q. Provisions, Contingent liabilities, Contingent assets and Commitments:
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 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 the provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognized 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 recognized as a finance cost.
Contingent liability is disclosed in the case of:
- a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation;
- a present obligation arising from past events, when no reliable estimate is possible;
- a possible obligation arising from past events, unless the probability of outflow of resources is remote.
Commitments include the amount of purchase order (net of advances) issued to parties for completion of assets. Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.
As per our report of even date attached
For P M P K & Co. For and on behalf of the Board of Directors
Chartered Accountants Phoenix International Limited
Firm Registration No.: 019681N
per Pravesh Kumar Sharma Narendra Aggarwal P. M. Alexander
Partner Director Director
Membership No.: 093350 DIN : 00027347 DIN : 00050022
Place: New Delhi Narender Makkar
Date:30.05.2024 Company Secretary
3. Property, Plant and Equipment
(ii) Company as lessee:-
The company evaluates if any arrangement qualifies to be a lease as per the requirements of Ind-AS 116. Identification of a lease requires significant judgment. The company uses judgment in assessing whether a contract (or part of contract) includes a lease, the lease term (including anticipated renewals), the applicable discount rate, variable lease payments whether are in- substance fixed. The judgment involves assessment of whether the asset included in the contract is a fully identifies asset based on the facts and circumstances, whether the lessee intends to opt for continuing with the use of the asset upon the expiry thereof, and whether the lease payments are fixed or variable or combinations of both.
All the lease is short term lease, hence Ind-AS has not been applied on Short Term Lease of Rs. 1106304/-
35. Earnings per Share
The calculation of Earnings per Share (EPS) as disclosed in the Statement of Profit and Loss has been made in accordance with Ind AS- 33 on "Earnings per Share".
The following is a reconciliation of the equity shares used in the computation of basic and diluted earnings per equity share: (Number of shares)
The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.
The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity, if any.
36. Income Tax:
a) Any change in the amount of deferred tax liability on account of change in the enacted tax rates and change in the quantum of depreciation allowable under the tax laws, is disclosed in the statement of profit and loss account as 'Deferred tax adjustment'.
38. Financial Risk Management
The financial assets of the company include investments, loans, trade and other receivables, and cash and bank balances that derive directly from its operations.
The financial liabilities of the company, other than derivatives, include loans and borrowings, trade and other payables and the main purpose of these financial liabilities is to finance the day to day operations of the company.
The company is mainly exposed to the following risks that arise from financial instruments:
(i) Market risk
(ii) Liquidity risk
(iii) Credit risk
The Company's senior management oversees the management of these risks and that advises on financial risks and the appropriate financial risk governance framework for the Company.
(i) 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 prices comprise two types of risk: interest rate risk, foreign currency risk.
(a) Foreign currency risk
The company imports certain assets and material from outside India. The exchange rate between the Indian rupee and foreign currencies has changed substantially in recent years and may fluctuate substantially in the future. Consequently, the company is exposed to foreign currency risk and the results of the company may be affected as the rupee appreciates/ depreciates against foreign currencies. Foreign exchange risk arises from the future probable transactions and recognized assets and liabilities denominated in a currency other than company's functional currency.
The company measures the risk through a forecast of highly probable foreign currency cash flows and manages its foreign currency risk by hedging appropriately. The Company uses foreign exchange forward contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The Company's exposure to foreign currency risk was based on the following amounts as at the reporting dates:
Foreign currency sensitivity analysis
Any changes in the exchange rate of GBP and USD against INR is not expected to have significant impact on the Company's profit due to the less exposure of these currencies. Accordingly, a 10% appreciation/depreciation of the INR as indicated below, against the GBP and USD would have increased/reduced profit by the amounts shown below. This analysis is based on the foreign currency exchange rate variances that the Company considered to be reasonably possible at the end of the reporting period. The analysis assumes that all other variable remains constant:
(b) Interest Rate Risk
The company is also exposed to interest rate risk, changes in interest rate will affect future cash flows.
(ii) Liquidity Risk
The financial liabilities of the company, other than derivatives, include loans and borrowings, trade and other payables. The company's principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. Ultimate responsibility of liquidity risk management rests with board of directors.
The company monitors its risk of shortage of funds to meet the financial liabilities using a liquidity planning tool. The company plans to maintain sufficient cash and marketable securities to meet the obligations as and when falls due.
(iii) Credit Risk
Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the company. The company has a prudent and conservative process for managing its credit risk arising in the course of its business activities.
Write off Policy
The financials assets are written off in case there is no reasonable expectation of recovering from the financial asset.
39. Capital Management
The capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the company. The primary objective of the company's capital management is to maintain optimum capital structure to reduce cost of capital and to maximize the shareholder value.
The company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants which otherwise would permit the banks to immediately call loans and borrowings. In order to maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.
The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company's gearing ratio was as follows:
Further, there have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.
There were no changes in the objectives, policies or processes for managing capital during the year ended 31 March 2023 and 31 March 2024.
40. In accordance with the Ind AS-36 on Impairment of Assets, the Company has assessed as on the balance sheet date, whether there are any indications with regard to the impairment of any of the assets. Based on such assessment. It has been ascertained that there in no potential loss is present and therefore, formal estimate of recoverable amount has not been made.
41. The Company owes dues of Rs Nil (Previous Year Rs. Nil) towards Micro and Small Enterprises, which are outstanding for more than 45 days as at 31st March, 2024. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.
42. There are no material events after the reporting period having significant impact on financial statement.
46. DETAILS OF BENAMI PROPERTY HELD
The company does not held any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder. Hence any proceeding has not been initiated or pending against the group companies for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.
47. Previous Year figures have been regrouped/ reclassified wherever considered necessary.
48. The Standalone Financial Statement has been approved by the Board of Directors as on 30th May, 2024.
As per our report of even date attached
For P M P K & Co. For and on behalf of the Board of Directors
Chartered Accountants Phoenix International Limited
Firm Registration No.: 019681N
per Pravesh Kumar Sharma Narendra Aggarwal P. M. Alexander
Partner Director Director
Membership No.: 093350 DIN : 00027347 DIN : 00050022
Place: New Delhi Narender Makkar
Date:30.05.2024 Company Secretary
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