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Accounting Policies of Pradeep Metals Ltd. Company

Mar 31, 2017

1.1. Corporate information

Pradeep Metals Limited (“the Company”) is a public company domiciled in India. Its shares are listed on BSE Limited in India. The Company is engaged in the manufacturing and selling of forged components. The Company caters to both domestic and international markets. The Company''s CIN is L99999MH1982PLC026191.

1.2. Basis of preparation of financial statements

The financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (“GAAP”) under the historical cost convention on accrual basis. GAAP comprises mandatory Accounting Standards as specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 as amended from time to time and the Companies Act, 2013 and guidelines issued by the Securities and Exchange Board of India.

The accounting policies followed in the preparation of the standalone financial statements are consistent with those followed in the preparation of the standalone financial statements for the year ended 31st March 2016 except for changes to comply with the amendments in accounting standards as per the Companies (Accounting Standards) Amendment Rules, 2016. Refer note no.41 in respect of change in accounting of Dies.

1.3. Presentation and disclosure of financial statement

All assets and liabilities have been classified as current & non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule III of the Companies Act, 2013.

Based on the nature of products / services and time between acquisition of assets for processing / rendering of services and their realization in cash and cash equivalents, operating cycle is less than 12 months. However for the purpose of current / non-current classification of assets & liabilities, period of 12 months has been considered as normal operating cycle.

1.4. Use of estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the application of accounting policies, reported balances of assets and liabilities, disclosure of contingent liabilities as on the date of financial statements and reported amounts of income and expenses during the period. Management believes that the estimates and assumptions used in the preparation of financial statements are prudent and reasonable. Actual results could differ from those estimates. Any difference between the actual results and estimates are recognized in the period in which the results are known / materialize. Any revision to accounting estimates is recognized prospectively in the current and future periods.

1.5. Property, Plant and Equipment

1.5.1. Property, plant and equipment are stated at cost of acquisition / construction less accumulated depreciation and where applicable accumulated impairment losses. Gross carrying amount of all property, plant and equipment are measured using cost model.

1.5.2. Cost of fixed assets includes non-refundable taxes and duties, borrowing cost directly attributable to the qualifying asset (as per Accounting Standard 16 - Borrowing Costs) and any directly attributable costs of bringing the asset to its working condition for its intended use and initial estimate of decommissioning, restoring and similar liabilities. Any trade discounts and rebates are deducted in arriving at the purchase price. Such cost includes the cost of replacing part of the plant and equipment. Likewise, when a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in profit or loss as incurred.

1.5.3. Parts (major components) of an item of property, plant and equipments having different useful lives are accounted as separate items of property, plant and equipments.

1.5.4. Capital work-in-progress comprises of cost incurred on property, plant and equipment under construction / acquisition that are not yet ready for their intended use at the balance sheet date.

1.5.5. Property, plant and equipment are eliminated from financial statement either on disposal or when retired from active use. Assets held for disposal are stated at net realizable value. Losses arising in case of retirement of property, plant and equipment and gains or losses arising from disposal of property, plant and equipment are recognized in the statement of profit and loss in the year of occurrence.

1.5.6. Items of stores and spares (dies) that meet the definition of plant, property and equipment are capitalized at cost and depreciated over their useful life.

1.6. Intangible assets

1.6.1. Intangible assets are recognized only if it is probable that the future economic benefits attributable to asset will flow to the Company and the cost of asset can be measured reliably. Intangible assets are stated at cost of acquisition/ development less accumulated amortization and accumulated impairment loss, if any.

1.6.2. Cost of an intangible asset includes purchase price including non - refundable taxes and duties, borrowing cost directly attributable to the qualifying asset and any directly attributable expenditure on making the asset ready for its intended use.

1.6.3. Intangible assets under development comprises of cost incurred on intangible assets under development that are not yet ready for their intended use as at the Balance Sheet date.

1.6.4. Amortization methods and useful lives are reviewed at each financial year end and adjusted prospectively.

1.6.5. In case of assets purchased during the year, amortization on such assets is calculated on prorata basis from the date of such addition.

