2.8 Provisions, Contingent Liabilities and Contingent Assets
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. The amount recognized as a
provision is the best estimate of the consideration required to settle the present
obligation at the end of the reporting period, taking into account the risks and
uncertainties surrounding the obligation. 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.
When the Company expects some or all of a provision to be reimbursed, for example,
under an insurance contract, 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.
Contingent liabilities are not recognised but are disclosed in the notes.
Contingent assets are not recognised but are disclosed in the notes where an inflow of
economic benefits is probable.
As mentioned in the financial statements, the balances of some of the trade receivables,
advances to the suppliers trade payables, and advance from customers and other are
subject to confirmation. As there has been no activity since 5 years and confirmation
from some of the parties are not received, as such we are unable to express opinion
whether the amounts are recoverable or not and as to the effect thereof on the
financial statements for the year.
2.9 Financial Instruments
Financial assets and financial liabilities are recognised when an entity becomes a party to
the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction
costs that are directly attributable to the acquisition or issue of financial assets and
financial liabilities (other than financial assets and financial liabilities at fair value
through profit or loss) are added to or deducted from the fair value of the financial
assets or financial liabilities, as appropriate, on initial recognition. Transaction costs
directly attributable to the acquisition of financial assets or financial liabilities at fair
value through profit or loss are recognised immediately in profit or loss.
2.10 Financial assets Initial recognition and measurement
Financial assets are recognized when the Company becomes a party to the contractual
provisions of the instrument. On initial recognition, a financial asset is recognized at fair
value. In case of financial assets which are recognized at fair value through profit and
loss (FVTPL), its transaction costs are recognized in the Statement of Profit and loss. In
other cases, the transaction costs are attributed to the acquisition value of the financial
asset.
Subsequent measurement
All recognised financial assets are subsequently measured in their entirety at either
amortised cost or fair value, depending on the classification of the financial assets.
Effective interest method
The effective interest method is a method of calculating the amortized cost of a debt
instrument and of allocating interest income over the relevant period. The effective
interest rate is the rate that exactly discounts estimated future cash receipts (including
all fees and transaction costs and other premiums or discounts) through the expected
life of the debt instrument, or, where appropriate, a shorter period, to the net carrying
amount on initial recognition. Income is recognized on an effective interest basis for debt
instruments other than those financial assets classified as a FVTPL. Interest income is
recognized in profit or loss and is included in the "Other Income" line item.
Classification of financial assets:
A financial asset is measured at the amortized cost if both the following conditions are
met:
a) The Company's business model objective for managing the financial asset is to hold
financial assets in order to collect
contractual cash flows, and
b) 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.
This category applies to cash and bank balances, trade receivables, loans and other
financial assets of the Company. Such financial assets are subsequently measured at
amortized cost using the effective interest method.
The amortized cost of a financial asset is also adjusted for loss allowances, if any.
Financial assets measured at FV TOCI
A financial asset is measured at FVTOCI if both of the following conditions are met:
a) The Company's business model objective for managing the financial asset is achieved
both by collecting contractual cashflows and selling the financial assets, and
b) 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 on the principal amount outstanding.
Financial assets measured at FVTPL
A financial asset is measured at FVTPL unless it is measured at amortized cost or at
FVTOCI as explained above. This is a residual category applied to all other investments
of the Company. Such financial assets are subsequently measured at fair value at each
reporting date. Fair value changes are recognized in the Statement of Profit and Loss.
Dividend Income on the investments in equity instruments are recognized as 'other
income' in the Statement of Profit and Loss.
Foreign exchange gains and losses
The fair value of financial assets denominated in a foreign currency is determined in that
foreign currency and translated at the spot rate at the end of each reporting period. For
foreign currency denominated financial assets measured at amortized cost and FVTPL,
the exchange differences are recognized in profit or loss except for those which are
designated as hedging instruments in a hedging relationship.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of group of
similar financial assets) is derecognized (i.e. removed from the Company's Balance
Sheet) when any of the following occurs:
a) The contractual rights to cash flows from the financial assets expires,
b) The company transfers its contractual rights to receive cash flows of the financial
asset and has substantially transferred all the risks and rewards of ownership of
the financial asset;
c) The Company retains the contractual rights to receive cash flows but assumes a
contractual obligation to pay the cash flows without material delay to one or more
recipients under a 'pass through' arrangement (thereby substantially transferring
all the risks and rewards of ownership of the financial asset);
d) The Company neither transfer nor retains substantially all risk and rewards of
ownership and does not retain control over the financial assets.
In cases where Company has neither transferred nor retained substantially all of the
risks and rewards of the financial asset, but retains control of the financial asset, the
Company continues to recognize such financial asset to the extent of its continuing
involvement in the financial asset; in that case, the Company also recognizes an
associated liability.
The financial asset and the associated liability are measured on a basis that reflects the
rights and obligations that the Company has retained.
