Maiden Forgings Ltd. நிறுவனத்தின் கணக்கியல் கொள்கைகள்

Mar 31, 2025

2.1. Basis of Preparation of financial statements

These financial statements have been prepared and presented under historical cost convention, on the accrual basis of
accounting except for certain financial assets and financial liabilities that are measured at fair values at the end of each
accounting period, as stated in the accounting policies set out below. The accounting policies have been applied
consistently over all the periods presented in these financial statements.

2.2. Inventories:

Inventories are valued as per AS-2 (Valuation of Inventories) issued by the ICAI at cost (net of Taxes credit) or net
realisable value, whichever is lower.

2.3. Revenue Recognition:

Revenue is recognized to the extent it is probable that the economic benefits will flow to the Company and revenue can
be reliably measured. The following specific recognition criterion must also be met before revenue is recognized:

Sale of goods

Revenue from sale of goods is recognized at the transfer of property in goods results in or coincides with the transfer of
significant risks and rewards of ownership to the buyer. Sales excludes GST.

Interest income

Interest income is recognized using the time proportion method, based on amount outstanding and the underlying
interest rates.

Job Charges/ Conversion charges received are recognized at gross value (excluding taxes)

2.4. Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of
ownership to the lessee. All other leases are classified as operating leases. Leasehold lands where the ownership of the
land will not be transferred to the Company at the end of the lease period are classified as operating leases. Upfront
operating lease payments are recognized as prepayments and amortized on a straight-line basis over the term of the
lease. Leasehold lands are considered as finance leases where ownership will be transferred to the Company at the end
of the lease period. Such leasehold lands are presented under property, plant, and equipment and not depreciated.

2.5. Foreign currencies:

The functional currency of the Company is the Indian Rupee, which represents the currency of the primary economic
environment in which it operates. Transactions in currencies other than the Company''s functional currency (foreign
currencies) are recognized at the rates of exchange prevailing at the dates of the transactions. Exchange difference
arising with respect to long-term foreign currency monetary items is recognized in the statement of profit and loss
except for the exchange difference related to long-term foreign currency monetary items, in so far as, they relate to the
acquisition of depreciable assets, are adjusted against the cost of such assets and depreciate the said adjustment, over
the balance life \,

2.6. Borrowing Costs: ,

Borrowing costs specifically identified to the acquisition or construction of qualifying assets are capitalized as part of

such assets. A qualifying asset is one that necessarily takes a substantial period to get ready for the intended use. All
other borrowing costs are charged in the statement of profit and loss.

2.7. Employee Benefits:

(i) Short-term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss
account of the 12 months Period in which the related service is rendered.

(ii) Defined Benefit Plans:

Gratuity and Leave encashment are defined benefit plan payable at the end of the employment. The provision for
gratuity has been made on the basis of 15days Salary and wages calculated for each completed year of service.

(iii) Defined Contribution Plans:

Defined contribution plans are those plans in which the company pays fixed contribution into separate entities and will
have no legal or constructive obligation to pay further amounts. Provident Fund and Employee State Insurance are
Defined Contribution Plans in which company pays a fixed contribution and will have no further obligation beyond the
monthly contributions and are recognised as an expenses in Statement of Profit & Loss.

2.8. Taxation:

The income tax expense represents the sum of the tax currently payable and deferred tax.

(i) Current tax:

The tax currently payable is based on taxable profit for the year. Taxable profit differs from ''profit before tax as
reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in
other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates that
have been enacted or substantively enacted by the end of the reporting period.

(ii) Deferred tax:

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the
Financial Statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities
are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all
deductible temporary differences to the extent that it is probable that taxable profits will be available against which
those deductible temporary differences can be utilized. Deferred taxes are recognized in respect of temporary
differences, which originate during the tax holiday period but reverse after the tax holiday period. For this purpose,
reversal of temporary difference is determined. The carrying amount of deferred tax assets is reviewed at the end of
each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be
available to allow all or part of the asset to be recovered. Deferred tax liabilities and assets are measured at the tax rates
that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax
laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred
tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company
expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Current and deferred tax for the year:

Current and deferred tax are recognised in the statement of profit or loss, except when they relate to items that are
recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also
recognised in other comprehensive income or directly in equity respectively.

2.9. Property, plant, and equipment (PPE):

Items of Property, plant and equipment are measured at its cost less any accumulated depreciation and any
accumulated impairment losses. The cost comprises its purchase price including import duties and non- refundable
purchase taxes after deducting trade discounts and rebates and any cost directly attributable to bringing the assets to its
working condition for its intended use.

