p. Provisions, Contingent liabilities and capital commitments
A provision is recognized when the Company has a present obligation as a result of
past event, it is probable 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. The expense relating to a provision is presented in the statement of profit
and loss. If the effect of the time value of money is material, provisions are discounted
using a current pre-tax rate that reflects, when appropriate, 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 cost.
A contingent liability is a possible obligation that arises from past events whose
existence will be confirmed by the occurrence or non-occurrence of one or more
uncertain future events beyond the control of the Company or a present obligation that
is not recognized because it is not probable that an outflow of resources will be required
to settle the obligation. A contingent liability also arises in extremely rare cases where
there is a liability that cannot be recognized because it cannot be measured reliably. The
Company does not recognize a contingent liability but discloses its existence in the
financial statements.
Capital Commitments includes the amount of purchase orders (net of advances) issued
to parties for completion of assets.
q. Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement comprise cash at
bank and in hand, cheques in hand and short-term deposits with an original maturity of
three months or less, which are subject to an insignificant risk of changes in value.
For the purposes of cash flow statement consist of cash and short-term deposits, as
defined above, net of outstanding bank overdrafts as they are considered an integral
part of the Company's cash management.
r. Financial instruments
Financial assets are divided into the following categories:
•financial assets carried at amortized cost
•financial assets at fair value through other comprehensive income
•financial assets at fair value through profit and loss;
Financial assets are assigned to the different categories by Management on initial
recognition, depending on the nature and purpose of the financial assets. The
designation of financial assets is re-evaluated at every reporting date at which a choice
of classification or accounting treatment is available. Financial Assets like Investments
in Subsidiaries are measured at Cost as allowed by Ind-AS 27 —
Separate Financial Statements and hence are not fair valued.
Financial assets carried at amortized cost:
"A financial asset is subsequently measured at amortized cost if it is held within a
business model whose objective is to hold the asset in order to collect contractual cash
flows and the contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount
outstanding. These are non-derivative financial assets that are not quoted in an active
market. Loans and receivables (including trade and other receivables, bank and cash
balances) are measured subsequent to initial recognition at amortized cost using the
effective interest method, less provision for impairment. Any change in their value
through impairment or reversal of impairment is recognized in the income statement.
In accordance with Ind AS
Allowance on trade receivables and content advances based on historically observed
default rates.
Impairment loss allowance recognized during the year is charged to Statement of Profit
and Loss.
Financial assets at fair value through other comprehensive income:
Financial assets at fair value through other comprehensive income are non-derivative
financial assets held within a business model whose objective is achieved by both
collecting contractual cash flows and selling financial assets and the contractual terms of
the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
Financial assets at fair value through profit or loss:
"A financial asset which is not classified in any of the above categories are subsequently
fair valued through profit or loss. It includes non-derivative financial assets that are
either designated as such or do not qualify for inclusion in any of the other categories of
financial assets. Gains and losses arising from investments classified under this category
are recognized in the income statement when they are sold or when the investment is
impaired.
In the case of impairment, any loss previously recognized in other comprehensive
income is transferred to the income statement. Impairment losses recognized in the
income statement on equity instruments are not reversed through the income statement.
Impairment losses recognized previously on debt securities are reversed through the
income statement when the increase can be related objectively to an event occurring
after the impairment loss was recognized in the income statement.
"When the Company considers that fair value of financial assets can be reliably
measured, the fair values of financial instruments that are not traded in an active
market are determined by using valuation techniques. The Company applies its
judgment to select a variety of methods and make assumptions that are mainly based
on market conditions existing at each balance sheet date. Equity instruments measured
at fair value through profit or loss that do not have a quoted price in an active market
and whose fair value cannot be reliably measured are measured at cost less impairment
at the end of each reporting period.
An assessment for impairment is undertaken at least at each balance sheet date:
A financial asset is derecognized only where the contractual rights to the cash flows
from the asset expire or the financial asset is transferred and that transfer qualifies for
derecognition. A financial asset is transferred if the contractual rights to receive the cash
flows of the asset have been transferred or the Company retains the contractual rights to
receive the cash flows of the asset but assumes a contractual obligation to pay the cash
flows to one or more recipients. A financial asset that is transferred qualifies for
derecognition if the Company transfers substantially all the risks and rewards of
ownership of the asset, or if the Company neither retains nor transfers substantially all
the risks and rewards of ownership but does transfer control of that asset.
