Notes to Accounts of Jeet Machine Tools Ltd.

Mar 31, 2024

(P) Provisions
Recognition of Provision:

A provision is recognized when the company has i) a present obligation as a result of past
event, ii) it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation and iii) a reliable estimate can be made of the amount of the
obligation. Where the effect of the time value of money is material, the amount of provision
shall be the present value of the expenditures expected to be required to settle the obligation.
Provisions shall be reviewed at the end of each reporting period and adjusted to reflect the
current best estimate. If it is no longer probable that an outflow of resources embodying
economic benefits will be required to settle the obligation, the provision shall be reversed.
Where the company expects some or all of a provision to be reimbursed, for example under
an insurance contract, the reimbursement is recognized as a separate asset but only when the
reimbursement is virtually certain. The expense relating to any provision is presented in the
statement of profit and loss net of any reimbursement.

(Q) Cash and cash equivalents

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and
in hand and short-term investments with an original maturity of three months or less.

(R) Earnings per share

The basic earnings per equity share are computed by dividing the net profit attributable to the
equity shareholders for the reporting period by the weighted average number of Equity shares
outstanding during the reporting period.

The number of shares used in computing diluted earnings per share comprises the weighted
average number of shares considered for deriving basic earnings per share and also the
weighted average number of equity shares, which may be issued on the conversion of all
dilutive potential shares, unless the results would be anti-dilutive.

(S)Leases

Where the Company is the lessee

Leases, where the lessor effectively retains substantially all the risks and benefits of
ownership of the leased item, are classified as operating leases. Operating lease payments are
recognized as an expense in the statement of profit and loss on a straight-line basis over the
lease term.

Where the Company is the lessor Assets subject to operating leases are included in property
plant and equipment. Lease income on an operating income is recognized in the statement of
profit and loss on a straight-line basis over the lease term. Costs, including depreciation are
recognized as an expense in the statement of profit and loss. Initial direct costs such as legal
costs, brokerage costs, etc. are recognized immediately in the statement of profit and loss.

(U) Fair value measurement

The company measures financial instrument such as investments at fair value at each
balance sheet date.

Fair value is the price 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 fair
value measurement is based on the presumption that the transaction to sell the asset or
transfer the liability takes place either:

• In the principal market for the asset or liability - or

• In the absence of a principal market, in the most advantageous market for the asset
or liability

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market
participants would use when pricing the asset or liability, assuming that market
participants act in their economic best interest.

The Company uses valuation techniques that are appropriate in the circumstances and for
which sufficient data are available to measure fair value, maximising the use of relevant
observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial
statements are categorised within the fair value hierarchy, described as follows, based on
the lowest level input that is significant to the fair value measurement as a whole:

• 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

Currently company carries those instruments in level 1 inputs of the above mentioned fair
value hierarchy.

For the purpose of fair value disclosures, the Company has determined classes of assets
and liabilities on the basis of the nature, characteristics and risks of the asset or liability
and the level of the fair value hierarchy as explained above.

(V) Financial instruments:

A financial instrument is any contract that gives rise to a financial asset of one entity and
a financial liability or equity instrument of another entity.

i. Financial assets

Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assets
not recorded at fair value through profit and loss, transaction costs that are attributable to
the acquisition of the financial asset.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in three broad
categories:

• Debt instruments assets at amortised cost

• Equity instruments measured at fair value through profit or loss (FVTPL)

When assets are measured at fair value, gains and losses are either recognised entirely in
the statement of profit and loss (i.e. fair value through profit and loss), or recognised in
other comprehensive income (i.e. fair value through other comprehensive income).

Debt instruments at amortised cost

A debt instrument is measured at amortised cost (net of any write down for impairment) if
both the following conditions are met:

• the asset is held to collect the contractual cash flows (rather than to sell the
instrument prior to its contractual maturity to realise its fair value changes), and

• the contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest (“SPPI”) on the principal
amount outstanding.

Such financial assets are subsequently measured at amortised cost using the effective
interest rate (EIR) method. Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that are an integral part of the EIR.
The EIR amortisation is included in finance income in the profit and loss. The losses
arising from impairment are recognised statement of profit and loss. This category
generally applies to trade and other receivables

Financial assets at fair value through OCI (FVTOCI)

A financial asset that meets the following two conditions is measured at fair value
through OCI unless the asset is designated at fair value through profit and loss under fair
value option.

• The financial asset is held both to collect contractual cash flows and to sell.

