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Techno Forge
BSE: 522142|ISIN: INE305I01018|SECTOR: Castings & Forgings
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« Mar 12
Accounting Policy Year : Mar '13
A.  BASIS OF PREPARATION OF FINANCIAL STATEMENTS
 
 i) The financial statements are prepared in accordance with the
 accounting principles generally accepted in India.
 
 ii) The concern generally follows the mercantile system of accounting
 and recognizes income & expenditure on an accrual basis except those
 with significant uncertainties.
 
 B.  USE OF ESTIMATES
 
 The presentation of financial statements requires estimates and
 assumptions to be made that affect the reported amounts of assets and
 liabilities on the date of the financial statements and the reported
 amounts of revenues and expenses during the reporting period.
 Differences between the actual result and estimates are recognized in
 the period in which the results are known/ materialized. The material
 assumptions are as under:
 
 i) Investments that are readily realizable and intended to be held for
 not more than a year are classified as current investments. AD other
 investments are classified as long-term investments. Long-term
 investments are carried at cost.
 
 ii) A provision is recognized when an enterprise has a present
 obligation as a result of past event; 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.
 
 C. FIXED ASSETS
 
 Fixed Assets are stated at cost of acquisition net of recoverable taxes
 and includes amount added on revaluation, less accumulated depreciation
 and
 
 impairment loss, if any. All costs, including financing cost till
 commencement of commercial''production, net charges on foreign exchange
 contracts and adjustments arising from exchange rate variations
 attributable to the fixed assets are capitalized.
 
 Gross Block includes Rs. 18.43 lacs added on revaluation of Employees
 Quarter as at 30.03.2009 based on report issued by the valuers.
 
 D.  EXPENDITURE DURING CONSTRUCTION PERIOD
 
 Expenditure related to and incurred during implementation of
 new/expansion- cum-modernization projects is included under capital
 work-in-progress and the same is allocated to the respective Fixed
 Assets on completion of its construction/erection. Interest on
 borrowing costs related to a qualifying asset is worked out on the
 basis of actual utilization of funds out of project specific loans
 and/or other borrowings to the extent identifiable with the qualifying
 asset and is capitalized with the cost of the qualifying asset.
 
 E.  DEPRECIATION AND AMORTIZATION
 
 Depreciation on fixed assets (other than land) is provided to the
 extent of depreciable amount on Straight Line method (SLM) at the rates
 and in the manner prescribed hi schedule XIV to the Companies Act, 1956
 over its useful life.
 
 Depreciation on additions to Fixed Assets or on sale/ discardment of
 assets is calculated pro rata from the month of such addition or up to
 the month of such sale/ discardment, as the case may be.
 
 Depreciation charged on Revalued Assets has been adjusted against the
 revaluation reserve. The Gross Block of Fixed Assets includes Rs.18.43
 lacs (Previous Year Rs.18.43 lacs) on account of revaluation of
 Employees Quarter carried out in March 2009. Consequent to the said
 revaluation there is an additional charge of depreciation of Rs,0.31
 lacs (Previous Year Rs.0.29 lacs) and an equivalent amount has been
 withdrawn from Revaluation Reserve and credited to the Profit and Loss
 Account. This has no impact on profit for the year.
 
 F. FOREIGN CURRENCY TRANSACTIONS
 
 Transactions denominated in foreign currency are recorded at the
 prevalent rates of Exchange in force at the time the transactions are
 effected and exchange rate difference is accounted on the date of
 realization of foreign exchange.
 
 Monetary foreign currency assets and liabilities in foreign currency,
 outstanding at the close of the year, are converted in Indian Currency
 at the appropriate rates of exchange prevailing on the date of the
 Balance sheet & resultant gain or losses are recognized in the Profit
 and Loss account for the year.
 
 G.  VALUATION OF INVENTORIES
 
 Items of Inventories are measured at lower of cost and net realizable
 value after providing for obsolescence, if any.
 
 (i) 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 & condition. Cost of
 Raw Materials, Stores & spares are determined at cost.
 
 (ii) Work- in- Progress are valued at cost of purchase, cost of
 conversion and other cost including manufacturing overheads incurred in
 bringing them to their respective present location and conditions.
 
