1) Provision:
A provision is recorded when the Company has a present legal or constructive obligation as a result of past
events, it is probable that an outflow of resources will be required to settle the obligation and the amount can
be reasonably estimated.
Provisions are measured at the present value of management's best estimate of the expenditure required
to settle the present obligation at the end of the reporting period. The discount rate used to determine the
present value is a pre-tax rate that reflects current market assessments of the time value of money and the
risks specific to the liability where the time value of money is essential.
The increase in the provision due to the passage of time is recognised as interest expenses
Wherever there is a possible obligation that arises from past events and whose existence will be confirmed
only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the
control of the entity or a present obligation that arises from past events but is not recognised because (a)
it is not probable that an outflow of resources embodying economic benefits will be required to settle the
obligation, or (b) the amount of the obligation cannot be measured with sufficient reliability are considered
as contingent liabilities. The company does not recognize contingent liability but discloses its existence in the
financial statements.
Contingent assets are not recognised but are disclosed when the inflow of economic benefits is probable.
o) Cash and Cash equivalents
Cash and cash equivalents for the purposes of the Cash Flow Statement comprise cash at the bank and in
hand and short-term deposits with an original maturity of three months or less, which are subject to an
insignificant risk of changes in value.
p) Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method, less provision for impairment.
q) Investments and Other financial assets
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.
1. Financial assets
Initial recognition and measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at
fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial
asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by
regulation or convention in the marketplace (regular way trades) are recognised on the trade date, i.e., the
date that the Company commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
• Debt instruments at amortized cost
• Debt instruments at fair value through other comprehensive income (FVTOCI);
• Debt instruments and equity instruments at fair value through profit or loss (FVTPL);
• Equity instruments measured at fair value through other comprehensive income (FVTOCI).
Debt instruments at amortized cost:
A 'debt instrument' is measured at the amortized cost if both the following conditions are met:
• The asset is held within a business model whose objective is to hold assets for collecting contractual cash
flows, and
• 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.
After initial measurement, such financial assets are subsequently measured at amortized cost using the
effective interest rate (EIR) method. Amortized 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 amortization 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 FVTOCI:
A 'debt instrument' is classified as at the FVTOCI if both of the following criteria are met:
• The objective of the business model is achieved both by collecting contractual cash flows and selling the
financial assets, and
• The asset's contractual cash flows represent SPPI
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date
at fair value. Fair value movements are recognised in the other comprehensive income (OCI).
Debt instrument at FVTPL:
FVTPL is a residual category for debt instruments. Any debt instrument, that does not meet the criteria for
categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. Debt instruments included within
the FVTPL category are measured at fair value with all changes recognised in the statement of profit and loss.
In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost
or FVTOCI criteria, as at FVTPL. However, such an election is allowed only if doing so reduces or eliminates a
measurement or recognition inconsistency (referred to as 'accounting mismatch').
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 de-recognised 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 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 recognize the transferred asset to the extent of
the Company's continuing involvement. In that case, the Company also recognizes 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..
2. Financial Liabilities
Initial recognition and measurement
All financial liabilities are recognised initially at fair value and transaction cost (if any) that is attributable to the
acquisition of the financial liabilities is also adjusted.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
a. Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost
using the Effective Interest Rate (EIR) method. Gains and losses are recognised in profit or loss when the
liabilities are de-recognised as well as through the EIR amortization process. Amortized 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 amortization is included as finance costs in the statement of profit and loss..
b. Trade and other payables
These amounts represent liabilities for goods or services provided to the Company which are unpaid at the end
of the reporting period. Trade and other payables 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 these instruments.
Other payables falling due after 12 months from the end of the reporting period are presented as non-current
liabilities and are measured at amortized cost unless designated as fair value through profit and loss at the
inception.
c. Other financial liabilities at fair value through profit or loss:
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. Gains or losses on liabilities
held for trading are recognised in the profit or loss.
De-recognition of Financial Liabilities:
A financial liability is de-recognised 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 or loss.
3. Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there
is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a
net basis, to realize the assets and settle the liabilities simultaneously.
4. Compound Financial Instruments:
A financial instrument that comprises both the liability and equity components is accounted as a compound
financial instrument. The fair value of the liability component is separated from the compound instrument
and is subsequently measured at amortized cost. The residual value is recognised as an equity component of
other financial instruments and is not re-measured after initial recognition.
The transaction costs related to compound instruments are allocated to the liability and equity components
in proportion to the allocation of gross proceeds. Transaction costs related to the equity component are
recognised directly in equity and the cost related to the liability component is included in the carrying amount
of the liability component and amortized using the effective interest method.
r) Borrowing costs
Borrowing costs directly attributable to the acquisition/ construction of qualifying assets are capitalized
until the time all substantial activities necessary to prepare the qualifying assets for their intended use are
complete. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its
intended use/ sale. All other borrowing costs are charged to the statement of profit and loss.
s) Current and Non-current classification
The operating cycle is the time between the acquisition of assets for processing and their realization in cash
and cash equivalents. The Company has identified twelve months as its operating cycle.
