2.14 Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognized when there is a present legal or constructive obligation as a result of a past event and it is probable (i.e. more likely than not)
that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount
of the obligation. Such provisions are determined based on management estimate of the amount required to settle the obligation at the balance sheet
date. When the Company expects some or all of a provision to be reimbursed, the reimbursement is recognized as a standalone asset only when the
reimbursement is virtually certain.
if the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, the risks specific to the liability.
When discounting is used, the increase in the provision due to the passage of time is recognized as a finance costs.
Present obligations arising under onerous contracts are recognized and measured as provisions. An onerous contract is considered to exist when a
contract under which the unavoidable costs of meeting the obligations exceed the economic benefits expected to be received from it.
Contingent liabilities are disclosed on the basis of judgment of management/independent experts. These are reviewed at each balance sheet date and
are adjusted to reflect the current management estimate.
Contingent Assets are not recognized, however, disclosed in financial statement when inflow of economic benefits is probable.
2.13 Revenue Recognition and Other Income
Revenue is measured at amount of transaction price (net of variable consideration) received or receivable when control of the goods is transferred to
the customer and there are no unfulfilled performance obligations as per the contract with the customers. The Company recognizes revenue when
it satisfies a performance obligation in accordance with the provisions of contract with the customer. This is achieved when;
a) effective control of goods along with significant risks and rewards of ownership has been transferred to customer;
b) the amount of revenue can be measured reliable;
c) it is probable that the economic benefits associated with the transaction will flow to the Company; and
d) the costs incurred or to be incurred in respect of the transaction can be measured reliable
Revenue represents net value of goods and services provided to customers after deducting for certain incentives including, but not limited to
discounts, volume rebates, etc. For incentives offered to customers, the Company makes estimates related customer performance and sales volume
to determine the total amounts earned and to be recorded as deductions. The estimate is made in such a manner, which ensures that it is highly
probable that a significant reversal in the amount of cumulative revenue recognized will not occur. The actual amounts may differ from these
estimates and are accounted for prospectively.
Revenue are net of Goods and Service Tax. No element of significant financing is deemed present as the sales are made with a credit ferny
which is consistent with market practice.
Companv generate revenue from sale of pumps and related support services. Revenue from services is recognized in the accounting period in which
the services are rendered.
Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Companv' and the amount of income
can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate
applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net
carrying amount on initial recognition.
2.16 Depreciation and Amortization
Depreciation of PPT commences when the assets are ready for their intended use. Depreciation on PPP is recognized so as to write off the cost of assets
(other than freehold land) less their residual values over their useful lives, using the straight-line method. PPP. which are added / disposed off during
the year, depreciation is provided on pro-rata basis from / up to the date on which the asset is available for use / disposal. The estimated useful lives,
residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on
a prospective basis. Component of an item of PPP with the cost that is significant in relation to total cost of that item is depredated Separately
if it's useful life differs from other components of the assets.
Depreciation on PPP is provided over the useful life of assets on written down value as specified in the Schedule II of the Companies Act 2013 to the
extent of 95 except the following;
Assets acquired on lease arrangement are depreciated over the respective useful life applicable to asset or written off over lease period, whichever is
lower.
2.17 Borrowing and Borrowing costs
Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortized cost. Any
difference between the proceeds (net of transaction costs) and the redemption amount is recognized in Statement of profit and loss over the period
of the borrowings using the effective interest method. Borrowings are derecognized from the balance sheet when the obligation specified in the
contract is discharged, cancelled or expired. The difference between the carrying amount of a borrowings that has been extinguished or transferred
to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in Statement of profit
and loss as other gains/(losses). Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of
the liability for at least 12 months after the reporting period.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get
ready for its intended use are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur.
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes
exchange differences to the extent regarded as an adjustment to the borrowing costs.
Borrowing costs which are directly attributable to acquisition / construction of qualifying assets that necessarily takes a substantia] period of time to
get ready for its intended use are capitalized as a part of cost pertaining to those assets. All other borrowing costs are recognized as expense in the
period in which they are incurred.