 H. REVENUE RECOGNITION
 
 Revenue is recognized only when it can be reliably measured and it is
 reasonable to expect ultimate collection. Turnover includes sale of
 goods and Job Charges adjusted for returns, discounts, Value Added Tax
 (VAT), excise duty, and Sales Tax. Materials returned/rejected are
 accounted for in the year of return/rejection.
 
 Export sales are accounted for on the basis of the date of bill of
 lading/ airways bill.
 
 Income from job charges accounted for at the time of billing.
 
 Revenue in respect of insurance /other claims, interest and commission
 etc. is recognized only when it is reasonably certain that the ultimate
 realization will be effected.  I.  EXCISE DUTY AND CUSTOMS DUTY
 
 Excise Duty liability on finished goods manufactured and lying in the
 factory is accounted for and the corresponding amount are considered
 for valuation thereof. Customs duty in respect of materials lying in
 bonded premises and in transit is accounted for as and when the
 property in the goods passes to the Company.
 
 J.  EXPORT BENEFITS
 
 Export benefits available under the Export Import policy of the
 Government of India are accounted for in the year of export, to the
 extent measurable.
 
 K. CENVAT
 
 CENVAT is accounted as per exclusive method of accounting.  L. TAXES ON
 INCOME
 
 Tax expenses comprises of current & deferred tax. Current income tax is
 measured at the amount expected to be paid to the tax authority in
 accordance with the Indian Income Tax.
 
 In accordance with Accounting Standard (AS-22) Accounting for Taxes on
 Income'''' issued by the Institute of Chartered Accountants of India,
 deferred tax resulting from timing difference between taxable and
 accounting income is accounted for using the tax rates and laws that
 are enacted or substantively enacted as on the balance sheet date.
 Deferred .Tax asset is recognized and carried forward only to the
 extent that there is a virtual certainty that the asset will be
 realized in future.
 
 M. EMPLOYEE BENEFITS
 
 Expenses & liabilities in respect of employee benefits are recorded in
 accordance with the Revised Accounting Standard (AS)-15 -Employee
 Benefits (revised 2005) issued by ICAI.
 
 a). Provident Fund
 
 The Company makes contribution to statutory provident fund in
 accordance with the Employees Provident Fund & Miscellaneous Provisions
 Act 1952 which is a defined contribution plan and contribution paid or
 payable is recognized as an expense in the period in which services are
 rendered by the employee.
 
 b). Post Employee Benefits / Gratuity
 
 [Post Employee Benefit and other long term Employee Benefits a''e
 recognized as an expense in the Profit and Loss account for the year in
 which the employee has rendered services. Provision has been made for
 liability in respect of gratuity to employees as per the actuarial
 valuation
 
 c). Leave Encashment / Salary
 
 The company has not provided any leave encashment / salary to the
 employees as the employees fully utilizes their leaves during the year.
 N. BORROWING COST
 
 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
 substantial period of time to get ready for intended use.
 
 All other borrowing costs are charged to Profit and Loss account.
 
 O. COMPARATIVES
 
 Comparative financial information is presented in accordance with the
 Corresponding Figure financial reporting framework set out in
 Standard- of Auditing 710 on Comparatives. Accordingly, amounts and
 other disclosures for the preceding year are included as an Integral
 part of the current year financial statements, and are to be read in
 relation to the amounts and other disclosures - relating to the current
 year.
 
 P.  SEGMENT INFORMATION FOR PRIMARY SEGMENT REPORTING (BY BUSINESS
 SEGMENTS)
 
 Based on guiding principles given in the Accounting standard on
 ''Segment Reporting'' (AS-17), the primary segment of the Company is
 business segment, which is involved In business of manufacturing
 Ingots, Flanges, Forging, etc.  As the company operates in a single
 primary business segment, no segment information thereof is given.
 
 Q. PROVISIONS AND CONTINGENT LIABILITIES
 
 Provisions involving substantial degree of estimation in measurement
 are recognized 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 recognized but are disclosed in the
 notes. Contingent Assets are neither recognized nor disclosed in the
 financial statements.
 
 Contingent Liabilities for the year end are as-
 
 Particulars                                 Amount in Rs. As on
                                               31/0312013
 
 Contingent Liabilities for Letter 
 of Credit issued by bank and
 outstanding                                       65,00,000/-
 
 Contingent Liabilities for Letter of Guarantee    61,70,910/-
 
 Total                                           1,26,70,910/-
Source : Dion Global Solutions Limited
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