Mar 31, 2018
NOTE NO. 1 - Significant Accounting Policies
1.1 Basis of Preparation:
Compliance with Ind as
These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the âInd ASâ) as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (âActâ) read with of the Companies (Indian Accounting Standards) Rules, 2015 as amended and other relevant provisions of the Act.
These financial statements for the year ended 31st March, 2018 are the first financial statements with comparatives, prepared under Ind AS. For all previous periods including the year ended 31st March, 2017, the Company had prepared its financial statements in accordance with the accounting standards notified under companies (Accounting Standard) Rule, 2006 (as amended) and other relevant provisions of the Act (hereinafter referred to as âPrevious GAAPâ) used for its statutory reporting requirement in India.
The accounting policies are applied consistently to all the periods presented in the financial statements, including the preparation of the opening Ind AS Balance Sheet as at 1st April, 2016 being the date of transition to Ind AS.
Historical cost convention
The financial statements have been prepared on a historical cost basis, except for the following:
1) certain financial assets and liabilities that are measured at fair value or amortized cost;
2) defined benefit plans - plan assets are measured at fair value;
Current and non-current classification
All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle (twelve months) and other criteria set out in the Schedule III to the Act.
Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakh as per the requirement of Schedule III, unless otherwise stated.
2. 2 Use of Estimates:
The estimates and judgements used in the preparation of the financial statements are continuously evaluated by the Company and are based on historical experience and various other assumptions and factors (including expectations of future events) that the Company believes to be reasonable under the existing circumstances. Differences between actual results and estimates are recognised in the period in which the results are known/materialised.
The said estimates are based on the facts and events, that existed as at the reporting date, or that occurred after that date but provide additional evidence about conditions existing as at the reporting date.
2. 3 Property, Plant & Equipment:
Property, plant and equipment are stated at cost, net of recoverable taxes, less depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and other cost directly attributable to the acquisition of the items.
Subsequent costs are included in the assetâs carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to the Statement of Profit and Loss during the reporting period in which they are incurred.
Depreciation methods, estimated useful lives and residual value
Depreciation is provided on a Straight Line Method over the estimated useful lives of assets.
The Company depreciates its property, plant and equipment over the useful life in the manner prescribed in Schedule II to the Act, and management believe that useful life of assets are same as those prescribed in Schedule II to the Act.
The residual values are not more than 5% of the original cost of the asset. The assets residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Statement of Profit and Loss.
2. 4 Intangible Assets
Computer software are stated at cost, less accumulated amortisation and impairments, if any.
Amortisation method and useful life
The Company amortizes computer software using the straight-line method over the period of 6 years.
2.5 Inventories:
Items of inventories of Raw Material, Finished goods, Spares and Stores, Packing Material, etc. are valued at lower of cost or net realizable value except waste which is valued at estimated net realizable value. Cost of inventories comprise of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition.
2.6 Financial Instruments (IND AS 109)
i. Recognition and initial measurement
All financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument.
A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit and loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.
ii. Classification and subsequent measurement Financial assets
On initial recognition, a financial asset is classified as measured at
- amortized cost;
- Fair Value through Other Comprehensive Income (FVOCI) -equity investment; or
- Fair Value Through Profit and Loss (FVTPL)
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.
A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:
- the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and
- 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.
On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investmentâs fair value in OCI. (designated as FVOCI - equity investment). This election is made on an invest-ment-by-investment basis.
All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI or at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
Financial liabilities
Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit orloss. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on de-recognition is also recognized in profit or loss.
De-recognition
Financial assets
The company de-recognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset.
If the company enters into transactions whereby it transfers assets recognized on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognized.
Financial liabilities
The company de-recognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The company also de-recognizes a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognized at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognized in profit or loss.
Off-setting
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.
2.7 Revenue recognition
Revenue is measured at the value of the consideration received or receivable. Amounts disclosed as revenue are inclusive of excise duty (upto Juneâ17) and net of returns, trade allowances, rebates, discounts, value added taxes and amounts collected on behalf of third parties.
The Company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the Company and specific criteria have been met for each of the Companyâs activities as described below.
Sale of goods
Sales are recognised when substantial risk and rewards of ownership are transferred to customer, In case of domestic customer, generally sales take place when goods are dispatched or delivery is handed over to transporter. In case of export customers, generally sales take place when goods are shipped onboard based on bill of lading.
