(a) The Company has written off 2.46 lakhs of slow-moving finished goods inventory during the current financial year.
(b) Inventory pledged as security- Refer note 29
(c) Method of inventory Valuation- Refer note 1.15
(d) The value of inventory includes ' 12.49 lakhs from the discontinued branches Guwahati (2.50 lakhs) and Hyderabad (9.99 lakhs).
(a) The amount classified under Balances with bank- Deposit account, consists of amount deposited with banks towards margin money for Bank Guarantee, Letter of Credit and Vendor bill discounting facilities.
11 Assets Held for Sale
Assets are classified as held for sale if their carrying amount will be recovered primarily through sale rather than through continuing use, if the assets are available for immediate sale in their present condition and if the sale is highly probable. Immediately before classification as held for sale, the assets are measured in accordance with company’s accounting policies. Once classified as held for sale, asset are measured at the lower of their carrying amount and fair value less cost to sell. Any write-down on initial classification or
(e) Terms/Rights attached to equity shares:
The Company has only one class of shares referred to as equity shares with a face value of ' 10 each. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed/declared by the Board of Directors is subject to approval/ regularisation of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts, in proportion to the number of equity shares held by the shareholders.
Redemption of preference shares
(i) The Board Meeting held on 22.07.2016 has approved the redemption plan of the Preference Shares. Ten Lakhs Redeemable Preference Shares of Rs.100/- each shall be redeemed out of the profits of the company in not more than 10 annual installments of a minimum of 1,00,000 Preference Shares of Rs.100/- each aggregating to Rs. 1 crore per year. Pursuant to the above approval by the board the company has redeemed 100000 Zero percent Redeemable Preference Shares of Rs. 100/- each at a value of Rs. 1 Crore, during the FY 2016-17.
(ii) The company has not redemeed any preference shares during the financial Year 2024-25
(f) Issue of bonus shares
There has been no issuance of bonus shares or share buy back during five years immediately preceding 31 March 2025.
Nature and purpose of each reserve Capital Redemption Reserve:
The Company had redeemed 100,000 numbers of Zero coupon cumulative Redeemable Preference Shares of ' 100 each amounting to ' 1 crore during the FY 2016-17 and the amount equal to the face value of such number of shares has been transferred to Capital Redemption Reserve.
Other Equity :
The balance in the Other equity represents the owners equity component of the Preference shares reclassified in accordance with Ind AS 32.
General Reserve :
General reserve was created from time to time by way of transfer of profits from retained earnings for appropriation purposes.
Retained Earnings :
Retained earnings are the profits or losses that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.
Other Comprehensive Income:
Revaluation surplus : Gain on revaluation of Property, Plant and Equipment consequent to adoption of revaluation model as permitted by Ind AS 16 “Property, Plant and Equipment” for measurement of carrying value of the land owned by the Company is accumulated under Other comprehensive income - Change in Revaluation surplus.
Remeasurements of net defined benefit plans: Difference between the interest income on plan assets and the return actually achieved, and any changes in the liabilities over the year due to changes in actuarial assumptions or experience adjustments within the plans, are recognised in ‘Other comprehensive income’ and subsequently not reclassified to the Statement of Profit and Loss.
(i) Term loans
Union Bank Term Loan
The term loans from Union Bank of India are to be repaid in equal monthly installments over a period of 36 to 54 months, with installment amounts ranging from INR 7.22 to 7.23 lakhs. The annual interest rate for these loans varies between 7.50% and 9.25% .The term loan from Union Bank of India is secured by a first charge on the company’s inventory, moveable plant, and machinery, with additional guarantees from the Promoter Directors. The loan is further secured by collateral, including the deposit of title deeds for the company’s land and building.
Deferred payment liabilities are related to Term loan from Union bank and the same have been recognized in accordance with amortised cost principles.
(ii) Loan from Related Party
The Company has obtained unsecured loan from its director which is repayable within in 3 years with an interest of 7.95% . However, the Company is required to repay 1 loan in the next financial year within 12 months.
