1.2.7 Provisions, Contingent Liabilities and Contingent Assets.
Provisions are recognized 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 benefit and the
Company will be required to settle the obligation, and a reliable estimate can be made of the amount of
the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the
present obligation at the end of the reporting period, taking into account the risks and uncertainties
surrounding the obligation. When a provision is measured using the cash flows estimated to settle the
present obligation, its carrying amount is the present value of those cash flows (when the effect of the
time value of money is material).When some or all of the economic benefits required to settle a provision
are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually
certain that reimbursements will be received and the receivable can be measured reliably.
Contingent liabilities
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.
Contingent assets
Contingent assets are disclosed in the Financial Statements by way of notes to accounts when an
inflow of economic benefits is probable.
1.2.8 Cash and Cash Equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes
cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments
with original maturities of three months or less that are readily convertible to known amounts of cash
and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts
are shown within borrowings in current liabilities in the balance sheet.
1.2.9 Earnings per Share
Basic earnings per share are computed by dividing the net profit after tax attributable to equity shareholders
of the Company by the weighted average number of Equity Shares outstanding during the period.
Diluted earnings per share is computed by dividing the profit after tax by the weighted average number
of Equity Shares considered for deriving basic earnings per share and the weighted average number of
Equity Shares that could have been issued upon conversion of all dilutive potential Equity Shares.
Potential shares are considered as antidilutive when their conversion to ordinary shares would increase
earnings per share or decrease loss per share from continuing operations.
1.2.10 Financial Instruments
Financial assets and financial liabilities are recognised when the Company becomes a party to the
contractual provisions of the instruments.
A. Financial Assets
(i) Classification
The company classifies its financial assets in the following measurement categories:
• those to be measured subsequently at fair value (either through other comprehensive income, or
through profit or loss), and
• those measured at amortised cost.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other
comprehensive income. For investments in debt instruments, this will depend on the business model
in which the investment is held. For investments in equity instruments, this will depend on whether the
company has made an irrevocable election at the time of initial recognition to account for the equity
investment at fair value through other comprehensive income.
(ii) Investment in Equity of Associates
The Company records the investments in Associates at cost less impairment loss, if any, as per Ind AS
27 - Separate Financial Statements. The Company on the date of transition to Ind AS has adopted the
previous GAAP carrying amount at that date as the Deemed Cost in accordance with the exemptions
provided under Ind AS 101 First-time Adoption of Indian Accounting Standards.
(iii) Financial Assets - Other than investment in associates
Financial assets other than investment in associate comprise of investments in equity (including
investments in equity oriented mutual funds) and, trade receivables, cash and cash equivalents and
other financial assets.
(iv) Initial recognition and Measurement
At initial recognition, the company measures a financial asset at its fair value and in the case of a
financial asset not recorded at fair value through profit or loss, fair value plus transaction costs that are
directly attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or
loss.
(v) Classification and subsequent measurement
The company classifies its financial assets in the following measurement categories:
• Financial assets measured at amortised cost and
• Financial assets measured subsequently at fair value (either through other comprehensive income,
or through profit or loss), and
The classification depends on the entity's business model for managing the financial assets and the
contractual cash flow characteristics of the Financial Assets.
• Financial assets measured at amortized cost:
Financial assets held within a business model whose objective is to hold financial 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
are measured at amortized cost using effective interest rate (EIR)method. The EIR amortization is
recognized as finance income in the statement of profit and loss.
The Company while applying above criteria has classified the following at amortized cost
(a) Trade receivable
(b) Other financial assets
• Financial assets measured at Fair value through other comprehensive income (FVTOCI)
Financial assets that are held within a business model whose objective is achieved by both collecting
contractual cash flow and selling financial asset and the contractual terms of financial assets give rise
on specified dates to cash flow that are solely payments of principal and interest on the principal
amount outstanding are subsequently measured at FVTOCI. Fair value movements in financial assets
at FVTOCI are recognized in other comprehensive income.
