s) Provisions, contingent liabilities and contingent assets
A provision is recognised when the Group has a present
obligation 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. Provisions
determined based on the best estimate required to settle
the obligation at the reporting date and adjusted to reflect
the current best estimates.
Provisions are discounted to their present values, where the
time value of money is material.
Contingent liabilities are disclosed on the basis of judgement
of management after a careful evaluation of facts and legal
aspects of matter involved.
Contingent assets are disclosed when probable and
recognised when the realization of income is virtually
certain.
1.4 Significant management judgments in applying accounting
policies and estimation uncertainty
The preparation of the Company's financial statements requires
management to make judgments, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets
and liabilities and the related disclosures.
Significant management judgments
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 utilised.
Provisions, contingent liabilities and contingent assets - The
Company is the subject of legal proceedings and tax issues
covering a range of matters, which are pending in various
jurisdictions. Due to the uncertainty inherent in such matters, it
is difficult to predict the final outcome of such matters. The cases
and claims against the Company often raise difficult and complex
factual and legal issues, which are subject to many uncertainties,
including but not limited to the facts and circumstances of each
particular case and claim, the jurisdiction and the differences in
applicable law. In the normal course of business, management
consults with legal counsel and certain other experts on matters
related to litigation and taxes. The Company accrues a liability
when it is determined that an adverse outcome is probable and
the amount of the loss can be reasonably estimated.
Impairment of financial assets - At each balance sheet date,
based on historical default rates observed over expected life, the
management assesses the expected credit loss on outstanding
financial assets.
Evaluation of indicators for impairment of assets - The
evaluation of applicability of indicators of impairment of assets
requires assessment of several external and internal factors which
could result in deterioration of recoverable amount of the assets.
Significant estimates
Useful lives of depreciable/amortisable assets - Management
reviews its estimate of the useful lives of depreciable/amortisable
assets at each reporting date, based on the expected utility of
the assets. Uncertainties in these estimates relate to technical
and economic obsolescence that may change the utility of certain
software, IT equipment and other plant and equipment.
Defined benefit obligation - Management's estimate of the DBO
is based on a number of critical underlying assumptions such as
standard rates of inflation, mortality, discount rate and
anticipation of future salary increases. Variation in these
assumptions may significantly impact the DBO amount and the
annual defined benefit expenses.
Fair value measurements
Management applies valuation techniques to determine the fair
value of financial instruments (where active market quotes are
not available). This involves developing estimates and
assumptions consistent with how market participants would price
the instrument.
Valuation of investment property
Investment property is stated at cost. However, as per Ind AS 40
there is a requirement to disclose fair value as at the balance
sheet date. The Company engaged independent valuation
specialists to determine the fair value of its investment property
as at reporting date. The determination of the fair value of
investment properties requires the use of estimates such as
future cash flows from the assets (such as lettings, future revenue
streams, capital values of fixtures and fittings, any environmental
matters and the overall repair and condition of the property)
and discount rates applicable to those assets. In addition,
development risks (such as construction and letting risk) are also
taken into consideration when determining the fair value of the
properties under construction. These estimates are based on local
market conditions existing at the balance sheet date.
Impairment of Property, plant and equipment
Impairment exists when the carrying value of an asset or cash
generating unit exceeds its recoverable amount, which is the
higher of its fair value less costs of disposal and its value in use.
The value in use calculation is based on a DCF model. The cash
flows are derived from the budgets. The recoverable amount is
sensitive to the discount rate used for the DCF model as well as
the expected future cash-inflows and the growth rate used.
Other equity
(i) Nature and purpose of other reserves
General reserve
General reserve is created out of the accumulated profits of the Company as per the provisions of Companies Act.
Retained earnings
All the profits made by the Company are transferred to retained earnings from statement of profit and loss.
Securities premium reserve
Securities premium reserve represents the amount received in excess of par value of securities (equity shares). Premium on redemption of
securities is accounted in security premium available. Where security premium is not available, premium on redemption of securities is
accounted in statement of profit and loss. Section 52 of Companies Act, 2013 specify restriction and utilisation of security premium.
Other comprehensive income
Other comprehensive income represents balance arising on account of changes in fair value of FVOCI equity instruments and gain/(loss)
booked on re-measurement of defined benefit plans.
Financial instruments by category
(i) Fair values hierarchy
Financial assets and financial liabilities measured at fair value in the statement of financial position are companied 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 financial instruments.
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 rely as little as possible on entity specific estimates.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
The management assessed that cash and cash equivalents, trade receivables, other receivables, trade payables and other current financial
liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. The fair value of the financial
assets and liabilities is included 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:
(i) Long-term fixed-rate and variable-rate receivables are evaluated by the Company based on parameters such as interest rates, individual
creditworthiness of the customer and other market risk factors. Based on this evaluation, allowances are taken into account for the
expected credit losses of these receivables.
