3.17 Ind AS 37 - Provisions, Contingent Liabilities and Contingent Asset
i The assessments undertaken in recognising provisions and contingencies have been made in accordance with the applicable Ind AS.
ii In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. The Company has significant capital commitments in relation to various capital projects which are not recognized on the balance sheet. Guarantees are also provided in the normal course of business. There are certain obligations which management has concluded, based on all available facts and circumstances, are not probable of payment or are very difficult to quantify reliably, and such obligations are treated as contingent liabilities and disclosed in the notes but are not reflected as liabilities in the financial statements. Although there can be no assurance regarding the final outcome of the legal proceedings in which the Company involved, it is not expected that such contingencies will have a material effect on its financial position or profitability.
iii Provisions represent liabilities to the Company for which the amount or timing is uncertain. Provisions are recognised when,
a the Company has a present obligation (legal or constructive) as a result of a past event
b it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and
c a reliable estimate can be made of the amount of the obligation.
iv When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain.
v The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.
vi 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. Unwinding of the discount is recognized in the statement of profit and loss as a finance cost.
vii 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.
viii Restructuring provisions are recognised only when the Company has a constructive obligation, which is when a detailed formal plan identifies the business or part of the business concerned, the location and number of employees affected, a detailed estimate of the associated costs, and an appropriate timeline, and the employees affected have been notified of the plan's main features.
ix The Company records a provision, if any, for decommissioning costs of a manufacturing facility / construction site. Decommissioning costs are provided at the present value of expected costs to settle the obligation using estimated cash flows and are recognised as part of the cost of the particular asset. The cash flows are discounted at a current pre-tax rate that reflects the risks specific to the decommissioning liability. The unwinding of the discount is expensed as incurred and recognised in the statement of profit and loss as a finance cost. The estimated future costs of decommissioning are reviewed annually and adjusted as appropriate. Changes in the estimated future costs or in the discount rate applied are added to or deducted from the cost of the asset.
x A contingent liability recognised in a business combination is initially measured at its fair value. Subsequently, it is measured at the higher of the amount that would be recognised in accordance with the requirements for
provisions above or the amount initially recognised less, when appropriate, cumulative amortisation recognised in accordance with the requirements for revenue recognition
xi Provisions are reviewed at each reporting date and are adjusted to reflect the current best estimate.
xii Contingent assets are not recognised but disclosed in the financial statements when an inflow of economic benefits is probable.
3.18 Ind AS 38 - Intangible Asset
i As required by Ind AS 38.72, the Company has chosen the cost model as per Ind AS 38.74 for measurement of intangible assets. The Company has measured the cost of acquisition or construction of intangible assets in accordance with Ind AS 38.24-38.71.
ii Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition.
iii Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred.
iv Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses.
v The useful lives of intangible assets are assessed as either finite or indefinite. The Company currently does not have any intangible assets with indefinite useful life.
vi Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired.
vii The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates.
viii The amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss unless such expenditure forms part of carrying value of another asset.
ix Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.
x Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit or loss when the asset is derecognised.
3.19 Ind AS 38 - Research and development costs
i Research costs are expensed as incurred.
ii Revenue expenditure towards development is charged to the statement of profit and loss in the year it is incurred.
iii Development expenditures on an individual project are recognised as an intangible asset when the Company can demonstrate:
? The technical feasibility of completing the intangible asset so that the asset will be available for use or sale
? Its intention to complete and its ability and intention to use or sell the asset
? How the asset will generate future economic benefits
? The availability of resources to complete the asset
? The ability to measure reliably the expenditure during development
iv During the period of development, the asset is tested for impairment annually.
v Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortisation and accumulated impairment losses.
vi Amortisation of the asset begins when development is complete and the asset is available for use.
vii It is amortised over the period of expected future benefit.
viii Amortisation expense is recognised in the statement of profit and loss unless such expenditure forms part of carrying value of another asset.
i The Company makes upfront payments to purchase patents and licenses. The patents are granted for a certain period by the relevant government agency with the option of renewal at the end of this period.