1.7. Depreciation / amortization

1.7.1. Depreciation on fixed assets (other than freehold land, leasehold land and capital work in progress) is provided using straight line basis over their useful lives which are in consonance of useful life mentioned in Schedule II of the Companies Act, 2013 except for the items prescribed in 1.7.2 where the useful life is lower than as mentioned in Schedule II based on internal technical assessment made by the management of the Company.

1.7.2. The assets which have useful life different than as prescribed under Part C of Schedule II of the Companies Act, 2013 are as follows:

1.7.4. In case of assets purchased, sold or discarded during the period, depreciation on such assets is calculated on pro-rata basis from the date of such addition or as the case may be, upto the date on which such asset has been sold or discarded.

1.7.5. Depreciation methods, useful lives and residual values are reviewed at each financial year end and adjusted prospectively.

1.7.6. Leasehold lands are amortized over the period of lease or useful life whichever is lower. Buildings constructed on leasehold land are depreciated over its useful life which matches with the useful life mentioned in Schedule II.

1.7.7. Intangible assets are amortized over their estimated useful lives on straight-line method.

1.8. Research & Development

Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. Development costs of products are also charged to the Statement of Profit and Loss unless a product''s technical feasibility and other criteria as set out in paragraph 44 of AS 26 - ‘Intangible Assets'' have been established, in which case such expenditure is capitalized. The amount capitalized comprises expenditure that can be directly attributed or allocated on a reasonable and consistent basis to creating, producing and making the asset ready for its intended use. Fixed assets utilized for research and development are capitalized and depreciated in accordance with the policies stated for Tangible assets.

1.9. Impairment of assets

The carrying amounts of assets are reviewed at each balance sheet date for any indication of impairment based on internal / external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset''s net selling price and value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.

Based on the assessment done at each balance sheet date, recognized impairment loss is further provided depending on changes in circumstances. After recognition of impairment loss, the depreciation / amortization charge for the property, plant and equipment / intangible is adjusted in future periods to allocate the asset''s revised carrying amount, less its residual value (if any), on a systematic basis over its remaining useful life. If the conditions leading to recognition of impairment losses no longer exist or have decreased, impairment losses recognized are reversed to the extent it does not exceed the carrying amount that would have been determined after considering depreciation/ amortization had no impairment loss been recognized in earlier years.

1.10. Inventories

1.10.1. Raw materials and components, packing materials, consumables, stores and spares are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.

The Cost comprises of costs of purchase, duties and taxes (other than those subsequently recoverable) and other costs incurred in bringing them to their present location and condition. Cost for raw material is determined on specific identification basis and other materials & consumables on weighted average method.

1.10.2. Work-in-progress & finished goods is valued at lower of cost and net realizable value. Cost includes direct materials valued on weighted average basis and costs of conversion which include costs directly related to the units of production and systematic allocation of fixed and variable production overheads. Net realizable value is the estimated selling price in the ordinary course of business less estimated costs of completion and estimated costs necessary to make the sale. The cost of finished goods also includes excise duty wherever applicable.

1.10.3. Scrap is valued at net realizable value.

1.11. Investments

Investments are classified into current and long-term investments.

Investments that are readily realizable and intended to be held for not more than a year from the date on which such investments are made are classified as current investments. All other investments are classified as long-term investments.

Current investments are carried at lower of cost and fair value / net asset value determined on category wise for related investments. Long term investments are carried at cost. Provision for diminution in value of long term investments is made to recognize a decline, other than temporary, on an individual investment basis.

The cost of investments comprises of purchase price and directly attributable acquisition charges such as brokerage, fees and duties. Investment transactions are accounted for on a trade date basis. In determining the holding cost of investments and the gain or loss on sale of investments, the ‘weighted average cost'' method is followed.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Statement of Profit and Loss.

1.12. Government grant

Government grants available to the Company are considered for inclusion in accounts:

- Where there is reasonable assurance that the Company will comply with the conditions attached to them; and

- Where such benefits have been earned by the Company and it is reasonably certain that the ultimate collection will be made.

The grant received by the company is accounted as deferred income in accordance with Accounting Standard 12 - Government Grants.

1.13. Revenue recognition

Revenue is recognized to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

- Domestic sales of goods are recognized when significant risks and rewards of ownership of the goods have been passed to the buyer which generally coincides with dispatch of goods and are recorded inclusive of excise duty and net of sales tax, rebates and trade discounts and sales returns.

