K. Provisions, Contingent Liabilities & Contingent Assets
(i) Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive)
as a result of a past event, it is probable that the Company will be required to settle the
obligation, and a reliable estimate can be made of the amount of the obligation. The amount
recognised as a provision is the best estimate of the consideration required to settle the
present obligation at the end of the reporting period, taking into account the risks and
uncertainties surrounding the obligation.
Long-term 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. Short term
provisions are carried at their redemption value and are not offset against receivables from
reimbursements.
Contingent liabilities are disclosed when there is a possible obligation arising from past events,
the existence of which will be confirmed only by the occurrence or non-occurrence of one or
more uncertain future events not wholly within the control of the Company or a present
obligation that arises from past events where it is either not probable that an outflow of
resources will be required to settle or a reliable estimate of the amount cannot be made.
Contingent Assets are neither recognized nor disclosed in the Notes forming part of the
Financial Statements
L. Earnings per Share:
Basic Earnings Per Share are calculated by dividing the net profit or loss [excluding
other comprehensive income] for the period attributable to Equity Shareholders by the
Weighted Average Number of Equity Shares outstanding during the period. Earnings
considered in ascertaining the Company's Earnings per Share are the Net Profit after Tax for
the Year. The Weighted Average Numbers of Equity Shares outstanding during the period are
adjusted for events of Bonus Issue and Sub-division of Shares.
For the purpose of calculating diluted earnings per share, the net profit or loss [excluding
other comprehensive income] for the year attributable to equity share holders and the
weighted average number of shares outstanding during the year are adjusted for the effects of
all dilutive potential equity shares.
M. Exceptional items:
Certain occasions, the size, type or incidence of an item of income or expense, pertaining to
the ordinary activities of the Company is such that its disclosure improves the understanding
of the performance of the Company, such income or expense is classified as an exceptional
item and accordingly, disclosed in the notes accompanying to the financial statements.
NOTE: 2
USE OF JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
While preparing financial statements in conformity with Ind AS, the management has made certain
estimates and assumptions that require subjective and complex judgments. These judgments affect
the application of accounting policies and the reported amount of assets, liabilities, income and
expenses, disclosure of contingent liabilities at the statement of financial position date and the
reported amount of income and expenses for the reporting period. Financial reporting results rely on
the management estimate of the effect of certain matters that are inherently uncertain. Future
events rarely develop exactly as forecasted and the best estimates require adjustments, as actual
results may differ from these estimates under different assumptions or conditions. Estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognized prospectively.
Judgment, estimates and assumptions are required in particular for:
a) Recognition and measurement of defined benefit obligations
The obligation arising from defined benefit plan is determined on the basis of actuarial
assumptions. Key actuarial assumptions include discount rate, trends in salary escalation, actuarial
rates and life expectancy. The discount rate is determined by reference to market yields at the
end of the reporting period on government bonds. The period to maturity of the underlying bonds
correspond to the probable maturity of the post-employment benefit obligations. Due to
complexities involved in the valuation and its long term nature, defined benefit obligation is highly
sensitive to changes in these assumptions. All assumptions are reviewed at each reporting period.
b) Recognition of deferred tax liabilities
Deferred tax assets and liabilities are recognized for the future tax consequences of temporary
differences between the carrying values of assets and liabilities and their respective tax bases, and
unutilized business loss and depreciation carry-forwards and tax credits. Deferred tax assets are
recognized to the extent that it is probable that future taxable income will be available against
which the deductible temporary differences, unused tax losses, depreciation carry-forwards and
unused tax credits could be utilized.
c) Discounting of financial assets / liabilities
All financial assets / liabilities are required to be measured at fair value on initial recognition. In
case of financial assets / liabilities which are required to be subsequently measured at amortized
cost, interest is accrued using the effective interest method.
d) Provisions
Significant estimates are involved in the determination of provisions. The Company records a
provision for onerous sales contracts when current estimates of total contract costs exceed
expected contract revenue. The provision for expenses is based on the best estimate required to
settle the present obligation at the end of the reporting period.
Legal proceedings often involve complex legal issues and are subject to substantial uncertainties.
Accordingly, considerable judgment is part of determining whether it is probable that there is a
present obligation as a result of a past event at the end of the reporting period, whether it is
probable that such a Legal Proceeding will result in an outflow of resources and whether the
amount of the obligation can reliably estimated. Internal and external counsels are generally part
of the determination process.