Other revenue:
Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable rate of interest.
Revenue in respect of insurance/other claims etc, is recognized only when it is reasonably certain that the ultimate collection will be made.
2.8 Goods and Service Tax / Service Tax input Credit:
Goods and Service tax / Service tax input credit is accounted for in the books in the period in which the underlying service received is accounted and when there is reasonable certainty in availing / utilising the credits.
2. 9 Functional Currency:
The financial statements are presented in Indian rupee (INR), which is Companyâs functional and presentation currency.
2.10 Income tax
Income tax expense represents the sum of tax currently payable and deferred tax. Tax is recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognized directly in equity or in other comprehensive income.
(a) Current Tax
Current tax includes provision for Income Tax computed under Special provision (i.e., Minimum alternate tax) or normal provision of Income Tax Act. Tax on Income for the current period is determined on the basis on estimated taxable income and tax credits computed in accordance with the provisions of the relevant tax laws and based on the expected outcome of assessments/appeals.
(b) Deferred Tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the balance sheet and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.
Deferred tax assets are generally recognised for all deductible temporary differences, unabsorbed losses and unabsorbed depreciation to the extent that it is probable that future taxable profits will be available against which those deductible temporary differences, unabsorbed losses and unabsorbed depreciation can be utilised.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.
(c) Minimum Alternate Tax (MAT):
MAT is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognised, it is credited to the Statement of Profit and Loss and is considered as (MAT Credit Entitlement). The Company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal Income Tax during the specified period. Minimum Alternate Tax (MAT) Credit are in the form of unused tax credits that are carried forward by the Company for a specified period of time, hence, it is presented as Deferred Tax Asset.
2.11 Provisions and contingent liabilities
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.
Provisions are measured at the present value of managementâs best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.
Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence will be confirmed by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made.
2.12 Employee benefits Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employeesâ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled.
Other long-term employee benefit obligations
The liabilities for earned leave and sick leave that are not expected to be settled wholly within 12 months are measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method.
Post-employment obligations
The Company operates the following post-employment schemes:
(a) defined benefit plans such as gratuity; and
(b) defined contribution plans such as provident fund.
Gratuity obligations
The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plan is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the Statement of Profit and Loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.
Gratuity liability of employees is funded with the approved gratuity trusts.
Defined Contribution Plans
Defined Contribution Plans such as Provident Fund, etc., are charged to the Statement of Profit and Loss as incurred.
2.13 Borrowing costs
Interest and other borrowing costs attributable to qualifying assets are capitalised. Other interest and borrowing costs are charged to Statement of Profit and Loss.
2.14 Earnings Per Share
Basic earnings per share
Basic earnings per share is calculated by dividing:
- the profit attributable to owners of the Company
- average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year and excluding treasury shares.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
- the after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and
- the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.
2.15 Impairment of Assets:
An asset is treated as impaired when the carrying cost of asset exceeds its recoverable Value. An impairment loss is charged to the statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in earlier accounting period is reversed if there has been a change in the estimate of recoverable amount.
2.16 Cash Flow Statements
The Cash Flow statement is prepared by the âIndirect methodâ set out in Ind AS-7 on âCash Flow Statement44 and presents the cash flows by operating, investing and financing activities of the Company. Cash and cash Equivalent presented in the cash flow statement consist of cash on hand and demand deposits with banks.
2.17 Events occurring after the balance sheet date (IND AS 10)
Assets and liabilities are adjusted for events occurring after the reporting period that provides additional evidence to assist the estimation of amounts relating to conditions existing at the end of the reporting period.
Dividends declared by the Company after the reporting period are not recognized as liability at the end of the reporting period. Dividends declared after the reporting period but before the issue of financial statements are not recognized as liability since no obligation exists at that time. Such dividends are disclosed in the notes to the financial statements.
Mar 31, 2015
01. Basis of accounting :
The financial statements have been prepared on historical cost
convention in accordance with the generally accepted accounting
principles, the Accounting Standards issued by the Institute of
Chartered Accountants of India to the extent they are applicable to the
Company and the provisions of the Companies Act, 2013.
02. Use of estimates :
The presentation of financial statements in conformity with the
generally accepted accounting principles requires, the management to
make estimates and assumptions that affect the reported amount of
assets and liabilities, disclosure of contingent assets & liabilities
on the date of the financial statements and the reported amount of
revenues and expenses during the reporting period. Difference between
the actual result and estimates are recognised in the period in which
the results are known/materialised.
