(p) Accounting For Provisions, Contingent Liabilities & Contingent Assets
In conformity with Ind AS 37, a provision is recognized
when the Company has a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date adjusted to reflect the current best estimates.
Contingent liabilities are not recognized in the financial statements. A contingent asset is neither
recognized nor disclosed in financial statements.
(q) Leases
The Company, as a lessee, recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and restoration cost, less any lease incentives received.
The right-of-use assets are subsequently depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. In addition, the right-of-use asset is reduced by impairment losses, if
any.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. When a lease liability is remeasured, the corresponding adjustment of the lease liability is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
(r) Segment reporting
Company is operating only in one business segment i.e. operation of e-waste recycling business in organized manner, the requirement to give segment reporting as per Ind AS Accounting Standard 108 on Operating Segment issued by the Institute of Chartered Accountants is not applicable.
(s) Earnings per share
Basic earnings per share is computed by dividing profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. The Company did not have any potentially dilutive securities in any of the periods presented.
(t) Recent pronouncements
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended
March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.
Explanatory notes:
(i) Cost of materials consumed for the purpose of Inventory turnover ratio includes Purchases of stock-in-trade and Changes in inventories of finished goods, stock-in-trade and work-in-progress.
(ii) Non-Current Borrowings for the purpose of Long term debt to working capital ratio includes Current Maturities of Non-Current Borrowings and excludes the same from Current Liabilities.
ii. Transaction with Struck off Companies
The company has not entered into any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
In terms of our report attached For Eco Recycling Limited
For R M R & Co B K Soni
Chartered Accountants Chairman & Managing Director (DIN: 01274250)
Frim's Registration No : 106467W
Shashank Soni
Executive Director & CFO (DIN: 06572759)
Ashish Mandowara Maneesha Jena
Partner (Membership No.: 168656) Company Secretary (FCS No. 11575)
Mumbai, May 14, 2024 Mumbai, May 14, 2024
(B) Fair Value Disclosure
A number of Company's accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. The Company has established policies and procedures with respect to the measurement of fair values.
Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
- Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities.
- Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly
or indirectly.
- Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
37. Financial risk management Framework
In the course of its business, the Company is exposed to certain financial risks namely credit risk, interest risk, currency
risk & liquidity risk. The Company's primary focus is to achieve better predictability of financial markets and seek to minimize potential adverse effects on its financial performance.
The financial risks are managed in accordance with the Company's risk management policy which has been approved by its Board of Directors.
Market Risk
Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates etc. could affect the Company's income or the value of its holdings of financial instruments including cash flow. The objective of market
risk management is to manage and control market risk exposures within acceptable parameters, while maximizing the return.
(a) Currency Risk
The Company's exposure to currency risk relates primarily to the Company's operating activities including anticipated sales and purchases where the transactions are denominated in a currency other than the Company's functional currency.
(b) Interest Rate Risk
The Company uses cash to manage the liquidity & fund requirements of its day-to-day operations. Further, certain interest bearing liabilities carry variable interest rates. The Company's investments are primarily in fixed rate interest bearing investments. Hence, the Company is not significantly exposed to interest rate risk.
Credit Risk
Credit Risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company's exposure are continuously monitored.
Financial instruments that are subject to credit risk consist of trade receivables, loans, investments, cash and cash equivalents, bank deposits and other financial assets. The maximum exposure to credit risk was Rs. 23.69 crores and Rs. 19.75 crores as at March 31, 2024 and March 31, 2023, respectively, being the total of the carrying amount of balances with banks, bank deposits, investments, trade receivables, loans and other financial assets. None of the other financial instruments result in material concentration of credit risk.
Liquidity Risk
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk
management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company consistently generated sufficient cash flows from operations to meet its financial obligations including lease liabilities as and when they fall due.
38. Capital Management
For the purpose of the Company's capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the company's capital management is to maximize shareholder value. The Company determines the capital requirement based on annual operating plans and long-term and other strategic investment plans. The funding requirements are met through equity and operating cash flows generated. The Company is not subject to any externally imposed capital requirements.
39. Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year's
classification/ disclosure.
Signatures to Notes 1 to 39
In terms of our report attached For Eco Recycling Limited
For R M R & Co B K Soni
Chartered Accountants Chairman & Managing Director (DIN: 01274250)
Frim's Registration No : 106467W
Shashank Soni
Executive Director & CFO (DIN: 06572759)
Ashish Mandowara Maneesha Jena
Partner (Membership No.: 168656) Company Secretary (FCS No. 11575)
Mumbai, May 14, 2024 Mumbai, May 14, 2024
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