(iii) Working Capital Loan
The WCTL - GECL loan from Union Bank will be repaid in 8 equal monthly installments of Rs 14.13 lakhs each .including an annual interest of 7.50 % . INDAS 109 requires, the borrowings from the banks to be carried in the books at amortised cost model. By using this model all the financial labilities are recorded using effective rate of interest and the interest income needs to be segregated when the amounts are expected to be settled for more than 12 months. All the transaction cost including the upfront processing fees paid are to be amortised over the tenure of the loan/borrowings using effective interest method.
(iii) Liability component of Cumulative Redeemable Preference Shares
The Company had issued 10 lakhs Zero Coupon Cumulative redeemable preference shares of ' 100 each to the promoters, which are redeemable after 5 years from the date of allotment subject to achieving net worth of ' 100 lakhs (without considering the said Preference Shares).
The Board Meeting held on 22 July 2016 had approved the redemption plan of the Preference Shares. Ten Lakhs Redeemable Preference Shares of ' 100 each shall be redeemed out of the profits of the Company in not more than 10 annual installments of a minimum of 100,000 Preference Shares of ' 100 each aggregating to ' 1 crore per year. During the FY 16-17, the Company had redeemed 100,000 numbers of Zero coupon cumulative Redeemable Preference Shares of ' 100 each valued at ' 1 crore.In accordance with Ind AS 32, these preference shares are classified as amortised cost liability as the preference shares provides for redemption on specific date or at the option of the holder.
(iv) Cash Credit
The Cash Credit from the Federal Bank Ltd is secured by way of first charge on the floating assets and second charge on the fixed assets of the Company and are further guaranteed by the Promoter Directors of the Company. The above loans are further secured by collateral security by deposit of title deeds of the land and building of the Company.
The Cash Credit from the Union Bank of India is secured by way of first charge on the floating assets and second charge on the fixed assets of the Company and are further guaranteed by the Promoter Directors of the Company. The above loans are further secured by collateral security by deposit of title deeds of the land and building of the Company.
The management determines that the segment information reported under Note 36 Segment reporting is sufficient to meet the disclosure objective with respect to disaggregation of revenue under Ind AS 115 Revenue from Contract with Customers. Hence, no separate disclosures of disaggregated revenues are reported. The Company’s performance obligation are satisfied upon shipment and payment is generally due by 30 to 60 days.
(a) Eligible employees of the Company receive benefits under the Provident Fund which is a defined contribution plan wherein both the employee and the Company make monthly contributions equal to a specific percentage of covered employees’ salary. These contributions are made to the Fund administered and managed by the Government of India and the Company has no further obligation beyond making its contribution. The Company’s monthly contributions are charged to Statement of Profit and Loss in the period in which they are incurred:
(b) In accordance with the payment of gratuity under ‘Payment of Gratuity Act, 1972’ of India, the Company provides for gratuity, a defined retirement benefit plan covering eligible employees. Liability with regard to such gratuity is determined by an independent actuarial valuation using the Projected Unit Credit method and is charged to the Statement of Profit and Loss in the year. 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.
* Estimates of future salary increases takes into account inflation, seniority, promotions and other
relevant factors such as supply and demand in employment market.
Sensitivity analysisDescription of Risk Exposures
Valuations are performed on certain basic set of pre-determined assumptions which may vary over time. Thus, the Company is exposed to various risks in providing the above benefit which are as follows:
Interest Rate Risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of liability (as shown in financial statements).
Liquidity Risk: This is the risk that the Company is not able to meet the short term benefit payouts. This may arise due to non availability of enough cash/cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time.
Salary Escalation Risk: The present value of the above benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase in salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan’s liability.
Regulatory Risk: Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time).
Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
Sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. There are no changes from the previous period in the methods and assumptions used in preparing the sensitivity analysis.
The Company’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company’s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The Company’s exposure to credit risk is influenced mainly by the individual characteristic of each customer.
The Company’s risk management activity focuses on actively securing the Company’s short to medium-term cash flows by minimising the exposure to volatile financial markets. Long-term financial investments are managed to generate lasting returns.
