3.11 Provisions, Contingent Liabilities, Contingent Assets and Commitments:
Provisions are recognised 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.
If the effect of the time value of money is material, provisions are discounted using
equivalent period government securities interest rate. Unwinding of the discount is
recognised in the statement of profit and loss as a finance cost. Provisions are reviewed
at each balance sheet date and are adjusted to reflect the current best estimate.
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. Information on contingent liability is disclosed in the Notes
to the Financial Statements. Contingent assets are not recognised. However, when the
realisation of income is virtually certain, then the related asset is no longer a contingent
asset, but it is recognised as an asset.
3.12 Borrowing Costs:
Borrowing costs comprises of interest and other costs incurred in connection with the
borrowing of the funds. All borrowing costs are recognized in the Statement of Profit and
Loss using the effective interest method except to the extent attributable to qualifying
Property Plant and Equipment (PPE) which are capitalized to the cost of the related
assets. A qualifying PPE is an asset that necessarily takes a substantial period of time
to get ready for its intended use or sale. Borrowing cost also includes exchange
differences to the extent considered as an adjustment to the borrowing costs.
3.13 Impairment of Assets:
An asset is considered as impaired when at the date of Balance Sheet, there are
indications of impairment and the carrying amount of the asset, or where applicable,
the cash generating unit to which the asset belongs, exceeds its recoverable amount (i.e.
the higher of the net asset selling price and value in use) .The carrying amount is reduced
to the recoverable amount and the reduction is recognised as an impairment loss in the
statement of profit and loss. The impairment loss recognised in the prior accounting
period is reversedifrfekere has been a change in the estimate of recoverab^^bupt. Post
impairment, provided on the revised carrying value Lmpame||\sset
7w/\ \r\ ($f hv\
over its remal^nfefilBBMfiJ^IJfe. | (FRN : U367JW)H
Vc-\ /-:./ I / V'— V rn l"3!
i A jw Ý U. A, I ( ^ V \ f / i
3.14 Financial instruments - initial recognition, subsequent measurement and
impairment:
A financial instrument is any contract that gives rise to a financial asset of one entity
and a financial liability or equity instrument of another entity,
a) Financial Assets
Initial recognition and measurement
All financial assets and liabilities are initially recognized at fair value. Transaction
costs that are directly attributable to the acquisition or issue of financial assets and
financial liabilities, which are not at fair value through profit or loss, are adjusted to
the fair value on initial recognition.
Subsequent measurement
Financial assets carried at amortised cost (AC)
A financial asset is measured at amortised cost if it is held within a business model
whose objective is to hold the asset in order to collect contractual cash flows and the
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.
For trade receivables and other financial assets maturing within one year from the
balance sheet date, the carrying amounts approximate fair value due to the short
maturity of these instruments.
Financial assets at fair value through other comprehensive income (FVTOCI)
A financial asset is measured at FVTOCI if it is held within a business model whose
objective is achieved by both collecting contractual cash flows and selling financial
assets and the 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.
Financial assets at fair value through profit or loss (FVTPL)
A financial asset which is not classified in any of the above categories are measured
at FVTPL.
b) Financial Liabilities
Initial recognition and measurement
All financial liabilities are recognized at fair value.
Subsequent measurement
Financial liabilities are carried at amortized cost using the effective interest method.
For trade and other payables maturing within one year from the balance sheet date,
the carrying amounts approximate fair value due to the short maturity of these
instruments.
Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash
flows from the financial asset expire or it transfers the financial asset and the
transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part
of a financial liability) is derecognized from the Company's Balance Sheet when the
obligation specified in the contract is discharged or cancelled or expires.
Impairment of financial assets
Trade receivables
In respect of trade receivables, the Company applies the simplified approach of ind
AS 109, which requires measurement of loss allowance at an amount equal to
lifetime expected credit losses. Lifetime expected credit losses are the expected credit
losses that result from all possible default events over the expected life of trade
receivables.
Other financial assets
In respect of its other financial assets, the Company assesses if the credit risk on
those financial assets has increased significantly since initial recognition. If the
credit risk has not increased significantly since initial recognition, the Company
measures the loss allowance at an amount equal to 12-month expected credit losses,
else at an amount equal to the lifetime expected credit losses.
When making this assessment, the Company uses the change in the risk of a default
occurring over the expected life of the financial asset. To make that assessment, the
Company compares the risk of a default occurring on the financial asset as at the
balance sheet date with the risk of a default occurring on the financial asset as at
the date of initial recognition and considers reasonable and supportable information,
that is available without undue cost or effort, that is indicative of significant
increases in credit risk since initial recognition. The Company assumes that the
credit risk on sdfc^SS&t'&sset has not increased significantly sinp^^h^^epgnition
if the financifiP Iermined to have low credit risk at th^balance sB^\date.
Write-offs
Financial assets are written off either partially or in their entirety to the extent that
there is no realistic prospect of recovery. Any subsequent recoveries are credited to
impairment on financial instrument on statement of profit and loss.
