2.b.12 Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognised when the Company has a present obligation (legal or constructive) as a
result of a past event and it is probable that an outflow of resources, which can be reliably estimated,
will be required to settle such an obligation.
If the effect of the time value of money is material, provisions are determined by discounting the
expected future cash flows to net present value using an appropriate pre-tax discount rate that
reflects current market assessments of the time value of money and, where appropriate, the risks
specific to the liability. Unwinding of the discount is recognised in the Statement of Profit and Loss as a
finance cost. Provisions are reviewed at each reporting date and are adjusted to reflect the current
best estimate.
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, is disclosed
as a contingent liability. Contingent liabilities are also 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.
Claims against the Company where the possibility of any outflow of resources in settlement is remote,
are not disclosed as contingent liabilities.
Contingent assets are not recognised in financial statements since this may result in the recognition of
income that may never be realised. However, when the realisation of income is virtually certain, then
the related asset is not a contingent asset and is recognised.
2.b.13 Trade receivables
A receivable represents the Company's right to an amount of consideration that is unconditional (i.e.,
only the passage of time is required before payment of the consideration is due).
2.b.14 Trade and other payables
These amounts represent liabilities for goods and services provided to the company prior to the end
of the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days
of recognition. Trade and other payables are presented as current liabilities unless payment is not due
within 12 months after the reporting period. They are recognised initially at their fair value and
subsequently measured at amortised cost using the effective interest method.
2.b.15 Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any difference between the proceeds (net of transaction
costs) and the redemption amount is recognised in profit or loss over the period of the borrowings
using the effective interest method. Fees paid on the establishment of loan facilities are recognised as
transaction costs of the loan to the extent that it is probable that some or all of the facility will be
drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no
evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a
prepayment for liquidity services and amortised over the period of the facility to which it relates.
Borrowings are removed from the balance sheet when the obligation specified in the contract is
discharged, cancelled, or expired. The difference between the carrying amount of a financial liability
that has been extinguished or transferred to another party and the consideration paid, including any
non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other
gains/(losses).
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer
settlement of the liability for at least 12 months after the reporting period. Where there is a breach of
a material provision of a long-term loan arrangement on or before the end of the reporting period
with the effect that the liability becomes payable on demand on the reporting date, the entity does
not classify the liability as current, if the lender agreed, after the reporting period and before the
approval of the financial statements for issue, not to demand payment as a consequence of the
breach.
2.b.16 Borrowing costs
Borrowing costs are interest and other costs that the Company incurs in connection with the
borrowing of funds and is measured with reference to the effective interest rate (EIR) applicable to the
respective borrowing.
Qualifying assets are assets that necessarily take a substantial period of time to get ready for their
intended use or sale. Borrowing costs, allocated to qualifying assets, pertaining to the period from
commencement of activities relating to construction / development of the qualifying asset up to the
date of capitalisation of such asset are added to the cost of the assets. Capitalisation of borrowing
costs is suspended and charged to the Statement of Profit and Loss during extended periods when
active development activity on the qualifying assets is interrupted.
All other borrowing costs are recognised as an expense in the period which they are incurred.
2.b.17 Segment Reporting - Identification of Segments
Operating segments are reported in a manner consistent with the internal reporting provided to the
chief operating decision maker. The Company is engaged in the business of Industrial Rubber Products
and there is no reportable primary segment as per Indian Accounting Standard (IND AS 108) ' Segment
Reporting'. The Company identified geographical locations as secondary segments. The products of
the company are sold both in the domestic & export markets, which are considered different
geographical segments.
2.b.18 Earnings per share
Basic Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to shareholders of the
company by the weighted average number of equity shares outstanding during the financial year,
adjusted for bonus elements in equity shares issued during the year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to
consider the after-income tax effect of interest and other financing costs associated with dilutive
potential equity and the weighted average number of additional equity shares that would have been
outstanding assuming the conversion of all dilutive potential equity shares.
2.b.19 Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on 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 purpose of the statement of cash flows, cash and cash equivalents 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.
2. c. Application of new and amended standards
The Ministry of Corporate Affairs vide notification dated May 07, 2025 and August 13, 2025 notified
the Companies (Indian Accounting Standards) Amendment Rules, 2025 and Companies (Indian
Accounting Standards) Second Amendment Rules, 2025, respectively, which amended certain
accounting standards (see below), and are effective for annual reporting periods beginning on or after
1 April 2025:
(i)Ind AS 1 - Classification of Liabilities as Current or Non-current and Non-current Liabilities with
Covenants
The company classifies liabilities as current or non-current based on its contractual rights at the
reporting date. A liability is classified as non-current only when the company has an unconditional
right to defer settlement for at least 12 months after the reporting period. Compliance with loan
covenants as at the reporting date is considered for classification. Covenants applicable after the
reporting date do not affect classification but are disclosed where relevant.