The Company does not actively engage in the trading of financial assets for speculative purposes nor does it write options. The most significant financial risks to which the Company is exposed are described below:
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company is exposed to credit risk for receivables, cash and cash equivalents, short term investments and financial guarantee.
Cash and cash equivalents and short term investments
The Company considers factors such as track record, size of institution, market reputation and service standard to select the banks with which deposits are maintained. Generally the balances are maintained with the institutions with which the Company has also availed borrowings. The Company does not maintain significant deposit balances other than those required for its day to day operations.
Trade receivables
The Company is exposed to credit risk from its operating activities primarily from trade receivables amounting to ' 1,332.48 Lakhs and ' 1493.94 as of 31 March 2025 and 31 March 2024 respectively. The Company has standard operating procedure for obtaining sufficient security like bank guarantees where appropriate, as a means of mitigating the risk of financial loss from defaults.
The credit quality of the Company’s customers is monitored on an ongoing basis and assessed for impairment where indicators of such impairment exist. The history of trade receivables shows a negligible provision for bad and doubtful debts. The solvency of customers and their ability to repay the receivable is considered in assessing receivables for impairment. Therefore, the Company does not expect any material risk on account of non-performance by any of the Company’s counterparties. Where receivables are impaired, the Company actively seeks to recover the amounts in question and enforce the compliance with credit terms.
B. Liquidity Risk
The Company requires funds both for short-term operational needs as well as for long-term growth projects. The Company generates sufficient cash flows from the current operations which together with the available cash and cash equivalents provide liquidity both in the short-term as well as in the long-term. In addtition company has also availed short term / long term finance from banks as and when required. The Company has been rated by CRISIL Limited (CRISIL) for its banking facilities in line with Basel II norms with a rating of Long term - CRISIL B/ Stable and short term A4.
The Company remains committed to maintaining a healthy liquidity, gearing ratio and strengthening the balance sheet. The maturity profile of the Company’s financial liabilities based on the remaining period from the date of balance sheet to the contractual maturity date is given in the table below. The figures reflect the contractual undiscounted cash obligation of the Company.
C. Market Risk
The company is exposed to market risk of financial instruments and specifically to currency risk and interest rate risk, which result from both its operating and investing activities.The company operates internationally and a significant portion of the business is transacted in USD currencies and consequently the Company is exposed to foreign exchange risk through us sales and purchases in foreign currencies.The exchange rate between rupee and foreign currency has changed substantialy in recent years and may fluctate substantially in future. Foreign currency denominated financial assets and liabilities which exposes the company to currency risk are discussed below:
Sensitivity
The following table details the company’s sensitivity to a 1% increase and decrease in the rupee against the relevant foreign currency.1%is the sensititvty rate used when reporting foreign currency risk internally to key managerial personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates.The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their transactions at the year-end for a 1 % change in foreign currency rates, with all other variables held constant.A positive number below indicates an increase in profit or equity where ruppees stengthens 1% against the relevent currency. For a 1% weakening of ruppee against the relevant currency,there would be a comparable impact on profit or equity, and the balanced below would be qnegative.
D. Interest rate risk
The Company is exposed to interest rate risk on short-term (cash credit) and long-term (term loans). The borrowings of the Company are principally denominated in Indian Rupees. These exposures are reviewed by appropriate levels of management on a regular basis. There are no foreign currency borrowings made by the company during the reporting periods. The impact on the companies profit or loss before tax due to change in interest rate is given below:
33 Capital Management
The Company’s objectives when managing capital is to safeguard continuity, maintain a strong credit rating and healthy capital ratios in order to support its business and provide adequate return to shareholders through continuing growth and maximise the shareholders value. 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. The Company’s policy is to use short term and long-term borrowings to meet anticipated funding requirements. For the purpose of calculating gearing ratio, debt is defined as non-current and current borrowings (excluding derivatives). Equity includes all capital and reserves of the Company attributable to equity holders of the Company.