2.18 Employee Benefits
Short-term Employees Benefits
All employee benefits payable wholly within twelve months of rendering services are classified as short term employee benefits. Benefits such as
salaries, wages, short-term compensated absences, performance incentives etc., are recognized during the period in which the employee renders
related services and are measured at undiscounted amount expected to be paid when the liabilities are settled.
Post-employment benefits
The Company provides the following post-employment benefits:
i) Defined benefit plans such as gratuity and
ii) Defined Contribution plans such as provident fund & employee State Insurance Scheme
Defined benefits plans
The cost of providing defined benefit plans such as gratuity is determined on the basis of present value of defined benefits obligation which is
computed using the projected unit credit method with independent actuarial valuation made at the end of each annual reporting period, which
recognizes each period of service as given rise to additional unit of employees benefit entitlement and measuring each unit separately to build
final obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets.
This cost is included in employee benefit expense in the Statement of Profit and Toss except those included in cost of assets as permitted.
Re-measurements comprising of actuarial gaiiys^nT'-'To^s^s arising from experience adjustments and change in actuarial assim\ptiong*,«4ha«4effect of
change in assets ceiling (if applicable) and/Tlie^ fetfiifdan asset (excluding net interest as defined above) are recognized iiwffE^Q<^i3pS^nsive
income (OC1) except those included in ^^^iX^^ssedS'^/^^'e^nitted in the period in which they occur, Re-measurements are
Statement of Profit and Loss in subsequent per/wdsT / \ '" ..Y\ / A.
d,s*»rajoi n i mi
Service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements) is recognized in the
Statement of Profit and Loss except those included in cost of assets as permitted in the period in which they occur.
Defined Contribution Plans
Pavments to defined contribution retirement benefit plans, viz., Provident Lund for eligible employees are recognized as an expense when employees
have rendered the service entitling them to the contribution.
2.19 Earnings per Share:
Basic earnings per share is calculated by dividing the profit from continuing operations and total profit, both attributable to equity shareholders of
the Company by the weighted average number of equity shares outstanding during the year.
2.20 Income Taxes
Income tax expense represents the sum of tax currently payable and deferred tax. Lax is recognized in the Statement of Profit and Loss, except to the
extent that it relates to items recognized directly in equity or in other comprehensive income.
Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax
law's used to compute the amount are those that are enacted or substantively enacted in India, at the reporting date.
Current tax relating to items recognized outside statement of profit or loss is recognized outside statement of profit or loss (either in other
comprehensive income or in equity). Current tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity.
Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to
interpretation and establishes provisions where appropriate.
Current tax assets is offset against current tax liabilities if, and only if, a legal!)’ enforceable right exists to set off the recognized amounts and there is
an intention either to settle on a net basis, or to realize the asset and settle the liability simultaneously
Deferred Lax
Deferred tax is recognized on temporal')' differences between the carrying amounts of assets and liabilities in the balance sheet and the corresponding
tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences.
Deferred tax assets are generally recognized for all deductible temporary differences, unabsorbed losses and unabsorbed depreciation to the extent
that it is probable that future taxable profits will be available against which those deductible temporal')' differences, unabsorbed losses and
unabsorbed depreciation can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from initial
recognition of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow' all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in w-hich the liability is settled or the asset
realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred
tax liabilities and assets reflects the tax consequences that would follow' from the manner in which the Company expects, at the reporting dale, to
recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when
they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.
Statement of Cash Flow’s and Cash and Cash Equivalents
Statement of cash flow's is prepared in accordance with the indirect method prescribed in the relevant IND AS. For the purpose of presentation in the
statement of cash flow's, cash and cash equivalents includes cash on hand, cheques and drafts on hand, deposits held with Banks, other short-term,
highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject
to an insignificant risk of changes in value, and book overdrafts. How'ever, Book overdrafts are to be shown within borrowings in current liabilities
in the balance sheet for the purpose of presentation.