Subsequent expenditures related to an item of Tangible asset are added to its book value only if they increase the future »

benefits from the existing asset beyond its previously assessed standards of performance.

a

Items of property, plant and equipment retired from active use and held for disposal is stated at the lower of their
carrying amount and net realisable value. Any write-down in this regard is recognised immediately in the statement of
profit and loss.

The Companies Act, 2013 prescribes that the asset should be written off over its useful life as estimated by the
management and provides the indicative useful lives for the different class of assets. In case the useful life of the asset
has expired but the asset is still in use it is carried at a nominal value of 5% of the original cost in the books. Other assets
are depreciated over their balance useful life which are as follows :

Assets held under finance leases are depreciated over their expected useful life on the same basis as owned assets.

An item of property, plant, and equipment is derecognised upon disposal, replacement, or when no future economic
benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement
of an item of property, plant, and equipment is determined as the difference between the sales proceeds and the
carrying amount of the asset and is recognised in profit or loss.

2.10. Intangible assets:

An intangible asset is recognised only when it is probable that the future economic benefits that are attributable to the
asset will flow to the enterprise and the cost of the asset can be measured reliably. Subsequent expenditure on an
intangible asset after its purchase or its completion recognised as an intangible asset it is probable that the expenditure
will enable the asset to generate future economic benefits in excess of its originally assessed standard of performance
and the expenditure can be measured and attributed to the asset reliably.

Intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. An
intangible asset is derecognised (eliminated from the balance sheet) on disposal or when no future economic benefits
are expected from its use and subsequent disposal. The depreciable amount of an intangible asset is allocated on a
systematic basis over the best estimate of its useful life.

Intangible assets are carried at cost less accumulated amortization and impairment losses, if any. The company has
capitalized all costs relating to acquisition and installation of intangible fixed assets.

2.11. Impairment of tangible and intangible assets other than goodwill:

The Management periodically assesses, using external and internal sources, whether there is an indication that an asset
may be impaired. An impairment loss is recognized wherever the carrying value of an asset exceeds its recoverable
amount. The recoverable amount is higher of the asset''s net selling price and value in use, which means the present
value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal. An
impairment loss for an asset is reversed if, and only if, the reversal can be related objectively to an event occurring after
the impairment loss was recognized. The carrying amount of an asset is increased to its revised recoverable amount,
provided that this amount does not exceed the carrying amount that would have been determined (net of any
accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.

However, there is no such kind of Fixed Asset in the company which require impairment.

2.12. Cash Flow Statement:

Cash flows are reported using the indirect method, whereby profit after 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 items of income
or expenses associated with investing or financing cash flows. The cash flows are segregated into operating, investing,
and financing activities

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Mar 31, 2024

2. Significant Accounting Policies

2.1. Basis of Preparation of financial statements

These financial statements have been prepared and presented under historical cost convention, on the accmal basis of accounting except for certain financial assets and financial liabilities that are measured at fair values at the end of each accounting period, as stated in the accounting policies set out below. The accounting policies have been applied consistently over all the periods presented in these financial statements.

2.2. Inventories:

Inventories are valued as per AS-2 (Valuation of Inventories) issued by the ICAI at cost (net of Taxes credit) or net realisable value, whichever is lower.

2.3. Revenue Recognition:

Revenue is recognized to the extent it is probable that the economic benefits will flow to the Company and revenue can be reliably measured. The following specific recognition criterion must also be met before revenue is recognized: Sale of goods

Revenue from sale of goods is recognized at the transfer of property in goods results in or coincides with the transfer of significant risks and rewards of ownership to the buyer. Sales excludes GST.

Interest income

Interest income is recognized using the time proportion method, based on amount outstanding and the underlying interest rates.

Job Charges/ Conversion charges received are recognized at gross value (excluding taxes)

2.4. Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. Leasehold lands where the ownership of the land will not be transferred to the Company at the end of the lease period are classified as operating leases. Upfront operating lease payments are recognized as prepayments and amortized on a straight-line basis over the term of the lease. Leasehold lands are considered as finance leases where ownership will be transferred to the Company at the end of the lease period. Such leasehold lands are presented under property, plant, and equipment and not depreciated.

2.5. Foreign currencies:

The functional currency of the Company is the Indian Rupee, which represents the currency of the primary economic environment in which it operates. Transactions in currencies other than the Company''s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions. Exchange difference arising with respect to long-term foreign currency monetary items is recognized in the statement of profit and loss except for the exchange difference related to long-tenn foreign currency monetary items, in so far as, they relate to the acquisition of depreciable assets, are adjusted against the cost of such assets and depreciate the said adjustment, over the balance life of the asset.