• Financial asset at Fair value through Profit or Loss (FVTPL)
Financial assets are measured at fair value through Profit and loss if it does not meet the criteria for
classification as measured at amortized cost or at fair value through other comprehensive income. All
fair value changes are recognized in the Statement of Profit and loss.
(vi) Investments in Equities and Equity mutual funds
Fair Value through Other Comprehensive Income (FVOCI)
All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are
held for trading and contingent consideration recognised by an acquirer in a business combination to
which Ind AS103 applies 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.
Where the management has elected to present fair value changes (gains and losses) on equity
investments in other comprehensive income, they are measured at fair value with gains and losses
arising from changes in fair value recognized in other comprehensive income and accumulated in the
'Fair value changes for equity instruments through other comprehensive income'.
There is no subsequent reclassification / recycling of fair value gains and losses to Statement of Profit or
Loss even on derecognition / sale of the Investments. However, the Company may transfer the cumulative
gain or loss within equity.
Dividends from such investments are recognised in profit or loss as other income when the company's
right to receive payments is established.
Impairment losses (and reversal of impairment losses) on equity investments measured at FVTOCI are
not reported separately from other changes in fair value.
Fair value through profit or loss (FVTPL)
Equity instruments held for trading are classified as FTVPL and are measured at fair value with all
changes recognised in the Statement of Profit or Loss.
(vii) De-recognition of financial assets
The Company derecognises a financial asset when the contractual rights to the cash flows from the
asset expire, or when it transfers the financial asset and substantially all the risks and rewards of
ownership of the asset to another party.
On derecognition of a financial asset in its entirety (except for equity instruments designated as (FVTOCI),
the difference between the asset's carrying amount and the sum of the consideration received and
receivable is recognised in the Statement of Profit and Loss.
(viii) Impairment of financial assets
Trade receivables under IND AS 109, investments in debt instruments that are carried at amortized cost,
investments in debt instruments that are carried at FVTOCI are tested for impairment based on the
expected credit losses for their respective financial asset.
> Trade Receivable
The Company applies the expected credit loss model for recognizing impairment loss on financial
assets measured at amortised cost, trade receivables and other contractual rights to receive cash or
another financial asset.
For trade receivables or any contractual right to receive cash or another financial asset that results from
transactions that are within the scope of Ind AS 115, the Company follows 'simplified approach' and
measures the loss allowance at an amount equal to lifetime expected credit losses. This impairment
allowance is computed based on historical credit loss experience and management assessment.
> Other financial assets
Other financial assets are tested for impairment and expected credit losses are measured at an amount
equal to 12 month expected credit loss. If the credit risk on the financial asset has increased significantly
since initial recognition, then the expected credit losses are measured at an amount equal to life-time
expected credit loss.
B. Financial liabilities and equity instruments
(i) Classification as debt or equity
Debt and equity instruments issued by the Company are classified as either financial liabilities or as
equity in accordance with the substance of the contractual arrangements and the definitions of a financial
liability and an equity instrument.
(ii) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds
received, net of direct issue costs.
(iii) Financial Liabilities - Initial recognition and measurement
All financial liabilities are recognized initially at fair value plus any transaction cost that are attributable to
the acquisition of financial liability except financial liabilities at fair value through profit and loss which
are initially measured at fair value.
(iv) Subsequent measurement
The financial liabilities are classified for subsequent measurement into following categories
• at amortized cost
• at fair value through profit and loss
Amortised Cost - Loans and Borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised
cost using the Effective Interest Rate (EIR) method. Gains and losses are recognized in the Statement
of Profit and Loss when the liabilities are derecognised. 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 interest-bearing loans and borrowings.
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. Financial liabilities designated upon initial recognition at fair value through profit or loss are
designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. The
Company has not designated any financial liability as at fair value through profit and loss.
(v) De-recognition of financial liabilities
A financial liability is derecognized when and only when, it is extinguished i.e. when the obligation
specified in the contract is discharged or cancelled or have expired.
An exchange between with a lender of debt instruments with substantially different terms is accounted
for as an extinguishment of the original financial liability and the recognition of a new financial liability.
