11) Provisions and Contingent Liabilities
i. Provisions:
A provision is recorded when the Company has a present legal or constructive obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation and the amount can be reasonably estimated.
Provisions are evaluated at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expenses.
ii. Contingent Liabilities:
Whenever there is possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or a present obligation that arises from past events but is not recognised because (a) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or (b) the amount of the obligation cannot be measured with sufficient reliability are considered
as contingent liability. Show cause notices are not considered as Contingent Liabilities unless converted into demand.
iii. Contingent Assets:
The Company does not recognise contingent assets. If it is virtually certain then they will be recognised as asset. These are assessed continually to ensure that the developments are appropriately disclosed in the financial statements.
12) Earnings Per Share:
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders 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, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares). 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 considered for the effects of all dilutive potential equity shares.
13) Cash and Cash Equivalents and Cash Flow Statement:
Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments maturing within three months from the date of acquisition and which are readily convertible into cash and which are subject to only an insignificant risk of changes in value.
Cash flows are reported using the indirect method, whereby profit/(loss) before tax is appropriately classified for the effects of transactions of non-cash nature and any deferrals or accruals of past or future receipts or payments. In the cash flow statement, cash and cash equivalents include cash in hand, cheques on hand, balances with banks in current accounts and other short- term highly liquid investments with original maturities of three months or less.
14) Segment Reporting:
The Company operates in one business segment namely “Auto Components”. Hence reporting under this standard is not applicable.
15) Borrowing Costs:
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is necessary to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed in the period in which they are incurred under finance costs. During the year, the company has capitalised borrowing costs of Rs.NIL
17) Government Grants:
The Company has a policy to recognize Government Grants only when-
i) It has complied with the conditions attached to it and
ii) there is a reasonable assurance that it will be received. Grants related to assets are presented in the Balance Sheet as deferred income and recognized in Profit and Loss account on systematic basis over the useful life of the asset. Currently there are no such grants. Grants related to income are presented as part of Profit and Loss account under “Other Operating Revenue”. Grants related to duty drawback refunds are accounted on receipt basis as the time frame within which it will be received cannot be estimated.Goverment Grant in the from of duty drawback accounted during the year is Rs. 82,06,953/- ( Previous Year Rs. 64,70,386/-)
18) Events occurring after Balance Sheet Date: -
The company by Special Resolution passed through Postal Ballot on 28.04.2024 and approved the Transfer/ Slum Sale of the Aluminium Die- Casting Unit along with its identified Assets & Liabilities on fair valuation basis to its Wholly Owned Subsidiary “Menon Alkop Limited”. The transaction will be completed after receipt of regulatory approval consequently. This disclosure is made in accordance with Ind AS -10. “Events after Reporting Period”. The results of Aluminium Die Casting Division included in financial results are as follows.
III. Significant management judgment in applying accounting policies and estimation of Uncertainty
While preparing the financial statements, management has made a number of judgments, estimates and assumptions about the recognition and measurement of assets, liabilities, income and expenses.
(i) Significant Management Judgment
The following are significant management judgments in applying the accounting policies of the Company that have significant effect on the financial statements.
Recognition of Deferred Tax Assets/Liability
The extent to which deferred tax assets/Liability can be recognized is based on an assessment of the probability that future taxable income will be available against which the deductible temporary differences and tax loss carry-forwards can be utilized. In addition, careful judgment is exercised in assessing the impact of any legal or economic limits or uncertainties in various tax issues.
(ii) Estimation of Uncertainty
Information about estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses is mentioned below. Actual results may be different.
a. Impairment of Non-Financial Assets
In assessing impairment, management has estimated economic usefulness of the assets, the recoverable amount of each asset or cash- generating units based on expected future cash flows and use of an interest rate to discount them. Estimation of uncertainty relates to assumptions about economically future operating cash flows and the determination of a suitable discount rate.
b. Useful Lives of Depreciable Assets
Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technological obsolescence that may change the utility of assets including Intangible Assets.
c. Inventories
Management has carefully estimated the net realizable values of inventories, taking into account the most reliable evidence available at each reporting date. The future realization of these inventories may be affected by market-driven changes.
d. Defined Benefit Obligation (DBO)
Management's estimate of the DBO is based on a number of critical 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 (as analysed in Note No. 26 & 27).
e. Current and Non-Current Classification
All assets and liabilities have been classified as Current or Non-Current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current or non-current classification of assets and liabilities.
Note No.34 : Other Statutory Information
1) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Group for holding any Benami property.
2) The Company does not have any transactions with struck off companies.
3) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
4) The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.
5) There are no such immovable properties which are not held in the name of the Company except lease hold land from MIDC.
6) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
7) 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.
8) 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) Directlyor 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.
9) 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).
Note No. 35:
The code of Social Security, 2020 (code) relating to employee benefits during employment and postemployment received Presidential assent in September, 2020 and its effective date is yet to be notified. The Company will assess and record the impact of the Code, once it is effective.
Note No. 36:
Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year's classification disclosure.
As per our report of even date attached
For M/s.A R N A & Associates. For and on behalf of the Board of Directors
Chartered Accountants
NITIN MENON R. D. DIXIT
Rahulprasad Agnihotri Executive Chairman Managing Director
Partner DIN: 00692754 DIN : 00626827
Membership No.:111576
UDIN : 24111576BKFBCY1320 ARUN ARADHYE MANMAY KALYANKAR
Place : K°lhapiir Whole Time Director & CFO Company Secretary
Date : 18‘h July 2024 DIN : 03052587 Membership No: A29264
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