t) Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognized when there is a present legal or statutory obligation or
constructive obligation as a result of past events and where it is probable that there will be
outflow of resources to settle the obligation and when a reliable estimate of the amount of
the obligation can be made.
Contingent liabilities are recognized only when there is a possible obligation arising from
past events due to occurrence or non-occurrence of one or more uncertain future events
not wholly within the control of the Company or where any present obligation cannot be
measured in terms of future outflow of resources or where a reliable estimate of the
obligation cannot be made. Obligations are assessed on an ongoing basis and only those
having a largely probable outflow of resources are provided for.
Contingent assets where it is probable that future economic benefits will flow to the
Company are not recognized but disclosed in the Financial Statements. However, when
the realization of income is virtually certain, then the related asset is no longer a
contingent asset, but it is recognized as an asset.
Level 1: Level 1 hierarchy includes Financial Instruments measured using quoted prices. This
includes listed equity instruments that have quoted price. The fair value of all equity instruments
which are traded in the stock exchanges is valued using the closing price as at the reporting period.
Fair value of mutual funds is determined based on the closing NAV.
Level 2: The fair value of Financial Instruments that are not traded in an active market is determined
using valuation techniques which maximizes the use of observable market data and rely as little as
possible on entity-specific estimates. If all significant inputs required to fair value an instrument are
observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the
instrument is included in level 3. This is the case for unlisted equity securities, security deposits
included in level 3.
37 FINANCIAL RISK MANAGEMENT
The Company’s activities exposes it to market risks (including currency risk, interest rate risk
and other price risk), liquidity risk, credit risk and other risks. This note explains the sources
of risk which the entity is exposed to and how the entity manages the risk :
The Company’s risk management is carried out by chief financial officer under policies
approved by the Board of Directors. The Company's chief financial officer identifies,
evaluates and hedges financial risks in close co-operation with the Company’s operating
units. The board provides principles for overall risk management, as well as policies covering
specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of non¬
derivative financial instruments and investment of excess liquidity The risk management
includes identification, evaluation and identifying the best possible option to reduce such
risk. The Board has taken all necessary actions to mitigate the risks identified on the basis of
the information and situation present.
(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 risks:
currency risk, interest rate risk and other price risk. Financial instruments affected by market
risk include borrowings, trade payables, trade receivables, loans and non-derivative financial
instruments.
(ii) 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 has given loans at fixed
rate of interest and hence it is not exposed to interest rate risk.
(B) Credit risk
Credit risk arises when a counter party defaults on contractual obligations resulting in
financial loss to the Company. In order to mitigate the risk of financial loss from defaulters,
the Company has an ongoing credit evaluation process in respect of customers who are
allowed credit period. In respect of walk-in customers the Company does not allow any credit
period and therefore, is not exposed to any credit risk.In general, it is presumed that credit risk
has significantly increased since initial recognition if the payments are more than 90 days past
due.
(C) Liquidity risk
The Company has sufficient cash and cash equivalents and other liquid current financial
assets which can be easily realised in cash or cash equivalents in short time .Therefore there
is no significant liquidity risk.
38 CAPITAL MANAGEMENT
For the purpose of the Company’s capital management, equity includes issued equity capital
and all other equity reserves attributable to the equity holders of the Company. The primary
objective of the Company’s capital management is to maximise the shareholders value. The
Company’s Capital Management objectives are to maintain equity including all reserves to
protect economic viability and to finance any growth opportunities that may be available in
future so as to maximize shareholders’ value. The Company is monitoring capital using debt
equity ratio as its base, which is debt to equity. The Company’s policy is to keep debt equity
ratio below one and infuse capital if and when it is required through issue of new shares and/or
better operational results and efficient working capital management. Presently the Company
does not have any debt.
43. EMPLOYEE BENEFITS:
I. Defined Benefits Plans
The Company has provided for bonus amounting to Rs.2,85,184/- (Previous year
Rs.2,76,523/-) for all its employees under the Payment of Bonus Act, 1965 which has been
recognized in the Statement of Profit & Loss for the year.
The Company has provided for Gratuity amounting to Rs. 1,76,730/- (Previous year Rs.75,904)
for its eligible employees under the Payment of Gratuity Act, 1972 which has been recognized
in the Statement of Profit & Loss for the year.
45. SEGMENT REPORTING
The Company is primarily engaged in the business of trading in engineering goods and related
items, which as per Indian Accounting Standard-108 on ‘Operating Segments’ is considered to
be the only reportable business segment. The Company is operating in India which is
considered as a single geographical segment.