• The contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount
outstanding.

Instruments included within the FVTOCI category are measured initially as well as at
each reporting date at fair value. Fair value movements are recognized in OCI. However,
the Company recognizes interest income, impairment losses & reversals and foreign
exchange gain or loss in the Profit and Loss. On derecognition of the asset, cumulative
gain or loss previously recognised in OCI is reclassified from the equity to Profit and
Loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest
income using the EIR method.

Financial assets at fair value through profit and loss

FVTPL is a residual category for company’s investment instruments. Any instruments
which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is
classified as at FVTPL.

All investments included within the FVTPL category are measured at fair value with all
changes recognized in the Profit and Loss

In addition, the company may elect to designate an instrument, which otherwise meets
amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only
if doing so reduces or eliminates a measurement or recognition inconsistency (referred to
as ‘accounting mismatch’).

Equity investments

All equity investments in scope of Ind AS 109 are measured at fair value. Equity
instruments which are held for trading are classified as at FVTPL. For all other equity
instruments, the Company may make an irrevocable election to present in other
comprehensive income subsequent changes in the fair value. The Company has not made
any such election. This classification is made on initial recognition and is irrevocable.

If the Company decides to classify an equity instrument as at FVOCI, then all fair value
changes on the instrument, excluding dividends, are recognized in the OCI. There is no
recycling of the amounts from OCI to P&L, even on sale of investment, However, the
Company may transfer the cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with
all changes recognized in the P&L.

Derecognition

When the Company has transferred its rights to receive cash flows from the asset or has
assumed an obligation to pay the received cash flows in full without material delay to a
third party under a ‘pass-through’ arrangement; it evaluates if and to what extent it has
retained the risks and rewards of ownership.

A financial asset (or, where applicable, a part of a financial asset or part of a Company of
similar financial assets) is primarily derecognised when:

• The rights to receive cash flows from the asset have expired, or

• Based on above evaluation, either (a) the Company has transferred substantially
all the risks and rewards of the asset, or (b) the Company has neither transferred
nor retained substantially all the risks and rewards of the asset, but has transferred
control of the asset.

When it has neither transferred nor retained substantially all of the risks and rewards of
the asset, nor transferred control of the asset, the Company continues to recognise the
transferred asset to the extent of the Company’s continuing involvement. In that case, the
Company also recognises an associated liability. The transferred asset and the associated
liability are measured on a bases that reflect the rights and obligations that the Company
has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is
measured at the lower of the original carrying amount of the asset and the maximum
amount of consideration that the Company could be required to repay.

Impairment of financial assets

The Company assesses at each date of balance sheet whether a financial asset or a group
of financial assets is impaired. Ind AS 109 (‘Financial instruments’) requires expected
credit losses to be measured through a loss allowance. The Company recognizes lifetime
expected losses for all contract assets and / or all trade receivables that do not constitute a
financing transaction. For all other financial assets, expected credit losses are measured at
an amount equal to the 12-month expected credit losses or at an amount equal to the life
time expected credit losses if the credit risk on the financial asset has increased
significantly since initial recognition.

ii. Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value
through profit and loss or at amortised cost, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and
borrowings, net of directly attributable transaction costs.

The Company’s financial liabilities include trade payables, lease obligations, and other
payables.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described
below:

Financial liabilities at amortised cost

After initial recognition, interest-bearing loans and borrowings and other payables are
subsequently measured at amortised cost using the EIR method. Gains and losses are
recognised in profit and loss when the liabilities are derecognised as well as through the
EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is
included as finance costs in the statement of profit and loss.

Derecognition

A financial liability is derecognised 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 derecognition
of the original liability and the recognition of a new liability. The difference in the
respective carrying amounts is recognised in the statement of profit and loss.

iii. Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the
balance sheet if there is a currently enforceable legal right to offset the recognised
amounts and there is an intention to settle on a net basis, to realise the assets and settle the
liabilities simultaneously.

iv. Reclassification of financial assets

The Company determines classification of financial assets and liabilities on initial
recognition. After initial recognition, no reclassification is made for financial assets
which are equity instruments and financial liabilities. For financial assets which are debt

instruments, a reclassification is made only if there is a change in the business model for
managing those assets. Changes to the business model are expected to be infrequent. The
Company’s senior management determines change in the business model as a result of
external or internal changes which are significant to the Company’s operations. Such
changes are evident to external parties. A change in the business model occurs when the
Company either begins or ceases to perform an activity that is significant to its
operations. If the Company reclassifies financial assets, it applies the reclassification
prospectively from the reclassification date which is the first day of the immediately next
reporting period following the change in business model. The Company does not restate
any previously recognised gains, losses (including impairment gains or losses) or interest.

