1 Company Information
Ameya Precision Engineers Limited is a Public Limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956 and now goverened by Provisions of Companies Act 2013, having Company Incorporation No. (CIN) L29253PN2012PLC145613. The Company Converted in Public Limited from Private Limited w.e.f. 25th Jan 2022. The Company is primarily engaged in Manufacture Pump and Valve Components and Other Engineering Components used in Valve Industry etc. The Company has set up a manufacturing facility at Pune.
2 Significant Accounting Policies
a) Basis of preparation
The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). GAAP comprises mandatory accounting standard as prescribed under section 133 of the Companies Act 2013 read with rule 7 of the Companies (Accounts) Rules, 2014, the Provision of Act (to extent notified). The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies adopted in the preparation of financial statements are consistent with those used in the previous year.
All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current - non current classification of assets and liabilities.
b) Use of Estimates
The preparation of financial statements in conformity with Indian GAAP requires the management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of reporting period. Although these estimates are based on management's best knowledge of current events & actions, uncertainity about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods. These differences between actuals & estimates are recognized in the period in which the results are known/materialised.
c) Fixed Assets
Fixed assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price. Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred. Gains or losses arising from de-recognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized. For those assets of which useful life is expired as per Schedule II of Companies Act 2013 are written off to accumulated Reserve and Surplus
Account.
d) Inventories
Raw materials, stores and spares and trading goods are valued at lower of cost and net realizable value. Work-in-Progress and finished goods are valued at the lower of cost and net realizable value. Cost includes direct materials and labour and a part of manufacturing overheads based on normal operating capacity. 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. Cost comprises of cost of Purchase & other costs incurred in bringing them to their respective present location and condition and is determined on First-in-First-Out (FIFO) basis."
e) Events Subsequent To The Balance Sheet Date
Events occuring after the Balance Sheet date, which provide additional information regarding conditions existing as at the balance sheet date are recognised in the Financial Statements. The events which do not provide additional information regarding conditions existing as on balance sheet date are disclosed in notes to accounts.
f) Prior Period, Extraordinary Items And Changes In Accounting Policies
Prior period and extraordinary items and changes in accounting policies having a material impact on the financial affairs of the Company are disclosed, wherever required.
g) Cash & Cash Equivalents
Cash and cash equivalents in the Cash Flow Statement comprise cash at bank and in hand and short term investments with an original maturity of three months or less.
h) Cash Flow Statement
Cash flow statement has been prepared following the indirect method set out in the Accounting Standard - 3 on "Cash Flow Statement" issued by the Institute of Chartered Accountants of India.
i) Depreciation & Amortization of Tangible & Intangible Assets:
Depreciation is provided on a pro-rata basis on the Written down value method over the estimated useful lives of the assets prescribed under Schedule II of the Companies Act, 2013, read with relevant circulars issued by the department of Company Affairs from time to time.
Depreciation on additions to / deletions from Tangible fixed assets made during the year is provided on pro-rata basis from / upto the date of such additions / deletions, as the case may be.
Intangible Assets are Amortized as follows:
a) Specialised software : Over the Estimated Economic useful life.
j) Revenue Recognition Sale of goods
Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods from Factory Gate. The company collects Goods and Service Tax (GST) on behalf of the government and, therefore, these are not economic benefits flowing to the company. Hence, they are excluded from revenue.
Export Incentives
Export of goods is eligible for incentives from Government as per Import-Export policies declared by the Government from time to time. Company's export products are eligible for duty drawback. Rates for duty drawback vary according to products and destinations. The Company recognizes duty drawback amount on accrual basis for this Financial year, However, in respect of preceding years benefits are recognized on receipt basis.
k) Retirement and other employee benefits
Retirement benefit in the form of provident fund is a defined contribution scheme. The company has no obligation, other than the contribution payable to the provident fund. The company recognizes contribution payable to the provident fund scheme as expenditure, when an employee renders the related service. Gratuty Preimium paid to LIC for Trust accounted as an expense on payment basis.Leave Encashment are considered as an expenditure as when paid to employees for accumulated leave balance period to the credit of employees. Company has not separateley provided for provision for gratuity payable to employees. Also company has not calculated and provided for leave encashment payable on the basis of acturial calculations.
l) Taxation
Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.Deferred tax is measured based on the tax rates and tax laws enacted or substantially enacted at the balance sheet date. Deferred tax is recognized, subject to consideration of prudence, on timing differences, being differences between taxable and accounting income that originate in one period and are capable of reversal in one or more subsequent period(s). Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. If the Company has unabsorbed depreciation or carry forward tax losses, deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realized against future taxable profits.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 certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized.The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.
m) Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization.
n) Segment Reporting
Based on the synergies, risk and returns associated with business operations and in terms of Accounting Standard-17, the Company has identified Manufacturing of Pump and Valve Components and Other Engineering Components used in Valve Industry etc., as its sole operating segment and the same has been treated as the primary segment.
o) Provision
A provision is recognized when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle such 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.
p) Contingencies
A contingent liability is a possible obligation that arises from past events whose existence will be
confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence in the financial statements.
q) Foreign Currency Transactions
(a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction.
(b) Monetary items denominated in foreign currencies at the year end are restated at year end rates.
(c) Non monetary foreign currency items are carried at cost.
(d) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss account.
r) Borrowing Costs
Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. Such borrowing costs are recognised in the statement of Profit & Loss.
s) Deferred Tax
Tax expense for the period, comprising of deferred tax, are included in the determination of the net profit or loss for the period.
Deferred tax is recognised for all the timing differences, subject to the consideration of prudence in respect of deferred tax assets. Deferred tax assets are recognised and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. At each Balance Sheet date, the company reassesses unrecognised deferred tax assets, if any.
Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off assets against liabilities representing current tax and where the deferred tax assets and the deferred tax liabilities relate to taxes on income levied by the same governing taxation laws.
Current tax assets & current tax liabilities are offset when there is a legally enforceable right to set off the recognized amounts and there is an intention to settle the asset and liability on a net basis.
t) Leases
Assets taken on lease under which all risks and rewards of ownership are effectively retained by the lessor are classified as operating lease. Lease payments under Operating Leases are recognized as expenses on straight Line Basis as per the terms of lease. Lease payments per year differ with respect to area of use by leasee.
u) Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
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