3.15 Cash and cash equivalents:
Cash and cash equivalent in the balance sheet comprise cash at banks, cash 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.
For the purpose of the statement of cash flows, cash and cash equivalents consist
of cash and short-term deposits, as defined above, net of outstanding bank
overdrafts as they are considered an integral part of the Company's cash
management.
3.16 Current and Non-Current classification:
The Company presents assets and liabilities in statement of financial position based
on current/non-current classification. •
The Company has presented non-current assets and current assets before equity,
non-current liabilities and current liabilities in accordance with Schedule III,
Division II of Companies Act, 2013 notified by MCA.
An asset is classified as current when it is:
a) Expected to be realised or intended to be sold or consumed in normal operating
cycle,
b) Held primarily for the purpose of trading & manufacturing.
c} Expected to be realised within twelve months after the reporting period, or
d) Cash or cash equivalent unless restricted from being exchanged or used to settle
a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is classified as current when it is:
a) Expected to be settled in normal operating cycle,
b) Held primarily for the purpose of trading, 8s manufacturing,
c) Due to be settled within twelve months after the reporting period, or
d) There is no unconditional right to defer the settlement of the liability for at least
• ii «i IV
twelve months^f&ffiBjVreporting period. —"SJA
fÝ3/
All other liarofffines arenas sified as non-current. /«/ fb%\
The operating cycle is the time between the acquisition of assets for processing and
their realisation in cash or cash equivalents. Deferred tax assets and liabilities are
classified as non-current assets and liabilities. The Company has identified twelve
months as its normal operating cycle.
3.17 Earnings per share:
Basic earnings per share is computed using the ‘net profit for the year attributable
to the shareholders (Before and After Exceptional Items)’ and weighted average
number of equity shares outstanding during the year.
. Diluted earnings per share is computed using the Met profit for the year attributable
to the shareholder (Before and After Exceptional Items)’ and weighted average
number of equity and potential equity shares outstanding during the year including
share options, convertible preference shares and debentures, except where the result
would be anti-dilutive. Potential equity shares that are converted during the year are
included in the calculation of diluted earnings per share, from the beginning of the
year or date of issuance of such potential equity shares, to the date of conversion.
3.18 Significant Accounting Judgements, Estimates and Assumptions:
The preparation of the financial statements in conformity with Ind AS requires the
Management to make estimates, judgments and assumptions. These estimates,
judgments and assumptions affect the application of accounting policies and the
reported amounts of assets and liabilities, the disclosures of contingent assets and
liabilities at the date of the financial statements and reported amounts of revenues
and expenses during the period. Actual results could differ from those estimates.
Estimates and judgements are continually evaluated. They are based on historical
experience and other factors, including expectations of future events that may have
a financial impact on the Company and that are believed to be reasonable under the
circumstances. Information about Significant judgements and Key sources of
estimation made in applying accounting policies that have the most significant
effects on the amounts recognized in the financial statements is included in the
following notes:
Property, plant and equipment and Intangible Assets
Management reviews the estimated useful lives and residual values of the assets
annually in order to determine the amount of depreciation to bp^idl'^^dnring any
reporting pepi^hjljj^useful lives and residual values as /^r 3chedm^&\ of the
Companieate&m, 20Mi\r are based on the Company’s hiI8M;with
v . vv jJM
similar assets and taking into account anticipated technological changes, whichever
is more appropriate.
Recognition of deferred tax assets
The extent to which deferred tax assets can be recognized is based on an assessment
of the probability of the future taxable income against which the deferred tax assets
can be utilized.
Contingencies
Management has estimated the possible outflow of resources at the end of each
annual reporting financial year, if any, in respect of contingencies/claim/litigations
against the Company as it is not possible to predict the outcome of pending matters
with accuracy.
Fair value measurements and Impairment of financial assets:
The impairment provisions for financial assets are based on assumptions about risk
of default and expected cash loss. The Company uses judgement in making these
assumptions and selecting the inputs to the impairment calculation, based on
Company’s past history, existing market conditions as well as forward looking
estimates at the end of each reporting period.
Defined benefits plan
The Cost of the defined benefit plan and other post-employment benefits and the
present value of such obligation are determined using actuarial valuations. An
actuarial valuation involves making various assumptions that may differ from actual
developments in the future. These include the determination of the discount rate,
future salary increases, mortality rates and attrition rate. Due to the complexities
involved in the valuation and its long-term nature, a defined benefit obligation is
highly sensitive to changes in these assumptions. All assumptions are reviewed at
each reporting date.
