2.19 Provisions, contingent assets and contingent
liabilities
Provisions are recognized only when there is
a present obligation, as a result of past events
and when a reliable estimate of the amount of
obligation can be made at the reporting date.
These estimates are reviewed at each reporting
date and adjusted to reflect the current best
estimates. Provisions are discounted to their
present values, where the time value of money
is material.
Contingent liability is disclosed for:-
• Possible obligations which will be confirmed
only by future events not wholly within the
control of the Company or
• Present obligations arising from past events
where it is not probable that an outflow
of resources will be required to settle the
obligation or a reliable estimate of the
amount of the obligation cannot be made.
Contingent assets are neither recognized nor
disclosed except when realisation of income is
virtually certain, related asset is disclosed.
2.20 Leases
Ind AS 116 supersedes Ind AS 17 Leases
including its appendices. The standard sets out
the principles for the recognition, measurement,
presentation and disclosure of leases and
requires lessees to recognise most leases on
the balance sheet.
The Company has adopted Ind AS 116 using the
modified retrospective method of adoption under
the transitional provisions of the Standards,
with the date of initial application on 1st April,
2019. The Company also elected to use the
recognition exemptions for lease contracts
that, at the commencement date, have a lease
term of 12 months or less and do not contain a
purchase option (short-term leases), and lease
contracts for which the underlying asset is of
low value (low-value assets). Adoption of Ind-
AS 116 doesn't have any material impact on the
financial statements of the Company.
The Company assesses at contract inception
whether a contract is, or contains, a lease. That
is, if the contract conveys the right to control the
use of an identified asset for a period of time in
exchange for consideration.
Company as a lessee
The Company applies a single recognition and
measurement approach for all leases, except
for short term leases and leases of low-value
assets. The Company recognises lease liabilities
to make lease payments and right-of-use assets
representing the right-to-use the underlying
assets.
Right-of-use assets
The Company recognises right-of-use assets at
the commencement date of the lease (i.e., the
date the underlying asset is available for use).
Right-of-use assets are measured at cost, less
any accumulated depreciation and impairment
losses, and adjusted for any remeasurement
of lease liabilities. The cost of right-of-use
assets includes the amount of lease liabilities
recognised, initial direct costs incurred,
and lease payments made at or before the
commencement date less any lease incentives
received. Right-of-use assets are depreciated on
a straight-line basis over the shorter of the lease
term and the estimated useful lives of the assets.
If ownership of the leased asset transfers to
the Company at the end of the lease term or
the reflects the exercise of a purchase option,
depreciation is calculated using the estimated
useful life of the asset. Right-of-use assets are
also subject to impairment.
Lease Liabilities
At the commencement date of the lease, the
Company recognises lease liabilities measured
at the present value of lease payments to be
made over the lease term. The lease payments
include fixed payments (including in substance
fixed payments) less any lease incentives
receivable, variable lease payments that depend
on an index or a rate, and amounts expected to
be paid under residual value guarantees.
In calculating the present value of lease
payments, the Company uses its incremental
borrowing rate at the lease commencement
date because the interest rate implicit in the
lease is not readily determinable. After the
commencement date, the amount of lease
liabilities is increased to reflect the accretion
of interest and reduced for the lease payments
made. In addition, the carrying amount of lease
liabilities is remeasured if there is a modification,
a change in the lease term, a change in the lease
payments (e.g., changes to future payments
resulting from a change in an index or rate used
to determine such lease payments) or a change
in the assessment of an option to purchase the
underlying asset.
Short-term leases and leases of low-value
assets
The Company applies the short-term lease
recognition exemption to its short-term leases
(i.e., those leases that have a lease term of 12
months or less from the commencement date
and do not contain a purchase option). It also
applies the lease of low-value assets recognition
exemption to leases of offices, godowns,
equipment, etc. that are of low value. Lease
payments on short-term leases and leases of
low value assets are recognised as expense on
a straight-line basis over the lease term.
