o) Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognised when the Company has a present legal or constructive obligation as a result of a past
event and 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. Such provisions are determined
based on management estimate of the amount required to settle the obligation at the balance sheet date. When the
Company expects some or all of a provision to be reimbursed, the reimbursement is recognised as a standalone
asset only when the reimbursement is virtually certain.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that
reflects when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision
due to the passage of time is recognised as a finance cost.
Contingent liabilities are disclosed on the basis of judgment of management. These are reviewed at each balance
sheet date and are adjusted to reflect the current management estimate.
Contingent assets are not recognized but are disclosed in the financial statements when inflow of economic
benefits is probable.
p) Impairment of non-financial assets - property, plant and equipment and intangible assets
The Company assesses at each reporting date as to whether there is any indication that any property, plant
and equipment and intangible assets or group of assets, called cash generating units (CGU) may be impaired.
If any such indication exists the recoverable amount of an asset or CGU is estimated to determine the extent of
impairment, if any. When it is not possible to estimate the recoverable amount of an individual asset, the Company
estimates the recoverable amount of the CGU to which the asset belongs.
An impairment loss is recognised in the Statement of Profit and Loss to the extent, asset's carrying amount
exceeds its recoverable amount. The recoverable amount is higher of an asset's fair value less cost of disposal
and value in use. Value in use is based on the estimated future cash flows, discounted to their present value using
pre-tax discount rate that reflects current market assessments of the time value of money and risk specific to the
assets.
The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate
of recoverable amount.
q) Share capital and share premium
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are
shown in equity as a deduction, net of tax, from the proceeds.
Par value of the equity share is recorded as share capital and the amount received in excess of the par value is
classified as share premium.
r) Financial Instruments
i) Financial Assets
A. Initial recognition and measurement
All financial assets and liabilities are initially recognized at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair value
through profit or loss, are adjusted to the fair value on initial recognition. Purchase and sale of financial
assets are recognised using trade date accounting.
B. Subsequent measurement
Financial assets carried at amortised cost
A financial asset is measured at amortised 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.
Financial assets at fair value through other comprehensive income (FVTOCI)
A financial asset is measured at FVTOCI if it is 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 (FVTPL)
A financial asset which is not classified in any of the above categories are measured at FVTPL.
C. Equity Investments
All equity investments are measured at fair value through Other Comprehensive Income with value
changes recognised therein.
D. Impairment of financial assets
In accordance with Ind AS 109, the Company uses 'Expected Credit Loss' (ECL) model, for evaluating
impairment of financial assets other than those measured at fair value through OCI.
Expected credit losses are measured through a loss allowance at an amount equal to:
- The 12-months expected credit losses (expected credit losses that result from those default events
on the financial instrument that are possible within 12 months after the reporting date); or
- Full lifetime expected credit losses (expected credit losses that result from all possible default events
over the life of the financial instrument).
For trade receivables Company applies 'simplified approach' which requires expected lifetime losses to
be recognised from initial recognition of the receivables. The Company uses historical default rates to
determine impairment loss on the portfolio of trade receivables. At every reporting date these historical
default rates are reviewed and changes in the forward looking estimates are analysed.
ii) Financial Liabilities
A. Initial recognition and measurement
All financial liabilities are recognized at fair value and in case of loans, net of directly attributable cost.
Fees of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost.
B. Subsequent measurement
Financial liabilities are carried at amortized cost using the effective interest method. For trade and other
payables maturing within one year from the balance sheet date, the carrying amounts approximate fair
value due to the short maturity of these instruments.
iii) Derivative financial instruments
The Company uses derivative financial instruments such as interest rate swaps and forward contracts to
mitigate the risk of changes in interest rates and exchange rates. Such derivative financial instruments
are initially recognised at fair value on the date on which a derivative contract is entered into and are also
subsequently measured at fair value. Derivatives are carried as financial assets when the fair value is positive
and as financial liabilities when the fair value is negative.
Any gains or losses arising from changes in the fair value of derivatives are taken directly to Statement of Profit
and Loss, except for the effective portion of cash flow hedges which is recognised in Other Comprehensive
Income and later to Statement of Profit and Loss when the hedged item affects profit or loss or treated as basis
adjustment if a hedged forecast transaction subsequently results in the recognition of a non-financial assets or
non-financial liability.
Hedges that meet the criteria for hedge accounting are accounted for as follows:
A. Cash flow hedge
The Company designates derivative contracts or non derivative financial assets / liabilities as hedging
instruments to mitigate the risk of movement in interest rates and foreign exchange rates for foreign
exchange exposure on highly probable future cash flows attributable to a recognised asset or liability
or forecast cash transactions. When a derivative is designated as a cash flow hedging instrument, the
effective portion of changes in the fair value of the derivative is recognized in the cash flow hedging
reserve being part of other comprehensive income. Any ineffective portion of changes in the fair value of
the derivative is recognized immediately in the Statement of Profit and Loss. If the hedging relationship no
longer meets the criteria for hedge accounting, then hedge accounting is discontinued prospectively. If the
hedging instrument expires or is sold, terminated or exercised, the cumulative gain or loss on the hedging
instrument recognized in cash flow hedging reserve till the period the hedge was effective remains in
cash flow hedging reserve until the underlying transaction occurs. The cumulative gain or loss previously
recognized in the cash flow hedging reserve is transferred to the Statement of Profit and Loss upon the
occurrence of the underlying transaction. If the forecasted transaction is no longer expected to occur, then
the amount accumulated in cash flow hedging reserve is reclassified in the Statement of Profit and Loss.
