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Accounting Policies of Pradeep Metals Ltd. Company

Mar 31, 2015

(1.1.1) Basis for preparation of Accounts

The Financial Statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the 1956 Act"), as applicable. The Financial Statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

(1.1.2) System of Accounting

The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis, except income from investments, which is accounted for on receipt basis.

(1.1.3) Use of Estimates

The preparation of Financial Statements is in accordance with Generally Accepted Accounting Principles. As per the Management, the best estimates and assumptions are made, wherever necessary, and reported in the amount of Assets and Liabilities as on the date of Financial Statement as well as in the amount of revenue and expenses during the reporting period. The Management believes that the estimates used in the preparation of the Financial Statements are prudent and reasonable. Actual results could differ from these estimates. Any variance is recognized prospectively in current or future period in which the results are known or materialized.

(1.1.4) Fixed Assets and Depreciation

The Fixed assets are stated at Cost less depreciation. The Company has provided depreciation on Straight Line Method based on the useful life prescribed in Part C of the Schedule II to the Companies Act, 2013 except for Plant and Machinery, for which, on the basis of Internal Technical Assessment made by the Management, the depreciation has been provided considering the useful life of the plant as follows:

Description of Assets: Useful life

Machinery for heavy Production Press Cranes etc. 15 Years

Other Machinery 8 Years

(1.1.5) Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

(1.1.6) Inventories

a. Raw material is valued at cost. The cost is arrived at on First-in-First-out basis.

b. Dies and tools, components, stores and spares are valued at cost.

c. Work-in-process and semi-finished goods are valued at lower of cost or estimated net realizable value.

(1.1.7) Investment

Investments are stated at Cost. Investments made in wholly owned subsidiary in Pradeep Metals Limited, New York/Pradeep Metals Limited, Inc., Texas are valued at the rate prevailing on the transaction date.

(1.1.8) Sales

Sales and Other Operating Income are shown at Net of Excise and VAT. Revenue from sale of

goods is recognized on transfer of significant risks and rewards of ownership to the buyer.

(1.1.9) Foreign Currency Transactions

Transactions in foreign currency are recorded at the rates of exchange in force at the time the transactions are effected. Monetary items denominated in foreign currency are restated using the exchange rates prevailing at the date of the Balance Sheet. The exchange difference between the rate prevailing on the date of transaction and on the date of settlement is recognized as income or expense, as the case may be.

(1.1.10) Provisions, Contingent Liabilities and Contingent Assets

Provisions, to the extent found necessary as per the Management, have been made based on best estimates and are also recognized in respect of present liability in respect of the prior activity. Contingent Assets have not been recognized and hence, not reported.

(1.1.11) Taxes on Income

Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid at the applicable tax rates. Deferred income tax reflects the current period timing difference between taxable income and accounting income for the period and reversal of timing differences of earlier years/period. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future income will be available for set off. (1.1.12 Employee Benefits

Contributions payable to the Government Provident Fund, ESIC and premium paid to Life Insurance Corporation of India under Employees Group Gratuity Scheme, are charged to revenue. The liabilities in respect of Leave Encashment at the year end are charged to revenue based on actuarial value.

(1.1.13) Impairment

At the end of each year, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard (AS-28) which deals with "Impairment of Assets", notified under the Company''s (Accounting Standards) Rules,2006. During the period, no such loss was observed and hence, no provision for impairment loss has been made.

(1.1.14) In respect of Standalone results, the Company has only single primary business segment i.e. closed Die forging and processing thereof. Further, the Company has set up a 2.1 MW Wind Mill for captive use. It has been commissioned in March 2015. It is treated as part of primary segment and no separate disclosure for Wind Mill segment is considered necessary.


Mar 31, 2014

(1.1) Basis for preparation of Accounts

These Financial Statements have been prepared to comply in all material aspects with applicable accounting principles in India, the applicable Accounting Standards notified under Section 211(3C) of the Companies Act, 1956. Pursuant to Circular 15/2013 dated 13 September, 2013 read with Circular 08/2014 dated 4th April, 2014, till the Standards of Accounting or any addendum thereto are prescribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these Financial Statements have been prepared to comply in all material aspects with Accounting Standards notified under section 211(3C) [Companies (Accounting Standards) Rules, 2006, as amended] and other relevant provisions of the Companies Act, 1956. The Financial Statements have been prepared under the historical cost convention. The accounting policies adopted in the preparation of the Financial Statements are consistent with those followed in the previous year.

