h) Provisions, Contingent Liabilities and
Contingent Assets
A provision is recognized if, as a result of a past
event, the Company has a present legal or
constructive obligation that can be estimated
reliably, and it is probable that an outflow of
economic benefits will be required to settle
the obligation. If the effect of the time value of
money is material, provisions are determined
by discounting the expected future cash flows
at a pre-tax rate that reflects current market
assessments of the time value of money and the
risks specific to the liability. Where discounting
is used, the increase in the provision due to the
passage of time is recognized as a finance cost.
Contingent Liability is disclosed after careful
evaluation of facts, uncertainties and possibility
of reimbursement, unless the possibility of an
outflow of resources embodying economic
benefits is remote. Contingent liabilities are not
recognized but are disclosed in notes. Contingent
assets are not disclosed in the financial statements
unless an inflow of economic benefits is probable.
Provisions, contingent liabilities, and contingent
assets are reviewed at each reporting date and
adjusted to reflect the current best estimates.
i) Revenue from Contract with Customers
Revenue from contracts with customers is
recognized when control of the goods or services
are transferred (performance obligation) to
the customer at an amount that reflects the
consideration to which the Company expects to be
entitled in exchange for those goods or services.
Goods and Service Tax ('GST') is not received by
the Company on its own account. Rather, it is tax
collected on value added to the commodity by the
seller on behalf of the government. Accordingly, it
is excluded from revenue.
i) Revenue from Sale of goods-
The Company classifies all other liabilities
as non-current. Deferred tax assets and
liabilities are classified as non-current assets
and liabilities. The operating cycle is the
time between the acquisition of assets for
processing and their realisation in cash and
cash equivalents. The Company has identified
twelve months as its operating cycle.
ii) Warranty obligations
The Company typically provides warranties
for general repairs of defects that existed at
the time of sale, as required by law. These
assurance-type warranties are accounted
for under Ind AS 37 Provisions, Contingent
Liabilities and Contingent Assets.
iii) Trade Receivables
Trade receivables are amounts due from
customers for goods sold or services
performed in the ordinary course of business.
They are generally due for settlement within
one year and therefore are all classified as
current. Where the settlement is due after
one year, they are classified as non-current.
Trade receivables are recognised initially
at the amount of consideration that is
unconditional unless they contain significant
financing components, when they are
recognised at fair value. The Company holds
the trade receivables with the objective
to collect the contractual cash flows and
therefore measures them subsequently at
amortised cost using the effective interest
method.
iv) Contract Assets
A contract asset is the entity's right to
consideration in exchange for goods or
services that the entity has transferred to
the customer. A contract asset becomes
a receivable when the entity's right to
consideration is unconditional, in such cases
only the passage of time is required before
payment of the consideration is due. The
impairment of contract assets is measured,
presented and disclosed on the same basis
as trade receivables.
v) Contract Liability
A contract liability is the obligation to transfer
goods or services to a customer for which the
Company has received consideration (or an
amount of consideration is due) from the
customer. If a customer pays consideration
before the Company transfers goods or
services to the customer, a contract liability
is recognised when the payment is made
or the payment is due (whichever is earlier).
Contract liabilities are recognised as revenue
when the Company performs under the
contract.
J) Other Income
i) Interest
Interest is recognised using the effective
interest rate (EIR) method, as income for the
period in which it occurs. EIR is the rate that
exactly discounts the estimated future cash
payments or receipts over the expected life of
the financial instrument to the gross carrying
amount of the financial asset or to the
amortised cost of a financial liability. When
calculating the effectctive interest rate, the
Company estimates the expected cash flows
by considering all the contractual terms
of the financial instrument (for example,
security deposit, prepayment etc.) but does
not consider the expected credit losses.
ii) Duty drawback and export incentives
Income from export incentives is recognized
on an accrual basis.
iii) Insurance claim
Claims lodged with the insurance companies
are accounted on accrual basis to the extent
these are measurable and ultimate collection
is reasonably certain.
k) Employee Benefits
i) Short term employee benefits
Short-term employee benefits are expensed
as the related service is provided. A liability
is recognized for the amount expected
to be paid if the Company has a present
legal or constructive obligation to pay this
amount as a result of past service provided
by the employee and the obligation can be
estimated reliably.
ii) Defined contribution plans
Employees benefits in the form of the
Company's contribution to Provident Fund,
Family Pension scheme and Employees State
Insurance are defined contribution schemes.