2.6. Borrowing Costs:

Borrowing costs specifically identified to the acquisition or construction of qualifying assets are capitalized as part of such assets. A qualifying asset is one that necessarily takes a substantial period to get ready for the intended use. All other borrowing costs are charged in the statement of profit and loss.

2.7. Employee Benefits:

(i) Short-term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the 12 months Period in which the related service is rendered.

(ii) Defined Benefit Plans:

Gratuity and Leave encashment are defined benefit plan payable at the end of the employment. The provision for gratuity has been made on the basis of 15days Salary and wages calculated for each completed year of service.

(iii) Defined Contribution Plans:

Defined contribution plans are those plans in which the company pays fixed contribution into separate entities and will have no legal or constructive obligation to pay further amounts. Provident Fund and Employee State Insurance are Defined Contribution Plans in which company pays a fixed contribution and will have no further obligation beyond the monthly contributions and are recognised as an expenses in Statement of Profit & Loss.

2.8. Taxation:

The income tax expense represents the sum of the tax currently payable and deferred tax.

(i) Current tax:

The tax currently payable is based on taxable profit for the year. Taxable profit differs from ‘profit before tax'' as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

(ii) Deferred tax:

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the Financial Statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Deferred taxes are recognized in respect of temporary differences, which originate during the tax holiday period but reverse after the tax holiday period. For this purpose, reversal of temporary difference is detennined. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Current and deferred tax for the year:

Current and deferred tax are recognised in the statement of profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.

2.9. Property, plant, and equipment (PPE):

Items of Property, plant and equipment are measured at its cost less any accumulated depreciation and any accumulated impairment losses. The cost comprises its purchase price including import duties and non- refundable purchase taxes after deducting trade discounts and rebates and any cost directly attributable to bringing the assets to its working condition for its intended use.

Subsequent expenditures related to an item of Tangible asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standards of performance.

Items of property, plant and equipment retired from active use and held for disposal is stated at the lower of their carrying amount and net realisable value. Any write-down in this regard is recognised immediately in the statement of profit and loss.

The Companies Act, 2013 prescribes that the asset should be written off over its useful life as estimated by the management and provides the indicative useful lives for the different class of assets. In case the useful life of the asset has expired but the asset is still in use it is carried at a nominal value of 5% of the original cost in the books. Other assets are deoreciated over their balance useful life which are as follows :

Asset Head	Useful life
Building	10-40 Years
Plant & Machinery	1-25 Years
Vehicles	1-15 Years
Furniture & Fixtures	1-10 Years
Computers	1-5 Years
Electrical Equipment''s	1-15 Years
Office Equipment''s	1-15 Years

Assets held under finance leases are depreciated over their expected useful life on the same basis as owned assets.

An item of property, plant, and equipment is derecognised upon disposal, replacement, or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant, and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

2.10. Intangible assets:

An intangible asset is recognised only when it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably. Subsequent expenditure on an intangible asset after its purchase or its completion recognised as an intangible asset it is probable that the expenditure

will enable the asset to generate future economic benefits in excess of its originally assessed standard of performance and the expenditure can be measured and attributed to the asset reliably.

Intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. An intangible asset is derecognised (eliminated from the balance sheet) on disposal or when no future economic benefits are expected from its use and subsequent disposal. The depreciable amount of an intangible asset is allocated on a systematic basis over the best estimate of its useful life.

Intangible assets are carried at cost less accumulated amortization and impairment losses, if any. The company has capitalized all costs relating to acquisition and installation of intangible fixed assets.

2.11. Impairment of tangible and intangible assets other than goodwill:

The Management periodically assesses, using external and internal sources, whether there is an indication that an asset may be impaired. An impairment loss is recognized wherever the carrying value of an asset exceeds its recoverable amount. The recoverable amount is higher of the asset''s net selling price and value in use, which means the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal. An impairment loss for an asset is reversed if, and only if, the reversal can be related objectively to an event occurring after the impairment loss was recognized. The carrying amount of an asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years. However, there is no such kind of Fixed Asset in the company which require impairment.

2.12. Cash Flow Statement:

Cash flows are reported using the indirect method, whereby profit after 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 items of income or expenses associated with investing or financing cash flows. The cash flows are segregated into operating, investing, and financing activities.