Company as a lessor
Lessor accounting under Ind AS 116 is
substantially unchanged from Ind AS 17. Lessors
will continue to classify leases as either operating
or finance leases using similar principles as
in Ind AS 17. Therefore, Ind AS 116 does not
have an impact for leases where the Company
is the lessor. Leases in which the Company
does not transfer substantially all the risks and
rewards incidental to ownership of an asset are
classified as operating leases. Rental income
arising is accounted for on a straight-line basis
over the lease terms. Initial direct costs incurred
in negotiating and arranging an operating lease
are added to the carrying amount of the leased
asset and recognised over the lease term on the
same basis as rental income. Contingent rents
are recognized as revenue in the period in which
they are earned.
2.21 Financial Instruments
Initial recognition and measurement
Financial assets and financial liabilities are
recognized when the Company becomes a party
to the contractual provisions of the financial
instrument and are measured initially at fair
Value adjusted for transaction costs, except for
those carried at fair value through profit or loss
which are measured initially at fair value.
Subsequent measurement of Financial Assets
i) Financial assets carried at amortised cost - a
financial asset is measured at the amortised
cost, if both the following conditions are
met:
• The asset is held within a business
model whose objective is to hold assets
for collecting contractual cash flows,
and
• Contractual terms of the asset give rise
on specified dates to cash flows that
are solely payments of principal and
interest (SPPI) on the principal amount
outstanding.
After initial measurement, such financial
assets are subsequently measured
at amortised cost using the effective
interest rate (EIR) method.
ii) Investments in equity instruments of
subsidiaries, joint ventures and associates
- Investments in equity instruments of
subsidiaries, joint ventures and associates
are accounted for at cost in accordance with
Ind AS 27Separate Financial Statements.
De-recognition of financial assets
A financial asset is primarily de-recognized
when the contractual rights to receive cash flows
from the asset have expired or the Company has
transferred its rights to receive cash flows from
the asset.
Subsequent measurement of Financial Assets
Subsequent to initial recognition, all non¬
derivative financial liabilities are measured
at amortised cost using the effective interest
method.
De-recognition of financial liabilities
A financial liability is de-recognized when the
obligation under the liability is discharged or
cancelled or expires. When an existing financial
liability is replaced by another from the Same
lender on substantially different terms or the
terms of an existing liability are substantially
modified, such an exchange or modification
is treated as the de-recognition of the original
liability and the recognition of a new liability. The
difference in the respective carrying amounts is
recognized in the statement of profit or loss.
2.22 Earnings per share
Basic earnings per share is calculated by dividing
the net profit or loss for the period attributable to
equity shareholders (after deducting attributable
taxes) by the weighted-average number of
equity shares outstanding during the period.
The weighted-average number of equity shares
outstanding during the period is adjusted for
events including a bonus issue.
For the purpose of calculating diluted earnings
per share, the net profit or loss for the period
attributable to equity shareholders and the
weighted-average number of shares outstanding
during the period are adjusted for the effects of
all dilutive potential equity shares.
2.23Significant management judgement in
applying accounting policies and estimation
uncertainty
The preparation of the Company's financial
statements requires management to make
judgments, estimates and assumptions that
affect the reported amounts of revenues,
expenses, assets and liabilities and the related
disclosures.
Significant management judgements
Recognition of deferred tax assets - The
extent to which deferred tax assets can be
recognized is based on an assessment of the
probability of the future taxable income against
which the deferred tax assets can be utilized.
Evaluation of indicators for impairment of
assets - The evaluation of applicability of
indicators of impairment of assets requires
assessment of several external and internal
factors which could result in deterioration of
recoverable amount of the assets.
Impairment of financial assets - At each
balance sheet date, based on historical
default rates observed over expected life, the
management assesses the expected credit loss
on outstanding financial assets.
Provisions - At each balance sheet date basis
the management judgment, changes in facts
and legal aspects, the Company assesses
the requirement of provisions against the
outstanding contingent liabilities. However, the
actual future outcome may be different from this
judgement.