2.21 Current versus non-current classification
The Company presents assets and liabilities in the Balance Sheet based on current /non-current classification.
a) An asset is current when it is:
- Expected to be realized or intended to be sold or consumed in the normal operating cycle,
- Held primarily for the purpose of trading,
•• Expected to be realized within twelve months after the reporting period, or
All other assets are classified as non-current.
b) A liability is current when:
- It is expected to be settled in the 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.
All other liabilities are classified as non-current.
c) Deferred tax assets and liabilities are classified as non-current assets and liabilities.
d) The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents.
2.22 First time adoption of Ind AS - mandatory exceptions/optional exemptions
Overall principle
The Company has prepared the opening balance sheet as per Ind AS as of April 1, 2023 (the transition date) by recognizing all assets and liabilities
whose recognition is required by Ind AS, not recognizing items of assets or liabilities w'hich are not permitted by Ind AS, by reclassifying certain
items from previous GAAP to Ind AS as requixyd under the Ind AS, and applying Ind AS in the measurement of recognized assets and liabilities.
However, this principle is subject to exceptions and certain optional exemptions availed by the Company as detailed below'.
Derecognition of financial assets and fina/m$^fTilities'^\, 3^ y.
The Company has applied the de-re/'Q^inion requireWfits\ of financial assets and financial liabilities prospectively for tra/fs^Ntof^^ or
after April!, 2023 (the transition date). II ^ ° ^ ^^220Wj jj sill \*^j\
Classification of debt instruments
The Company has determined the classification of debt instruments in terms of whether they meet the amortized cost criteria or the fair value through
other comprehensive income (FVTOCI) criteria based on the facts and circumstances that existed as of the transition date.
Impairment of financial assets
The Company has applied the impairment requirements of Ind AS 109 retrospectively; however, as permitted by Ind AS 101, it has used reasonable
and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were
initially recognized in order to compare it with the credit risk at the transition date. Further, the Companv has not undertaken an exhaustive search
for information when determining, at the date of transition to Ind AS whether there have been significant increases in credit risk since initial
recognition, as permitted by Ind AS 101.
Deemed cost for PPE, CWIP and Intangible assets
The Company has elected to continue with the carrying value of its PPE, CWIP and Intangible assets recognized as of 1 April 2023 (Transition date)
measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
A) Right of use assets and lease liability
Under previous GAAP, the Company had recognized lease payments as indirect expenses under the profit and loss account. Under Ind AS the
Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is subsequently depreciated using
the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.
The lease liability is measured at amortized cost using the effective interest method.
B) Reclassification
Appropriate re-classification have been made, wherever required, bv reclassification of the corresponding items of income, expenses, assets, liabilities
and cash flow's, in order to bring them in line with the accounting policies and classification as per the Ind AS financial information of the Company
prepared in accordance with Schedule III of Companies Act, 2013, requirements of Ind AS 1 and other applicable Ind AS principles and the
requirements of the Securities and Exchange Board of India (Issue of Capital & Disclosure Requirements) Regulations, 2018, as amended.
C) Other financial assets
Under previous GAAP, interest free lease security deposits are recorded at their transaction value. Under IndAS, all financial assets are required to
be recognized at fair value. Accordingly, the Company has fair valued these security deposits under Ind AS 109. Difference between the fair value and
transaction value of the security deposit has been recognized as right-of-use asset as per Ind AS T16.
D) Borrowings
Under previous GAAP, transaction costs that are directly attributable to borrowings was charged to profit and loss. Under Ind AS, Borrowings are
initiallv measured at fair value. On initial recognition transaction costs that are directly attributable to the borrowings are deducted from the fair value
of the borrowings. Borrowings are measured at amortized cost at the end of subsequent accounting periods. Amortized cost is calculated by taking
into account fees or costs that are an integral part of the PIR. Under previous GAAP, borrowings from related parties was recognized at transaction price.
