39 Contract Asset and Contract Liability (continued)
* The transfer to Intangible Assets includes an amount of Rs. 710.23 Lakhs arising from the termination of a contract by a client. The Revenue from Operations includes Rs. 1560.93 Lakhs on account of income from cessation of liability due to termination of contract by client resulting in discharge from performance obligation.
Under the original contract, the Company was obligated to deliver carbon credits to the client from a project deployed on the client's behalf. Accordingly, amounts received from the client were recorded as contract liabilities, while the corresponding expenses incurred on the project were recognised as contract assets.
During the year, the client terminated the contract and released the Company from its performance obligation. In addition to paying a termination compensation, the client also transferred the underlying project to the Company, along with the entitlement to all future carbon credits generated therefrom.
Consequent to the above, the amounts previously recorded as contract assets have been reclassified to Intangible Assets, as the project is now owned by the Company and is expected to generate future economic benefits through the production of carbon credits. Further, the outstanding balance recorded as contract liability has been recognised as revenue from contract termination and credited to the Statement of Profit and Loss.
40 Segment reporting
The Company is into climate change & sustainability advisory and carbon offsetting, along with business excellence services. Also, the company develops its own projects for generation of carbon credits. The company has been operating in different business segments, which has different set of risk and rewards, vis-a-vis the profitability and expense allocation in different segments is also diverse. The Board of Directors of the Company have assessed and deliberated to report these segments by segregation of assets and liabilities & income and expenses to evaluate the performance of the respective segments and to unlock the potential of the segments. The allocation of resources and obligations is based on the analysis of the various performance indicators of the Company and their respective capital intensive nature. As per the requirements of Ind AS 108 - “Operating Segments”, the company has two reportable segments as under:
(i) Trading Segment: where the carbon credits are purchased from various vendors and are sold to customers
(ii) Generation Segment: where the carbon credits are issued from the projects implemented, developed and owned by the company.
The revenue of both these segments are earned majorly from sale of carbon credits, however the decision of board is derived separately in both these segments considering the variable outcomes of the respective segments.
During the year, out of total 291,837 options granted, 83,056 options were exercised during the financial year 2025-26 (79,950 during FY 2024-25). Accordingly, an amount of Rs. 267.97 lacs (Rs. 664.33 lacs during 31st March 2025) was credited by the company in its securities premium account and correspondingly an amount of Rs. 251.36 Lacs (Rs. 512.42 lacs during 31st March 2025) is adjusted against Employee Stock Option Reserve. The fair value of the options granted is computed under Black Scholes Model by an Independent Valuer pursuant to Ind AS 102 - Share based payments.
43 Transfer Pricing Adjustment
As per transfer pricing legislation under section 92-92F of the Income Tax Act, 1961, the Company is required to use certain specific methods in computing arm's length prices of certain domestic and certain international transaction with associated enterprises and maintain adequate documentation in this respect. The legislations require that such information and documentation to be contemporaneous in nature, the Company has appointed independent consultant (the 'Consultant') for conducting the Transfer Pricing Study (the 'Study') to determine whether the transactions with associate enterprises undertaken during the Financial year are on an “arm's length basis”. Management is of the opinion that the Company's dome stic and international transactions are at arm's length & require no transfer pricing adjustments.
47 Ratios to be disclosed as per the requirements of the Companies Act, Schedule III (continued)
A Explanation for change in ratio of more than 25%:
1. Financial year 2021-22 was an exceptional year for the company as the prices for carbon credits vis-a-vis demand for the credits increased substantially. The company held its leadership position in the market and capitalised on the opportunities during FY 2021-22. During FY 2022-23, owing to various macro-economic factors, the overall business slowed down during the second half of the year on account of low pricing of environmental commodities, international geopolitical turmoil, high interest rates, inflation, regulatory changes, media trial of green house mitigation projects, rating of projects etc. The company incurred heavy losses during FY 2023-24 due to the above factors. During FY 2024-25, the company had regained its stability and profitability; however, during FY 2025-26, continued volatility in demand and pricing of carbon credits has once again adversely impacted the revenues and margins, resulting in a net loss for the year. In view of the extreme volatility in the business over the last few years, the financial figures of the company are largely incomparable, and the ratios may not depict a correct trend analysis.