Financial liabilities:
"Financial liabilities are classified as either 'financial liabilities at fair value through
profit or loss' or 'other financial liabilities'. Financial liabilities are subsequently
measured at amortized cost using the effective interest method or at fair value through
profit or loss.
Financial liabilities are classified as at fair value through profit or loss when the
financial liability is held for trading such as a derivative, except for a designated and
effective hedging instrument, or if upon initial recognition it is thus designated to
eliminate or significantly reduce measurement or recognition inconsistency or it forms
part of a contract containing one or more embedded derivatives and the contract is
designated as fair value through profit or loss.
Financial liabilities at fair value through profit or loss are stated at fair value. Any gains
or losses arising of held for trading financial liabilities are recognized in profit or loss.
Such gains or losses incorporate any interest paid and are included in the "other gains
and losses" line item.
Other financial liabilities (including borrowing and trade and other payables) are
subsequently measured at amortized cost using the effective interest method.
The effective interest method is a method of calculating the amortized cost of a financial
liability and of allocating interest expense over the relevant period. The effective interest
rate is the rate that exactly discounts estimated future cash payments (including all fees
and points paid or received that form an integral part of the effective interest rate,
transaction costs and other premiums or discounts) through the expected life of the
financial liability, or (where appropriate) a shorter period, to the net carrying amount
on initial recognition.
A financial liability is derecognized only when the obligation is extinguished, that is,
when the obligation is discharged or cancelled or expires. Changes in liabilities' fair
value that are reported in profit or loss are included in the income statement within
finance costs or finance income.
s. Derivative financial instruments
The Company has not entered into any Derivative contracts during the year.
t. Government grants:
Government grants are recognized where there is reasonable assurance that the grant
will be received, and all attached conditions will be complied with.
When the grant relates to an expense item, it is recognized as income on a systematic
basis over the periods that the related costs, for which it is intended to compensate, are
expensed.
When the grant relates to an asset, it's recognition as income in the statement of profit
and loss is linked to fulfillment of associated export obligations.
The Company has chosen to present grants received to income as other income in the
statement of profit and loss.
Note 2.2.: Significant accounting judgments, estimates and assumptions
In the course of applying the policies outlined in all notes, the Company is required to make
judgments, estimates and assumptions about the carrying amount of assets and liabilities
that are not readily apparent from other sources. The estimates and associated assumptions
are based on historical experience and other factors that are considered to be relevant.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognized in the period in which the estimate is revised if the
revision affects only that period, or in the period of the revision and future period, if the
revision affects current and future period.
In the course of applying the policies outlined in all notes, the Company is required to make
judgements, estimates and assumptions about the carrying amount of assets and liabilities
that are not readily apparent from other sources. The estimates and associated assumptions
are based on historical experience and other factors that are considered to be relevant.
Actual results may differ from these estimates. Estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and future periods are affected.
The key assumptions concerning the future and other key sources of estimation
uncertainty at the reporting date, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year,
are described below. The Company based its assumptions and estimates on parameters
available when the financial statements were prepared. Existing circumstances and
assumptions about future developments, however, may change due to market changes or
circumstances arising that are beyond the control of the Company. Such changes are
reflected in the assumptions when they occur. The Company uses the following critical
accounting estimates in preparation of its financial statements:
1. Revenue Recognition:
The Company applied judgements that significantly affect the determination of the
amount and timing of revenue from contracts at a point in time with customers, such as
identifying performance obligations in a sales transaction. Also, certain contracts of sale
include volume rebates that give rise to variable consideration. In respect of long-term
contracts significant judgments are used in:
A) Determining the revenue to be recognised in case of performance obligation
satisfied over a period of time; revenue recognition is done by measuring the progress
towards complete satisfaction of performance obligation. The progress is measured in
terms of a proportion of actual cost incurred to-date, to the total estimated cost attributable
to the performance obligation.
B) Determining the expected losses, which are recognised in the period in which such
losses become probable based on the expected total contract cost as at the reporting date.
2. Cost to complete
The Company's management estimate the cost to complete for each project for the purpose
of revenue recognition and recognition of anticipated losses of the projects, if any. In the
process of calculating the cost to complete, Management conducts regular and systematic
reviews of actual results and future projections with comparison against budget. The
process requires monitoring controls including financial and operational controls and
identifying major risks facing the Company and developing and implementing initiative to
manage those risks. The Company's Management is confident that the costs to complete
the project are estimated.