Under Ind AS, borrowings from related parties are initially measured at fair value. Difference between the proceeds (transaction price) and the fair
value at initial recognition is recognized as deferred liability. The deferred liability is subsequently credited in the Statement of Profit and Loss
(Interest income) over tine loan period.
E) Deferred Tax
Under previous GAAP, deferred tax accounting was done using the income statement approach, which focuses on differences between taxable profits
and accounting profits for the period. Under Ind AS, accounting of deferred taxes is done using the Balance Sheet approach, which focuses on
temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base.
Based on this approach, additional deferred tax has been recognized by the Company on all IndAS adjustments as some would
create temporary difference between books and tax accounts.
ii. Credit Risk
Credit Risk is the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Company. It arises from credit
exposure to customers and Balances with Banks.
The Company holds cash and cash equivalents with banks which are having highest safety rankings and hence has a low credit risk.
The Company's exposure to credit risk is influenced mainly bv the individual characteristics of each customer. The demographics of the customer,
including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. The Company 's
receivables can be classified in to two categories, one is from the customers/dealers in the market and second one is from the Government of
India/State. As far as receivables from the Government are concerned, credit risk is Nil. Credit risk is managed through credit approvals, establishing
credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of
business. The outstanding trade receivables due for a period exceeding 180 davs as at the period ended 31st March 2025 is 11.13%, 31st March 2024 is 2.14%,
of the total trade receivables. The Company uses Expected Credit Loss (ECL) Model to assess the impairment loss or gain.
iii. Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled
by delivering cash or another financial asset.
The Company manages liquidity risk by maintaining adequate surplus, banking facilities and reserve borrowings facilities by continuously monitoring
forecasts and actual cash flows.
All payments are made along due dates and requests for early payments are entertained after due approval and availing early payment discounts.
The Company has a system of forecasting rolling one month cash inflow and outflow and all liquidity requirements are planned.
iv. Exposure to liquidity risk
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted and
include estimated interest payments.
62 UTILISATION OF BORROWED FUNDS AND SHARE PREMIUM:
a. The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds)
to any other person(s) or entity(ies), including foreign entities (Intermediaries). So the details as required to be provided are not applicable to the
company.
b The Company has not received any funds from any person(s) or entity(ies), including foreign entities (funding party) with the understanding (whether
recorded in writing or otherwise). So the details as required to be provided are not applicable to the company.
63 The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether
recorded in writing or otherwise) that the Company shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or
on behalf of the Funding Party (Ultimate Beneficiaries) or provide an}’ guarantee, security or the like on behalf of the Ultimate Beneficiaries.
64 M AT E RIA L R E G R O U PIN G
Appropriate regroupings have been made in the Balance Sheet, Statement of Profit & Loss and Statement of Cashflows,
wherever required, by reclassification of the corresponding items of income, expenses, assets, liabilities and cashflows, in order to bring them in line with
the accounting policies and classification as per Ind AS financial information of the Company for the years ended 31 March 2025, 31 March 2024 and
1 April 2023 prepared in accordance with Schedule III of Companies Act, 2013, requirements of Ind AS 1 and other applicable Ind AS principles.
For Bharat j. Rughani & Co For and on Behalf of the Board of Directors of GK Energy Limited
Chartered Accountants _ (Formerly GK Energy Private Limited,
Firm Registration No: 101220W GK Energy Marketers Private Limited)
CA Akash Bharat Rughani ’ GCy Gopal/KabraV Mehul Ajit Shah
Partner Director ) Director r/V
Membership No. 139664 " DIN: 02M3T58 DIN: 03508348 XAA-----
Date:-April 17,2025 Date :-ApriI 17, 2025 Date:-April 17,2025 (if?/
Place:-Pune Place:-Pune ^ Place:-Pune lU'( 1 —11
u&jui-isisseM-ftwuuwv’Ssfc. v Gy Jm)
SumtS^Mffalkishor Malu Jeevan Santoshkumar Innani
Chief Financial Officer Company Secretary and
Date : - April 17, 2025 Compliance Officer
Place:-Pune Date April 17,2025
PlacePune
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