2.16 Provisions and Contingent Liabilities
Provisions are recognized when the company
has a present legal or constructive obligation
as a result of past event, it is probable that an
outflow of resources will be required to settle
the obligation, and a reliable estimate of
the amount of the obligation can be made.
Provisions are determined based on the best
estimate required to settle the obligation at the
balance sheet date. Provisions are reviewed
at each balance sheet date and adjusted to
reflect current best estimates. The Company
does not recognize a contingent liability
but discloses its existence in the financial
statements. A disclosure of contingent liability
is made where there is a possible obligation or
a present obligation that may, but probably will
not require an outflow of resources.
2.17 Government grants
Government grants are recognised where there
is reasonable assurance that the grant will be
received and all attached conditions will be
complied with. When the grant or subsidy relates
to revenue, it is recognized as income on a
systematic basis in the statement of profit and
loss over the periods necessary to match them
with the related costs, which they are intended
to compensate. Where the grant relates to an
asset, it is recognized as deferred income and
is allocated to statement of profit and loss over
the periods and in the proportions in which
depreciation on those assets is charged.
When loans or similar assistance are provided
by governments or related institutions, with
an interest rate below the current applicable
market rate, the effect of this favourable interest
is regarded as a government grant. The loan or
assistance is initially recognised and measured
at fair value and the government grant is
measured as the difference between the initial
carrying value of the loan and the proceeds
received. The loan is subsequently measured
as per the accounting policy applicable to
financial liabilities.
2.18 Taxation
Current Income Tax
Current income tax assets and l iabil ities
are measured at the amount expected to
be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to
compute the amount are those that are enacted
or substantively enacted, at the reporting date
in the countries where the Company operates
and generates taxable income.
Current tax is recognized in statement of profit
and loss, except when it relates to items that are
recognized in Other Comprehensive income
or Equity, in which case Current Tax is also
recognized in Other Comprehensive income
or 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.
Deferred Tax
Deferred tax is provided using the liability method
on temporary differences between the tax
bases of assets and liabilities and their carrying
amounts for financial reporting purposes at the
reporting date.
Deferred tax liabilities are recognised for all
taxable temporary differences, except:
(i) When the deferred tax liability arises from
the initial recognition of goodwill or an
asset or liability in a transaction that is not
a business combination and, at the time
of the transaction, affects neither the
accounting profit nor taxable profit or loss.
(ii) In respect of taxable temporary
differences associated with investments
in subsidiaries, associates and interests
in joint ventures, when the timing of the
reversal of the temporary differences can
be controlled and it is probable that the
temporary differences will not reverse in the
foreseeable future.
Deferred tax assets and liabilities are measured
at the tax rates that are expected to apply in the
year when the asset is realised or the liability is
settled, based on tax rates (and tax laws) that
have been enacted or substantively enacted
at the reporting date.
Deferred tax is recognized in statement of profit
and loss, except when it relates to items that are
recognized in Other Comprehensive income
or Equity, in which case Deferred Tax is also
recognized in Other Comprehensive income
or Equity.
2.19 Financial instruments
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. 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 market place
(regular way trades) are recognised on the
trade date, i.e., the date that the Company
commits to purchase or sell the asset.
2.20 CRITICAL ACCOUNTING ESTIMATES AND
JUDGEMENTS
The preparation of financial statements requires
the use of accounting estimates which, by
definition, will seldom equal the actual results.
This note provides an overview of the areas
that involved a higher degree of judgement
or complexity, and of items which are more
likely to be materially adjusted due to estimates
and assumptions turning out to be different
than those originally assessed. Detailed
information about each of these estimates
and judgements is included in relevant notes
together with information about the basis of
calculation for each affected line item in the
financial statements.
The areas involving critical estimates or
judgements are:
Tax expense Note 35
Estimation of contingent liabilities refer Note 32.1
Estimates and judgements are continually
evaluated. They are based on historical
experience and other factors, including
expectations of future events that may have
a financial impact on the Company and
that are believed to be reasonable under
the circumstances.