On derecognition of a financial asset, the difference between the asset's carrying amount
and the sum of the consideration received and receivable and the cumulative gain or loss
that had been recognized in other comprehensive income and accumulated in equity is
recognized in profit or loss if such gain or loss would have otherwise been recognized in
profit or loss on disposal of that financial asset.
Impairment of financial assets
The Company applies expected credit losses (ECL) model for recognizing impairment loss
on financial assets measured at amortized cost and trade receivables. In case of trade
receivables, the Company follows a simplified approach wherein an amount equal to
lifetime ECL is measured and recognized as loss allowance. For the purpose of measuring
lifetime expected credit loss, for trade receivables, the Company has used a practical
expedient as permitted under Ind AS 109. The expected credit loss allowance is
computed based on a provision matrix which takes in to account historical credit loss
experience and adjusted for forward looking information. For recognition of impairment
loss on other financial assets and risk exposure, the company determines whether there
has been a significant increase in the credit risk since initial recognition. If the credit risk
has not increased significantly, 12 month ECL is used to provide for impairment loss.
However, if the credit risk has increased significantly, then the impairment loss is
provided based on lifetime ECL. Subsequently, if the credit quality of the financial asset
improves such that there is no longer a significant increase in credit risk since initial
recognition, the Company reverts to recognizing impairment loss allowance based on 12-
month ECL. ECL impairment loss allowance (or reversal) recognized during the period is
recognized as income / expenses in the Statement of profit and loss under the head
'Other expense'.
2.11 Financial liabilities and equity instruments
Debt and Equity Instruments:
Debt and equity instruments issued by the Company are classified as either financial
liabilities or as equity in accordance with the substance of the contractual arrangements
and the definitions of a financial liability and an equity instruments.
Equity instruments:
An equity instruments is any contract that evidences a residual interest in the assets of
an entity after deducting all of its liabilities, Equity instruments issued by the Company
are recognised at the proceeds received, not of direct issue costs.
Financial Liabilities: Initial recognition and measurement
Financial liabilities are recognised when the Company becomes a party to the contractual
provisions of the instrument. Financial liabilities are initially measured at fair value.
Subsequent measurement
Financial liabilities are subsequently measured at amortised cost using the effective
interest rate method. Financial liabilities carried at fair value through profit or loss are
measured at fair value with all changes in fair value recognised in the Statement of Profit
and Loss.
Financial liabilities at FVTPL
A financial liability may be designated as at FVTPL upon initial recognition if:
• such designation eliminates or significantly reduces a measurement or recognition
inconsistency that would otherwise arise;
• the financial liability whose performance is evaluated on a fair value basis, in
accordance with the Company's documented risk management;
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on
measurement recognised in profit or loss. The net gain or loss recognised in profit or loss
incorporates any interest paid on the financial liability.
Foreign exchange gains and losses
For financial liabilities that are denominated in a foreign currency and are measured at
amortised cost at the end of each reporting period, the foreign exchange gains and
losses are determined based on the amortised cost of the instruments and are
recognised in profit or loss.
The fair value of financial liabilities denominated in a foreign currency is determined in
that foreign currency and translated at the closing rate at the end of the reporting
period. For financial liabilities that are measured as at FVTPL, the foreign exchange
component forms part of the fair value gains or losses and is recognised in profit or loss.
Derecognition of financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or
cancelled or expires. When an existing financial liability is replaced by another from the
same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as the derecognition
of the original .liability and the recognition of a new liability. The difference between the
carrying amount of the financial liability derecognized and the consideration paid is
recognized in the Statement of Profit and Loss.
2.12 Leases
Leases are classified as finance leases whenever the terms of the lease transfer
substantially all the risks and rewards of ownership to the lessee. All other leases are
classified as operating leases.
In respect of assets taken on operating lease, lease rentals are recognized as an
expense in the Statement of Profit and Loss on straight line basis over the lease term
unless another systematic basis is more representative of the time pattern in which the
benefit is derived from the leased asset; or the payments to the lessor are structured to
increase in the line with expected general inflation to compensate for the lessor's
expected inflationary cost increases.
2.13 Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting
provided to the Chief Operating Decision Maker (CODM) of the Company. The CODM is
responsible for allocating resources and assessing performance of the operating
segments of the Company.
2.14 Fair Value
The Company measures financial instruments at fair value in accordance with the
accounting policies mentioned above. Fair value is 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 fair value measurement is based on the
presumption that the transaction to sell the asset or transfer the liability takes place
either;
• In the principal market for the asset or liability, or
• In the absence of a principal market, in the most advantageous market for the asset or
liability
All assets and liabilities for which fair value is measured or disclosed in the financial
statements are categorized within the fair value hierarchy that categorized into three
levels, described as follows, the inputs to valuation techniques used to measure value.
The fair value hierarchy gives the highest priority to quoted prices in active markets for
Identical assets or liabilities
(Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs).
Level 1 - quoted (unadjusted) market prices 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 - inputs that are unobservable for the asset or liability.
