credit
risk to be identified on a timely basis.
For debt instruments at fair value through OCI, the
Company applies the low credit risk simplification.
At every reporting date, the Company evaluates
whether the debt instrument is considered to
have low credit risk using all reasonable and
supportable information that is available without
undue cost or effort. In making that evaluation,
the Company reassesses the internal credit rating
of the debt instrument.
However, in certain cases, the Company may also
consider a financial asset to be in default when
internal or external information indicates that the
Company is unlikely to receive the outstanding
contractual amounts in full before taking into
account any credit enhancements held by the
Company. A financial asset is written off when
there is no reasonable expectation of recovering
the contractual cash flows.
Derecognition
A financial liability is derecognised when the
obligation specified in the contract is discharged,
cancelled or expires.
c. Offsetting of financial instruments
Financial assets and financial liabilities are offset
and the net amount is reported in financial
statements 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.
2.16 Borrowing costs
General and specific borrowing costs that are
directly attributable to the acquisition, construction
or production of a qualifying asset are capitalised
during the period of time that is required to complete
and prepare the asset for its intended use or sale
otherwise to be charged to the statement of profit
and loss. Qualifying assets are assets that necessarily
take a substantial period of time to get ready for their
intended use or sale.
Investment income earned on the temporary
investment of specific borrowings pending their
expenditure on qualifying assets is deducted from
the borrowing costs eligible for capitalisation. Other
borrowing costs are expensed in the period in which
they are incurred.
2.17 Employee Benefits
Employee benefits consist of contribution to
employee's state insurance, provident fund, gratuity
fund and compensated absences.
Post-employment benefit plans
Defined Contribution plans
Contributions to defined contribution schemes such
as employees' state insurance, labour welfare fund,
employee pension scheme etc. are charged as an
expense based on the amount of contribution required
to be made as and when services are rendered by the
employees. Company's provident fund contribution is
made to a government administered fund and charged
as an expense to the Statement of Profit and Loss. The
above benefits are classified as Defined Contribution
Schemes as the Company has no further defined
obligations beyond the monthly contributions.
Defined benefit plans
The Company operates defined benefit plan in the form
of gratuity and compensated absence. The liability or
asset recognised in the balance sheet in respect of its
defined benefit plans is the present value of the defined
benefit obligation at the end of the reporting period.
The defined benefit obligation is calculated annually by
actuaries using the projected unit credit method. The
present value of the said obligation is determined by
discounting the estimated future cash out flows, using
market yields of government bonds that have tenure
approximating the tenures of the related liability.
The interest expenses are calculated by applying the
discount rate to the net defined benefit liability or
asset. The net interest expense on the net defined
benefit liability or asset is recognised in the Statement
of Profit and loss.
Remeasurement gains and losses arising from
experience adjustments and changes in actuarial
assumptions are recognised in the period in which
they occur, directly in other comprehensive income.
They are included in retained earnings in the Statement
of Changes in Equity and in the Balance Sheet.
Changes in the present value of the defined benefit
obligation resulting from plan amendments or
curtailments are recognised immediately in profit or
loss as past service cost.
The classification of the company's net obligation
into current and non- current is as per the actuarial
valuation report.
2.18 Earnings per share (EPS)
Basic EPS is computed by dividing the profit or loss
attributable to the equity shareholders of the Company
by the weighted average number of Ordinary shares
outstanding during the year. Diluted EPS is computed
by adjusting the profit or loss attributable to the
ordinary equity shareholders and the weighted average
number of ordinary equity shares, for the effects of all
dilutive potential Ordinary shares.
Level 1 : The fair value of financial instrument traded in active markets (such as publicly traded derivatives and equity
securities) is based on quoted market prices at the end of the reporting period.
Level 2 : The fair value of financial instrument that are not traded in active markets is determined using valuation
techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimate.
If all significant input required to fair value an instrument is observable, the instrument is included in level 2.
Level 3 : If one or more of the significant input is not based on observable data, the instrument is included in level 3.
42. FINANCIAL RISK MANAGEMENT AND POLICIES
Capital risk management
The Company manages its capital to ensure that the Company will be able to continue as going concern while
maximizing the return to stakeholders through optimization of debt and equity balance. The Company is not subject
to any externally imposed capital requirements.
The capital structure of the Company consists of total equity of the Company. Equity consists of equity capital and
Retained Earning.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and
the requirements of the financial covenants.
Capital management
(a) The company's objectives when managing capital are to
Ý Safeguard its ability to continue as a going concern, so that it can continue to provide returns to shareholders
and benefits to other stakeholders, and
Ý Maintain an optimal capital structure to reduce the cost of capital.
Ý The capital structure of the Company consists of net debt (borrowings as detailed in notes 16 & 19 less cash
and bank balances as detailed in note 10 & 11) and total equity of the Company. Equity consists of equity
capital, share premium and all other equity reserves attributable to the equity holders.
Financial risk management
The Company's principal financial liabilities comprise loans and borrowings, trade and other payables. The main
purpose of these financial liabilities is to finance and support the Company's operations. The Company's principal
financial assets comprise inventories, cash and bank balance, trade and other receivables.
The financial risks are identified, measured and managed in accordance with the Company's policies and risk objectives.
The Company is not exposed to any financial risks such as market risk, credit risk and liquidity risk.
a. Market Risk
The Company's activities expose it primarily to changes in interest rates. There have been no changes to the
Company's exposure to market risk or the manner in which it manages and measures the risk in recent past.
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 two types of risk: interest rate risk and currency risk. Financial
instruments affected by market risk include borrowings and bank deposits.
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 is limited.
Credit risk
Credit risk is the risk that counterparty will default on its contractual obligations resulting in financial loss to the
company. The Company has adopted a policy of only dealing with creditworthy customers.
The credit limit is granted to a customer after assessing the Credit worthiness based on the information supplied
by credit rating agencies, publicly available financial information or its own past trading records and trends.
As at 31st March, 2025, the company did not consider there to be any significant concentration of credit risk,
which had not been adequately provided for. The carrying amount of the financial assets recorded in the financial
statements, grossed up for any allowances for losses, represent the maximum exposure to credit risk.
Liquidity risk
The Company manages liquidity risk by maintaining adequate reserves and banking facilities, by continuously
monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities
for the Company.
The Company has established an appropriate liquidity risk management framework for it's short-term, medium
term and long-term funding requirement.
44. Before dealing with other companies, Company always check the status of other companies and to the best of
knowledge of the company, company do not have any transaction with companies struck off under section 248 of
the Companies Act, 2013 or section 560 of companies Act, 1956.
45. With the object not to restate the published quarterly results of the Company, management has decided to disclose
the profit and loss separately in respect of profit and loss related to investment.
46. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's
classification / disclosure. Figures have been rounded off to the nearest lakhs rupees unless otherwise stated.
For Chaturvedi & Co.LLP For and on behalf of the Board
Chartered Accountants
Firm Registration No.302137E/E300286
Rajesh Kumar Agarwal Vikram Agarwal Kanha Agarwal
Partner Director Managing Director
M.No.058769 DIN:00054125 DIN:06885529
Jagdish Chandra Dalip Kumar Sharma
New Delhi Company Secretary Chief Financial Officer
30th May,2025 M.No.ACS 47018
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