(W) Recent accounting pronouncements

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration:
On March 28, 2018, the Ministry of Corporate Affairs (‘the MCA’) notified the
Companies (Indian Accounting Standards) Amendment Rule, 2018 containing Appendix
B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies
the date of the transaction for the purpose of determining the exchange rate to use on
initial recognition of the related asset, expense or income, which an entity has received or
paid advance consideration in foreign currency.

The amendment will come into force from April 1, 2018, The Company has evaluated the
effect of this on the financial statements and the same is not applicable to the Company.

Ind AS 115, Revenue from Contract with Customers: On March 28, 2018, the MCA
notified the Ind AS 115. The core principle of the new standard is that an entity should
recognize revenue to depict the transfer of promised goods or services to customers in an
amount that reflects the consideration to which the entity expects to be entitled in
exchange for those goods or services. Further, the new standard requires enhanced
disclosures about the nature, amount, timing, and uncertainty of revenue and cash flows
arising from the entity’s contracts with customers.

The standard permits two possible methods of transaction:

• Retrospective approach: Under this approach the standard will be applied
retrospectively to each prior reporting period presented in accordance with Ind AS
8, Accounting, Policies, Changes in Accounting Estimates and Errors.

• Retrospectively with cumulative effect of initially applying the standard
recognized at the date of initial application (cumulative catch-up approach)

The effective date for adoption of Ind AS 115 is financial period beginning on or after
April, 1, 2018. The company will adopt the standard on April 1, 2018 by using the
cumulative catch-up transaction method and accordingly, comparatives for the year
ending March 31, 2018 will not be retrospectively adjusted. The effect on adoption of Ind
AS 115 is expected to be very insignificant.

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Mar 31, 2014

1. CONTIGENT LIABILITIES :

Contigent Liabilities in respect of show cause notices received are considered only when they are converted into demands.

a) Claims against company not acknowledged as debt is Nil

2. PROVISION FOR INCOME TAX

Income tax comprises Current Tax and Deferred Tax. Income tax has been provided at the applicable rates prevailing during the year. Deferred tax Assets and liabilities are recognized for future Tax consequences of tanning differences of taxable income or expenses as per books and income tax, subject to the consideration of prudence, deferred tax assets and liabilities are measured using the tax rate enacted or substantially enacted the Balance sheet date.

3. There is no amount due to any enterprise, which is small scale and ancillary undertaking for more than 30 days.

4. Previous years figures are regrouped or rearranged wherever necessary.

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Mar 31, 2013

1. CONTIGENT LIABILITIES :

Contigent Liabilities in respect of show cause notices received are considered only when they are converted into demands.

a) Claims against company not acknowledged as debt is Nil

2. PROVISION FOR INCOME TAX

income tax comprises Current Tax and Deferred Tax, Income tax has been provided at the applicable rates prevailing during the year. Deferred tax Assets and liabilities are recognized for future Tax consequences of tanning differences of taxable income or expenses as per books and income tax, subject to the consideration of prudence, deferred tax assets and liabilities are measured using the tax rate enacted or substantially enacted the Balance sheet date.

3 There is no amount due to any enterprise, which is small scale and ancillary undertaking for more than 30 days.

4. Previous years figures are regrouped or rearranged wherever necessary.

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Mar 31, 2012

1. CONTIGENT LIABILITIES:

Contigent Liabilities in respect of show cause notices received are considered only when they are converted into demands.'

a) Claims against company not acknowledged as debt NIL (NIL)

b) The Company is in appeal against income tax assessments made for A.Y:2006-07 & A.Y: 2007-08.- The demand created in these years is Rs.1,20,752/- & Rs.3,93,676/- respectively.

2. PROVISION FOR INCOME TAX .

Income tax comprises Current Tax, Fringe Benefit Tax and Deferred Tax. Income tax has been provided at the applicable rates prevailing during the year. Deferred tax Assets and liabilities are recognized for future Tax consequences of tanning differences of taxable income or expenses as per books and income tax, subject to the consideration of prudence, deferred tax assets and liabilities are measured using the tax rate enacted or substantially enacted the Balance sheet date.

