(1) Provisions, Contingent Liabilities and Contingent Assets
A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic
benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value of money and the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is
recognised as a finance cost.
Contingent Liability is disclosed after careful evaluation of facts, uncertainties and possibility of reimbursement, unless the possibility of an outflow of resources embodying economic benefits is
remote. Contingent liabilities are not recognised but are disclosed in notes.
Contingent assets are not disclosed in the Restated Financial Information unless an inflow of economic benefits is probable.
(m) Cash & Cash Equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and demand deposits with an original maturity of three months or less and highly liquid investments that are
readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value net of outstanding bank overdrafts as they are considered an integral part of the
Company’s cash management.
(n) Employee Benefits
Short Term Employee Benefit obligation:
Short-term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit and loss for the year in which the related services are rendered.
Long Term Employee Benefit obligation:
L Defined Contribution plans:
Payments to defined contribution retirement benefit schemes are charged to the statement of profit and loss of the year when the contribution to the respective funds are due. There are no other
obliaations other than the contribution payable to the fund.
II. Defined benefit plans
Gratuity expense is recognized on payment basis in the statement of profit and loss.
( o) Impairment of Non-financial Assets
The carrying amounts of non-financial assets are reviewed at each balance sheet date if there is any indication of impairment based on intemal/extemal factors. An asset is treated as impaired
when the carrying amount exceeds its recoverable value.
The recoverable amount is the greater of an asset’s or cash generating unit's, net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to the
present value using a pre-tax discount rate that reflects current market assessment of the time value of money and risks specific to the assets. An impairment loss is charged to the statement of
profit and loss in the year in which an asset is identified as impaired. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life. The
impairment loss recognized in prior accounting periods is reversed by crediting the statement of profit and loss if there has been a change in the estimate of recoverable amount.
(p) Segment reporting
The Company identifies operating segments based on the dominant source, nature of risks and returns and the internal organisation. The operating segments are the segments for which separate
financial information is available and for which operating profit/loss amounts are evaluated regularly by the Managing Director (who is the Company’s chief operating decision maker) in
decidine how to allocate resources and in assessina performance.
<<*) F^a^videndon'shares are recorded as a liability on .he date of approval by .he shareholders and interim dividends are recorded as a liability on .he date of declaration by the Company’s Board
of Directors.
(r> Basic earn^ngs^per'share are calculated by dividing the Profit or Loss for the period attributable to equity shareholders by the weighted average number of equity shares ouBtanding during the
period. For the purpose of calculating diluted earnings per share, the Profit or Loss for the period attributable to equity shareholders and the wetghted average number of shares outstanding
durum the oeriod are adiusted for the effect of all dilutive potential eouitv shares.
<S) WhTrel™tsTI"nngdafier the balance sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted within the Restated
Financial Information. Otherwise, events after the balance sheet date of material size or nature are only disclosed.
10 F,nmcia7jirrd7l^!irMfiUes are offset and the net amount is reported ,n the Balance Sheet, if there is a currently enforceable legal right to offset the recognised amounts and there is an
intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.
(u) Use Of Critical Estimates, Judgments And Assumptions ~ , ,i,„
The preparation of the Company's Restated Financial Information in conformity with Ind AS requires management to make judgements, estimates and assumptions that affec the,'eported
expenses, Leu and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Estimatesrand judgements are continuously evaluated and are
based on historical experience and other factors, including expectations of future events that are believed to be reasonable. Uncertainty about these assumptions and est ma
cTuld result in outcomes tha, require a material adjustment to file cany.ng amount of assets or liabilities affected in future periods. Revisions to accounting estimates are recognised in the period
in which the estimate is revised.
Wh‘en ^rZsTfCc" aTd'fiiiancial liabilities recorded in die balance sheet cannot be measured based on quoted prices in acrive markets their fair y*uerismmured using
appropriate valuation techniques. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement * “l“lre<1
fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial
instruments.
The Company periodically assesses its liabilities and contingencies related to income taxes for all years open to scrutiny based on latest information available. For matters where it is probable
readjustment will be made, the Company records its best estimates of the tax liability in the current rax provision. The Management believes that they have adequately provided fo, die
Deferred reTets°2^0^!^ for unused rax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management
judgement is required to determine the amount of deferred rax assets that can be recognised, based upon the likely timing and the level of future taxable profits.
The^obfigation'arisiri^from^e^ned^enefit'planTs'd^termined^^the basis of actuarial assumptions. Key actuarial assumptions include discount rate, trends in salaiy escalation and attrition rate.
The discount rate is determined by reference to market yields at the end of the reporting period on government securities.