03. Fixed assets :
Fixed assets are stated at cost net of CENVAT / VAT to the extent
applicable, less accumulated depreciation. Direct costs related to
acquisition of fixed assets are capitalised when the assets are put to
use. These costs include freight, installation cost, duties & taxes and
other allocated expenses, including finance cost relating to specific
borrowing incurred during the construction period. Moulding boxes,
patterns / pattern plates & dies are considered as fixed assets.
04. Depreciation and Amortisation :
Depreciation on fixed assets is provided based on the useful life of
the assets in the manner prescribed in schedule II to the Companies
Act, 2013.
05. Inventories:
Inventories are valued at lower of cost or net realisable value on FIFO
basis.
06. Employees Retirement benefit :
Short term employee benefits (which are payable within 12 months after
the end of the period in which the employees render service) are
measured at cost.
Long term employee benefits (which are payable after the end of 12
months from the end of the period in which the employees render
service) and post employment benefits (benefits which are payable after
completion of employment) are measured on a discounted basis by the
Projected Unit Credit method on the basis of actuarial valuation.
Contribution to provident fund - a defined contribution plan are made
in accordance with the statute.
The cost of providing leave encashment and gratuity defined benefit
plans are determined using Projected Unit Credit method on the basis of
actuarial valuation.
07. Borrowing cost :
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as part of cost of
such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
08. Revenue recognition:
Income and Expenditure are recognized and accounted on Accrual Basis.
Revenue from sale of goods is recognized on delivery of the goods, when
all significant contractual obligations have been satisfied, the
property in the goods is transferred for a price, significant risks and
rewards of ownership are transferred to customers & no effective
ownership is retained However;
[a] Revenue in respect of insurance / other claims etc., is recognised
only when it is reasonably certain that the ultimate collection will be
made.
[b] Interest income is recognized on a time proportion basis taking
into account the amount outstanding and the applicable rate of
interest.
[c] Interest subsidy is accounted for on accrual basis and prima facie
when there is no uncertainty of final claim.
09. Research and development:
Revenue expenditure on research and development is charged to profit
and loss account in the year in which it is incurred. Capital
expenditure on assets acquired for research and development is added to
the fixed assets.
10. Accounting of CENVAT:
CENVAT credit of excise duty is accounted on the basis of materials
including capital goods purchased. CENVAT credit on capital goods,
spares etc is accounted on the basis of their date of purchase. CENVAT
credit of service tax is accounted on the payment basis of services
obtained.
11. Excise duty:
Excise duty payable on finished goods is being accounted for on the
basis of clearance of goods.
12. Earning per share:
The earnings considered in ascertaining the Company's EPS comprises the
net profit after tax (and includes the post tax effect of extra
ordinary items.) The number of shares used in computing basic EPS is
the weighted average number of shares outstanding during the year.
13. Taxation:
Tax expense for the year, comprising current tax and deferred tax is
included in determining the net profit for the year.
A Provision is made for the current tax based on tax liability computed
in accordance with relevant tax rates and tax laws. A provision is made
for deferred tax for all timing differences arising between taxable
income and accounting income at currently enacted tax rates. Deferred
tax assets are recognised only if there is reasonable certainty that
they will be realised and are reviewed for the appropriateness of their
respective carrying values at each balance sheet date.
14. Segment reporting:
The Company deals in only one product segment i.e. "Manufacturing of
castings" and hence requirements of AS-17 " segment reporting " issued
by ICAI are not applicable.
15. Contingent liabilities & Provisions:
A provision is recognised when the Company has a legal & constructive
obligations as results of a past event, for which it is probable that
cash outflow will be required and a reliable estimate can be made of
the amount of the obligation. A contingent liability is disclosed when
the Company has a possible or present obligation where it is not
possible that an outflow of resources will be required to settle it,
contingent assets are neither recognised nor disclosed.
16. Impairment of Assets:
The Company on an annual basis make an assessment of any indicator that
may lead to impairment of assets. If any such indication exists, the
Company estimates recoverable amount of the assets. If such recoverable
amount is less than the carrying amount, than the carrying amount is
reduced to its recoverable amount by treating the difference between
them as impairment loss and is charged to the profit & loss account.
17. Foreign currency transactions:
[a] Initial recognition:
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency of the date of the
transaction.