(1.2) System of Accounting

The Company generally follows the mercantile system of accounting and recognizes income and expenditure on accrual basis, except income from investments, which is accounted for on receipt basis.

(1.3) Use of Estimates

The preparation of Financial Statements is in accordance with Generally Accepted Accounting Principles. As per the Management, the best estimates and assumptions are made, wherever necessary, and reported in the amount of Assets and Liabilities as on the date of Financial Statement as well as in the amount of revenue and expenses during the reporting period. The Management believes that the estimates used in the preparation of the Financial Statements are prudent and reasonable. Actual results could differ from these estimates. Any variance is recognized prospectively in current or future period in which the results are known or materialized.

(1.4) Fixed Assets and Depreciation

Fixed Assets are stated at cost less depreciation. Depreciation on assets has been provided for on straight line method at the rates specified in Schedule XIV of the Companies Act, 1956, on continuous process plant basis.

Depreciation on additions to assets is calculated on pro-rata basis from the day of asset being put to use.

(1.5) Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

(1.6) Inventories

a. Raw material is valued at cost. The cost is arrived at on First-in-First-out basis.

b. Dies and tools, Components, stores and spares are valued at cost.

c. Work-in-process and semi-finished goods are valued at lower of cost or estimated net realizable value.

(1.7) Investment

Investments are stated at Cost.

(1.8) Sales

Sales are inclusive of excise duty. Revenue from sale of goods is recognized on transfer of significant risks and rewards of ownership to the buyer.

(1.9) Foreign Currency Transactions

Transactions in foreign currency are recorded at the rates of exchange in force at the time the transactions are effected. Monetary items denominated in foreign currency are restated using the exchange rates prevailing at the date of the Balance Sheet. The exchange difference between the rate prevailing on the date of transaction and on the date of settlement is recognized as income or expense, as the case may be.

(1.10) Provisions, Contingent Liabilities and Contingent Assets

Provisions, to the extent found necessary as per the Management, have been made based on best estimates and are also recognized in respect of present liability in respect of the prior activity. Contingent Assets have not been recognized and hence, not reported.

(1.11) Taxes on Income

Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid/recovered from the applicable tax rates.

Deferred income tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years/period. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future income will be available except that deferred tax assets arising on account of unabsorbed depreciation and losses are recognized if there is virtual certainty that sufficient future taxable income will be available to realize the same.

(1.12) Employee Benefits

Contributions payable to the Government Provident Fund, ESIC and premium paid to Life Insurance Corporation of India under Employees Group Gratuity Scheme, are charged to revenue. The liabilities in respect of Leave Encashment at the year end are charged to revenue based on actuarial value.

(1.13) Impairment

At the end of each year, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard (AS-28) which deals with "Impairment of Assets", notified under the Company''s (Accounting Standards)Rules,2006.

During the period, no such loss was observed and hence, no provision for impairment loss has been made.

(1.14) The Company manufactures "Forgings" of various types at one location only. Hence, Accounting Standard 17 regarding Segment Reporting notified under the Company''s (Accounting Standards) Rules, 2006, is not applicable to the Company.

(1.15) Preliminary expenses are being amortized in the year in which the same has been incurred.


Mar 31, 2013

(1.1.1) Basis for preparation of Accounts.

a. The accounts have been prepared under the historical cost convention in accordance with the generally accepted accounting principles in India and the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

b. Accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

(1.1.2) System of Accounting

The Company generally follows the mercantile system of accounting and recognizes income and expenditure on accrual basis, except income from investments, which is accounted for on receipt basis.

(1.1.3) Use of Estimates

The preparation of Financial Statements are in accordance with generally accepted accounting principles. As per the Management, the best estimates and assumptions are made, wherever necessary, and reported in the amount of assets and liabilities as on the date of financial statement as well as in the amount of revenue and expenses during the reporting period.

The Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results could differ from these estimates. Any variance is recognized prospectively in current or future period in which the results are known/materialized.