2. The primary reason for deterioration in all profitability-linked ratios - namely Return on Equity, Return on Capital Employed, Return on Investments, Net Profit
Ratio, and Debt Service Coverage Ratio - is the significant decline in revenue from operations from ?16,461.47 lakhs to T8,337.19 lakhs, driven by reduced demand and lower realisations, which has resulted in a net loss of T758.61 lakhs during FY 2025-26 as against a net profit of ?1,529.11 lakhs in the preceding year. No dividend has been declared during the current year in view of the net loss, as against a dividend of T552.07 lakhs paid in FY 2024-25.
3. The improvement in Current Ratio (from 9.21 to 17.29), Trade Payable Turnover Ratio (from 0.83 to 1.36), and Inventory Turnover Ratio (from 0.76 to 1.14) is
attributable to increased liquidity, significant reduction in trade payables and inventory levels on account of lower purchasing and procurement activity during the year, and faster settlement of vendor dues. This reflects the company's leaner operating model and shift towards margin-based trades during the year.
4. The decline in Net Capital Turnover Ratio (from 0.46 to 0.25) is on account of the sharp fall in revenues, while the working capital of the company has not contracted proportionately, as the company continues to carry significant current assets. The business and profit margins of the company have shrunk owing to the unstable and volatile nature of the carbon credit business, and accordingly the ratios may vary year on year.
48 Additional regulatory information not disclosed elsewhere in the Financial Statements
a. The Company does not have any benami property and 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 a ‘Wilful Defaulter' by any bank or Financial institution (as defined under the Companies Act, 2013) or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.
c. The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.
d. The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies (ROC) beyond the statutory period.
e. During the year, the company has written down the value of its inventory to the tune of Rs. 280.23 Lakhs (Rs. 1081.84 Lakhs during FY 2024-25) on account of valuation of inventory at net realizable value (NRV), to the extent the same does not exceed cost. The valuation of inventory at cost or NRV, whichever is lower is a usual and recurring transaction. This disclosure is accordingly made pursuant to paragraph 97 and 98 of the Ind AS 1, Presentation of Financial Statements.
f. In respect of the reporting made by the erstwhile Statutory Auditors under Rule 13 of the Companies (Audit and Auditors) Rules, 2014, recently, subsequent to the Balance Sheet date of 31st March 2026, the Company received a communication in response to its request filed bearing a communication from the Office of the Director General of Corporate Affairs (DGCoA), MCA. In the said communication, in respect of the observations of the erstwhile auditor, the MCA has directed that no action be taken. Accordingly, the reporting made by the erstwhile auditors no longer gives rise to any probable obligation and stands concluded.
g. The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
h. The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.
i. The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.
j. The Company does not have any transactions with struck off companies.
k. The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous Financial year.
l. The Company has not advanced or loaned or invested funds to any other persons or entities, including foreign entities (Intermediaries) with the understanding
that the Intermediary shall:
(a) 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
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
m. The 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:
(a) 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
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
Estimation of fair value
The Company performs a valuation for its investment properties by engaging an external
consultant once every three year or in circumstances of substantial and permanent decline in the value of investments. The best evidence of fair value is current prices in an active market for similar properties
The fair value of investment properties have been determined by the management using an external expert who holds relavant expertise in the field. The main inputs used are the relavant prices of comparable transactions and industry data. All resulting fair value estimates for investment properties are included in level 3. As as result of the the assessment of the company and experts, if the fair value of the property exceeds its cost, the amount tabulated above as fair value is capped at the cost of the property.
Nature and purpose of reserves Surplus in statement of profit and loss
Surplus in Statement of Profit and Loss represents the profits that the Company has earned till date.
General reserve
General reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. This reserve is freely available for use by the Company.
Actuarial gain / (loss) on employment benefits
The reserve represents the remeasurement gains/(losses) arising from the actuarial valuation of the defined benefit obligations of the Company. The remeasurement gains / (losses) are recognized in other comprehensive income and accumulated under this reserve within equity. The amounts recognized under this reserve are not reclassified to Statement of Profit and Loss.
Details of security and other terms of borrowings:
(a) Vehicle loan outstanding to the tune of Rs. 36.66 Lacs (31 March 2025: ^118.68 Lacs) is secured by hypothecation of the respective motor vehicles purchased by the Company. The loans carry an interest rates ranging from 8.10% to 8.85% (31 March 2025: 8.10% to 8.85%) and repayable in equated monthly installments, ranging from 60 to 84 months.
