k. Provisions, Contingent liabilities and contingent assets
Provisions are recognised when the Company has a present legal or constructive obligation, as a result of past events, and it is probable that an outflow of resources, that can reliably be estimated, will be required to settle such an obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows to net present value using an appropriate pre-tax discount rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Unwinding of the discount is recognised in the statement of profit and loss as a finance cost. Provisions are reviewed at each balance sheet date and are adjusted to reflect the current best estimate.
Contingent liabilities are not recognised but disclosed where the existence of an obligation will only be confirmed by future events or where the amount of the obligation cannot be measured reliably. Contingent assets are not recognised, but are disclosed where an inflow of economic benefits is probable.
l. Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits, (which are not pledged) with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
m. Employee Benefits Provident Fund / ESIC
Retirement benefits in the form of Provident Fund / ESIC are a defined contribution scheme and the contributions are charged to the profit and loss of the year when the contributions to the respective fund are due. There are no other obligations other than the contribution payable to the respective funds.
Gratuity /Leave encashment
The obligation of assets recognised in the balance sheet in respect to defined benefit / leave encashment value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets .The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.
Change in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit of loss as past service cost.
Re-measurement gain and losses arising from experience adjustment and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retain earning in the statement of changes in equity and in the balance sheet. Re-measurements are not reclassified to profit or loss in subsequent periods.
n. Foreign currencies
The Company's financial statements are presented in INR, which is also the Company's functional currency.
Transactions in foreign currencies are initially recorded by the Company into functional currency at the exchange rate on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date.
Exchange differences arising on settlement or translation of monetary items are recognised in profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.
o. Earnings Per Share
Basic Earnings per share (EPS) amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.
p. Significant accounting judgements, estimates and assumptions
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. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Difference between actual results and estimates are recognised in the periods in which the results are known / materialised.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. There are no items falling under Level 1.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. There are no items falling under Level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
Note:
There are no financial liabilities which are measured at fair value - recurring fair value measurements or at amortised cost for which fair values are required to be disclosed.
For the purpose of the Company's capital management, equity includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company's capital management is to maximise the shareholder value. The Company's Capital Management objectives are to maintain equity including all reserves to protect economic viability and to finance any growth opportunities that may be available in future so as to maximize shareholders' value. The Company is monitoring capital using debt equity ratio as its base, which is debt to equity. The company's policy is to keep debt equity ratio below two. There is constant endeavour to reduce debt as much as feasible and practical by improving operational and working capital management.
The Company's principal financial liability represents Borrowings. The main purpose of this financial liability is to pay for Company's operations. The Company's principal financial assets consists of investments in subsidiaries and jointly controlled companies, plant property & equipment, investment properties and trade receivables that are derived directly from its operations.
The Company's activities exposes it to credit risk, liquidity risk and market risk. All such activities are undertaken within a approved risk management policy framework.
The Board of Directors approves these policies for managing each of these risks, which are summarised below:
(a) Credit risk
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from Trade Receivables and other Financial Asset. Trade receivables are typically unsecured and are derived from revenue earned from customers located in India. Credit risk has always been managed by the Company through credit approvals and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. On account of adoption of Ind AS 109, the Company has adopted expected lifetime credit loss model to assess the impairment loss, and is positive of the realisability of the other trade receivables and other Financial Asset.
(b) Liquidity risk
Liquidity risk arise from the unlikely possibility of Companies inability to meet its cash flow commitments on due date. Company exercises local financial market to meet its liquidity requirement. During the current year, the Company has settled a substantial portion of its financial obligations with Bank / Financial Institutions and is in process of settling the majority of its remaining dues with Financial Institutions / Banks by monetising its assets. This will enable to mitigate the Liquidity Risk of the Company thereby strengthen the financial position of the Company.
(c) Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises Foreign Currency Risk and Interest Risk.
(i) Foreign Currency Risk
The Company does not have any exposure in foreign Currency. Hence, there is no Foreign Currency Risk in the Company.
(ii) Interest Rate Risk
Companies exposure to the risk of changes in market interest rate relates to the floating rate obligations.
The exposures of the Companies borrowing's and interest rate changes at the end of the reporting period are as follows:-
(i) Leave obligations
The leave obligations cover the Company's liability for earned leave and sick leave.
(ii) Post-employment obligations - Gratuity
The Company has a defined benefit gratuity plan in India, governed by the Payment of Gratuity Act, 1972. The plan entitles an employee, who has rendered at least five years of continuous service, to gratuity at the rate of fifteen day wages for every completed year of service or part thereof in excess of six months, based on the rate of wages last drawn by the employee concerned. The gratuity plan is a funded plan and the Company makes contributions to recognised funds in India. The Company does not fully fund the liability and maintains a target level of funding to be maintained over a period of time based on estimations of expected gratuity payments. This defined benefit plans expose the Company to actuarial risks, such as interest rate risk and market (investment) risk.