The entity presents assets and liabilities in the balance sheet based on current/ non-current classification.
An asset is classified as current, when:
• It is expected to be realised or intended to be sold or consumed in the normal operating cycle.
• It is held primarily for the purpose of trading.
• It is expected to be realised within twelve months after the reporting period, or
• It is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least
twelve months after the reporting period.
All other assets are classified as non-current.
A liability is classified as current, when:
• It is expected to be settled in a normal operating cycle.
• It is held primarily for the purpose of trading.
• It is due to be settled within twelve months after the reporting period, or
• There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period.
The entity classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
2. Vehicle loan from HDFC Bank:
The Company obtained loan from HDFC bank for purchase of MG Electric Car. Loan amount is Rs.23,00,000/-.
Loan was sanctioned on 01.02.2023. Amount outstanding against this loan is Rs. 16,02,506.90/- lakhs . The
loan is secured by way of hypothecation of vehicle purchased out of the loan.
The loan is repayable in 39 monthly instalments of Rs.67,702 from the date of sanction. Rate of intrest on the
loan is 8.5% P.a.
Note:
1) Working capital loan from Bank is secured by way of :
1) First Charge on current assets by way of hypothecation of present and future current assets including
stock,book debts and receivables. The loan is repayable on demand.
ii) The above working capital facility is collaterally secured by property of the Director.
iii) The Rate of Interest is in the range of 9.55% to 10.35% p.a
2) Loan from director is interest free and the loan is repayable on demand.
Note:
1. Company undertook the process of seeking information from the suppliers about their status of
registration under MSME Act. NO confirmation has come forth till the date of the balance sheet and
hence company is unable to identify such suppliers.
2. In the absense of information the amount payable to such suppliers is taken to be NIL.
3. Interest payable if any will be provided for as and when the liability arises.
Notes regarding Fire Incident and Related Costs:
On 9th March 2025, the Company experienced a fire accident at one of its manufacturing facilities, resulting
in significant damage to certain spares and stores inventory.
Following the incident:
i) The Company incurred an expenditure of Rs.18,55,114 during the financial year ended 31st March 2025 for
the replacement of spares and stores damaged by the fire. This amount has been charged to the Statement
of Profit and Loss and is separately disclosed as an exceptional item, in accordance with Ind AS 1, considering
the unusual and material nature of the event.
ii) An insurance claim of Rs.90,83,000 was lodged by the Company. Of this, only Rs.18,55,114 pertains to
the fire-damaged spares and stores. The remaining amount relates to enhancement of the facility and
procurement of additional spares and stores, incurred in FY 2025-26, as part of the Company's post-incident
improvement plan.
iii) As the realisation of the insurance claim is presently uncertain, no asset has been recognized in the financial
statements for the year ended 31st March 2025, in accordance with Ind AS 37 - Provisions, Contingent
Liabilities and Contingent Assets.
B Defined benefit plans:
Gratuity liability is provided in accordance with the provisions of the Payment of Gratuity Act,
1972 based on actuarial valuation. The plan provides a lump sum gratuity payment to eligible
employee at retirement or termination of their employment. The amounts are based on the
respective employee's last drawn salary and the years of employment with the Company.
The most recent actuarial valuation of the defined benefit obligation was carried out at the balance sheet
date. The present value of the defined benefit obligations and the related current service cost and past service
cost were measured using the Projected Unit Credit Method.
These plans typically expose the Company to actuarial risks such as: interest rate risk, salary risk and longevity
risk.
Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially
offset by an increase in the return on the plan's debt investments.
Salary risk : The present value of the defined benefit plan liability is calculated by reference to the future
salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan's
liability.
Longevity risk: The present value of defined benefit plan liability is calculated by reference to the best
estimate of the mortality of plan participants both during and after their employment. An increase in the life
expectancy of the plan participants will increase the plan's liability.
32. Contingent Liability:
The Company creates a provision when there is present obligation as a result of past event that probably
requires an outflow of resources/financial asset and a reliable estimate can be made of the amount of the
obligation. The disclosure of contingent liability is made when there is a possible obligation or a present
obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation
or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or
disclosure is made. Contingent assets are neither recognized nor disclosed in the financial statements.
ii. Fair Value Hierarchy
Assets and Liabilities that are disclosed at Amortised Cost for which Fair values are disclosed are classified
as Level 3.
If one or more of the significant inputs is not based on observable market data, the respective assets and
liabilities are considered under Level 3.
ii. Fair Value Hierarchy
The Company has classified its financial instruments into three levels in order to provide an indication about
the reliability of the inputs used in determining fair values.
(i) Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
(ii) Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e., as prices) or indirectly (i.e., derived from prices).