3. Useful lives of property, plant and equipment
The Company reviews the useful life of property, plant and equipment at the end of each
reporting period. This reassessment may result in change in depreciation expense in
current and future periods.
4. Provisions
The Company estimates the provisions that have present obligations as a result of past
events, and it is probable that outflow of resources will be required to settle the
obligations. These provisions are reviewed at the end of each reporting period and are
adjusted to reflect the current best estimates. The timing of recognition requires
application of judgement to existing facts and circumstances which may be subject to
change.
5. Contingencies
In the normal course of business, contingent liabilities may arise from litigation and other
claims against the Company. Potential liabilities that are possible but not probable of
crystallising or are very difficult to quantify reliably are treated as contingent liabilities.
Such liabilities are disclosed in the notes but are not recognized. Contingent assets are
neither recognised nor disclosed in the financial statements.
6. Fair value measurement of financial instruments
When the fair value of financial assets and financial liabilities recorded in the balance sheet
cannot be measured based on quoted prices in active markets, their fair value is measured
using valuation techniques including the Discounted Cash Flow model. The inputs to these
models are taken from observable markets where possible, but where this is not feasible, a
degree of judgement is required in establishing fair values. Judgments include
considerations of inputs such as liquidity risk, credit risk and volatility. Changes in
assumptions about these factors could affect the reported fair value of financial
instruments
7. Provision for income tax and deferred tax assets
The Company uses estimates and judgments based on the relevant rulings in the areas of
allocation of revenue, costs, allowances and disallowances which is exercised while
determining the provision for income tax. A deferred tax asset is recognised to the extent
that it is probable that future taxable profit will be available against which the deductible
temporary differences and tax losses can be utilised. Deferred tax assets are recognised for
unused tax losses to the extent that it is probable that taxable profit will be available
against which the losses can be utilised. Significant management judgement is required to
determine the amount of deferred tax assets that can be recognised, based upon the likely
timing and the level of future taxable profits together with future tax planning strategies.
Accordingly, the Company exercises its judgement to reassess the carrying amount of
deferred tax assets at the end of each reporting period.
8. Impairment of non-financial assets
The Company assesses at each reporting date whether there is an indication that an asset
may be impaired. If an indication exists, or when the annual impairment testing of the
asset is required, the Company estimates the asset's recoverable amount. An asset's
recoverable amount is the higher of an asset's or Cash-generating-unit's (CGU's) fair value
less costs of disposal and its value in use. It is determined for an individual asset, unless
the asset does not generate cash inflows that are largely independent of those from the
other assets or group of assets. When the carrying amount of an asset or CGU exceeds it
recoverable amount, the asset is considered as impaired and it's written down to its
recoverable amount.
9. Employee benefits
The accounting of employee benefit plans defined benefit requires the Company to use
assumptions. These assumptions have been explained under employee benefits note.
10. Leases
The Company evaluates if an arrangement qualifies to be a lease as per the requirements of
Ind AS 116. Identification of a lease requires significant judgment. The Company uses
significant judgement in assessing the lease term (including anticipated renewals) and the
applicable discount rate. The Company determines the lease term as the non-cancellable
period of a lease, together with both periods covered by an option to extend the lease if the
Company is reasonably certain to exercise that option; and periods covered by an option to
terminate the lease if the Company is reasonably certain not to exercise that option. In
assessing whether the Company is reasonably certain to exercise an option to extend a
lease, or not to exercise an option to terminate a lease, it considers all relevant facts and
circumstances that create an economic incentive for the Company to exercise the option to
extend the lease, or not to exercise the option to terminate the lease. The Company revises
the lease term if there is a change in the non-cancellable period of a lease.
The discount rate is generally based on the incremental borrowing rate specific to the lease
being evaluated or for a portfolio of leases with similar characteristics.
Fair value hierarchy
The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.
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 Ind AS. An explanation for each level is given below.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable
market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instruments 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 this level, Income Approach - the discounted cash
flow menthod was used to capture the present value of the expected future economic benefits.
a) The fair values of the financial assets & financial liabilities included in Level 3 category 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.
b) The carrying amounts of trade receivables, cash and cash equivalents, bank balances other than cash and cash equivalents, current loans, other current financial
assets, current borrowings, trade payables and other financial liabilities approximates the fair values due to the short-term maturities of these financial assets /
liabilities.
c) There have been no transfers between level 1, level 2 and level 3 for the years ended 31st March, 2024 and 31st March, 2023.