ii Licenses for the use of intellectual property are granted for certain periods depending on the specific licenses. The licenses may be renewed at little or no cost to the Company. As a result, those licenses are assessed as having an indefinite useful life
3.21 Ind AS 108 - Operating Segments
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. Revenue and expenses are identified to segments on the basis of their relationship to the operating activities of the segment. Inter segment revenue are accounted for based on the cost price. Revenue, expenses, assets and liabilities which are not allocable to segments on a reasonable basis, are included under “Unallocated revenue/ expenses/ assets/ liabilities”.
3.22 Ind AS 113 - Fair Value Measurement
i Fair value is the price 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. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
? In the principal market for the asset or liability, or
? In the absence of a principal market, in the most advantageous market for the asset or liability
ii The principal or the most advantageous market must be accessible by the Company.
iii The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
iv A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
v The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
vi All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
? Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
? Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
? Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
vii For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
viii For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
3.23 Ind AS 115 - Revenue from contracts with customer
i Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made.
ii Revenue towards satisfaction of performance obligation is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. The transaction price of goods sold and services rendered is net of variable consideration on account of various discounts and schemes offered by the Company as part of the contract.
iii Goods & Service Tax 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.
iv The Company has concluded that it is the principal in all of its revenue arrangements since it is the primary obligor in all the revenue arrangements as it has pricing latitude and is also exposed to inventory and credit risks.
v The specific recognition criteria described below must also be met before revenue is recognised.
a Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on delivery of the goods.
b Export benefits are accounted on actual basis and not on recognition of export sales.
c Revenue in the form of interest on moneys advanced by the Company is recognized only if recovery of both the interest and principal is certain or if required by the provisions of Section 186(7) of the Companies Act, 2013.
d Revenue in the form of dividend is recognised when the Company's right to receive the payment is established, which is generally when shareholders approve the dividend.
e Rental income arising from operating leases on investment properties is not accounted for on a straight-line basis over the lease terms and is included in revenue in the statement of profit or loss due to its operating nature because the Company has determined that it does not meet criteria for recognition of lease rental income on straight-line basis i.e.
? Another systematic basis is more representative of the time pattern in which use benefit derived from the leased asset is diminished, even if the payments to the lessors are not on that basis, or
? The payments to the lessor are structured to increase in line with expected general inflation to compensate for the lessor's expected inflationary cost increases.
f Revenues from maintenance contracts are recognized pro-rata over the period of the contract as and when services are rendered.
vi In the case of composite contracts, the fair consideration attributable to each component of the contract is identified and recorded as revenue. However, the Company has not entered into composite contracts during the year under review.
41 Additional information related to delayed payment by the Company to Micro / Small Enterprises as per Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006):
The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26th August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Enterpreneur's Memorandum Number as allocated after filing of the memorandum. Accordingly the disclosures in respect of the amounts payable to such enterprises as at the balance sheet date has been made in the financial statements based on information received and available with the company. Further in the opinion of the management, the impact of interest, if any that may be payable in accordance with the provisions of the Act is not expected to be material. The company has not received any claim for interest from any supplier under the said Act.
46 Title deeds of Immovable Property not held in name of the Company:
The title deeds of all immovable properties are held in the name of the Company. Hence the details specified in Para 6(L)(i) of the General Instructions for preparation of balance sheet in Division II of Schedule III to CA 2013 are not stated.
47 Investment Property:
The Company has no investment property. Hence the details specified in Para 6(L)(ii) of the General Instructions for preparation of balance sheet in Division II of Schedule III to CA 2013 are not stated
48 Revaluation of items of PPE:
The Company's PPE have not been revalued. Hence the details specified in Para 6(L)(iii) of the General Instructions for preparation of balance sheet in Division II of Schedule III to CA 2013 are not stated.
49 Revaluation of items of intangible assets:
The Company's intangible assets have not been revalued. Hence the details specified in Para 6(L)(iv) of the General Instructions for preparation of balance sheet in Division II of Schedule III to CA 2013 are not stated.