(v) Rounding Of Amounts
All amounts disclosed in the Restated Financial Information and notes have been rounded off to the nearest lakhs, unless otherwise stated.
(w) Recent Accounting Pronouncements . _ ,
Ministry of Corporate Affairs (“MCA") notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For
financial year beginning from 1 April 2024. MCA has not notified any new standards or amendments to the existing standards applicable to the Company.
/Tv
33 Financial instruments
The details of Material Accounting Policies, including criteria for recognition, the basis of measurement and the basis on which income and expenditure are
recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 1.
A Calculation of fair values
The fair values of the financial assets and liabilities are defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The following methods and assumptions were used to estimate the fair values of financial
instruments:
i The fair value of the long-term borrowings carrying floating-rate of interest is not impacted due to interest rate changes and will not be significantly different
from their carrying amounts as there is no significant change in the under-lying credit risk of the Company (since the date of inception of the loans).
ii Cash and cash equivalents, trade receivables, investments in term deposits, other financial assets, trade payables, and other financial liabilities have fair values
that approximate to their carrying amounts due to their short-term nature.
c. Fair value hierarchy . . , , .
The Company uses the following hierarchy for determining and/or disclosing the fair value of financial instruments by valuation techniques.
The categories used are as follows: ... . ,. ,n
• Level 1: It includes financial instruments measured using quoted prices and the mutual funds are measured using the closing Net Asset Value (NAV).
• Level 2 The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of
observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the
instrument is included in level 2.
• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
There were no transfer between Level 1 and Level 2 in the periods.
There has been no change in fair value hierarchy of any financial asset and liability during the periods ended 31.03.2024, 31.03.2023 and 31.03.2022.
36 (*) Financial risk management
The Board of Directors has overall responsibility for the establishment and oversight of the company’s risk management framework.
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. Risk management pohetes and systems are reviewed regularly to reflect changes in market
conditions and the Company’s activities.
The Company has exposure to the following risks arising from financial instruments.
a. Credit risk;
b. Liquidity risk;
c. Market risk; and
d. Interest rate risk
(A) Credit risk .
Credit risk arises from the possibility that the value of receivables or other financial assets of the Company may be impaired because counterparties cannot meet their payment or other performance obligations.
To manage credit risks from trade receivables other than Related Party, the credit managers from Order to Cash department of the Compuny regularly analyse customer’s receivables, overdue and payment behaviours. Some of these receivables are collateralised and
the same is used according to conditions. These could include advance payments, security deposits, post-dated cliques etc. Credit limits for this trade receivables are evaluated and set in line with Company’s internal guidelines. There is no significant concentration of
Credit risks from fmsncial transactions are insnagctl independently by Finance department. For banks and financial institutions, the Company has policies and operating guidelines in place to ensure that financial instrument transactions are only entered into with high
quality banks and financial institutions. The Company had no other financial instrument that represents a significant concentration of credit risk.
The Company considers the probability of default upon initial recognition of asset and whether there has been u significant increase in credit risk on an ongoing basis through out each reporting period. To assess whether there is a significant increase in credit risk the
Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:
i) Actual or expected significant adverse changes in business, r
ii) Actual or expected significant changes in the operating results of the counterparty,
iii) Financial or economic conditions that are expected to cause a significant change to the counterparty’s ability to meet its obligations,
iv) Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees or credit enhancements.
Financial assets an: written off when there is no reasonable expectations of recovery. Where loans or receivables have been written off, Ae Company continues engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these
are recognized in statement of profit & loss.
Credit risk is managed at Company level. , ... .
For other financial assets, the Company assesses and manages credit risk based on internal control and credit management system. The finance function consists of a separate team who assess and maintain an internal credit management system. Internal credit control
and management is performed on a Company basis for each class of financial instruments with different characteristics.
The Company considers whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. It considers available reasonable and supportive forward-looking information.
Macroeconomic information (such ns regulatory changes, market interest rale or growth rates) are also considered as part of the internal credit management system.
A default on a financial asset is when the counterparty fails to make payments as per contract. This definition of default is determined by considering llie business environment in which entity operates and other macro-economic factors.
The company has valued financial liabilities (Other than Investment in subsidiaries, associates ana joint ventures wmcn are m*uuuicu « u
the date of transition, is recognized in opening reserves and changes thereafter are recognized in statement of profit and loss for the subsequent periods.
B Other' adjustments comprises of loan processing fees / transaction cost. Under Ind AS such expenditure are considered for calculating effective interest rate. The impact for the
periods subsequent to the date of transition is reflected in the statement of profit and loss.
C The previous year 1-GAAP figures have been reclassified/reCompanyed to make them comparable with Ind AS presentation.
_ 6A
|