(i) Ind AS 7 and Ind AS 107 - Supplier Finance Arrangements
The company may enter into supplier finance arrangements and require additional disclosure of such
arrangements. The disclosure requirements in the amendments are intended to assist users of
financial statements in understanding the effects of supplier finance arrangements on an entity's
liabilities, cash flows and exposure to liquidity risk.
(iii) Amendments to Ind AS 21 - Lack of exchangeability
The Effects of Changes in Foreign Exchange Rates to specify how an entity should assess whether a
currency is exchangeable and how it should determine a spot exchange rate when exchangeability is
lacking. The amendments also require disclosure of information that enables users of its financial
statements to understand how the currency not being exchangeable into the other currency affects,
or is expected to affect, the entity's financial performance, financial position and cash flows.
These amendments did not have any material impact on the amounts recognised in prior periods and
are not expected to significantly affect the current or future periods.
Capital Reserve
The Company created capital reserve on cancellation/ forfeiture of the Company's own equity instruments. Capital
reserve was created in financial year 2008-09.
Capital Redemption Reserve
Capital Redemption Reserve is created out of profit available for distribution towards redemption of Preference shares.
This reserve can be used for the purpose of issue of Bonus shares.
General Reserve
General Reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the
General Reserve is created by a transfer from one component of equity to another and is not an item of other
comprehensive income, items included in the General Reserve will not be reclassified subsequently to statement of
profit and loss.
Amalgamation Reserve
The amalgamation Reserve was created on amalgamation of Pix Auto Ltd with the Company in financial year 1999¬
2000.
Securities Premium
Securities Premium Reserve represents premium on issue of shares. The reserve will be utilised in accordance with the
provisions of the Companies Act, 2013.
Retained earnings
The balance in the Retained Earnings primarily represents the surplus after payment of dividend and transfer to
reserves.
Leave Obligations:
The leave obligations cover the Company's liability for earned leave which are classified as other long-term benefits.
Leave obligations expected to be settled within the next 12 months - Rs.74.15 lakhs (31 March, 2025: Rs.61.80 lakhs)
Leave obligations not expected to be settled within the next 12 months - Rs.247.52 lakhs (31 March, 2025: Rs. 244.65
lakhs)
Post-employment obligations (Gratuity):
The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who
are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on
retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days
salary multiplied for the number of years of service. The gratuity plan is unfunded.
Defined contribution plans:
The Company also has a certain defined contribution plan. Contributions are made to provident fund in India for
employees at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident
fund administered by the government. The obligation of the Company is limited to the amount contributed and it has
no further contractual nor any constructive obligation. The expense recognised during the period towards defined
contribution plan is Rs.211.06 lakhs (31 March 2025 - Rs. 218.87 lakhs).
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant.
In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior
period.
Risk Exposure:
Through its defined benefit plan, the Company is exposed to a number of risks, the most significant of which are
detailed below:
1. Changes in bond yields: A decrease in bond yields will increase plan liabilities.
2. Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate
of the mortality of plan participants both during and after their employment. An increase in the life expectancy of
the plan participants will increase the plan's liability.
3. Salary growth risk: The present value of the defined benefit plan liability is calculated by reference to the future
salaries of plan participants. An increase in the salary of the plan participants will increase the plan's liability.
Notes
1. Remuneration does not include Post employment benefits and other long term benefits payable to Key managerial
persons, relatives of key managerial persons and other selected employees amounting to Rs. 335.16 lakhs
(31March, 2025 Rs.279.68 lakhs) at gross level on totality basis and not available at individual employee level.
2. Transactions relating to dividends were on the same terms and conditions that applied to other shareholders.
3. Goods were sold to subsidiaries (including step down subsidiaries) during the year based on the price lists in force
and terms that would be available to third parties.
4. All other transactions were made on normal commercial terms and conditions and at market rates.
The accounting classification of each category of financial instrument, their carrying amount and fair value are as
follows :-
Fair Valuation Techniques
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.
The following methods and assumptions were used to estimate the fair values:
- The fair value of investment are based on price quotations at the reporting date.