The Company recognizes contribution
payable to these schemes as an expense,
when an employee renders the related
service.
If the contribution payable exceeds
contribution already paid, the deficit payable
is recognized as a liability (accrued expense),
after deducting any contribution already
paid. If the contribution already paid exceeds
the contribution due for service before the
end of the reporting period. The Company
recognize that excess as an asset (prepaid
expense) to the extent that the prepayment
will lead to, for example, a reduction in future
payments or a cash refund.
iii) Defined benefit plans
Retirement benefits in the form of gratuity
are considered as defined benefit plans.
The Company's net obligation in respect
of defined benefit plans is calculated by
estimating the amount of future benefit that
employees have earned in the current and
prior periods, discounting that amount and
deducting the fair value of any plan assets.
The company provides for its gratuity liability
based on actuarial valuation of the gratuity
liability as at the Balance Sheet date, based
on Projected Unit Credit Method, carried out
by an independent actuary. The Company
contributes to the gratuity fund, which
are recognized as plan assets. The defined
benefit obligation as reduced by fair value
of plan assets is recognized in the Balance
Sheet.
When the calculation results in a potential
asset for the company, the recognized asset
is limited to the present value of economic
benefits available in the form of any future
refunds from the plan or reductions in
future contributions to the plan. To calculate
the present value of economic benefits,
consideration is given to any applicable
minimum funding requirements.
Remeasurements comprising actuarial gains
and losses, changes in the fair value of plan
assets (excluding interest income), and
adjustments for the asset ceiling effect (if
applicable), are recognized immediately in
Other Comprehensive Income and are not
reclassified to profit or loss in subsequent
periods. Net interest expense (income) on
the net defined liability (assets) is computed
by applying the discount rate, used to
measure the net defined liability (asset), to
the net defined liability (asset) at the start of
the financial year after taking into account
any changes as a result of contribution
and benefit payments during the year. Net
interest expense and other expenses related
to defined benefit plans are recognized in
statement of profit or loss.
When the benefits of a plan are changed or
when a plan is curtailed, the resulting change
in benefit that relates to past service or the
gain or loss on curtailment is recognized
immediately in statement of profit or loss.
The company recognizes gains and losses
on the settlement of a defined benefit plan
when the settlement occurs.
iv) Other long-term employee benefits
Employee benefits in the form of long term
compensated absences are considered
as long term employee benefits. The
Company's net obligation in respect of
long-term employee benefits is the amount
of future benefit that employees have
earned in return for their service in the
current and prior periods. That benefit is
discounted to determine its present value.
Remeasurements are recognized in profit or
loss in the period in which they arise.
The liability for long term compensated
absences are provided based on actuarial
valuation as at the Balance Sheet date, based
on Projected Unit Credit Method, carried out
by an independent actuary.
l) Valuation of inventories
i) Finished goods : are valued at lower of
cost or net realizable value. Scrap is valued
at net realizable value. cost includes direct
materials and labour and a proportion of
manufacturing overheads based on normal
operating capacity. cost of Finished goods
includes excise duty.
ii) Work in progress : is valued at raw material
cost including proportionate production
overheads.
iii) Stores, spares and raw materials : are
valued at lower of cost or net realizable value.
However materials & other items held for
use in the production of inventories are not
written below cost if the finished products in
which they will be incorporated are expected
to be sold at or above cost. cost of purchases
is assessed on first in first out (FIFO) method.