Similarly, a substantial modification of the terms of an existing financial liability (whether or not attributable
to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial
liability and the recognition of a new financial liability.
The difference between the carrying amount of the financial liability derecognized and the consideration
paid / payable is recognized in statement of profit and loss.
1.2.11 Equity and Reserves
Share Capital represents the nominal (par) value of shares that have been issued and fully paid-up.
Retained earnings include all current and previous period retained profit.
1.3 Significant accounting judgements, estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the
reporting date, that have a significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year, are described below. Existing circumstances
and assumptions about future developments may change due to market changes or circumstances
arising that are beyond the control of the Company. Such changes are reflected in the assumptions
when they occur.
a. Income Taxes
The calculations of income taxes required judgement in interpreting tax rules and regulations.
Management judgment is used to determine the amounts of deferred tax assets and liabilities and
future tax liabilities to be recognized.
b. Recognition of deferred tax
The Company estimates the possible utilization of unabsorbed losses while recognizing deferred tax
asset considering the future business plan and economic environment.
c. Useful lives of property, plant and equipment and intangible assets
The Company has estimated useful life of each class of assets based on the nature of assets, the
estimated usage of the asset, the operating condition of the asset, past history of replacement,
anticipated technological changes, etc. The Company reviews the carrying amount of property, plant
and equipment and Intangible assets at the end of each reporting period. This reassessment may
result in change in depreciation expense in future periods.
d. Impairment testing
Property, plant and equipment and Intangible assets are tested for impairment when events occur
or changes in circumstances indicate that the recoverable amount of the cash generating unit is less
than its carrying value. The recoverable amount of cash generating units is higher of fair value less
costs of disposal and its value-in-use. The calculation involves use of significant estimates and
assumptions which includes turnover and earnings multiples, growth rates and net margins used
to calculate projected future cash flows, risk-adjusted discount rate, future economic and market
conditions.
e. Cash Flow statements
Cash Flow Statement is prepared segregating the cash flows from operating, investing and financing
activities. Cash flow from operating activities is reported using indirect method. Using indirect method,
the net profit is adjusted for the effects of
(i) Transactions of non-cash nature.
(ii) Any deferrals or accruals of past or future operating cash receipts or payments and
(iii) Items of income or expense associated with investing or financing cash flows.
Cash and cash equivalents (including bank balances) are reflected as such in cash flow statement.
The number of persons employed by the Company falls below the limits prescribed under the Payment of Gratuity Act,
1972 and hence not covered under the Payment of Gratuity Act. Hence the Company has not provided for Gratuity
Liability based on actuarial Valuation. The Company made provision for Gratuity Liability on the basis of estimates made
by the Company . However, in the opinion of the Management the impact of Non Provision of Gratuity Liability under
Actuarial Valuation will not be material considering the minimal number of Employees employed by the Company. In
respect of Leave Salary, the company as such does not have any scheme and the same will be accounted for as
and when the liability for the same is admitted. Though the employees Provident Fund & Miscellaneous Provisions Act,
1952 is not applicable to the company, the company has complied with the provisions voluntarily.
Note 29: Going Concern :-
The Company has incurred continuous losses for the past three years and the accumulated retained earnings has
become negative . The current liabilities also exceeds the current assets. However, the net worth continues to remains
positive and further the Company has in place revised business strategy and new plans which will turn around the
Company in the future years. In view of the above factors, the management is confident on the Company's ability to
continue as a going concern for a foreseeable future
a. There are no transactions which are not recorded in the books of accounts that have been surrendered or
disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.
b. The Company does not have any balance or transactions with companies struck off under section 248 of
Companies Act, 2013 or section 560 of Companies Act, 1956.
c. The Provisions of Companies Social Responsibility under Section 135 of the Companies Act, 2013 are not applicable
to the Company for the year.
d. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.
e. The company has not traded or invested in Crypto or virtual currency during the year(PY Nil).