Fair Value Hierarchy
Fair Values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation
techniques as follows
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.
(a) Working capital loans are secured by:
1) 1st pari passu charge by way of hypothecation of entire current assets of the Company including raw materials,
finished goods, stock-in-process at the Company's factory premises or at such places as may be approved by the Bank
from time to time including stocks-in-transit, book debts, receivables, on pari passu basis under multiple banking
arrangement.
2) 2 pari passu charge on entire fixed assets (Moveable and Immovable) of the Company by way of Equitable Mortgage
located at
i) Plot no J-7, MIDC Hingna Road, Nagpur - Unit No.1
ii) K-36,K-37/38 at MIDC , Hingna Road, Nagpur- Unit No.2
iii) Khasra No. 55 & 57, Nagalwadi, Tahsil Hingna. Dist. Nagpur Mixing Plant
iv) Khasra No.45, 46/2, 48,25, 46/1,47, Mauza, Nagalwadi.
(b) Working capital loans from banks are repayable on demand
(c) Working capital loans from banks/ financial institution are not availed by the Company during the current financial
year (31 March, 2025: Nil)
(D) Financial Risk Management
The Company's activities are exposed to variety of financial risks. The key financial risks include market risk, credit risk
and liquidity risk. The company's focus is to foresee the unpredictability of financial markets and seek to minimise
potential adverse effects on its financial performance. The Board of Directors reviews and approves policies for
managing these risks. The risks are governed by appropriate policies and procedures and accordingly financial risks are
identified, measured and managed in accordance with the company's policies and risk objectives.
(i) CREDIT RISK
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract,
leading to a financial loss. The Company is exposed to credit risk for trade receivables, cash and cash equivalents,
investments, other bank balances, loans and other financial assets. The Company only deals with parties which have
good credit rating/ worthiness given by external rating agencies or based on Company's internal assessment.
Credit risk on trade receivables and contract assets are managed by the Company's established policy, procedures and
control relating to customer credit risk management. Credit quality of a customer is assessed and individual credit
limits are defined in accordance with this assessment. Moreover, given the diverse nature of the Company's
businesses, trade receivables and contract assets are spread over a number of customers. Single external customer
(except for subsidiaries) accounted for 10% or more of the trade receivables in any of the years presented.
For trade receivables, as a practical expedient, the Company computes credit loss allowance based on a provision
matrix. The provision matrix is prepared based on historically observed default rates over the expected life of trade
receivables and is adjusted for forward-looking estimates.
For Mutual Fund Investments, counterparty risk are in place to limit the amount of credit exposure to any one
counterparty. This, therefore, results in diversification of credit risk for Company's mutual fund investments.
The Credit risk on mutual fund investments, cash and cash equivalents, and other bank balances are limited as the
counterparties are banks and fund houses with high-credit ratings assigned by credit rating agencies.
The carrying amount of maximum exposure to credit risk. The concentration of credit risk is limited due to the
customer base being large and respective financial assets recognised in the financial statements, represents the
Company's unrelated. The Company has a total recoverables of INR.1286.66 Lakhs from single external Customer as at
31 March 2026 which is more than 10% of the total trade receivables (31 March, 2025:INR 1253.34).
The Company establishes an allowance for impairment that represents its estimate of incurred losses in respect of
trade and other receivables. Receivables from customers are reviewed/evaluated periodically by the management of
the company and appropriate provisions are made to the extent recovery there against has been considered to be
remote.
(ii) Liquidity Risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a
reasonable price. The Company's objective is to maintain optimum level of liquidity to meet it's cash and collateral
requirements at all times. The Company relies on borrowings and internal accruals to meet its fund requirement. The
current committed line of credit are sufficient to meet its short to medium term fund requirement. The company
manages liquidity risk by maintaining sufficient cash and marketable securities and by having access to funding
through an adequate amount of committed credit lines.
(iii) Market Risk
Market risk is the risk or uncertainty arising from possible market fluctuations resulting in variation in the fair value of
future cash flows of a financial instrument. The major components of Market risks are currency risk, interest rate risk
and other price risk. Financial instruments affected by market risk includes trade receivables, borrowings,
investments and trade and other payables.
(a) Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rate. There is nominal amount of interest income but significant interest expenses are
incurred by the company on borrowed funds. In order to minimize the interest cost, interest reset options is opted and
a regular pursuance is made with financial institutions/commercial banks to lower down the interest rates as per
prevailing market trend. The policies is designed to optimise the use of available funds for repayment of loans and
other payment obligations so that funds are not remained idle with the company.