(b) Working capital loans from banks represent cash credit facilities availed by the Company which is secured by Primary Security of Stock, Book Debts and Fixed Deposits of the Company. Secondary Security of Plot No. 48, Scheme no 78, Vijay Nagar, Indore, Flat No. 401, Dakshta Apartment, Godbole Colony, Indore, Plot No. 140, Scheme No. 78 and 801, Atulya IT Park, Indore, of the Company.
(c) Represents credit card facilities obtained by the Company.
(d) The balance in the current account includes an amount of ?500 Lakhs representing cheques issued by the Company which were outstanding for presentation as at the balance sheet date. Consequently, the bank balance appears as a credit balance to that extent. Upon presentation of these cheques, the balance will be adjusted in the normal course.
The Company's principal financial liabilities comprise of trade and other payables and the Company's principal financial assets include investments in mutual funds, trade and other receivables and cash and cash equivalents that derive directly from its operations.
Investments in subsidiaries, associates and joint ventures are accounted at cost in accordance with Ind AS 27 'Separate Financial Statements', which is not included above.
(ii) The carrying amounts of trade receivables, trade payables, cash and cash equivalents and other bank balances are considered to be the same as their fair values, due to their short-term nature. Difference between carrying amounts and fair values of bank deposits, earmarked balances with banks, other financial assets, other financial liabilities subsequently measured at amortised cost is not significant in each of the years presented. For all other amortised cost instruments, carrying value represents the best estimate of fair value.
For the financial assets measured at fair values, the carrying amounts are equal to the fair values.
(iii) Valuation technique used to determine fair value:
The fair value of the financials assets and liabilities is reported at the amount at which the instrument could be exchanged in a current transaction between willing parties other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values: a. The use of directly observable unquoted prices received from the respective mutual funds.
36 Fair value measurements (continued)
(iv) Fair Value hierarchy:
Financial assets and financial liabilities measured at fair value in the balance sheet 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:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.
The following table shows the Levels within the hierarchy, of financial assets and liabilities measured at fair value on a recurring basis as at 31 March 2026 and 31 March 2025:
37 Financial Risk Management objectives and policies:
The Company is exposed to financial risks arising from its operations and the use of financial instruments. The key financial risks include market risk, credit risk and liquidity risk. The Company's risk management policies are established to identify and analyse the risks faced by the Com pany and seek to, where appropriate, minimize potential impact of the risk and to control and monitor such risks. There has been no change to the Company’s exposure to these financial risks or the manner in which it manages and measures the risks.
The following sections provide details regarding the Company’s exposure to the financial risks associated with financial instruments held in the ordinary course of business and the objectives, policies and processes for management of these risks.
(i) Market risk
Market risk is the risk of loss of future earnings, fair value or future cash flows of a financial instrument that will fluctuate because of changes in market rates and prices. The Company is exposed to market risk primarily related to interest rate risk. Thus, the Company’s exposure to market risk is a function of investing and operating activities in foreign currencies.
(a) Interest rate risk:
Interest rate risk is the risk that the fair value or future cash flows of the Company and the Company’s financial instruments will fluctuate because of changes in market interest rates. The Company's investment in deposits with banks are for short durations and therefore do not expose the Company to significant interest rate risk. Further, the terms loans availed by the Company carries a fixed interest rate and therefore not subject to interest rate risk since neither the carrying value nor the future cash flows will fluctuate because of the change in market interest rates.
The Company’s policy is to manage its interest rate risk by investing in fixed deposits, debt securities and debt mutual funds. Further, as there are no borrowings, the company’s policy to manage its interest cost does not arise.
The Company’s exposure to changes in interest rates relates primarily to the Company’s outstanding floating rate debt.
(b) Currency Risk:
Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. T he Company's exposure to the risk of change in foreign exchange rates relates primarily to the Company's operating activities (when revenue or expense is denominated in foreign currency).
The Company has transactional currency exposures arising from goods sold/purchased or services provided/availed that are denominated in a currency other than the functional currency.
37 Financial Risk Management objectives and policies (continued):
(c) Other price risk
Other price risk is the risk that the fair value or future cash flows of the Company's financial instruments will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer or by factors affecting all similar financial instruments traded in the market.
The Company based on working capital requirement keeps its liquid funds in current accounts. Excess funds are invested in current instruments.
The following table demonstrates the sensitivity of the Company's un-quoted investments on the profit [increase/(decrease)] for the period. The analysis is based on the assumption that net asset values has increased or decrease by 10%, with all other variables held constant.