For assets and liabilities that are recognized in the financial statements at fair value on a
recurring basis, the Company determines whether transfers have occurred between
levels in the hierarchy by re-assessing categorized at the end of each reporting period
and discloses the same.
2.15 Earnings Per Share
Basic earnings per share are computed by dividing the profit after tax by the weighted
average number of equity shares outstanding during the year. Diluted earnings per
share is computed by dividing the profit after tax as adjusted for the effects of dividend
interest and other charges relating to the dilutive potential equity shares by weighted
average number of shares plus dilutive potential equity shares.
2.16 Significant accounting judgments, estimates and assumptions
Significant accounting judgements
The application of the Company's accounting policies in the preparation of the
Company's financial statements requires management to make judgements, estimates
and assumptions that affect the reported amounts of revenues, expenses, assets and
liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities.
The estimates and assumptions are based on historical experience and other factors that
are considered to be relevant. The estimates and underlying assumptions are reviewed
on an ongoing basis and any revisions thereto are recognized in the period in which they
are revised or in the period of revision and future periods if the revision affects both the
current and future periods. Actual results may differ from these estimates which could
result in outcomes that require a material adjustment to the carrying amount of assets
or liabilities affected in future periods.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation
uncertainty at the reporting date, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial
year, are described below. Existing circumstances and assumptions about future
developments may change due to market changes or circumstances arising that are
beyond the control of the Company. Such changes are reflected in the assumptions when
they occur.
(a) Fair value measurement of financial instruments
When the fair value of financial assets and financial liabilities recorded in the balance
sheet cannot be measured based on quoted prices in active markets, their fair value is
measured using ECL model. The inputs to these models are taken from observable
markets where possible, but where this is not feasible, a degree of judgement is required
in establishing 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.
(b) Defined benefit plans (gratuity benefits)
The cost of the defined benefit gratuity plan and the present value of the gratuity
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 and
mortality rates. 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.
(c) Provisions and Contingent Liabilities
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. These are reviewed at each
Balance Sheet date and adjusted to reflect the current best estimate. Contingent
liabilities are not recognised in the financial statements. The policy for the same has
been explained above in note 2.4.
2.17 Benami Property
The company does not hold any benami property as defined under the Benami
Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder. No
proceeding has been initiated or pending against the company for holding any benami
property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the
rules made thereunder.
2.18 Transaction in Crypto Currency
The Company has not traded or invested in crypto currency or virtual currency during
the financial year.
2.19 Transaction with Struck off
The Company does not have any transactions with companies struck off.
3. NOTES TO ACCOUNTS:
3.1 Balances of sundry creditors, sundry debtors, loans & advances and other liabilities
are subject to confirmation and reconciliation.
3.2 The Company operates in one segment i.e., trading of agricultural produce and
chemical and within one geographical segment i.e., India.
3.4 The Company manages its capital to ensure that it will be able to continue as a
going concern. The structure is managed to provide ongoing returns to shareholders
and service debt obligations, whilst maintaining maximum operational flexibility.
3.5 The carrying amounts of trade payables, other financial liabilities, cash and cash
equivalents, other bank balances, trade receivables and other financial assets are
considered to be the same as their fair values due to their short-term nature.
3.6 The Company opines that no provision for expected credit loss is required.
3.7 There is no significant market risk or liquidity risk to which the Company is exposed.
3.8 The disclosure of transactions with the related parties is given below:
(i) Parties where control exists: NIL
(ii) Subsidiary Companies: NIL
(iii) Fellow Subsidiary Companies: NIL
(iv) Key Management Personnel: Mr. Arun Prajapati - Managing Director, Mr. Gopal
Trivedi Company Secretary.
ADDITIONAL DISCLOSURES:
(i) Previous year figures have been regrouped and reclassified where ever
necessary.
(ii) Expenditure and earning in foreign currency: Nil
(iii) Expenditure incurred on employees who are in receipt of remuneration which
is less than the prescribed limit for the year.
(iv) In the opinion of the board the value on realization of current assets and loans
and advance in ordinary course of business will not be less than the amount
at which they are stated in the balance sheet.
(v) All amounts in the financial statements are presented in Thousands except per
share data and as otherwise stated.
(vi) The closing stock is taken at cost price except this no other inventories is
there as on 31.03.2025.
(vii) Undisclosed Income: Company does not have any transactions 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). Also, there are nil previously unrecorded income and related assets.
(viii) There is no any amount payable to the suppliers of Micro, Small and Medium
Enterprises as on March 31, 2024. Hence no need of disclosure as per Micro,
small and Medium Enterprises development Act, 2006.
For and on behalf of the Board of Directors FOR, MAYUR SHAH & ASSOCIATES
CHARTERED ACCOUNTANTS
Arun Prajapati Bhaskar Vishe
Director Director
(DIN:- 08281232) (DIN: 09357853)
Mayur Shah
M. No. 036827
Partner
Gopal Trivedi FRN:- 106125W
Company Secretory UDIN: 25036827BMIIFQ4322
PLACE: AHMEDABAD
DATE : 29th May, 2025
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