36 Capital Management
The Company's capital management is intended to create value for shareholders by facilitating the achievement
of long term and short term goals of the Company.
The Company determines the amount of capital required on the basis of annual business plan coupled with long
term and short term strategic investment and expansion plans. The funding needs are met through equity, cash
generated from operations, long term and short term bank borrowings and unsecured loans from directors.
The Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the
overall debt portfolio of the Company.
Net debt includes borrowings less cash and cash equivalents and other bank balances (including non-current
and earmarked balances).
The table below summarizes the capital, net debt and net debt to equity ratio of the Company.
37 Risk Management:
The Company's activities expose it to market risk, liquidity risk and credit risk.
This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and
the related impact in the financial statements.
The Company's risk management is done in close co-ordination with the board of directors and focuses on
actively securing the Company's short, medium and long-term cash flows by minimizing the exposure to volatile
financial markets. Long-term financial investments are managed to generate lasting returns. The Company does
not actively engage in the trading of financial assets for speculative purposes nor does it write options.
The most significant financial risks to which the Company is exposed are described below:
a) Credit risk:
Trade Receivable: The Company trades with recognized and credit worthy parties. It is the Company's policy
that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition,
receivable balances are monitored on an on-going basis with the result that the Company's exposure to bad
debts is not significant.
The Company is exposed to credit risk in the event of non-payment by customers. Credit risk concentration
with respect to trade receivables is mitigated by the Company's large customer base. Adequate expected credit
losses are recognized as per the assessments.
b) Liquidity risk:
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the
availability of funding through an adequate amount of committed credit facilities to meet obligations when due.
Due to the nature of the business, the Company maintains flexibility in funding by maintaining availability under
committed facilities.
Management monitors rolling forecasts of the Company's liquidity position and cash and cash equivalents on
the basis of expected cash flows. The Company takes into account the liquidity of the market in which it
operates. In addition, the Company's liquidity management policy involves projecting cash flows and
considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against
internal and external regulatory requirements and maintaining debt financing plans.
Maturities of financial liabilities:
The tables below analyse the Company's financial liabilities into relevant maturity groupings based on their
contractual maturities for all non-derivative financial liabilities. The amounts disclosed in the table are the
contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the
impact of discounting is not significant.
c) Interest Rate risk
Liabilities:
The Company's policy is to minimise interest rate cash flow risk exposures on long-term financing. As at March
31, 2025, the Company is exposed to changes in market interest rates through bank borrowings at variable
interest rates. The Company's investments in Fixed Deposits are at fixed interest rates.
38. Other statutory information
(i) Contingent Liabilities not provided for NIL
(ii) Estimated amount of Contract remaining to be executed on Capital Accounts and not provided for, net of
advance is - NIL ( Previous year - 8.00L)
(iii) The Company is working in single segment namely the manufacturing Segment includes manufacturing
of gears, gear boxes and other transmission components
(iv) The Company does not have any Benami property, where any proceeding has been initiated or pending
against the Group for holding any Benami property.
(v) The Company does not have any transactions with companies struck off.
(vi) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond
the statutory period.
(vii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(viii) The Company has not been declared wilful defaulter by any bank or financial institution or government
or any government authority.
(ix) 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
(x) 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 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 company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(xi) The Company has 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.
(xii) According to the opinion of the management of the Company the value of realization of Trade & Other
Receivables and Loans & Advances given in the ordinary course of business would not be less than the
amount at which they are stated in the Balance sheet.
(xiii) The amounts received from directors before 1st April, 2014 amounting to ' 21,000 have been disclosed in
Note No. 19 of Notes forming part of Financial Statements under the head Short term borrowings From
Directors.
(xiv) Previous year's figure have been regrouped/reclassified wherever necessary to confirm with the current
year's presentation.
See accompanying Statement on Significant accounting policies & Notes to Accounts
As per my Report of even date For & on behalf of the Board of Directors,
For J. A. Sheth & Associates,
Chartered Accountants
(Firm Registration No. 119980W)
Rameshkumar D. Virani Shreyas R. Virani
Managing Director Whole Time Director
Jingal A. Sheth & CFO
Proprietor (DIN: 00313236) (DIN: 00465240)
(Membership No.107067)
UDIN : 25107067BMLFCC2985
Zalak K. Upadhyay
Company Secretary
Mem. No.: A44319
Rajkot, Dated May 12, 2025 Rajkot, Dated May 12, 2025
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