(ii) Credit risk:
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and deposits) and from its investing activities, including deposits with banks and other financial instruments.
In addition, receivable balances are monitored on an ongoing basis with the result that the Company’s exposure to bad debts is not significant.
(a) Exposure to credit risk:
At the end of the reporting period, the Company’s maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statement of financial position. No other financial assets carry a significant exposure to credit risk.
(b) Credit risk concentration profile:
At the end of the reporting period, there were no significant concentrations of credit risk. The maximum exposures to credit risk in relation to each class of recognised financial assets is represented by the carrying amount of each financial assets as indicated in the balance sheet.
(c) Financial assets that are neither past due nor impaired:
None of the Company’s cash equivalents, other bank balances, security deposits and other receivables were past due or impaire d as at 31 March 2024. Trade and other receivables including loans that are neither past due nor impaired are from creditworthy debtors. Cash and short-term deposits investment securities that are neither past due nor impaired, are placed with or entered with reputable banks or financial institutions or companies with high credit ratings and no history of default.
37 Financial Risk Management objectives and policies (continued):
(d) Financial assets that are either past due or impaired:
The Company doesn't have any significant trade receivables or other financial assets which are either past due or impaired. The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, the Management also evaluates the factors that may influence the credit risk of its customer base, including the default risk. The Company’s receivables turnover is quick and historically, there was no significant default on account of tr ade and other receivables. An impairment analysis is performed at each reporting date on an individual basis for major clients. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information.
(iii) Liquidity risk:
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company’s reputation.
Management monitors rolling forecasts of the Company’s liquidity position comprising the cash and cash equivalents including other bank balances and investments in mutual funds on the basis of expected cash flows.
The table below summarises the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments as of 31 March 2026:
38 Capital management
Capital includes equity capital and all other reserves attributable to the equity holders of the parent. The primary objective of the capital management is to ensure that it maintain an efficient capital structure and healthy capital ratios in order to support its business and maximise shareholder's value. The Company manages its capital structure and make adjustments to it, in light of changes in economic conditions or its business requirements. To maintain or adjust the capital structure, Company may adjust the dividend payment to shareholders return capital to shareholders or issue new shares.
# Total Borrowings include long-term borrowing, current maturities of long-term borrowings and working capital loans like cash credit and buyer's credit.
In order to achieve this overall objective, the Company's capital management, amongst other things, aims to ensure that it meets the financial covenants attached to interest bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call back loans and borrowings.
There have been no breaches in the financial covenants of any interest bearing loans and borrowings in the current period.
No changes were made in the objectives, policies or processes for managing the capital during the year ended 31 March 2025 and 31 March 2024.
39 Contract Asset and Contract Liability
The amount spent by the company towards fulfilling its performance obligation (or part thereof) in accordance with contracts entered with counter party before the invoicing from such contract is due as per the Ind AS - 115 is regognized as Contract Assets in these financials. A contract asset is an entity's right to the assets for performance obligation that the entity has executed in accordance with the contract.
39 Contract Asset and Contract Liability (continued)
* The transfer to Intangible Assets includes an amount of Rs. 710.23 Lakhs arising from the termination of a contract by a client. The Revenue from Operations includes Rs. 1560.93 Lakhs on account of income from cessation of liability due to termination of contract by client resulting in discharge from performance obligation.
Under the original contract, the Company was obligated to deliver carbon credits to the client from a project deployed on the client's behalf. Accordingly, amounts received from the client were recorded as contract liabilities, while the corresponding expenses incurred on the project were recognised as contract assets.
During the year, the client terminated the contract and released the Company from its performance obligation. In addition to paying a termination compensation, the client also transferred the underlying project to the Company, along with the entitlement to all future carbon credits generated therefrom.
Consequent to the above, the amounts previously recorded as contract assets have been reclassified to Intangible Assets, as the project is now owned by the Company and is expected to generate future economic benefits through the production of carbon credits. Further, the outstanding balance recorded as contract liability has been recognised as revenue from contract termination and credited to the Statement of Profit and Loss.