Costs of raw materials and stores include
all costs of purchase, conversion, and other
costs incurred in bringing the inventories to
their present location and condition.
iv) Net realizable value : is the estimated selling
price in the ordinary course of business, less
estimated costs of completion and estimated
costs necessary to make the sale.
Inventory is assessed for impairment at
each reporting date, and provision is made
for slow-moving, obsolete, or damaged
inventory to reflect net realizable value.
m) Foreign Exchange Transactions / Translations /
Hedge Accounting
Standalone financial statements have been
presented in Indian Rupees ('), which is the
Company's functional and presentation currency.
• Initial recognition
Foreign currency transactions are recorded
on initial recognition in the functional
currency, using the exchange rate at the date
of the transaction.
• Conversion
Foreign currency monetary items are
retranslated using the exchange rate
prevailing at the reporting date. Non¬
monetary items, which are measured in
terms of historical cost denominated in a
foreign currency, are reported using the
exchange rate at the date of the transaction.
Non-monetary items, which are measured
at fair value or other similar valuation
denominated in a foreign currency, are
translated using the exchange rate at the date
when such value was determined. Exchange
differences on monetary items related to
foreign operations are recognized in profit
or loss, except those that form part of the
net investment in a foreign operation, which
are recognized in Other Comprehensive
Income (OCI) and accumulated in a separate
component of equity until disposal.
• Exchange differences
The gain or loss arising on translation of
non-monetary items measured at fair value
is treated in line with the recognition of the
gain or loss on the change in fair value of the
item (i.e., translation differences on items
whose fair value gain or loss is recognized
in OCI or profit or loss are also recognized in
OCI or profit or loss, respectively).
n) Borrowing costs
Borrowing costs are interest and other ancillary
costs (including exchange differences relating to
foreign currency borrowings to the extent that
they are regarded as an adjustment to interest
costs) incurred in connection with the borrowing
of funds.
General and specific borrowing costs attributable
to acquisition and construction of any qualifying
asset (one that takes a substantial period of
time to get ready for its designated use or sale)
are capitalized until such time as the assets are
substantially ready for their intended use or sale,
and included as part of the cost of that asset. All
the other borrowing costs are recognized in the
Statement of Profit and Loss within Finance costs
of the period in which they are incurred.
Capitalization of borrowing costs commences
when expenditure for the qualifying asset is being
incurred, borrowing costs are being incurred, and
activities necessary to prepare the asset for its
intended use or sale are in progress. Capitalization
of borrowing costs is suspended during extended
periods in which active development of the
qualifying asset is interrupted. Capitalization
ceases when substantially all the activities
necessary to prepare the qualifying asset for its
intended use or sale are complete.
o) Income tax
Income tax expense comprises current and
deferred tax. It is recognized in profit or loss except
to the extent that it relates to items recognized
directly in equity or in Other Comprehensive
Income.
i) Current tax
Current tax comprises the expected tax
payable or receivable on the taxable income
or loss for the year after taking credit of the
benefits available under the Income Tax
Act and any adjustment to the tax payable
or receivable in respect of previous years.
It is measured using tax rates enacted or
substantively enacted at the reporting date.
Current tax assets and liabilities are offset
only if, the Company:
a) has a legally enforceable right to set off
the recognized amounts; and
b) intends either to settle on a net basis, or
to realize the asset and settle the liability
simultaneously.
ii) Deferred tax
Deferred tax is the tax expected to be payable
or recoverable on differences between the
carrying values of assets and liabilities in the
financial statements and the corresponding
tax bases used in the computation of taxable
profit and is accounted for using the balance
sheet liability method. Deferred tax liabilities
are generally recognized for all taxable
temporary differences. In contrast, deferred
tax assets are only recognized to the extent
that it is probable that future taxable profits
will be available against which the temporary
differences can be utilized.