[b] Conversion:
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
of the date of the transaction; and non-monetary items which are
carried of fair value or other similar valuation denominated in a
foreign currency are reported using the exchange rates that existed
when the values were determined.
[c] Exchange differences:
Exchange difference arising on the settlement of monetary items or on
reporting Company's monetary items of rates different from those of
which they were initially recorded during the year, or reported in
previous financial statements, are recognized as income or as expenses
in the year in which they arise.
[d] Forward Exchange Contracts not intended for trading:
The premium or discount arising of the inception of forward exchange
contracts is amortised as expense or income over the life of the
contract. Exchange differences on such contracts are recognized in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognized as income or as expense for the
year.
Mar 31, 2014
01. Basis of accounting :
The financial statements have been prepared on historical cost
convention in accordance with the generally accepted accounting
principles, the Accounting Standards issued by the Institute of
Chartered Accountants of India to the extent they are applicable to the
Company and the provisions of the Companies Act, 1956.
02. Use of estimates :
The presentation of financial statements in conformity with the
generally accepted accounting principles requires, the management to
make estimates and assumptions that affect the reported amount of
assets and liabilities, disclosure of contingent assets & liabilities
on the date of the financial statements and the reported amount of
revenues and expenses during the reporting period. Difference between
the actual result and estimates are recognised in the period in which
the results are known/materialised.
03. Fixed assets :
Fixed assets are stated at cost net of CENVAT / VAT to the extent
applicable, less accumulated depreciation. Direct costs related to
acquisition of fixed assets are capitalised when the assets are put to
use. These costs include freight, installation cost, duties & taxes and
other allocated expenses, including finance cost relating to specific
borrowing incurred during the construction period. Moulding boxes,
patterns / pattern plates & dies are considered as fixed assets.
04. Depreciation :
Depreciation on all the fixed assets installed and/or acquired up to
31st December, 1986 is provided on straight line method in accordance
with section-205 (2)(b) of the Companies Act, 1956, read with circular
No.1/86 CL.VNo.15 (50)-84 CL.VI dated 21/05/86 issued by the department
of Company affairs.
Depreciation on all the fixed assets, installed and/or acquired, after
31st December, 1986 but up to 15th December, 1993 are provided on
straight line method, at the rates prescribed in the schedule-XIV to
the Companies (amendment) Act, 1988, and those installed and / or
acquired after 15th December, 1993 are provided on straight line method
at revised rates amended by notification No. 756 E Dated 16th December,
1993 to the schedule-XIV of the Companies Act, 1956. Depreciation is
charged on a pro-rata basis for assets put to usesold during the year.
Individual assets costing less than Rs. 5000/- are depreciated in full
in the year in which it is acquired. The management has estimated
useful lives of following items of fixed assets and rates of
depreciation are arrived at accordingly as follows which are more than
prescribed rates.
Category of assets Rate of depreciation
Moulding boxes, patterns/pattern plates & dies 15 %
05. Inventories: (Valued at lower of cost or net realisable value)
[a] Stores & spares : Valued on FIFO method
[b] Raw materials : Valued on FIFO method
[c] Work in process : Valued on FIFO method
[d] Finished goods : Valued on FIFO method
[e] Stock in transit : Valued on FIFO method
[f] Trading goods : Valued on FIFO method
[g] Sales returns & Runners / Risers : Valued on FIFO method
06. Employees Retirement benefit :
Short term employee benefits (which are payable within 12 months after
the end of the period in which the employees render service) are
measured at cost.
Long term employee benefits (which are payable after the end of 12
months from the end of the period in which the employees render
service) and post employment benefits (benefits which are payable after
completion of employment) are measured on a discounted basis by the
Projected Unit Credit method on the basis of actuarial valuation.
Contribution to provident fund - a defined contribution plan are made
in accordance with the statute.
The cost of providing leave encashment and gratuity defined benefit
plans are determined using Projected Unit Credit method on the basis of
actuarial valuation.
07. Borrowing cost :
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as part of cost of
such assets.
A qualifying asset is one that necessarily takes substantial period of
time to get ready for intended use. All other borrowing costs are
charged to revenue.
08. Revenue recognition:
Income and Expenditure are recognized and accounted on Accrual Basis.
