• Provisions, Contingent Liabilities and Contingent Assets
The Company creates a provision when there is a present obligation as a result of past event that probably
require an outflow of resources and a reliable estimate can be made of the amount of obligation. Provisions
are measured at the best estimate of the expenditure required to settle the present obligation at the balance
sheet date and are not discounted to the present value. These are reviewed at each year end and adjusted
to reflect the best current estimate.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that
may or may not require an outflow of resources. When there is a possible obligation or present obligation in
respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
Contingent Assets are neither recognised nor disclosed in the financial statements.
• Cash and Cash Equivalents
Cash and Cash Equivalents in the balance sheet and for the purpose of cash flow statement comprise cash
in hand and cash at bank including fixed deposit with original maturity period of three months and short-term
highly liquid investments with an original maturity of three months or less as they are considered an integral
part of the Company's cash management.
• Financial Instruments
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.
FINANCIAL ASSETS
Initial recognition and measurement:
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value
through other comprehensive income (OCI), and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset's contractual cash
flow characteristics and the Company's business model for managing them. With the exception of trade
receivables that do not contain a significant financing component or for which the Company has applied the
practical expedient, the Company initially measures a financial asset at its fair value plus, in the case of a
financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain
a significant financing component or for which the Company has applied the practical expedient are
measured at the transaction price determined under Ind AS 115.
n order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it
needs to give rise to cash flows that are 'solely payments of principal and interest (SPPI)' on the principal
amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.
The Company's business model for managing financial assets refers to how it manages its financial assets in
order to generate cash flows. The business model determines whether cash flows will result from collecting
contractual cash flows, selling the financial assets, or both.
Purchases or sales of financial assets that require delivery of assets within a time frame established by
regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the
date that the Company commits to purchase or sell the asset."
FINANCIAL ASSET
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
a) Debt instruments at amortised cost
b) Debt instruments at fair value through other comprehensive income (FVTOCI)
c) Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)
d) Equity instruments measured at fair value through other comprehensive income (FVTOCI)
DEBT INSTRUMENTS AT AMORTISED COST
A 'debt instrument' is measured at the amortised cost if both the following conditions are met:
a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash
flows, and
b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal amount outstanding.
This category is the most relevant to the Company. After initial measurement, such financial assets are
subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is
calculated by taking into account any discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses
arising from impairment are recognised in the profit or loss. This category generally applies to trade and
other receivables."
DEBT INSTRUMENT AT FVTPL
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for
categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.
In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost
or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a
measurement or recognition inconsistency. The Company has not designated any debt instrument as at
FVTPL.
Debt instruments included within the FVTPL category are measured at fair value with all changes recognized
in the P&L.
EQUITY INVESTMENTS
All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for
trading and contingent consideration recognised by an acquirer in a business combination to which Ind
AS103 applies are classified as at FVTPL. For all other equity instruments, the Company may make an
irrevocable election to present in other comprehensive income subsequent changes in the fair value. The
Company makes such election on an instrument-by-instrument basis. The classification is made on initial
recognition and is irrevocable.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the
instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to
P&L, even on sale of investment. However, the Company may transfer the cumulative gain or loss within
equity.
Equity instruments included within the FVTPL category are measured at fair value with all changes
recognized in the P&L.
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DE-RECOGNITION OF FINANCIAL ASSETS
A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial
assets) is primarily derecognised (i.e. removed from the Company's consolidated balance sheet) when:
a) The rights to receive cash flows from the asset have expired, or
b) The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to
pay the received cash flows in full without material delay to a third party under a 'pass-through' arrangement
and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the
Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has
transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass¬
through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership.
When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor
transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the
Company's continuing involvement. In that case, the Company also recognises an associated liability. The
transferred asset and the associated liability are measured on a basis that reflects the rights and obligations
that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of
the original carrying amount of the asset and the maximum amount of consideration that the Company could
be required to repay.
IMPAIRMENT OF FINANCIAL ASSETS
In accordance with Ind-AS 109, the Company applies Expected Credit Loss ("ECL") model for measurement and
recognition of impairment loss on the financial assets measured at amortized cost and financial assets
measured at FVOCI. For financial assets other than trade receivables, as per Ind AS 109, the Company
recognises 12 month expected credit losses for all originated or acquired financial assets if at the reporting
date the credit risk of the financial asset has not increased significantly since its initial recognition. The expected
credit losses are measured as lifetime expected credit losses if the credit risk on financial asset increases
significantly since its initial recognition. The Company's trade receivables do not contain significant financing
component and loss allowance on trade receivables is measured at an amount equal to life time expected
losses i.e. expected cash shortfall.
The impairment losses and reversals are recognised in Statement of Profit and Loss.
FINANCIAL LIABILITIES
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss,
loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as
appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs.
The Company financial liabilities include trade and other payables, loans and borrowings including bank
overdrafts, financial guarantee contracts and derivative financial instruments.
The measurement of financial liabilities depends on their classification, as described below:
FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS
Financial liabilities at fair value through profit and loss include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair value through profit and loss. Financial liabilities are
classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category
also includes derivative financial instruments entered into by the Company that are not designated as hedging
instruments in hedge relationships as defined by Ind AS 109. Separated embedded derivatives are also
classified as held for trading unless they are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognised in the profit and loss.
Financial liabilities designated upon initial recognition at fair value through profit and loss are designated as
such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated
as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/
loss are not subsequently transferred to P&L. However, the Company may transfer the cumulative gain or loss
within equity. All other changes in fair value of such liability are recognised in the statement of profit or loss. The
Company has not designated any financial liability as at fair value through profit and loss.
LOANS AND BORROWINGS
This is the category most relevant to the Company. After initial recognition, interest -bearing loans and
borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are
recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation
process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit
and loss.
DE-RECOGNITION
A financial liability is derecognised 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
de-recognition of the original liability and the recognition of a new liability. The difference in the respective
carrying amounts is recognised in the Statement of Profit and Loss.
OFFSETTING
Financial assets and financial liabilities are offset and the net amount is presented in the Balance Sheet, if the
Company currently has a legally enforceable 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.
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Significant Accounting Policies Fo r and On Behalf of Board of Directors of
Notes to the Standalone Financial Statements M/s D. P. ABHUSHAN LIMITED
CIN - L74999MP2017PLC043234
As per our report of even date,
For, JEEVAN JAGETIYA & CO
(Chartered Accountants)
FRN No: 121335W
Nilesh Asava Santosh Kataria Anil Kataria
Partner (Managing Director) (Whole Time Director)
M. No. 0142577 DIN: 02855068 DIN: 00092730
Date: 16th May, 2025 Vijesh Kumar Kasera Aashi Neema
Place: Ratlam (Chief Financial Officer) (Company Secretary)
M. No. 67041
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