- Exports sales of goods are recognized when significant risks and rewards of ownership of the goods have been passed to the buyer, usually on the basis of dates of shipping bill / bill of lading as per the applicable terms.

- Revenue from job work and tooling charges (die design and preparation charges for customers) are recognized as per the terms of the contract and as and when services are rendered.

- Revenue from sales of electricity is recognized when significant risks and rewards of ownership of the goods have been passed to the buyer, usually on transmission of electricity based on the data provided by the electricity department.

- Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.

- Dividend income on investment is accounted for in the year in which the right to receive the payment is established.

- Income from guarantee commission is recognized as a percentage of guarantee given on annual basis.

- Export incentives / benefits

Export incentives / benefits are recognized as income in Statement of Profit and Loss on export of goods based on fulfilling specified criteria''s and also reasonable certainty of utilizing the benefit by import of goods / sale of license in open market.

1.14. Foreign currency transactions

Transactions denominated in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction.

As at balance sheet date, foreign currency monetary items are translated at closing exchange rate. Foreign currency non-monetary items are carried at historical cost using exchange rate on the date of transaction. Exchange difference arising on settlement or translation of foreign currency monetary items are recognized as income or expense in the year in which they arise except to the extent exchange differences are regarded as an adjustment to interest cost and treated in accordance with Accounting Standard 16-Borrowing Cost.

The premium or discount arising at the inception of forward exchange contracts, which are not intended for trading or speculation purposes are amortized as income or expense over the life of the contract. Outstanding forward exchange contracts as at the reporting date are translated at closing rate and any exchange difference arising on such contracts are recognized in the Consolidated Statement of Profit and Loss in the year in which exchange rate changes. Any profit or loss on cancellation or renewal of forward exchange contracts are recognized as income or expense of the year.

1.15. Employee benefits

1.15.1. Short term employee benefits

All employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee benefits and they are recognized as an expense at undiscounted amount in the Statement of Profit and Loss in the period in which the employee renders the related service.

1.15.2. Post-employment benefits

- Defined Contribution Plan

The Company''s defined contribution plan comprises of Provident Fund, Employee State Insurance Scheme and Employee Pension Scheme. The defined contribution plan is postemployment benefit plan under which the Company contributes fixed contribution amount to a government administered fund and will have no obligation to pay further contribution. The fixed contribution under the schemes is recognized in Statement of Profit and Loss during the period in the period in which employee renders the related service.

- Defined Benefit Plan and other long-term benefits

- The Company has defined benefit plans comprising of gratuity and other long term benefits include leave benefits. For gratuity, the Company has a Group Gratuity-cum-Life Insurance Scheme with Life Insurance Corporation of India (LIC), for future payment of gratuity to employees at retirement, death while in employment or on termination. Leave benefits are non-funded. The present value of the defined benefit obligations and other long term benefits is determined based on actuarial valuation using the projected unit credit method. The rate used to discount defined benefit obligation is determined by reference to market yields at the Balance Sheet date on Indian Government Bonds for the estimated term of obligations. The expected return on plan assets is the Company''s expectation of average long term rate of return on the investment of the fund over the entire life of the related obligation. The rate used to discount defined benefit obligation is determined by reference to market yields at the Balance Sheet date on Indian Government Bonds for the estimated term of obligations.

- Actuarial gains or losses arising on account of experience adjustment and the effect of changes in actuarial assumptions are recognized immediately in the Statement of Profit and Loss as income or expense.

1.16. Borrowing cost

Borrowing costs that are directly attributable to the acquisition, construction or development of a qualifying asset are capitalized as part of the cost of the respective asset till such time the asset is ready for its intended use. A qualifying asset is an asset which necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest, exchange difference arising from foreign currency borrowings to the extent they are treated as an adjustment to the borrowing cost and other costs that an entity incurs in connection with the borrowing of funds.

1.17. Operating lease

Lease arrangements where risks and rewards incidental to ownership of an asset substantially vest with the lessor are classified as operating lease.

Rental expenses on assets obtained under operating lease arrangements are recognized on a straight-line basis as an expense in the Statement of Profit and Loss over the lease term of respective lease arrangement.