(iii) Level 3: inputs for the asset or liability that are not based on observable market data (unobservable
inputs)
The carrying amounts of trade receivables, cash and cash equivalents, other financial assets, current
borrowings,trade payables and other current financial liabilities are a reasonable approximation of their fair
values. Accordingly, the fair values of such financial assets and financial liabilities have not been disclosed
seperately.
iii. Valuation technique used to determine fair value
The fair value of the financial assets and liabilities are at the amount that would be received to sell an asset
and paid to transfer a liability in an orderly transaction between market participants at the measurement
date.
The carrying amounts of trade receivables, cash and cash equivalents, other financial assets, current
borrowings,trade payables and other current financial liabilities are a reasonable approximation of their fair
values.
The estimated fair value amounts as at March 31, 2025 have been measured as at that date. As such, the
fair values of these financial instruments subsequent to reporting date may be different than the amounts
reported at each year-end.
There were no transfers between Level 1, Level 2 and Level 3 during the year.
37. Financial Risk Management
The Company's activities expose it to credit risk, liquidity risk and market risk - interest rate risk. The Board of
Directors have 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 counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. Credit risk encompasses of both, the direct risk of default and the risk of
deterioration of creditworthiness as well as concentration risks.
The company's credit risk generally arises from Cash and cash equivalents, trade receivables, and other
financial assets.
Credit risk management
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.
A: Low credit risk
B: Moderate credit risk
C: High credit risk
* Based on the past experience, there have not been any write off of trade receivables and hence no allowance
is made for expected credit loss on trade receivables.
Based on business environment in which the Company operates, a default on a financial asset is considered
when the counterparty fails to make payments within the agreed time period as per contract. Loss rates
reflecting defaults are based on actual credit loss experience and considering differences between current and
historical economic conditions. Assets are written off when there is no reasonable expectation of recovery.
The Company continues to engage with parties whose balances are written off and attempts to enforce
repayment. Recoveries made are recognized in statement of profit and loss.
b. Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the
availability of funding through an adequate amount of committed credit facilities to meet obligations when
due and to close out market positions. Due to the dynamic nature of the business, the Company maintains
flexibility in funding by maintaining availability under committed credit lines. 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. In addition, the
company's liquidity management policy involves projecting cash flows and considering the level of liquid assets
necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory
requirements and maintaining debt financing plans.
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 maximising the return.
Interest rate Risks
The Company uses a mix of cash and borrowings to manage the liquidity & fund requirements of its day-to¬
day operations. Interest rate risk is the risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in market interest rates. The borrowings are fixed rate borrowings and are
carried at amortized cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, 'Financial
Instruments - Disclosures', since neither the carrying amount nor the future cash flows will fluctuate because
of a change in market interest rates.
38. Capital Management
The Company's objectives when managing capital is to safeguard continuity, maintain a strong credit rating
and healthy capital ratios in order to support its business and provide adequate return to shareholders through
continuing growth. The Company's overall strategy remains unchanged from previous year.
The funding requirements are met through a mixture of equity, internal fund generation and other non¬
current borrowings. The Company's policy is to use current and non-current borrowings to meet anticipated
funding requirements.
The Company monitors capital on the basis of the gearing ratio which is net debt divided by total capital
(equity plus net debt).
Net debt are non-current and current debts as reduced by cash and cash equivalents, other bank balances
and current investments. Equity comprises all components including other comprehensive income.
40. Previous years figures have been regrouped, reclassified and rearranged wherever necessary to conform
to the current years classification.
41. Material Changes & Commitments:
Based on the company's experience and the current trend, company as on the date of approval of the financial
statements has used internal and external sources to assess and form an opinion and judgement on the future
performance of the company. Based on current estimates the company expects the carrying amounts of these
assets to be realised as stated in the financial statements.
42. Other Regulatory requirement details asper Schedule III requirements
a. The company does not have immovable property , that are not held in the name of the company
b. Company has not granted any loan or advance to the Directors, KMP's during the year
c. There are no proceedings initiated or are pending against the company for holding any benami property
under Benami Transactions (Prohibition) Act, 1988
d. The Company is not declared as wilful defaulter by any bank or financial institution or other lenders
e. The company did not have any transactions with companies struck off under sec 248 of Companies Act,2013
or Sec 560 of companies Act,1956 considering the information available with the company.
43. Figures have been rounded off to the nearest rupee.
Place : Coimbatore. For Paul & Arvind LLP
Date : 28.05.2025 Chartered Accountants
UDIN : 25026261BMLDBL2661 FRN 013722S
For and on behalf of the Board of Directors
Vignesh Velu S.S.Velu CA P.Paul Thangam
Chairman & Managing Director Director Partner
DIN: 01682508 DIN: 01740974 M.No. 026261
S.Ranisri V.Rajan
Chief Financial Officer Company Secretary
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