(ii) The fair values of the Company's interest-bearing borrowings, loans and receivables are determined by applying discounted cash
flows ('DCF') method, using discount rate that reflects the issuer's borrowing rate as at the end of the reporting period. The own non¬
performance risk as at 31 March 2025 was assessed to be insignificant.
Note - 31
Financial risk management
The Company's activities expose it to credit risk, liquidity risk and market risk. The Company's board of directors has overall responsibility
for the establishment and oversight of the Company's risk management framework. This note explains the sources of risk which the entity
is exposed to and how the entity manages the risk and the related impact in the financial statements.
(A) Credit risk
Credit risk is the risk that a counterparty fails to discharge its obligation to the Company. The Company's exposure to credit risk is influenced
mainly by cash and cash equivalents, trade receivables and financial assets measured at amortised cost. The Company continuously monitors
defaults of customers and other counterparties and incorporates this information into its credit risk controls.
a) Credit risk management
i) Credit risk rating
The Company assesses and manages credit risk of financial assets based on following categories arrived on the basis of assumptions,
inputs and factors specific to the class of financial assets. The Company assigns the following credit ratings to each class of financial assets
based on the assumptions, inputs and factors specific to the class of financial assets.
A: Low
B: Medium
C: High
The Company provides for expected credit loss based on the following:
(B) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are
settled by delivering cash or another financial asset. The Company's approach to managing liquidity is to ensure as far as possible, that it
will have sufficient liquidity to meet its liabilities when they are due.
Management monitors rolling forecasts of the Company's liquidity position and cash and cash equivalents on the basis of expected cash
flows. The Company takes into account the liquidity of the market in which the entity operates.
Maturities of financial liabilities
The tables below analyse the Company's financial liabilities into relevant maturity groupings based on their contractual maturities.
Note - 33
Related party transactions
In accordance with the requirements of Ind AS 24 the names of the related party where control exists/ able to exercise significant influence
along with the aggregate transactions and year end balances with them as identified and certified by the management are given below:
i) Parties where control exists:
(a) Holding Company:
- M/s Anadi Investments Private Limited
(b) Subsidiary:
- Majestic IT Services Limited
- Emirates Technologies Private Limited
(c) Key Management Personnel (KMP) and their Relatives:
- Mr. Mahesh Munjal (Managing Director)
- Mr. Aayush Munjal (Joint Managing director)
- Mr. Anil Kumar Sharma (Independent Director)
- Mr. Rajesh Kumar Yaduvanshi (Independent Director)
- Ms. Ayushi Jain (Director)
- Mr. Tripurari Pandey (Independent Director) w.e.f 8th February 2024
- Mr. Ajay Kumar (Chief Financial Officer) w.e.f 08th August 2024
- Ms. Parul Chadha (Company Secretary)
- Mr. Prateek Garg (Independent Director) retired w.e.f 17th April 2024
- Mr. Rajpal Singh Negi (Chief Financial Officer) resign w.e.f 22nd May 2024
- Mr. Kartik Khandelwal (Company secretary of subsidiary company) resign w.e.f 15th September 2023
- Mrs. Renuka Munjal (wife of Managing Director)
1Due to increase in current liabilities (increase in Advance from customer)
2Due to decrease in borrowing (repayment during the current year)
3Due to decrease in profit and increase in principal repayment of non-current borrowings.
4Due to decrease in profit (decrease in total income)
5Due to decrease in revenue from operations
6Due to decrease in trade payables
7Due to decrease in income generated from invested funds
Note - 40
Other disclosures
(a) Relationship with Struck off Companies - The Company does not have any transactions or relationships with any companies struck off
under Section 248 of the Companies Act, 2013 or Section 560 of the Companies Act, 1956.
(b) There are no transactions that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax
Act, 1961 which have not been recorded in the books of account.
(c) There are no charges or satisfaction of charges yet to be registered with Registrar of Companies beyond the statutory period.
For Hari S & Associates For and on behalf of Majestic Auto Limited
Chartered Accountants
Firm Registration No. 007709N
Kapil Vohra (Ajay Kumar) (Mahesh Munjal)
Partner Chief Financial Officer Managing Director
Membership No. 523735 Place: Delhi DIN-00002990
Place: Delhi Place: Delhi
(Parul Chadha) (Dr. Rajesh Kumar Yaduvanshi)
Company Secretary Director
Date : 26 May 2025 M. No. A50171 DIN-07206654
Place: Delhi Place: Delhi
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