XV) PROVISIONS AND CONTINGENT LIABILITIES
Provisions: Provisions are recognized when the entity has a present obligation (legal or
constructive) as a result of 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 entity expects some or all of a provision to be reimbursed,
the reimbursement is recognised 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 recognised as a finance cost.
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 or a reliable estimate of the amount
cannot be made.
XVI) CASH AND CASH EQUIVALENTS
Cash and cash equivalent in the Balance Sheet comprise cash at banks and on hand and short¬
term deposits with an original maturity of three months or less, which are subject to an
insignificant risk of changes in value.
XVII) FINANCIAL ASSETS AT AMORTISED COST
Financial assets are subsequently measured at amortised cost if these financial assets are held
within a business whose objective is to hold these assets in order to collect contractual cash
flows and 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.
XVIII) FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIV E INCOME
Financial assets are measured at fair value through other comprehensive income if these
financial assets are held within a business whose objective is achieved by both collecting
contractual cash flows and selling financial assets and a contractual terms of the financial
assets give rise on the specified dates to cash flows that are solely payment of the principal
and interest on the principal amount outstanding.
XIX) FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Financial assets are measured at fair value through profit or loss unless it is measured at
amortised cost or at fair value through other comprehensive income on initial recognition. The
transaction costs directly attributable to the acquisition of assets and liabilities at fair value
thro ugh profit and loss are immediately recognised in the statement of profit and loss.
XX) FINANCIAL LIABILITIES
Financial liabilities are measured at amortised cost using the effective interest method, if
tenure of repayment of such liability exceeds one year.
XXI) RECLASSIFICATION OF FINANCIAL ASSETS
The Company determines classification of the financial assets and liabilities on initial
recognitions. After initial recognition, no reclassification is made for financial assets which are
equity instruments and financial liabilities. For financial assets which are debt instruments, a
reclassification is made only if there is a change in the business model for managing those
assets. Changes to the business model are expected to be infrequent. The Company's senior
management determines change in the business model as a result of external or internal
changes which are significant to the company's operations. Such changes are evident to
external parties. A change in the business model occurs when a company either begins or
ceases to perform an activity that is significant to its operations. If the Company reclassifies
financial assets, it applies the reclassification prospectively from the reclassification date
which is the first day of the immediately next reporting period following the change in business
model. The Company does not restate any previously recognized gains, losses (including
impairment gains and losses) or interest.
XXII) OFFSETTING OF FINANCIAL INSTRUMENTS
Financial assets and liabilities are offset and the net amount is reported in the Balance Sheet
if there is currently enforceable legal right to offset the recognized amounts and there is on
intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
XXIII) LEASES:
The determination of whether an arrangement is (or contains) a lease is based on the
substance of the arrangement at the inception of the lease. The arrangement is, or contains,
a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets
and the arrangement conveys a right to use the asset or assets, even if that right is not
explicitly specified in an arrangement.
Entity as a lessee
A lease is classified at the inception date as a finance lease or an operating lease. A lease that
transfers substantially all the risks and rewards incidental to ownership to the entity is
classified as a finance lease.
Finance leases are capitalised at the commencement of the lease at the inception date fair
value of the leased property or, if lower, at the present value of the minimum lease payments.
Lease payments are apportioned between finance charges and reduction of the lease liability
so as to achieve a constant rate of interest on the remaining balance of the liability. Finance
charges are recognised in finance costs in the Statement of Profit and Loss, unless they are
directly attributable to qualifying assets, in which case they are capitalized in accordance with
the entity's general policy on the borrowing costs. Contingent rentals are recognised as
expenses in the periods in which they are incurred.
Leased assets are depreciated over the useful life of the asset. However, if there is no
reasonable certainty that the entity will obtain ownership by the end of the lease term, the
asset is depreciated over the shorter of the estimated useful life of the asset and the lease
term.
34 Fair Value Measurement
The management assessed that the fair values of short-term financial assets and liabilities
significantly approximate their carrying amounts largely due to the short-term maturities of
these instruments. The fair value of financial assets and liabilities are included at the amount at
which the instrument could be exchanged in a current transaction among willing parties, other
than in a forced or liquidation sale
The Company determines fair values of long-term financial assets and financial liabilities by
discounting contractual cash inflows/ outflows using prevailing interest rates of financial
instruments with similar terms. The fair value of investment is determined using quoted net
assets value from the fund. Further, the subsequent measurement of all finance assets and
liabilities (other than investment in mutual funds) is at amortized cost, using the effective
interest method.
Discount rates used in determining fair value
The interest rate used to discount estimate future cash flows, wherever applicable, are based
on the incremental borrowing rate of the borrower which in case of financial liabilities is the
weighted average cost of borrowing of the Company and in case of financial assets is the
average market rate of similar credits rated instrument.
The Company maintains policies and procedures to value financial assets or financial liabilities
using the best and most relevant data available. In addition, the Company internally reviews
valu ation, including independent price validation for certain instruments.
Fair value hierarchy
All financial instruments for which fair value is recognized or disclosed are categorized within
the fair value hierarchy described as follows, based on the lowest level input that is significant
to the fair value measurement as a whole.