f. The Company does not holds any Benami property and there are no proceedings against the company under the
benami transactions (prohibition) Act 1988 (as amended from time to time).
g. The Company has not been declared as a willful defaulter (as per RBI circular) by any bank or financial institution
or any other lender at any time during the financial year or after the end of the reporting period.
h. To the best of our knowledge and belief, other than as disclosed in the notes to the accounts, no funds have
been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or
kind of funds) by the company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”),
with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, 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 provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries;
i. To the best of our knowledge and belief, other than as disclosed in the notes to the accounts, no funds have
been received by the company form any person)s) or entity(ies), including foreign entities (“Funding Parties”), with
the understanding, whether recorded in writing or otherwise, that the company shall, whether, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
j. There are no amounts due to be remitted to Investors Education and Protection Fund (PY Nil).
k The company has carried out impairment exercise as required by Ind AS 36 - Impairment of Assets and such
exercise did not result in any adjustment in the books of accounts towards impairment loss as at the year end.
l. The company does not have any subsidiary and hence the reporting requirement with respect to Number of
layerof companies is not applicable.
m During the Financial Year Company has not revalued any of its Property Plant and Equipment
n. The Company does not have any investment properties as at March 31,2024 & March 31,2023 as defined in Ind
AS 40
o. The Company has not granted any loans (or) advances in the nature of Loans to Promoters,Directors , Key
Managerial Personnels(KMP) , and the related Parties, either severally or jointly with any other person.
"p. The Company has borrowings from bank on the basis of security of current assets and the Current asset
Statements furnished to the Bank include certain Accounts Receivables which in the opinion of the management
are recoverable but considered as bad debts in the books in compliance with applicable accounting Standards
due to significant increase in credit risk. To that extent the Accounts receivable as stated in the Financial
Statement is lesser than the amount furnished to the Bank and is not in agreement with the books of account.““The
Current asset Statements furnished to the Bank carries higher valuation of inventories due to the fact that certain
jigs and moulds and tools which has Nil carrying value in the books are included in the Statement and due to
write down in the books in accordance with applicable Accounting Standards. “"
q. The Board of Directors have also reviewed the reliasable value of all the current assets of the Company and
have confirmed that the value of such assets in the ordinary course of business will not be less than the value
at which these are recognized in the financial statements. In addition board has also confirmed the carrying value
of non current assets in the Financial Statements.
r. The title deeds of immovable property are held in the name of the erstwhile name of the Company i.e M/s Munoth
Investments LTD
Notes 32: FINANCIAL INSTRUMENTS
32.1 Financial Risk Management
The Company's business activities expose it to a variety of financial risks, namely market risk, credit risk and liquidity
risk, The Company's senior management has the overall responsibility for the establishment and oversight of the
Company's risk management framework. The key risks and mitigating actions are also placed before the Audit Committee
of the Company. The Company's risk management policies are established to identify and analyse the risks faced by
the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management
policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities.
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, foreign currency risk and commodity risk
a) 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 relates primarily to the Company's short term debt obligations with floating interest rates.
If the interest rates had been 50 basis points higher or lower and all the other variables were held constant,
the Company's profit would be impacted by Rs. 67.12 thousands in FY 2023-24 (Rs. 40.93 thousand in FY
2022-23)
(b) Foreign Currency Risk
Foreign currency risk is the risk that the fair value of future cash flows of an exposure will fluctuate
because of changes in foreign exchange rates. The Company's exposure to the risk of changes in foreign
exchange rates relates primarily to the Company's operating activities which is Nil. Since the company do
not have any transaction in Foreign currency.
Hedging and foreign currency sensitivity analysis
There are no foreign currency exposures and hence hedging requirements and sensitivity analysis does not
arise for the year 2023-2024 ( Nil for 2022-23)
(c) Commodity Price Risk
The Company is affected by the price volatility of certain commodities. Its operating activities require the
on-going purchase or continuous supply of items dealt with by the Company. Therefore, the Company has
policy of monitoring its purchases closely to optimise the price when the company purchases the commodity.
