NOTE-1: CORPORATE INFORMATION
The Company is a Public limited Company (CIN - L36900WB1992PLC099901} having its registered office in the State of West Bengal. The Company is engaged in the business of manufacturing and trading of Automobiles parts, Parts of Railway or tramway and other related services including Jobwork. The company is listed in a recognized stock exchange as a SME (Small and Medium Enterprise).
SIGNIFICANT ACCOUNTING POLICIES
1 Basis of Preparation
The Financial statements of the company have been prepared in accordance with generally accepted accounting principles in India {Indian GAAP) and complied in all material respect with the accounting standards specified under section 133 of the Companies Act. 2013 read with rule 7 of the Companies {Accounts) Rules, 2014 has amended and other relevant provision of the Act. The financial statements have been prepared using historical cost convention and on the basis of going concern using accrual method of accounting. The Accounting Policies have been consistently applied by the company and are consistent with those used in the previous year.
2 Use of estimates
The preparation of Financial statement of the company is on conformity with Generally Accepted Accounting principles in India require management to make estimates that affect the reported amount of assets and liabilities, disclosures relating to contingent liabilities and assets as at the date of the Financial Statement and the reported amounts of revenue and expenses, during the reporting period, although these estimates are based on management's best knowledge of current events and actions, actual results may ultimately differ from these estimates, which are recognized in the period in which the results are known/materialized.
3 Revenue Recognition
a. Revenue for the purpose of the accounts has been recognized on accrual basis. Sales of Products and scrap are recognized when all significant risk and reward of ownership have been passed to the buyer, usually on delivery to customers. Incomes from Job work are recognized as and when the services are rendered and the resultant product is returned back to customers.
b. All claims and other income to the extent ascertainable and considered receivable have been accounted for.
c. Interest income is recognized on the time proportion basis taking into account the amount outstanding and the applicable interest rate.
d. Dividend income is recognized when the company's right to receive dividend is established.
4 Property, Plant and Equipment and Intangible Assets Property, Plant and Equipment
Property, Plant and Equipment (PPE), being fixed assets are tangible items that are held for use in production or supply of goods or services, for rental to others, or for administrative purpose and are expected to be used for more than a period of twelve months. They are measured at cost less accumulated depreciation and any accumulated impairment. Cost comprises of the purchase prices including import duties and nonrefundable purchase taxes after deducting trade discounts and rebates and any cost attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by the Management. Own manufacturing assets are capitalized at cost including an appropriate share of overheads. Financing cost relating to acquisition of assets which take substantial period of time to get ready for intended use are also included to the extent they relate to the period up to such assets are ready for their intended use.
Items such as spare parts, stand-by equipment and servicing equipment are capitalized if they meet the definition of property, plant and equipment. When an asset is scraped, or otherwise disposed off, the cost and related depreciation are written back and resultant Profit (including capital profit) or loss, if any is reflected in Statement of Profit & Loss.
Intangible Assets
Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization.
Pursuant to the requirements under schedule II of the Company Act 2013, the company has identified the cost of each component of the assets on the basis of its technical expertise and no component had a cost which is significant to the total cost of the assets and has useful life materially different from.that of the remaining asset.
Capital work in progress
Expenditure incurred during the construction period, including all expenditure direct or indirect expenses, incidental and related to construction is carried forward and on completion the cost is allocated to the respective property, plant and equipment.
5 Depreciation & Amortization
Depreciation on all property, plant & equipment and intangible assets is provided on Straight Line Method in the manner as prescribed by Schedule II of the Companies Act 2013. Depreciation on additions during the year has been provided on pro-rata basis from the next month of addition.
Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, commencing from the date the asset is available to the Company for its use.
Lease hold land is amortized on straight line basis over the period of lease.
6 Inventories
Inventories are stated at lower of cost or net realisable value. Cost is ascertained on a weighted average basis. Costs comprise direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Net Realisable value is the price at which the inventories can be realised in the normal course of business after allowing for the cost of conversion from their existing state to a finished condition and for the cost of marketing, selling and distribution.
7 Investment
Long Term Investments are stated at cost. Current investments are carried at lower of cost and quoted/ fair value as on the Balance Sheet date. Provision for diminution in the value of long- term investments is made only if such a decline is other than temporary.
8 Employees Benefits
a. Contribution to Provident Fund & Employee State Insurance Corporation is made in accordance with the respective Act and statute.
b. Provision on account of unutilised leave payable to employees is provided in the accounts on accrual basis.
c. Provision on account of gratuity and bonus is provided in the accounts on accrual basis.
9 Cash Flow Statement
Cash flow statement has been prepared in accordance with the indirect method prescribed in Accounting Standard - 3 issued by the Institute of Chartered Accountants of India.
10 Provisions, Contingent Liabilities & Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised in the books of accounts but are disclosed in the Notes on Accounts. Continent Assets are neither recognised nor disclosed in the financial statement.
11 Impairment of Assets
An Assets is treated as impaired when the carrying amount of assets exceeds its recoverable value. An impairment loss is charged for when an asset is identified as impaired.
12 Foreign Currency Transaction
Foreign currency transactions during the year were recorded at the rate of exchange prevailing on the date of transaction. Foreign currency assets and liabilities, other than those related to fixed assets was revalued at the close of year on the basis of exchange rate prevailing on that date and exchange difference arising there from were charged to the profit & loss account. Exchange differences in respect of liabilities incurred to acquire fixed assets are adjusted to the carrying amount of such assets. (as per Para 46 of AS - 11).
13 Taxes on Income
Tax expenses comprises of current and deferred tax.
a. Current Income Tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted. At the reporting dates. Current income tax relating to items recognised directly in the statement of profit & loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
b. Deferred Tax
Deferred tax is provided on temporary difference between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose at the reporting date.
Deferred Tax assets are recognised for all deductible temporary difference, the carry forwards of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary difference, and the carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax assets to be utilised.
Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
14 Borrowing Cost
Borrowing costs that are allocated to the acquisition or construction of qualified assets are capitalized 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 charges to revenue.
15 Earnings per share
Basic earnings per share are computed in accordance with Accounting Standards - 20, Earning per Share. Basic earnings per share is 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, bonus element in a right issue to existing shareholders, share split and consideration of share, if any.
For the purpose of calculating diluted earnings per share, the profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effect of all dilutive potential equity shares.
16 Cash and Cash Equivalents
Cash and cash equivalents for the purpose of cash flow statement comprise cash at bank and in hand and short-term deposits, which are subject to an insignificant risk of changes in value.
17 Governments Grants
Grants and subsidies from the Government are recognized when there is reasonable assurance that the grant/subsidy are received and all attached conditions will be complied with. Grant related to specific fixed assets are presented in the Balance Sheet by showing such grants as deduction from the fixed assets concerned.
The grant that is received as a compensation for expenses or losses incurred or for the purpose of giving immediate financial support, shall be recognised as income of the period in which it is received.
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