3. There is no amount due to any enterprise, which is small scale and ancillary undertaking for more than 30 days.

4. Previous years figures are regrouped or rearranged wherever necessary.

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Mar 31, 2011

1. CONTIGENT LIABILITIES :

Contingent Liabilities in respect of show cause notices received are considered only when they are converted into demands.

a) Claims against company not acknowledged as debt NIL (NIL)

b) The Company is in appeal against income tax assessments made for A.Y:2006-07 & A.Y: 2007-08. The demand created in these years is Rs. 1,20,752/- & Rs.3,93,676/- respectively.

c) An income tax demand had been raised for A.Y: 2005-06 which the company won in appeal & the demand created had been deleted. The Income Tax department has preferred a 2nd appeal before the H'ble ITAT (Mum) against part of the addition deleted. The company is contingently liable for any demand that may arise in pursuance to the decision of the ITAT. The demand that can arise, if the order goes against the company, will be Rs.4,54,276/- along with interest accrued thereon.

2. EARNING PER SHARE :-

The basic earning per share is computed by dividing the net profit attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year. As there is no presence of dilutive potential equity shares, the diluted EPS is same as basic EPS.

3. PROVISION FOR INCOME TAX

Income tax comprises Current Tax, Fringe Benefit Tax and Deferred Tax. Income tax has been provided at the applicable rates prevailing during the year. Deferred tax Assets and liabilities are recognized for future Tax consequences of tanning differences of taxable income or expenses as per books and income tax, subject to the consideration of prudence, deferred tax assets and liabilities are measured using the tax rate enacted or substantially enacted the Balance sheet date.

4. RELATED PARTY TRANSACTIONS:

a) List of related parties and relationship: -

Name Relationship.

Key Management 1. Ajit Singh Chawia Wholetime

Director

Personal 2. Kawaljit Singh Chawia Wholetime

Director

Relative of Key Quality Machine Tools One Director is

Management personal Partner in the firm

Firm.

b). Related party Transactions:

Relative of Key Personnel Purchase of Goods Nil Nil

Sale of Goods Nil Nil

Interest received Nil Nil

5. There is no amount due to.any enterprise, which is small scale and ancillary undertaking for more than 30 days.

6. Previous years figures are regrouped or rearranged wherever necessary.

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Mar 31, 2010

1. CONTIGENT LIABILITIES :

Contigent Liabilities in respect of show cause notices received are considered only when they are converted into demands.

a) Claims against company not acknowledged as debt NIL (NIL)

b) The Company is in appeal against income tax assessments made for A.Y:2006-07 & A.Y: 2007-08. The demand created in these years is Rs. 1,20,752/- & Rs.3.93.676/- respectively.

c) An income tax demand had been raised for A.Y: 2005-06 which the company won in appeal & the demand created had been deleted. The Income Tax department has preferred a 2nd appeal before the Hble IT AT (Mum) against part of the addition deleted. The company is contingently liable for any demand that may arise in pursuance to the decision of the ITAT. The demand that can arise, if the order goes against the company, will be Rs.4,54,276/- along with interest accrued thereon.

2. EARNING PER SHARE :-

The basic earning per share is computed by dividing the net profit attributable to equity shareholders for the year by the weighted average lumber of equity shares outstanding during the year. As there is no presence of dilutive potential equity- shares, the diluted EPS is same as basic EPS.

3. Other Information:

Licenced capacity Not Applicable

Installed Capacity Not Applicable

Actual Capacity Not Applicable

4. PROVISION FOR INCOME TAX

Income tax comprises Current Tax, Fringe Benefit Tax and Deferred Tax. Income tax has been provided at the applicable rates prevailing during the year.

Deferred tax Assets and liabilities are recognized for future Tax consequences of tanning differences of taxable income or expenses as per books and income tax, subject to the consideration of prudence, deferred tax assets and liabilities are measured using the tax rate enacted or substantially enacted the Balance sheet date.

5. RELATED PARTY TRANSACTIONS:

a) List of related parties and relationship:-

Key Management Name Relationship

Director Ajit Singh Chawla Wholetime

Director Kawaljit Singh Chawla Wholetime Personal

Relative of Key Quality Machine Tools One Director is Management Partner in the firm personal Firm,.

b) Related party Transcations:

Relative of Key Personnel

Purchase of Nil Nil Goods

Sale of Goods Nil Nil

Interest received Nil Nil

6. There is no amount due to any enterprise, which is small scale and ancillary undertaking for more than 30 days.

7. Previous years figures are regrouped or rearranged wherever necessary.