Note 33 - Financial risk management
(A) Credit risk
The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and other
financial instruments. Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. To manage this, the Company
periodically assesses the financial reliability of counter party, taking into account the financial condition, current economic trends, and the analysis of historical bad
debts and ageing of accounts receivable etc. Individual risk limits are set accordingly.
Trade receivables
The Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings
for extension of credit to customers. The Company monitors the payment track record of the customers. Outstanding customer receivables are regularly monitored.
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. The Company has also taken advances from certain customers, which mitigate the credit risk to an extent.
(C) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of
its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while
optimising the return. The sensitivity analysis excludes the impact of movements in market variables on the carrying value of post-employment benefit obligations
provisions and on the non-financial assets and liabilities. The sensitivity of the relevant profit and loss item is the effect of the assumed changes in respective market
risks.
(D) Foreign Currency Risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign currency rates. There were no
foreign currency exposure as at 31 March 2024 and 31 March 2023.
(E) 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. In order to
optimize the Company’s position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive
corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.
Exposure to interest rate risk
The Company is not exposed to significant interest rate risk as at the respective reporting date.
Note 34 - Capital Management
For the purpose of the Company’s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity
shareholders. The primary objective is to maximise the shareholders value, safeguard business continuity and support the growth of the Company. The Company
determines the capital requirement based on annual operating plans and long-term and other strategic investment plans. The funding requirements are met through
equity, operating cash flows generated and external borrowings.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To
maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.
The capital structure is governed by policies approved by the Board of Directors and monitors capital using a gearing ratio, which is net debt divided by total capital
plus net debt. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents.
Current ratio - Increment in ratio is due to decrease in trade payables.
Return on Equity Ratio: Return on Equity has decreased due to loss during the year.
Inventory Turnover Ratio: Decrease in ratio is due to Decreased turnover.
Net Capital T urnover Ratio: Decrease in ratio is due to Decreased turnover.
Net Profit Ratio: Decrease in ratio is due to loss and decrease in turnover during the year.
Return on Capital Employed: The decrease in ratio is due to an decrease in profitability as compared to the previous year.
Return on investment: The decrease in ratio is due to an decrease in profitability as compared to the previous year.
Note 43 - Other Statutory Information
1. The Company does not have any transaction with struck off Companies.
2. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
3. The Company has used the borrowings from banks and financial institutions for the specific purpose for which it was taken as at Balance sheet date.
4. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
5. The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.
6. The Company does 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)
7. The Company is in compliance with the number of layers prescribed under Clause (87) of Section 2 of the Companies Act read with the Companies (Restriction on
number of Layers) Rules, 2017.
8. 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) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
9. 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) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
10. The Company is not declared willful defaulter by any bank or financial institution or lender during the year.
Note 44 - Audit trail reporting
The Ministry of Corporate Affairs (MCA) has prescribed a new requirement for companies under the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014
inserted by the Companies (Accounts) Amendment Rules 2021 requiring companies, which uses accounting software for maintaining its books of accounts, shall use
only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of
accounts along with the date when such changes were made and ensuring that the audit trail cannot be disabled.
The Company has been maintaining its books of accounts in the Tally which has feature of recording audit trail of each and every transaction, creating an edit log of
each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled, throughout the year as
required by proviso to sub rule (1) of Rule 3 of The Companies (Accounts) Rules, 2014 known as the Companies (Accounts) Amendment Rules, 2021. However, the
audit trail feature is not enabled for direct changes to data in the underlying database.
Note 45 - Prior period comparatives
Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with current year’s classifications / disclosures.
Note 46 - Other Notes to Accounts
1. No significant adjusting event occurred between the balance sheet date and date of the approval of these financial statements by the Board of Directors of the
Company requiring adjustment or disclosure.
2. Figures representing Rs. 0.00 Lakh are below Rs. 1,000.
AS PER OUR REPORT OF EVEN DATE ATTACHED
For and on behalf of the Board of Directors
For CHANDAK AGARWAL & CO Shree Steel Wire Ropes Limited
Chartered Accountants
Firm Registration Number : 135067W
Anil L. Sajnani Ramnarayan J Tiwari
Ghanshyam Suthar Managing Director Whole Time Director
Partner DIN : 00014257 DIN : 10422348
Membership Number:- 176115
Place : Mumbai Sagar Desai Manoj Patade
Date : 24th May, 2024 Chief Financial Officer Company Secretary
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