l) 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.
If 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.
m) Financial Instruments
I. Financial Assets:
a. Initial recognition and measurement
All financial assets and liabilities are initially recognized at fair value. Transaction
costs that are directly attributable to the acquisition or issue of financial assets and
financial liabilities, which are not at fair value through profit or loss, are adjusted to the
fair value on initial recognition. Purchase and sale of financial assets are recognised
using trade date accounting.
b. Subsequent measurement
i. Financial assets carried at amortised cost
A financial asset is measured at amortised cost if it is held within a business model
whose objective is to hold the asset 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.
ii. Financial assets at fair value through other comprehensive income (FVTOCI)
A financial asset is measured at FVTOCI if it is held within a business model whose
objective is achieved by both collecting contractual cash flows and selling financial
assets 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.
At present the Company does not have investment in any debt securities classified
as FVOCI.
On initial recognition of an equity investment that is not held for trading, the Company
has irrevocably elected to present subsequent changes in the investment's fair
value in OCI (designated as FVOCI-equity investment). This election is made on an
investment by investment basis.
iii. Financial assets at fair value through profit or loss (FVTPL)
A financial asset which is not classified in any of the above categories are measured
at FVTPL.
c. Other Equity Investments
All other equity investments are measured at fair value, with value changes recognised
in Other Comprehensive Income.
d. Impairment of financial assets
In accordance with Ind AS 109, the Company uses ‘Expected Credit Loss' (ECL) model,
for evaluating impairment of financial assets other than those measured at fair value
through profit and loss (FVTPL).
Expected credit losses are measured through a loss allowance at an amount equal to:
Ý The 12-months expected credit losses (expected credit losses that result from those
default events on the financial instrument that are possible within 12 months after
the reporting date); or
Ý Full lifetime expected credit losses (expected credit losses that result from all possible
default events over the life of the financial instrument)
For trade receivables Company applies ‘simplified approach' which requires expected
lifetime losses to be recognised from initial recognition of the receivables. The Company
uses historical default rates to determine impairment loss on the portfolio of trade
receivables. At every reporting date these historical default rates are reviewed and
changes in the forward looking estimates are analysed.
For other assets, the Company uses 12 month ECL to provide for impairment loss
where there is no significant increase in credit risk. If there is significant increase in
credit risk full lifetime ECL is used.
II. Financial Liabilities:
a. Initial recognition and measurement
All financial liabilities are recognized at fair value and in case of loans, net of directly
attributable cost. Fees of recurring nature are directly recognised in the Statement of
Profit and Loss as finance cost.
b. Subsequent measurement
Financial liabilities are carried at amortized cost using the effective interest method.
For trade and other payable maturing within one year from the balance sheet date, the
carrying amounts approximate fair value due to the short maturity of these instruments
III. Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows
from the financial asset expire or it transfers the financial asset and the transfer qualifies
for Derecognition under Ind AS 109.
A financial liability (or a part of a financial liability) is derecognized from the Company's
Balance Sheet when contractual obligation is discharged or cancelled or expires.
n) Impairment of Non-Financial Assets
The Company assesses at each reporting date as to whether there is any indication that any
non-financial asset or group of assets, called cash generating units (CGU) may be impaired.
If any indication of impairment exists, an estimate of the recoverable amount of the individual
asset/CGU is made. Asset/CGU whose carrying value exceeds their recoverable amount are
written down to the recoverable amount by recognising the impairment loss as an expense in
the Statement of Profit and Loss. The impairment loss is allocated first to reduce the carrying
amount of any goodwill (if any)allocated to the cash generating unit and then to the other
assets of the unit, pro rata based on the carrying amount of each asset in the unit.
The recoverable amount is higher of an asset's fair value less cost of disposal and value in
use. Value in use is based on the estimated future cash flows, discounted to their present
value using pre-tax discount rate that reflects current market assessments of the time value of
money and risk specific to the assets.
The impairment loss recognised in prior accounting period is reversed if there has been a
change in the estimate of recoverable amount i.e. an impairment loss recognised for an asset
in prior accounting periods may no longer exist or may have decreased.
o) Employee Benefits:
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed
contributions into a separate entity and will have no legal or constructive obligation to pay
further amounts.
