2.13 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS_
fa} Provisions are recognized when the Com jinny has a present obligation (legal or constructive >, as a result of past events, and if L-t probable that an outflow of resources, Lhal can be reliably estimated, will be required to settle such an obligation.
(b) I'lie anionnt recognized as a provision is die best estimate of the consideration required to senle the present obligation at the balance si beet date, considering tire risks and Line ertam tics surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows {when the effect of the time value of money is material).
(e) When some or all die economic benefits reiMired to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset if it is virtually certain that the reimbursement will be received and the amount of the receivable can be measured reliably.
(d) 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 ora present obligation that arises from past events where it is either not probable i hut an outflow of resources will he required to settle the obligation or a reliable c si i mate of the a mount cannot be tnade, Contingent liabilities and conlingent assets are not recognized but are disclosed in the notes,
2.14 EARNING FEK SHARE _
fa) Basie earnings per share is computed by dividing the pro lit ; floss) alter lax Attributable to equity shareholders by the weighted average number of equity shares outstanding during the year The weighted average number of equity shares o util a riding during the year is adjusted for bonus issue, bonus cj Lenient in a rights issue to existing shareholders, share split and reverse share split icon soli datum of shares).
(b) Diluted earn togs per share is computed by dividing the profit (loss) after tux attributable in equity s hare ho idem as adjusted for dividend, interest and other charges to expense or income (net of any attributable (axes) rotating to ihe dilutive potential equity shares, bv the weighted average number of equity shares considered for riming basis earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.
2.13 BORROWING COSTS_
rSoiTowing costs directly attributable to the acquisition, construction nr production of qualifying assets, which are assets that necessarily tike it substantial period of time to gel ready for their intended use, arc added to the cos! of those assets, until such time as the assets are substantially ready far their intended use. All other borrowing costs arc recognized in the Statement of Profit and Loss in the period in which they are incurred.
2.16 GOVERNMENT GRANTS 4ND SUBSIDIES_
(a) Goytimmetit grants ant recognized by the company where there is reasonable assurance that the grants will he reedt/ed anti till the attached conditions will he complied with. Revenue grants are recognized in the Statement of Profit and Loss in the same period, in which the related costs are incurred are accounted tor.
(bj Government grants relating to Property, plant and equipment arc recognized ! presented as deferred income .and released to the statement of Profit and Loss over the expected useful lives of the assets concerned,
2.17 FINANCIAL INSTRUMENTS_
A financial instrument is any conlract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial Assets rind financial liabilities are initially measured at fair value. Transaction tost- 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 statement of profit and jft&s (*PV I'PL’V) are added to or deducted from the fair value of the financial assets nr 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 and loss are recognized immediately in Statement of Profit and Loss.
[Aj Financial Assets
Initial recognition and measurement.
(a) All financial assets are recognized initially at lair value. Transaction costs that are directly attributable lo the acquisition of financial assets (other than financial assets at fair value through statement of profit and loss at fair value through statement of profit and !oss(*FVTTL’) are added to (he fair value of the financial assets, on initial recognition. I'ransaetion cost directly attributable to the acquisition oT financial assets at h'VTPl. is recognized immediately in Statement of Profit and Loss. However, trade receivables that do not contain Significant financial component are measured at transaction costs.
Subsequent measurement
(b) For purposes of subsequent measurement, financial asseis are classified in four categories:
Ý Debt instruments at a mortized cost;
* Debt instruments at fair value through other comprehensive inconite (FVTpCl);
Ý Debt instruments and equity instruments at fair value through profit or loss (J-'VTPLJ;
Ý Equity instruments measured at fair value through other comprehensive income (FVTOC!),
Debt instruments at amortized cost:
(c) A 'debt instrument' is measured at the amortized cost if both the following conditions are met;
* The contractual terms of the financial asset give rise on specified dates to cash flows that arc solely payments of principal and interest on the principal amount outstanding; and
Ý The asset is held within a business model whose objccti ve is to hold assets for collecting contractual cash flows,
(cfy After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (.HR} method. Amortized cost is calculated hy taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The El R amortization is included in finance income in the profit or loss. The losses arising from impairment are recognized lit the profit or loss. This category generally applies lo trade and other receivables.
Debt instrument at FVTOC1:
(e) A ‘debt instrument' is classified as FVTOC1 if both of the following criteria are met:
* ihe objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and
Ý Tile asset's contractual cash flow represents SFPI,
(i) Debt instruments included within the FVTOCI category are measured initially as well as at each repurling date uL fair value. Fair value movements are recognized in the other comprehensive income (OCI).