Revenue from sale of goods is recognized on delivery of the goods, when
all significant contractual obligations have been satisfied, the
property in the goods is transferred for a price, significant risks and
rewards of ownership are transferred to customers & no effective
ownership is retained However;
[a] Revenue in respect of insurance / other claims etc., is recognised
only when it is reasonably certain that the ultimate collection will be
made.
[b] Interest income is recognized on a time proportion basis taking
into account the amount outstanding and the applicable rate of
interest.
[c] Interest subsidy is accounted for on accrual basis and prima facie
when there is no uncertainty of final claim.
09. Research and development:
Revenue expenditure on research and development is charged to profit
and loss account in the year in which it is incurred. Capital
expenditure on assets acquired for research and development is added to
the fixed assets.
10. Accounting of CENVAT:
CENVAT credit of excise duty is accounted on the basis of materials
including capital goods purchased. CENVAT credit on capital goods,
spares etc is accounted on the basis of their date of purchase. CENVAT
credit of service tax is accounted on the payment basis of services
obtained.
11 . Excise duty:
Excise duty payable on finished goods is being accounted for on basis
of clearance of goods.
12. Earning per share:
The earnings considered in ascertaining the Company''s EPS comprises the
net profit after tax (and includes the post tax effect of extra
ordinary items.) The number of shares used in computing basic EPS is
the weighted average number of shares outstanding during the year.
13. Taxation:
Tax expense for the year, comprising current tax and deferred tax is
included in determining the net profit for the year.
A Provision is made for the current tax based on tax liability computed
in accordance with relevant tax rates and tax laws. A provision is made
for deferred tax for all timing differences arising between taxable
income and accounting income at currently enacted tax rates. Deferred
tax assets are recognised only if there is reasonable certainty that
they will be realised and are reviewed for the appropriateness of their
respective carrying values at each balance sheet date.
14. Segment reporting:
The Company deals in only one product segment i.e. "Manufacturing of
castings" and hence requirements of AS-17 " segment reporting " issued
by ICAI are not applicable.
15. Contingent liabilities & Provisions:
A provision is recognised when the Company has a legal & constructive
obligations as results of a past event, for which it is probable that
cash outflow will be required and a reliable estimate can be made of
the amount of the obligation. A contingent liability is disclosed when
the Company has a possible or present obligation where it is not
possible that an outflow of resources will be required to settle it,
contingent assets are neither recognised nor disclosed.
16. Impairment of Assets:
The Company on an annual basis make an assessment of any indicator that
may lead to impairment of assets. If any such indication exists, the
Company estimates recoverable amount of the assets. If such recoverable
amount is less than the carrying amount, than the carrying amount is
reduced to its recoverable amount by treating the difference between
them as impairment loss and is charged to the profit & loss account.
17. Foreign currency transactions:
[a] Initial recognition:
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency of the date of the
transaction.
[b] Conversion:
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
of the date of the transaction; and non-monetary items which are
carried of fair value or other similar valuation denominated in a
foreign currency are reported using the exchange rates that existed
when the values were determined.
[c] Exchange differences:
Exchange difference arising on the settlement of monetary items or on
reporting Company''s monetary items of rates different from those of
which they were initially recorded during the year, or reported in
previous financial statements, are recognized as income or as expenses
in the year in which they arise.
[d] Forward Exchange Contracts not intended for trading:
The premium or discount arising of the inception of forward exchange
contracts is amortised as expense or income over the life of the
contract. Exchange differences on such contracts are recognized in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognized as income or as expense for the
year.
Mar 31, 2013
01. Basis of accounting :
The financial statements have been prepared on historical cost
convention in accordance with the generally accepted accounting
principles, the Accounting Standards issued by the Institute of
Chartered Accountants of India to the extent they are applicable to the
Company and the provisions of the Companies Act, 1956.
02. Use of estimates :
The presentation of financial statements in conformity with the
generally accepted accounting principles requires, the management to
make estimates and assumptions that affect the reported amount of
assets and liabilities, disclosure of contingent assets & liabilities
on the date of the financial statements and the reported amount of
revenues and expenses during the reporting period. Difference between
the actual result and estimates are recognised in the period in which
the results are known/materialised.
03. Fixed assets :
Fixed assets are stated at cost net of CENVAT / VAT to the extent
applicable, less accumulated depreciation. Direct costs related to
acquisition of fixed assets are capitalised when the assets are put to
use. These costs include freight, installation cost, duties & taxes and
other allocated expenses, including finance cost relating to specific
borrowing incurred during the construction period. Moulding boxes,
patterns / pattern plates & dies are considered as fixed assets.
