r) Provision and contingent liabilities
A provision is recognised if as a result of a past event, the Company has a present
obligation (legal or constructive) that can be estimated reliably and it is probable that
an outflow of economic benefits will be required to settle the obligation. Provisions are
recognised at the best estimate of the expenditure required to settle the present
obligation at the balance sheet date.
A contingent liability exists when there is a possible but not probable obligation, or a
present obligation that may, but probably will not, require an outflow of resources, or a
present obligation whose amount cannot be estimated reliably. Contingent liabilities
do not warrant provisions but are disclosed unless the possibility of outflow of resources
is remote.
Note 2: Critical estimates and judgements
In applying the accounting policies, which are described in note 1B, the management
are required to make judgements (other than those involving estimations) that have a
significant impact on the amounts recognized and to make estimates and assumptions
about the carrying amounts of assets and liabilities that are not readily apparent from
other sources. The estimates and associated assumptions are based on historical
experience and after considering the impact of macro-economic factors including
geo- political factors that are considered to be relevant. Actual results may differ from
these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions
to accounting estimates are recognised in the period in which the estimate is revised if
the revision affects only that period, or in the period of the revision and future periods if
the revision affects both current and future periods.
This note provides an overview of the areas that involved a higher degree of
judgement or complexity, and of items which are more likely to be materially adjusted
due to estimates and assumptions turning out to be different than those originally
assessed.
a) Tax:
The Company reviews at each balance sheet date the carrying amount of deferred
tax assets. The factors used in estimates may differ from actual outcome which could
lead to an adjustment to the amounts reported in the financial statements.
b) Estimation of useful life
Useful lives of tangible assets and intangible assets are based on the estimate by the
management. The useful lives as estimated are same as prescribed in Schedule II of the
Companies Act, 2013. In cases, where the useful lives are different from that prescribed
in Schedule II, they are based on management estimate, taking into account the
nature of the asset, the estimated usage of the asset, the operating conditions of the
asset, past history of replacement, anticipated technological changes, manufacturers’
warranties and maintenance support. Assumptions also need to be made, when the
Company assesses, whether an asset may be capitalized and which components of
the cost of the asset may be capitalised.
The useful lives and residual values of Company’s assets are determined by
management at the time the asset is acquired and reviewed annually for
appropriateness. The lives are based on historical experience with similar assets as well
as anticipation of future events which may impact their life such as changes in
technology.
c) Provisions and contingent liabilities
The Company exercises judgement in measuring and recognising provisions and the
exposures to contingent liabilities related to pending litigation or other outstanding
claims subject to negotiated settlement, mediation, arbitration or government
regulation, as well as other contingent liabilities. Judgement is necessary in assessing
the likelihood that a pending claim will succeed, or a liability will arise, and to quantify
the possible range of the financial settlement. Because of the inherent uncertainty in
this evaluation process, actual losses may be different from the originally estimated
provision.
d) Impairment of assets
The Company reviews the carrying amounts of its property, plant and equipment,
Capital work in progress and intangible assets, whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. If any such
indication exists, the recoverable amount of the asset is estimated to determine the
extent of the impairment loss (if any). Further details on the Company’s accounting
policies on this are set out in the accounting policy above. Determining whether an
asset is impaired requires an estimation of the recoverable amount, which requires
company to estimate the Fair value less cost of disposal.
e) Investment in Subsidiary
The carrying amount of the Company’s investment in its subsidiary is subject to
management’s estimates and judgements regarding its recoverable value. Under Ind
AS 27 - Separate Financial Statements, investments in subsidiaries are carried at cost.
Management assesses whether there is any indication of impairment in the value of the
investment. This assessment involves estimating the recoverable amount based on the
subsidiary’s future cash flows, expected profitability, and overall business outlook. Any
change in these estimates could lead to recognition of an impairment loss in the
Statement of Profit and Loss.
In the current year, no impairment loss has been recognized as management believes
that the carrying amount of the investment is fully recoverable.
f) Employee Benefits
The measurement of employee benefits, particularly defined benefit plans such as
gratuity, involves management estimates and judgements regarding actuarial
assumptions including discount rates, future salary increases, employee turnover, and
mortality rates.
During the year:
Holding Company: Since the Company does not have sufficient employees on its rolls,
no provision for gratuity has been recognized, and no actuarial assumptions have been
applied.
Subsidiary Company: The subsidiary was incorporated in FY 2023-24. As at March 31,
2025, no employee has completed the minimum qualifying period of five years’
continuous service under the Payment of Gratuity Act, 1972. Accordingly, no provision
for gratuity has been recognized, and no actuarial assumptions have been applied.
For defined contribution plans such as Provident Fund (PF) and Employees’ State
Insurance (ESIC), contributions are made as per statutory requirements and recognized
as an expense on an accrual basis; no further estimates or judgements are involved.
g) Consolidation Adjustments
During the preparation of the consolidated financial statements, management applies
judgements and estimates to eliminate the effects of inter-company transactions and
balances in accordance with Ind AS 110 - Consolidated Financial Statements.
Key areas requiring judgement and estimation include:
Inter-company Balances and Loans: Determining the correct elimination of outstanding
balances, including advances, loans, and fixed deposits, between the Holding
Company and its Subsidiary.
Inter-company Transactions: Eliminating inter-company sales, purchases, and other
transactions to avoid double counting of revenue and expenses.
Unrealized Profits: Assessing and eliminating unrealized profits arising from inter¬
company transfers of inventory, fixed assets, or other items.
Minority Interests (if applicable): Judgement in measuring the non-controlling interest in
the net assets and profit/loss of the Subsidiary.
Management believes that the assumptions and estimates applied in these
consolidation adjustments are reasonable and provide a true and fair view of the
consolidated financial position and results of operations.
For Jain Chhajed & Associates For and on Behalf of Board of Directors
FRN No. 127911W Banganga Pa per Industries Limited
Chartered Accountants
Chetan Dhatrak Jayshree Dhatrak
Director Director
CA Suyash Chhajed DIN: 10064427 DIN: 10064293
Partner
M. No.:121597
place : Nashik Santosh B. Ugale Jitendra R. Patil
Dated : 15/05/2025 cFO CS
UDIN: 25121597BMIFYW4958 m.nO. 39055
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