34 Disclosure with respect to operating leases
The lease expenses for cancellable operating leases during the year ended 31 March 2025:Rs. 55.08 lakhs (31 March 2024 is ' 52.84 lakhs)
The Company’s significant leasing arrangements in respect of operating leases for office premises, which includes cancellable leases generally range between 11 months to 60 months and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as rent under note 2.27 to the financial statements.
Details of leasing arrangements as lessor:
During the year, certain items of plant and machinery previously provided under cancellable operating lease arrangements reached the end of their lease term. In accordance with the lease terms, the lessees were provided an option to purchase the assets at their written down value. The Company intends to dispose of these assets in the financial year 2025-26 and has accordingly classified them as assets held for sale in compliance with the requirements of Ind AS 105 - Non-current Assets Held for Sale and Discontinued Operations.The disclosure of future minimum lease payments and net block of plant and machinery given on lease has not been provided for assets classified as held for sale during the year in accordance with Ind AS 105
The management assessed that the fair value of cash and cash equivalents, trade receivables, loans, other financial assets, trade payables, working capital loans and other financial liabilities approximate the carrying amount largely due to short-term maturity of this instruments.
(ii) Fair value of financial assets and liabilities measured at amortised cost
The management assessed that for amortised cost instruments, fair value approximate largely to the carrying amount.
(iii) Fair value hierarchy
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:
a) Level 1- Quoted prices (unadjusted) is the active market price for identical assets or liabilities
b) Level 2 -Inputs other than quoted price included within level 1 that are observable for the assets or laiblity, either directly
c) Level 3- Inputs for the assets or liablities that are not based on observable market data (unobservable inputs).
The fair value of trade receivables, trade payables and other current financial assets and liablities is considered to be equal to the carrying amounts of these items due to their short- term nature.
37 Segment Information
The Company is engaged in the manufacture and sale of products which form part of one product group which represents one operating segment, as the Chief Operating Decision Maker (CODM), reviews business performance at an overall company level. Entity-wide disclosure as required by Ind AS 108 “Operating Segment” are as follows:
38 An offer of rights issue was made to the Company by Shipnext Solutions Private Limited (“Subsidiary”) on 4 September 2021 which was renounced by the Company in it’s board of directors meeting held on 13 September 2021. Subsequently, the capital base of the Subsidiary was increased by way of private placement of equity shares to other investors on 30 November 2021. Consequently, the shareholding of the Company has reduced to 14.53% resulting in loss of control in Subsidiary and Shipnext Solutions Private Limited became an associate as per Ind AS 28 “Investments in Associates and Joint Ventures” with effect from 1 December 2021. Further, due to various actions taken by the management of the Company including amendment in shareholders’ agreement which resulted to reduce in share holdings to 9.69%, Shipnext Solutions Private Limited ceased to be an associate of the Company with effect from 15 February 2022.
40 a) No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
b) The Company has not been declared as a wilful defaulter by any bank or financial institution or government or any government authority.
c) As per the information available with the Company, the Company has no transactions with the companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
d) There has been no charges or satisfaction yet to be registered with ROC beyond the statutory period.
e) The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds to any other persons or entities, including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the intermediary shall
1) 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).
2) provide any guarante, security or the like on behalf of the ultimate beneficiaries. Company has not received any fund from any persons or entities, including foreign entities (funding party) 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) provided any guarantee, security or the like on behalf of the ultimate beneficiaries.
f) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year ended March 31,2025.
g) The Company does not have any surrendered or undisclosed income during the year in the tax assessments under the Income Tax Act, 1961.
h) The title deeds of all the immovable properties held by the Company disclosed in the financial statements
are held in the name of the Company.
i) The borrowings obtained by the company from banks and financial institutions have been applied for the purposes for which such loans were taken.
j) The Company has complied with the number of layers prescribed under the Section 2(87) of the Companies Act, 2013 read with Companies (Restriction on number of layers) Rules, 2017.
41 Events after the balance sheet date
There were no material subsequent events after the reporting date which requires any adjustments or disclosures relating to reported assets and liabilities at the end of the reporting period.
42 Prior year comparatives have been regrouped/reclassified where necessary to conform with the current year classification.