(g) 100% of the plan assets are invested in Insurer Managed Fund which is in India.
(h) Risk exposure
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which is Asset volatility. The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. The plan assets are invested by the company in insurer manager fund wholly with the Life Insurance Corporation of India (“LIC”). The Company intends to maintain this investment in the continuing years.
(j) Other long-term employee benefits
The Company's liability on account of compensated absences is not funded and hence the disclosures relating to planned assets are not applicable. Compensated absences of INR 3.77 Lakhs (31 March 2023: INR 3.70 Lakhs) expected to be paid in exchange for the services recognized as an expense during the period.
c) Performance Obligations
The contract (work orders) with customers include a clause of maintenance of log sheets for working hours. The log sheets needs to be signed by authorized personnel of customer. The Company submits invoice along with the detailed log sheets and customer makes payment after necessary verification. As per work orders entered with customers, performance obligations for Company is to provide the crane services and once log sheets are signed by both the parties it denotes that performance obligations is completed and Company is eligible to receive the payment as agreed. At this stage an enforceable claim becomes due and no services are incomplete.
The contract is a fixed price contract and do not contain any financing component. The payment is generally due within 30-60 days. There are no other significant obligations attached in the contract with customer.
d) Determining the transaction price and the amounts allocated to performance obligations
Revenue recognised in the statement of profit and loss with the contracted price does not have any adjustments made to the contract price.
39 Segment Information
The company is primarily engaged in the business of providing cranes on rental basis. Further all the commercial operations of the company are based in India. Accordingly, there are no separate reportable segments.
40 The gap between the current liabilities and current assets amounting to Rs. 4,171.36 Lakhs is mainly on account of current maturities of long term debt. The Company is actively engaged in one time settlement with remaining 1 lender through monetizing some of its fixed assets, recovery of dues from its clients and improving EBIDTA. The Company has got “No-Dues” Certificates from majority of its Lenders and is on the road to becoming a debt free company.
41 The balances in Trade Receivable, Trade Payable, Advances and certain Bank balances are subject to reconciliation/ confirmation and adjustment, if any. In the opinion of the management there will be no material adjustment and if any, will be carried out as and when ascertained.
42 The company has elected to carry its Property Plant and Equipment (PPE) at previous GAAP carrying value as its deemed cost on the date of transition to Ind AS and thereon continued to compute depreciation as required under Companies Act, 2013. No impairment on non-operative PPE due to corrosion and being stationed unused at remote locations have been considered.
43 ADDITIONAL REGULATORY INFORMATION REQUIRED BY SCHEDULE III TO THE COMPANIES ACT, 2013
(i) The Company does not have any benami property held in its name. No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
(ii) The Company has not been declared wilful defaulter by any bank or financial institution or other lender or government or any government authority.
(iii) The Company has complied with the requirement with respect to number of layers as prescribed under section 2(87) of the Companies Act, 2013 read with the Companies (Restriction on number of layers) Rules, 2017.
(iv) There is no income surrendered or disclosed as income during the year in tax assessments under the Income Tax Act,1961 (such as search or survey), that has not been recorded in the books of account.
(v) The Company has not traded or invested in crypto currency or virtual currency during the year.
(vi) The Company does not have any charges or satisfaction of charges which is yet to be registered with Registrar of Companies beyond the statutory period.
c) Trade Receivables Turnover Ratio changed due to increase in credit sales during the year.
d) Trade Payables Turnover Ration has decreased on account of reduce in Crane Hiring Expenses
e) Net Capital Turnover Ratio is increased primarily due to increase in Net Sales
f) Net Profit Ratio is decreased on account of income earned in the previous year on One Time Settlement(OTS) reported in Exceptional items
g) Return on Capital Employed ratio has changed because of income earned on One Time Settlement(OTS) reported in Exceptional items previous year
h) Return on investment ratio has changed due to One Time Settlement(OTS) reported in Exceptional items previous year
* Inventory Turnover Ratio is not applicable because the company is service provider.
45 Relationship with Struck off Companies
Company does not have any transaction and outstanding balance with Struck off companies
46 Micro, Small And Medium Enterprises
To the extent, the Company has received intimation from the “suppliers” regarding their status under the Micro,
Small and Medium Enterprises Development Act, 2006, the details are provided as under:
47 The figures for the corresponding previous periods have been regrouped/reclassified wherever necessary, to make them comparable.
As per our report of even date
For Gupta Rustagi & Co. For and on behalf of the Board of Directors
Chartered Accountants Starlog Enterprises Limited
ICAI F.R.N.: 128701W
Niraj Gupta Saket Agarwal Edwina D’Souza
Partner Director Director
ICAI M.N.: 100808 DIN: 00162608 DIN: 09532802
UDIN # 24100808BKDHXN9621
Place: Mumbai Date: 30th May 2024
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