B. Fair Value Hedge
The Company designates derivative contracts or non derivative financial assets / liabilities as hedging
instruments to mitigate the risk of change in fair value of hedged item due to movement in interest rates
and foreign exchange rates.
Changes in the fair value of hedging instruments and hedged items that are designated and qualify as
fair value hedges are recorded in the Statement of Profit and Loss. If the hedging relationship no longer
meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item for
which the effective interest method is used is amortised to Statement of Profit and Loss over the period
of maturity.
iv) Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial
asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A
financial liability (or a part of a financial liability) is derecognized from the Company's Balance Sheet when the
obligation specified in the contract is discharged or cancelled or expires.
s) Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity
shareholders by weighted average number of equity shares outstanding during the period. The weighted average
number of equity shares outstanding during the period are adjusted for events of bonus issue; bonus element in a
right issue to existing shareholders.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity
shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects
of all dilutive potential equity shares.
t) Dividend Distribution
Dividend distribution to the Company's shareholders is recognised as a liability in the company's financial
statements in the period in which the dividends are approved by the Company's shareholders.
u) Statement of Cash Flows
i) Cash and Cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on
hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original
maturities of three months or less that are readily convertible to known amounts of cash and which are subject
to an insignificant risk of changes in value, and bank overdrafts. However for Balance Sheet presentation,
Bank overdrafts are classified within borrowings in current liabilities.
ii) Statement of Cash Flows is prepared in accordance with the Indirect Method prescribed in the relevant
Accounting Standard.
v) Warranty provisions
Provisions for warranty-related costs are recognised when the product is sold or service provided to the customer.
Initial recognition is based on historical experience. The initial estimate of warranty-related costs is revised annually.
w) Segment Accounting:
The CODM (Chief Operating Decision Maker) monitors the operating results of the business segments separately
for the purpose of making decisions about the allocation of resources and performance assessment. Segment
performance is measured based on profit or loss and is measured consistently with profit or loss in Financial
Statements.
Identification of Operating Segments
The operating segments have been identified based on its revenue streams and in the current year company has
only one reportable segment, as follows:
i. Manufacturing of SG lron, Steel, Special Alloy Castings, C.l. Castings and Equipments.
Accounting of Operating Segments
The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.
Revenue and expenses have been identified to segments based on their relationship to the operating activities
of the segment. Revenues and expenses, which relate to the enterprise as a whole and are not allocable
to segments on a reasonable basis and inter-segment revenue and expenses, have been included under
“Unallocated Corporate Expenses/Eliminations”.
However, as there is only one reportable segment in the current year, segment reporting is not applicable to
the company.
3 KEY ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of the Company's financial statements requires management to make judgement, estimates and
assumptions that affect the reported amount of revenue, expenses, assets and liabilities and the accompanying
disclosures. Uncertainty about these assumptions and estimates could result in outcomes that require a material
adjustment to the carrying amount of assets or liabilities affected in future periods.
a) Depreciation / amortisation and useful lives of property plant and equipment / intangible assets
Property, plant and equipment / intangible assets are depreciated / amortised over their estimated useful lives,
after taking into account estimated residual value. The estimated useful lives and residual values of the assets
are reviewed annually in order to determine the amount of depreciation / amortisation to be recorded during any
reporting period. The useful lives and residual values are based on the Company's historical experience with
similar assets and take into account anticipated technological changes and other related matters. The depreciation
/ amortisation for future periods is revised if there are significant changes from previous estimates.
b) Recoverability of trade receivable
Judgements are required in assessing the recoverability of overdue trade receivables and determining whether
a provision against those receivables is required. Factors considered include the period of overdues, the amount
and timing of anticipated future payments and the probability of default.
c) Provisions
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow
of resources resulting from past operations or events and the amount of cash outflow can be reliably estimated.
The timing of recognition and quantification of the liability requires the application of judgement to existing facts
and circumstances. The carrying amounts of provisions and liabilities are reviewed regularly and revised to take
account of changing facts and circumstances.
d) Impairment of non-financial assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If
any indication exists, the Company estimates the asset's recoverable amount. An asset's recoverable amount is
the higher of an asset's or Cash Generating Units (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 other assets or a groups of assets. Where the carrying amount of an asset or CGU exceeds its
recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. In determining fair value less costs of disposal, recent market transactions are taken into account, if no such
transactions can be identified, an appropriate valuation model is used.
e) Measurement of defined benefit obligations
The measurement of defined benefit and other post-employment benefits obligations are determined using
actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual
developments in the future. These include the determination of the discount rate, future salary increases, mortality
rates and future pension increases. Due to the complexities involved in the valuation and its long-term nature, a
defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at
each reporting date.
3.1 NEW AND AMENDED STANDARDS
During the year the company has not early adopted any standards, amendments that have been issued but are not yet
effective/notified.
3.2 RECENT ACCOUNTING DEVETOPMENTS
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.
There are no major changes proposed which can have any material impact on the books of accounts of the company.
As per our report of even date For and on behalf of the Board of Directors of
For Harsh Jain & Associates Simplex Castings Limited
(ICAI Firm Reg. No.007639C)
Chartered Accountants
CA Harsh Jain Ketan M Shah Sangeeta K Shah
Partner Chairman & Whole time Director Managing Director
Membership No.076736 (DIN: 00312343) (DIN: 05322039)
UDIN- 25076736BMGWQH2891
Place : Bhilai Akanksha Kotwani Avinash Hariharno
Date : 30/05/2025 Company Secretary CFO
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