I. Basis of Preparation :

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) as prescribed by Ministry of Corporate Affairs under Companies (Indian Accounting Standards) Rules, 2015, provisions of the Companies Act, 2013, to the extent notified and pronouncements of the Institute of Chartered Accountants of India.

Disclosures under Ind AS are made only in respect of material items and in respect of the items that will be useful to the users of financial statements in making economic decisions.

The financial statements for the year ended 31st March 2019 (including comparatives) are duly adopted by the Board on 23rd April, 2019 for consideration and approval by shareholders.

Notes:

a. Mr. R. D. Dixit - Chairman & Managing Director, Mr. Nitin Menon - Vice Chairman & Joint Managing Director and Mr. Arun R. Aradhye Whole time Director & CFO are employees of the Company. Mr. M.L.Shinde, Mr. B. S. Ajitkumar , Capt.Sudheer Naphade , Mrs. Nazura Ajaney, Mr. G.T.Vasa, Mrs. Kailash A.Nevagi and Dr. Santosh Prabhu Independent Directors are not paid any remuneration, Only Sitting Fees are paid to them. The salary, perquisites and remuneration paid are disclosed under Report on Corporate Governance point no.4.4 as details of Remuneration and sitting fees paid to Directors.

b. Mr. Arun R. Aradhye was V.P.Corporate & Finance till 30/01/2019. Since 31/01/2019 he has been taken on board as Director.

c. Apart from above mentioned parties, following parties are also related parties of the Company. However, no significant transactions took place with these parties during the year.

1. Menon Piston Ltd

2. Menon Signature Pvt.Ltd.

3. Flyga Auto Pvt.Ltd.

There are no write offs / write backs of any amount for any of the above parties during the year.

II. 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

The extent to which deferred tax assets 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 .10).

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.

i) The Company has s single class of equity shares. All equity shares rank equally with regard to dividend and shares in the Company’s residual assets.

ii) Equity Shareholders List holding more than 5% of equity shares along with the number of equity shares held is given below:

A) Axis Bank:- The Company has availed and utilised FCTL ( Foreign Currency Term Loan) of Rs. 2.83 Crores (Current Outstanding $299754) & of Rs.2.00 Crore (Current Outstanding $266783.28). These loans are repayable in monthly instalments of $7863 & $5698.52 plus interest as and when applied upto 30/06/2022 & 28/02/2023 respectively. The loan is secured by First Charge over entire movable and immovable fixed assets , both curent and future, of the company situated at G-01, MIDC Gokul Shirgaon, Kolhapur. It is also colaterally secured by entire movable and immovable fixed assets, both present and future, of the company situated at G-01, MIDC Gokul Shirgaon, Kolhapur & Plot No C-1, Kagal Five Star MIDc, Hatkanangale. It is also secured by personal guarantee of Mr. Nitin Menon.

B) Bajaj Finance:- The company has availed Term Loan of Rs.15.00 Crore . Out of this the Company has utilised Term Loan of Rs.9.00 Crore only. The repayment of this utilised loan amount is to be done by monthly Instalment of Rs.1899314/- plus interest as and when applied till 05/05/2024. The loan is secured by exclusive charge over immovable and movable fixed assets located at B-2, MIDC, Gokul Shirgaon and Personal Guarantee of Mr. Nitin Menon.

C) HDFC Bank:-The Company has availed Term Loan of Rs.22.00 Crore, Out of this, the Company has utilised the Term Loan of Rs.20.43 Crore.The loan is repayable in monthly instalments of Rs.3430755 plus interest as and when applied till 06/02/2024. The Loan is Secured by Pari Passu charge on Factory land and Building at Plot No C-1, Kagal Five Star MIDC, Hatkanangale and exclusive first charge on Factory Land & Building at G-1, MIDC, Gokul Shirgaon, Kolhapur. Pari Passu charge over entire movable fixed assets of Bearing and Alkop division. Plus Collateral charge on entire current assets of Alkop & Bearing division and Personal guarantee of Mr. Nitin Menon.

Note:

a) The Working Capital facilities from Axis Bank Ltd (Rajarampuri Branch) and HDFC Bank Ltd. Kolhapur are secured by stock of raw materials, semi-finished goods, finished goods and debtors, collateral security of factory land & building situated at G-1, MIDC Gokulshirgaon, Kolhapur- 416 234 and personal guarantee of Mr. Nitin Menon

b) The company has availed Foreign Currency Demand Load (as a sub limit of existing Working Capital Facility) of Rs. 7.00 Crores. The total outstanding of such loan in foreign currency is $422094.26