Deht instillment at FVTPL:
(£) FVTPL is a residual category for debt instrument
(h) Any debi instrument Which does not meet the crilerta for categorizalion as amortized cost or ns FVTOCI, is classified as FVTPL. Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss.
(ij In addition,. the company may tied to designate a debt instrument, which otherwise meets amortized tost or FVTOd criteria, as FVTPL, 1 loweVet, such election is chosen only ifdoingso reduces oreliminates ti measurement or recognition inconsistency (referred to as ‘accounting mismatch" )-
Derecognition nf financial assets
(j) A financial asset [or, where applicable, a part of a financial asset or part of a company of similar financial assets) is primarily de-recognized when:
* The rights to receive cash flows from the asset have expired, or
* The company has transferred its rights to receive cash flows from the asset or lias assumed an obligation to pay the received cash Dows in full whhont material delay to a third party under a ‘pass-through1 finatigemetd and either (a) the company lias 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, hut has transferred control of the asset.
(k) When (lie company has transferred its rights to receive cash flows from an assel or has entered into a pass-through arrangement, d evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all the risks and rewards of the asset, nor transferred control of the asset, the company continues to recognized Lhe transferred asset to the extent of (he company's continuing involvement. In that case, the company also recognizes an associated liability, 'lhe transferred asset and the associated liability are measured on a basis that re fleets the rights and obligations that lhe company has retained.
[BJ Financial liabilities and equity instruments Initial recognition mid measurement
[a) All financial liabilities are recognized initially at fair value pins transaction cost [ifany} that is attributable to Lhe acquisition of the financial liabilities Which is also adjusted,
Subsequent measurement
fb) The measurement uf financial liabilities depends on their classification, as described below:
Loans and borrowings
(c) After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cosi using the Effective Interest Rate (ElR) method. Gains and losses are recognized in profit or loss when the liabilities are de-recognised as well as through the FIR amortization pro^ss. Amortised cost is calculated by taking into account liny discount or premium on acquisition and tees or costs that are ttu integral part of the EIR. The E1R amortization is included as finance costs in the statement of profit and loss,
Trade and other pay ables
(dj These amounts represent liabilities for goods or services provided to the company which tire unpaid at the end of the reporting period. trade and other payable are presented as current liabilities when the payment is due within a period of 12 months from the end of the reporting period. For all trade and other payables classified as current, the carrying amounts approximate fair value due to the short maturity of those instruments. Oilier payables tilling due after I 2 months from the end of lhe reporting period are presented as non- current liabilities and are measured at amortized cost unites designated as fair value through profit and Joss at the inception.
Other financial liabilities at fair value through profit or hiss:
(e) Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Gain or losses on liabilities held for trading or designated as at F VTPJ. are recognized in the profit or loss.
De-recognition of financial liabilities:
(f) A financial liability is de-recognition when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another front rhe 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 tic-recognition of the original Liability and the recognition of a new liability, '[he difference in the respective carrying amounts is recognized in the statement of profit or loss.
Offsellin-g
(g) Financial assets and financial liabilities are offsei and the net amount is reported in Lhe balance sheet if there is a currently enforceable legal right to offset rhe recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the Jiabililies simultaneously.
r in pair mcnt of financial assets
(h) The company assesses at each dale of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS 109 requires expected credit losses to lie measured through a loss allowance. The company recognized lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction, for all other financial assets, expected credit losses are measured at an amount equal in the 12-month expected credit losses or at an amount equal to the life time expeeted credit losses, if the credit risk on the financial assei has increased significantly since initial recognition.
2.1ft FA1RVALUE MEASUREMENT*_
(a) The company measures financial instruments at fair value at each balance sheet date. Fair value is the price that would lie 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 die transaction to sell the asset or transfer the liability takes place either: f 111 the principal market for (he asset or liability, or
Ý In the absence of a principal market, in the most advantageous market for the asset or liability.
(b| The principal or the most advantageous markcl must be accessible by (he' company.
(c) The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the as^er or liability, assuming that market participants act in their economic best iuteresi.
fdl A fair value measurement of a noil-financial asset takes into account a market participant’s ability to generate economic benefits by using the assei in ils highest and best use or by soiling if to another market partieipant that would use the asset in its highest and best use.
fej The company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of retec am observable inputs and minimizing the use of unobservable inputs.
