2.9 Trade and other payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of the
financial year which are unpaid. The amounts are unsecured and are usually paid within the agreed credit
days of recognition. Trade and other payables are presented as current liabilities unless payment is not
due within 12 months after the reporting period. They are recognised initially at their fair value and
subsequently measured at amortised cost using the effective interest method.
2.10 Revenue recognition policy
The Company accounts for a contract when it has approval and commitment from parties involved, the
rights of the parties are identified, payment terms are identified, the contract has commercial substance
and collectability of consideration is probable.
Revenue from the sale of goods is recognized at the point in time when control is transferred to the
customer - based on delivery terms, payment terms, customer acceptance and other indicators of control
as mentioned above.
The Company recognizes revenue in the gross amount of consideration when it is acting as a principal and
at net amount of consideration when it is acting as an agent. Revenue is measured based on the
transaction price, which is the consideration, adjusted for volume discounts, performance bonuses, price
concessions and incentives, if any, as specified in the contract with the customer. Revenue also excludes
taxes collected from customers.
Revenue from contract with customers is recognized when the Company satisfies performance obligations
by transferring promised goods to the customer. Performance obligations are satisfied at the point of time
when the customer obtains controls of the asset. Revenue is measured based on transaction price, which
is the fair value of consideration received or receivable, stated net of discounts, returns and value added
tax. Transaction price is recognized based on the price specified in the contract, net of the estimated
sales incentives/discounts. Accumulated experience is used to estimate and provide for the
discounts/right of the return, using the expected value method.
The Company assesses for the timing of revenue recognition in case of each distinct performance
obligation. The Company first assesses whether the revenue can be recognized over time as it performs if
any of the following criteria is met:
(a) The customer simultaneously consumes the benefits as the Company performs, or
(b) The customer controls the work-in-progress, or
(c) The Company’s performance does not create an asset with alternative use to the Company and the
Company has right to payment for performance completed till date.
If none of the criteria above are met, the Company recognizes revenue at a point-in-time. The point-in¬
time is determined when the control of the goods or services is transferred which is generally determined
based on when the significant risks and rewards of ownership are transferred to the customer. Apart from
this, the Company also considers its present right to payment, the legal title to the goods, the physical
possession and the customer acceptance in determining the point in time where control has been
transferred.
2.11 Interest income
Interest income from financial assets at fair value through profit or loss is disclosed as interest income
within other income. Interest income on financial assets at amortised cost and financial assets at FVOCI is
calculated using the effective interest method is recognised in the statement of profit and loss as part of
other income.
2.12 Earnings per share(i) Basic earnings per share
Basic earnings per share is calculated by dividing:
• the profit attributable to equity shareholders of the Company
• by the weighted average number of equity shares outstanding during the financial year, adjusted for
bonus elements in equity shares issued during the year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to
take into account:
• the after income tax effect of interest and other financing costs associated with dilutive potential
equity shares, and
• the weighted average number of additional equity shares that would have been outstanding assuming
the conversion of all dilutive potential equity shares.
(c) Terms/ rights attached to equity shares
The equity shares referred to as 'Ordinary equity shares' have a par value of Rs. 10 each. All Ordinary equity shares rank equally with regard to dividend and share
in the Company’s residual assets. Equity shares are entitled to receive dividend declared from time to time subject to payment of dividend to preference
shareholders. On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company, remaining after
distribution of all preferential amounts in proportion to the number of equity shares held.
32 Employee benefit obligations
A. Defined contribution plans :
The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards
Provident Fund, which is defined contribution plan. The Company has no obligation other than to make the specified contribution. The
contribution is charged to Statement of Profit and Loss as it accrues. The amount recognised as an expense towards contribution to Provident
Fund for the year aggregated to Rs.7.16 (2025: 5.09) and other funds to Rs.0.05 (2025: 0.04).
B. Defined benefit plan
The Company provides for gratuity to employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service
for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic
salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a non-funded
plan and the Company makes gratuity payments to employees.
Liability Risks
Asset-Liability Mismatch Risk-
Risk which arises if there is a mismatch in the duration of the assets relative to the liabilities. By matching duration with the defined benefit
liabilities, the company is successfully able to neutralize valuation swings caused by interest rate movements. Hence companies are
encouraged to adopt asset-liability management.
Discount Rate Risk-
Variations in the discount rate used to compute the present value of the liabilities may seem small, but in practise can have a significant
impact on the defined benefit liabilities.
Future Salary Escalation and Inflation Risk -
Since price inflation and salary growth are linked economically, they are combined for disclosure purposes. Rising salaries will often result in
higher future defined benefit payments resulting in a higher present value of liabilities especially unexpected salary increases provided at
management's discretion may lead to uncertainties in estimating this increasing risk.
The management assessed that the fair value of cash and cash equivalents, trade receivables, trade payables and other current financial assets and liabilities approximate
their carrying amounts, largely due to the short term nature of these balances.
The fair value of the financial assets and liabilities is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a
forced or liquidation sale.
The management assessed that the carrying amounts of its financial instruments are reasonable approximations of fair values.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b)
measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining
fair value, the Company has classified its financial instruments into three levels prescribed under the accounting standard. An explanation of each level follows underneath
the table.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. However the Company does not have any financial instruments that are measured
using Level 1 inputs.
Level 2: The fair value of derivatives is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-
specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in 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.
ii) Fair value of financial assets and liabilities measured at amortised cost
The fair value of all financial instruments carried at amortised cost are not materially different from their carrying amounts, since they are either short-term in nature or the
interest rate applicable are equal to the current market rate of interest.
