R. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provision is recognized in the accounts when there is a present obligation as a result of past event(s) and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
Contingent liabilities are disclosed unless the possibility of outflow of resources is remote.
Contingent assets are neither recognized nor disclosed in the financial statements.
A. Sharp Chucks and Machines Limited (“the Company’) is a company incorporated and domiciled in India under the Indian Companies Act, 1956. Its registered office is A -12, Industrial Development Colony, Jalandhar-12 (Punjab). The Company had been converted from Private Limited Company to a Public Limited Company, The name of the Company has been changed pursuant to a fresh certificate of incorporation issued by Registrar of Companies on December 20, 2022. The Company's equity shares were listed on the National Stock Exchange (’NSE‘) on October 12, 2023.
The Company is engaged in manufacturing of Hand Tools & Machine Tools along with 'Fully Finished Forged and Graded Casting Parts & Assemblies being supplied to Major OEMs in Tractor and Automobile Industries in India.
B. Disclosure pursuant to Accounting Standard (AS) 15 (Revised) “Employee benefits"
Defined contribution plans:
During the year, the Company has contributed Rs. 50.59 Lakhs (Previous Year Rs. 51.45 Lakhs) towards recognized provident fund.
1) Discount rate- Discount Rate has been determined by reference to market yields on the balance sheet date on Government bonds.
2) Salary escalation rate- The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.
3) Retirement age-The employees of the Company are assumed to retire at the age of 60 years.
4) Mortality- As per published rates under the Indian Assured Lives Mortality (2012-14) Ultimate Table.
C. The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and postemployment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on November 13, 2020. However, the date on which the Code will come into effect has not been notified and the final rules/interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.
The details with respect to amount due to micro and small enterprises have been determined to the extent such parties have been identified, based on information available with the Company. The Company has worked out interest liability amounting to Rs. 10.15 Lakhs on account of delay in payment to suppliers. The above interest liability will be accounted for in the books on cash basis.
E. Disclosures pursuant to AS-17 “Segment Reporting”
I. Primary Segment
The Primary segment reporting of the Company has been determined to be the business segments. The Company has only one business segment which is manufacture and sale of customized Casting, Machine Tools and Forging items. The amounts appearing in these financial statements relate to this primary business segment and therefore no separate business segment disclosure is required.
II. Secondary Segment
The Company has identified its geographic segments as (1) India and (2) Outside India. The details in respect of the geographical segments are given below:
During the year, the Company came up with an INITIAL PUBLIC ISSUE (IPO) of equity size of 2,904,000 Equity Shares, each having a Face Value of Rs 10 and a Premium of Rs 48 per Equity Share at a collective price of Rs.58 per equity share. This IPO included an Offer for Sale (OFS) of 1,928,516 Equity Shares held by SIDBI Trustee Company Limited A/c India Opportunities Fund and included a fresh issue of 975,484 Equity Shares, each with a Face Value of Rs 10 and a Premium of Rs 48 per Equity Share at a collective price of Rs.58 per equity share. The issue was fully subscribed, and the Company's Shares were listed on the SME EMERGE Platform of National Stock Exchange of India ('NSE EMERGE’) on October 12, 2023.
N. As per Goods and Services Tax Act., where a recipient fails to pay to the supplier of goods or services or both, the amount towards the value of supply along with tax payable thereon within a period of 180 Days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient is added to his output tax liability, along with interest thereon. During the year, the Company had delayed in making payment against outstanding of suppliers of goods and services.
This has resulted in an interest liability amounting to Rs. 7.71 Lakhs for the current year. Additionally, an interest liability amounting to Rs. 48.66 Lakhs, pertaining to FY 2019-20, FY 2020-21, FY 2021-22, and FY 2022-23, is still pending for deposition. This liability shall be accounted for in the books on a cash basis.
O. The Company's financial statements include inventories having value of Rs. 7608.13 Lakhs, which is a significant component of the assets. At present, the Company does not have any methodology to track over the stage wise inventory forming part of the work-in-progress.
Valuation of inventories has been carried out by the Independent Cost Accountant. Basis adopted to arrive the value of the various items is not provided to us for verification. Management is taking steps to address these limitations and enhance the accuracy and reliability of inventory-related data in future reporting periods.
P. The Company has carried out physical verification of fixed assets during the year. The Company is in the process to upgrade its current methodology to reconcile physically verified assets with the fixed assets registers maintained and the Management is taking necessary steps to update its records and reconcile it
In the opinion of the management, no provision is required to be made on such receivables from the customers.
There is no outstanding in Undisputed Trade Receivables-considered doubtful, Disputed Trade Receivables considered good & Disputed Trade Receivables considered doubtful categories as on March 31,2024 & March 31,2023.
W. Other statutory information
(1) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
(2) The Company do not have any transactions with companies struck off.
(3) The Company do not have any charges or satisfaction which is yet to be registered with the Registrar of Companies ("ROC") beyond the statutory period.
(4) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.
(5) The Company have 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
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(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(6) The Company have 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 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.
(7) The Company have not entered into any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the period 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).
X. Balances under Sundry Debtors, Loans and Advances and Creditors are subject to confirmation. The impact of reconciliation, if any, will be given in the year of reconciliation.
Y. In the opinion of Board of Directors, Current Assets have a value on realization at least equal to the amount at which they are stated in Balance Sheet.
Z. The corresponding previous year figures have been regrouped where necessary to confirm to the presentation of the current year’s accounts.
The accompanying notes form an integral part of the financial statements.
For and on behalf of the Board As per our report attached
Sharp & Tannan Chartered Accountants
ICAI registration no.: 000452N . ^
By the hand of A /-n . /
Rajkumar Khullar YV Ajay S-tkka^ \ Gdpika Sikka /O^ajat Kathpal
Partner Managing Director j Director & CFO Company Secretary
Membership No: 092507 CNN: 00665858 DIN: 00665904 Redg No: 36236
Place: Jalandhar Date: 29-05-2024
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