The carrying value of deferred tax assets is
reviewed at the end of each reporting period
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 is calculated at the tax rates that
are expected to apply in the period when the
liability is settled or the asset is realized based
on the tax rates and tax laws that have been
enacted or substantially enacted by the end
of the reporting period. 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 end of the reporting period, to cover
or settle the carrying value of its assets and
liabilities.
Deferred tax assets and liabilities are offset
only if:
i) The entity has a legally enforceable
right to set off current tax assets against
current tax liabilities; and
ii) The deferred tax assets and the deferred
tax liabilities relate to income taxes
levied by the same taxation authority
on the same taxable entity.
Deferred tax assets include Minimum
Alternate Tax (MAT) paid in accordance
with the tax laws in India, which is likely
to give future economic benefits in the
form of availability of set off against
future income tax liability. MAT is
recognized as deferred tax assets in the
Balance Sheet when the asset can be
measured reliably and it is probable that
the future economic benefit associated
with the asset will be realized.
p) Segment Reporting
The Company's operating businesses are
organized and managed separately according to
the nature of products manufactured and services
provided, with each segment representing
a strategic business unit that offers different
products. The analysis of geographical segments
is based on the areas in which major operating
divisions of the Company operate. The reportable
segments have been identified based on the
significant components of the enterprise for
which discrete financial information is available
and are reviewed by the Chief operating decision
maker (CODM) to assess the performance and
allocate resources to the operating segments.
Refer Note -39.
q) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank
and on hand and short-term deposits 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.
Cash and cash equivalents also include balances
held as margin money or security against
borrowings only to the extent that they are
repayable on demand.
Bank overdrafts that are repayable on demand
and form an integral part of the Company's cash
management are included as a component of
cash and cash equivalents for the purpose of the
Statement of Cash Flows.
r) Cash flow statement
Cash flows are reported using the indirect
method as explained in the Accounting Standard
on Statement of Cash Flows (Ind AS - 7), whereby
profit for the period is adjusted for the effects of
transactions of a non-cash nature, any deferrals or
accruals of past or future operating cash receipts
or payments and item of income or expenses
associated with investing or financing cash
flows. The cash flows from operating, investing
and financing activities of the Company are
segregated and presented separately to provide
clear information on the Company's sources and
uses of cash.
Cash flows from operating activities represent
the cash generated from the principal revenue-
producing activities of the Company. Investing
activities relate to the acquisition and disposal
of long-term assets and other investments not
included in cash equivalents. Financing activities
result in changes in the size and composition of
the contributed equity and borrowings of the
Company.
s) Dividend
The Company recognises a liability to pay
dividend to equity holders of the Company
when the distribution is authorised, and the
distribution is no longer at the discretion of the
Company. As per the corporate laws in India, a
distribution is authorised when it is approved
by the shareholders. A corresponding amount is
recognised directly in equity.
t) Ind AS - 116 Lease
Ind AS 116 requires lessees to determine the lease
term as the non-cancellable period of a lease
adjusted with any option to extend or terminate
the lease, if the use of such option is reasonably
certain. The Company makes an assessment on
the expected lease term on a lease-by-lease basis
and thereby assesses whether it is reasonably
certain that any options to extend or terminate
the contract will be exercised. In evaluating
the lease term, the Company considers factors
such as any significant leasehold improvements
undertaken over the lease term, costs relating to
the termination of the lease and the importance
of the underlying asset to Company's operations
taking into account the location of the underlying
asset and the availability of suitable alternatives.
The lease term in future periods is reassessed to
ensure that the lease term reflects the current
economic circumstances. After considering
current and future economic conditions, the
company has concluded that no changes are
required to lease period relating to the existing
lease contracts.
