Accounting Policies of Mipco Seamless Rings (Gujarat) Ltd. Company

Mar 31, 2024

3. Basis of Preparation and Significant Accounting Policies

3.1 (a) Basis of preparation of Financial Statements and measurement.

The standalone Financial Statement has been prepared in accordance with Indian Accounting
Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 and
Companies (Indian Accounting Standards) Amendment Rules, 2016 and other relevant provisions
of the Act.

These Financial Statements have been prepared to comply in all material respects with the
Accounting Standards notified by Companies (Accounting Standards) Rules, 2006, (as amended)
and the relevant provisions of the Companies Act, 1956/2013 read together with paragraph 7
of the Companies (Accounts) Rules, 2014 (Indian GAAP). The Financial Statements have been
prepared under the historical cost convention on an accrual basis and going concern basis. The
Accounting Policies that have been consistently applied by the Company are consistent with those
used in the previous year.

(b) Functional and Presentation Currency

The Financial Statements are prepared in Indian Rupees (“INR”) which is the Company’s Functional
Currency for its Operations. All Financial Information presented in INR has been rounded to the
nearest ‘Thousands’ with two decimal places, unless stated otherwise.

3.2 Use of estimates

The preparation of Financial Statements in conformity with the Ind AS requires the Management
to make estimates, judgements, and assumptions that affect the reported amounts of revenue,
expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting
period.

Although these estimates are based on the management’s best knowledge of current events and
actions, uncertainty about these assumptions and estimates could result in the outcome requiring a
material adjustment to the carrying amounts of assets or liabilities in future periods.

3.3 Significant Accounting Policies
(a) Revenue Recognition

i. Revenue is recognized when the significant risks and rewards of ownership have been
transferred to the customers. Revenue is measured net of returns, trade discounts and
volume rebates. The timing of the transfer of risks and rewards varies depending on the
individual terms of the sales agreement.

ii. Revenues from contracts priced on a time and material basis are recognized when services
are rendered and related costs are incurred.

iii. Revenues from turnkey contracts, which are generally time bound fixed price contracts, are

recognized over the life of the contract using the proportionate completion method, with
contract costs determining the degree of completion. Foreseeable losses on such contracts
are recognized when probable.

iv. Revenues from maintenance contracts are recognized pro-rata over the period of the
contract.

v. Revenue from sale of goods will be recognized when the delivery of goods has happened, and
ownership is transferred to buyer.

vi. Interest income is recognized on the accrual basis using transactional interest rates.

(b) Property, Plant and Equipment (PPE)

i. All fixed assets are stated at cost of acquisition or construction less accumulated depreciation.

ii. Recognition and measurement: Normally Property, plant and equipment are measured at
cost less accumulated depreciation and impairment losses, if any. Cost includes expenditures
directly attributable to the acquisition of the asset. The Company has elected to apply the
optional exemption to use this previous GAAP value as deemed cost on 1 April 2017, the date
of transition.

iii. Depreciation has been provided on straight line method based on life assigned to each asset
in accordance with Schedule II of the Companies Act 2013.

iv. Depreciation on additions to fixed assets has been calculated on pro-rata basis from the date
of addition.

v. No depreciation has been provided on the fully depreciated assets.

(c) Borrowing cost

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

(d) Income Tax

Current Tax is determined as the amount of tax payable in respect of taxable income for the
period. Deferred Tax is recognized, on timing differences, being the difference between taxable
Income and accounting Income that originates in one period and are capable of reversal in one
or more subsequent periods. Deferred Tax assets are recognized subject to the consideration
of prudence. The tax rates and laws that have been enacted or substantively enacted as of the
balance sheet date are applied.

(e) Inventories

Inventories are measured at lower of cost and net realizable value after providing for obsolescence,
if any. Cost of inventories comprises of cost of purchase, cost of conversion and other cost
including manufacturing overheads incurred in bringing them to their respective present location
and condition. Cost of raw materials, work-in- progress, packing materials, trading and other
products are determined on first-in-first-out basis.

(f) Deferred Revenue Expenditure

Expenditure incurred on advertisement and other expenses for promotion of new products and
recruitment of key personnel is amortized over a period of five years, having due regard to the
nature of expenses and the benefit that may be derived there from. Expenditure on routine
product advertisement and personnel recruitment is expensed off to Profit & loss account in the
year in which it is incurred.

(g) Cash and cash equivalents

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in
hand and short-term deposits with banks with an original maturity of three months or less.

(h) Cash Flow Statement

Cash flows are reported using the indirect method, whereby 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.

(i) Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured
at amortized cost. Gains and losses are recognized in Profit and loss when the liabilities are
derecognized. This category generally applies to interest-bearing loans and borrowings.

(j) Foreign currency transactions

Transactions arising in foreign currency during the year are recorded at average rates closely
approximating those ruling at the transaction dates. Current Assets and Current Liabilities,
denominated in foreign currency, are translated at the exchange rate prevalent at the date of
the Balance Sheet. Exchange differences arising on foreign currency transactions/translations
are recognized as income or expense in the Profit & Loss Account, except those relating to the
acquisition of fixed assets, which are adjusted against the cost of the assets.

(k) Leases

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of
the leased item, are classified as operating leases. Operating lease payments are recognized as
an expense in the Statement of Profit and Loss on a Straight - line basis over the lease term.

(l) Employee benefits

All Employee Benefits payable for rendering the service such as Salaries, Wages etc. and the
expected cost of ex-gratia are recognized in the period in which the employee renders the related
service. A Liability is recognized for the amount expected to be paid when there is a present
legal or constructive obligation to pay this amount as a result of past service provided by the
employeeand the obligation can be estimated reliably.

---

Mar 31, 2015

1.1 Basis of accounting and preparation of financial statements

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 notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. 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.