50 Loans or Advances in the nature of loans granted to promoters, directors, KMPs and the related parties either severally or jointly with any other person:
The Company has not granted to promoters, directors, KMPs and the related parties either severally or jointly with any other person, any loans or advances in the nature of loans. Hence the details specified in Para 6(L)(v) of the General Instructions for preparation of balance sheet in Division II of Schedule III to CA 2013 are not stated.
51 Intangible assets under development:
The Company has no intangible assets under development
Hence the details specified in Para 6(L)(vii) of the General Instructions for preparation of balance sheet in Division II of Schedule III to CA 2013 are not stated.
52 Benami Property held and proceedings initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder:
The Company does not hold any benami property. There are no proceedings initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder
53 Borrowings from banks or financial institutions on the basis of security of current assets:
The quarterly returns or statements of current assets filed by the Company with banks or financial institutions from whom the Company has borrowed on the basis of security of current assets are in agreement with the books of accounts.
54 Wilful defaulter:
The company has not been declared a wilful defaulter by any bank or financial Institution or other lender .
Hence the details specified in Para 6(L)(x) of the General Instructions for preparation of balance sheet in Division II of Schedule III to CA 2013 are not stated.
55 Relationship with Struck off Companies:
The company has no transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
Hence the details specified in Para 6(L)(xi) of the General Instructions for preparation of balance sheet in Division II of Schedule III to CA 2013 are not stated.
56 Registration of charges or satisfaction with Registrar of Companies:
There are no charges or satisfaction yet to be registered with Registrar of Companies beyond the statutory period. Hence the details specified in Para 6(L)(xii) of the General Instructions for preparation of balance sheet in Division II of Schedule III to CA 2013 are not stated.
57 Compliance with number of layers of companies The Company has no subsidiaries.
The company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.
Hence the details specified in Para 6(L)(xiii) of the General Instructions for preparation of balance sheet in Division II of Schedule III to CA 2013 are not stated.
59 Compliance with approved Scheme(s) of Arrangements
No Scheme of Arrangements has been approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013.
Hence the details specified in Para 6(L)(xv) of the General Instructions for preparation of balance sheet in Division II of Schedule III to CA 2013 are not stated.
60 Utilisation of Borrowed funds and share premium
The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to, nor received such funds from, any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall
(i) 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
(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
61 Undisclosed income
The Company has not surrendered or disclosed any 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).
Hence, the details of any transaction not recorded in the books of account, specified in Para 7(l) of the General Instructions for preparation of statement of profit and loss in Division II of Schedule III to CA 2013, are not stated.
62 Corporate Social Responsibility (CSR)
The provisions of S.135 of the CA, 2013, are applicable to the Company since during the immediately preceding year the net profit of the Company is more than Rs.5 crores, although
(i) the net worth of the Company is less than Rs.500 crores
(ii) the turnover of the Company is less than Rs.1,000 crores
The details of CSR expenses, specified in Para 5(x) of the General Instructions for preparation of statement of profit and loss in Schedule III to CA 2013, are as follows:
63 Details of Crypto Currency or Virtual Currency
The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
Hence, the details of Crypto Currency or Virtual Currency, specified in Para 7(n) of the General Instructions for preparation of statement of profit and loss in Division II of Schedule III to CA 2013, are not stated.
The accompanying notes are an integral part of these financial statements.
As per our audit report of even date
For Gokhale, Tanksale & Ghatpande, For & on behalf of the Board of Directors
Firm Registration No: 103277W
Chartered Accountants N. S. Rajore A. K. Jindal
Whole-time Director Chairman
DIN: 01802633 DIN: 00121523
N. H. Shah
Partner Viralkumar Shah Shilpa Soni
Membership No. 116534 Chief Financial Officer Company Secretary
UDIN: 24116534BKEYPO8386 Membership No. A59308
Place : Pune Place : Pune
Date : May 17, 2024 Date : May 17, 2024
|