The Company as a lessee
The Company's lease asset classes primarily
consist of leases for buildings. The Company
assesses whether a contract contains a lease, at
inception of a contract. A contract is, or contains,
a lease if the contract conveys the right to control
the use of an identified asset for a period of time
in exchange for consideration. To assess whether a
contract conveys the right to control the use of an
identified asset, the Company assesses whether:
(i) the contract involves the use of an identified
asset (ii) the Company has substantially all of the
economic benefits from use of the asset through
the period of the lease and (iii) the Company has
the right to direct the use of the asset.
At the date of commencement of the lease,
The Company recognizes a right-of-use asset
and a corresponding lease liability at the lease
commencement date for all leases where it acts
as a lessee, except for short-term leases (lease
term less than 12 months) and leases of low-value
assets. Lease liabilities are measured at the present
value of lease payments, discounted using the
Company's incremental borrowing rate where the
implicit rate is not readily determinable. For these
short-term and low value leases, the Company
recognizes the lease payments as an operating
expense on a straight-line basis over the term of
the lease.
Certain lease arrangements include the options
to extend or terminate the lease before the end
of the lease term. ROU assets and lease liabilities
includes these options when it is reasonably
certain that they will be exercised.
The right-of-use assets are initially recognized at
cost, which comprises the initial amount of the
lease liability adjusted for any lease payments
made at or prior to the commencement date
of the lease plus any initial direct costs less any
lease incentives. They are subsequently measured
at cost less accumulated depreciation and
impairment losses.
Right-of-use assets are depreciated from the
commencement date on a straight-line basis over
the shorter of the lease term and useful life of the
underlying asset. Right of use assets are evaluated
for recoverability whenever events or changes
in circumstances indicate that their carrying
amounts may not be recoverable. For the purpose
of impairment testing, the recoverable amount
(i.e. the higher of the fair value less cost to sell and
the value-in-use) is determined on an individual
asset basis unless the asset does not generate
cash flows that are largely independent of those
from other assets. In such cases, the recoverable
amount is determined for the Cash Generating
Unit (CGU) to which the asset belongs.
The lease liability is initially measured at amortized
cost at the present value of the future lease
payments. The lease payments are discounted
using the interest rate implicit in the lease or, if
not readily determinable, using the incremental
borrowing rates in the country of domicile of
these leases. Lease liabilities are re-measured with
a corresponding adjustment to the related right of
use asset if the Company changes its assessment
if whether it will exercise an extension or a
termination option. Lease liability and ROU asset
have been separately presented in the Balance
Sheet and lease payments have been classified as
financing cash flows.
The Company as a lessor
Leases for which the Company is a lessor is
classified as a finance or operating lease. Whenever
the terms of the lease transfer substantially all the
risks and rewards of ownership to the lessee, the
contract is classified as a finance lease. All other
leases are classified as operating leases. When the
Company is an intermediate lessor, it accounts for
its interests in the head lease and the sublease
separately. The sublease is classified as a finance
or operating lease by reference to the right-of-use
asset arising from the head lease. For operating
leases, rental income is recognized on a straight
line basis over the term of the relevant lease.
u) Earning per share
Basic earnings per share are calculated by dividing
the net profit or loss for the period attributable
to equity shareholders by the weighted average
number of equity shares outstanding during the
year.
For the purpose of calculating diluted earnings
per share, the net profit or loss for the period
attributable to equity shareholders and the
weighted average number of shares outstanding
during the period are adjusted for the effects of all
dilutive potential equity shares.
Potential equity shares are deemed to be dilutive
only if their conversion to equity shares would
decrease earnings per share or increase loss per
share from continuing operations.
v) Government grants
Government grants are recognized at fair value
when there is reasonable assurance that the
Company will comply with the conditions
attached to them and the grants will be received.