1.2 Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

1.3 Inventories

Inventories are valued at the lower of cost (on FIFO basis) and the net realisable value after providing for obsolescence and other losses, where considered necessary. Cost includes all charges in bringing the goods to the point of sale, including Octroi and other levies, transit insurance and receiving charges. Work-in-progress and finished goods include appropriate proportion of overheads and, where applicable, excise duty.

1.4 Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash & Cash equivalents comprises cash on hand and demand deposits with banks.

1.5 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.6 Depreciation and amortisation

Depreciation has been provided as per the rates prescribed in Schedule XIV to the Companies Act, 1956

1.7 Revenue recognition

(i) Sales comprise sale of goods including excise duty and is accounted on the transfer of property in the goods to the buyer.

(ii) Revenue from job work is recognized by the completed service contract.

1.8 Tangible fixed assets

(i) Tangible fixed assets are stated at their historical cost.

(ii) Additions to tangible fixed assets comprise their purchase price and directly attributable costs.

1.9 Employee benefits

Since there was no employee during the year, no provision has been created during the year for gratuity and the balance of previous year is being carried forward Retirement Benefits to employees comprise of payments of gratuity and provident fund.

1.10 Leases

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the Lessor are recognised as operating leases. Lease rentals under operating leases are recognised in the Statement of Profit and Loss on a straight-line basis.

1.11 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.

1.12 Taxes on income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their reliability.

1.13 Provisions and contingencies

A provision is recognised 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 the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on the 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. Contingent liabilities are not charged to profit and loss account and are disclosed separately in the Notes.

---

Mar 31, 2014

1.1. Basis of accounting and preparation of financial statements:

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 notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. 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.

1.2. Use of estimates:

''The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

1.3.Inventories:

''Inventories are valued at the lower of cost (on FIFO basis) and the net realisable value after providing for obsolescence and other losses, where considered necessary. Cost includes all charges in bringing the goods to the point of sale, including octroi and other levies, transit insurance and receiving charges. Work-in-progress and finished goods include appropriate proportion of overheads and, where applicable, excise duty.

1.4. Cash and cash equivalents (for purposes of Cash Flow Statement):

Cash & Cash equivalents comprise cash on hand and demand deposits with banks.

1.5. Cash flow statement:

''Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.6. Depreciation and amortisation:

Depreciation has been provided as per the rates prescribed in Schedule XIV to the Companies Act, 1956

1.7. Revenue recognition:

(i) Sales comprise sale of goods including excise duty and is accounted on the transfer of property in the goods to the buyer.

(ii) Revenue from job work is recognized by the completed service contract.

1.8. Tangible fixed assets:

(i) Tangible fixed assets are stated at their historical cost.

(ii) Additions to tangible fixed assets comprise their purchase price and directly attributable costs.

1.9. Employee benefits:

Since there was no employee during the year, no provision has been created during the year for gratuity and the balance of previous year is being carried forward Retirement Benefits to employees comprise of payments of gratuity and provident fund.

1.10. Leases:

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognised as operating leases. Lease rentals under operating leases are recognised in the Statement of Profit and Loss on a straight-line basis.

1.11. Earnings per share:

''Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.

1.12. Taxes on income:

''Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their realisability.

1.13. Provisions and contingencies:

A provision is recognised 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 the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on the 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. Contingent liabilities are not charged to profit and loss account and are disclosed separately in the Notes.

---

Mar 31, 2011

1. FIXED ASSETS:

(a) Fixed Assets are stated at their historical cost.

(b) Additions to fixed assets comprise their purchase price and directly attributable costs.

(c) Depreciation is provided at the rates prescribed in Schedule XIV to the Companies Act, 1956.

2. INVENTORY VALUATION:

(a) Stock of Stores &Spares, : At lower of cost (on FIFO basis) or Raw Materials & Tools netrealizable value.

(b) Work in Process : At lower of cost or net realizable value. Cost comprising of raw materials, manufacturing and other overheads.

(c) Finished Goods : i. At lower of cost or market value.

ii. Excise Duty payable if any on finished goods stocks at the end of the year is accounted for and is considered for valuation pur -poses.

3. RETIREMENT BENEFITS:

Retirement benefits to employees comprise of payments of gratuity, superannuation and provident fund under the approved Schemes of the Company. Gratuity liability is provided on the basis of actuarial valuation.

4. REVENUE RECOGNITION:

(i) Sales comprise sale of goods including excise duty and is accounted on the transfer of property in the goods to the buyer.

(ii) Revenue from job work is recognized by the completed service contract.

---

Mar 31, 2010

1. FIXED ASSETS :

(a) Fixed Assets are stated at their historical cost.

(b) Additions to fxed assets comprise their purchase price and directly attributable costs.

(c) Depreciation is provided at the rates prescribed in Schedule XIV to the Companies Act, 1956

2. INVENTORY VALUATION :

(a) Stock of Stores & Spares, Raw Materials & Tools : At lower of cost (on FIFO basis) or net realizable value.

(b) Work in Process : At lower of cost or net realizable value. Cost comprising of raw materials, manufacturing and other overheads.

(c) Finished Goods : i. At lower of cost or market value.

ii Excise Duty payable on fnished goods stocks at the end of the year is accounted for and is considered for valuation purposes.

3. RETIREMENT BENEFITS:

Retirement benefts to employees comprise of payments of gratuity, superannuation and provident fund under the approved Schemes of the Company. Gratuity liability is provided on the basis of actuarial valuation and funded with an approved Trust.

4 REVENUE RECOGNITION:

(i) Sales comprise sale of goods including excise duty and is accounted on the transfer of property in the goods to the buyer.

(ii) Revenue from job work is recognized by the completed service contract.