Recoverability of trade receivable
Judgements are required in assessing the recoverability of overdue trade receivables
and determining whether a provision against those receivables is required. Factors
considered include the credit rating of the counterparty, the amount and timing of
anticipated future payments and any possible actions that canjisui^ken to mitigate
.u Ý i
the risk odAjaibn-^&ftraent. /yV XA0\
7.9 r xrJ\ f vA
Provisions
Provisions and liabilities are recognised in the period when it becomes probable that
there will be a future outflow of funds resulting from past operations or events and
the amount of cash outflow can be reliably estimated. The timing of recognition and
quantification of the liability require the application of judgement to existing facts
and circumstances, which can be subject to change. Since the cash outflows can
take place many years in the future, the carrying amounts of provisions and
liabilities are reviewed regularly and adjusted to take account of changing facts and
circumstances,
1 VM
a (i?f J \ r* \
I » f L'tJKl U
27.The disclosures required under Indian Accounting Standard 19 "Employee Benefits" are
given below:
Defined Benefit Plans
The gratuity plan entitles an employee, who has rendered at least 5 year's of continuous
service, to receive one-half month salary for each year of completed service at the time of
retirement/exit, A Benefit ceiling of Rs. 20,00,000 will be applied. The Company does not
operate or has invested in any Defined Benefits Plans as of now.
Notes:
I. The estimate of future salary increase takes into account inflation, seniority,
’ promotion and other relevant factors.
II. Discount rate is based on the prevailing market yields of Indian Government
Bonds as at the Balance Sheet date for the estimated term of the obligation,
28.In the opinion of the Board, current assets, loans and advances have a value on
realization in the ordinary course of business at least equal to the amount at which they
are stated. The balances of Sundry Debtors, Loans and advances, Deposits, some of the
Sundry Creditors and Unsecured Loans are subject to confirmations, reconciliation and
adjustments, if any.
30. The Company has not received information from the suppliers regarding their status
under the micro, small and medium enterprises development act, 2006. Hence,
disclosure, if any, relating to amount unpaid as at the balance sheet date together with
interest paid or payable as per the requirement under the said act have not been made.
31. Financial Instruments- Fair Values
A. Accounting classification and fair values
The following table shows the carrying amounts and fair values of financial assets
and financial liabilities, including their levels in the fair value hierarchy. It does
not include fair value information for financial assets and financial liabilities if the
carrying amount is a reasonable approximation of fair value.
32. Financial risk management objectives
The Company's corporate treasury function provides services to the business, co¬
ordinates access to domestic financial markets, monitors and manages the financial risk
relating to the operation of the Company through internal risk reports which analyse
exposures by degree and magnitude of risk. These risks include market risk (including
currency risk, interest risk and other price risk), credit risk and liquidity risk.
• The use of financial derivatives is governed by the Company’s policies approved by the
board of directors, which provide written principles on foreign exchange risk, interest rate
risk, credit risk, the use of financial derivatives and non-derivatives financial
instruments, and the investment of excess liquidity. Compliance with policies and
exposure limit is reviewed by the management on a continuous basis. The Company does
not enter into or trade financial instrument, including derivative financial instruments,
for speculative purpose.
Foreign Currency risk management
The Company undertakes transactions denominated in foreign currencies; consequently,
exposures to exchange rate fluctuations arise. Exchange rate exposures are managed
Ý within approved policy parameters utilising forward foreign exchange contracts where
the amount is material,
33. Cash Flow sensitivity analysis for variable rate instrument
The Company does not account for any fixed - rate financial assets or financial liabilities
at fair value through profit and loss, and the Company does not have any designated
derivatives. Therefore, a change in interest rates at the reporting date would not affect
profit and loss for any of these fixed interest bearing financial instruments.
Credit risk management
Credit risk refers to the risk that a counter party will default on its contractual obligation
. resulting in financial loss to the Company. The Company uses its own trading records to
evaluate the credit worthiness of its customers. Credit risk is the risk of financial loss to
the Company if a customer or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from the Company’s receivables from
customers. Credit risk is managed through credit approvals, establishing credit limits
and continuously monitoring the creditworthiness of customers to which the Company
grants credit terms in the normal course of business. The Company establishes an
allowance for debts and impairment that represents f incurred
losses in reffect of traBAand other receivables and investments.^/ yC\
The credit risk on investment in mutual funds is limited because the counter parties are
' reputed banks or funds sponsored by reputed bank.
Liquidity Risk Management
Ultimate responsibility for liquidity risk management rests with the Board of Directors,
which has established an appropriate liquidity risk management framework for the
management of the Company’s short term, medium term and long term funding and
liquidity management 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.
37.Event after reporting date
There have been no events after the reporting date that requires disclosure in these
financial statements.
Ý 38. Information regard to other matter specified in Schedule III of Companies Act, 2013 is
either nil or not applicable to the Company for the year.
39, Previous year figures have been regrouped /rearranged wherever necessary to make them
comparable with those of the Current Year.
For Jhunjhunwala Jain 8s Associates LLP For and on behalf of the Board of Directors
Chartered Accountants
Firm’Registration No : 113675W/W100361
11 (fun i mm
(CA Priteesh Jitendra JainfeV yHarpreet Singh Nikhil Savaliya
—-vy .
Partner A»cff>^ariaging Director Director
Membership Number : 164931 DIN: 09554648 DIN: 07737935
Place : Mumbai Khilan Savaliya Padma Tapariya
Date : May 19, 2025 Additional Director Company Secretary
DIN: 08790209
|