(fl All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, ha cud on the lowest level input that is significant to the fair value measure merit as a whole:
* Level 1: Quoted {unadjusted) mark el prices in active markets for identical assets or liabilities;
Ý Level 2. Valuation techniques for which (he lowest level input thn( is significant to the fair value measurement is directly or indirectly observable, or
* Level .1: VjiInation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
ijjjj l-or assets and liabilities that are recognized in (he financial statements on a recurring basts, 1 lie company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorizuliun (based on ihc lowest level input that is significant to the fair value measurement as a who Lei at tire end of each reporting period.
2.19 CASH & CASH EQUIVALENTS -
(a) Cash comprises cash on hand and demand deposits with banks. Cnsh equivalents are short-term balance (with an original maturity of twelvemonths or less from the dale of acquisition), highly liquid investments that arc readily convertible into known amount? of cash and wifi eh are subject to insignificant risk of changes in value,
2.20 SEGMENT-
(a) Operating segments are reported in a manner consists with the interna} reporting provided lo the management of (he company.
Identification of segments
(b) The Company's management examines the Company's performance both from a product and geographic perspective. The Company's operating businesses are organized and managed separately according to die nature of products, with each segments representing a strategic business unit dial offers different products and serves different markets. The analysts of the geographical segments is based on the areas in which major operating divisions of the Company operate.
Intersegment transfers
fc) The company accounts for intersegment stiles on the basis Qf price charged for inter segment transfers.
Allocation of common cost
(d| Common allocable costs ;ire allocated to each segment according to ihe relevant contribution of each Segment to the total common cost.
Unallocated items
(e) Unallocated items include general Corporate income and expenses items which are nol allocated io ativ bus mess segment.
Segment acenunfing policies
{f) The Company prepares its segment information in con form sty wish the accounting policies adopted for preparing and presenting the financial statement of the Company as a whole.
2.21 KEY SOURCES OF ESTIMATION UNCERTAINTY AND CRITICAL ACCOUNTING JUDGEMENTS_
faj In the course of applying die policies outlined in all note?. Linder section 2 above, the company is required to make judgment, estimates and assumptions about the* carrying amount of assets and liabilities that are not readily apparent From other sources. The estimates and associated assumptions arc based on historical experience and other factor that are considered to be relevant. Actual results may differ front these estimates,
(b) The estimates and underlying assurt^tioiis are reviewed on an ongoing basis. Revisions to amounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future period, if the revision affects current and future period.
Useful Jives of property, plant, and equipment
(c) Management reviews the useful lives of property, ptant. and equipment at least onee a year. Such lives are dependent upon an assessment of both the technical lives of the assets and also their likely economic lives based or various internal and external factors including relative efficiency and operating Costs. Accordingly depreciable lives are reviewed annually using the best information available to the Management.
Provisions Arid (labilities
(d) Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds res Lilting front past operations or events (hot can reasonably be estimated, 'lire timing of recognition requires application of judgment to existing facts and cite urn stances which may be subject to change. The amounts are determined by discounting the expected future cash flows at a pre-tax rate rhat reflects current market assessments of the time value of money and the risks specific to the liability.
Conti ngencuH
(e) In (he normal course of business, contingent liabilities may arise from litigation and other claims against the company. Potential liabilities that are possible but not probable of crystallizing or are very difficult to quantify reliably are ireaied as contingent liabilities. Such liabilities are disclosed in the notes bm are noi recognized,
Fair value measurements
(fj When the fair values of ilftaiiciii I assets or financial Liabilities recorded or disclosed in the financial statements cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. .[udgmenLs include coti side rat ion of inputs such as liquidity risk, credit risk And volatility”.
Taxes
(g) Deferred tax assets are recognized for unused tax losses to Lhe extent that it is probable that taxable profit will be available: against which the losses can be utilized. Significant i nun agent ent judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future, tax planning strategies.
As per our report of even date For anti on behalf of the Board of Directors
For J C Ranpura &. Co. Sd.1'- Sd/'-
F'irm Registration No, H>8b47W Rhinihhui H, Daml Rajan R. Ram tilinniii
Chartered Accountants Chairman $d/- Managing Director
Sttf- DIN; W284065 Siddharth V. Vaishnav DlN:OOI4d2||
KelmiYShcth Executive Director
panncr &j/- pnft mm sa£
M. No. 118411 Efeta It. Bhimiuli Asliok L. Sliekliat
tiDIN: 24 i 18411 RJ7.WRM.5639 Company Secretaiy Chief Financial Officer
Place: Rajkot Place: Junagadh
Date: May 25, 2024 Dale: May 25.2<i24
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