(1.1.4) Fixed Assets and Depreciation

Fixed Assets are stated at cost less depreciation. Depreciation on assets has been provided for on straight line method at the rates specified in Schedule XIV of the Companies Act, 1956, on continuous process plant basis. Depreciation on additions to assets is calculated on pro-rata basis from the day asset was put to use.

(1.1.5) Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

(1.1.6) Inventories

a. Raw material is valued at cost. The cost is arrived at on First-in-First-out basis.

b. Components, stores and spares are valued at cost.

c. Dies and tools are valued at cost, including the cost of design, development and proportionate cost of factory overheads taken at 15% of Raw Material cost of dies.

d. Work-in-process and semi-finished goods are valued at lower of cost or estimated net realizable value.

(1.1.7) Investment

Investments are stated at Cost.

(1.1.8) Sales

Sales are inclusive of excise duty. Revenue from sale of goods is recognised on transfer of significant risks and rewards of ownership to the buyer.

(1.1.9) Foreign Currency transactions

Transactions in foreign currency are recorded at the rates of exchange in force at the time the transactions are effected. Monetary items denominated in foreign currency are restated using

the exchange rates prevailing at the date of the Balance Sheet. The exchange difference between the rate prevailing on the date of transaction and on the date of settlement is recognized as income or expense, as the case may be.

(1.1.10) Provisions, Contingent Liabilities and Contingent Assets

Provisions, to the extent found necessary as per the Management, have been made based on best estimates which includes a provision for a present obligation as a result of past event. Contingent Assets have not been recognized and hence, not reported.

(1.1.11) Employee Benefits

Contributions payable to the Government Provident Fund, ESIC and premium paid to Life Insurance Corporation of India under Employees Group Gratuity Scheme, are charged to revenue. The liabilities in respect of leave encashment at the year end is charged to revenue based on actuarial value.

(1.1.12) Impairment

At the end of each year, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard (AS-28) which deals with "Impairment of Assets", notified under the Company''s (Accounting Standards)Rules, 2006. During the period, no such loss was observed and hence, no provision for impairment loss has been made.

(1.1.13) The Company manufactures "Forgings" of various types at one location only.Hence, Accounting Standard 17 regarding Segment Reporting notified under the Company''s (Accounting Standards) Rules, 2006, is not applicable to the Company.

(1.1.14) Preliminary expenses are being amortized in the year in which the same has been incurred.


Mar 31, 2011

(1) Basis for preparation of Accounts.

a. The accounts have been prepared under the historical cost convention in accordance with the generally accepted accounting principles in India and the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

b. Accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

(2) System of Accounting

The Company generally follows the mercantile system of accounting and recognizes income and expenditure on accrual basis, except income from investments, which is accounted for on receipt basis.

(3) Use of Estimates

The preparation of Financial Statements are in accordance with generally accepted accounting principles. As per the Management, the best estimates and assumptions are made, wherever necessary, and reported in the amount of assets and liabilities as on the date of financial statement as well as in the amount of revenue and expenses during the reporting period. The Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results could differ from these estimates. Any variance is recognized prospectively in current or future period in which the results are known/materialized.

(4) Fixed Assets and Depreciation

Fixed Assets are stated at cost less depreciation. Depreciation on assets has been provided for on straight line method at the rates specified in Schedule XIV of the Companies Act, 1956, on continuous process plant basis.

Depreciation on additions to assets is calculated on pro-rata basis from the day of asset put to use.

(5) Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

(6) Inventories

a. Raw material is valued at cost. The cost is arrived at on First-in-First-out basis.

b. Components, stores and spares are valued at cost.

c. Dies and tools are valued at cost, including the cost of design, development and proportionate cost of factory overheads taken at 10% of Raw Material cost of dies.

d. Work-in-process and semi-finished goods are valued at lower of cost or estimated net realizable value.

(7) Investment

Investments are stated at Cost.

(8) Sales

Sales are inclusive of income from job work, excise duty, export incentives, exchange fluctuations on export receivables and income from Microwave Operations. The revenue from sale of goods are recognised when title to goods is transferred on delivery of goods.

(9) Foreign Currency transactions

Transactions in foreign currency are recorded at the original rates of exchange in force at the time the transactions are effected. Monetary items denominated in foreign currency are restated using the exchange rates prevailing at the date of the Balance Sheet. The exchange difference between the rate prevailing on the date of transaction and on the date of settlement is recognized as income or expense, as the case may be.