Estimates and judgements are continually
evaluated. They are based on historical
experience and other factors, including
expectations of future events that may have
a financial impact on the Company and
that are believed to be reasonable under
the circumstances.
2.21 Recent Pronouncements
The Ministry of Corporate Affairs has vide
notification dated 31st March 2023 notified
Companies (Indian Accounting Standards)
Amendment Rules, 2023 (the ‘Rules') which
amends certain accounting standards, and are
effective 1st April 2023. The Rules predominantly
amend Ind AS 12, Income taxes, and Ind AS 1,
Presentation of financial statements. The other
amendments to Ind AS notified by these rules
are primarily in the nature of clarifications.
These amendments are not expected to have a
material impact on the Company in the current
or future reporting periods and on foreseeable
future transactions. Specifically, no changes
would be necessary as a consequence of
amendments made to Ind AS 12 as the group's
accounting policy already complies with the
now mandatory treatment.
2.22 Additional regulatory information
required by Schedule III
i Wilful Defaulter
None of the entities in the group have been
declared wilful defaulter by any bank or
financial institution or government or any
government authority.
ii Relationship with struck off Companies
The group has no transactions with the
companies struck off under Companies
Act, 2013 or Companies Act, 1956.
iii Details of benami property held
No proceedings have been initiated on or
are pending against the group for holding
benami property under the Benami
Transactions (Prohibition) Act, 1988 (45 of
1988) and Rules made thereunder.
iv Compliance with number of layers of
companies
The group has complied with the number
of layers prescribed under the Companies
Act, 2013.
v Compliance with approved
scheme(s) of arrangements
The group has not entered into any scheme
of arrangement which has an accounting
impact on current or previous financial year.
vi Utilisation of Borrowed funds and
Share premium
No funds have been advanced or loaned
or invested (either from borrowed funds or
share premium or any other sources or kind
of funds by the Group to or in any other
person or entity, including foreign entities
("Intermediaries") with the understanding,
whether recorded in writing or otherwise,
that the Intermediary shall lend or invest
in party identified by or on behalf of the
Group (Ultimate Beneficiaries). The Group
has not received any fund from any party
(Funding Party) with the understanding
that the GRoup shall whether, directly or
indirectly lend or invest in other persons
or entities identified by or on behalf of the
Group ("Ultimate Beneficiaries") or provide
any guarantee, security or the like on behalf
of the Ultimate Beneficiaries.
vii Undisclosed Income
There is no income surrendered or disclosed
as income during the current or previous
year in the tax assessments under the
Income Tax Act, 1961, that has not been
recorded in the books of account.
viii Details of cypto currency or virtual
currency
The group has not traded or invested in
crypto currency or virtual currency during
the current or previous year.
ix Valuation of PP&E, intangible asset
and investment property
The group has not revalued its property,
plant and equipment (including right-
of-use assets) or intangible assets or both
during the current or previous year.
2 Terms/Rights attached to the equity shares
The Company has only one class of equity shares having par value of '10/- each. Each equity holder is entitled
to one vote per share and have a right to receive dividend as recommended by Board of Directors subject to the
necessary approval from the shareholders
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets
of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number
of equity shares held by the shareholders.
3 Shares held by holding/ultimate holding Company and/or their subsidiaries/associates
NIL
Notes:
1 Company's fund and non fund based working capital facilities of '52,50,00,000/- are secured by first charge by
way of hypothecation on pari passu basis with existing working capital lenders (State Bank of India- and HDFC Bank
Ltd.) over the company's entire current assets including stocks, WIP, receivables and finished goods and also the
second charge on the whole of the fixed assets of the Company on pari passu basis with working capital lenders.
Cash credit out standing balance include HDFC Bank 2915.86 Lakhs and SBI 2014.27 Lakhs
2 Company has taken loan of '500 Lakhs from a company where key management person is common. Outstanding
balance include accrued interest of '1.97 Lakhs.