Revenue and inventories - The Company
recognizes revenue using the percentage of
completion method. This requires forecasts
to be made of total budgeted cost with the
outcomes of underlying construction and
service contracts, which require assessments
and judgements to be made on changes in
work scopes, claims (compensation, rebates
etc.) and other payments to the extent they are
probable and they are capable of being reliably
measured. For the purpose of making estimates
for claims, the Company used the available
Contractual and historical information.
Useful lives of depreciable/ amortisable
assets -Management reviews its estimate of the
useful lives of depreciable/amortisable assets at
each reporting date, based on the expected utility
of the assets. Uncertainties in these estimates
relate to technical and economic obsolescence
that may change the utility of assets.
Defined benefit obligation (DBO) -
Management's estimate of the DBO is based
on a number of underlying assumptions such
as standard rates of inflation, mortality, discount
rate and anticipation of future salary increases.
Variation in these assumptions may significantly
impact the DBO amount and the annual defined
benefit expenses.
Fair value measurements - Management
applies valuation techniques to determine
the fair value of financial instruments (where
active market quotes are not available). This
involves developing estimates and assumptions
consistent with how market participants
would price the instrument. The Group used
valuation techniques that are appropriate in
the circumstances and for which sufficient data
is available to measure fair value, maximizing
the use of relevant observable inputs and
minimizing the use of unobservable inputs.
All assets and liabilities for which fair value
is measured or disclosed in the financial
statements are categorized within the fair value
hierarchy, described as follows, based on the
lowest level input i.e. significant to the fair value
measurement as a whole.;
Level 1. Quoted prices(unadjusted) in active
markets for identical assets and liabilities
Level 2. Input other than quoted prices included
within level 1 that are observable for the assets
or liabilities either directly(i.e. as prices) or
indirectly (i.e. derived from prices)
Level 3. Inputs for the assets and liabilities
that are not based on observable market data
(unobservable inputs)
2.24 Recent accounting pronouncements
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.
For the year ended March 31, 2024, MCA has
not notified any new standards or amendments
to the existing standards applicable to the
Company.
26. Deferred Taxation:
(a) During the Year, the Company has not made any provision for income tax including Minimum
Alternate Tax (MAT) on account of accumulated losses as per the Income Tax Act as well as under
Companies Act.
(b) The Company has, on account of substantial unabsorbed Depreciation and Business Loss as per
the Income Tax Act 1961. However, as a prudent policy, the said Deferred Tax Asset has not been
recognized, which is in accordance with Ind AS 12.
27. Employee Benefit
Consequent to Ind AS 19 “Employee Benefits”, the company has reviewed and revised its accounting
policy in respect of employee benefits.
30. Disclosure under Micro, Small and Medium Enterprises Development Act, 2006:
a) The principal amount Rs. NIL (Previous Year NIL) and the interest due thereon is NIL (Previous
Year NIL) remaining unpaid to any supplier at the end of each accounting year 2023-24.
b) The amount of interest paid by the buyer in terms of section 16 of the Micro, Small and Medium
Enterprises Development Act, 2006, along with the amount of the payment made to the supplier
beyond the appointed day during each accounting year.
C) The amount of Interest due and payable for the period of delay in making payment but without
adding the interest specified under the Micro, Small and Medium Enterprises Development Act,
2006
d) The amount of Interest accrued and remaining unpaid at the end of each accounting year Nil
e) The amount of further interest remaining due and payable even in the succeeding years until
such date when the interest dues above are actually paid to the small enterprise, for the purpose
of disallowance of a deductible expenditure under section 23 of the Micro, Small and Medium
Enterprises Development Act, 2006 is Nil
The above information and that given in note no.13 & 15 -“Trade Payables” regarding Micro and
Small Enterprises has been determined to the extent such parties have been identified on the
basis of available with the company. This has been relied upon by the auditors.
31. The Company has re - assessed the useful life of assets for the purpose of determination of depreciation
in the manner prescribed under Schedule II of the Companies Act, 2013.