1.18. Taxes on income

Tax expenses comprise of current tax, minimum alternate tax, deferred tax charge or credit and adjustments of taxes for earlier years.

Provision for current tax is made as per the provisions of the Income Tax Act, 1961.

Deferred tax charge or credit reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years and are measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date.

Deferred tax assets are recognized only to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits. Deferred tax assets are reviewed for the appropriateness of their respective carrying amounts at each balance sheet date.

At each Balance Sheet date, the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably / virtually certain as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Minimum Alternative Tax (MAT) credit, which is equal to the excess of MAT [calculated in accordance with provisions of section 115JB of the Income tax Act, 1961 (the Act)] over normal income-tax is recognized as an asset by crediting the Statement of Profit and Loss only when and to the extent there is convincing evidence that the Company will be able to avail the said credit against normal tax payable during the period specified under the Act for utilization. The Company reviews the MAT credit entitlement asset at each reporting date for reversal, if any.

1.19. Cash and cash equivalents

Cash and cash equivalents include cash in hand, bank balances, deposits with banks (other than on lien) and all short term and highly liquid investments that are readily convertible into known amounts of cash and are subject to an insignificant risk of changes in value.

1.20. Cash flow statement

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities are segregated.

1.21. Provisions, contingent liabilities and contingent assets

A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value (except (a) retirement benefits and (b) dismantling / decommissioning liabilities that are recognized as cost of Property, Plant and Equipment) and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not require an outflow of resources. When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources is remote, no provision or disclosure is made.

Contingent assets are neither disclosed nor recognized.

1.22. Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss (after tax) for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue and share split, if any.

For the purpose of calculating diluted earnings per share, the net profit or loss (after tax) for the year attributable to equity shareholders and the weighted average number of equity shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

1.23. Segment reporting

The segments have been identified taking into account the nature of the products / services, geographical locations, nature of risks and returns, internal organization structure and internal financial reporting system. The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

1.24. Prior period items

Prior period items are disclosed separately in the Financial Statement.


Mar 31, 2016

1. Significant accounting policies

1.1. Basis of preparation of financial statements

The financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (“GAAP”) under the historical cost convention on the accrual basis. GAAP comprises of accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

1.2. Presentation and disclosure of financial statement

All assets and liabilities have been classified as current & non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule III of the Companies Act, 2013.

Based on the nature of products / services and time between acquisition of assets for processing / rendering of services and their realization in cash and cash equivalents, operating cycle is less than

12 months, however for the purpose of current/ non-current classification of assets and liabilities, period of 12 months have been considered as its normal operating cycle.

1.3. Use of estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the application of accounting policies, reported balances of assets and liabilities, disclosure of contingent liabilities as on the date of financial statements and reported amounts of income and expenses during the period. Management believes that the estimates and assumptions used in the preparation of financial statements are prudent and reasonable. Actual results could differ from those estimates. Any difference between the actual results and estimates are recognized in the period in which the results are known / materialize. Any revision to accounting estimates is recognized prospectively in the current and future periods.

1.4. Fixed assets

1.4.1. Tangible assets

Tangible assets are stated at cost of acquisition / construction less accumulated depreciation (amortization wherever applicable) and accumulated impairment losses, if any.

1.4.2. Intangible assets

Intangible assets are recognized only if it is probable that the future economic benefits attributable to asset will flow to the Company and the cost of asset can be measured reliably. Intangible assets are stated at cost of acquisition/ development less accumulated amortization and accumulated impairment loss, if any.

1.4.3. Cost of fixed assets includes non-refundable taxes and duties, borrowing cost directly attributable to the qualifying asset (as per Accounting Standard 16 - Borrowing Costs) and any directly attributable costs of bringing the asset to its working condition for its intended use.

1.4.4. Capital work-in-progress comprises of cost incurred on fixed assets under construction / acquisition that are not yet ready for their intended use at the balance sheet date.

1.5. Depreciation / amortization

1.5.1. Depreciation on fixed assets (other than freehold land and capital work in progress) is provided using straight line basis in accordance with Schedule II of the Companies Act, 2013 except for the 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. The assets which has useful life different than as prescribed under Part C of Schedule II of the Companies Act, 2013 are as follows:

1.5.2. In case of assets purchased, sold or discarded during the period, depreciation on such assets is calculated on pro-rata basis from the date of such addition or as the case may be, up to the date on which such asset has been sold or discarded.