Grants related to assets are initially recorded as
deferred income and recognized in the statement
of profit and loss over the useful life of the
related asset, while revenue-related grants are
recognized in profit or loss on a systematic basis
in the periods in which the related expenses are
incurred. Government grants related to PPE are
treated as deferred income (included under non¬
current liabilities with current portion considered
under current liabilities) and are recognized and
credited in the Statement of Profit and Loss on a
systematic and rational basis over the estimated
useful life of the related asset and included under
"Other operating income". Government grants
related to revenue nature are recognized 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 and are adjusted with the
related expenditure. If not related to a specific
expenditure, it is taken as income and presented
under "Other operating income"
w) Recent Pronouncements
Ministry of Corporate Affairs ("MCA") notifies
new standards or amendments to the existing
standards under Companies (Indian Accounting
Standards) Rules as issued from time to time.
During the year ended March 31, 2025, MCA has
notified Ind AS 117- Insurance Contracts and
amendments to IndAS 116-Leases, relating to sale
and lease back transactions, applicable from April
1, 2024. The Company has assessed that there is
no significant impact on its financial statements.
On May 9, 2025, MCA notified the amendments
to Ind AS 21- Effects of changes in Foreign
Exchange Rates. These amendments aim to
provide clearer guidance on assessing currency
exchangeability and estimating exchange rates
when currencies are not readily exchangeable.
The amendments are effective for annual periods
beginning on or after April 1, 2025. The company
is currently assessing the probable impact of
these amendments on its financial statements.
i) Terms & right attached to equity shares
a) The Company has only one class of equity shares having par value of Rs. 2/- per share. Each shareholder of
equity shares is entitled to one vote per share. The company declares dividends in Indian Rupees. During
the year ended March 31, 2025, the amount of dividend per share recognised as distributed to equity
shareholder was Rs NIL ( March 31, 2024 Rs.NIL).
b) Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares
bought back during the period of five years immediately preceding the reporting date.-Nil.
c) 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 the preferencial amount,if any. The distribution will be in
proportion to the number of equity shares held by the shareholders.
d) The Board of Directors, at its meeting held on February 20, 2025, approved the allotment into 92,72,997
(Ninety-Two Lakhs Seventy-Two Thousand Nine Hundred Ninety-Seven) fully paid-up equity shares as per
the terms of conversion of Optionally Convertible Debentures into equity shares.
Interest on above demands is not computed and demanded by the department, therefore interest amount is not
included above except otherwise stated.
* The Traces demands have been extracted from the traces online portal and income tax demands have been extracted
from the income tax online portal.
Contingent liabilities and claims against the Company not acknowledged as debts related to various matters.
i) In respect of above matters, future cash outflows are determinable only on receipt of judgements / decisions
pending at various forums / authorities.
ii) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where
provisions are required and disclosed as contingent liabilities where applicable in its financial statements. The
Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial
position.
35 Segment Information
(i) General Disclosure
The Company is primarily in the business of manufacture and sale of components to automotive original
equipment manufacturers. Hence there is only one identified reportable segments as per Ind As 108 - Segment
reporting.
The above reportable segments have been identified based on the significant components of the enterprise for
which discrete financial information is available and are reviewed by the Chief operating decision maker (CODM)
to assess the performance and allocate resources to the operating segments.
36 Employee Benefits - Gratuity & Post employement benefits
The Company has classified the various benefits provided to employees as under:-
A. Defined Contribution Plan
The Company makes contribution to Statutory Provident Fund and Employee State Insurance in accordance
with Employees Provident Fund and Miscellaneous Provision Act, 1952 and Employee State Insurance Act, 1948
respectively .This is post-employment benefit and is in the nature of defined contribution plan.
B. Defined Benefit Plan
Gratuity (being partly administered by a Trust) is computed as 15 days salary, for every recognized retirement
/ termination / resignation. The Gratuity plan for the company is a defined benefit scheme where annual
contributions as per actuarial valuation are charged to the statement of profit and loss.
The Company also has a leave encashment scheme with defined benefits for its employees. The Company makes
provision for such liability in the books of accounts on the basis of year end actuarial valuation. No fund has been
created for this scheme.