B. Credit Risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer
contract, leading to financial loss.
Credit risk encompasses of both, the direct risk of default and the risk of deterioration of credit worthiness as
well as concentration of risks.
The Investments mainly consists of Equity Investments in quoted Equity Shares listed in Bombay Stock Exchange
/ National Stock Exchange. The Company has investments for a long term and continuously monitoring the same.
The outlook of Indian capital markets are positive and the company do not foresee any risk which can not be
mitigated
Financial instruments that are subject to concentrations of credit risk principally consist of investments classified
as trade receivables, loans and advances and cash and cash equivalents amounting to Rs.921.77 thousands
(Previous year Rs.741.60 thousands). None of the other financial instruments of the Company result in material
concentration of credit risk.
Cash and cash equivalents with banks has high credit-rating assigned to them.
32.2 Trade Receivables
Customer credit risk is managed as per the Company's established policy, procedures and control relating to customer
credit risk management. Credit quality of a customer is assessed based on a detailed assessment and individual credit
limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored.
An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large
number of minor receivables are grouped into homogenous groups and assessed for impairment collectively.
The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to
trade receivables as low, as its customers are located in several jurisdictions and operate in largely independent
markets.
The Company follows simplified approach for recognition of impairment loss allowance on trade receivables which do
not contain a significant financing component.
The company has outstanding only from 2 customers which the company is confidents of recovering with in 12 months
from date of this Financial statements.
32.3 Liquidity Risk
The Company monitors its risk of shortage of funds using cash flow forecasting models. These models consider the
maturity of its financial investments, committed funding and projected cash flows from operations. The Company's
objective is to provide financial resources to meet its business objectives in a timely, cost effective and reliable manner
and to manage its capital structure.
A balance between continuity of funding and flexibility is maintained through continued support from lenders and trade
creditors.
During the year, the Company has made repayment of principal and interest on borrowings on or before due dates.
The Company did not have any defaults of principal and interest as on the reporting date.
The table below summarises the maturity profile of the Company's financial liability based on contractual undiscounted
payment and financial assets based on contractual undiscounted receipts.
32.6 Capital Management
The Company's capital comprises Equity Share Capital, retained earnings and other equity attributable to equity holders.
The primary objective of Company's capital management is to maximize shareholders value. The Company manages
its capital and makes adjustment to it in light of the changes in economic and market conditions. The Company does
so by adjusting dividend paid to shareholders. The total Paid up EquityShare Capital as on March 31, 2024 is Rs.
99,513.43 thousands (Previous Year: Rs. 99,513.43 thouasnds).
The Company's overall strategy remains unchanged from previous year.
The Company sets the amount of capital required on the basis of annual business and long-term operating plans which
include capital and other strategic investments. The funding requirements are met through a mixture of term borrowings
to meet anticipated funding requirements.
Note 34: Previous Year Figures
The previous year's figures of Balance Sheet have been regrouped, reclassified wherever necessary. Amounts and
other disclosures for the preceding year are included as an integral part of the current year financial statements and
are to be read in relation to the amounts and other disclosures relating to the current year. Figures are rounded off
to the nearest thousand. Figures in bracket represent negative figures.
The Financial Statements were approved for issue by the Board of Directos on 29th May 2024_
The above Statement of Profit & Loss should be read in conjunction with the accompanying notes
As per our report of even date
For KUMBHAT & CO
Chartered Accountants For and on behalf of the board of directors of
Firm Registration Number : 001609S Munoth Communication Ltd
-sd- -sd- -sd- -sd-
M.V. CHANDRAMOULEESWARAN Lalchand Munoth Jaswant Munoth Bharat Munoth
Partner [DIN:01693640] [DIN: 00769545] [DIN:00769588]
Membership Number : 202629 [Chairman] [Managing Director] [Director]
UDIN : 24202629BKAMQG2732
-sd- -sd-
Place : Chennai S Anantha Padmanabhan Jinal Jain
Date : 29-05-2024 CFO Company Secretary
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