04. Depreciation :
Depreciation on all the fixed assets installed and/or acquired up to
31st December, 1986 is provided on straight line method in accordance
with section-205 (2)(b) of the Companies Act, 1956, read with circular
No. 1/86 CL.V.No.15 (50)-84 CL.VI dated 21/05/86 issued by the
department of Company affairs.
Depreciation on all the fixed assets, installed and/or acquired, after
31st December, 1986 but up to 15th December, 1993 are provided on
straight line method, at the rates prescribed in the schedule-XIV to
the Companies (amendment) Act, 1988, and those installed and / or
acquired after 15th December, 1993 are provided on straight line method
at revised rates amended by notification No. 756 E Dated 16th December,
1993 to the schedule-XIV of the Companies Act, 1956. Depreciation is
charged on a pro-rata basis for assets put to usesold during the year.
Individual assets costing less than Rs. 5000/- are depreciated in full
in the year in which it is acquired. The management has estimated
useful lives of following items of fixed assets and rates of
depreciation are arrived at accordingly as follows which are more than
prescribed rates.
Category of assets Rate of depreciation
Moulding boxes, patterns/pattern plates & dies 15 %
05. Inventories: (Valued at lower of cost or net realisable value)
[a] Stores & spares : Valued on FIFO method
[b] Raw materials : Valued on FIFO method
[c] Work in process : Valued on FIFO method
[d] Finished goods : Valued on FIFO method
[e] Stock in transit : Valued on FIFO method
[f] Trading goods : Valued on FIFO method
[g] Sales returns & Runners / Risers : Valued on FIFO method
06. Employees Retirement benefit :
Short term employee benefits (which are payable within 12 months after
the end of the period in which the employees render service) are
measured at cost.
Long term employee benefits (which are payable after the end of 12
months from the end of the period in which the employees render
service) and post employment benefits (benefits which are payable after
completion of employment) are measured on a discounted basis by the
Projected Unit Credit method on the basis of actuarial valuation.
Contribution to provident fund - a defined contribution plan are made
in accordance with the statute.
The cost of providing leave encashment and gratuity defined benefit
plans are determined using Projected Unit Credit method on the basis of
actuarial valuation.
07. Borrowing cost : ''
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as part of cost of
such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
08. Revenue recognition:
Income and Expenditure are recognized and accounted on Accrual Basis.
Revenue from sale of goods is recognized on delivery of the goods, when
all significant contractual obligations have been satisfied, the
property in the goods is transferred for a price, significant risks and
rewards of ownership are transferred to customers & no effective
ownership is retained However;
[a ] Revenue in respect of insurance / other claims etc., is recognised
only when it is reasonably certain that the ultimate collection will be
made.
[b] Interest income is recognized on a time proportion basis taking
into account the amount outstanding and the applicable rate of
interest.
[c] Interest subsidy is accounted for on accrual basis and prima facie
when there is no uncertainty of final claim.
09. Research and development:
Revenue expenditure on research and development is charged to profit
and loss account in the year in which it is incurred. Capital
expenditure on assets acquired for research and development is added to
the fixed assets.
10. Accounting of CENVAT:
CENVAT credit of excise duty is accounted on the basis of materials
including capital goods purchased. CENVAT credit on capital goods,
spares etc is accounted on the basis of their date of purchase. CENVAT
credit of service tax is accounted on the payment basis of services
obtained.
11. Excise duty:
Excise duty payable on finished goods is being accounted for on basis
of clearance of goods.
12. Earning per share:
The earnings considered in ascertaining the Company''s EPS comprises the
net profit after tax (and includes the post tax effect of extra
ordinary items.) The number of shares used in computing basic EPS is
the weighted average number of shares outstanding during the year.
13. Taxation:
Tax expense for the year, comprising current tax and deferred tax is
included in determining the net profit for the year.
A Provision is made for the current tax based on tax liability computed
in accordance with relevant tax rates and tax laws. A provision is made
for deferred tax for all timing differences arising between taxable
income and accounting income at currently enacted tax rates.
Deferred tax assets are recognised only if there is reasonable
certainty that they will be realised and are reviewed for the
appropriateness of their respective carrying values at each balance
sheet date.