For summarizing the components of net benefit expense recognized in the statement of profit and loss and the
funded status and amounts recognized in the balance sheet for the respective plans, the details are as under:
any business. The primary focus is to foresee the unpredictability of financial markets and seek to minimize potential
adverse effects on its financial performance. The Company's senior management oversees the management of
these risks and devise approrpiate risk management framework for the Company. The senior management provides
assurance that the Company's financial risk activities are governed by appropriate policies and procedures and that
financial risks are identified, measured and managed in accordance with the Company's policies and risk objectives.
Below notes explain the sources of risks in which the Company is exposed to and how it manages the risks:
A 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. The Company is exposed to the risk of movements in interest rates, inventory price and
foreign currency exchange rates that affects its assets, liabilities and future transactions. The Company is exposed
to following key market risks:
a) Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate
because of changes in market interest rates. The Company's main interest rate risk arises from long-term
borrowings with variable rates, which exposes the Company to cash flow interest rate risk. During March
31, 2025 and March 31, 2024, the Company's borrowings at variable rate were mainly denominated in INR.
Interest rate risk exposure - The exposure of the Company's borrowing to interest rate changes at the end
of the reporting period are as follows:
b) Price Risk
Fluctuation in commodity price in global market affects directly and indirectly the price of raw material
and components used by the Company in its various products segment. Substantial pricing pressure from
major OEMs to give price cuts and inability to pass on the increased cost to customers may also affect the
profitability of the Company.
Key Raw material - As per the agreement with the customers, any increase in the raw material prices is
passed on to the customer. But in some cases where the customer was already asking for reduction in
prices, the company has to absorb the price increase.
B Credit risk:
Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily
trade receivables and advances to suppliers) and from its financing activities, including deposits and other
financial instruments
The Company has developed guidelines for the management of credit risk from trade receivables. The Company's
primary customers are major Indian automobile manufacturers (OEMs) with good credit ratings. Non-OEM
clients are subjected to credit assessments as a precautionary measure, and the adherence of all clients to
payment due dates is monitored on an on-going basis. An impairment analysis is performed at each reporting
date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into
homogeneous groups and assessed for impairment collectively. The calculation is based on historical data. The
maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets
disclosed in Note 44. The Company does not hold collateral as security except in case of few customers. The
Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located
in several jurisdictions and industries and operate in largely independent markets.
Credit risk from balances with banks and other financial asset is managed in accordance with the Company's
approved investment policy. Investments of surplus funds are made only with approved counterparties and
within credit limits assigned to each counterparty. Counterparty credit limits are reviewed on regular basis and
the said limits gets revised as and when appropriate. The limits are set to minimise the concentration of risks and
therefore mitigate financial loss through counterparty's potential failure to make payments. The Company has
deposited liquid funds at various banking institutions. Primary banking institutions are major Indian and foreign
banks. In long term credit ratings these banking institutions are considered to be investment gradeAlso, no
impairment loss has been recorded in respect of ixed deposits that are with recognised commercial banks and
are not past due.
C Liquidity risk:
The liquidity risk encompasses any risk that the Company cannot fully meet its financial obligations. To manage
the liquidity risk, cash flow forecasting is performed in the operating divisions of the Company and aggregated
by Company finance. The Company's finance monitors rolling forecasts of the Company's liquidity requirements
to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn
committed borrowing facilities / overdraft facilities at all times so that the Company does not breach borrowing
limits or covenants (where applicable) on any of its borrowing facilities.
A - Company has opted to fair value its mutual fund investment through profit & loss
B - Company has opted to fair value its quoted investments in equity share through OCI
C - As per Para D-15 of Appendix D of Ind AS 101, the first time adopter may chose to measure its investment in
subsidiaries, JVs and Associates at cost or at fair value. Company has opted to value its investments in subsidiaries, JVs
and Associates at cost.