Level -1
Quoted (unadjusted) price is active market for identical assets or liabilities
Level 2:
Valuation technique for which the lowest level input that has a significant effect on the fair value
measurement are observed, either directly or indirectly.
Level 3
Valuation technique for which the lowest level input has a significant effect on the fair value
measurement is not based on observation market data.
35 Financial Instruments and Risk Review
i) Capital Management
The Company's capital management objectives are: -
The Board policy is to maintain a strong capital base so as to maintain inventory, creditors and
market confidence and to future development of the business. The Board of Directors monitors
retu rn on capital employed.
The Company manages capital risk by maintaining sound/optimal capital structure through
monitoring of financial ratios, such as debt-to-equity ratio and net borrowings-to-equity ratio
on a monthly basis and implements capital structure improvement plan when necessary.
The Company uses debt equity ratio as a capital management index and calculates the ratio as
Net debt divided by total equity. Net debt and total equity are based on the amounts stated in
the financial statements.
ii) Credit Risk
Credit risk is the risk of financial loss arising from counter-party failure to repay or service debt according
to contractual terms or obligations. Credit risk encompasses both, the direct risk of default and the risk
of deterioration of credit worthiness as well as concentration of risks. Credit risk is controlled by
analysing credit limit and credit worthiness of customers on a continuous basis to whom the credit has
been granted.
Financial instruments that are subject to concentration of credit risk principally consists of trade
receivable investments, derivative financial instruments and other financial assets. None of the financial
instru ments of the Company results in material concentration of credit risk.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum
exposure to credit risk is as under, being the total of the carrying amount of balances with trade
receivables
Trade receivables
Ind AS requires expected credit losses to be measured through a loss allowance. The Company assesses
at each date of financial statement whether a financial asset or group of financial assets is impaired.
The Company recognizes lifetime expected losses for all contract assets and / or all trade receivables
that do not constitute a financing transaction. For all other financial assets, expected credit losses are
measured at an amount equal to 12 months expected credit losses or at an amount equal to the life
time expected credit losses, if the credit risk on the financial asset has increased significantly since initial
recognition.
Before accenting any new customer, the Company uses an external/internal credit scoring system to
asses potential customer's credit quality and defines credit limits by customer. Limits and scoring
attributed to customer are reviewed on periodic basis.
iii) Liquidity Risk
a) Liquidity risk management
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of
liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use
as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking
facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows,
and by matching the maturity profiles of financial assets and liabilities.
b) Maturities of financial liabilities
The following table details the remaining contractual maturities for its financial liabilities with agreed
repayment period. The amount disclosed in the table has been drawn up based on the undiscounted cash flow
of financial liabilities based on the earliest date on which the Company can be required to pay. The table
includes both interest and principal cash flows.
Before accenting any new customer, the Company uses an external/internal credit scoring system to asses
potential customer's credit quality and defines credit limits by customer. Limits and scoring attributed to
customer are reviewed on periodic basis.
iii) Liquidity Risk
a) Liquidity risk management
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity
risk management is to maintain sufficient liquidity and ensure that funds are available for use as per
requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and
reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the
maturity profiles of financial assets and liabilities.
b) Maturities of financial liabilities
The following table details the remaining contractual maturities for its financial liabilities with agreed
repayment period. The amount disclosed in the table has been drawn up based on the undiscounted cash flow
of financial liabilities based on the earliest date on which the Company can be required to pay. The table
includes both interest and principal cash flows.
56 The Company does not have any investment property, hence related disclosure is not required.
57 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
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.
58 There is no case of search or survey of any other cases related to income surrendered or disclosed in any tax assessments under the Income Tax Act, 1961.
59 The company has not invested in Crypto Currency or Virtual Currency, hence related details are not provided.
60 Statement of Ratios :- This being the first year of commercial operation, comparable finacial ratio and its deviation have not been provided.
61 The company has not met with the applicability criteria of provisions of section 135 of the Act with respect to corporate social responsibility, hence the related
information has not been provided.
62 The Company has not entered into any scheme of arrangement or compromise which has an accounting impact on current or previous financial year.
63 All the amounts disclosed in the financial statements and notes have been rounded off to nearest Lakhs as per the requirements of Schedule III of the
Companies Act, 2013, unless otherwise stated.
64 There are no loans or advances in the nature of loans which are granted to promoters, directors, KMPs and the related parties (as defined under the
Companies Act, 2013) either severally or jointly with any other person which are either repayable on demand or without specifying any terms and period of
repayment.
65 Previous year's figures have been re-grouped/ re-arranged/re-classified/re-casted wherever necessary to make them comparable.
Sd/- Sd/- Sd/- Sd/-
Sanchit Singh Rajpal Bhupendra Singh Rajpal Shrutisheel Jhanwar Koyal Gehani
Managing Director
Chairman Whole time director and CFO
Company Secretary
DIN: 00311190 DIN: 00311202 DIN: 03582803 M. No. 45277
Place: Chhatrapati Sambhajinagar
Date: 30-05-2025
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