14. Segment reporting:
The Company deals in only one product segment i.e. "Manufacturing of
castings" and hence requirements of AS-17 " segment reporting " issued
by ICAI are not applicable.
15. Contingent liabilities & Provisions:
A provision is recognised when the Company has a legal & constructive
obligations as results of a past event, for which it is probable that
cash outflow will be required and a reliable estimate can be made of
the amount of the obligation. A contingent liability is disclosed when
the Company has a possible or present obligation where it is not
possible that an outflow of resources will be required to settle it,
contingent assets are neither recognised nor disclosed.
16. Impairment of Assets:
The Company on an annual basis make an assessment of any indicator that
may lead to impairment of assets. If any such indication exists, the
Company estimates recoverable amount of the assets. If such recoverable
amount is less than the carrying amount, than the carrying amount is
reduced to its recoverable amount by treating the difference between
them as impairment loss and is charged to the profit & loss account.
17. Foreign currency transactions:
[a] Initial recognition:
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency of the date of the
transaction.
[b] Conversion:
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
of the date of the transaction; and non-monetary items which are
carried of fair value or other similar valuation denominated in a
foreign currency are reported using the exchange rates that existed
when the values were determined.
[c] Exchange differences:
Exchange difference arising on the settlement of monetary items or on
reporting Company''s monetary items of rates different from those of
which they were initially recorded during the year, or reported in
previous financial statements, are recognized as income or as expenses
in the year in which they arise.
[d] Forward Exchange Contracts not intended for trading:
The premium or discount arising of the inception of forward exchange
contracts is amortised as expense or income over the life of the
contract. Exchange differences on such contracts are recognized in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognized as income or as expense for the
year.
Mar 31, 2012
01. Basis of accounting :
The financial statements have been prepared on historical cost
convention in accordance with the generally accepted accounting
principles, the Accounting Standards issued by the Institute of
Chartered Accountants of India to the extent they are applicable to the
Company and the provisions of the Companies Act, 1956.
02. Use of estimates :
The presentation of financial statements in conformity with the
generally accepted accounting principles requires, the management to
make estimates and assumptions that affect the reported amount of
assets and liabilities, disclosure of contingent assets & liabilities
on the date of the financial statements and the reported amount of
revenues and expenses during the reporting period. Difference between
the actual result and estimates are recognised in the period in which
the results are known/materialised.
03. Fixed assets :
Fixed assets are stated at cost net of CENVAT / VAT to the extent
applicable, less accumulated depreciation. Direct costs related to
acquisition of fixed assets are capitalised when the assets are put to
use. These costs include freight, installation cost, duties & taxes and
other allocated expenses, including finance cost relating to specific
borrowing incurred during the construction period. Moulding boxes,
patterns / pattern plates & dies are considered as fixed assets.
04. Depreciation :
Depreciation on all the fixed assets installed and/or acquired up to
31st December, 1986 is provided on straight line method in accordance
with section-205 (2)(b) of the Companies Act, 1956, read with circular
No.1/86 CL.VNo.15 (50)-84 CL.VI dated 21/05/86 issued by the department
of Company affairs.
Depreciation on all the fixed assets, installed and/or acquired, after
31st December, 1986 but up to 15th December, 1993 are provided on
straight line method, at the rates prescribed in the schedule-XIV to
the Companies (amendment) Act, 1988, and those installed and / or
acquired after 15th December, 1993 are provided on straight line method
at revised rates amended by notification No. 756 E Dated 16th December,
1993 to the schedule-XIV of the Companies Act, 1956. Depreciation is
charged on a pro-rata basis for assets put to usesold during the year.
Individual assets costing less than Rs. 5000/- are depreciated in full
in the year in which it is acquired. The management has estimated
useful lives of following items of fixed assets and rates of
depreciation are arrived at accordingly as follows which are more than
prescribed rates.
Category of assets Rate of depreciation
Moulding boxes, patterns/pattern plates & dies 15 %
05. Inventories :
[a] Stores & spares : At cost [on FIFO method]
[b] Raw materials : At cost or net realisable value, whichever is lower
[on FIFO method]
[c] Work in process : At cost or net realisable value, whichever is
lower [on FIFO method]
[d] Finished goods : At cost or net realisable value, whichever is
lower [on FIFO method]
[e] Stock in Transit : At cost
[f] Trading Goods : At cost
[g] Sales returns & : At estimated cost Runners / Risers
06. Employees Retirement benefit :
Short term employee benefits (which are payable within 12 months after
the end of the period in which the employees render service) are
measured at cost.