D - Company has adopted effective rate of interest for calculating Interest. This has been calculated as the weighted
average of effective interest rates calculated for each loan. In addition processing fees and transaction cost relating to
each loan has also been considered for calculating effective interest rate.
* In case of trade receivables, cash and cash equivalents, trade payables, short term borrowings and other financial
assets and liabilities it is assessed that the fair values approximate their carrying amounts largely due to the short-term
maturities of these instruments.
Fair value hierarchy
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
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). The fair values of the financial assets and financial
liabilities included above have been determined in accordance with generally accepted pricing models based on a
discounted cash flow analysis, with the most significant inputs being the discount rate that reflects the credit risk of
counterparties
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
2 Capital Management
"For the purpose of the Company's capital management, equity includes issued equity capital and all other equity
reserves attributable to the equity shareholders and net debt includes interest bearing loans and borrowings less
current investments and cash and cash equivalents. The Company's objectives when managing capital is to safeguard
their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits
for other stakeholders, and maintain an optimal capital structure to reduce the cost of capital.
The Company manages its capital structure and makes adjustments in light of changes in economic & financial
conditions and the requirements of the financial covenants. The funding requirement is met through a mixture of
equity, internal accruals, long term borrowings and sho C30rt term borrowings. The Company monitors capital using
a gearing ratio, which is net debt divided by total capital plus net debt.
In order to achieve this overall objective, the Company's capital management, amongst other things, aims to ensure
that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure
requirements. During the year the Company has breached with these covenants. During the year lenders has imposed
the penalties towards non-fulfillment of the covenants as per the loan agreements and the same has duly been
accounted in financial statements wherever charged by the lenders.
43 The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the
Company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for
the Code on Social Security, 2020 on November 13, 2020, and has invited suggestions from stakeholders, which are
under active consideration by the Ministry. The Company will assess the impact and its evaluation once the subject
rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes
effective and the related rules to determine the financial impact are published.
# Ratio deteriorate due to increase in operational expenses mainly consumption of raw material & stores spares.
## Ratio deteriorate due to decrease in operational profit caused mainly higher consumption of raw material & stores
spares.
45 Events occurring After the Balance Sheet date
No adjusting or significant non adjusting events have occurred between the reporting date and date of authorization
of financial statements.
46 The Company is in the process of obtaining confirmations and reconciliation with its trade receivables, trade payables
and other dues receivables. The confirmations to the extent received have been reconciled and adjustments, if any,
have been made. The others are pending for confirmations, reconciliations and adjustments, if any. However, the
management does not expect any significant variations in the existing status.
47 Corporate Social Responsibility not applicable to the company due to loss incurred in last three years.
48 Previous year figures have been regrouped / reclassified wherever necessary to correspond with current year
classification/ disclosure.
49 i) The Company do not have any benami property, and no proceeding has been initiated against the Company for
holding any benami property.
ii) The Company do not have any transactions with companies struck off.
iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory
period.
iv) The Company have not traded or invested in crypto currency or virtual currency during the financial year.
v) The Company have 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) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
vi) 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 Group 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) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
vii) The Company have not any such 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
viii) The Company have not declared willful defaulter by any banks or any other financial institution at any time
during the financial year.
ix) All immovable properties are held in the name of the Company.
As per our report of even date attached
For NSBP & Co. For & on behalf of the Board of Directors of
Chartered Accountants Shivam Autotech Limited
Firm Regn. No. 001075N
Sd/- Sd/- Sd/-
Sanjay Kumar Agrawal Neeraj Munjal Charu Munjal
Partner Managing Director Whole Time Director
Membership Number: 089090 DIN : 00037792 DIN: 03094545
Sd/- Sd/-
Devendra Kumar Goyal Shakti Kant Mahana
Place : New Delhi Chief financial Officer Company Secretary
Dated: May 12, 2025 PAN No. AGNPG1981F M No A69273
Place : Gurugram
Dated: May 12, 2025
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