(10) Provisions, Contingent Liabilities and Contingent Assets

Provisions, to the extent found necessary as per the Management, have been made based on best estimates and are also recognized in respect of present liability in respect of the prior activity. Contingent Assets have not been recognized and hence, not reported.

(11) Employee Benefits

Contributions payable to the Government Provident Fund, ESIC and premium paid to Life Insurance Corporation of India under Employees Group Gratuity Scheme. are charged to revenue. The liabilities in respect of leave encashment at the year end is charged to revenue based on actuarial value.

(12) Impairment

At the end of each year, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard (AS-28) which deals with "Impairment of Assets", notified under the Companys (Accounting Standards) Rules, 2006. During the year, no such loss was observed and hence, no provision for impairment loss has been made.

(13) The Company manufactures forgings of various types at one location only. Hence, Accounting Standard 17 regarding Segment Reporting notified under the Companys (Accounting Standards) Rules, 2006, is not applicable to the Company.

(14) Preliminary expenses are being amortized over a period of 10 years.


Mar 31, 2010

(1) Basis for preparation of Accounts.

a The accounts have been prepared under the historical cost convention in accordance with the generally accepted accounting principles in India and the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

b Accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

(2) System of Accounting

The Company generally follows the mercantile system of accounting and recognizes income and expenditure on accrual basis, except income from investments, which is accounted for on receipt basis.

(3) Use of Estimates

The preparation of Financial Statements are in accordance with generally accepted accounting principles. As per the Management, the best estimates and assumptions are made wherever necessary and reported in the amount of assets and liabilities as on the date of financial statement as well as in the amount of revenue and expenses during the reporting period. The Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results could differ from these estimates. Any variance is recognized prospectively in current or future period in which the results are known/materialized.

(4) Fixed Assets and Depreciation

Fixed Assets are stated at cost less depreciation. Depreciation on assets acquired on or after 1st January 1988 has been provided for on straight line method at the rates specified in Schedule XIV of the Companies Act, 1956.

Depreciation on the assets acquired prior to 1st January 1988 is provided for at the rates prevailing at the time of their acauisition.

Depreciation on additions to assets is calculated on pro-rata basis from the day of asset put to use.

(5) Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

(6) Inventories

a. Raw material is valued at cost. The cost is arrived at on First-in-First-out basis.

b. Components, stores and spares are valued at cost.

c. Dies and tools are valued at cost, including the cost of design, development and proportionate cost of factory overheads taken at 10% of raw material cost of dies.

d. Work-in-process and semi-finished goods are valued at lower of cost or estimated net realizable value.

(7) Investment

Investments are stated at Cost.

(8) Sales

Sales are inclusive of income from job work, excise duty, export incentives, exchange fluctuations on export receivables and income from Microwave Operations. The revenue from sale of goods are recognised when title to goods is transferred on delivery of goods.

(9) Foreign Currency transactions

Transactions in foreign currency are recorded at the original rates of exchange in force at the time the transactions are effected. Monetary items denominated in foreign currency are restated using the exchange rates prevailing at the date of the Balance Sheet. The exchange difference between the rate prevailing on the date of transaction and on the date of settlement is recognized as income or expense, as the case may be.

(10)Provisions, Contingent Liabilities and Contingent Assets

Provisions, to the extent found necessary as per the Management, have been made based on best estimates and are also recognized in respect of present liability in respect of prior activity. Contingent Assets have not been recognized and hence, not reported.

(11)Employee Benefits

Contributions payable to the Government Provident Fund, ESIC and premium paid to Life Insurance Corporation of India under Employees Group Gratuity Scheme, are charged to revenue.

The liabilities in respect of leave encashment at the year end is charged to revenue based on actuarial value.

(12)lmpairment

At the end of each year, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard (AS-28) which deals with "Impairment of Assets", notified under the Companys (Accounting Standards) Rules, 2006. During the year, no such loss was observed and hence, no provision for impairment loss has been made.

(13)The Company manufactures forgings of various types at one location only. Hence, Accounting Standard 17 regarding Segment Reporting notified under the Companys (Accounting Standards) Rules, 2006, is not applicable to the Company.

(14)Preliminary expenses are being amortized over a period of 10 years.

 
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