40 Segment reporting
The Company is into climate change & sustainability advisory and carbon offsetting, along with business excellence services. Also, the company develops its own projects for generation of carbon credits. The company has been operating in different business segments, which has different set of risk and rewards, vis-a-vis the profitability and expense allocation in different segments is also diverse. The Board of Directors of the Company have assessed and deliberated to report these segments by segregation of assets and liabilities & income and expenses to evaluate the performance of the respective segments and to unlock the potential of the segments. The allocation of resources and obligations is based on the analysis of the various performance indicators of the Company and their respective capital intensive nature. As per the requirements of Ind AS 108 - “Operating Segments”, the company has two reportable segments as under:
(i) Trading Segment: where the carbon credits are purchased from various vendors and are sold to customers
(ii) Generation Segment: where the carbon credits are issued from the projects implemented, developed and owned by the company.
The revenue of both these segments are earned majorly from sale of carbon credits, however the decision of board is derived separately in both these segments considering the variable outcomes of the respective segments.
During the year, out of total 291,837 options granted, 83,056 options were exercised during the financial year 2025-26 (79,950 during FY 2024-25). Accordingly, an amount of Rs. 267.97 lacs (Rs. 664.33 lacs during 31st March 2025) was credited by the company in its securities premium account and correspondingly an amount of Rs. 251.36 Lacs (Rs. 512.42 lacs during 31st March 2025) is adjusted against Employee Stock Option Reserve. The fair value of the options granted is computed under Black Scholes Model by an Independent Valuer pursuant to Ind AS 102 - Share based payments.
43 Transfer Pricing Adjustment
As per transfer pricing legislation under section 92-92F of the Income Tax Act, 1961, the Company is required to use certain specific methods in computing arm's length prices of certain domestic and certain international transaction with associated enterprises and maintain adequate documentation in this respect. The legislations require that such information and documentation to be contemporaneous in nature, the Company has appointed independent consultant (the 'Consultant') for conducting the Transfer Pricing Study (the 'Study') to determine whether the transactions with associate enterprises undertaken during the Financial year are on an “arm's length basis”. Management is of the opinion that the Company's dome stic and international transactions are at arm's length & require no transfer pricing adjustments.
47 Ratios to be disclosed as per the requirements of the Companies Act, Schedule III (continued)
A Explanation for change in ratio of more than 25%:
1. Financial year 2021-22 was an exceptional year for the company as the prices for carbon credits vis-a-vis demand for the credits increased substantially. The company held its leadership position in the market and capitalised on the opportunities during FY 2021-22. During FY 2022-23, owing to various macro-economic factors, the overall business slowed down during the second half of the year on account of low pricing of environmental commodities, international geopolitical turmoil, high interest rates, inflation, regulatory changes, media trial of green house mitigation projects, rating of projects etc. The company incurred heavy losses during FY 2023-24 due to the above factors. During FY 2024-25, the company had regained its stability and profitability; however, during FY 2025-26, continued volatility in demand and pricing of carbon credits has once again adversely impacted the revenues and margins, resulting in a net loss for the year. In view of the extreme volatility in the business over the last few years, the financial figures of the company are largely incomparable, and the ratios may not depict a correct trend analysis.
2. The primary reason for deterioration in all profitability-linked ratios - namely Return on Equity, Return on Capital Employed, Return on Investments, Net Profit
Ratio, and Debt Service Coverage Ratio - is the significant decline in revenue from operations from ?16,461.47 lakhs to T8,337.19 lakhs, driven by reduced demand and lower realisations, which has resulted in a net loss of T758.61 lakhs during FY 2025-26 as against a net profit of ?1,529.11 lakhs in the preceding year. No dividend has been declared during the current year in view of the net loss, as against a dividend of T552.07 lakhs paid in FY 2024-25.
3. The improvement in Current Ratio (from 9.21 to 17.29), Trade Payable Turnover Ratio (from 0.83 to 1.36), and Inventory Turnover Ratio (from 0.76 to 1.14) is
attributable to increased liquidity, significant reduction in trade payables and inventory levels on account of lower purchasing and procurement activity during the year, and faster settlement of vendor dues. This reflects the company's leaner operating model and shift towards margin-based trades during the year.
4. The decline in Net Capital Turnover Ratio (from 0.46 to 0.25) is on account of the sharp fall in revenues, while the working capital of the company has not contracted proportionately, as the company continues to carry significant current assets. The business and profit margins of the company have shrunk owing to the unstable and volatile nature of the carbon credit business, and accordingly the ratios may vary year on year.
49 Previous year figures
The figures of the corresponding previous year have been regrouped wherever considered necessary to correspond to current year disclosures.
This is the summary of significant accounting policies and other explanatory notes referred to in our report of even date.
|