The Company makes specified monthly contributions towards government administered
employees' provident fund and state insurance schemes. Obligations for contributions to defined
contribution plans are recognised as an employee benefit expense in profit or loss in the
periods during which the related services are rendered by employees.
The company also makes contribution for gratuity and superannuation benefits, which are
covered by policies taken with the LIC. The premium paid under these schemes is charged to
profit and loss on actual payment basis when the related services are rendered by employees.
Short-term and long-term compensated absences (leave encashment) are provided for on the
basis of an actuarial valuation, using projected unit credit method, as at each balance sheet
date. Actuarial losses are taken to the statement of profit and loss and are not deferred.
B. USE OF ESTIMATES AND CRITICAL JUDGEMENTS:
The preparation of financial statements requires the management to make judgements, estimates
and assumptions in the application of accounting policies that may affect the reported balances of
assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of
financial statements and reported amounts of income and expenses during the reporting period.
Although these estimates are based upon management's best knowledge of current events and
actions, actual results could differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognized prospectively.
Information about critical judgments in applying accounting policies, as well as estimates and
assumptions that have the most significant effect on the amounts recognized in the standalone
financial statements is included in the following notes:
1. Note-2 - Identification of the land and/or building is an investment property
2. Note-2- Depreciation /Amortization and useful lives of property plant and equipments
3. Note-16 & 28 - recognition and measurement of provisions and contingencies: key assumptions
about the likelihood and magnitude of an outflow of resources (contingent liabilities)
4. Impairment of Non-Financial assets
The Company assesses at each reporting date whether there is an indication that an asset
may be impaired. If any indication exists, the Company estimates the asset's recoverable
amount. An asset's recoverable amount is the higher of an asset's or Cash Generating Units
(CGU's) fair value less costs of disposal and its value in use. Where the carrying amount of an
asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written
down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value
using pre-tax discount rate that reflects current market assessments of the time value of money
and the risks specific to the asset. In determining fair value less costs of disposal, recent
market transactions are taken into account, if no such transactions can be identified, an
appropriate valuation model is used.
D. Disclosure as required by AS 29 “Provisions, Contingent Liability and contingent Assets” in
respect of provisions as at 31st March, 2024:
(a) Uncalled liability on partly paid up Shares ' 0.03 Lakhs (P.Y. ' 0.03 Lakhs).
(b) Sales Tax matter under appeal ' 33.00 Lakhs (P.Y. ' 33.00 Lakhs)
(c) Income Tax disallowance, matter pending under appeal before ITAT ' 73.13 Lakhs (P.Y '
73.13 Lakhs)
(d) Income Tax disallowance, matter pending under appeal before Commissioner Appeal ' 81.64
Lacs (P.Y ' 81.64 Lakhs)
(e) The Company has imported certain Plant and Machinery at concessional rate of custom duty
under Export promotion Capital Goods (EPCG) scheme. The unit has been granted license for
pre-decided export obligation. As such, the liability that may arise for non-fulfillment of export
obligation is currently non ascertainable. The said matter is pending with Deputy Commissioner
of Customs, Raigad, Maharastra.
Foreign Currency Risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate
because of changes in foreign exchange rates.
Company has not undertaken any transactions denominated in foreign currency and therefore,
there is no foreign currency risk.
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.
Borrowings of the company are interest free and therefore, there is no interest rate risk.
Credit Risk
Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or
customer contract, leading to a financial loss. The Company is exposed to credit risk primarily trade
receivables and other financial assets including deposits with banks.
Other financial assets
This comprises mainly of deposits with banks and other receivables. Credit risk arising from these
financial assets is limited and there is no collateral held against these because the counterparties
are group companies and banks.
For V H GUNDARWALA & CO. For and on behalf of the Board
CHARTERS iACiCOUN|TANTS Kiran M. Virani Mansukh K. Virani
VINOD H. GUNDARWALA Director Whole-time Director
Proprietor DIN: 07126947 DIN: 00873403
ICAI MNo : 046851 Dipak S. Patel Bhoomi Shah
ICAI FRN :113291W cfo Company Secretary
UDIN : 24046851BKFHGV7140 PAN: AGLPP6759Q PAN: DFCPS8940R
Place : Surat Place: Ankleshwar
Date : 28-05-2024 Date : 28-05-2024
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