1.5.4. Leasehold land is amortized over the period of lease (i.e. 95 years) or useful life whichever is lower.

1.6. Impairment of assets

The carrying amounts of assets are reviewed at each balance sheet date for any indication of impairment based on internal / external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset''s net selling price and value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life or a reasonable estimate thereof.

Based on the assessment done at each balance sheet date, recognized impairment loss is further provided or reversed depending on changes in circumstances. After recognition of impairment loss or reversal of impairment loss as applicable, the depreciation charge for the fixed asset is adjusted in future periods to allocate the asset''s revised carrying amount, less its residual value (if any), on a systematic basis over its useful life. If the conditions leading to recognition of impairment losses no longer exist or have decreased, impairment losses recognized are reversed to the extent it does not exceed the carrying amount that would have been determined after considering depreciation/ amortization had no impairment loss been recognized in earlier years.

1.7. Inventories

Raw materials and components, packing materials, consumables, stores and spares are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.

The Cost comprises of costs of purchase, duties and taxes (other than those subsequently recoverable) and other costs incurred in bringing them to their present location and condition. Cost for raw material is determined on specific identification basis and other materials & consumables on weighted average method.

1.7.1. Work-in-progress & finished goods is valued at lower of cost and net realizable value. Cost includes direct materials valued on weighted average basis and costs of conversion which include costs directly related to the units of production and systematic allocation of fixed and variable production overheads. Net realizable value is the estimated selling price in the ordinary course of business less estimated costs of completion and estimated costs necessary to make the sale. The cost of finished goods also includes excise duty wherever applicable.

1.7.2. Dies are valued at cost or net realizable value whichever is less. Cost includes material cost & labour cost. Costs are determined on specific identification basis.

1.7.3. Scrap is valued at net realizable value.

1.8. Investments

Investments are classified into current and long-term investments.

Investments that are readily realizable and intended to be held for not more than a year from the date on which such investments are made are classified as current investments. All other investments are classified as long-term investments.

Current investments are carried at lower of cost and fair value / net asset value determined on category wise for related investments. Long term investments are carried at cost. Provision for diminution in value of long term investments is made to recognize a decline, other than temporary, on an individual investment basis.

The cost of investments comprises of purchase price and directly attributable acquisition charges such as brokerage, fees and duties. Investment transactions are accounted for on a trade date basis. In determining the holding cost of investments and the gain or loss on sale of investments, the ''weighted average cost'' method is followed.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Statement of Profit and Loss.

1.9. Revenue recognition

Revenue is recognized to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

-Domestic sales of goods are recognized when significant risks and rewards of ownership of the goods have been passed to the buyer which generally coincides with dispatch of goods and are recorded inclusive of excise duty and net of sales tax, rebates and trade discounts and sales returns.

-Exports sales of goods are recognized when significant risks and rewards of ownership of the goods have been passed to the buyer, usually on the basis of dates of shipping bill / bill of lading.

-Revenue from tooling charges (die design and preparation charges) are recognized as per the terms of the contract as and when services are rendered.

-Revenue from sales of electricity is recognized when significant risks and rewards of ownership of the goods have been passed to the buyer, usually on transmission of electricity based on the data provided by the electricity department.

-Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.

-Dividend income on investment is accounted for in the year in which the right to receive the payment is established.

-Income from guarantee commission is recognized as a percentage of guarantee given on annual basis.

-Export incentives / benefits

Export incentives / benefits are recognized as income in Statement of Profit and Loss on export of goods based on fulfilling specified criteria''s and also reasonable certainty of utilizing the benefit by import of goods/sale of license in open market.

1.10. Foreign currency transactions

Transactions denominated in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction.

As at balance sheet date, foreign currency monetary items are translated at closing exchange rate. Foreign currency non-monetary items are carried at historical cost using exchange rate on the date of transaction.

Exchange difference arising on settlement or translation of foreign currency monetary items are recognized as income or expense in the year in which they arise except to the extent exchange differences are regarded as an adjustment to interest cost and treated in accordance with Accounting Standard 16- Borrowing Cost.