The Company's exposure in market risk relating to change in interest rate primarily arises from floating rate borrowing
with banks. The Company maintains a portfolio mix of fixed and floating rate borrowings. During the current year, the
Company has structured and swapped floating interest rate loan to fixed interest rate loan.
Further there are deposits with banks which are for short term period and are exposed to interest rate risk, falling due
for renewal. These deposits are however generally for trade purposes as such do not cause material implication.
(b) 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 exchange rates. The Company's exposure to the risk of changes in foreign exchange rates relates primarily to
the Company's foreign currency borrowings, trade receivables and trade payables.
NOTE :- 39 Disclosure requirement as per Ind AS 108 ' Operating Segment-
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief
Operating Decision Maker ("CODM") of the Company. The CODM, who is responsible for allocating
resources and assessing performance of the operating segments, has been identified as the Managing
Director of the Company.
The company identified geographical locations as secondary segments. The product of the company are
sold both in the domestic & export markets.
NOTE 41
Capital management
The primary objective of the Company's capital management is to ensure that it maintains a healthy capital
ratio in order to support its business and maximise shareholder value. The Company's objective 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 stake holders. The Company is focused on keeping
strong total equity base to ensure independence, security, as well as a high financial flexibility for potential
future borrowings, if required.
Notes:
(i) Current Assets= Inventories Current Investment Trade Receivable Cash & Cash Equivalents Bank
Balance other than Cash & Cash Equivalents Loans Current Tax Assets Other Financial Current
Assets Other Current Assets
(ii) Current Liability= Short term borrowings Lease Liabilities Trade Payables Other financial Current
Liabilities Provisions Other Current Liability
(iii) Debt= long term borrowings Short term borrowings
(iv) Earning for Debt Service =Net Profit after taxes Non-cash operating expenses like depreciation and
other amortisations long term borrowing Interest loss/(profit) on sale of Property, Plant and
Equipement
(v) Debt Service = Interest of long term borrowing & Lease Payments Principal Repayments of long term
borrowing
(vi) Capital Employed=Tangible Net Worth long term borrowings Deferred Tax Liability
Note 45.5 Details of benami property held
No proceedings have been initiated on or are pending against the Company for holding benami property
under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
Note 45.6 Borrowing secured against current assets
The Company has borrowings from banks and financial institutions on the basis of security of current assets.
The quarterly returns or statements of current assets filed by the Company with banks and financial
institutions are in agreement with the books of accounts.
Note 45.7 Wilful defaulter
The Company has not been declared wilful defaulter by any bank or financial institution or government or
any government authority.
Note 45.8 Relationship with struck off companies
The Company has no transactions with the companies struck off under Companies Act, 2013 or Companies
Act, 1956.
Note 45.9 Compliance with number of layers of companies
The Company has complied with the number of layers prescribed under the Companies Act, 2013.
Note 45.10 Compliance with approved schemes of arrangements
The Company has not entered into any scheme of arrangement which has an accounting impact on current
or previous financial year.
Note 45.11 Utilisation of borrowed funds and share premium
The Company has not advanced or loaned or invested funds to any other persons or entities, 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
The Company has not received any fund from any persons or entities, 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
Note 45.12 Undisclosed income
There is no income surrendered or disclosed as income during the current or previous year in the tax
assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.
Note 45.13 Details of crypto currency or virtual currency
The Company has not traded or invested in crypto currency or virtual currency during the current or
previous year.
Note 45.14 Valuation of PP&E and intangible asset
The Company has not revalued its property, plant and equipment (including right-of-use assets) or
intangible assets or both during the current or previous year.
Note 45.15 Title deeds of Immovable Properties
Title deeds of all immovable properties are held in the name of the Company.
Note 45.16 Borrowings from Banks and financial institutions
The Company has used the borrowings from banks and financial institutions for the specific purpose for
which it was taken.
Note 45.17 Registration of charges / satisfaction with Registrar of Companies (ROC)
Charges / Satisfaction has been duly registered with ROC within the statutory period
Note 45.18 Disclosures with regards to section 186 of the Companies Act, 2013
The Company has made investments (Refer note no 5 and 9) but not provided any guarantee or security or
granted any loans or advances in the nature of loans, secured or unsecured, to companies, firms, Limited
Liability Partnerships or any other parties
Note 46: Previous Year's figures
Previous Year's figure has been regrouped, re-arranged and reclassified, wherever considered necessary, to
confirm with the current year's presentation.
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