Note: The information has been given in respect of such vendors to the extent they could be identified as " Micro and
Small" enterprises on the basis of information available with the Company.
32.7 Related Party Transactions :
(a) The Company has single Product,viz:" Forgings" consequently there are no Reportable Segments of the company
as per Ind AS 108 "Operating segments"
(b) Disclosures of transactions with Related Parties as required by Ind AS - 24 "Related Party Disclosures" is given below.
Related parties as defined under clause 3 of the Accounting Standard have been identified on the basis of
representations made by the Key Managerial Personnel, information available with the company and taken on
record by the Board.
34.4 Credit risk
Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To
manage this, the Company periodically assesses financial reliability of customers and other counter parties, taking
into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of
financial assets. Individual risk limits are set and periodically reviewed on the basis of such information.
Financial assests are written off when there is no reasonable expectations of recovery, such as a debtor failing to
engage in a repayment plan with the Company. Where loans or receivables have been written off, the Company
continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made,
these are recognized as income in the statement of profit and loss.
The Company measures the expected credit loss of trade receivables and loan from individual customers based on
historical trend, industry practices and the business environment in which the entity operates.Loss rates are based
on actual credit loss experience and past trends. Based on the historical data, loss on collection of receivable is
not material hence no additional provision considered.
Financial Assets are considered to be of good quality and there is no significant increase in credit risk.
37 AUDIT TRAIL :
The Company uses SAP ERP as the accounting software. SAP ensures an audit trail, providing standard functionality
and logging in all changed data in the system. This functionality and audit trail feature in SAP has been operational
throughout the year for all relevant transactions recorded through the application.
38 BENAMI PROPERTY :
The Company does not have any Benami property, where any proceeding has been initiated or pending against
the Company for holding any Benami
39 TRADING DISCLOSURE
The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
40 LOANS AND ADVANCES
No funds (which are material either individually or in the aggregate) have been advanced or loaned or invested
(either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any
other person(s) or entity(ies), including foreign entities (‘Intermediaries'), with the understanding, whether recorded
in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities
identified in any manner whatsoever by or on behalf of the Company (‘Ultimate Beneficiaries') or provide any
guarantee, security or the like on behalf of the Ultimate Beneficiaries.
No funds (which are material either individually or in the aggregate) have been received by the Company from
any person(s) or entity(ies), including foreign entities (‘Funding Parties'), 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 any
guarantee, security or the like on behalf of the Ultimate Beneficiaries.
41 UNDISCLOSED INCOME
The Company does not have any transaction which is not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961. (such
as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
42 WILFUL DEFAULTER :
The Company has not been declared wilful defaulter by any bank or financial institution or other lender.
43 BOOKS OF ACCOUNTS :
As per the MCA notification dated August 05, 2022, the Central Government has notified the Companies (Accounts)
Fourth Amendment Rules, 2022. As per the amended rules, the Companies are required to maintain back-up of
the books of account and other relevant books and papers in electronic mode that should be accessible in India
at all the time. Also, the Companies are required to create backup of accounts on servers physically located in
India on a daily basis. The books of account along with other relevant records and papers of the Company are
maintained in electronic mode. The Company has server physically located in India for the daily backup of the
books of account and other books and papers maintained in electronic mode.
44 REGROUPING OF PREVIOUS YEAR'S FIGURES:
Previous Year's figures have been regrouped wherever necessary to make them comparable with those of the
current year.
As per our attached report of even date For and on behalf of the Board
For M. P. Chitale & Co.
Chartered Accountants
Firm Registration Number: 101851W
Sanat Ulhas Chitale Rohini G. Kalyani Abhijit Sen
Partner Executive Chairperson Director
Membership No. 143700 DIN:00519565 DIN: 00002593
Viraj Kalyani Nilesh Bandale
Managing Director Chief Finance Officer
DIN: 02268846
Place: Pune Rachana Agarwal
Date: 27th May 2025 Company Secretary
|