Long term employee benefits (which are payable after the end of 12
months from the end of the period in which the employees render
service) and post employment benefits (benefits which are payable after
completion of employment) are measured on a discounted basis by the
Projected Unit Credit method on the basis of actuarial valuation.
Contribution to provident fund - a defined contribution plan are made
in accordance with the statute.
The cost of providing leave encashment and gratuity defined benefit
plans are determined using Projected Unit Credit method on the basis of
actuarial valuation.
07. Borrowing cost :
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as part of cost of
such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
08. Revenue recognition:
Income and Expenditure are recognized and accounted on Accrual Basis.
Revenue from sale of goods is recognized on delivery of the goods, when
all significant contractual obligations have been satisfied, the
property in the goods is transferred for a price, significant risks and
rewards of ownership are transferred to customers & no effective
ownership is retained However;
[a] Revenue in respect of insurance / other claims etc., is recognised
only when it is reasonably certain that the ultimate collection will be
made.
[b] Interest income is recognized on a time proportion basis taking
into account the amount outstanding and the applicable rate of
interest.
[c] Interest subsidy is accounted for on accrual basis and prima facie
when there is no uncertainty of final claim.
09. Research and development:
Revenue expenditure on research and development is charged to profit
and loss account in the year in which it is incurred. Capital
expenditure on assets acquired for research and development is added to
the fixed assets.
10 . Accounting of CENVAT:
CENVAT credit of excise duty is accounted on the basis of materials
including capital goods purchased. CENVAT credit on capital goods,
spares etc is accounted on the basis of their date of purchase. CENVAT
credit of service tax is accounted on the payment basis of services
obtained.
11. Excise duty:
Excise duty payable on finished goods is being accounted for on basis
of clearance of goods.
12. Earning per share:
The earnings considered in ascertaining the Company's EPS comprises
the net profit after tax (and includes the post tax effect of extra
ordinary items.) The number of shares used in computing basic EPS is
the weighted average number of shares outstanding during the year.
13 . Taxation:
Tax expense for the year, comprising current tax and deferred tax is
included in determining the net profit for the year.
A Provision is made for the current tax based on tax liability computed
in accordance with relevant tax rates and tax laws. A provision is made
for deferred tax for all timing differences arising between taxable
income and accounting income at currently enacted tax rates. Deferred
tax assets are recognised only if there is reasonable certainty that
they will be realised and are reviewed for the appropriateness of their
respective carrying values at each balance sheet date.
14. Segment reporting:
The Company deals in only one product segment i.e. "Manufacturing of
castings" and hence requirements of AS-17 " segment reporting "
issued by ICAI are not applicable.
15. Contingent liabilities & Provisions:
A provision is recognised when the Company has a legal & constructive
obligations as results of a past event, for which it is probable that
cash outflow will be required and a reliable estimate can be made of
the amount of the obligation. A contingent liability is disclosed when
the Company has a possible or present obligation where it is not
possible that an outflow of resources will be required to settle it,
contingent assets are neither recognised nor disclosed.
16. Impairment of Assets:
The Company on an annual basis make an assessment of any indicator that
may lead to impairment of assets. If any such indication exists, the
Company estimates recoverable amount of the assets. If such recoverable
amount is less than the carrying amount, than the carrying amount is
reduced to its recoverable amount by treating the difference between
them as impairment loss and is charged to the profit & loss account.
17. Foreign currency transactions:
[a] Initial recognition:
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency of the date of the
transaction.
[b] Conversion:
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
of the date of the transaction; and non-monetary items which are
carried of fair value or other similar valuation denominated in a
foreign currency are reported using the exchange rates that existed
when the values were determined.
[c] Exchange differences:
Exchange difference arising on the settlement of monetary items or on
reporting Company's monetary items of rates different from those of
which they were initially recorded during the year, or reported in
previous financial statements, are recognized as income or as expenses
in the year in which they arise.
[d] Forward Exchange Contracts not intended for trading:
The premium or discount arising of the inception of forward exchange
contracts is amortised as expense or income over the life of the
contract. Exchange differences on such contracts are recognized in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognized as income or as expense for the
year.
18. Preliminary Expenditure :
Rights issue expenses are written off over a period of five years.