The Company’s principal financial liabilities comprises of borrowings, lease liabilities , trade and other payables (including capital creditors). The main purpose of these financial
liabilities is to finance the Company’s operations. The Company’s principal financial assets include loans given, trade and other receivables, and cash and cash equivalents that
are derived directly from its operations.
The Company is exposed to the following risks from the use of financial instruments:
(a) credit risk,
(b) liquidity risk, and
(c) market risk,
(i) foreign currency exchange risk, and
(ii) interest rate risk.
The Company’s senior management oversees the management of these risks. The Company’s financial risk activities are governed by appropriate policies and procedures and
financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. The Board of Directors reviews and agrees policies for
managing each of these risks, which are summarized below.
(a) Credit Risk
The Company is exposed to credit risk as a result of counterparties defaulting their obligations. The Company's exposure to credit risk primarily relates to trade receivables. The
Company monitors and limits its exposure to credit risks on a reasonable basis. The Company's credit risk is associated with Trade Receivables is primarily related to customers not
able to settle their obligations as agreed upon. To manage this, the Company periodically reviews the financial reliability of its customers, taken into account their financial
conditions, current economic trends, analysis of historical bad debts and ageing of trade receivables.
Financial instruments that are subject to such risks, principally consist of trade receivables,contract assets such as security deposits and cash and bank balances. None of the
financial instruments of the Company results in material concentration of credit risk.
(b) Liquidity Risk
The Company is exposed to liquidity risk related to its ability to fund its obligations as and when they become due. The Company monitors and manages the liquidity risk to ensure
access to sufficient fund to meet operational and financial requirements. The Company has access to credit facilities and monitors cash and bank balances on a regular basis. In
relation to the Company's liquidity risk , the Company's policy is to ensure that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed
conditions without incurring unacceptable losses.
The table below analyzes the Company's financial liabilities into relevent maturity groupings based on their contractual maturities.
(c) Market risk
Market risk is the risk of any loss in the future earnings, in realisable fair values or in future cash flows that may result from a change in the price of a financial instrument. The
value of a financial instrument may change due to change in interest rates, foreign currency exchange rates, liquidity, and other market changes. Future specific market
movements cannot be market predicted with reasonable accuracy.
(i) Foreign currency exchange rate risk
The Company deals with receivables from customers and payables to vendors. It is therefore exposed to foreign exchange risk associated with exchange rate movements.The
foreign exchange rate fluctuations do not have any material impact on the profitability of the Company as such exports and foreign currency expenditure is negligible in totality.
There are no forward exchange contracts which have been entered into by the Company as on the reporting dates.
(ii) Interest rate risk
Interest rate risk is the risk that the fair value or the future cash flows of a financial instument will fluctuate because of changes in market interest rates. The group's exposure to
the risk of changes in market interest rates relates primarily to the group's debt obligations with floating interest rates.
Reasons for Change more than 25% from previous year
1) Debt-Equity Ratio : Decrease in this raton is due substantial reduction in debt in the current year.
2) Debt Service Coverage Ratio : Increase in this ratio is due substantial reduction in debt in the current year.
3) Return on Equity Ratio : Return on equity has increased on account of substantial increase in profits of the company during the year.
4) Net capital turnover ratio: Increase in the ratio is on account of increase in revenue of the company and decrease in working capital.
5) Net profit ratio : Decrease in the ratio is due to substantial increase in the profits of the company.
6) Return on capital employed: Increase in return on capital employed is on account of significant increase in EBIT during the year.
36 Capital Management
For the purpose of the Company’s capital management, capital includes issued equity share capital and all other equity reserves
attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to ensure that it
maintains a strong credit rating in order to support its business activities and maximize brand value.
The Company manages its capital and makes adjustments to it in light of the changes in economic and market conditions.
37 Micro, Small and Medium Enterprises Development Act, 2006
As per the information available, the management has not received information from some of their suppliers for the year ended 31
March, 2025 confirming that they are covered under Micro, Small and Medium Enterprises Development Act, 2006. In Management’s
view, the impact of any interest that may be payable (in accordance with the provisions of the Micro, Small and Medium Enterprise
Development Act, 2006) on delayed payments to its micro or small suppliers is not expected to be significant.
38 Segment Information
As the Company's business activities fall within a single primary business segment viz. auto components for two wheeler and for three
wheeler industry, the disclousure requirement of Indian Accounting standard (IND AS- 108) "Operating segments" are not applicable.
39 Additional Regulatory Disclosures As Per Schedule III Of Companies Act, 2013
i) There are no Immovable Property in the name of company during the year.
ii) The Company does not have any Benami property, where any proceedings has been initiated or pending against the Company for
holding any Benami property.
iii) The company has not been declared wilful defaulter by bank or financial institution or government or any government authority.
iv) The Company does not have any transactions with the Struck off Companies as per section 248 of the Companies Act, 2013 or section
560 of Companies Act,1956, during the current year and in the previous year.
v) Compliance with number of layers of companies - Not Applicable as the Company has complied with the number of layers prescribed
under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.
vi) Compliance with approved Scheme(s) of Arrangements - Not Applicable as the Company has no Scheme of Arrangements that has been
approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013.
vii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
viii) There were no whistle blower complaints received by the Company during the year.
ix) The Company does not have any such transaction which is not recorded in the books of accounts that have been surrendered or
disclosed as income during the year in the tax assessments under the Income-tax Act, 1961.
x) The Company does not have any intangible assets under development, whose completion is overdue or has exceeded its cost compared
to its original plan.
xi) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:
(a) 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
(b) Provided any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
xii) The Company has 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:
(a) 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
b) Provided any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
xiii) The Company does not have any charges or satisfaction which is yet to registered with ROC beyond the statutory period.
40 Previous year figures
Figures of the previous year have been regrouped /reclassified wherever considered necessary to confirm to current year's
classification.
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