32. Capital Management Policy
For the Company's capital management, capital includes issued equity capital, share premium and
all other equity reserves attributable to the equity holders of the Company. The primary objective of
the Company's capital management is to maximize the shareholder value. 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
Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt.
a. Credit Risk
The Company measures the expected credit loss of trade receivables based on historical trend,
industry practices and the business environment in which the entity operates. Expected Credit
Loss is based on actual credit loss experienced and past trends based on the historical data.
b. Liquidity Risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated
with its financial liabilities that are settled by delivering cash or another financial asset. The Group's
approach to managing liquidity is to ensure as far as possible that it will have sufficient liquidity to
meet its liabilities when they are due.
Management monitors rolling forecasts of the Group's liquidity position and cash and cash
equivalents on the basis of expected cash flows. The Group takes into account the liquidity of the
market in which the entity operates.
c. Foreign Currency Risk
The Group has international transactions and is exposed to foreign exchange risk arising from
foreign currency transactions. Foreign exchange risk arises from recognized assets and liabilities
denominated in a currency that is not the Group's functional currency.
35. Capital and other commitments
Capital and other commitments on account of revenue as well as capital nature is Rs. NIL (Previous
Year NIL)
No proceedings have been initiated during the year or are pending against the Company as at March
31, 2024 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (as
amended in 2016) and rules made thereunder.
36. The Company has not been declared a willful defaulter by any bank or financial institution or government
or any government authority.
37. There were no transactions relating to previously unrecorded income that have been surrendered or
disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of
1961).
38. The Board of Directors is of the opinion that none of the assets other than Property, Plant and Equipment,
Intangible Assets and non-current investments have realizable value less than their carrying amount in
the ordinary course of business.
39. No funds have been advanced or loaned or invested by the company to any intermediary and no funds
have been received by the company to act as intermediary.
40. Relationship with Struck off Companies is Nil (Previous Year Nil)
41. Ratios: The following are analytical ratios for the year ended 31st March, 2024 and 31st March, 2023
42. The company has not traded or not invested in Crypto currency or Virtual currency during the financial
year.
43. Title deeds of all the immovable properties are held in the name of the company.
44. During the year the Company has not availed any borrowing from banks or financial institutions.
45. There are no charges or satisfaction of charges which is yet to be registered with Registrar of Companies
beyond the statutory period.
46. The Company has complied with Companies (Restriction of Number of Layers) Rules, 2017, and there
are no downstream companies beyond the specified layers.
47. The Company has not been sanctioned working capital limits in excess of ' 5 crore, in aggregate, at
any points of time during the year
48. The Company has not taken any funds from any entity or person on account of or to meet the obligations
of its subsidiaries, associates or joint ventures.
49. Earnings & Expenditure in Foreign Currency (accrual basis): - Expenses: Rs. NIL (Previous Year Rs. Rs.
NIL)
50. The Balance in Debtors, Creditors, few Bank Accounts balances and Advances accounts are subject
to confirmation and reconciliation, if any. However as per management opinion no material impact on
financial statements out of such reconciliation is anticipated.
51. Subsequent events
There is not any subsequent event reported after the date of financial statements.
52. Regrouping of Previous Year Figures.
The company has regrouped / rearranged and reclassified previous year figures to conform to current
year's classification.
As per our report of even date For & on behalf of Board Of Directors of
For MANESH MEHTA & ASSOCIATES SHREE PRECOATED STEELS LIMITED
Chartered Accountants
Firm Reg. No. 115832W
MANESH MEHTA A. C. PATEL HARSH L MEHTA
PARTNER CHAIRMAN MANAGING DIRECOR
Membership No. 36032 DIN:00037870 DIN:01738989
UDIN: 24036032BKFCFX8763
SURESH N. PITALE KRISHNA AGRAWAL
CHIEF FINANCIAL COMPANY SECRETARY
OFFICER
Place : Vadodara Place : Mumbai
Dated : 09th May 2024 Dated : 09th May 2024
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