46. DISCLOSURE OF RELATED PARTIES AS PER THE REQUIREMENT IND AS 24
a) Companies / Enterprises in which Key Management Personnel having significant
influence and with whom transactions have taken place during the year and/or
where balances exist:
i) Candour Techtex Limited
b) Key Management Personnel:
i) Mr. Jayesh R. Mehta - Managing Director
ii) Mr. Bharat K. Shah - Director and Chief Financial Officer
iii) Ms. Neelam Devani - Company Secretary & Compliance officer
c) Relatives of Key Management Personnel & Other Related parties:
i) Mrs. Amita J. Mehta - Non-executive Director
ii) Dr. Bharat Bhatia - Independent Director
iii) Mr. R.C. Garg - Independent Director
iv) Mr. Richie Amin - Independent Director
d) Transactions during the year and Balance outstanding at the year end with related
parties.
47. ADDITIONAL REGULATORY INFORMATION (TO THE EXTENT APPLICABLE) AS PER MCA’S
NOTIFICATION NO. G.S.R. 207(E) DATED 24-03-2021
(i) Title deed of Immovable property not held in name of the company
The Company is the owner of Office Premises the title deeds of which is held in the name of
the Company
The Company has taken certain premises on lease and the lease agreements are duly
executed in favour of the Company.
(ii) Fair valuation of investment property
The fair value of the investment property is not based on the valuation by a registered valuer
as defined under Rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017.
However, the above valuation of the investment properties are in accordance with the
Ready Reckoner rates prescribed by the Government of Maharashtra for the purpose of
levying stamp duty.
(iii) Revaluation of Property. Plant & Equipment an d Right of Use Assets
The Company has not revalued its Property, Plant & Equipment and Right of Use Assets
during the year.
(iv) Revaluation of Intangible assets
The Company does not own any Intangible Assets during the year.
(v) Loans and advances to Specified Persons.
The Company has not granted any loans or Advances in nature of loans to Specified
Persons, namely Promoters, Directors, KMP's & Related Parties which are repayable on
demand or without specifying any terms or period of repayment.
(vi) Capital - Work in Progress ageing Schedule
Capital - Work in Progress Completion Schedule
There is no Capital Work-in-Progress as on the date of the Balance Sheet.
(vii) Intangible assets under development Completion Schedule
There is no intangible assets under development as on the date of Balance Sheet.
(viii) Details of Benami Property held
The Company does not hold any Benami Property.
No proceedings have been initiated or pending against the Company for holding any Benami
Property under the Benami Transactions (Prohibitions) Act, 1988 and Rules made there
under, during the year.
(ix) Borrowings secured against currents assets
The company has not availed any borrowings from banks or financial institutions on the
basis of security of current assets during the year.
(x) Willful Defaulter
The Company is not declared as wilful defaulter by any Bank or Financial Institutions or
other lenders during the year.
(xi) Transaction with Struck off Companies
The Company has not entered into any transactions with struck-off Companies
(xii) Registration of Charges or satisfaction with Re gistrar of Companies
The Company has not availed any loans or borrowings against security of its assets hence
there is no question of registration or satisfact ion of charges with Registrar of Companies
(xiii) Compliance with number of layers of Compan ies.
The Company does not have any subsidiary Company
(xiv) Compliance with approved Scheme(s) of Arrangements
The Company has not made any scheme of arrangements in terms of sections 230 to 237 of
the Companies Act, 2013 during the year.
(xv) Utilisation of Borrowed funds and share premi um:
No funds have been advanced / loaned / invested (from borrowed funds or from share
premium or from any other sources / kind of funds) by the Company to any other person(s)
or entity(ies), including foreign entities (Intermediaries), with the understanding (whether
recorded in writing or otherwise) that the Intermediary shall (i) 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 (ii) provide any guarantee, security or the like to or on
behalf of the Ultimate Beneficiaries.
No funds have been received by the Company from any person(s) or entity(ies), including
foreign entities (Funding Parties), with the understanding (whether recorded in writing or
otherwise) that the Company shall (i) 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 (ii) provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries.
(xvi) Undisclosed income
The Company has not surrendered or disclosed any income during the year in the tax
assessments under the Income Tax Act, 1961 which were not recorded in the books of
accounts.
(xvii) Corporate Social Responsibility (CSR)
The provisions of section 135 of the Companies Act relating to CSR are not applicable to the
Company during year.
(xviii) Details of Crypto Currency or Virtual Currency
The Company has not traded or invested in Crypto currency or Virtual Currency during the
financial year.
49. CONTINGENT LIABILITY
Claims against the Company not acknowledged as debts represent suits filed by parties and
disputed by the Company Rs. 22,58,385/- (Previous Year Rs. 22,58,385/-)
50. The previous year's figures are grouped / regrouped or arranged / rearranged wherever
necessary to make them comparable with the current period’s figures.
As per our report of even date On behalf of the Board
For Ambavat Jain & Associates LLP
Firm Registration No. 109681W
J.R. Mehta R.C. Garg
Director Director
Ashish J. Jain DIN 00193029 DIN 03346742
Partner
Membership No. 111829
Neelam Devani Bharat Shah
Company Secretary Chief Financial Officer
Membership No. A47166 DIN 08066115
Place: Mumbai Place: Mumbai
Date: 29-05-2024 Date: 29-05-2024
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