1.11. Employee benefits

1.11.1. Short term employee benefits

All employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee benefits and they are recognized as an expense at undiscounted amount in the Statement of Profit and Loss in the period in which the employee renders the related service.

1.11.2. Post-employment benefits

- Defined Contribution Plan

The Company''s defined contribution plan comprises of Provident Fund, Employee State Insurance Scheme and Employee Pension Scheme. The defined contribution plan is postemployment benefit plan under which the Company contributes fixed contribution amount to a government administered fund and will have no obligation to pay further contribution. The fixed contribution under the schemes is recognized in Statement of Profit and Loss during the period in the period in which employee renders the related service.

- Defined Benefit Plan and other long-term benefits

o The Company has defined benefit plans comprising of gratuity and other long term benefits include leave benefits. For gratuity, the Company has a Group Gratuity-cum-Life Insurance Scheme with Life Insurance Corporation of India (LIC), for future payment of gratuity to employees at retirement, death while in employment or on termination. Leave benefits are non-funded. The present value of the defined benefit obligations and other long term benefits is determined based on actuarial valuation using the projected unit credit method. The rate used to discount defined benefit obligation is determined by reference to market yields at the Balance Sheet date on Indian Government Bonds for the estimated term of obligations. The expected return on plan assets is the Company''s expectation of average long term rate of return on the investment of the fund over the entire life of the related obligation. The rate used to discount defined benefit obligation is determined by reference to market yields at the Balance Sheet date on Indian Government Bonds for the estimated term of obligations. o Actuarial gains or losses arising on account of experience adjustment and the effect of changes in actuarial assumptions are recognized immediately in the Statement of Profit and Loss as income or expense.

1.12.Borrowing cost

Borrowing costs that are directly attributable to the acquisition, construction or development of a qualifying asset are capitalized as part of the cost of the respective asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset which necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest, exchange difference arising from foreign currency borrowings to the extent they are treated as an adjustment to the borrowing cost and other costs that an entity incurs in connection with the borrowing of funds.

1.13.Operating lease

Lease arrangements where risks and rewards incidental to ownership of an asset substantially vest with the lessor are classified as operating lease.

Rental expenses on assets obtained under operating lease arrangements are recognized on a straight-line basis as an expense in the Statement of Profit and Loss over the lease term of respective lease arrangement.

1.14.Taxes on income

Tax expenses comprise of current tax, minimum alternate tax, deferred tax charge or credit and adjustments of taxes for earlier years.

Provision for current tax is made as per the provisions of the Income Tax Act, 1961.

Deferred tax charge or credit reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years and are measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date.

Deferred tax assets are recognized only to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits. Deferred tax assets are reviewed for the appropriateness of their respective carrying amounts at each balance sheet date.

At each Balance Sheet date, the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably / virtually certain as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Minimum Alternative Tax (MAT) credit, which is equal to the excess of MAT [calculated in accordance with provisions of section 115JB of the Income tax Act, 1961 (the Act)] over normal income-tax is recognized as an asset by crediting the Statement of Profit and Loss only when and to the extent there is convincing evidence that the Company will be able to avail the said credit against normal tax payable during the period specified under the Act for utilization. The Company reviews the MAT credit entitlement asset at each reporting date for reversal, if any.

1.15.Cash and cash equivalents

Cash and cash equivalents include cash in hand, bank balances, deposits with banks (other than on lien) and all short term and highly liquid investments that are readily convertible into known amounts of cash and are subject to an insignificant risk of changes in value.

1.16.Cash flow statement

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

1.17. Provisions, contingent liabilities and contingent assets

A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not require an outflow of resources. When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources is remote, no provision or disclosure is made.

Contingent assets are neither disclosed nor recognized.

1.18. Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss (after tax) for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue and share split.

For the purpose of calculating diluted earnings per share, the net profit or loss (after tax) for the year attributable to equity shareholders and the weighted average number of equity shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

1.19.Segment reporting

The segments have been identified taking into account the nature of the products / services, geographical locations, nature of risks and returns, internal organization structure and internal financial reporting system. The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

1.20. Prior period items

Prior period items are disclosed separately in the Financial Statement.


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, 2012

(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 of asset 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. The revenue from sale of goods are recognised when title to goods is transferred on delivery of goods.

(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) 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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